What Causes a Real Estate Bubble?

While investors in the stock market agree and anticipate the high risks of this investment portfolio, real estate investors often assume that the value of their properties won’t decrease by much. This isn’t entirely wrong. There are a few times that a real estate bubble will form and cause similar extreme volatility as other investments. However, the housing market occasionally undergoes a period of irrational exuberance that precedes low demand and prices.

Overhead photo of a neighborhood of houses by the water
The real estate bubble is caused by multiple factors including supply and demand. | Photo by June
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