Housing Bubble

“It was worth 250 but appraised for double” Hat Tip to Marlow at 360Digest.

When IrvineRenter approached us to write a review about his book I almost said no. Although I still follow the local housing market closely I really didn’t have the time nor energy to keep up with all the housing blogs. A week or so passed and the book came in the mail and just sat [...]

Our friend Irvine Renter over at the Irvine Housing Blog has finished his book: "The Great Housing Bubble: Why Did House Prices Fall?" It's available now from Amazon. He's also scheduled a book signing Nov. 12 at JT Schmid's at The District in Tustin if you'd like to meet the Internet celeb-turned author in the flesh.We were lucky enough to read a manuscript. It's a very good book, written by some

Information is true power.  The idea that only certain experts can explain economic phenomena is falling by the wayside.  What has occurred over the past few years is a rapid shift in how people digest their information.  In the housing sector, information is absolutely vital.  Not only is information important but having accurate information.  You [...]

What is the trouble now?

I saw this today and thought it was “cute”.  A little sad that this video has happened to thousands of people.

You may have noticed that my most recent Real Homes of Genius examples have shifted from inner city $500,000 homes to struggling high priced “prime” areas like Beverly Hills and Culver City. The reason is that this housing correction is impacting properties in every corner of California. In 2005 and 2006, it was [...]Related Posts:■Real Homes of Genius: Today we Salute you Brea.

You may have noticed that my most recent Real Homes of Genius examples have shifted from inner city $500,000 homes to struggling high priced “prime” areas like Beverly Hills and Culver City. The reason is that this housing correction is impacting properties in every corner of California. In 2005 and 2006, it was [...]Related Posts:■Real Homes of Genius: Today we Salute you Brea.

The Washington Post has an excellent three part series that will be highlighting the epic in progress housing bubble. For those of you who are still uncertain how this entire jigsaw puzzle comes together, this resource will prove to be invaluable. You have to wonder how the entire economy has become so [...]

These policies, often referred to as "smart growth," create a scarcity of land, artificially raise the price of housing, and, again, have increased the exposure of the market to risky mortgage debt. When more liberal loan policies were implemented, metropolitan areas that had adopted these more restrictive policies lacked the resilient land markets that would have allowed the greater demand to be accommodated without inordinate increases in house prices.A few voices in the wilderness on both sides of the political spectrum have pointed to the role of excessive land use policies in driving up housing costs. For example: Liberal economist Paul Krugman of The New York Times put most of his conservative colleagues to shame in noting that the house price bubble has been limited

Need to know why the housing market got out of control? Take a look at these 4 articles: 1. Going broke on $100,000 a year 2. 10 overpriced California Homes 3. A couple with $130,000 goes into foreclosure 4. No Housing Bottom! If you are interested, you should subscribe to the quarterly newsletter which will [...]

Need to know why the housing market got out of control? Take a look at these 4 articles: 1. Going broke on $100,000 a year 2. 10 overpriced California Homes 3. A couple with $130,000 goes into foreclosure 4. No Housing Bottom! If you are interested, you should subscribe to the quarterly newsletter which will [...]

Housing Bubble video  below shows homeowners who got themselves in deep real estate trouble.  My guess is that this guy bought his home in the year 2000. Just like many homeowners he made a great deal of equity in his home and thought he could refinance. Bad idea. Not just because it’s obvious now, it just doesn’t make good sense [...]

Government guarantees, global capital flows, and a consumption binge add up to a national mortgage crisis.  By Robertson Morrow From the security of their own homes, many sneer at the get-rich-quick crowd that lost money when the tech bubble burst. But many who would throw stones are living in glass houses—barely maintained by fragile second mortgages. The brash [...]

I found this YouTube video on the Wall Street Journal online's real estate blog Developments. According to them, it was written by a former home appraiser in California.    

Well the week definitely ended on a sour note and appropriately so. A trio of CEOs made their case for insane compensation while their companies walked off the proverbial cliff. We also had the largest number of job losses in 5 years making it harder for certain people to deny that we really [...]Related Posts:■How I learned to Love SoCal and Forget the Bubble!■Foreclosures? Housing Bubble? In Southern California? Impossible!■About■What Do Wedding Invitations, Arson, and Moonwalking have to do with Housing? Apparently, they are the new Tactics in Reworking Mortgages.■What really goes on with Black-matter SIVs. A Micro-case study. My Experience with Prosper and how it is Similar to the Current Mortgage Debacle.

