Before You Rush To Buy Inflated Real Estate Assets, Take A Vacation To Greece

http://www.forbes.com/sites/panosmourdoukoutas/2016/07/03/before-you-rush-to-buy-inflated-real-estate-assets-take-a-vacation-to-greece/#52f728e6ea27

 I really enjoyed this perspective, its important to be aware of what is going on in the world, yes we are not Greece however we can learn from them. Here are a few highlights from the article: 

The trouble is that real estate recoveries in recent decades have been built on a secular decline of interest rates that has reflated real estate bubbles, rather than on genuine market clearing.

Simply put, the Federal Reserve has been reflating one real estate bubble after another, creating a grand bubble, as Bank of Japan did back in the 1980s.

But since 2009, real estate prices have been heading south with no end in sight. The Greek Home Price Index has dropped from 100 in 2009 to 59.8 in 2016. A popular asset has turned into liability even in the hottest property areas of the country.

Again, America isn’t Greece. Still, a Greek style crisis can happen here, as the Fed is running out of bullets to reflate the grand bubble when it bursts, as was the case in Japan in the 1990s.