OK, can’t exactly call it a warning, nor is President Obama suddenly turned into a housing bear.
But the president certainly alluded to the potential of a new bubble in his big housing speech Tuesday.
Yes, I know, all the housing market cheerleaders keep telling us there is no bubble, that things have changed, that the market will even out, even magically correct itself.
Yet just because all those nasty subprime mortgages are a thing of the past doesn’t mean we are somehow immune from another housing bubble.
We are seeing the housing market heat up far too quickly, driven by the Fed’s campaign to keep interest rates at rock bottom levels, speculative buying of massive tracts of homes and condos by investors and increasingly ridiculous barriers to new construction in Greater Boston and other high-priced, boutique markets.
Of course, the Obama didn’t mention any of those factors – he is trying to sell his plan to disband Fannie Mae and Freddie Mac as a way of preventing a future bubble.
Good luck with that – it’s a little late for prevention and disbanding the Washington-based housing giants will probably take years.
The cat is out of the bag and the market forces driving home and condo prices up – not ot mention rents as well – aren’t going to be so easily contained.
In fact, if it’s gotten to the point where the president is starting to warn about the potential of a new bubble, we are probably already well along our way.