The Real Estate Bubble Debated Again

Once again, the question whether a real estate bubble exist is popping up in the media. It continues to be a hot topic as housing prices continue to appreciate at an unsupported pace, especially in the coastal markets. For those who live on the coast, the cost of housing is being felt hard, as the cost of purchasing a home has far outstripped income increases over the past five years.

While underlying factors such as low interest rates have helped push home prices upward, the astronomical rise of home prices over the past five years has many economists comparing the current housing market to the stock market boom and bust of the 90s. It was fueled by speculative buyers who thought the stock market would only keep rising, which it did not. The current housing market is full of speculative buyers, which may prove to be the ultimate demise of current housing boom. This will not only wipe out the speculators, but hurt the average homeowner as they see their equity shrink significantly.

For more information click the link below:

Will Home Prices Pop?

Click the comments link below to post comments.