The problem I have with these articles is that housing is always local at the end of the day…and these articles tend to generalize so much.
I REALLY don’t think “middle-class” people, making say 60k-80k total household income are meant to buy a home with how tough it is to get a loan now, especially not in the markets we care about in CA with our prop 13 taxes and great sunny living.
If we look at places in the coast (which is relevant to us in San Diego) and places like LA and the bay area…unemployment is incredibly low and inventory is non-existent. Prices in San Francisco is crazy and some of the places my parents own are well past the 2007/08 bubble price. With non-existent supply, wealthy twitter/facebook/google millionaires, I again say and doubt there is any real bubble in these markets.
Yes, the places in unlimited land maybe different (TX, AZ, NV), but again, real estate is local and I can care less about those areas since it doesn’t affect me nor many of the people on this forum…Even San Diego which tends to lead the housing market isn’t showing crazy bubbles …. yet of course…
Also, people who bought in the past 5 years were all pretty well capitalized to get a loan so it’s unlikely they will panic or sell at a price they don’t want. They can easily, again keep the property and RENT for more than their carrying cost…I see it in a few places around where I’m at already with people renting out places lower than their loan since they can.
Again, this doesn’t mean we don’t have bubble areas, but for the places we care about and for people here, I don’t think these alarmist articles do anyone that good since it’s not what’s happening in your local market and some of these folks were saying the same thing 5 years ago (at the low)…
Lastly, maybe more like Japan, we might not see interest rates jump as much as people think…
Europe is concerned with deflation now…
I think interest rates will stay low for a long time since there is absolutely no wage inflation to begin with.
