Is the Real Estate Market about to go flat?

[liberal N proud]

Forbes
Which housing markets are ready to pop?
Skyrocketing prices are just one facet of the boom; in many places, paychecks are keeping up. But in many, the gap is widening.

By Forbes.com

Housing prices have risen so far and so fast, who can afford to buy anymore?

Plenty of people. Of course, those people don't live in New York. Or San Francisco. Or Miami.

As everyone knows (or should know by now), home prices have increased around the country over the last few years. In some places, they have shot up like wayward bottle rockets--and many people expect them to eventually come dropping down.
How much of a median house does a median income buy?
1980 1990 2000 2004
Atlanta 135.3 150.9 167.5 193.0
Boston 80.8 100.0 94.0 93.8
Chicago 100.4 115.2 128.8 122.8
Dallas 100.1 134.4 163.8 201.8
Detroit 132.5 159.5 156.8 169.4
Houston 110.0 166.3 159.4 193.5
Los Angeles 52.6 60.3 78.9 57.2
Miami 63.8 104.0 99.4 75.0
New York 81.0 63.4 76.1 63.8
Philadelphia 101.6 115.1 180.4 174.1
San Francisco 61.6 61.0 67.3 60.6
Washington, D.C. 75.1 108.1 152.7 115.6

Source: Economy.com
http://moneycentral.msn.com/content/invest/forbes/P120229.asp?GT1=6657

Also the the cover of the Plain Dealer this AM had an article about the Real Estate Bubble.
This is the only thing that has kept this economy from a complete collapse, what will happen when it goes down?

[BooScout]

1. Thanks...

Good article and timely for me since we are selling later this summer.

[HughBeaumont]

2. The rule is, once the media grabs it, consider it CASHED.

That's pretty much with any investment - look at the big deal made in stocks in 1998-99. 1 year later - PPFFFFFFFFT. Sorry, coastlines aside, there's only so much that someone will be willing to pay for a 40-year-old house that needs work. Homes like that aren't worth over half a million dollars. Too late to do this now. This bubble's going to burst soon.

[newportdadde]

6. Thats a pretty good rule.

Back in late 1999 first part of 2000 when EVERYONE was talking about all of the money they had made and how great the stockmarket was the books were all out 'DOW 36,000' anyone? I knew it was almost over... so sitting with my finger on the trigger I was able to move out and into bonds in 2000 - 2001. Caught the nice rally there then as rates dropped.

I did miss out on 2003's rally, but at the time I hand't heard about 3rd year of a presidency rally that generally takes place yet either.

As of right now when I click around and find all of these shows pitching mortgages "When you refinance you SKIP a month of payments!!!!!" and then all the books on how to 'Become a millionare in real estate' I know its almost at the top now.

[HughBeaumont]

7. The best time to have ridden this wave was 5-6 years ago.

If I would have purchased 3 properties in the D.C. metro area where my sister lives in 1999-2000, I'd be semi-retired by now. Prices in that area for even 40-year-old houses are skyrocketing.

[Must_B_Free]

3. When is toilet paper going to get so expensive that no one uses it?

This is a quality of life issue. What has happened is the average person gets more for less, so - no - no one can afford a home unless they have a bunch of dough to sink into it.

This means people live in apartments. and the standard quality of living goes down as the population increases.

[salin]

4. The bubble talk obscures the real threat - crushing personal debt

followed by a possible flooding of the market due to foreclosures... followed by depressed costs .... banks holding assetts that get devalued and are hard to liquidate... ???

There is a huge debt problem in this country - and the govt is one part of it; Rising per person consumer debt is another part of it (and it will only increase as we see continued months of inflation outstripping wage increases); and more risky debt carried by banks and other financial institutions.

[Chef]

5. Bust

Between October 10th and the 21st.