The most important thing to understand in bubblonomy is that money do not disappear. When one bubble bursts, someone lost money, someone earned, but there are always some money to feed the next bubble. Bubbles have the period of infection, when they are unstoppable.

After dot-com bubble burst, it was just another year or two before money started to feed the real estate bubble. It probably did not burst yet, but just give it few more weeks. The Florida real estate looks horrible, sooner or later it will spread over.

New home sales

Here's a great chart. So construction spending continues like a drunken sailor at port. While New Home Sales have clearly become the laggard. I would say, there is no denying the inevitable with higher interest rates, laggging wage growth, and escalated housing costs. Not a time to be buying a new house, I say if you are new to the market, wait a few more years and when real estate isn't the most talked about item, build a nice relationship with your local banker and let him know when he can't take the pain of his inventory on his books you will be ready to buy. Same game happened in stocks. Reflation game is nearly over for Real Estate. 

 

For the first time in years, the median price of new homes is below last year. Look at the unsold real estate inventory graph:

Unsold real estate inventory

And finally, the mortgage application graph, the indication of future purchases, which is down 19% from last year and already below 2003:

So the bloodbath in real estate is coming soon, but there is a next bubble already – natural resources and gold! This one is still years from burst, and likely the money from real estate will soon go there. If you believe that oil and gold can go up forever, look again at this chart:

When bubble-forming will stop? Never. What to do? Understand it and profit from it.

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