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Real Estate Bubble - Explained

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Housing Bubble explained clearly.
As a real estate agent in the bubble city of Phoenix, I often wondered what the heck happened in the Great Real Estate Bubble! 10 years after the peak of the boom I was still confused because everyone was blaming everyone else for the Bubble. Being a geeky guy and a former economist, I decided to try and figure it out for myself.

MORE at http://www.realestatedecoded.com/the-great-real-estate-bubble-explained/
Includes:
- Price charts
- Larger versions of the Money Chasing Homes flowchart.

WHAT DO YOU THINK?
- What did I get right?
- What did I get wrong?

Please leave a comment here on YouTube or at RealEstateDecoded.com.

John Wake
Geek-in-Chief at RealEstateDecoded.com
Real Estate Agent at HomeSmart

NOTES

I don't dive into WHY subprime mortgages expanded or lending standards fell. That's more political science than economics. The "why" is super controversial and it's super easy to go down a rabbit hole and get distracted from the basic economics of the Bubble, money chasing homes.

The definition of "subprime" is all over the place.

Many people, especially in the mortgage industry, don't include "Alt-A" mortgages within their definition of subprime. This just confuses things and minimizes their number of "subprime" mortgages. "Alt-A" mortgages are significantly below prime mortgages in quality so I include them in my definition of subprime.

There are other data problems in measuring the number of subprime mortgages but no matter how you slice it, there were a ton of subprime mortgages.

Just be aware that within the video the definition of subprime may change depending on who's study I'm referring to. The video isn't as internally consistent as an academic paper would be. But to give you an overview of what happened in the Great Real Estate Bubble, I wanted to pull in all the best research I could find even if the different studies weren't consistent in their definitions of subprime.
Category
Real Estate

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