Read the story here. Advertise at Before It's News here.
Profile image
Story Views
Last hour:
Last 24 hours:

No Bubble in Real Estate – Not Even in Los Angeles

% of readers think this story is Fact. Add your two cents.

“Everyone here says Los Angeles is in a housing bubble,” my friend in LA said to me this week.
Is it true?
Is American real estate in a housing bubble again, just like it was in 2006?
The short answer is no – not at all.
The smartest thing my friend could do is be bold, ignore “everyone in LA,” make the contrarian choice, and buy a house (or two!).
Let’s look at LA first – then the nation…
We can most easily see the story in LA with a couple charts…
The first chart is the median price of a house in LA, adjusted for inflation. You can see house prices soared in the mid-2000s… and then crashed:
At this moment, house prices are on their way back up… But importantly, they’re still nowhere near their old peak prices.
I get why “everyone” thinks LA is in a bubble… $500,000-plus is a lot of money for a house. And that’s what they cost in LA today.
But based on history, today’s prices are not extreme at all for Los Angeles… particularly when you take today’s extremely low mortgage rates into account.
This next chart does just that… It shows the Los Angeles “Housing Affordability Index.” This index looks at house prices relative to household incomes and mortgage rates. It lets us know how “affordable” homes are.
This affordability index chart gives us an even clearer picture… Houses were extremely unaffordable in 2006. Then they were extremely affordable in 2012. Today, we’re somewhere in the middle. Take a look:
In short, since LA homes are not near the extreme unaffordability that we saw in 2006, we are definitely not in a housing bubble in LA.
Can house prices in LA go higher from here?
Absolutely! Interest rates are still very low. And most importantly of all, there’s a near-record low of existing houses for sale in Los Angeles.
This is basic economics…
If supply is low and demand is high, then prices rise. And that’s the case in Los Angeles today – there is no supply.
But now let’s shift our story a bit… because this supply story is not just an LA story – it’s a national story…
Home listings in the U.S. just hit their lowest level since people started tracking the data.
The supply is not meeting demand. And that means that NATIONWIDE, house prices can continue higher from here.
See for yourself…
In 2008, home listings hit all-time highs. Supply hit record levels. What do you think happened next?
When there was too much supply relative to demand, prices crashed.
Now, house listings are at record lows. Supply is nonexistent. It’s the opposite of 2008. So what do you think will happen next?
Housing starts are still well below normal levels, as well. With so few new homes and lots of demand, we have hit a major supply-and-demand imbalance in America.
And as long as there are more people searching for homes than there are homes to buy, home prices will keep rising.
I am still bullish on U.S. real estate today. As I said last month, if you buy today, you are not buying at the bottom. But there’s still a lot of upside left!
If you are looking to buy a home – but you’re worried that the housing market is “in a bubble” – then please, stop worrying. That “excuse” is no good with me.
There is no bubble. And because the current supply of homes can’t meet the demand, prices can go dramatically higher from here.
Now is still a great time to buy a house in America!
With low interest rates, and no supply, prices can still go a lot higher…
Don’t hesitate. Take advantage of it!!!
Good investing,
Editor’s note: U.S. real estate isn’t the only opportunity Steve sees today. He also believes we’re in the early stages of an extraordinary financial event that could push the Dow all the way to 50,000. Learn how to maximize your profits from “the last bull market” right here.


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Immusist Beverage Concentrate - Proprietary blend, formulated to reduce inflammation while hydrating and oxygenating the cells.

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Total 1 comment
    • raburgeson

      The economy is fake. Bubbles are everywhere. People are opting out and going homeless. Housing has become non- affordable for a lot of the population. The government has their filthy hands fisting the American dream. A well and a leach bead will bankrupt you. The prices per acre is staggering thanks to the government stealing land everywhere. This is done to invent fake money that does not exist to keep the fake economy going. A used home has the added bonus of the greedy real estate handlers fee. Now add onto that the governments involvement of inspectors and codes and all the other horse manure they can pile on.

      Now look at housing before all this crap hit the market. There are houses all over the US that are over 100 years old. The people that built them did not have the codes breaking their backs in payments.

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.