A Reminder On What It Was Like During The Housing Bubble
Housing is a mess, everyone knows that. But, what everyone doesn’t know is that we’re not going back to what real estate was doing during the peak of the bubble. To back up my point, I wish to give two reminders of what it was like during the real estate bubble.
First up, the raffle. Back in the hey-day of 2005/2006, people were staying up all night (including several people I know personally) to enter a raffle or drawing where a select group of winners will have the opportunity to buy a condo before they even broke ground on the condo building! Now, that’s a bubble.
Secondly, I was thinking about a person I know who owned two houses during the bubble. He was a bartender (nothing against bartenders, but he wasn’t killing it if you know what I mean). He had two houses because he figured they were good investments. Pure speculation.
Now, we’re not going anywhere near either of those situations for a long, long time. If we don’t get near those situations, how will housing prices (minus inflation) return to levels during such a time? Answer: they won’t.
If housing prices return to these bubble levels, it will be due to massive inflation and in such a case, gas might be $10 per gallon, and milk might be $10 per gallon. Not exactly a good thing.