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Wednesday, June 29, 2005
Thought Bubbles on Housing Bubble
Some links I found browsing today:

A Running Archive of Topical Links (

Patrick also suggests shorting Fannie Mae -- they make an obvious target for betting against real estate prices.

Is It Time to Cash Out? (Fortune Magazine)

It point out another bubble warning sign:

While home prices are dangerously high in hot markets, rents are generally a screaming bargain. The disconnect between prices and rents carries two strong messages, especially for folks planning to retire in a few years. First, prices can?t keep soaring while rents stay flat. The rent?what you?d pay to live in the house?is the fundamental factor driving its value, just as earnings growth guides stock prices. Booming prices and depressed rents are an unstable, unsustainable combination, a flashing red alert that we?re in a bubble. Second, you can grab a peak or near-peak price on your house, then rent a similar one for as little as half the cost of owning it (even after factoring in the tax benefits of ownership).

Trying to find historical correlations between interest rates and housing prices. This site argues against correlation. What about between rents and housing prices? Look for California Association of Realtors data. [Google search]