Bubble talk

The true test of today’s premiums in these
markets will be the economic environment, especially incomes and interest rates,
in the years ahead.”

…”I’m a bubble
believer,” says Dean Baker, co-director of the Center for Economic and Policy
Research in Washington, D.C. He notes that rents haven’t risen as quickly as
home prices in recent years, and warns of a possible collapse in the face of a
weakening dollar, massive deficits and an expected rise in mortgage interest
rates.

“There is no bubble,” insists
David Stiff, senior economist at FISERV/CSW in Cambridge, Mass., who’s
predicting strong price gains for the coming year, though not as spectacular as
last year.”

Charlottesville remains under the radar on
this study by National City which evaluated
potential “bubblettes.’ Repeat after me – “real estate is
local!”

“While overvaluation in
home prices presents a risk of future declines,” DeKaser notes, “these risks may
well go unfulfilled. The true test of today’s premiums in these markets will be
the economic environment, especially incomes and interest rates, in the years
ahead.”

Don’t feel bad if you
can’t get a handle on the market or if your crystal ball remains
murky.

“In fact, experts can’t
even agree on whether there’s currently a real-estate bubble on a national
scale.

“I’m a bubble
believer,” says Dean Baker, co-director of the Center for Economic and Policy
Research in Washington, D.C. He notes that rents haven’t risen as quickly as
home prices in recent years, and warns of a possible collapse in the face of a
weakening dollar, massive deficits and an expected rise in mortgage interest
rates.

“There is no bubble,”
insists David Stiff, senior economist at FISERV/CSW in Cambridge, Mass., who’s
predicting strong price gains for the coming year, though not as spectacular as
last year.”

From the Realestatejournal .

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