Is the Bubble Starting to Shrink?
Everyone in real estate investing has been talking about “the bubble”. Is there really a real estate bubble? When will it burst?
A couple of recent articles suggest that maybe the bubble will not burst, but slowly shrink. In the RealEstateJournal an article, Is the Housing Boom Headed For a Soft Landing or a Crash?, quotes Standard & Poor’s Chief Economist David Wyss as saying “The bubble should end with a fizzle, not a bang”. Meanwhile an article in today’s New York Times, Slowing Is Seen in Housing Prices in Hot Markets, suggests that the real estate market may have reached its peak.
This could be good or bad for real estate investors, depending on what properties they are currently holding. People who have properties with little equity could be in trouble. Now is not a time to be over-leveraged. Those with cash to start buying properties could see some good times ahead.