I recall housing prices dropping 30% in Northern Jersey (where I lived) after the last real estate run up. In other places, prices may just flatten, but you can have a bubble. People are speculating on houses in my area now, getting 2nd homes and leveraging assets to move up. A real estate bubble can be real...
There's no question that there CAN be regional real estate bubbles. But it's almost impossible on a national level (for the reasons sfrepub cited and more). Areas like the DC suburbs, much of California, etc cannot maintain the growth rate they've been seeing, but the numbers haven't been so out of whack nationally.
It's supply and demand. And unlike stocks, the demand for housing CANNOT go to "zero", it can hardly decrease at all... especially since they are "durable", but not eternal.
Agreed. A bubble can be real, however, in real estate, it will always continue up after a burst, you just hold your property a little longer. (by the way, if you're referring to the bubble in the 80's, that was a result of Congress screwing around with the tax code and changing the rules for shelters mid-stream. The market was flooded with people trying to sell. The underlying economic factors did not change)
Agreed. A bubble can be real, however, in real estate, it will always continue up after a burst, you just hold your property a little longer. (by the way, if you're referring to the bubble in the 80's, that was a result of Congress screwing around with the tax code and changing the rules for shelters mid-stream. The market was flooded with people trying to sell. The underlying economic factors did not change)