Wednesday, January 25, 2006

Newsday Says 'No Bubble'

Newsday looks at housing sales data in Long Island, NY, and explains that there's no bubble to burst.

The problem with this story is the reasoning it uses. High up in the story it says "the traditional desire to own a home, the need for growing families to find a place to live, and the desirability of Long Island still keeps buyers coming." None of that has anything to do with the bursting of a bubble. Of course the "desire" to buy is still there, but when prices are out of reach, and sellers panic, you hear this sound: "Pop!"

Here's an excerpt:
Despite widespread fears of a housing bubble ready to burst and prices ready to plummet, a Newsday analysis of 25 years of Long Island sales data finds little support for the idea. Based on historical norms in data compiled from records of the Long Island Multiple Listing Service, Newsday has found a housing market that may be softening, but still has rising prices and little evidence of a glut. Indeed, if history is any indication, the economic trends point to a relatively harmless landing, without the trappings of a huge falloff.

Find the entire story at this link.
— The Boy in the Big Housing Bubble