This article is completely ignorant. Bubbles aren't defined by, as some commenters suggest (not TFA), poor lending practices. Please see investopedia's excelle

This article is completely ignorant. Bubbles aren't defined by, as some commenters suggest (not TFA), poor lending practices. Please see investopedia's excellent article on asset bubbles [1]. Houses require maintenance, they go out of style, newer buildings have more amenities, etc. In general they retain their value well, but they do become used over time. Historically (hundreds of years) the value of property is highly associated with income, which is highly associated with inflation. Real estate is conventionally considered to be an asset class that maintains its value relative to inflation. Presently, enormous amounts of money have been poured into real estate. Housing costs are now disconnected from the ability of people to afford it, or from the potential of the property to extract rents. Price-to-Income ratios and Rent-to-Income ratios are completely out of line right now. TFA repeats the complaint that housing supply is the issue because wealthy people and financial instruments are buying all the housing and letting it sit empty to appreciate in value. In other words, TFA claims that speculation on housing price increases is evidence that there is no asset bubble. The fact that there is widespread speculation on the price increase of an asset class is, in fact, evidence of a bubble, which is why I called the article ignorant. The fact is that ~11% [2] of housing in the US is currently vacant. But this isn't just a US issue. If this was a supply constraint it would be a geographically local problem. It's not. It's not even isolated to a single nation. Housing prices are exploding globally [3]. This is a speculative asset bubble. The fact that it's not a bubble based on unaffordable leverage doesn't mean it's not a bubble. Finally, it's impossible that this issue resolves without a crash [4]. Since we've had inflated prices for maybe a decade now, I expect that it will take somewhere between 5 and 10 years after the crash for prices to normalize. Put it another way: do you expect housing prices to increase exponentially forever? If not, do you expect prices to remain the same, adjusted for inflation? In other words, have we reached the maximum ability of people to afford houses, and this is just the new price? If neither of those things are true, then there is only one other option. [1] https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp https://www.investopedia.com/articles/stocks/10/5-steps-of-a... [2] Total Housing Estimate - https://fred.stlouisfed.org/series/ETOTALUSQ176N https://fred.stlouisfed.org/series/ETOTALUSQ176N Vacant Housing Estimate - https://fred.stlouisfed.org/series/EVACANTUSQ176N https://fred.stlouisfed.org/series/EVACANTUSQ176N [3] https://betterdwelling.com/canada-says-property-bubble-not-great-for-locals-good-for-foreign-investors/ https://betterdwelling.com/canada-says-property-bubble-not-g... [4] https://betterdwelling.com/canadas-property-bubble-is-now-so-large-a-soft-landing-would-take-19-years/ https://betterdwelling.com/canadas-property-bubble-is-now-so...