May 15, 2008

Isn't the housing "crisis" actually pretty darn good news?


* Home prices will fall to a level that will make it attractive for non-"owners" to buy

* Young couples will again be able to live the "American Dream", and buy a home they can afford

* The crash has washed away the mortgage fraud and crazed speculation

* The fundamentals will make sense again, making real estate an attractive investment class for intelligent investors

* Housing will no longer be seen as a get-rich-quick scheme. Homes will be treated as homes, not lottery tickets

* Angelo Mozilo will spend the rest of his life in jail, and will have his assets seized

* Housing porn TV shows will be few and far between

* Realtors will go the way of travel agents and buggy whip salesmen

So, what other good news will come about because of the "housing crisis"

36 comments:

Anonymous said...

The collapse of the housing bubble has been great but there's one thing that we should all be very concerned about. While the BubbleBuyers were enjoying their credit fueled nouveau riche orgies of greed, George Bush and his cabal of crazy Neoconservatives rewrote the laws of this nation and laid siege to the US Constitution.

What portion of the population is actually aware of the deliberate moves of the Bush administration to drastically and unconstitutionally expand the powers of the executive branch to elevate the president's powers to those of a dictator? How many people are aware of the destruction of basic human rights in laws like the Patriot Act, the Military Commissions Act, The John Warner National Defense Act? How many know that George Bush can declare martial law in the case of any national emergency? How many even care?

While the population engorged themselves on credit fueled binges of consumption the crazies staged a silent coup'd'etat on the US and the US barely blinked. Bye bye Constitution, bye bye Habeas Corpus, bye bye Bill of Rights, hello martial law.

What does America mean to you?

What makes America special?

Isn't it the US Constitution that defines liberty and the freedom of individuals the very essence of what it means to be American?

If the Constitution is ignored or virtually shredded by unconstitutional laws then isn't the very essence of America being destroyed?

Face it America. The USA is a shining red, white and blue apple on a hill with a black, putrid rotting core. It's an illusion of freedom because Americans forgot that the most dangerous threat to liberty is the corruption at the highest levels of government not some third world Arabs 4,000 miles away.

Jeff said...

Housing "crisis" means people who do honest hard work for a living and rent won't feel as left behind.

Me in OC said...

What other good news will come about because of the "housing crisis"?
Let's see. My money will only be getting 3.7% interest, the US dollar will continue to slide, and the real cost of living will continue to rise.
"Good news"?
Are you nuts?

Noodles 2 said...

Exurbia will come to be seen as a blight and waste of resources rather than the sign of growth it had been mistaken for. Mega-commutes will no longer bee seen as a viable tradeoff for more rooms that need to be filled with stuff made in China.

Anonymous said...

This crisis has hurt us all in one form or another. In principle we root for a correction in housing, but the unintended inflationary consequences aren't easy to endure.

Frank@Scottsdale-Sucks.com said...

Hell yeah! This is when intelligent people, the ones who sit tight through crashes, get ready to snag some smokin' deals. We're foaming at the mouth over here!

Anonymous said...

Keith,

That's like going over a cliff in a car, and about six inches from hitting the ground saying - "Isn't it great that we won't be falling anymore!"

It's painful to watch the BS on CNBS. Things have been set in motion. Our society is mortally wounded. There will be MUCH MORE pain before the "Renewal" comes.

Peahippo said...

I can't wait for the surviving banks to start demanding 30% down payments.

Naturally, the prices of houses will have fallen to 25% of the bubble peak by then.

Prices in the USA will fall rather uniformly until 2013. If the US Congress continues to try to effectively nationalize housing with all this bailout crap, then the trough of the fall will be even longer (2015+).

Anonymous said...

Um. Let's get this the right way around. The PROBLEM was the housing bubble. The SOLUTION is the housing crash.

The US slit it's own throat the moment it embarked on the debt binge. The economy was always going to tank after that. The housing crash at least allows the people who didn't play ball to protect themselves now.

