If There's a R.E. Bubble, What Do You Do?

I must confess that I am fascinated by all the discussion and media coverage regarding the so called Real Estate Bubble.

I read differing reports that both support the Bubble position and others that supposedly disprove it. It gets confusing knowing what the situation is because of the conflicting information and the obvious bias of the reporting.

If we only knew the truth, we could spend our energy to optimize our results. We could sleep well at night. We could be free of worry and doubt forever!

As it is, I’ve read so much troubling news about “The Bubble” that I have about decided to give up on reading!

I know that it has been discussed before, but I just wanted to pick your brains in a slightly different way today:

1.) Is there a Real Estate Bubble in your local market? What makes you believe this?

2.) Regardless whether or not you believe there is a Real Estate Bubble in your local market, has all the discussion and coverage of this topic caused you to alter your business and/or your investing strategy?

That is, are you doing anything differently to either take advantage of the Bubble, or to try to protect yourself from it when it bursts?

Thanks in advance!

There is no nationwide RE bubble. They say that “all politics is local” and the same can be said of RE. In my little corner of the world, appreciation has been relatively steady at between 3 - 5% for many years. However, last year property prices actually decreased about 2% and they are also down a little bit this year. I believe that this is in part due to the huge number of foreclosures in the area and the continual slow decrease of higher paying manufacturing jobs and increase in lower paying service jobs (thank you OSHA, EPA, worker’s comp, environmental wackos)! Ohio is proud to be battling for the title of MOST FORECLOSURES with #1 Indiana.

Anyway, I don’t lose any sleep worrying about the bubble because I buy at an average of 54% of FMV. This gives me a hugh cushion and I’m renting the properties anyway. I’m not counting on any appreciation and will consider this as icing on the cake.

Now, if I was living in California, Florida, Las Vegas where there is a hugh bubble and I paid retail for houses and borrowed 100% on an interest-only loan hoping for appreciation - then I wouldn’t sleep at all!!! Instead of sleeping, I’d spend all that time in church - praying for a miracle.


Just buy right and you should have nothing to worry about-IMHO.

Happy Investing,


edit:Sorry “propertymanager”, I didn’t see that you pretty much said the same thing.

Wow Propertymanager what is this world coming to I could not agree more! Here in Colorado I have seen a consistent 4% to 6% over the past 4 years… I think if you are basing your findings on what so-called market expert’s financial annalists are saying you are getting advice from the wrong source. I Personally look at the history of where I invest and look at the ten-year cycle. Granted the times are changing. That is more so do to the huge outsourcing problem and how many Americans are loosing their employment to foreign countries. If you really want to do something call your congressmen and tell them to bring it back home to the U.S.A. We as Americans need to stand up to corporate America and pass a tax bill that charges a huge export and import tax from all other countries. Make it more worth there while to do business here.

Remember the more American job’s the better the economy, The Better the economy the better the housing prices… Supply and demand. The more we Demand job’s the more people are buying houses the happier we all are…

Oh yeah and REO Consultants for president 2012!