More bubble talk in this article from the latimes.com – an excerpt:
More investors are buying homes to quickly sell again at a profit.
“Everybody I know is trying to do flips right now. It’s like the day trading of the 1990s,” Nordine said. “We went straight from Armageddon to speculation; there was nothing in between this time.”
Still, Nordine is advising clients to buy now if they can, citing low interest rates and low risk of another foreclosure crisis.
“That is how the American economy works now,” he said. “It seems as if we just go from one bubble to the next.”
There is a distinct difference between the home price run-up of the last decade and the current upswing. During the previous boom, listings abounded and sales soared. Now, rising prices are driven by a shortage of supply. And although underwriting standards may be relaxing, they remain tight when compared to the days when lenders issued enough subprime loans to crash the U.S. economy.
Christopher Thornberg, founding partner at Beacon Economics, said today’s market remains rational, despite a rise in prices.
“It’s not a bubble by any stretch of the imagination,” he said of the recent price gains. “If you can’t borrow, you can’t speculate — that is the primary thing that will prevent this from happening.”