what bubble ?

ok im new, as some of you may have guessed by my posts. i was half listening to the radio this morning and the station was about to have a guest on. he was the guy who predicted the " . com " bust. what ever that was. ( as i said, im new ) he is now saying that theres gonna be a re bust. i didnt get a chance to hear his views. ok, now, whats he talking about ? what bubble? what bust? im sure theres several of us on here new to rei, and havent a clue as to whats going on about this “bubble”. any of the seasoned pro’s out there care to give us a report ?

Housing Market Bubble.
A lot of info that you can find in this link:

The guys that go on radio shows to talk about an impending real estate crash when the bubble bursts, usually have some alternative product to sell or some investment advisory service to offer.

These guys will point to Japan’s national housing bubble in the early 80s and remind you that it took 17 years for Japan’s housing market to recover from its crash. Then, using Japan’s experience as a precursor for the US housing market, they paint a doom and gloom picture before offering you their product or service to rescue you.

The difference between Japan and the US is that there is no national housing bubble in the US. Sure there are local markets with bubble conditions but if you know your market and only take short term positions in a bubble market (that is have your buyer lined up before you buy), you should be OK.

Well state DaveT, unfortunelty most folks have a hidden agenda. The only bubble that is created is when talk begins that there is one. I have seen this post about 6 times in the past week, some have some really good points, others like myself who live in FL, still think FL is a growing and flourishing market, my bank accout agrees. I have heard UT, AZ and SC are all doing well. This is good news and shows that while one market may slow there is another you can look into thus why RE has maintained a historical track record of consistancy. I used to be a stock guy (but it not trade it, you know what i mean). But i would cross my fingers and beg for a 10% return. I scoff at those numbers know! So everyone lets chill on the bubble threat and keep this engine running…

Thanks cbrechbill, I agree and could not have said it better myself :wink:

Happy Investing, April is going to be HOT!

I have found that people who believe in the bubble don’t invest in RE. Before I started investing my doubts caused me to pick the brain of every guru, asking about the bubble. Their reply “what bubble”.

i believe strongly that California is going to burst so i’m moving to undervalued states like Utah. undervalued states haven’t runnup 100% in 3 years so there’s no bubble to burst!!!
not only that, i’m buying at a discount there too!

thanks for all the replies on “the bubble”. i guess theres no need for alarm then huh ?

Well it depends on your financial situation and where you invest. Over inflated markets tend to decrease in value for one reason or an other but it will always bounce back stronger. The bubble is like a phantom that most people are afraid of but, only a few knows it doesn’t exist.

couldn’t agree more

I rememberd this post from a few weeks back, and someone made comment about Vegas going downhill, i disagreed then and do now, i just read this article: http://www.msnbc.msn.com/id/7739547/

I will say this is just one news source, and someone may have a conflicting report, but i am standing by my guns and saying that Vegas is going to continue being a cash cow…

Someone recently asked me if there was a nationwide Housing Bubble, I responded;

There is on CNBC

But not on CBS

A PMI Company out of Walnut Creek CA recently wrote an article that stated, “There’s a Housing Bubble in 50 of America’s largest cities, especially coastal cities” (Seattle included).

Last week the Seattle Times; “The Greater Puget Sound Region maybe one of the most underpriced areas on the West Coast.”

So if you don’t like the sounds of “Housing Bubble”–turn the channel or turn the page, cause this debates been raging for nearly 5 years (anybody remember Y2K).

Having said that, there are some areas that are overpriced and due for a correction. This is called cycling–a term I prefer to the alarmists, “Bubble,” and cycles have always come & gone, and will continue in the future.

I’m the one that mentioned that I thought Vegas might be due for a correction. The reason: “Building permits in relation to estimated population growth.” Many builders have moved into Vegas & Henderson to ride the equity elevator. I’m surprised, jealous, and glad I’ve been wrong thusfar.


Well, being a Vegas resident for 25 years now, I can tell you that the bubble has not burst, just contracted some.

I am not sure what it looks like to those on the outside but the market has cooled down from its frantic pace over the past 12-18 months. Of course, it had to. We had a run where properties were being sold in 24-48 hours with 10-40 offers on them. Only complete garbage was on the market more than 2 weeks.

Today, it is back to close to normal, as far as Vegas goes. RE is still on the rise and will be for some time. Right now the housing inventory is saturated and many new developments, including a big one, are now being pre-sold.

The good news is the amount of land available. It is coming to an end. The big community, Summerlin, ran out last year.

