February 22, 2007

Time magazine is getting closer to that long-predicted "oops, housing crashed" cover...

Hey, someone woke up a writer at Time magazine this week! They actually ran a housing bubble story - go figure. And a really really poor one at that. But hey, it's a start.

We're still waiting (and waiting, and waiting) for that make-good cover. . After all, the housing crash is the biggest story in the country today, and did win the AP business story of 2006. But I guess Time didn't notice that.

What do you think HP'ers, will Time run maybe one of these this summer?

"Our bad - you shouldn't have gone ga-ga for real estate. Sorry!"

"The Great Housing Ponzi Scheme Has Ended"

"Housing Crash"

Here's Time's naive silly little story today (thanks HP'ers for the tip):

Will The Housing Bubble Burst in 2007?
Since early 2000, economists have been sounding the housing bubble alarm with increasing urgency. And while many markets around the country have seen prices drop in the last year, the dire, across-the-board correction that many predicted has yet to materialize.

There are several factors that could cause a real estate bubble to burst, but the most important factor, one that is sometimes overlooked, is buyer and seller sentiment-how we feel about what's likely to be the biggest windfall, or biggest purchase, of our lives.

Our real estate search and browsing patterns provide a window into the minds of buyers and sellers and offer more than a glimpse of their feelings about the current market. Take for example the simple search for "housing bubble." As bad news continues to build around the housing market, you would expect that "housing bubble" searches would be nearing a crescendo. Actually, the opposite is true.

As of the week ending February 17th 2007, searches for "housing bubble" have reached a two year low, only 4.4% of the searches on the same subject that occurred during the second week of June 2005. A media frenzy around a pending correction occurred that very same week, which demonstrates just how suggestible we are, as well as how short our attention spans can be.

Despite the impasse that the data is painting, in the depths of the search tables for this last week are a few terms to keep an eye on, such as "sell my house fast," and "how to stop a foreclosure." If those reach significant volume, signaling an urgency to sell, the housing bubble alarm might finally ring true.


Anonymous said...

anyone notice Toll Brothers getting killed and Bob Toll not calling bottom anymore?


"We were a little more disappointed than we were two weeks ago," Toll said on the call. Presidents Day's weekend had "good sales, but not anywhere near the bump that we'd typically see," Toll said.

Anonymous said...

You might want to change your acronym for David Lereah to "TSDL" The *Stupid* David Lereah. Check out the davidlereahwatch blog. He bought into his own BS and bought flipper condos at the peak of the bubble. Now they are under water. Maybe now he can be absolved of being corrupt but certainly not of being an idiot.....

veritas_faust said...

Admittedly I too get tired of waiting for the inevitable. Sometimes I feel like the crazy guy on the corner carrying a sign saying the CIA is trying to get him...or some other lame conspiracy.

But that doesn't make the facts any less true and the creation of the bubble is far from fiction.

Anonymous said...

The housing bubble is an American
tragedy. I believe it will be a huge
shock to those who perpetrated this
unprecendented fraud, when it becomes
clear how betrayed the public will
feel, whether they already had a
home or not, whether they refinanced
beyond their ability to pay or not.

A crime has been committed.

It was done by means of a large scale collusion between developers, realtors, mortgage brokers and banks,appraisers, the financial media, individual investors, & city
governments eager to collect higher
tax assessments. Have I left anyone

When I was growing up, credit was
not extended if you didn't have
the income; in fact as a single
mother in the 1980's I was told
I really didn't exist because I
had no credit. I was so old fashioned I paid as I went...

I think that was in most people's
mind. "They wouldn't give me a loan
if I couldn't afford it". In fact,
many ads psychologically played to
"being good enough" to qualify.
Then too, the money emphasis that
even permeates America's churches,
has subtlely cast a spell of belief
in basic "entitlement" over our

I want it all..I am worth...
I should be able to....the most
house I can afford...and the willingness to believe that somehow
the accounting industry has come
up with a "modern" numbers magic.

Many people cannot tell if they
can afford something or not,
especially if someone who seems
more informed, more qualified to
know, ie a realtor, a mortgage
representative tells you you can.
Even though 20 years ago you
would have been laughed out of
the office...The theory being,
certainly these finance guru's wouldn't risk their own money.

And of course they wouldn't, they
planned on bundling and unloading
these hot potatoes just as fast
as they could.

