Bubbles

Experts Warn Of Housing Bubble Signs In New York, San Francisco And Miami

 The U.S. housing market has been on a tear in recent years, with home prices surging more than 50% on average since their trough in early 2012. But experts are now seeing disturbing signs that a bubble appears to be forming in at least three major markets – New York, Miami and San Francisco.

“When you start seeing 20% to 30% year-over-year increases in prices, which we’ve seen over the last four years in some of these markets, it’s just not sustainable,” said Daren Blomquist, a senior vice president at RealtyTrac. “People’s wages are not rising 20% or 30% a year.”

Even the “flippers” – which are investors who buy homes and sell them within a year for a quick profit – are back, which is another red flag. In the boom years leading up to the 2008 recession, speculative investors – many with no housing or real estate experience – jumped into the housing sector, buying up blocks of homes to flip. When the housing market collapsed, many were left with a glut of unsold homes, which exacerbated the housing crisis.

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