Even before the real estate market devolved into what it is today, there were conflicting opinions about how long the boom would last. All agreed that it wouldn't last forever, just when the market would fall apart no one could know. The following are snippets of articles found online dating from 2004 and 2005.
2004
Want to Invest? Join the Club.
By VIVIAN MARINO
Published: October 31, 2004
"As a mortgage broker, Richard Banach helped many investors finance real estate deals over the years, but when it came to his own money, he stayed mostly with stocks, a strategy he has grown to regret. "I've seen people with marginal credit and modest means making big money in real estate," he said, while he has watched his technology-heavy portfolio swell, then shrivel.
Now "totally out of stocks," Mr. Banach, 46, who lives in Glen Head, N.Y., said he will focus on real estate. While he has the advantage of knowing something about buying property, he realizes that finding good deals won't be easy in a still-rising market crammed with other stock market refugees. So last year he joined the Long Island Investors Group, a club that serves both as an informal repository of information about properties for sale and as a support group."
Lost in the Super Market
"The housing situation is tight. How tight? Let’s put it this way: If you’re able to go see a house at midnight, do it. It may be gone in the morning."
By Carl Swanson
"You should've bought last summer. Or better yet, last spring—the last time property stayed on the market and prices were negotiable.
When the family that owned the nine-room co-op, smack in the middle of the investment-banker promised land that is Park Avenue in the Seventies, decided to pull up stakes last summer, they put their price at $3.6 million. That was in August, and the number was a bit exuberant, given that it had been a slow year so far and the family had lived there for 40 years; the place was more Sister Parrish than Peter Marino.
The bids came in at $3.2 million. “There was resistance” among buyers to paying more, admits Stribling Private Brokerage president Kirk Henckels—especially after the family increased the price 10 percent in September. “But we broke through it.”
Did they ever. After the board rejected one bidder, the apartment went back on the block for $4.25 million in January, where it garnered multiple $4.1 million bids. “That 28 percent increase in five months,” Henckels says, is “as freestanding an increase as you can find.” And thus the bear market—such as it was—is ended."
Foldvary: The Real Estate Bubble
Editorial
The Real Estate Bubble
by Fred E. Foldvary, Senior Editor
"The last bottom of the real estate cycle in the US was in 1990, when there was a recession. Real estate prices have been rising since then, and were not at all deterred by the downturn of 2001. Real estate speculation has carried real estate prices in some parts of the US, such as California, to heights that cannot be sustained when interest rates rise as the Federal Reserve reverses its low-interest policy. Another crash is coming.Henry George, the American economist and social reformer of the latter 1800s, originated one of the first theories of business cycles. The basic cause, he said, was land speculation. During an economic boom, at first, a growing demand for real estate is met by reducing vacancies. But then new real estate is constructed, and rent and land values rise. Speculators notice this and buy land expecting to sell at higher prices later. This speculative demand, added to the demand for use, carries land prices so high that investments in enterprise become unprofitable. Land becomes priced for expected future uses, rather than present-day uses."
2005
Boom in Jobs, Not Just Houses, as Real Estate Drives Economy
July 9, 2005
"For all its benefits, the new found
power of real estate has also left the country vulnerable to a
housing slowdown, which many economists expect over the next few
years. Residential housing now makes up 16 percent, or $1.9 trillion,
of the gross domestic product and is the economy's largest single
sector, slightly bigger than the industries and services that supply
health care, according to Economy.com."
Bernanke: There's No Housing Bubble to Go Bust
By Nell Henderson
Washington
Post Staff Writer
Thursday, October 27, 2005
Thursday, October 27, 2005
"Ben S. Bernanke does not think
the national housing boom is a bubble that is about to burst, he
indicated to Congress last week, just a few days before President
Bush nominated him to become the next chairman of the Federal
Reserve.
U.S. house prices have risen
by nearly 25 percent over the past two years, noted Bernanke,
currently chairman of the president's Council of Economic Advisers,
in testimony to Congress's Joint Economic Committee. But these
increases, he said, "largely reflect strong economic
fundamentals," such as strong growth in jobs, incomes and the
number of new households".
Real estate investors cast watchful eye on Las Vegas' high stakes housing game
Kelly Zito, Chronicle Staff Writer
Monday, March 7, 2005
"Las Vegas' lucky number last year was 52 -- as in 52 percent. That's how much real estate prices jumped in the nation's fastest-growing city in one year, as a housing shortage set off a wave of speculation by investors from California and other states.
But as any gambler knows, Lady Luck eventually turns a cold shoulder. Las Vegans wanted to cash in, too, and so many put their houses up for sale that they flooded the market. By the end of the year, some home builders were slashing prices".
