Real Estate Wrap up

Search for the words "real estate bubble" on Google and it returns you 1,720,000 hits. This past week, we heard a lot of chatter on the subject. So for the weekend, we are taking a look at a slew of Real Estate related matters for your reading pleasure.

I’ve dug up some off-the-beaten-path statistics, commentaries, and ideas. These are well worth your time:

Froth vs Bubble
Anyone looking for clarity from Fed Chair Alan
Greenspan on whether the U.S. Real Estate market is a
speculative bubble is probably asking the wrong guy . . .

Uh-oh: Fortune cover Real Estate Gold Rush
Fortune asks: Is it too late to get in? Is this another case of the magazine cover indicator at work?

Comparing Real Estate with Equity Market Capitalization
Can you compare RE and Equities to determine when one is too expensive? Mike Panzner takes a try.   

Interest Only Loans, 1.00% Mortgages
HELOC data is far from encouraging regarding home financing. Some of the statistics are eyepopping. (Hint: if you take a 1% loan, you are essentially renting with an option to buy)

As Prices Rise, Homeowners Go Deep in Debt to Buy Real Estate
Rising asset class, increased levelrage — why does that sound so familiar?   

 How Housing Lowers CPI
Ever stop to think of the impact of ultra low interest rates on CPI? Turns out that they lower the reported inflation due to cheaper rentals.

Be Wary of Anything approaching 140% of GDP
Nasdaq peaked when it passed 140% of GDP; Real Estate capitalization is now a stone’s throw away. What does this mean?

Real Estate Blogs
An overview of some of the more popular and/or interesting looking Real Estate related weblogs

Playboy Bunny or Real Estate Investor?
Is this the most effective allocation of capital and resources? 

Bull Market in Real Estate Agents   
We can debate whether its a bubble — but its certainly a bull market for the number of new realty agents.

Selling a Home: Best Time?
When is the best time to sell a home to maximize your sale price? When’s the cheapest time to buy?   

Category: Real Estate

How Housing Lowers CPI

Tony Crescenzi had an interesting article on RealMoney this week. In it, he notes that as the housing market soars, it ends up knocking rents lower. After all, why rent if ultra low real interest rates allow you to buy for the same price, and with nearly no money down? So what’s the problem with…Read More

Category: Economy, Real Estate

Real Estate Blogs

Category: Real Estate, Weblogs

Interest Only Loans, 1.00% Mortgages

Category: Economy, Real Estate

Selling a Home: Best Time?

Category: Finance, Real Estate

Comparing Real Estate with Equity Market Capitalization

Category: Economy, Markets, Real Estate

Froth vs Bubble

Anyone looking for some clarity from Federal Reserve Chair Alan Greenspan on whether the United States Real Estate market is in a speculative bubble is probably asking the person least likely to provide a clear and understandable answer. 

Well, do we or don’t we?

Well, yes kinda, but not really, no.

That was Big Al’s answer to the question of whether we have a housing bubble in the U.S. or not.

"There are a few things that suggest, at a minimum, there’s a little froth in this market. We don’t perceive that there is a national bubble, but it’s hard not to see that there are a lot of local bubbles," Greenspan opined to the Economic Club of New York.

O.K., frothy, no national bubble; yet lots of smaller bubblettes. (Recall our prior bubblette discussion in February).

But don’t breathe to deeply just yet. Greenie noted that asset gains in Real Estate are unsustainable: 

"Without calling the overall national issue a bubble, it’s pretty clear that it’s an unsustainable underlying pattern. What we see are a number of forces, which are, as far as I can judge, not infinitely projectable."

Got that? Let’s review: Not a bubble, but Unsustainable. Not a national bubble, but local bubblettes.

Thanks for clarifying that for us . . .


UPDATE MAY 22,2005   6:36am

Alan Abelson had a few choice words on the Fed Chief’s prognostications here. He equates Friday’s speechifying to the infamous 1996  "irrational exuberance" speech. (So we got that going for us, which is nice).


Greenspan Calls Home-Price Speculation Unsustainable
Craig Torres, Alison Fitzgerald
Bloomberg, May 20, 2005 18:04 EDT

Greenspan sees no housing bubble
Federal Reserve chairman says sector shows sign of
‘froth’ but doesn’t perceive a national bubble.
Reuters, May 20, 2005: 3:08 PM EDT

A Bubble in the Housing Market? Any Implosion Won’t Be Obvious
Ken Brown
The Wall Street Journal, May 20, 2005,,SB111662227079239476,00.html

Greenspan Is Concerned About ‘Froth’ in Housing
NYTimes, May 21, 2005


Read More

Category: Real Estate

Uh-oh Fortune’s cover: Real Estate Gold Rush

Fortune aks:  Is it too late to get in? The answer to that question, when posed by a major magazine cover, tends to be an emphatic yes. > > The articles are actually more circumspect than the cover: Is the Housing Boom Over? How Real People Get Rich The New King of the Real Estate…Read More

Category: Financial Press, Psychology, Real Estate

Squawkbox is Blogging

Category: Financial Press, Weblogs

Concert attendance and ticket pricing

Category: Finance, Music