Oh, and us going downhill? Well, let’s just wait until the huge high rise luxury condo towers are built to see. Trump Towers will be one and there are 6 more in the works.

While appreciation is back resembling normal returns, this place has a lot in the works. It has recently been listed as one of the best places to retire and is working on sheding its small town form for big city feel. The next decade is going to be amazing.

well i’m going to have to agree with infowell on this one. real estate is cyclical and when prices get out of whack with economic value, they usually contract a little bit. of course the further they are from their true value, the further they will contract.

no one knows when a market adjusts, but its common sense that it has to at some point. the SoCal market seems like a repeat of the stock market crash in 2000. all the similarities are there.

one thing about vegas is that its still number 1 in the nation in terms of job growth. so there is a housing demand. the question is, at what price??? if the jobs created pay 30k/year, will there be a huge demand for million dollar condos???

another question you want to ask yourself is are you an investor or a speculator? a speculator buys something at any cost and he’s betting that it will go up and he’ll sell it to someone else. an investor tries to buy something thats selling for less than its worth.
you don’t need to answer here or justify your investments. just read the book “fooled by randomness”.

Vegas is a destination and the high end condos are for those weekend travelers and high rollers looking for that 3rd, 4th vacation home. Most of these Casinos are being overbooked 90% of the year and are no making negotioations with these high rise condos to park their overflow, i know this is the case with the RIO and the units i just purchased. They actaully just paid the developer 15 million to put a monorail in to connect the two properties. This is the high class playground and i certainly beleive they will pay, and i keep quite and just smile all the way to the bank ;D

if the jobs created pay 30k/year

Don’t forget that this place is an IRS nightmare. We are the only state in the union which an official hostile stance towards the IRS. As much as 80% of earnings from casino workers, dancers, cab drivers, et al goes unreported.

It is extremely hard to guage what the avg job in the prime LV area pays. Many vallet workers in good spots make 50k a year or more.

Many of the apartment complexes here have been converting to condos over the past 12 months. The end result is less apartments to rent and slightly higher rent fees, which equates to more home buyers and/or renters.

There are more casinos being built and thus more jobs on the horizon.

Las Vegas has recently worked on a deal that would make us a non-stop destination from China, which is home to load of rich chinese gamblers. The move will bring in hundreds of millions per year into the local economy.

If we get the 2007 NBA all-star game and week, as expected, it will be a first and huge for the city. More publicity = more travel = more residents.

This is investing, yes there’s always is a risk,
There’s a risk associated with any activity, whether it’s re investing or not.

Now here is the most important question! where are you more probably going to lose more $$ re or stock market?

Also where can you make 4% not using your money rates are low and cash is cheep right now

And yes there is always a chance of a bubble burst that is part of the fun right win some lose some and diversify


I honestly believe that losing is all a part of learning how to win. No one in there right mind believes that you can win all of the time…No one does. When you lose you have to remember that it’s there for you to learn something, once you learn then move on.

Stocks: You can make money with stocks and I know some traders on Wall Street who make money when the market goes up, down and sideways. With stocks you have to have insurance so you won’t take a loss when stocks go down.

Risk is important in investing, In most cases the greater the risk the better the reward.

Not playing “Devils Advocate” but I remember there was talk about a stock market bubble in the early 90’s before the bubble popped, (Warren Buffet) and how overpriced everything was. Financial analysis ridiculed Warren saying that his stock picking techniques are “Outdated”. It was on CNBC and a financial analysis was being interviewed they asked him “So what do you think about a stock market bubble in the tech sector” And he said “What bubble” in result a lot of the tech companies were over valued and went out of business.

The point is this:

Look at BOTH sides of the coin. Also don’t listen to someone who has their OWN agenda in mind. Example: “Never ask an Insurance Salesmen if you need Insurance”


I think using the stock market’s tech bubble as an analogy to the national real estate market is comparing apples to oranges.

The investor in domestically traded stock’s, no matter where s/he is located in the US, buys and sells a particular stock in only one market – whether the NYSE, the AMEX, or the NASDAQ.

When there is only one market serving the entire country, it is easy to see how a stock market bubble can form in certain sectors. When the bubble bursts, all investors are affected across the nation.

Real estate does not have a single marketplace where property is bought and sold. No one disputes that certain local markets are experiencing bubble conditions. Those conditions are influenced by factos specific to that market, and those factors may not even be applicable to other real estate markets. When that local bubble bursts, investors in other markets are not affected. We should not expect a national decline in property values when the California or Florida bubbles burst.

If I were asked a general question about a real estate bubble, in the context of a national bubble, I too would have replied, “What bubble?”