Analysis of the Real Estate Bubble
September 24, 2008
Excellent piece on the analysis of the real estate bubble
Wild Child trailer . Discusses a personally known example of what a person was doing, why it was a poor long term choice, and the consequences of those poor decisions. Essentially, one of the primary contributors to the real estate, mortgage, and market/economy crisis has been that persons were getting into homes with little or no money down. They were then relying on the very strong/fast appreciation of the real estate market to then provide them “built in” equity in the home. The problem of course with this way of doing things: what happens when the appreciation isn’t there, or worse, when the market starts declining in value….and this is what has led the charge on driving the economy down. Risky and greedy financial strategies – and now they are paying the price for their unconservative decisions.
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2 Responses to “Analysis of the Real Estate Bubble”
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Jon, I agree 100% with your views. I also feel thankful that not all communities have wild up’s and down’s in home values. Take Manitowoc, WI for example. Its the perfect place to park money in real estate if your not looking for a huge return on investment and not looking to loose a pile of money either.
Lawrence White of the Cato Institute has also written a very good analysis of the real estate and financial bubble and how it happened.
The commercial mortgage market is suffering but (knock wood) we are still able to close loans and make deals.