Contrarian ChroniclesThe housing bubble doesn't
add up
Just like stock prices, real estate prices
will not go up forever. We can't all live in million-dollar houses. Thatâs what
scares me and should scare you.By Bill FleckensteinIt might be hard for folks to
step back and see
I don't think that construction costs have a great deal to do with
inflation in housing prices. As Schiller says, "location, location,
location:" land prices have been soaring in the booming areas. For that
reason, a good deal of increase in our population has come from people who
sell their pro
Eugene Coyle wrote:
The most persuasive is that the cost of constructing a new house --
if lower than the price of a house -- would prevent a bubble as
profitable new construction flooded in to keep the prices from
bubbling.
But the market is mainly about existing houses, which are about 80%
Robert Shiller has an interesting essay in today's WSJ, "Safe as
Houses?" in which he argues against a housing bubble in several ways.
The most persuasive is that the cost of constructing a new house -- if
lower than the price of a house -- would prevent a bubble as profitable
new construction
Doug is raising an important issue that goes beyond housing. Because of
their addiction to the human capital framework, mainstream economists
have looked at inequality almost entirely through the lense of years of
education. If the gap between HS and college grads narrows, they
interpret this
It's hard to know what data to look at in figuring out whether there's a
bubble. But falling margin requirements always make me suspicious; and,
nowadays, at least in the Bay area, you can get a mortgage with little or
no money down.
There is also the extraordinary obligation of the mortgage co
Jim Devine quoted Dean Baker:
Second, the bubble years 1995-2002, where exactly the years in which
income inequality fell back somehwat.
Eh? Household ginis, acc to the Census Bureau:
1990 0.428
1991 0.428
1992 0.434
1993 0.454
1994 0.456
1995 0.450
1996 0.455
1997
Title: FW: housing bubble?
Dean Baker responded to my comment:>Both the home price index that I cite in the paper and the CPI's rental index are quality adjusted (more or less) so there would not be an issue of composition effects driving the price changes. It could be the case t
