{"id":305,"date":"2013-02-27T04:11:15","date_gmt":"2013-02-26T23:11:15","guid":{"rendered":"http:\/\/www.allphoenixareahomes.com\/?p=305"},"modified":"2013-10-26T04:01:35","modified_gmt":"2013-10-25T23:01:35","slug":"housing-bubble-2-0","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=305","title":{"rendered":"Housing Bubble 2.0?"},"content":{"rendered":"

As we reported in last month\u00e2\u20ac\u2122s issue, the market shifted (again) and January began with the lowest supply of \"\"<\/a>listings coming on to the market.\u00c2\u00a0 This understandably has been putting pressure on pricing as supply is not abundant.\u00c2\u00a0 This has prompted a new rumor (I guess the persistent \u00e2\u20ac\u0153shadow inventory\u00e2\u20ac\u009d rumor eventually had to be abandoned) to surface.\u00c2\u00a0 Let\u00e2\u20ac\u2122s call the new rumor \u00e2\u20ac\u0153Housing Bubble 2.0\u00e2\u20ac\u009d as one pundit referred to our market.\u00c2\u00a0 The theory goes that as prices move up we are re-experiencing a bubble such as 2005 which is doomed to be followed by a crash similar to 2007.\u00c2\u00a0 Before that rumor causes anyone too much heartburn, let\u00e2\u20ac\u2122s go to the facts.\u00c2\u00a0 For facts on Real Estate in the greater Phoenix market, there is no one who documents the numbers like Michael Orr of the Cromford Report:<\/p>\n

\u00e2\u20ac\u0153Most housing analysts use data to support their observations. Those analysts tend to agree that housing is becoming a bright spot in a broader though slow economic recovery. This is particularly true in the Phoenix area, where our economy is improving a little faster than most and the housing market has been improving much faster than any other in the country. However there are also large numbers of commentators who are not data driven but tend to rely heavily on their personal theories, largely based on sentiment or political viewpoints. They tend to take one aspect of the market and amplify it out of proportion to derive their conclusions. One example of this is an <\/em>article by Lauren Lyster based on the views of David Stockman, who describes the current situation as “Housing Bubble 2.0”. This is a ridiculous description of a market in which the median home price is lower than the median replacement construction cost, even excluding land values.<\/em><\/p>\n

The observations by David Stockman have only a tentative connection with reality. His logic is flawed because, unlike the real housing bubble in 2004-2006:<\/em><\/p>\n