The United States is facing the prospect of a new boom in real estate speculation.
In September, compared with 2012 , the annual price increase was 12.8% . In some states like California or Nevada the rise was 20 %.
The Case – Shiller index that produces the recently awarded Nobel prize -winning economist Robert J. Shiller , sounded the alarm in April when calculated that the rate of increase in housing had reached its highest level since the ferocious bubble burst in 2007 – 2008 .
Shiller is not only a Nobel prize. He was one of the few who predicted the collapse of the subprime or high-risk one year before to precipitate the fall of Lehman Brothers and the global recession of 2008.
And the most powerful alarm signal was the voice of an official of the U.S. central bank, the chairman of the Federal Reserve Bank of Dallas ,
The much- quoted phrase of Karl Marx on history – as tragedy occurs and is repeated as farce – is irrelevant.
The Estate 2008 financial crisis focused on subprime mortgages granted to people who often did not even work.
Fisher sounded the warning : there are ” signs” , he said, that the properties falling into a new bubble.
Now the social sector that is more fuel the bubble is the high and low income through the medium called jumbo mortgages or mortgage giants .
The regulation stipulates that U.S. mortgage market lending standards for a family home can not exceed the $ 417,000 limit that to more expensive as New York or Los Angeles areas , increases to $ 625,000.
If you want to take a loan above that figure enters the realm of “jumbo ” which normally require higher interest rate (typically , 0.25 % more).
But now banks are promoting 30-year jumbo mortgages that cost less than the standard family loans .
Peter Zalewski of Condo Vultures , a consulting real estate market in Florida, says it is a narrower speculation.
. “In the previous teachers bubble , firemen , businessmen , taxi drivers, all were involved in the market What we see now are niches : the property worth about a million dollars, for example , to access or foreigners the very wealthiest Americans and institutional investors , “he told the BBC .
Not all are equal
. ” In the previous bubble teachers , firefighters , businessmen , taxi drivers, all were involved in the market What we see now are niches : property worth about a million dollars, for example , that access to the very rich “
Thus, it is a bubble with a distinct spatial distribution .
In cities like New York , Los Angeles, San Francisco , Miami and Washington pressure on prices is much higher than in other areas. In Sacramento , for instance, the increase exceeded 34.1 %, in Las Vegas, or 33.3% in Riverside , California , 31% .
But the real estate consultant Zillow estimates can not yet speak of a nationwide bubble because people are spending on average 13% of their income on mortgage payments , well below the 20 % of other times .
This cost-revenue relationship is important because it creates a “cushion” designed to absorb sudden increases in interest rates that may unbalance the individual budget and jeopardize payments .
Zillow notes, however , that the national average changes radically in hot areas of the market.
In places like San Francisco or San Jose mortgage payments exceed half the income.
Still, the consultant estimated that next year there will be a moderation of increases do not exceed 3.8%.
Regardless of whether this projection is accurate, economic and social impact will depend on a key actor. Sea tragedy or farce , the story of the bubbles of the last 15 years has there been a major player : the Federal Reserve ( the Fed ) .
Robert Shiller , Nobel laureate in economics , was one of the few who predicted the collapse of the subprime mortgage before 2008.
In the subprime crisis and the cheap – credit – existent regulation encouraged the stampede price . In the present , the interest rates on the floor , has been added called Quantitative Easing , quantitative easing or printing money electronically .
With this issue , which has been this year of about $ 80,000 million per month , the central bank purchases financial assets from banks for these entities have more funds to lend to producers and consumers through credit oiling economic recovery.
By one estimate, the Federal Reserve now owns 12 % of the mortgages in the country.
The vice president of financial HSH.Com , Keith Gumbinger , said that his intervention is key to sustaining the mortgage market.
” With interest rates at today’s prices and quantitative easing , the Fed has provided liquidity and the mortgage market has revived ” Gumbinger the BBC said.
But it is also playing with fire. In an economy like the U.S. the line between a sharp rise in prices and a bubble is very thin.
The credit – addiction
The Federal Reserve is part of an economic model that has been struggling with a new disease : the credit – addiction.
Properties for sale
Now the social sector that is more fuel the housing bubble is the high-income and upper middle .
In 1978 the average U.S. wage was equivalent to about U.S. $ 48,000 (in present value ) . Today it is $ 33,000.
If the U.S. consumption remained a driver of growth in these decades was largely thanks to the credit card supplied by very low rates.
The subprime crisis of 2007-2008 marked a limit to this economic pathology of everyday life .
According to the deputy director of the Center for Economic and Policy Research in Washington, Dean Baker , the system has not changed.
“The growth of the last ten years has been based on bubbles. ‘s Amazing that the Federal Reserve has not seen . Regulatory system has hardly changed,” Baker told the BBC.
Not everyone agrees . Keith Gumbinger analysts say the regulatory system is much more strict, but others say that even if it did, the bubble will continue to grow .
“Capitalism is the creative – destructive capacity There are many people watching get the hang of regulation it is our story from the 20s onwards . . . Boom followed by implosion not going to change ,” he told BBC News Peter Zalewski of Condo Vultures .