There is an interesting look at the current state of the US real estate market by Andrew Hecht on seekingalpha.com. He writes about some concerns he has about the current state of today's market.
Markets have recovered since 2008 as central banks around the world lowered interest rates and policies of quantitative easing dealt with the effects of the financial meltdown. Today, we are still feeling the consequences of the events that transpired eight years ago; interest rates remain at or close to historical lows.
Many of the issues that caused the housing crisis in the U.S. have been addressed by increased regulation, particularly on the lending side. While before 2008, anyone with a pulse could get a mortgage, today credit is tight, and only the most qualified borrowers can finance a home.
However, the low interest rate environment and improving economy has caused real estate values to come storming back and now they are approaching highs once again. There are some signs that housing could be overheating as the Fed is now in a tightening cycle that began with the first rate hike in nine years last December.
If you are not familiar with Andrew Hecht, he is the Chief Market Strategist at Carden Capital and Carden Futures. He has an interesting history with the real estate market...
In 2003, I wrote a provisional patent for the development of a trading market for real estate derivatives...The rationale behind the product was that it would provide a method for hedging real estate values for those with large and small exposures...They all told me the same thing in 2003; real estate never goes down in value.