So the dollar goes down, society gets more violent, and unemployment peaks. That was all guaranteed back in 2003. Tomorrow just came, that's all.

Other positives:
- People realise you get rich through hard work and thrift
- Obesity, depression and other results of debt-fuelled soft living reverse
- People judge each other on their character rather than their Hummer
- Kids grow up with a sense of financial responsibility.
- Public sector pensions don't get paid (yes, that's a positive)

Nick

Metroplexual said...

You forgot the energy hog McMansions going the way of the dodo. A piece in CNN Money yesterday had predictions that people are downsizing on houses in favor of amenities.

Paul E. Math said...

The good news is that we can talk to our stupid friends again without arguing over what is happening in housing.

Anonymous said...

5 houses in my neighborhood have sold in the past 2 months. in the past 2 years 3 that I know of have sold.

whatever benefits of the crash are, they better come quick cuz I don't think it's going to go on much more.

now go ahead and do the HP knee jerk reaction of calling me a realtwhore, or whatever, I'm just telling you what i'm seeing and 5/08 is not anything like 5/07 or 06. you can keep acting like it is for all i care

keyser soze said...

I hope to buy a nice little 'sin den' in 2010.

Mammoth said...

Keith asks, "Isn't the housing "crisis" actually pretty darn good news?"

Well, it deos indeed provide priceless entertainment!

On Tuesday the New York Timed published a letter from a Peter Kleeman in London. In it, he complains about the high taxes on the condo he bought in Florida:
----------------
“I own an apartment in Palm Beach but as a nonresident alien, I am not allowed to homestead. As a result, my property taxes in the last four years have risen from $4,500 to $20,000. My homesteading neighbor pays $3,000 a year for an identical unit.

The State of Florida is a magical tourist destination but runs enormous risks in trying to entice non-residents to become homeowners when legislation omits fairness in the payment of property taxes.”
----------------
WTF? You mean that you purchased property in a foreign country without first researching and understanding its property tax laws?

No sympathy for you here on HP!
-Mammoth

devestment said...

1)Appraisers won’t inflate values.

2)Banks will need to see your income.

3)Realtors will have humility.

4)The dollar will gain strength.

5)Interest rates won’t be a joke.

Anonymous said...

The unemployed (REIC - sales for building suppliers), wife-beating drunk who enforces the appearance rules for our HOA went into foreclosure last month. The bank will start the eviction soon.

Anonymous said...

This is what you get when you buy a condo in Miami. Be a sucker, too:

NYT -- Collateral Foreclosure Damage for Condo Owners

Barbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway.

Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee.

Even though she pays more, her building has broken washers and dryers and unusable exercise equipment, and her hallway is spotted with mold.

“It’s not fair,” said Ms. Sanz, a 32-year-old event planner. “The first two years, I enjoyed all of the benefits of living in a condo. I’m disappointed now. I hate the way the building looks.”

In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community.


http://tinyurl.com/5rtbkc

These suckers are paying expensive HOAs and still having to do the work themselves..bwahahahaha...what a deal! Geniuses!

Alpine the Realist said...

Housing porn shows are not going anywhere. I live in NJ and the local NBC affilaite just added a new housing porn shopw that shows the interiors of Manhattan penthouse apartments.

And how is the "housing crash" so good for you bitter renters and bubble sitters considering the fact that it is going to cost taxpayers nearly half a TRILLION dollars in bailouts that you have absolutely no power to stop?

Alpine the Realist said...

"Hell yeah! This is when intelligent people, the ones who sit tight through crashes, get ready to snag some smokin' deals. We're foaming at the mouth over here!"

Once again Frank, you are misinformed and wrong. Before you start foaming at the mouth, did you read former Fed Reserve Chairman's Paul Volcker's comments today in the NY Times?

Paul A. Volcker, former chairman of the Federal Reserve, warned on Wednesday the United States could face a 1970s-style period of skyrocketing inflation if investors lost confidence in the buying power of the dollar.”

