October 27, 2006

Housing crash goes 100% mainstream as it's all over USA Today cover page


My only questions are:

1) What took so long, and
2) When does Time finally do its housing crash cover story?

Housing crash was yesterday's USA Today cover story. First of many in a series I would imagine that'll run for 3 to 6 years.

Sellers sing the blues as price drop sets record

Then: San Diego's housing market was so hot that the town house next to Jeff Cruce's was flipped from buyer to seller three times in three years. The owners, who never moved in, didn't even need to put up a "For Sale" sign.

Now: Since August, Cruce and seven of his neighbors have put their town houses on the market (that's nearly 20% of the units in the complex). All have cut their prices, including Cruce, who chopped his price last month by $30,000 to $559,000. Not one has received an offer yet. Each time one owner would lower the asking price, it put pressure on the others to follow, says Cruce, 38, a salesman who's moving to Atlanta.

"It was surprising just how quickly the market seemed to turn," says Mark Zandi, chief economist for Economy.com. "It was like, boom, boom, bust. It was like, 'What happened?' The psychology in the marketplace unraveled very rapidly."

Being a mortgage broker, Diaz knows some investors who used their home equity like debit cards. He says of the quick decline in real estate, "It's coming like a culture shock to many." 'Everyone was doing it'

Vicki di Bernardo agrees. "It taught us a lesson," she says of the downturn in Las Vegas. "It was a little risky, but we got caught up in it. Everyone was doing it. ... (Now) everyone is very, very nervous here about the real estate market."

"The problem is the builder is giving away homes," Rauch says.

42 comments:

kilobar said...

MSM stories like these will only accelerate the deflation back to fair value as buyers evaporate into thin air.

Anonymous said...

It was like "like, ohh my god, like my house wont be like my atm anymore." It was like an economist sounded like this chick in like my econ 101 class.

Anonymous said...

Just think the greedy morons who own apartments are plaaning to raise rents next year. Suprise Suprise all of the housing prices will collapse, so buying will become an option again.
HAHAHAHAHAHAHHAHAHAHAhahaHAhaHAhAh!!!!

keith said...

a year ago, it was really tough to do a housing bubble blog, as there were few articles to choose from

now? it's a fricking deluge. I post one out of every 20 articles I come across

From "there is no housing bubble - bubbles are for bathtubs!" to "holy crap how can we have been so stupid - it's all crashing down around us now"

humans. we're so dumb.

Anonymous said...

True there is a bubble in lots of areas, especiialy in the new home sectors. But for example, homes in the pasadena area still selling at asking price or even more unbelieveable at OVER asking price. Some areas will not be affected enough to put a dent in prices.

Metroplexual said...

Keith,

The MSM is just trying to keep us ignorant. They are so incompetent and unoriginal, always copying each other for what "is" the news.

Anonymous said...

Anon
Friday, October 27, 2006 8:20:38 PM -


BAHHAHAHAHA! How many homes are you trying to find a GF for?



Crispy (TM)

Metroplexual said...
This comment has been removed by a blog administrator.
Metroplexual said...
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Metroplexual said...

Should have used this one Keith.

michael said...

keith,

most of the stories i see on yours and other bubble blogs are centered around california and florida.

i live in northern virginia. do you have any great sources of information for my region?

Anonymous said...

Hey Pasadena!

Your due day is coming... This country is imploding expeditiously. After the elections your your Pasadena dream will look more like Sodam and Gomorrah!

Metroplexual said...

Noone is immune. Afraid dot even Pasadena.

Anonymous said...

builders drove it to new heights and builders will drive it into the dirt hahahahahahahahahah! let them eat granite countertops!

Smug Bastard

Anonymous said...

virginia and DC are bubble central

Metroplexual said...

Fairfax has all that homeland security industry money and the internet. It won't fall because of incomes. As I see it the region will be steady for the next decade, try saying that for anywhere else.

Paul E. Math said...

You have to have some respect for Zandi for being man enough to admit that the speed of the housing decline was a surprise to him. This was even after he had predicted a significant decline. Can you imagine Lereah ever having the balls to admit to even one iota of his own incompetence? I mean, economics can be pretty complex and confusing, even for a phd (which I am not) so it would be understandable that Lereah might make a mistake once in awhile. But he's such a scared and insecure little coward even in the face of irrefutable evidence of a housing bubble he will continue to look straight into the camera and say 'this is exactly what I had predicted and now, thank the Lord, we can return to double-digit price increases'.

I'm looking forward to Lereah's next interview, to see how the old shiester will spin the latest news.

Sorry for the sidetrack. My contempt for Lereah has a way of erupting at the slightest pretext. I suspect some of you can relate.

borkafatty said...

Denial is Not Just a River in Egypt

This morning's release of disappointing GDP figures for the third quarter capped a week of bad economic news. Nevertheless, Wall Street bulls continued to march to the pleasant beat of the "soft landing" scenario. The Fed's benign policy statement provided the soothing cadence upon which the National Association of Realtors chanted their rosy outlook for the housing market, despite more evidence supporting the opposite. However, a "soft landing" simply cannot be willed into existence no matter how many embrace it as a sure thing.

http://tinyurl.com/yzs5a2

Alan P. said...

