Summary: In the game of musical chairs no one wants to be the last one standing when the music stops!
That said, at what point of the song is this real estate cycle at?
Billy Joel: ‘Cause the good ole days weren’t always good and tomorrow ain’t as bad as it seems!’
In the early 2000’s we witnessed an unfettered rate of real estate price appreciation that was fueled in no small part by extremely lax lending standards coupled with mortgage-backed securities where the vast majority of those questionable mortgages were stuffed and sold!
Post-boom we then had to endure the extremely painful financial crisis when the music stopped and those who were left holding the real estate bag had no place to sit down.
Finally, after the financial crisis reportedly ended and the economic recovery began, we have been faced with much tighter lending standards, ramped-up regulations, extremely low interest rates, a hunt for return by investors of all types and, of course, an inflow of cash from foreign buyers.
As a result, in many real estate markets around the United States prices have come roaring back and in some even surpassing pre-2008 highs.
So where do we go from here? Some anecdotal evidence seems to suggest that prices have peaked and may be turning lower. These are links to articles that help to tell some of the story…
Seeking Alpha – Real Estate – I’m Getting That Sinking Feeling
Mish’s Global Economic Trend Analysis – Miami Condo Boom Ends: Sellers Find Few Buyers, Inventory Soars
Wolf Street – Ultimate Market Timer Sam Zell: “Know What the Problem Is?”
DSNews – Where are the Best Markets for Flipping?
New York Times – 40 Percent of the Buildings in Manhattan Could Not Be Built Today
Business Insider – Massive spike in the number of apartments built in the US last year was almost entirely because of a single city
Wolf Street – Another Condo Bubble Bites the Dust
Business Insider – Barclays is resurrecting a risky mortgage product that was killed off after the credit crisis
Real Estate Freedom – 25 Cities with Biggest Rent Hikes
Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at mhaltman@hallmarkabstractllc.com
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