The Housing Bubble
This column was written by CBS News Early Show co-anchor Harry Smith.
Is the housing bubble about to break? Hard to say, isn't it? I know my apartment is worth about seven jillion times what I paid for it almost twenty years ago. I read a piece in the paper the other day about people living in homes they could no longer afford to buy. I said, "I get that."
Is now the time to sell, to clean up? Take the money and run? But, to where exactly?
The real estate boom has made Americans rich. Prices for existing homes are up 13 percent just this year. And according to USA Today prices in Phoenix -- listen now -- are up 47 percent in the last year -- 47 percent. Who needs to win the lottery? You just have to figure out how to get the down payment, wait a year, and kaboom.
When I was in my twenties, I remember the real estate boom of the 1970's, prices of homes were zooming based on high interest rates. I was telling the kids in the office about 18 and 21 percent interest rates and they just looked at me like, and what, you had dinosaurs for neighbors?
No it was inflation kids. President Jerry Ford wore a WIN button. Whip Inflation Now was what it stood for. We thankfully don't have inflation problems, but people are trying to cash in. Tuesday's USA Today talks about the oh-so-hot cash-out mortgages, which basically means you refinance for more than you owe and pocket the cash
What to do with all that wealth? Try filling your car with gas.
Harry's daily commentary can be heard on manyCBS Radio News affiliates across the country.
By Harry Smith