The housing bubble isn't showing overt any signs of popping yet, with prices up another 15% in year over year comparisons this June and sales volume out of sight. But, this Martin Wolk piece for MSNBC.com, points to a number of signs that bubble is getting very mature:
The latest pricing data also offered more evidence for what one industry analyst called a “frenzy” in sales. The national median price for existing homes jumped to a record $219,000, up 15 percent from a year ago, the fastest rate of growth in 25 years, according to the National Association of Realtors, a trade group. That pushed the Realtors’ affordability index, which compares incomes with home prices, to its lowest level in 14 years.
...Joel Naroff of Naroff Economic Advisers (said) the market is getting “out of hand.” Cocktail-party and office chatter he hears nowadays is reminiscent of the tech-stock boom of the 1990s, except that now would-be investors are looking to make a killing by flipping unbuilt condo units.
“When you see everyone starting to get into these deals, it’s getting beyond crazy,” he said. “People are saying, I’ve got to buy now, because if I don’t I’m never going to get into the market.”
In addition, the Fed is targeting the housing bubble straight out now:
Although the Fed has little control over low mortgage rates that are helping propel record sales and price growth in the housing market, Greenspan once again made clear that the red-hot sector is very much on his mind as he prepares for a mandatory retirement next year after an eventful 18 years in office.
In some of his strongest remarks yet about the potential fallout from high housing prices, Greenspan reiterated warnings about the increasing use of what he described as “exotic” mortgages and referred to “speculative fervor” that has driven up prices in some markets.
“This type of expansion in prices historically does not go on very long and indeed, while it’s hard to forecast, and I’m not sure that it’s going to occur, there may be -- there certainly will be in certain local areas -- price declines,” Greenspan said.
It was the most definitive prediction yet from Greenspan that home prices will decline in some areas.
I'd put the peak right at about July 19th, 2005.
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