"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Housing Joins The Everything Bubble

When people tick off the components of the “everything bubble” they usually omit US housing, for a couple of reasons. First, bubbles don’t normally recur immediately in the same asset class, because memories of past carnage need to fade before investors can be seduced back into irrational optimism. Since housing was the epicenter of the last boom/bust cycle, no one is looking there for evidence of new bubbles.

Second, the action in housing has been more gradual than in the 2000s, so it hasn’t generated a lot of breathless headlines about speculators making killings with other people’s money.

But this expansion has gone on for such a long time that even modest annual price gains have taken home prices back into bubble territory. And now the news is starting to reflect it. From today’s DollarCollapse.com “Real Estate” links list:

Southern Cal home prices surge 5.6% to record $549,000 in November

Oakland home values surge 261 percent in 20 years

Broward real estate leads rebound in decade after downturn

San Diego median home price hits all-time high of $594k

Phoenix home prices still outpacing wage growth

Dallas-Fort Worth median home prices unaffordable for average wage earners

An average worker can’t afford a median-priced home in the Denver metro

Median home prices are still unaffordable in majority of U.S.

Blue-state voters feel harshest squeeze from soaring home prices

Millennials have no place to turn? Rising home prices

Housing shortage hits new record low, igniting prices

To recap, home prices are above their 2007 bubble peaks in many places while the wages of potential homebuyers have barely risen, which is squeezing ever-larger numbers of people out of the market. Yet somehow the buying continues. This may not qualify as a mania, but it’s definitely looking dysfunctional, because where can a sector go from “record low affordability” if it wants to keep rising?

Going forward, one of two things has to happen. Either buyers go on strike, as they (and their mortgage lenders) recognize that houses are a bad deal at current prices and mortgages written at those prices are unlikely to be paid off. Or the government tries to keep the party going by lowering interest rates to make future mortgages easier to manage.

Since a dramatic slowdown in the housing market would take the rest of nominal GDP down with it, that will of course be seen as unacceptable, leading calls for lower rates, a weaker dollar and various other kinds of stimulus like tax cuts paid for with bigger deficits.

Put another way, even if housing doesn’t crash, the need to keep prices elevated is one more impetus for what looks like a tidal wave of monetary ease coming our way.

 

Emigrate While You Still Can – To Finca Bayano

8 thoughts on "Housing Joins The Everything Bubble"

  1. I can’t say I’m actually banking on this but as “impossible” as it might seem, the level and consequences of more “monetary easing” may make the last decade look tame.

    So many articles that warn of negative imminent or inevitable financial events like a stock and/or bond market crash “worries” me in that too many people are saying it, and that usually means they will be wrong. How many articles like that have we been reading since 2009?

    In the last decade or so, we have already passed through the impossible and absurd and “obvious” limits (debt levels, deficit spending levels, interest rate levels, central bank interventions, etc.) There simply hasn’t been any of the “normal” expected market reactions and throttling that market theory has predicted. Therefore, I really don’t know what will finally matter to people to change the direction of things. It may be that we haven’t seen nothin’ yet.

    1. Great comment! I will never believe another hyperinflation or collapse article after being duped by the fear-porn and terrible analysis of John Rubino, James Turk, John Williams and Peter Schiff in 2008. And yet these guys are still treated like gold-bug royalty.

    2. you forgot something very important:
      Since the dollar is the Reserve currency , it has a dual role (Internal and External)
      They can play all the games they want internally (The wealth gap , cost of living, and housing is a huge problem due to those internal games), hence your comments but make no mistake about it the confidence in the greenback (external Role) and the petrodollar are definitely coming to an end. You don’t weaponize your reserve currency.Also trade not finance is being done using less and less dollars. it is a slow process and when you countries asking for their gold back, you know something big externally is coming

      1. After 5 yrs I decided I would abandon my old work which improved my everyday life… I commenced working on a task through the internet, for an establishment I saw on-line, for several hours everyday, profit a lot more than I have done on my old job… Previous check I obtained was $9000… Remarkable thing regarding this is the fact that I have more time for my family and friends. Take a look, what it is about… cut.sx/auP/

      2. You’re probably right ewentually, but it may take much longer than side liners like us might think, Beware of giving other countries too much credit. Most of he best of other countries emigrate to the US so I don’t think the Russias and Chinas of the world are so independent. We shall see. It’s why I’m interested in this drama.

        1. Affiliate job opportunities are becoming a trend all over the over world now. A recent survey shows beyond 77% of the people are working for internet based jobs at their home with no difficulty. Every person wants to spend some time daily with his/her family by going any wonderful place in the country or any other country. So web-based income enables you to complete the work at any time you want and enjoy your life. Though selecting the best track moreover establishing a proper destination is our goal in direction of financial success. Already most of the people are generating such a good revenue of $19000 every single week by utilizing highly recommended as well as efficient techniques for earning money online. You will start to earn from the first day as soon as you see our web site. ENTER NOW >>>>> earn35kpermonth.am-geilsten.de

  2. An anxiety free work space and boss who rewards you for all your hardwork and you receive sufficient time to spend with your family. It absolutely feels like a fantasy. Well, It is possible to get everything above. We bring to you an internet based venture that actually works towards your growth. This web based work can give you flexible time. You are able to get the job done from anywhere. Get around $29000 each and every week by just spending handful of hrs regularly. Check out this excellent opportunity and transform your life completely >>> aburs.ir/95cfb1

  3. Trump already jawboned the Fed into lowering rates 3 times. We have never had a 15-year stock market bubble like the one that is brewing now. Imagine an animal that doesn’t go to the restroom for 1 month. Imagine a woman who carries a baby for 27 months. This is what these rocket-science economists are trying to create. Their arrogance will become our misery.

Leave a Reply

Your email address will not be published. Required fields are marked *


Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.



Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.