Back in June 2005, TIME magazine put what in hindsight turned out to be a massive housing bubble on its cover, cleverly calling it “Home $weet Home”. Inside, the main story titled America’s House Party raved about how disk jockeys, hair dressers and Taco Bell cashiers were making fortunes flipping houses:
You shouldn’t get the impression that you can make six figures in real estate by snapping your fingers. Just ask Max Kaiser. It once took him a whole hour. The South Florida real estate investor bought a Miami-area two-bedroom luxury condo–which had not yet been built–for $425,000 last year. After signing the purchase papers, Kaiser, 32, heard that a couple outside the developer’s office was interested in the same apartment. So he sold it to them on the spot for $525,000. “I heard it’s now going for $570,000, but what can you do?” he says. Don’t cry for Kaiser. Four years ago, he was an accountant, stultified by his job. Now he’s pricing Porsche Carreras.
At that time, I wondered if the cover story portends a real estate downturn. It turned out that in a mere weeks, the housing market started to slow down, setting off a chain reaction of economic events that brought the financial world so close to Armageddon.
How TIMEs have changed! Now, with US National home prices back at the level they were in the Fall of 2003, the magazine is at it again putting the housing market on the cover (thanks to Thicken My Wallet for alerting us to the story), only this TIME the caption reads “Rethinking Homeownership: Why owning a home may no longer make economic sense”. This may or may not be the absolute best time to buy a home in the US but we can say with some confidence that it is less risky buying a home after prices have dropped sharply than it would have back in 2005 after years of strong home price increases. Did TIME once again nail the precise moment in which the market turns? We’ll know in 2015.