What do you do, with such a large
scale collaboration? Such a bunch
of hucksters, going all the way
to the top, to the bottom, to the
side....this fungus is networked
throughout our financial web.

And they are still promulgating lies as fast as their tongues can wobble. No one wants to admit
how bad this situation looks.
The house of cards that is
Capitalism could have been dealt
a fatal blow.


Anonymous said...

What do you expect from Time?

Aren't these folks the same imbeciles that gave "Man of the Year" titles to Adolf Hitler and Yasir Arafat?

Anonymous said...
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Anonymous said...

Housing bubble eh? Hmm never heard of it. Oh you mean the 5 year runup in prices followed by an 18 month 2-3% reduction in prices? Well if that is your definition of a bubble and crash, then sure I know it very well.

Anonymous said...

The longer it takes to burst, the more suckers get trapped in the bubble. And PKK, the US hasn't had capitalism since FDR instituted central planning in the 1930's. Laissez-faire capitalism is what the world needs, but is getting corporate fascism or socialism, depending on the country.
Yes, I am waiting and renting after selling my house for a double, and would like it to burst, but I take comfort in the longer it takes, the worse it will be. And I hope for a total collapse of this politically-correct Frankfurt School welfare/warfare society. I want chaos to reign.

Anonymous said...


and that's what it's all about with you socialists, bringing down capitalism. You don't give a damn about housing. You just see this as an opportunity to advance your communist goals of complete government control so lazy single mothers like you can steal more of my money.

Ain't gonna work honey. You and your ilk tried and failed so many times nobody believes your bullshit anymore which is why nobody is taking you idiots seriously no matter how loud you cry.

Anonymous said...

They searched for "Housing Bubble" but not for "Housing Crash"?

"how we feel about what's likely to be the biggest windfall, or biggest purchase, of our lives."

WINDFALL or PURCHASE? Nice way to load terms there Time.

Should be-

"how we feel about what's likely to be the biggest windfall, or biggest MISTAKE, of our lives."

Whistling past the cemetery....

Anonymous said...

Time Magazine, like all news magazines, either are late reporting the story or get it all wrong.
How many news magazine forecasted the end of day trading or the dot coms going bust?

Anonymous said...

Werner Erhard

try Googling that name.

I wonder if the realtor "seminars" are derivatives of this guys work.

EST, Lifespring, sorry...can't say anything more.

Don't look too far down the rabbit hole however...it's actually uglier than the Housing Bubble IMO.

Sadly enough...I speak from experience.

Anonymous said...

TIME magazine has to break the news without causing a Housing Panic (Crash). I expect to see more TIME stories that will present the housing crash as a result of some phenomenon noone could have predicted.

They won't publish the real story until there is blood in the streets. I hope they have TSDL and AG pictures on the cover.

Shakster said...

Time is a fraud.When they finally cover this thing they will act as though they weren't aware,but were probably involved in acts of ommission.I hope some bad shizzle happens to all of them one by one.

Dragasoni said...

"Housing Bubble" isn't what people are searching for...they're searching for "Housing Panic"! DUH!!

I think most bubble believers have found a blog of their choice, and have bookmarked them. I know I have! This may have somethign to do with the 4% drop in searches.

But seriously, Time, what's with the delay? This crash is well underway, and I think prices will tumble quite a bit this year. I predict $90-$100 a barrel oil, and significant gains in gold. This will eat into housing further through the summer.

2007 ought to be interesting...


Anonymous said...

Time article is very non-committal about the "bubble" and just seems to want to speculate that because people are not using certain search terms that its all circumspect as to its existence/validity.

I say thousand of blogs w/ tens of thousands of posters can't all be wrong. The billions that are being lost by banks, builders and sellers are not make believe. Buyers with good jobs and decent savings cannot afford a decent place to live unless the go toxic mortgage.

Something just is not right.

Anonymous said...

Wow Anon 10pm - you should put that post to music...could be a hit...

Time would be better off waiting until 2012/13 long after we bottom out and maybe start stabilizing again. Wouldn't want them to ruin their track record of reporting news after it actually happened.

tmaioli said...

we've been through the worst of it-the "experts" cited.

we're going to go back to those ever-rising values any day now.

Don't get priced out of the market, buy now.

Paul E. Math said...

That time article is certainly lame. Sure, buyer and seller sentiment is an operative factor in the housing market. But the most important factor? You're kidding, right?

