Thursday, June 20, 2013

Real Estate Bubble on the Way?

Today in the Sarasota Herald Tribune there appears a column about the real estate market conditions written by a business reporter, focusing on stories about real estate. In the article, Mr. Salman reports "Although most economists stop short of predicting another real estate bubble, current conditions match the housing run-up of nearly a decade ago." There is a big difference from the 8 year old 'bubble burst'. The major actor in the real estate crash had mostly to do with the lending practices of  Fanny Mae. In those days there were high risk, questionable loans in play. For example no money down loans and no document loans were quite common, When I think of today's Buyers who are often cash buyers including institutional investors such as hedge funds I believe they have professionally analyzed the risk vs. reward factors of the Sarasota market. This is totally different from the days of  what I call the "sign and drive" mortgages. Today's market seems to be on more solid ground.