Is history about to repeat?
Inman.com didn’t get it right in ’05: Real Estate Bubbles Bubble May Deflate 1/28/05.
Better luck this time: A Real Estate Bubble Mythical at Best May 2021.
Inman.com is the go-to source whatever it takes to move real estate.
Sixteen years later, we know the bubble was real. It didn’t deflate. It burst. Was it an economic crisis or a humanitarian crisis? It depends; did you lose your job, your home, your family, your dignity? Or, did you experience a temporary inconvenience before being bailed out by the federal government?
There is no doubt that history does indeed repeat itself. Wouldn’t you think there would be a few generations between one disaster and its second coming? Having been around long enough to see how easy it is to forget painful lessons, Inman.com publishing an article saying a housing bubble in 2021 is mythical at best is no surprise. We humans have short attention spans and shorter memories, or we are the most optimistic creatures on earth.
How different is this? For history to repeat itself, we don’t need the same players. (Afghanistan plays the role of Vietnam in the 1950s and ’60s in the 21st century.) Subprime lending, low interest rates, and too few homes created a surplus of buyers in the first decade of this century. Low rates and a shortage of homes for sale, and high land prices have accelerated the price a person has to pay to own a home again. The players may be different, but is there evidence to expect the outcome will be?
I don’t know if we are growing a bubble or not. Is it safe to say there are sound financial principles we might be ignoring and might be wise to consider before we rush into the mystic?