Several years before the housing bubble burst, there were a few lonesome voices in the media -- such as Yale's Dr. Robert Shiller and former UCLA Anderson Forecast's Chrisopher Thornberg (now with Beacon Economics) -- insisting that there would be serious consequences to pay for rising home values that had no connection at all to underlying economic fundamentals. In the aftermath comes the obvious question: how did such an important story stay for so long under the radar? Dr. Shiller has an answer, which he provides in the New York Times:ONE great puzzle about the recent housing bubble is why even most experts didn’t recognize the bubble as it was forming.The failure to recognize the housing bubble is the core reason for the collapsing house of cards we are seeing in financial markets

These are just some of the interesting articles the media publish today about the housing bust. US Home Prices Plunged 4.5% in Third Quarter Recession Worries Are On the Rise O.C. foreclosures rising faster than in ‘90s

                    Housing price bubblesPrice movements generated in the market due to the self-fulfilling prophecies of market participants are often called “bubbles“ to denote their dependence on events that are extraneous to the market. The idea that bubbles might exist is often traced to J. M. Keynes’s (1936) description of an equity market as an environment in which speculators anticipate “what average opinion expects average opinion to be“, rather than focusing on things fundamental to the market.In the literature (e.g. Flood and Hodrick) a bubble is characterised as a certain type of deviation from equilibrium price based on fundamental factors. In the case of housing market, the market fundamental price is the equilibrium price based on income, employment, real interest rate etc. A deviation of the current market price of the asset from the value implied by

Why a blog in Finnish housing buble?Asset BubblePrice of any type of accommodations (kerrostalo, paritalo, rivitalo, omakotitalo) are overwhelmingly overvalued.Yet no one seems to be worry about the level of prices. Why is that? Are people ignorant? have income followed the surge of housing price? are we running short of land? the construction industry is slow to produce houses/flats?-Throughout this blog we will try to gather evidence on why we are currently in a bubble that is about to deflate.Psychology bubbleIn fact many factors have contributed to the current housing bubble we are witnessing today. Who has never heard about people telling that "You are wasting money by renting. Housing price has gone up and will always. Housing is a sure investment. You haven't bought?", it tells a lot about how deep it is anchored in people mind that buying a house, today, will make your life better and will be a good investment. We will try demistify that.This blog will try as well

From TelegraphThe fallout from the worst US housing bubble in history has much further to run, investor Jim Rogers has warned.Mr Rogers, a former partner of George Soros who retired at the age of 37, told Bloomberg: "This is only time in world history when people were able to buy houses with no money down and in fact, in some cases, the builders gave them money for a down payment.''The debris from the steepest slump in US housing for almost 20 years has contributed to the turmoil in credit and equity markets.advertisementJust this week, Accredited Home Lenders, a subprime lender in the US, warned it may go bankrupt. The sub-prime mortgage crisis has wrecked global markets around the world and forced investment banks to pull $43bn worth of deals in the past fortnight.Mr Rogers, who made much of his fortune in the commodities bull run of the 1970s, said: "So this bubble is the worst we've had in housing and it's going to be the worst before itsover cleaning it out.''Banks and US mo

Take a long and hard look at the chart above. Sometimes a picture is worth a thousand words or in this case, worth half a million. Many would be housing buyers have felt the angst of never being... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

KB Home CEO sees U.S. housing market declining in '08 by Reuters - 7/20/07 snip:The CEO of KB Home, the No. 5 U.S. home builder, said on Thursday he does not expect the overall U.S. home market to bottom out until the end of next year and that prices will not increase until well into 2009. "By the end of '08 it will start to stabilize," Jeffrey Mezger told Reuters. "Then it will start to go back up in '09. I think it will take a year"...Miami Condo Glut Pushes Florida's Economy to Brink of Recession by Bloomberg - 7/20/07 snip:In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building. The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida. "Florida is the epicenter for all the problems that exist i

Here is another out of touch kooky academic talking rubbish.

I’m in a celebratory mood. Today marks our 100th post on Dr. Housing Bubble! While reviewing the archives of previous posts, it turns out that I’ve written over 300 pages worth of housing bubble... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

So far I have been one hundred percent accurate in my predictions for the subprime lending industry, its effect on the housing market and its fallout into other economic sectors. And it didn’t take an MBA or PHD in economics to see it coming. As I sit back and watch the unwinding of what [...]

So far I have been one hundred percent accurate in my predictions for the subprime lending industry, its effect on the housing market and its fallout into other economic sectors.  And it didn’t take an MBA or PHD in economics to see it coming.  As I sit back and watch the unwinding of what will become [...]

