Cutting Edge Real Estate, Is the Bubble Ready To Burst?
Sunday 17 February
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by Tim Phelan
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Of course, this is the big question in real estate now. . .
Will the so-called real estate bubble burst like the dot-com
bubble did a few years back?
There are some good arguments
on both sides of the issue. Whatever happens in the next few
years, it will affect millions of Americans, and therefore
also millions of people worldwide. If the bubble does
“burst” as some say, it is all but certain we could, or more
like would, go into a recession. A deep one. Right now the
real estate business has been a prime reason that the
economy has been decent the last few years. It has been one
of the few consistently bright areas of our economy.
First of all, to compare the real estate industry with the
dot-com industry is unreasonable. It’s comparing apples with
oranges. The real estate industry has been and will always
be a central part of the US economy. It will never disappear
and there will always be a need and demand for it. Investing
in real estate makes sense for the long term. On the other
hand, the dot-com bubble was not based on anything more than
speculation. Many businesses were trading on the stock
market for unreal amounts of money and never made a dime in
profit and ultimately never would.
So for me, some of this thinking is this: “Well, the stock
market had the dot-com boom and then it collapsed, so now we
have this real estate boom so surely it will collapse also.”
I just don’t go along with that comparison. Again, these are
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