You’ve heard about the so-called real estate bubble–how could you not? The phrase is getting more media coverage than most celebrity couples. Doom-and-gloom pundits are gleefully predicting a collapse of the American real estate market; other experts say that’s impossible. Real estate author and attorney William Bronchick says, “The ‘bubble theory’ is full of hot air.”
Bubble? What bubble?
At the root of the Real Estate Bubble Myth is the fact that interest rates are on the rise and the inexplicable truth is that, all of a sudden, everybody is so worried and concerned about it. Interest rates have been steadily on the rise both in the United States and, by reflection, in Canada since mid-2004, so I will leave to psychiatrists and psychologists the arduous task of explaining the newest, interest-rates phobia. I will, however, delve into the reasons as to why interest rates have been on the rise for these past 18 months.