There is no housing bubble

I'm not an expert on economics, but I do have a real estate sales license and I've been studying this market for several years.

During the dotcom bubble I kept saying it couldn't last. That booms are always followed by a bust, and they are.

But houses are only mildly booming. And that's mostly because of population growth.

First, GenX has finally gotten some money together and started buying homes. They've stopped renting, stopped living with roomates, and gotten kids and families. So they are buying houses.

Second, the yuppies are buying big houses and second and third homes. How many people from the baby boom generation do you know? How many of them have bought another house? A retirement home or a rental property, maybe? Most of them, probably.

I've got an uncle who is getting close to retirement. He owns four houses. One in New Jersey, one in Mississippi that he bought in the 70's and has been renting out since, one in Spain and another lake home in Alabama near where he grew up.

This isn't only about low interest rates because the rates have risen and people are still buying and home prices are still rising. It's because of a population boom and a housing shortage.

Also, this isn't like the stock bubble. When the bubble burst what did you have? Stock in a bankrupt company....nothing at all. If this bubble bursts what will you have? Maybe you'll take a loss. Maybe you'll have to hold on to that house for another 10 years before you can sell it for a profit...but you'll still have a house.

In the late 80's the real estate market was oversaturated. You couldn't sell a house for a couple of years, there. But if you were willing to wait a couple of years, or knock a few thousand off the asking price, you could sell it. Those who waited sold for a profit, it just took longer.

Like the old folks say, land is the one thing that they aren't making any more of.

I think this "bubble" will level off. Maybe prices will flatten, but I don't think houses that sold for 2 million will suddenly be worth $10,000. If they are I'll be snapping them up as fast as I can get the money together.

Maybe I'm wrong. Time will tell. Make prudent investments and don't get greedy. That's always a good decision.