If Americans were gaga over housing in 2005 (see Time cover) they are something like the opposite right now.
Want proof? Pick a major newspaper and scan the reader comments on almost any real estate related article. You’ll quickly get a palpable sense of the fear and loathing that runs as an undercurrent to the real estate market.
Risk aversion is ascendant, and it’s so high-pitched that we may actually be witnessing a ‘Fear Bubble’ in real estate.
And the great thing about bubbles is that if you recognize them, and can take the other side (see, The Big Short) you can come out in pretty good shape. There’s opportunity in bubbles.
I mention this in case you’ve forgotten: One of the contributing factors to the runup in house prices from 2000-2006 was that too many people followed popular wisdom and the crowd – Housing has never lost value! Flip and get rich! It’s the best investment you’ll ever make! etc. etc. etc.
But all the while, there were seasoned observers like Lewis Ranieri, Calculated Risk (to name just two – there were many others) who warned of the impending reversal. They were mostly ignored. The real estate market partied on.
Which brings me back to today. Quietly, there’s a growing number of analysts, commentators, and other interested observers making the case that we may be looking at a very good opportunity in housing, despite the high level of fear and anxiety that permeates the real estate market.
Ingoring them now may be as big a mistake as those who ignored the housing bears in 2005, so going forward we’ll do our level best here at Behind the Mortgage Headquarters to hoist the well-reasoned, fundamentally sound analysis and opinion that points to what we think will prove to be a very good time to purchase a home.
As a final note: It is almost NEVER a good time for everyone and anyone to buy a home, so understand that any chatter about it being a “good time to buy” this, or “great opportunity” that, assumes the rest of your personal and financial circumstances make home ownership a good idea. Okay?