Its totally possible we are in another bubble. Cheap interest rates make homes more affordable, especially with rents going crazy in a few spots.

I live in Denver, and about 18 months ago, it became cheaper to buy than to rent (my calculation). And rents are continuing to go up. We were renting and our landlord jacked ours up three times in less than 18 months. When we started looking outside, we discovered we actually had a great deal on our rental, we should have been paying $2000/month (ours was $1575). So we bought.

The thing is the housing market isn't booming everywhere, and the markets that I know are doing well either bottomed (orlando), have always been strong (san fran) or didn't go completely crazy (denver, seattle).

I am definitely nervous we are in a bubble, but with the growth denver and seattle have seen maybe its justified.

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Posted by meansonny

ATL

Member since Sep 2012

25775 posts

Posted on 7/22/14 at 1:53 pm to Hawkeye95

if employment holds, there is no bubble.

if people are out of work, there will be a new flood of foreclosures. and a burst is inevitable.

a prediction of bubble is essentially a prediction of the labor market in an area.

i recommend that people quit looking at price increases and looking at job bubbles. is there an industry that can potentially suffer in the short term future? is a region/city heavily affected by this workforce? if yes, there is your bubble.

if you are looking for whether to make an investment into an area, follow the jobs forecasting and make sure that the employment sector is not in for a downfall.

i know that this is more of a demand side view of real estate. but developers do their homework on absorption rates and zoning trends. demand drives this bus. over-suppy is more of an indicator of how big a bubble bust drives prices down.

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