Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage 2: Suddenly Motivated Sellers.
He reminds us that housing bubbles follow a predictable progression:
- Stage 1: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/low credit standards/hot foreign money drive a virtuous bidding cycle well above sustainably afforable levels.
- Stage 2: Peak -- Increasingly jittery owners attempt to sell out before the party ends. Supply jumps as prices stagnate.
- Stage 3: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle : buyers go on strike not wanting to catch a falling knife, causing sellers to drop prices further.
Rubino cites recent statistics that may indicate the US national housing market is finally entering Stage 2 after a rip-roaring decade of recovery since the bursting of the 2007 housing bubble:
from Peak Prosperity https://ift.tt/2Ju7ohT
