Housing bubble bears

September 24, 2009Jon Brooks Comments Off

“When will California see peak housing prices again? According to Moody’s, not until 2030.”

“The housing market has further to fall and will not bounce back to prior levels for a long, long time. Sorry everyone. Sorry.”

“I know many people with kids feel they have to own a house. But for me I will choose freedom for the rest of my life. Take that six percent and !*%@+* it where nothing seems to shine. You will never see a dime from me.”

ForSale2The housing comeback has hit a snag. In what one analyst called “an unpleasant surprise,” a National Association of Realtors’ report announced a 2.7% decrease in existing home sales in August. What that means long-term,nobody knows. But the real estate blogosphere, for its part, looks decidedly bearish as we continue to sit in the middle of one the worst housing collapses in U.S. history. Here’s a quick look at three of the naysayers.

Dr. Housing Bubble focuses primarily on the once-superheated California real estate market. This recent post examines the reasons behind last week’s Moody’s forecast that California’s (as well as Florida’s) real estate prices won’t re-hit their peak until at least 2030, and issues a caution:

So as California is experiencing its own depression we have a group of people trying to sucker people back into buying homes. The rhetoric seems eerily familiar to the bubble days. “If you don’t buy you’ll be priced out!” or “you’ll miss the next move up!” and people jump on this. Many are going to be shocked as 2010 rolls around. Anyone can logically understand that an economy with depression like unemployment is not a good place for a housing market.

Bubble Meter has been tracking housing since the halcyon days of 2005, when people practically thought buying a share in someone’s closet was a good investment. As you may have noticed, times have changed. This post from last week highlights a recent online comment from a loan offiicer:

Folks, the bubble was all about giving a loan to anyone who had a pulse. That credit is long, long gone, and IMO getting harder to get. No more easy money. 49% of the USA has a credit score below 669. I am guessing (based on actual sales experience this year) that a good 1/3 of all people who could buy a home two years ago are now toast. That doesn’t even include people who are now unemployed and without work or who just recently go re-employed (2 years work history now, no gaps for a house loan). The housing market has further to fall and will not bounce back to prior levels for a long, long time. Sorry everyone. Sorry.


The Housing Bubble blog is running a series of “regular guy” interviews, exploring the housing collapse’s effect on real people. You can read those here, here, and here. This post recounts a recent awful experience in selling a home and serves as an example of how fundamental convictions about owning real estate may have changed:

I did not just get rid of a house. I got rid of Sundays doing yard work. I got rid of witnessing the neighbor’s kids go through their teenage years at their pool while the hip-hop blasted. I got rid of having no flexibility to look for a job where I wanted to look for a job. I got rid of being over $250,000 in debt and feeling like I had to go to work every day and say, “yes sir” because I was a debt slave. I got rid of a lot of things. I got back a sense of freedom and that was worth its weight in platinum. I was all smiles.

The moment I sold that boat anchor was the day I began my eternal boycott. It was my independence day from the scam that is known as “the real estate market”. I could state from that day forth that I never again wanted to deal with a real estate agent. I never again wanted to deal with a mortgage broker. I never wanted to have a house for sale. I never wanted to have to fight with my wife about the nickels and dimes that were paid on the house. Renting is not throwing my money away any more than eating a steak, instead of ramen noodles, is throwing money away.

I will gladly sign over a check to my landlord for the opportunity to pass along all problems onto him or her or whatever. Today I received an email that a good friend in the North Carolina mountains had a basement full of water. I spoke to a colleague in Atlanta and he had pumped 250 gallons of water out of his basement in the past few days. Their tales make me feel bad for them but they make me feel wonderful that I have not bought into the fairy tale that owning a house is the American Dream. I know many people with kids feel they have to own a house. I can understand that. But for me I will choose freedom for the rest of my life. Take that six percent and shove it where nothing seems to shine. You will never see a dime from me.

Also, don’t forget, you have to pay $40 per house when you are assessed for street repairs in Monopoly. Realtors, you may want to take this guy off your mailing list.

We’ll take a look at some more housing blogs soon…

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