In my opinion, John Burns Consulting is one of the best national sources for real estate market information.  They do a great job of both national research, and area specific research (which often differs dramatically).  

In 2013 John Burns consulting compiled a survey of the Top 10 Signs of a Housing Bubble.    Here is their latest article on the subject.  Some of the interesting qualitative signs of a housing bubble from this survey that we are seeing in the current market are:

1) Falling Builder Stock Prices.  Although the entire market is down, the home-builder stocks are performing even worse.

2) Creative Mortgages.  More flexible mortgage options are available that are not credit score dependent.  I personally think that this is great for the housing market.  The new programs are being structured more conservative than previous ones from the housing meltdown.  They also provide homeowners who went through hardship a great opportunity to purchase a home again.

3) Water-cooler talk.  John Burns consulting reported that more people are looking at getting their real estate licenses and getting into the real estate market.  So when everyone at your office from the janitor to the CEO is talking about real estate……….RUN!  🙂

One interesting observation is that for the first time ever, single family homes have become an institutional asset class with numerous private and public REITs holding billions of dollars worth of “starter-home” assets across the US.   The challenge with owning bulk single family homes (I have bought and sold over 2,600 of them) is that you do not have the operating efficiency that you do when managing an apartment building or office complex where you have the ability to have a property management team onsite.  Currently there is consolidation occurring within this industry, as was expected.  Once this stage is complete, I believe there will be 5-8 companies standing.   Once this merger activity has stabilized, eventually……they will sell these assets when the timing of it benefits their shareholders (and not necessarily the housing market).  Let’s just hope they all don’t sell at the same time – or we could have trouble in the starter home markets across the country.  

Here is the full chart from the article:


Thank you for taking the time to read this post.

Regards,

Steve Taplin