[photopress:flying.jpg,thumb,alignright]This might sound strange coming from a real estate blogger, but I just don’t find all the hype about a real estate bubble all that interesting. None the less, it seems that about once a week a new blog starts up with the mission to highlight all the “evidence” that there is a nationwide real estate bubble that is about to pop. The most popular site is the Housing Bubble 2, although there are many others.
In reality, I think I’d be way out of my league discussing a real estate bubble with the type of certainty the pervades the “anti-bubble” crowd. Most real estate agents simply do not have a great understanding of macro-economics and don’t follow the issue that closely. The real estate agents that I know do their best to prepare/market/sell homes for sellers and find homes for buyers, and spend very little time researching housing price trends over long time periods. Along those lines, I’d be VERY weary of any agent who said they had some inside knowledge on the long-term value of any property.
Besides, it seems to me that most of the people with the “sky is falling” approach to the bubble are not all that educated in macro-economics while many of the macro-economists I enjoy reading seem to have a much more nuanced view of the situation.
So I began this discussion on real estate bubbles because I was a bit surprised to find Rain City Guide listed as a “local anti-bubble site” on a new blog dedicated to highlighting issues related to the Seattle housing bubble . Apparently Timothy Ellis (author of the blog) sees the real estate world as pretty darn black-and-white, if he is going to call all realtor sites as “anti-bubble”. Nonetheless, Timothy has posted some interesting observations, and I look forward to reading more of what he has to say.
Since I’ve now gone down the road of discussing the concept of a real estate bubble in Seattle, I’d be interested to hear the response of people to the bubble-related issues that David raised over on the City Comforts Blog:
What I would like to hear is a “pro-bubble” argument which takes into account two secular, local Seattle conditions which both tend to limit the supply of urban land:
1. A firm political consensus for “growth management” which will not change & hence unleash a lot of land for at least the next generation or so. (Even if there is land to be found.)
2. Total inability to deal with traffic congestion which is having a centralizing force, making “in city” properties (where one can minimize travel) more and more valuable.
When you take into account these trends — both firmly rooted in our local culture — do you still get a bubble?
Please feel free to comment either here or on David’s site. I’ll check them both!