Is “Impact Of The Internet” The “Untold Bubble Story”?
Reades suggested a topic about the role of the internet and the housing bubble. “While reading yesterday’s ‘The Rest Of The Worst Is Yet To Come’ post, something occurred to me. People in Des Moines, Iowa are aware of what is going on in the major real estate markets at either end of the country in a way they never were before, and it’s affecting their market in real time. Why? The Internet, baby!”
“Twenty years ago, how many people in Des Moines, Iowa would even be aware of the real estate market in Florida or San Diego? What time lag would it take for information about a boom or bust to travel thousands of miles and affect a critical mass of people in another, largely unrelated market?”
“Maybe the untold story behind this whole thing is the impact of the Internet. Just as the Internet allowed folks the ability to research home prices and then buy them at long-distances with great confidence in what they ‘knew’ about the national market, so will the Internet spread the bad news now that the mania is turning to fear. Fear is contagious, and the Internet is a wonderful spreader of viruses.”
A reply, “I don’t believe that the internet is speeding up information transfer, on the contrary. Please explain to me why people in Europe are totally unaware of the housing bubble troubles in the US. We do have internet here as well.”
“I can assure you there is NO stories about the US housing bubble in Netherlands, either on the TV news or in the newspapers; nothing at all for at least the last year or so. And of course there are NO stories about the EU housing bubble either. If people don’t look for something they will not find it.”
“People are not interested in housing bubble stories, they believe all the rosy crap that the official news outlets (which are just as corrupt as those in the US) feed them. The 1635 tulip bubble in the Netherlands collapsed (minus 90%) within a week. That was long before the internet and the telephone. It’s all about psychology, not about technology.”
Another said, “I’ve been following the Seattle bubble closely, and what many market watchers there believe is that because Boeing was hit incredibly hard by 9/11, the Seattle real estate market had a significant lag behind many others. However, I’ve been wondering if the Seattle market won’t turn down faster, more in line with LA and MA and FL once news becomes more prevalent on a national level.”
“What happens when Time Magazine sports a cover with an illustration of an imploding bubble?”
One pointed this out, “Well The Economist, which is European if not continental, had the collapse of the American RE bubble as a cover story last year.”
One saw the internet as a factor all along, “I think the Internet was what helped equity locusts buy in Oregon and Arizona. In turn, that helped turn the bubble into a national phenomenon, or at least to extend it into areas that would not have seen such appreciation before the Internet.”
The Associated Press. “Call it a million-dollar impulse purchase. Ahmed Goheer was checking e-mail before bed this month when he read a message saying a Web site was selling luxury apartments in this boomtown.”
“So Goheer, a vice president at a Dubai investment bank, clicked. On the site, two apartments in a nearly finished high-rise caught his eye. Goheer looked over the floor plans and did some calculations. Still in his pajamas, the Pakistani banker jumped in his Range Rover and drove past the tower under construction, just to make sure it existed. Then he returned to his computer and clicked ‘buy now.’ In an instant, Goheer agreed to spend just more than $1 million for two apartments.”
“On the same site, Goheer arranged for a loan from local mortgage company, which took his personal information and gave him provisional approval. Goheer sealed the deal just after midnight by leaving a $2,700 deposit with his credit card.”
“‘There was no sense waiting. I bought it that night,’ Goheer said.”
“Selling property online might not make sense in markets where a buyer wants to see the neighborhood and inspect the house. But in Dubai’s high-octane market, apartments are often sold from architect’s renderings in neighborhoods that won’t exist for years.”
“‘There’s nothing physical to show them anyway,’ said Omar Hijazi, who oversees Simsari.”
“As of this week, Simsari, which is still in pre-launch mode, had sold four properties and was finalizing 20 more where mortgages had been approved online, Hijazi said. For those who insist on seeing the construction site, Simsari offers satellite imagery that gives views of neighboring homes and their backyard swimming pools.”
“Whether it’s smart to spend $500,000 on an apartment in Dubai, rather than in, say, London or New York, is another matter. Steve Brice, head of research at Standard Chartered Bank in Dubai, said the local market is overheated and nearing the peak of a boom that started in 2002 when foreigners were given permission to buy.”
“Skyrocketing prices that doubled over three years have slowed. Apartment prices jumped 10 percent in 2005 and home prices jumped 30 percent, Brice said. He believes housing prices will stabilize or start falling by summer, when dozens of 30- and 40-story apartment towers in the Dubai Marina neighborhood will be complete.”
