Something puzzling

about the real estate bubble narrative:

I also am unsure how Shiller’s concept of real estate price bubbles in “superstar” cities is to be reconciled with the fact that the problems with mortgage defaults initially proved to be most serious in rustbelt areas where there had been very little real estate price inflation.

.

via: Econbrowser: Report from Jackson Hole

The WSJ today reports that a good chunk of the defaults were not for owner occupied houses–real estate speculators–in the “superstar” markets, as far as I can tell.

There is something about lax credit standards, as much as  bubbles going on here. It is to empirically measure a ‘bubble,’ though.

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