The next housing crisis is pending

[marmar]

(MarketWatch) Back when the 2005-2007 housing bubble was brewing, photos of impossibly small houses selling for insanely high prices famously made the rounds.

It was one of those signals that you look back on and say, “Hmmm ... that was a clear indictor of trouble ahead.”

So in what feels like déjà vu, it’s worrying now to see a glorified “tool shed” on the market in New York for a cool $500,000. In Brooklyn, no less. Not even in Manhattan.

Here are some other troubling anecdotal signals on the housing market:

1. A major financial website recently ran a guide to the best cities to “flip” houses in. (I don’t want to encourage the behavior.) Real estate speculation via house “flipping” was another early sign of trouble ahead.

2. A few days later, news arrived that home prices in the Bronx shot up by an astonishing 30% in the first quarter. Crazy advances in home values were a signal of trouble ahead, a decade ago.

3. Ads are running on TV for “quick mortgages.” ................(more)

http://www.marketwatch.com/story/the-next-housing-crisis-is-pending-2016-05-04#:bO9xRIG9JX50PA

[Kelvin Mace]

1. When you don't punish criminals for their behaviour

when you instead reward them, guess what?

[Sherman A1]

2. Interesting

Thanks for posting.

[pscot]

3. I know New York is the center of the Universe and all

but I'm not sure you can generalize from the Bronx to the entire housing market. Nationwide, starts are up about 12% but sales are outpacing construction almost 2 to 1, so there's no indication of over building, just really strong demand.

[Punx]

4. The question I have is "where is the money coming from to do this?"

Is this foreign funds coming in from places such as China as has been reported in spots along the west coast like Portland, Seattle and Vancouver BC.

Is this the cash flush .1% buying everything in sight?

Or is it a renewed version of the last bubble with lender fraud and desperate or gullible people taking out loans they can’t possibly repay.

Or something completely different; inquiring minds want to know. Depending on where the money is coming from, it may have more legs than the last RE bubble.

[trudyco]

5. Good Point

[glinda]

7. In MN. specifically Minneapolis, St. Paul and Duluth the building frenzy is insane.

and many of the properties are uncommonly high end for what the State is used to. I have wondered who is buying these up as well as it seems crazy expensive and fast paced.I suspect a good portion of them are from out of the Country imho.

[Califonz]

6. Wait until all the Chinese money launderers have bought up American real estate

and then watch the market crash again when mortgage interest rates return to 6%, 7%, 8% by 2020.