“So, what do you make of this housing bubble?” I am occasionally asked. I’m no economist, but as the old joke says, if two economists are asked a question, you’ll get at least five different opinions. Maybe one will match mine.
The shape of a bubble is always the same, but what creates the bubble can be wildly different. Such is the case with the current bubble versus the one leading to the housing crash of 2008.
Do bubbles always pop? That was certainly the case after the collapse of Lehman Brothers in 2008, the largest bankruptcy in America’s history. But sometimes a bubble can just deflate. That is my prediction for the current housing bubble.