Welcome to the 2006 economy, where stocks are booming, the art market is setting records, and home prices are soaring all over the country. In fact— not to rush things along too much— it's already time for you to start worrying about the collapse of the next housing bubble.
"Aw gee, we just had a collapse of a housing bubble!" you exclaim, kicking the dirt in frustration. "I still have three partially constructed condos in Bed-Stuy to flip and IT'S NOT FAIR." We know, we know. But what can you do? These things happen. It's been, like, five years since the last housing collapse— plenty of time for Americans to put it out of their minds entirely. We're not saying that we're about to relive the housing bubble explosion any minute now (we're just ill-informed doomsaying sensationalists, after all!). We're just pointing out to you that stories like this Bloomberg article today are the things that people look back on after the bubble explodes and say to themselves, "How could that have happened when they were warning us way back then?"
U.S. home prices jumped almost 11 percent in March from a year earlier, the biggest gain since the height of the real estate boom in 2006[!], CoreLogic Inc. reported last week. Values are rising faster than incomes, an indication that prices may fall in some cities once higher mortgage rates erode affordability, Humphries said. Investor purchases will inevitably cool, adding another potential hit to the market, according to Vitner...
“If prices keep going up at this rate for another six months, we will have a bubble, and people will get hurt,” [Dean Baker, co-director of the Center for Economic and Policy Research] said in a telephone interview.
I wouldn't worry, though: if there's anyone smart enough to get in and out before the whole thing collapses, it's you. You're smarter than the others.
[Bloomberg. Photo: AP]