Seriously Folks, The Housing Bubble Is Back


, though this story has been kind of flying under the radar: The housing bubble is back.

No, home prices aren’t (yet) at overinflated levels again, but the housing market is seeing a return of enthusiasm, mania, and speculation, the likes of which we haven’t seen in a long time.

Now CNBC’s Diana Olick (via Calculated Risk) is talking about it. Here’s an email a realtor sent to a friend of hers.

The foreclosure capital of America, Vegas home prices are down more than 50 per cent from their peak in 2006. The median price of a home there is $138,000, but, interestingly, the inventory is down to a less than 3-month supply. Compare that to the national inventory, now at an 8.5 month supply. Despite the low supply, prices are not recovering quickly because the sales are all by banks, looking to unload properties quickly.

But back to Katie. Her Realtor, who is also an old friend, emailed Katie the following warnings before her arrival on the Vegas strip:

    – This market is crazy and many things are just not going to make any sense.
    – I can guarantee you 99.99% of the listings emailed to you will no longer be available by the time you get here.
    – Properties are selling in the blink of an eye.
    – Properties are getting multiple offers within a few days of being on the market, the most offers I’ve heard a house had recently was 44 offers (I know, crazy).
    – This market is crazy and many things are just not going to make any sense.
    – 40% of all transactions are cash purchases, which makes it harder for the buyers who are financing to get their offers accepted.
    – We have 1/2 the inventory we had a year ago and 4 times as many buyers as we did a year ago.
    – Chances are we will have to submit several offers to have the chance of getting 1 accepted.
    – This market is crazy and many things are just not going to make any sense.
    – You will probably leave not knowing if you have a house or not because banks take 2 to 3 weeks to respond, because this market is crazy… you know the rest.

Is this just realtor puffery? Possible. But this fits with other anecdotal evidence people are seeing. Foreclosureville markets are going crazy again.

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