“‘At some point soon we’re going to see the scales tip in favor of excess supply,’ Brice said. ‘If you’re prepared to buy and hold for the long haul, it’s not a bad purchase.’”
The average Joe’s think Blogs, pro or con, on any issue are by unwritten definition “Lunatic Fringe”.
They are as easily dismissed as the words on a pamphlet stuffed into your palm on Hollywood blvd.
Hey but if Hal Fishbeck says it’s true….. Confirmation Supremo.
From a brokerage site on the east end of Long Island. This agent is basically taunting HB bloggers. Today he ran a headline called “What Bubbles are About …Again” along with photos of kids blowing soap bubbles. This agent has declared the HB over.
If you ask me, the carnage has abrely started in the Hamptons - it’s filled with second homes all bought as INVESTMENTS.
Housing Bubble Blogs…
January 31st, 2007
…whatever are they going to angst about next?
Let’s see…a few of my predictions:
1- Global Warming
2- Meteors
3- Water Filters 3.0
4- China taking over the world
5- Cellphones causing enlarged ear lobes
Add your prediction in comments and we’ll post it here. md
http://thehamptons.wordpress.com/
That’s very true. Whenever I reference Ben’s blog in a discussion about RE, I always preface it with “I’m not the guy who thinks aliens killed Kennedy or the UN’s black helicopters are going to take over the US, but…”
While would you feel the need to make such an idiotic disclaimer? The posters on this site have been consistently right in their predictions of where the market is headed, and why, while the MSN and RE touts have consistently gotten it wrong.
Sammy, that may be true but the idiots at work still look at me like I’m from Uranus when I discuss real estate. I am the only one in the office that has been right every step of the way and I am still the only one that is laughed at for my views.
Stand in the middle of your co-workers and say, “I think real estate is really set to take off in 2007.” They will nod in approval and look at you with love and respect.
Stand amidst that same group and say, “I think the deterioration of subprime lending and the meltdown of the secondary mortgage bond market will sink real estate in 2007.” They will look at you like you just pulled out your willy and stuck it in the coffee pot. Not that I know what that actual facial expression looks like. Okay, I do, but I was really young at the time and the coffee was cold.
Making pleasant conversation is one thing but it’s completely irrelevant to what you do with your money. You’re talking about the zeitgeist, not financial planning.
When people tell me, “Yeah, but housing always goes up!” I just ask, “Is that a fact?” Suckers and their money. I toss out the name of this blog. If they’re curious and dilligent, I might have saved them from ruin. If they’re deliberately ignorant of the reality of the market, it’s not my (or your) responsibility to bring them around. For a great many people, “Liberty” means the freedom to hang yourself.
Among the greedy, I’d prefer to be independently wealthy and unpopular rather than broke with broke friends.
“the coffee was cold.”
imploder says it feels better when coffee is hot
“idiots at work still look at me like I’m from Uranus”
imploder notes you are making headway… last year they just looked at you like U R Anus
There’s a reason why the phrase “primacy of print” exists. I constantly inveigh against the MSM with my writing partner and how the bubble will burst, and he believes it, BUT when the LA Times prints a story in the RE section proclaiming that the market has recovered and prices will not drop much, it takes a lot of effort on my part to convince him that they’re merely shills.
Most of us grew up reading papers and watching the evening news, and it’s hard to break those habits. Plus, the lunatic fringe has used the Net to its own insane devices, so telling someone that you read something in a blog doesn’t carry much weight. I worked with a guy recently who seemed quite reasonable, until we got into a discussion about 9/11 and he looked at me like I was nuts because I didn’t understand that Bush and Cheney blew up the Towers, etc. What did he suggest I read? Not the New York Times or the WSJ, it was a blog.
I think situations like the bubble will bolster the credibility of blogs in general, but there will always be lunatics using this same medium to spread their nutty ideas.
Anything goes on the internet. It’s up to the reader to filter out the legit sites from the kooks.
luckly, everyone has a different opinion of what constitutes a “kook”
My favorite factoid about Fishbeck is that he owns a series of toupes, each slightly longer than the next so that it appears his hair is actually growing. Twit.
excellent
The power of the internet, like any form of communication, lies in the integrity of its information/sources. People have to have enough basic intelligence to be able to glean the good info from among the garbage….
So for many, confusion will still ensue because they are not able to find the worthy sources in the morass.
