No More Real Estate Bubble Talk, Please

No More Real Estate Bubble Talk, Please

No More Real Estate Bubble Talk, Please

By Dan Fitzpatrick
RealMoney.com Contributor
6/23/2005 8:22 AM EDT

This column was originally published on RealMoney on June 22 at 11:16 a.m. EDT.
Every time I hear CNBC’s “Realty Check” (which is a not-so-subtle play on the words “reality check”), I find myself wishing they’d just put Google (GOOG:Nasdaq - commentary - research) back on the tube and talk about a “Google bubble” all day. I’m tired of hearing real estate discussed in forums that used to be dedicated to the financial markets.

CNBC’s preoccupation with the real estate market is entirely self-serving. After all, if investors are withdrawing money from Wall Street and buying a piece of the rock on Main Street instead, ratings tend to fall for those programs dedicated to following the financial markets each morning.

It seems as if the pundits are almost jealous of all those unsophisticated real estate investors who have the temerity to make money by themselves rather than with the help of some overpriced money manager. After all, we all know that Joe Public is too unsophisticated to make his own financial decisions.

The affordability issue acts as a natural regulator on the real estate market. When folks can’t afford to buy a more expensive house, they just won’t buy one. Period. But a dropoff in new purchases doesn’t necessarily translate to a popping of a bubble.

Will most folks just decide to sell their homes and move into apartments? I know one guy who did that three years ago, assuming that he’d be able to buy a nice house for cash once the real estate bubble burst. He’s still renting.