Housing Market Bubble
At a breakfast in New York on May 15 former Fed Chairman Paul Volcker said that there was a danger of an asset bubble forming as result of cheap money. He said pretty much the same thing on March 13, 2013, at another event.
Everyone has talked about the Fed policy, but no one seems willing and able to do anything about it.
The stock market and the housing market both are roaring full steam ahead… while GDP is expanding anemically and unemployment is continuing at high levels – above 7.5% for more than 4 years.
So what’s driving these markets??
Cheap money! Everyone is lining up at the trough. Even hedge fund managers – famous for making million off market anomalies – are getting into the act.
Austinites are lining up for cheap money, too. House prices jumped an average of 18% in April, from $272k in 2012 to $321k in 2013, according to the Austin Board of REALTORS.
Low interest rates, lack of inventory, and new buyers are driving these steep price increases.
One of my clients lost a bid battle by offering only 8% over the asking price. 8% – that’s stiff competition! I was worried about an 8% annual increase, but 8% over ask is nuts!!
So…I’m going to get off my soap box and go fishing. Next weekend is Memorial Day, which is a good time to rest up before the busy summer buying season.
Certainly with all the people flocking to the coast I know that Port O’Connor will be packed for the three-day weekend, and that means the bays will be packed with fishermen.
So I think offshore is the answer. The weather and the water temperature have finally gotten about right…so I”ll let you know how we do.
After that, I’ll be fit, tan and rested – ready to help Austinites who want to take advantage of cheap money!!