Is Another Housing Bubble Sneaking Up On Us?


Nick Timiraos points to an interesting IMF chart today. It breaks the world into two sorts of countries. The first, which includes the US, UK, Spain, and others, saw a big housing bubble during the aughts and a big housing bust during the Great Recession. The second, which includes Canada, Germany, and others, had only a modest runup in housing prices during the aughts and a correspondingly small decline during the Great Recession.

So what’s happening now? Well, countries that already had a housing bubble continue to struggle. Housing prices today are more than 20 percent below their 2007 peak. And the other countries? Well, they’re having their own housing bubble now, with prices nearly 30 percent higher than their previous peak.

Is this a problem? Maybe. With the exception of China, the IMF reckons that housing prices in the rebounding economies are still only modestly overvalued. Still, it sure looks as though there was a big pot of money chasing returns in one set of countries in the aughts, contributing significantly to the housing bubble. Now, with those countries no longer looking very attractive, the pot of money has moved on. More sensible controls on mortgages are supposedly what saved these other countries from the mid-aughts bubble, but I wonder if that’s enough now that lots of money is apparently sloshing its way in their direction? Stay tuned.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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