Given the current depression/recession, it is hard to see another bubble coming. But real estate (in a few cities)-like SF, Boston, Seattle, is up considerably from the low point (in parts of Boston, people are getting offers above the listed price).
Now, it is much harder to get a mortgage, and you do have to put down a significant down payment. Interest rates are very low…so what would it take to have another insane boom in residential real estate?
The other question is inflation-as awareness grows (of the depreciation of the currency), will people see real estate as a good hedge?
That’s part of the answer right there. Interest rates are being kept artificially low, which tends to push up prices. Once that artificial stimulus is removed, it will put an added downward pressure on R prices.
The Fed is trying to thread the needle here, in propping up RE prices until the economy gathers steam, at which point they would (gradually?) remove the stimulus and let market forces take over. But what they’re doing is unprecedented, and human beings - including and perhaps especially economists - have an extremely poor track record in predicting the outcome of their actions. So there’s a very big risk that they get it wrong and things come crashing down at some point.
I suspect it won’t happen until demographic factors favor it. Given that the Baby boom is entering the “downsizing” phase or at least not needing to upgrade because of a bigger family, I suspect it will be at least several decades until a really big boom could happen, just because for the next decade or two demographic factors alone would be against it. Plus the fed seems to want to keep us on the Japan path as far as recovery which would also mean decades.