I Was Wrong About Housing Bubbles. Here's What Changed.

Posted by Tim Bray on June 7th, 2026

Market Analysis • A Correction

Why I Changed My Mind About Housing Bubbles

Revisiting an old theory in light of what the pandemic — and our own local data — taught us about prices, value, and the dollar itself.

By Tim Bray  •  Broker / Owner  •  Seaport Real Estate Services

Editor’s Note

This article revisits and corrects an earlier piece published on this blog — “Housing Bubbles & Market Crashes: The Holy Grail,” originally written by Barry Neilsen and modified by Tim Bray. The years since have tested its central claim, and I’d rather correct the record openly than let an old argument stand unchallenged.

Years ago, I published a piece on this blog about housing bubbles, market crashes, and the idea of mean reversion —…

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HOUSING BUBBLES & MARKET CRASHES - The Holy Grail (Updated)

Posted by Tim Bray on February 2nd, 2021

Unlike the stock market, where most people understand and accept the risk that prices may fall, most people who buy a house don't ever think that the value of their home will ever decrease.

The housing market, like other assets, is susceptible to unsustainable gains, and bubbles are formed over time even though many people feel it is a sure bet for growth.  That's because of the large transaction costs associated with purchasing a home, not to mention the carrying costs of owning and maintaining a home discourage speculative behavior. However, housing markets do go through periods of irrational exuberance.

This article will help to explain real estate cycles, triggers that cause them, and why consumers should be cognizant of the forces at play…

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