Real Estate Bubble

[Rodrigo]

I just wanted to find out people's opinion and mostly experienced realtors if and when can we expect a decline in the real estate bubble. Comments and suggestions are welcome


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[La Jolla Real Estate]

Inventory has been up, so have market times. It will take a while for the market to adjust and settle into a new "trading range". I don't see a bubble- but the frenzy is certainly over.

I'd just be worried if you purchased a few properties at the top of the market with a short term adjustable in a no money down/ no cash flow scenario.

G&S

[Nickie]

Don't we all wish we could read crystal balls??? We'd all be on perpetual vacations... :p

I don't see any bubbles bursting, but I think it is great now that the frenzy is over. More inventory for clients to choose from and less of that desperation in finding "something -ANYTHING" and then fighting with the multiple offers and then worrying about appraisals coming in.

I'm glad to see things a bit more normal, where people can make sensible decisions and take enough time to find the home that truly suits them best.

And obviously as a result of having more inventory and less of the craziness, I've seen the need for people to better prepare their homes to go on the market. I think that will create a better market for everyone as well. I hate to see people buy a home, slap on some paint and install the cheapest carpet they can find and then put it back on the market a month later for $60,000+ more than what they paid for it and expecting to get it. I'm all for investing in and upgrading homes to put them on the market, but not some of the stuff I've seen these last couple years.

I know a lot of people that wanted to sell during all the frenzy but were afraid they would never find anything else to live in. They would go out and take a look around at what they could buy for their money and said "forget it!". I think the calmer market helps everyone feel a little more secure, no matter if they are buying or selling.

[La Jolla Real Estate]

We'd all be on perpetual vacations...

I like the sound of that. :)

G&S

[HomeSurfer]

Bubble is an inaccurate term, but it makes for great news.

Bubbles burst, leaving nothing but soap film on the floor. The dot-com bubble and the Nikkei bubble are good examples of bubbles.

Real estate has never been that way.

Regionally, there have been declines in value, more like a slow leak in a balloon, not a bubble. After a while, maybe years, the balloon stops leaking.

When will the balloon start to leak, if it starts to leak? Who has that crystal ball again?

[STVP]

Actually wasn't the dot com bomb... :D

[La Jolla Real Estate]

I miss all the dot.com ads from the super bowls...

[Shimmer]

how can be a realestate broker?

[kthor]

the Term Bubble are for the non-experience investor or non-savvy investment type of people or people who never owned real estate.....
ohh could I add for the media too=yup the media's job is to be as negative
as possible so they can sell more of their product to as much audience as possible .... being positive in the media won't get any newspeople
promotion..(my life actually is better when I stopped watching news like 7 years ago)

people 5 years ago called the stock market bubble, but out of the ashes
I made the same amount of money next 5 years (2000-2005) than i made
from the market upturn (1995-1999)..why and how ?
first thing is, I didn't listen to the so called pro's of the market - Iam my
my self made pro! listen to those so called pro say bye bye 2 money...
(ya who attends those seminars anyway ? the people who knows zero about investment and those people who wants to get rich in 24 hours and would pay top money for crap, am I right?)

anyway if you treat a home as investment then you should be fine .

[Executive Home Buyer]

A Blast from the Past posts!

Funny how things come full circle, eh? ;)

Jean

P.S. Yeah, I'm Canandian and we're all wondering if and when OUR bubble will burst, especially, here in Vancouver, British Columbia CANADA! :eek:

[kthor]

[QUOTE=Executive Home Buyer;19965]A Blast from the Past posts!

Funny how things come full circle, eh? ;)



Life is a circle - just have to know when to take advantage of that situation when things starts to turn and when to get back to things when things are about to turn into a circle .. that's the difference between making money or losing money ..

[CCHI]

Maybe in some areas that went way up way fast. But how much of a drop would be considered a bubble burst? 10%? 20% or 50%? 10% drop has easily happened in many areas but ultimately things will adjust and in a few years climb at a slower pace. Some areas really did not see a rise and have not seen much of a slow down.

[Notactingmyage]

Bubble is an inaccurate term...

Indeed. My definition of a real estate bubble is a market in which people are willing to pay prices that can ONLY be recovered by speculating on continuation of rapid price inflation. That is, the price does not allow for a reasonable rate of return from ANY of the intrinsic values offered by various uses of property (i.e., rental; to produce other goods and services, etc.).

I went looking for investment property in coastal areas of Florida in early 2005. I came away shaking my head in disbelief; refusing to become caught up in the "frenzy". My alternative investment in S&P 500 index funds is looking pretty good at this point, relative to what I might have done with a rental condo in Sarasota over that same time period. I'm still hopeful that enough air will eventually leak out of the bubble to make real estate investing profitable again, but there clearly are times when you just have to walk away from hopeless deals.

[Chief Tutor]

This may be an old post but look at the graph on the link below and then tell me if you think we are seeing a bubble or a paradigm shift.

I would argue neither and what we will see over the next 5-10 years is the same correction we saw in Japan in the early 90's and Hong Kong between 1998-2002. Granted that although the market correction of 50% in each market had different issues creating the change, this graph is scary. I believe that if the theories of Adam Smith are sound, we will see a correction of tremendous magnitude.

Home Values adjusted for Inflation from 1890 to 2006 (http://retips.wordpress.com)

[OregonLO]

that is a very interesting graph Martin! Thanks for posting that up for us...definitely sparks some debate as to what is in store for the economy...It could be interesting :)

[Cedar City Utah Realtor]

That is some scary stuff. Hopefully we come down slowly and its fairly un noticable because of inflation and other economic factors but for some reason I doubt it will be.

[CCHI]

That is a pretty crazy graph. Puts things in perspective. We will see what happens.