If you know of a housing bubble related cartoon that you feel is exceptional for a future post, please leave me a link in the comments section and I'll give ya a hat-tip when I post it. All Comics Courtesy of Slate.comClick an image to enlarge... New York City Housing Bubble - The Big Picture

Trust me - if you’re tracking the US housing bubble you’ll want to read this.  In the winter of 2001 my wife Jeanine and I took our annual trips over Thanksgiving and Christmas down to Los Barriles, Baja California.  For those of you lacking Google Earth, Los Barriles is located south of La Paz and north [...]

“Much has been written about panics and manias, much more than with the most outstretched, intellect we are able to follow or conceive; but one thing is certain, that at particular times a great deal... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

A real estate market decline, like any market decline, is part technical, part fundamental, and part psychological. In my previous post “How Inflated are House Prices?” I discussed the fundamental value of real estate and described how and why prices fall to their fundamental values once a bubble has burst. In this post, I intend to describe the technical and psychological factors at work during a speculative mania, and demonstrate how sub-prime lending created this bubble. A Thought Experiment I would like to start with a thought experiment. Imagine a room with 100 people representing the pool of sub-prime borrowers. These are new entrants to the market. They were previously unable to buy due to bad credit, lack of savings, etc. All of them are told they are going to bid on an asset that never goes down in value, and they will be given the ability to borrow unlimited funds (stated income loans, aka “liar loans”) The only caveat is the borrowed money must be paid back w

There was a post on a housing blog recently talking about the decrease in those searching for the illustrious “housing bubble” we all know is here. The way the article was written, they were trying... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

How much more expensive is it living in California than say in 1970? We can speculate, guess, do the housing bubble cha-cha or we can use hard data and numbers to see the actual cost of living in... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Last week DataQuick released quarterly foreclosure numbers for the state of California. If anything the numbers again are pointing to a bursting housing bubble. Take a look at the chart... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Today we will exam our friend in Normal Heights. Each week I will dissect a property that is overly valued (like what isn’t right now?) and has very little potential of selling at the current listed... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Interesting look regarding the housing bubble: www.itulip.com Filed in: housing-data [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The desperation of Gordon to keep house prices rising and therefore keep the public borrowing was demonstrated again yesterday with the announcement of the Open Market HomeBuy scheme which has been designed to help key workers buy their first house.  The possibility that the reason they cannot afford to buy a house in the traditional fashion lies with the vastly overinflated debt bubble that the UK finds itself in today has been all but ignored, and Gordon has decided instead that the best course of action is to continue inflating debt and waste £230 million in the process on a scheme which will only help around 20,000 people.  The other obvious implication is that the salaries of teachers, nurses etc. determined largely by the government are set too low and eroded each year by pay rises linked to the massively fiddled inflation figures of CPI at roughly 2%, when the cost of living is increasing at a rate far far higher.  The likelihood, as pointed out by the RICS, that assistance

Housing Bubble you say?? What do our experts say?Since 2001, we've been hearing about our doomed housing market. From a serious downturn to a full blown bubble bust, the naysayers continue to capture our attention and heighten our concerns. Is there any truth to the prophesized collapse? To find out, we asked some experts. " The fundamentals underlying housing demand in Vancouver are positive and will remain so in 2007", reports Gregory Klump, Chief Economist at the Canadian Real Estate Assocication. These fundamentals include a strong economy, high employment and income growth, and low interest rates.Urban Futures Institute economist Andrew Ramlo expects international immigration will accelerate, along with in-migration from other provinces as baby-boomers start to retire and head west, " I also see job growth remaining positive, given rising investment in public infrastructure such as the RAV line, the Gateway Project and the Olympics," says Ramlo.What would have to happen for a bub

From The ReporterNot to gloat, but "I told you so" - about two years ago, if I remember correctly. Today, nearly one in four mortgages (23.8 percent) in the Vallejo-Fairfield area are expected to be in foreclosure. That's a 405 percent increase since the 1998-2001 rates of 4.7 percent and the highest in the nation. Ain't it great to be Numero Uno?Remember the slides from the presentation I gave back in 2005 regarding foreclosures in the last six months of 2004? I only wish that I could predict the outcome of horse races and stocks as well as this. Unfortunately, horses and stocks are pretty much based on chance, not stupidity, which makes it much easier to detect and predict the outcome.My biggest concern is how much will the bailout of the stupidity and greed in the lending industry cost us taxpayers for the rest of our lives - and our descendants' lives? There are billions of dollars in bad paper floating around out there that will eventually end up in some sewer farm to be paid o