Wild examples of the mania in real estate: $200,000 for permits? Crap shacks galore? The mania is reaching a fever pitch.
ByThe housing market is deep into mania. You can see it in the eyes of the house lusting buyers and the overweight Taco Tuesday baby boomers drooling at their mouth trying to justify why their World War II built crap shack is worth $1 million. The market has gotten unhinged and in this environment you keep hearing things like “crazy” and “insane” and “what the hell is going on?” over and over. That sure inspires confidence and stability! Yet people want to commit to a 30-year fixed mortgage on a dump. In a time when flexibility is key and being nimble in your mind is paramount, you have old thinking boomers trying to infect people with this old paradigm of how business is done. And the telling thing is what is happening right now is not any different from what happened in the last crisis. Mortgage debt is down because a large part of recent buying has come from investors! Of course mortgage debt in aggregate is down when many investors pay in cash – that is why the homeownership rate is also down. Duh! But overall household debt is up thanks to people loading up on student loans, auto debt, and credit card debt. Yet this is somehow better? Just look at some of the wild examples in the real estate market…
