The bubble-babblers, who’ve been playing their one-track tape for several years now, may find it shocking, but some experts still consider this an open question.
The new Freakonomics blog at the New York Times asks whether it’s “time to believe in the housing bubble?“
Lets see, housing is too expensive for the average family to afford in most of the country, loans are a lot harder to get now that real lending standards are returning, inventory is rising while massive new construction continues, home price appreciation has been at an unsustainable level for years. How can this not end badly? The bubble will not pop all at once, but it has definitely started to deflate and will likely be a slow bleed as houses linger on the market for months at too-high prices.
Jane,
You’re talking generalities – which do not hold true in every market.
Manhattan, for example, has extremely low and falling inventory levels and strong appreciation, and many deals that sell for cash (in the millions).
Joe your website is about Chicago, no one cares about Manhattan.
Manhattan seems to be its own little island. The NYT was just reporting that things are not slowing down at all in Manhattan and that inventory is tight. But then Fortune has an article today talking about how the mortgage woes are hitting the high end and a Corcoran agent in the Hamptons saying that prices there will drop by 20%.
It’s a bubble everywhere and will affect some places earlier than others- just like the Nasdaq. The very speculative stocks crashed first followed only later by companies that actually made money (Microsoft, Cisco etc.) But they too eventually fell.
All the talking heads on CNBC are all agog that down payments may return to 20% again. Imagine that? They kept saying, “who can afford it?”
Exactly.
Who is buying the $300,000 700 square foot one bedroom in River North with 20% down?
How about this question – does the proprietor of this site think a bubble exists currently in the Chicago market? If not, what reasons and stats can you cite to support that position?
Dmac,
A fair question, but not one that’s answerable as phrased.
My long-standing position is that there is no such thing as a “Chicago market.”
There are thousands of sub-markets in Chicagoland, some of which are currently experiencing varying degrees of pain and others that are healthy.
Talk of a generalized bubble is meaningless, and market-wide statistics don’t tell us very much that’s useful. A few of our recent posts tell mixed stories – some projects selling more slowly and offering incentives, others selling well at the asking prices.
Joe, thanks for the specifics.
“There are thousands of sub-markets in Chicagoland, some of which are currently experiencing varying degrees of pain and others that are healthy.”
Absolutely- and I think they all have varying levels of gravitational pull on each other, depending on which neighborhood is currently “hot” and whether that makes surrounding areas under or overpriced, etc. it’s all relative.