There Really Isn't a Housing Bubble
So says Lionel Tiger of the Wall Street Journal.
posted by Alan Stewart Carl @ 10:10 AM
3 comments
The Yellow Line
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Saturday, June 25, 2005
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3 Comments:
the housing bubble probably does exist in a few markets, but not overall. I have always had problems with the models used, because they rely too heavily on past prices. They do not adjust for the economic growth in a region.
They seem to ignore trends. Like calling Las Vegas overheated. not recognizing the growth of the city. past numbers are not relevant in situatiosn where a city doubles in size in elss than ten years.
Lionel Tiger sounds like some British adult movie star.
I do a lot of work in real estate in Washington, DC where the prices have gone up by over 100% in 5 years, so the housing bubble is big talk up here. I don't know if Tiger is correct, but I do think it's important to remember that real estate is a different kind of investment in that, for most people, it's actually a place to live first and an investment second. My feeling is the buble won't "burst" so much as prices will dip slightly and then rise at a far slower rate.
There's a difference between commercial real estate and housing. As I recall, a lot of the Japanese problem revolved around commercial speculation.
He does say that some of those who speculate are going to get burned, but those who are buying a house to live in should be fine.
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