Real Estate Bubble Article
Standard cautions about the housing market, but a good argument that homes are unlike stocks in that they are not all for sale, people live in them, and can wait out a down turn in the market. Nothing new there. Easy to forget how cheap mortgage rates really are right now. Rents have not kept up with home prices, which is too bad for investing in rental properties. As for commercial real estate, several lines point to the continuing commercial bubble that isn't quite showing signs of popping. Wonder what some of the correlations between residential and commercial are.
Most interesting is the last paragraph discussing increasing liquidity in the real estate market:
In fact, people are always bolder in a market that is liquid — they figure they can get out — than with an asset for which selling requires a listing, a broker, a title search. Which is why the new Web sites like Zillow.com, on which people can check their home values as often as the price of Yahoo!, and even Shiller’s dream of an active futures market, may not be the welcome innovations they might seem. The stickiness of home markets, the lack of continuous liquidity and information, makes them different from stocks. Come the day when they are broadcasting your home value on CNBC, look out
Makes you think to err on the side of caution when investigating RIET's and worth considering the effects of credit derivatives with respect to real estate futures, and a more liquid market in whole.
Several other good Real Estate Articles from today's NYT:
Down the Middle
By ANNA BERNASEK
The high and low ends of the real estate market are doing pretty well. It’s in between that’s the problem.
Russ Whitney Wants You to Be Rich (Creating wealth is all about hard work, gimmick or not)
By RANDALL PATTERSON
The real estate evangelist’s wealth-building seminar costs up to $54,000. But no matter. You can put it on your credit cards.
Betting on Star Power
By ANDREW RICE
Mario Procida’s new building has park views, multimillion-dollar apartments and Manhattan’s hottest architect. Just one thing: It’s in Brooklyn.
