Real Estate Change: Bubble Trouble (Again?)

April 10, 2010 2:24 am Stephan Trends, Updates

For real estate professionals there are lessons to be learned from every changing market condition; especially a housing bubble. The question is will they? For a great many agents who have never experienced anything other than the recent feeding frenzy this is the first time they�ll be learning them and for the rest who have �been there before�, it�s a time to reflect on the last time through the cycle and add the new lessons learned.

The housing bubble expanded in the first few years of the 2000s, especially in the costal areas, the southwest and the highly populous areas. The bubble is basically a period during which a mania for home buying occurs. In this instance in included a rapid increase in housing prices due to historically low interest rates and generally poor lending standards.

Bubbles are usually hard to identify beforehand, not widely accepted during the upswing but easy to detail with hindsight. Retrospection is remarkable, isn�t it?

So in light of the current declining real estate market including overall lower sales, rising inventories, longer time on market and increasing foreclosure rates, we can easily look back and summarize the housing bubble as follows:

1995�2001: The Internet Dotcom Frenzy
Life was changing and fast. Innovation was excitingly confusing. Technology drove the stock market to dizzy new heights and minted thousands of newly-made stock market experts and millionaires.

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