Every one knows that now US is facing the crucial crisis called housing bubble. Even I was one who bought a farmhouse at the outskirts as an investment. The value of the farmhouse now is decreased by more than 20% from when I bought it. There are many people who lost their money in the bubble and nobody knows when this is going to be end. Lax
Economists have been predicting the burst of the bubble for the past five years. Every year they have been wrong. 2005 was supposed to be the year when things really started to slow down. Those in the building supply business are sitting around smiling as they count the profits. I went through the causes for a bubble in the housing market.
- Mania for home ownership
- Belief that housing is a good investment
- Promotion in the media
- Speculative fever
- Crash of the dot-com bubble
- Historically low interest rates
- Risky mortgage products and lax lending standards
I am waiting for the bubble burst to settle down to the normal to do anything with my farmhouse. Much is being said about the economic recession these days. Many are hoping that there would be no recession in the near future and it would be the worst case if that happens.
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