Question: What Is A Housing Bubble?

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Mar 27, 2015
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Behavioral Finance, Question of the Day, Budgeting, Investing, Current Events, Video Resource

Many of the students in your class may have first-hand experience with the housing bubble.  Now a story from PBS NewsHour (8 minute video) is suggesting that bubbles may be inflating again in certain Florida markets.

Here are some questions to ask your students to look for in this piece:

  • What is a “bubble”?  What types of investments may be susceptible to “bubbles?”
  • What evidence does the reporter use to prove that a bubble currently exists?
  • Why did rents rise after the housing crash in 2008-09?
  • Why is real estate such an attractive investment for investors? Think leverage and being able to borrow 80%+ of the value of a home!

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Check out the NGPF Lesson on What’s the Cost of Living?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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