Why do see real estate bubbles almost everywhere?
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411 points
jester112358 answered one year ago …
Since all real estate is overpriced relative to historical norms for people's income (i.e. it is unaffordable). This historical ratio which has held for over 100 years is about 3:1. For example, in the US average gross income is about 50k$, so the median home price should be 150K$. Since its still around 230k$, we have about another 20% drop ahead of us.
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2222 points
readytoretire answered one year ago …
I'm not sure that there are bubbles everywhere. There are some areas where there has been little price erosion. There has been an increase in the time to sell a house, but the price hasn't changed much. Those places did not go up like the rest of the country. With the high interest rates on mortgages, it tends to put negative pressure on house prices. Couple that with tightening borrower rules, it is hard to see much upside for house prices in the short term.
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