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Wednesday, July 18, 2018

Trouble Ahead For The Housing Market

We're starting to see rising supply & flat/declining prices...

Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage 2: Suddenly Motivated Sellers.

He reminds us that housing bubbles follow a predictable progression:

Stage 1: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/low credit standards/hot foreign money drive a virtuous bidding cycle well above sustainably afforable levels.

Stage 2: Peak -- Increasingly jittery owners attempt to sell out before the party ends. Supply jumps as prices stagnate.

Stage 3: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle : buyers go on strike not wanting to catch a falling knife, causing sellers to drop prices further.

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2 comments:

Anonymous said...

Prices might be high in some places but that doesn’t include Somerset and Wicomico counties. Both are well below the State of Md average and Somerset is well below the national average.

Anonymous said...

Your good friend. LMAO.