Experts: This Will Level Off, Honest!
This long USA Today piece wrestles with the many issues of the housing bubble."For a time late last year, it looked as though the long-predicted slowdown was arriving. The NAR expects existing-home sales to decline about 1.2 percent this year and new-home sales to slip 2.5 percent. Prices are expected to rise 7 percent."
"'The market here is just absolutely nuts,' says Pamela Harness, realtor in Chandler, Ariz. 'I get investors calling; they want to buy a home. I tell them they're a day late and a dollar short at this point.'"
"'Home buyers appear to be irrationally exuberant,' Jan Hatzius, economist at Goldman Sachs, said in an April report to clients." Not the most original call, but welcome.
"In an April USA TODAY poll of 55 top economists, three-fourths called housing overheated, though they differed on whether they expect a gradual cool-down or a sharp drop in sales and prices." This blog has pointed out that this is what experts have said for a while, yet the bubble grows on. "Nationally, home prices have jumped an average 50 percent in the past five years."
The number of speculators shocked the NAR when first announced. Now they use it as a reason to explain the mania away! "Further, affluent baby boomers, are buying second houses..(says) the National Association of Realtors."
"Mass migration from pricey areas to affordable ones, dubbed the 'salmon run',creates its own problems. 'Like the plague in the Middle Ages, real-estate-price inflation is being spread by the people who are fleeing it,' Eric Wolfe wrote recently."