'Everyone was doing it'

Vicki di Bernardo agrees. "It taught us a lesson," she says of the downturn in Las Vegas. "It was a little risky, but we got caught up in it. Everyone was doing it.


Well, if everyone was doing it, then everyone is screwed. You just wish everyone was doing it so you don't feel so stupid. He who laughs last, laughs loudest. Eat it stupid Cali sukkas!! HAHAHA!!!!!!!

NYC_COP said...
This comment has been removed by a blog administrator.
NYC_COP said...

Anyone know if Lereah made any comments regarding the release of yesterday's numbers?

honica jewinski said...

I don't know Mark, I kinda feel sorry for the Cali suckers. I mean, first they have to deal with the savage mexican beasts, now this? What else could go wrong for them?

Alan P. said...

Fires, floods, earthquakes?

Anonymous said...

did the feds pick Richard up?

Metroplexual said...

Is Richard now labeled an enemy combatant?

joey said...

It was just starting to get quiet. Housing seemed to have "bottomed" out a bit and the economy was looking better than previously predicted. Things just changed again after the GDP(1.6 sounds pretty crappy) and housing numbers. We hada nice lull in bad news and a 12 000 dow but that might be over soon enough.

47james said...

hey guys, i don't know why your so pissed at lereah, he is the best thing to ever happen to the bubble. he kept the ball rolling so prices would hit their peak faster. now we can just watch the ball roll down hill taking f/b, realwhores, builders, illegals and mort. brokers with it.

SMARTER THAN KEITH said...

Hey Mark,
Vegas is mostly decimating their own locals.Many casino dealers are the ones owning 6-8 houses. Most Cali investors have been out of there since 2005. But on the other hand the Phoenix Cali investors are still for the most part holding a flaming bag of SH%%.

keith said...

"A home is no longer a place to live," notes Lereah, "but a place to invest."

http://tinyurl.com/ydrk3x

Anonymous said...

economics really isn't all that complex. it only seems complex because there is so much lying about it.

bubble trouble said...

Good point anon....if all the data really were on the table, it would not be complex at all. It's the lying that goes on and the fact that we have to figure out which figures are being manipulated and how they are being manipulated.

Anonymous said...

Hey, human are not totally dumb. Some of them are pretty smart though. Especially, those that sold their houses last year or earlier this year. Those who sold their houses in late 2004 are OK too.

The dumb ones those are still buying and those that bought in the last two years.

Anonymous said...

Richard is posting in bubbletalk. Scroll all the way up.
He gets the post all to himself.

Anonymous said...

Fairfax has all that homeland security industry money and the internet. It won't fall because of incomes. As I see it the region will be steady for the next decade, try saying that for anywhere else.

Budgets sometimes have a way of changing. Just ask all the FBs who are seeing their future equity disappearing before their eyes.

Anonymous said...

"now? it's a fricking deluge"



defenite sign of market bottom.


Maybe we are in a "housing-bubble story" bubble

Anonymous said...

Long time lurker, first time poster. Just a quick comment on the Pasadena blogger. I don't think it's a troll. I rent in South Pasadena (a small town next to Pasadena) and as much as I'm hoping and waiting, for prices to drop, nothing is happening! There seems to be a bigger supply of greater fools here than anywhere else. We've had a 350% increase in prices in less than six years and the morons just keep buying. I know it will happen eventually, but I want it now. Mainly because there's a particularly obnoxious flipper working in my neighborhood who just found a greater fool to pay 40% over the already outrageous prices for a rebuild down the street. He got 1.6 million for it in August, when the highest comps in the 'hood were 1.2 in June. Now he swears he's a frickin' financial genius. He owns two houses around the corner that he paid 1.2 million for and thinks he's going to tear down and build a Mcmansion worth 3 million. It's across the street from the metrolink train tracks, in a neighborhood of (overpriced)800,000 houses. I'm just waiting for the day when those house drop 50+%, and he loses everything he made on the other house. In short, it hasn't hit here yet. It will, but WHEN!!!! Can't be too soon for me.

Bideshi said...

Interesting thread, So, how do we stop illegal immigration? I suggest going after employers and landlords. If I shelter a fugitive I am subject to prosecution. Why should it be different for an employer or landlord?

Bideshi said...

Ooops, my apologies, I meant to post this in the illegal immigration thread.

Anonymous said...

Whet Time does a cover story The bubble will be officially over

Anonymous said...

I Take that back the bubble will officially be over by Feb 2007.(even if Time doen't do a cover story)
30 year rates will be at historical lows Home prices up 6-7% by 2008.\

Anonymous said...

" "

"The plan was to renovate it and flip it," says Rauch, 37, a nurse-turned-real estate-investor.

He put the home back on the market in February, at $284,000, then lowered the price repeatedly until he hit $270,000. Still no buyers. After six months, he rented it out at a $500-a-month loss.
----------------

Oh my god! he's fvcked! I'm in Chicago, make good $$ but am totally locked out of the market.

I could not survive a -$500/mo for long....

Anonymous said...

Which builder is "giving" away homes?

What an idiot.