Over the past year, I’ve come to the widely thought but rarely spoken and never-printed conclusion that we are living in a very speculative housing market bubble. I know that some will disagree, especially those who buy and sell real estate, those who are realtors, and those actually know how markets work and study real estate for a living.
In my very unscientific research, the following findings confirm for me that no three bedroom co-op in Brooklyn is worth $985,000 (plus $850 per month maintenance), as I saw posted in our Park Slope neighborhood:

• The baby boomers, who control most of the political and monetary capital in the U.S., will not want their large houses forever. They will need to sell them at some point in order to move to warmer climes. Who will they sell them to? The Village Voice recently published a long article about debt for those in the 18 to 34 year old demographic and noted that “the average collegian … is $20,000-plus in the hole thanks to student loans and credit cards.” Not them
• Health insurance continues to sky rocket, increasing 13.9 percent last year, far outstripping what folks can possibly earn in overtime. If it’s health insurance or mortgage payments, I imagine there will be many home defaults in the coming years. People will abandon their large homes and mortages in order to stay alive.
• A Google Search on the real estate bubble finds very little of substantive discussion by the media. This is because the media, by and large, relies tremendously on real estate agents and advertisers to fund their publications. I can’t remember the last time I saw an article in the New York Times about speculative real estate. Even the Village Voice doesn’t dare to speak the possible truth on this one.
• Politicians sometimes go out on a limb to talk about the coming burden of health care and Social Security for the coming boomer retirement. But they will never point to the fact that Gen X and Generation Y will need to pay for those soon retiring. Taxes will need to go up on the young to pay for those on Social Security. And without safe, lucrative jobs with health insurance, they won’t be able to afford homes if taxes are high.
• I learned today of yet another person I know who is going to real estate “school” to buy and sell the stuff. This makes a total of about 6 folks within my little circle of friends and acquaintences who either want to study real estate or have completed their coursework. In 1999, I read many stories of folks taking courses in “beating market timing.” But that was a different and well publicized bubble.
• Brian Lehrer said something interesting the other day on his WNYC show: that if you don’t own real estate, you’re essentially paying a tax because investing in other products (e.g. IRAs, mutual funds, stocks) will assure you of a lower and riskier return. This is true especially in major metropolitan areas like NYC but is coming true even in upstate New York.
• The housing pricing market just does not reflect anything going on in the rest of the economy. Jobs are leaving the States or are not growing statistically. 13% of the population is in poverty. The stock market is doing well but and is nervous about the next attack on U.S. soil.