“If there is a real loss of confidence in the dollar, then I think we are in trouble. That is something that has to be watched.

“That has to be very much in the forefront of our thinking. Without that, we are back to the inflation of the 1970s or worse,” Mr. Volcker said”


YEAH skyrocketing inflation!! I agree with the HPers, this housing crash is GREAT NEWS. We can become Zimbabwae!

Anonymous said...

Metroplexual said...

You forgot the energy hog McMansions going the way of the dodo. A piece in CNN Money yesterday had predictions that people are downsizing on houses in favor of amenities.

When they begin downsizing in favor of their annual income we will know that we have arrived at bottom.

JaneZ

Anonymous said...

LA Times/Bloomberg Poll:

.....Just slightly more than half of homeowners polled said they thought their homes would appreciate in value over the next three years. In a poll taken 14 months ago, 83% expected to see gains in the value of their homes.

Half still think their homes are appreciating....

And in 2006, just 5% of those with adjustable-rate mortgages said they were "not confident at all" that they would be able to make their mortgage payments if rates rose.

In the most recent poll, 24% of those with adjustable mortgages said they didn't think they'd be able to handle the payments if interest rates went up.

Housing gambling has slowed....

Five percent said they were "not too confident" that they could pay an adjustable rate.

Credit card debt eating them alive.

Still, despite their worries about the housing market, many of those polled haven't given up on the American dream of owning real estate. When asked where they would invest a hypothetical $1 million, a quarter of those polled said they would buy real estate, more than in any other category.

Yup, that housing "crisis" has really been pretty darn good news for Americans.

http://tinyurl.com/3mnxbd

Afterthought said...

The problem was that prices rising was interpreted as a blessing by the Boomer Establishment.

I hope we continue to build so that houses become even more affordable. Does that make me a "socialist"?

Anonymous said...

Anon May 15, 2008 6:26 AM

There will be an exodus from the US. You'd better get out ahead of the stampede!

Happy Homedebtor said...

(Yawn)
They raised prices in my neighborhood about $5K per model base in the last 2 months, and more and more people keep showing up.

Good schools, good location, good neighborhood/people for the win! ;)

Oh yeah, and soon my free $$ from the gov't making my payment & principal lower than yours will be - man, this housing crash is horrid! :D

Now to finish part of a contract proposal due tonight, wheeee! Man it sucks looking out the window at my lovely well-manicured lawn and the beautiful flowers, trees, and shrubs we planted...wow I hate life so much it hurts...

Anonymous said...

The American Dream has nothing to do with homeownership. Do your homework. The American Dream equating to a house was cooked up by realtors over 50 years ago. Looks like you gobbled it up.

mairca izda debol said...


How many know that George Bush can declare martial law in the case of any national emergency?


I think that's always been the case. George Washington did it during the Whiskey Rebellion. Lincoln did it during the Civil War. FDR put the Japanese-Americans into concentration camps.

If you want freedom, buy guns. The government cannot oppress an armed populace. The first thing that dictators do when they attempt to take power is to confiscate guns.

Anonymous said...

"Now to finish part of a contract proposal due tonight, wheeee! Man it sucks looking out the window at my lovely well-manicured lawn and the beautiful flowers, trees, and shrubs we planted...wow I hate life so much it hurts..."

I look at a well taken care of lawn myself. Except as a renter I don't have to pay anyone to take care of that lawn. My landlord pays for that. And he also pays for the pool maintenance that costs $55 a week. And he pays for all repairs and maintenance. And he pays for property taxes which run close to $6K yearly. And HOA fees which run $115 a month. And for things like chimney cleaning (yep I have a fireplace too, imagine that a fireplace in a rental !!!) and termite control, and pest control and cleaning the gutters and the yearly pine straw replacing and pretty much every cost associated with maintaining a 2900 sq ft home on a 1.1 acre lot.

So on top of the fact I pay about $1000 less a month in rent than a mortgage would cost, I pay none of the indirect costs of owning either which add another $1000 or so to my bottom line.

