Housing Has Peaked

One of my favorite websites on the current housing bubble is this one.  It has set of new links, almost daily, which point to the huge housing bubble which is currently peaking.  Prices are now starting to fall in large markets, like Boston, San Francisco, and San Diego. 

Of course, all the home builders have said that this wouldn't happen, though I'm not sure who believed them.  Housing stocks have been taking a hit lately as almost everyone has caught on to the current shell game.  Unfortunately, so much money is now tied up in housing that, as the market corrects itself, we will most likely enter a recession next year.   

No one wants a recession, but economic activity always goes in cycles.  Right now, we are at the top of the roller coaster and getting ready to head down.  Some blame the Fed for pushing interest rates so low and making housing that much more attractive.  I don't necessarily blame the Fed, I'm more suspicious of banks who have been loaning money to anyone with a pulse.  With the new bankruptcy laws, there are much more likely to get their money from a delinquent borrower than before. 

All these factors have combined to form a "perfect storm", so to speak, for the housing market.  Unfortunately, investors, banks, and real estate agents are the ones getting rich, while a middle-class family is stuck paying $300,000 for a house that's really only worth half that.