This journalist seems to be arguing that fundamentals don't matter at all. Perhaps he's never heard of them.

Ultimately, it is the underlying fundamentals that will determine the long-term course of the market. Buyer and seller sentiment is like a lagging indicator of underlying fundamentals. It absolutely is NOT the most important factor.

tmaioli said...

“A Rolling Loan Gathers No Loss” – making a bad loan bigger to pay existing interest -hey the gov does it.

Anonymous said...
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Anonymous said...

Perhaps as a result of being older I have been truly amazed by the entire bubble. I have an ex who earns 50k per year and another 15 k in child support. Somehow she and a realtor thought it made sense to get a 550k mortgage. I was amazed by this and more amazed that somebody earning 65k with no downpayment could get such aloan. More amazing is that only few of us seem to think this is odd. Ideally, the return of the ol house mortgage = 3X annual income will return.

Anonymous said...

Media like Time, Economist, etc. used to publish big pieces at the very end of the trend, so, there will be no further crash...

Anonymous said...

I can't remember if I read it here or on one of the other bubble blogs I read - where someone tracked that the reason there was a drop on the search for "housing bubble" was because more people were searching for "housing crash" - this Time article would be funny if it weren't so pathetically behind the curve on reporting on the crash!

Anonymous said...

Time and Newsweek, just comic books for adults.

tmaioli said...


Housing search trends Google

housing crash, Housing bubble, Housing panic


Anonymous said...

Maybe the Time article should have contained something about economic data that shows that all the indicators are in place for the continuing free fall in the housing market.

Maybe I missed something but his example of internet blogging as some kind of barometer is stupid and embarrassing.

There is the very real probability that the diminished sites coming up for his "housing bubble" search is because people like me just go to the few good sites and that's it. It has nothing to do with the amount of sites. It has everything to do with the quality of site.

He's a very stupid man. Stupid and embarrasing.

If he is trying to rest his case on that stupid notion, then we know the end is near, as the excuses are becoming a little bit ridiculous.

How about this strange bit of info. For a lot of reasons, people aren't buying houses. One reason, strangely enough, might be because most are over-priced dogs that are rotting away. This, and a whole host of factors, are going to rip out the heart of so many idiots that rode this phantom gravy train.

...and the worst is yet to come. It's just starting to formulate.

Maybe he should have focused on the actual numbers, environment and other facts.

Stupid man. Stupid article.

Anonymous said...


To those who responded to my note
as if I were an ideologue, let me
make a point or two.

Humans organize around concepts and
philosophies, and individuals do their best to manage daily life in
order to raise families, live, etc.

I do not espouse any economic philosophy for the simple reason that they are just that.

I am an old fashioned person in many ways. I enjoy doing things from scratch, ie washing a wool
fleece straight from the sheep,
spinning and weaving it to garment,
sweater, etc. Because I like to know how things are done. I came from people who were very creative,
sensible, of moderate means. I read
very broadly, about pretty much any
thing that's written: cutting edge
science for the layman, economics,
textile arts, art, cooking, gardening, permaculture, old building methods, world politics,
local politics, social problems,
health and environmental issues,
how other cultures have solved human/living problems,human behavior, animal behavior, conscionsness research,religions of the world, and so on. You name it
and I read it, if there is something to be learned. I can cook
from scratch, grow wheat and take
it to bread or noodles, I've raised
chickens in the city, anoora rabbits and spun their hair to make
beautiful clothing. I've dyed with
plants and natural dyes, worked in
my father's small plastic business
and seen him design a product, make
the molds, the product, finish it, and sell it.

What do I believe in? I believe in
human creativity and common sense,
and cooking for the people you love.

What does that have to do with anything? I think sitting around
and talking to family on a daily
basis does something for children
that fast food, and microwaved
dinner, and video games and television cannot match. Something
has happened to our culture, and we
are emotionally dulled to one another, willing to use what we know to cheat each other. I hate to
think of that loosed in hard times.

If you want to prepare for anything, learn a skill for something you absolutely need in
your life. It speaks to our genes
as a creative species, and does more for self esteem than all the
money in the world. You come away
with respect for the hours of work
that were the foundation on which
we are busy building houses of questionable quality and leveraging
financial paper to the skies.

