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Why There's No Such Thing As a Housing Bubble

" There are lies, damn lies and statistics." Will Rodgers, I believe.

Mr Kime fails to take into consideration economic rents, Why would someone pay 2-3 times more monthly to buy a house than to rent the same? Also, he fails to take into consideration the buyers who felt they had to buy now, because they might not be able to afford to buy in the future. The lenders who helped them buy more than they could afford, with a loan containing a future payment they thought they would never have to pay. They would either refinance or flip. Those lenders have now either gone out of business or tightened their standards, making this marginal pool of buyers no longer available. Like the tulip mania, when the manic buying stops, things revert to the mean. The only problem is, they tend to overshoot to the downside first. If property has gone up 50% in your area, I would expect it to go down 50% and more. In the early 1990's I had a prime California property go from an appriased $800,000 to a $560,000 asking price with no offers.

I think this time will be worse.