Is This Harvard Report of Continued Strength in Housing Markets Good News?

According to this report from Harvard, the housing bubble, if it’s a bubble, is in no danger of popping anytime soon. Is that good news? It depends on whether you are a have or a have-not. It’s good news for existing homeowners, but bad news for renters, potential first-time buyers, and commuters:

No Slowdown in Housing Market Seen, Report Says, By Kirstin Downey, Washington Post: … Harvard University economists see little reason for homeowner gloom: U.S. home prices have been climbing for 13 years, with the rise in 2004 the largest annual jump since 1979, according to a new report from the university's Joint Center for Housing Studies. … In a report to be released today … the Harvard economists say the market continues to be fueled by easy credit, low interest rates, affluent baby boomers buying second homes and the continued growth of immigration. Moreover, thanks to an expanding economy, regulatory constraints and a limited supply of land for development, they see no sign of a slowdown. "The muscularity and potency of this market continues to amaze," said Nicolas P. Retsinas, the center's director and a former assistant secretary for housing at the Housing and Urban Development Department. … But some Americans have been left out of the party ... Renters face a diminishing supply of apartments because rental-housing construction fell to a 10-year low in 2004 and affordable units that are being demolished to make way for high-end condominiums …. Many renters can't afford the new units being constructed. About half of renters now face "severe cost burdens," the report said. However, there are fewer renters because homeownership has risen to a record high of 69 percent of households, as renters took advantage of lower interest rates … The price increases in the purchase market have caused particular anguish for would-be first-time homeowners, particularly those living in high-priced markets such as Southern California, New York, Washington and Florida coasts. In 33 of the nation's 110 metropolitan areas, median home prices now are about four times median incomes. Land constraints in many of those cities make it likely that the regions will have "permanently higher prices," the report said. "There's increasing distance between the housing haves and have-nots," Retsinas said. … Where house prices are higher, commutes are growing longer. About 20 percent of Boston area households live 40 miles out of the central business district, as do about 10 percent in Las Vegas, New York, Portland, San Francisco and Washington. Consequently, traffic congestion is worsening. About 3.1 million workers commute an hour or more a day, often from a house in a suburb to another distant suburb, making it more difficult for people to carpool…