Loose Lips Pop Bubbles

A story by Gail Buckner over at Fox News poses a question in headline form: "Can You Identify a Housing Bubble?" Here's an excerpt:

Dear Friends,
Just as it was impossible to pick up a newspaper or magazine in late 1999 that didn't have a story about over-priced tech stocks, so it is today when it comes to residential real estate. As Yale economist Robert Shiller sees it, talk — positive on the upside and negative on the downside — both creates and destroys financial bubbles.

That's not to say there is universal agreement that real estate prices are, in fact, headed for the kind of collapse the stock market experienced, where $7 trillion in value was erased.

It depends on whom you talk to.

What’s not in dispute is that the housing prices have been on a tear for at least the past five years, posting record gains in the past two. To be sure, not all areas of the country have seen the 31 percent appreciation experienced in Nevada or the 19 percent jump in home prices Arizona homeowners saw over a 12-month period. According to the Office of Federal Housing Enterprise Oversight, Texas, Colorado, Ohio, Oklahoma, and Indiana were among the states that had the smallest increases.

The story can be found at this link.

— The Boy in the Big Housing Bubble