Are We Living in a 2008 Bubble?

GlobeSt.com caught up with Marc Shuster, partner at Berger Singerman with more than 15 years of experience in real estate law, to dig into the topic.

MIAMI—It’s summer time in South Florida. What does that mean for home sales? Are we seeing overpricing? Where do we go from here with the “global headwinds”? GlobeSt.com caught up with Marc Shuster , partner at Berger Singerman with more than 15 years of experience in real estate law, to dig into the topic in part two of this exclusive interview. You can still read part one: How Recession Concerns Are Impacting Today’s Buy-Sell Equations . GlobeSt.com: What do you expect for the housing market this summer season? Shuster: There is a lot of talk about recession due to global headwinds. That means it’s anyone’s guess on what the fed will do with interest rates for the remainder of the year. It becomes particularly vexing to hazard a guess when so much worldwide turmoil is upon us. Having said that, the US continues to be the best or perhaps safest play to invest in vis-à-vis the world stage. So if a home buyer considers that their primary residence really shouldn’t be viewed as an investment but rather their place to call home and live, and takes a long view, then buying a home now makes a lot of sense provided it’s in the right location. Rates are low and the tax benefits continue to accrue to the homeowner. Sellers in those locations will also be generally ok because of the dearth of inventory. Housing today is incredibly local, so if the idea is to buy a “deal” in a bad school district or undesirable area, think twice. The fundamentals of what makes communities desirable include access to highways, good schools, amenities, etc. GlobeSt.com: Are homes prices fairly today? Still underpriced? Overpriced? Are trends encouraging or not? Shuster: I think homes in most cities across the US are probably fairly priced. There has been an uptick over the last several years as we have climbed out of the Great Recession. But the thought that we are living in some 2008 bubble is wrongheaded if only because of the available liquidity in the system that banks and institutions have control over today. The outlier to my statement might be the very tony sections of major cities where prices have approached historically high levels. GlobeSt.com: How do homes perform compared to stocks and other investments? Shuster: Most economists would probably say that renting a house and investing in the stock market is a historically smarter move—even when the fact that living costs are factored in. And you get the dividends.