Mr. Real Estate specializes in High End waterfront property on Florida's west coast. He tells us his views on the bubble myth.
It,s not really a bubble, but prices will level off eventually, and may even lower in some markets. Next year the National Association of Realtors expects housing to slow somewhat, and rates here in the U.S. should go up to around 6.8 percent by year's end, says Fannie Mae.
As rates go up, as I've said all along, housing will begin to level off, but as builders continue to build we should be fine. When builders slow in building new construction, that's the first sign of a housing slowdown. Housing will be back to normal when rates get back to 8 percent, I predict, but the bubble is a myth created by the media.
Prices are high because more people are buying and paying the prices, but it would only be a bubble if the same people buying now wouldn't be able to buy at 8-9 percent interest rates. In my specialization area, luxury waterfront, this is simply not the case.