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Housing Bubble

Housing is Still Underpriced

January 8th, 2006

After rising at a quick pace for the last five years, housing prices are now at a plateau according to some. Housing bubble believers frequently point to the fact that housing prices have run up while rents have remained relatively flat, and claim that the disparity must be corrected by a decline in housing prices. Analyzing the purchase price of a given home against the price it fetches in rent though shows that housing still remains a great investment with much room to the upside. In fact, the P/E ratio of housing is currently below most stocks when it should be higher due to a decreased risk factor. Even in the most overpriced markets, the price of housing is backed up by solid fundamentals. Read more »

The Housing Bubble Mentality

January 5th, 2006

A fit of media-induced hysteria has struck many normally rational Americans. According to those who believe in the housing bubble, the sky is falling, the seas are melting away, and the world is about to end yesterday. Bubbleheads claim to have analyzed the housing market with a sharp eye and reached an apparently logical conclusion that growth is unsustainable. How can two sets of people look at the same facts and reach conclusions that are at a direct opposite? Read more »

Media Spin and the Housing Bubble

January 2nd, 2006

The mainstream media has officially gone overboard in their coverage of the so-called housing bubble. Once again the media has shown that they will go to any lengths to create a housing market panic with their sensationalist coverage. The truth that housing still remains a good investment does not sell newspapers and does not keep viewers glued to their televisions. Tell the public that there exists a massive housing bubble, then tell them that their future is doomed because of the inevitable collapse, and you will have the general public hooked like heroin. This is what we like to call "Chicken Little journalism". Read more »

There Is No Housing Bubble

December 27th, 2005

You cannot read a newspaper or turn on a television these days without being confronted by the media discussing a bubble in the housing market. According to the man on the TV, there is zero doubt as to the existence of a housing bubble. In fact, the media has told us that housing will crash, if not today then probably this afternoon or next week. Before you throw your hands up in panic though let’s take a rational look at the situation. Facts and logic seem to indicate that the housing bubble is nothing more than a media myth. Read more »


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