Home prices have increased 8% in December 2012 compared to December of 2011. Home sales have also increased over last year. This is giving many the confidence to sell and move up before values get too high or interest rates go up.
Investors continue to buy up distress properties in hopes of flipping them and making a big profit. Many homes on the market are price high at first and then some have to reduce the price to get an offer. On the other hand, properties that are priced right can go for over asking price when speculators feel the values are going up.
So, can we be headed for another bubble? It's hard to say and although home prices are still very low compared to 2008 when they hit a peak, values are going up fast just like before.
"I would say we have a housing bubble again," said David Stockman, former director of the Office of Management and Budget under President Reagan, told Yahoo! Finance, who recently has been working in the private equity sector. "We don't have a real organic sustainable recovery because, in a world of medicated money by the central bank, things aren't what they appear to be. ... It's happening in the most speculative subprime markets, where massive amounts of 'fast money' is rolling in to buy, to rent, on a speculative basis for a quick trade. And as soon as they conclude prices have moved enough, they'll be gone as fast as they came."
American banks have once again begun producing mortgage-based bonds in substantial numbers. Meanwhile, institutional investors have been buying up low-cost houses in order to rent them while speculating on the value. As a result, the housing market may be going into another bubble. Are we headed for another financial crisis? Moreover, is history destined to repeat itself, given human nature? If interested, see the following article: http://thewordenreport.blogspot.com/2013/04/return-of-mortgage-based-bonds-another.html
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