Bubbles

5 Replies

Tiny bubbles (tiny bubbles) / In the wine (in the wine) / Make me happy (make me happy) / Make me feel fine (make me feel fine)

Is it just me, or does there seem to be just too much hype in the RE market in general these days. Seems familiar to me. Too many people talking about how fast the deals get grabbed up, how hard it is to find a 1% buy and hold property, much less a 2% that is not in a war zone. It just has a feel to it when I read through the BP forum for example.

People much smarter than I are urged to comment. I know there are some very sharp and experienced folks on this forum.

Thanks,

So, what exactly is your question? 

My question is do others agree or disagree with my statement that it feels like another bubble inflating in the RE market in general here in the US. I am just looking for opinions from BP members that have a long term view both to the past and looking ahead.

And I thought this was about someone I met in a bar, when I was in the Navy...

We are currently in a bond and equities bubble.  The inflation, printing money, under QE1, 2 and 3 have flowed directly into these markets.  The commodities have been in a bear market.  This is teetering on a dramatic shift.  When the equities and bonds start falling the money will flow into the general economy, prices and wages.

The bonds will go down and interest rates will go up.  Inflation will push up on RE prices and interest rates will push down.  Volatility will increase.

Commodities will go up via inflationary pressures.

In short good luck.  Make fast trades, buy way under market value, be cautious.  

I have seen values go up quite a bit but they are still lower than previous highs of 2007. I also buy cheaper houses in decent areas and get about a 2-4% monthly return from rentals. I expect the market to continue to go up especially with all the money that has come into existence since the last crash but I also buy properties that when the next bubble burst will still bring in a decent cash flow. The more you spend on a house the more it is able to drop. In every economy there will be people looking for a cheap place to live. 

  

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