Housing Bubble

Before getting into reading this article I’d like to address something, one thing I’ve realized is that the market usually does the opposite of the obvious. If the market always did the obvious we would all be retired and have houses in every country. 

Yesterday Bloomberg released an article titled, “Worlds Bubbliest Housing Market Flash 2008 Style Warnings.” It addresses how New Zealand, Canada, and Sweden are among the “bubbliest” rea; estate areas. And it puts the US close behind. 

A contribution to these sky high lumber and housing prices is a stew of low interest rates, fiscal stimulus, and the money people saved during lockdown burning a hole in people’s pockets. Another thing that is stoking this fire of demand is at home workers needing more space and the tax incentives behind that. 

I think we all can see signs of a housing bubble, to be fair it’s pretty obvious but like I stated above…the markets tend to do the opposite. I think the government is going to try their best to avoid such a thing happening. 

One difference between now and the huge bubble that burst in ‘08 are the difficulty of getting mortgage loans. In ‘08 it was much less strenuous to get a mortgage loan. In the 2008 era you saw a lot of people “bluffing” to get loans and we are not seeing this hardly at all now. 

I do not personally see it as a bubble, the housing market may weaken but I don’t see a bubble popping anytime soon. Last August you could have said that growth stocks were in a bubble and they kept going until late February this year.

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