There is no ideology for what I
believe. I have always asked myself, having heard of the hard
years of the Depression from my
pablum days, these questions:

Can you eat it? If I couldn't buy
it, could I make it for myself:
what materials, how long does it
take, is it necessary? What else
is it good for? How much do we need
of anything to stay healthy, how
much per person? Does it keep us
warm? Is it toxic? Will it poison
anyone, or the earth? What does it
cost in labor, or spirit to produce
this? Can I share it?

Tell me, what ideology does that
belong to?

To the person who wants anarchy?
I don't like many things about this
current world, but Life is very
good, and it is good to be alive,
even if our own life is difficult.
I do no want to see children hungry,people suffering in the way
that anarchy brings. I do not want
to see that scenario. That's the
crap we've been shown on television
for years.

I want to see healthy people,

Anonymous said...

pkk here, accidentally hit publish
button on rather long statement,
ending with ..."healthy/people"

my point is, a simpler life, with
less obvious glitz can be very
satisfying. Richness is something
we feel, not what we see. Even if
prompted by something we see visually in front of us (large
house/bank balance, etc), the feeling is internal. I feel rich standing in the soft air of
an orchard, or surrounded by
the sound of bees in a cluster of
flowers. I feel rich harvesting
the last carrot from a garden I
tended, even if it was only semi

I feel poor when I look at a contract I knew is skewed against
my interest. I feel poor when a
doctor looks at me with a straight
face and tells me I need a drug that's going to cost me $200 a month, instead of telling me to
walk for two miles a day for free.
I feel disrespected when I am told
something has great value as a
collectible when it is clearly
ugly and nothing but a bling to
catch my eye for a moment.

I have to rely on my own judgement.
I have to trust myself to remind
myself of what is likely, what is
real. I tell myself what is fantasy, what is true. I go back
down the technology scale if I can't afford the current model to
find something I can substitute:
ie walking, eating fresh food, making it myself, using what I have
in a diffent way, ...These are hard
learned lessons, and my strengths.

What ideology is that? I met a younger man on the bus last year
and in the course of conversation
re current events with several
passengers, he said he was an
anarchist and wanted everything to
blow up, and didn't I too, a 62
year old grandma type? I said hell
no, who would feed people?
I said I want to garden. My ideology is reasonably close to
Permaculture if I have to claim
one. We could start by growing food
everywhere, and since 40% flowers
aid in pollinization, that would
be lovely, don't you think? Not
manicured, couldn't use sprays, but

Capitalism imploding? That's just
an observation, based on the leveraging aspect, and readings of
history. Most cultures/empires contain the seeds of their destruction in the behavior of what
led them to success. It's just life.

That's all I have to say. PKK

Anonymous said...
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Lou campo said...

Another underlying factor is that Mortgage Financing is starting to tighten up. I know of two deals that fell through due to the inability to secure financing. Inventories will rise and sales will decrease and the glut of downtown condos will create a huge over-supply and prices will fall, dramatically. The % of pre-sold condos is decreasing and speculators are trying to rent or sell or bailing out and forfeiting their deposits. Once the snowball gains momentume then we'll see a dramatic rise in listing perhaps by October/November. For those looking for a steal and who sold 6 months ago at the peak, hang in there and wait , not necessarily for a massive downturn, but for the unfortunate foreign investor that is losing his shirt in San Diego and Florida and Sinapore and is starting to panic about the ripple effect in Vancouver and is astute enough to take a loss now before it gets crazy. Relieve the poor schmuck of his anxieties and pick up his over-priced condo for 50 cents on the dollar which is what it truly is worth

Anonymous said...

Also, to play Devil's Advocate, if this person from TIME is seeing less online traffic regarding the housing bubble, then doesn't it stand to reason that it's an indication of the exact opposite of his point?

...that maybe interest in buying a house has really, really gone down.

As in, "Why involve myself in looking or commenting online to the housing bubble when I'm clearly not going to buy in the next couple of years, given the obvious economic data?"

Anonymous said...

I don't know why people think just because things don't turn on a dime from good to bad that means there must not be a problem. The problem wasn't created overnight; it won't unwind overnight, but the aggregate will start to show shortly. Based on the HELOC w/drwls I was guessing the end of 2007 for the credit crunch to set in. If the price of oil skyrockets that'll just put the aggregate into overdrive.

People can discuss credit default swaps and the more esoteric effects, but it never needs to get the complicated, the simple fact of the matter is that people will no longer be able to spend money.
And even most MSM journalists can understand that concept.