The Four Reasons Why We Are Not In A Housing Bubble

My only question is on the last point in that 91% of homes are undervalued. Undervalued from what pricing?  The bubble pricing of 2004-2006?  

Some folks actually get paid to make some of these predictions. There are always folks that throw this stuff out, but have no bases for these comments.

Make it a great weekend!

It's funny...as soon as buyers/sellers got a hint of "we might be in a bubble" they went full blown into crazy expectations like overpricing their homes. Real Estate agents need to bring them back to reality.

I would agree that we are not in a bubble.  In my opinion, what caused the bubble last time was the easy credit and ridiculously easy to get 100% financing, which wsa available for Owner Occupied loans, although a lot of the mortgage fraud came about because people were not buying Owner-Occupied homes with that 100% financing.  Approximately 10% in my neighborhood.  

 In Real Estate, one should prosper and get ahead not gamble or hope to win....Always do homework followed by personal math..then move

Interesting cartoon, the "no, we are not in a housing bubble" cheerleading coming from the media and our industry makes us look like we lack integrity. The fundamentals household debt, personal incomes, manipulated rates, government backed mortgages or lack of private funding in the secondary markets are all still out there. Consumers deserve un-biased facts, not market hype.

As interest rates and prices continue to climb I believe we will see a major change in the housing market...

Good points but to me it is all still very shaky

There are reasons why in a local fashion we do have a bubble, maybe not as big as 2007 but still big. In nevada the state has made it hard to foreclose so an aritificial supply and demand market is in existence. In areas like Phoenix come lately investors have come in to cash on supposed short term riches, and that sounds familiar. It will not become a true market until we still wade through foreclosures, and until owner occupants take over from investors to drive the market. Loan originations for owner occupants are at a low not seen since the mid 1990s.

I completely agree and in California in particular we're still trying to get back to peak prices in some markets.  We're got a long way to go.

Like not growing one crop and banking the farm on the cash from the harvest if market holds up or not. Don't be mono-cultured. Diversify and list, market, sell (repeat) more than houses, homes. Land is one hot comodity, waterfront never goes out of style and mom and pop business listings all add to the razzle dazzle, number of round trip tickets to real estate closing you collect. Year after year.

The market in Tuolumne County, California (rural and less prone to extreme peaks and valleys) is beginning to show signs of a slow, modest recovery. It is too early to tell what effect the sudden jump in interest rates will have on what appears to be a recovery - not a bubble.

I think that the statistics in many markets are misleading. A lot of the increase in median prices in our market is due to more higher priced homes selling combined with fewer REO and foreclosure activity . This distorts the increase in median price levels.

Nina, 

It will be interesting to see.  I do have some concerns as we are rising so fast in price point in Atlanta.  We are seeing builders of new communities rasing prices very quickly.  In some cases they are up 40% + in the last year.  That's a bit insane, so in some places, locally, we could actually see a bubble.  

All the best, Mcihelle

Hi Nina - KCM is one of the most fascinating blogs I frequent. This was one of their best posts - thanks for sharing!

Nina,

Great post, thanks for providing relevant data which counters some of the hype promoted by our MSM.