A few days ago an article written by Forbes’ Kenneth Rapozza said “forget the housing bubble story in Brazil, that real estate market still has legs” until 2017. Most of the calls were not his, but of real estate “experts” (read here the list of “experts” who wrongly denied the US housing bubble in 2006). And the author still seemed to agree with them:
“So what’s with the 2017 deadline? Brazil’s building out for the 2104 FIFA World Cup. In 2016, the Summer Olympics come to Rio de Janeiro. The fundamentals of Brazil real estate … have probably never been so good.”
Well, everyone has opinions, and we do respect and often read Mr. Rapozza’s insightful articles… but this one in special has caught our attention. Could he possibly be right? Absolutely. Is it likely? Not in our opinion.
Where do we start??? First, a couple of paragraphs from the article:
Our comment: Alpine’s EGLRX is down big time this year but still seems positive on the Brazilian real estate market (bubble? what bubble?). Mr. Samuel Lieber is the lead manager of EGLRX and Joel Wells’s boss. Do you guys want to know what Mr. Lieber (named by Forbes as “The Mortgage Maven“) said back in 2005 and 2006 about the US housing bubble?
“Stop worrying about bursting bubbles and get a piece of the housing boom. Buy shares of mortgage companies.” And then repeated his bullish call to Barron’s by mid-2006:
“We don’t see a bubble. Historically, home prices just don’t go down nationwide unless we are in a significant recession. The last time home prices fell nationwide was in 1990. It’s employment that really counts. The underlying fundamentals of real estate are still very positive.” (by the way, he is part of our list of “experts” who were wrong about the US housing bubble)
Having said that, back to Forbes’ article…
Final comment: Great… remember these names. They are calling the popping of the Brazil housing “bubble” in 2017.