Chicken Little
“The sky is falling”
- We want a housing crisis so the Republicans won’t get re-elected
- Housing price rises moderating
- Overhang of variable rate loans from boom
- Middle income wages stagnant in real terms
- Evidence of flipping in hot markets suggesting bubble
Pollyanna
“what a perfectly lovely, lovely house! How awfully glad you must be you’re so rich!”
- No capital gains taxes
- Thick mortgage backed securities market
- Fewer new buyers chasing money
- Falling real estate commissions
- Rising incomes
- Changing commuting patterns
- “breathtaking profit”
- Active Federal Reserve Board
- Industry sensitive to interest rates
- Rising population
- Middle income wages rising in money terms
- Median age rising
- Family size falling
- Rise in ownership of 2nd homes
- Rise in telecommuting
- Home entertainment such as video games eclipsing movies
- Capitalization and standardization of home building industry (e.g. Toll Brothers)
A moderation in an accellerator suggests just a slow-down in the rate of growth of housing prices to me, but don’t listen to me–I just cashed out a 40% capital gain in my last house tax free and locked in a super low rate from a private equity mortgage lender and didn’t use a real estate agent to buy and used a cut commission agent to sell. Clearly I’m a Pollyanna.