Housing.com News, Analysis & Opinion: More signs of a bursting bubble?

Of course, the answer to this rampant desire for property will be more supply, which, as Fleckenstein notes, we may already have too much of. The country's a big place, with lots of undeveloped acreage, but does that mean we need more? What about refurbishing and maintaining existing homes for the market?

Fleckenstein also quotes real estate columnist Kenneth Harney on the popularity of option ARMs. ARMs are so popular, in fact, that the Feds and Standard & Poors are beginning a crackdown on them.

Much like raising mandatory minimum credit card payments, the short-term effects of restricting ARMs will be "sticker shock" for overextended consumers, a lot of foreclosures, and a lot of sagging housing prices. But in the long run, it will help the housing market "right" itself by discouraging consumers from taking on more debt than they can handle, and by spanking unscrupulous lenders who will cook the books to get a deal closed.

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Hedge fund investor Bill Fleckenstein has a fairly pointed take on the likelihood of a housing bubble. I don't agree on all of his points, but one issue I am firmly agreed with him upon is the fact that speculators are buying property just for the sake of buying property. Housing and real estate is being turned into a disposable purchase, almost like buying DVD's or a neat new decoration for a dinner table. Of course, the answer to this rampant desire for property will be more supply, which, as Fleckenstein notes, we may already have too much of. The country's a big place, with lots of undeveloped acreage, but does that mean we need more? What about refurbishing and maintaining existing homes for the market? Fleckenstein also quotes real estate columnist Kenneth Harney on the popularity of option ARMs. ARMs are so popular, in fact, that the Feds and Standard & Poors are beginning a crackdown on them. Much like raising mandatory minimum credit card payments, the short-term effects of restricting ARMs will be "sticker shock" for overextended consumers, a lot of foreclosures, and a lot of sagging housing prices. But in the long run, it will help the housing market "right" itself by discouraging consumers from taking on more debt than they can handle, and by spanking unscrupulous lenders who will cook the books to get a deal closed. We hope.