Friday, December 30, 2005

is there a housing bubble?

Who knows. I know most people can't afford houses in San Francisco, but that's hardly a formal definition. It's a very practical definition, however, unless you personally happen to be getting 18.2% pay raises annually.

However, the homes for sale just hit a 19-year-high, which would be an awfully alarming statistic if I were selling a house right now. From the article:

The number of previously owned homes on the market rose last month to the highest level in more than 19 years, while sales fell for the second-consecutive month, raising concerns that a housing bubble might be about to burst.


Here's a passionate exposition from someone who strongly believes there is a housing crisis, and somewhat more moderate remarks from a bearist economist. And if you're so fascinated by this that you cannot sleep, here is a 33-page paper that models the housing market by price-to-income ratios.

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