is there a realestate bubble ?

Answer 1

Yes, real estate started climbing at an unrealistic pace about 5 years ago. There was a shortage of homes in the market feeding the the progress. What should have happened is that people should have been priced out of the market and that would have stabilized or slowed down growth. The opposite occur ed, new loan products allowed people to qualify for larger mortgages (interest only, step up programs etc.) This fed into the mania and kept more people in the market and raising prices, raising prices drew investors and before you know it everyone is rushing to get property.

All was good when rates were low, but now the interest only adjustables are maturing and rates are rising. Current owners are not moving or selling because they don't want to lose the cheap all time low rates. Investors are trying to sell because they expect prices to drop due to increased rates will push down home prices. There is now building a market surplus with no buyers. New builders have stopped phases until the phase is completely sold out. Things are going to drop quickly in the next 6-8 months unless something changes to the rates to the lower side.

Bubble is on its way, as much as many people don't want to believe it.

Answer 2

hmm bubble is such a rather vague word that has been over used by the media. simple economics of supply and demand is what is happening. what happens is when interest rates go down more renters become buyers and current owners want to trade up cause they can afford more for the same money outlay. when you have more buyers the builders want to make money so they produce more homes. as more homes are being produced costs go up as everyone wants a piece of the pie. then interest rates begin to rise. as they rise those who can, still do but others begin to fall off as they have leveraged too much and have to drop out of the game. then when rates are too high you have surplus of homes and not enough buyers. and in order for builders to stay afloat they have to unload their supply which you see as price reductions. and then you see the pendulum swing back the other direction. so it is more like a swing than a bubble. the smart buyer buys with fixed rates so that when the rates rise their costs remain the same. those who like to risk more use arms or adjustable rate mortgages. while each has its good points and its bad, when the pendulum is on the wong side you see many buyers foreclosing because the monthly payment is now out of their means to pay. this cycle has been going on for years. it has many violent swings and many slow periods of swing but it always swings. these last few years have been violent swings and yes there is going to be a violent reaction but it is not going to explode like a bubble. too many variables are in play for that to happen. so no bubble, but yes a swing in the other direction is already in motion and will peak in my estimation in about another 8 months. those who are prepared will feel the effect but not be hampered by it. those unprepared will lose. that is the same in lfe also.

Answer 3

look around your neighborhood if houses are sitting for 6 months or more or if your property taxes went down or if sellers have to come way off the starting price there is a bubble. also with interest rates going up it cost more to buy a house and that eliminates a large cross section of buyers

Answer 4

Yes

Answer 5

theres always oppertunity in realestate .. do you have a bubble?