Life may not hurt for you. But it sure does cost more than it does for me. And I'll bet I sleep a lot better at night too.

Anonymous said...

once again happy homedebtor nails it

builders are raising prices where I live as well. one model that used to go for $700K is now $715K

the economy is still in good shape, unemployment is low, interest rates are low, stock market is sowly but surely making up the losses from earlier this year. and yet here is HP still talking about recessions, depressions and the end of the world.

oh well everyone needs a hobby i suppose

Alpine the Realist said...

"And he pays for property taxes which run close to $6K yearly. And HOA fees which run $115 a month."

No, you pay those costs you silly bitter renter! Those costs are factored into your rent. Every renter in America pays property taxes!!!!! I was a landlord once and I can tell you that the building's common charges were factored into the rent I charged. When the common charges went up, I immediately informed the tenant that their rent would be increased at the end of the lease.

Anonymous said...

.


Just returned home from the Las Vegas Money Show at the Mandalay.

Several Real Estate Investing hotshots claim housing will be on the downside til 3rd quarter of 2009, then flat for a while.



.

Anonymous said...

affordable housing is grrrreat!

Anonymous said...

Alpine the Realist said...

No, you pay those costs you silly bitter renter! Those costs are factored into your rent.


This would be true in a sane market.
But, for example, my monthly rent is 0.3% of the purchase price on my home, or less than 4% per year. Once my landlord pays his taxes, insurance, and the property management company, there's not enough left to cover the mortgage interest, let alone any of the principal.

Anonymous said...

"No, you pay those costs you silly bitter renter! Those costs are factored into your rent. Every renter in America pays property taxes!!!!! I was a landlord once and I can tell you that the building's common charges were factored into the rent I charged. When the common charges went up, I immediately informed the tenant that their rent would be increased at the end of the lease."

I wrote the above about my LL paying property tax. I looked at county records and know what my landlord pays. His mortgage alone is higher than my rent. My rent covers about 90% of the mortgage. And that is on an ARM that resets in 2009. Everything else including property tax comes out of his pocket.

My LL is the definition of an FB. And that's just fine. If he forecloses, I'll buy the house from the bank at a significant discount . Market value is down 15-20% and through a short sale or pre-foreclosure another 10-15% is a given. If he continues making the payments, I keep getting subsidized. Either way I come out ahead. Only way out for him is if the market rebounds substantially between now and his reset date. Not impossible I suppose, but highly unlikely.

As for an increase in rent, good one, thanks for the laugh. I made it more than clear to m y LL that if he was thinking of raising my rent, he might as well give an eviction notice since I wouldn't pay an extra $1 a month. He agreed and said he wouldn't raise rent for the next year. There is so much competition for my high end rental dollar he knows if he loses me, he might got months without anyone else moving in. He may be an FB but he's not a total idiot and understands what's going on.

And I am by no means bitter. I rode the boom from 2001 to 2006. I sold my house at the peak and walked away with a substantial profit. I was and still am ecstatic with the way things turned out. You on the other hand sound quite bitter with the name calling and snarky tone.

Just out of curiosity what are you doing this weekend Mr. Homeowner BigShot? Since I save thousands of dollars a month

Anonymous said...

"Either way I come out ahead."

Except you don't have a house and have just delayed the date your mortgage is finally paid off, Mr. High-End Renter. Hey, isn't high-end renter an oxymoron?

Anonymous said...

"I made it more than clear to m y LL that if he was thinking of raising my rent, he might as well give an eviction notice since I wouldn't pay an extra $1 a month."

Way to go. You have guaranteed yourself that once your landlord can do it, you'll be out on your ass. I'm sure you'll find a way to blame him, your parents, or George W. Bush.

Alpine the Realist said...

I will be playing GTA IV on my massive 60 inch HDTV this weekend. The game is so much more fun when you pretend the cops and gang bangers are bitter renters, so that this was I get more pleasure when I blow up their car with an RPG or make their head explode with a high-powered rifle.