[Sonny M]

I still get annoyed seeing how real estate is treated like its a macro-economic issue when it is really, a micro-economic issue.

Forget this "Interconnected eco-systems" crap, what happens in the state of Idaho real estate wise, has no effect what so ever, on what happens in NYC.

Sure some parts of the country might have housing bubbles, but other parts of the country do not.

The idea of giving pain to everyone so someone somewhere, will some how be better off, is altruistic sadism to the highest degree.

Repeat after me, Bubbles are not everywhere, just because it might be somewhere does not mean its also right here.

If your neighborhood goes boom, does not mean mines goes bust, especially if you live on the other side of the country, and if I go boom, doesn't mean you do to.

[dhs12345]

Wonder if baby boomer's retiring will have an impact on the housing market... as more and more move to retirement communities.

Then again, they may stay in their houses.

[Black Tooth]

Sure some parts of the country might have housing bubbles, but other parts of the country do not.

Some might, other parts do not?

Does this make sense?

Where I am real estate is strong, and the demand is endless.

As American goes from a country of 300 million, to 1 billion....Those looking for the great deal, will have a long wait.

[SF Republican]

If your neighborhood goes boom, does not mean mines goes bust, especially if you live on the other side of the country, and if I go boom, doesn't mean you do to - what is the old line? recession is when your neighbor is out of work, depression is when you are.

[oldtimer]

The NW Florida/Alabama Gulf Coast is a case in point. Destin prices have reached as much as $1,000 sft, and the demand has shot across to Orange Beach/Gulf Shores to as much as $800 sft.

Condo construction is breathtaking, and after Hurricane Ivan, a number of condos are still under repair.

There will be capacity plus in the next 12-18 months.

Add the interest rate hikes that Greenspan is working on, and I see trouble ahead.

[Jaysun]

Thanks for this. The hysteria over the supposedly doomed housing market is sick.

[Pessimist]

I disagree w/ this article in so many ways. For instance:

""the most attractive way for policy makers to cool the housing market would be to put pressure on lenders to tighten their credit standards" and for the Fed to "nudge the long end of the market toward higher rates." Their proposed solution is identical to the assumed problem"

No, its not. And I'm sure the author knows it. Tightening credit to slow inflation in home prices it not at ALL the same as inflated home prices due to easy credit.

Similarly, he seems to completely miss (or at least misstate) the impact of ARMS on an already credit saturated population. Small rises in the interest rate could easily force many marginal borrowers (you know who you are...) into foreclosure, immediately depressing the value of the homes in question as well as diminishing their capacity to spend on other goods.

I'm pretty sure that's obvious.

[GOP_1900AD]

You do have a good point. I would say that here in California, the overpricing drives some fairly risky mortgages, whereas, in less expensive places, such mortgages are not taken. If there is a correction, it may well not be nation wide.

[Atlas Sneezed]

Some big factors in housing prices:

Environmentalism (and NIMBY "I was here first" zoning), which close vast areas of usable land (increasing lot costs).

Inflation. The interest rate controllers may pretend otherwise, but we have inflation. And anyone who built a home over the last year or two can tell you that essentially every material has substantially increased.

[mlmr]

Anyone interested in purchasing my three family, on the East End near the Eastern Prom in Portland Maine? 400K?

[xzins]

How to determine if there's a housing bubble.

1. Houses are used for living in....generally for 3 or more years to lifelong.

2. When houses are bought and put on the market again within months for markedly higher prices, then rest assured that someone's using the house to make a killing and not to live in.

The author knows a lot. But it's just common knowledge that houses are a FUNCTIONAL piece of property.

[durasell]

The money that runs through the mortgage system is all connected. It's like looking at a wire fence after a snowstorm: you might see the tops of the fence poking out at regular intervals, but don't see the wire connecting them.

Also, housing booms on the coasts have sparked local economies and businesses far away. This would include timber and siding as well as fixtures. And, too, money being extracted from home equity has purchased products that have kept many factories humming, both here and abroad.

[BurbankKarl]

I will send you the article on some of these Rocket Scientist 0%'ers who can't pay their property taxes because they can't get another refi.

[pollyannaish]

There is always a bubble, or a bust, somewhere. Ironically, we did poorly in the 90s while everyone was kicking and did much better in the 00s while others were really struggling. So I know this first hand. Just as all politics are local, all economics are personal. We can only see broad trends.

[socal_parrot]

I just sold a house in Orange County and netted 600k after 7 years. Here in So Cal it's still demand>supply.

[Straight Vermonter]

Housing COSTS are connected nationally in the sense that demand for housing drives the demand for mortgages and thus increases interest rates.

A housing bubble in NYC may not raise the price of a house in Idaho but it may in fact raise the cost of acquiring that house.

[Tennessean4Bush]

Finally, some sanity.

[soloNYer]

All of the housing bubble talk originates from the same pool of pessimistic lefties, same as how a homeless problem pops up during Reagan, is suddenly gone during Clinton and back with W. Economy's good under an evil Republican? Watch out for the fall!

There will be slowdowns in areas, but the cause is local economics and demographics. Check out Michigan/Detroit area. To regulate is the liberal answer to everything. The economy is just too complex for a single fix from some liberal know it all writing in the NYTimes, there's always an opposite reaction to their meddling. However, the housing prices like everything else in life are not a sure thing, but there is not much else that has as high a return for relatively little risk. And you can live in it!

Krugman and his pessimist ilk are trying to derail everything for only one reason, and if they somehow get their power back watch how rosy the economy and housing will suddenly become.

[sauropod]

mark

[Rodney King]

Forget this "Interconnected eco-systems" crap, what happens in the state of Idaho real estate wise, has no effect what so ever, on what happens in NYC.

That is only the case if interest rates have nothing to do with housing prices.