On January 12, Bill Moyers addressed the Media Reform
Conference. His remarks were clearly relevant to much of
what’s happening here on the HBB and elsewhere in
cyberspace: The MSM’s unwillingness to report and discuss
realities which do not support the worldview of their
corporate owners and benefactors. The speech is long, but
it’s well worth the effort to read or listen to. I’ve
excerpted two particularly appropriate sections below.
Links follow.
Life on the Plantation
by Bill Moyers
Delivered to the Media Reform Conference, Memphis, TN
January 12, 2007
[...]
“So if we need to know what is happening, and big media won’t
tell us; if we need to know why it matters, and big media
won’t tell us; if we need to know what to do about it, and
big media won’t tell us – it’s clear what we have to do: we
have to tell the story ourselves.”
“And this is what the plantation owners fear most of all.”
[...]
“The greatest challenge to the plantation mentality of the
media giants is the innovation and expression made possible
by the digital revolution. I may still prefer the newspaper
for its investigative journalism and in-depth analysis but
we now have in our hands the means to tell a different story
than big media tells. Our story. The other story of America
that says free speech is not just corporate speech, that
news is not just chattel in the field, living the bossman’s
story. This is the real gift of the digital revolution. The
Internet, cell phones and digital cameras that can transmit
images over the Internet, make possible a nation of story
tellers…every citizen a Tom Paine.”
Text of speech
Edited Audio of speech
“The greatest challenge to the plantation mentality of the
media giants is the innovation and expression made possible
by the digital revolution.”
“Plantation mentality”–what a great way to describe the lack of hard information peddled by the corporate media.
In the future, Ben Jones will be celebrated with Harriet Tubman for keeping freedom alive.
Unfortunately, to Average American Joe, Moyers is also “Lunatic Fringe”
Bill Moyers is part of the old MSM. Drudge, the blogs and other sites are the new media.
What does that got to do with the typical Average Joe Animatrons that believe everything they hear on Fox News. They think that he is “Lunatic Fringe”….regardless of his career path.
My view is that all real estate is local, and that the minute a listing goes up in any neighborhood, there is a “buzz” over the asking price. Who can resist living next door and not wondering what is going on. So out comes the $800,000 listing, and all the neighbors start comparing the quality of their house to the subject listing. Bigger? Nicer carpets? Better layout? So they base the value of their house on the new listing. OK, so far everybody is happy. And then, the listing starts aging. Like in 30 days, all the neighbors figure something must be wrong with the agent, the condition of the house. Then at about 60 days, the reality of the market sets in.
It’s really hard to figure the prices for an entire city, when there are pockets of desirable homes in good school districts and less desirable homes in slum areas. People set values for their homes on a particular neighborhood, and to make a generalization about an entire city is not very accurate.
People set value for their homes on a particular neighborhood, and yet generalization about an entire city can be quite accurate nonetheless.
geekish: the variance of home prices is not unbounded, hence law of large numbers & central limit theorems apply.
real world: Detroit, Michigan vs London, UK
Saw this on CNN Money
What is slowing down Ford is that construction is slowing down. Companies are cutting back. The numbers haven’t shown it but the economy is starting to slip.
i think work sized truck sales are gonna go in the sh#ter…. They were as oversold as houses.
OT: We’re the Government
http://www.youtube.com/watch?v=pvsADU2OOWM
It might be OT, but it’s Spot On! LOL
Very funny video — and true.
Only issue I have with it is the tax part. Most people don’t mind sole proprietors earning whatever they can. If they take the risks, I have no problem with them getting the rewards. I’ve worked for both sole proprietorships and corporations, and the sole proprietors were much more likely to earn income within reasonable multiples of their lowest paid employees. Not because they were trying to be nice (though that doesn’t hurt), but because that was the only way for the business to survive.
Today’s corporatists move from one corporation to the other, sucking the companies dry and moving on, like the parasites that they are.
The problem lies with the corporations — large and small. If an individual takes no real personal risk (can lose everything, including their own investments and private property, even if he/she didn’t commit a crime), they should not be entitled to all the rewards.
Single family home inventory in the Portland, ME market based on Portland (04101-03), Falmouth, Cumberland and North Yarmouth:
352 9/6/2005
394 9/19/2005
400 9/29/2005
425 11/3/2005
406 12/5/2005
352 1/3/2006
344 2/2/2006
345 3/3/2006
351 4/4/2006
409 6/4/2006
477 7/22/2006
467 9/9/2006
437 11/5/2006
355 12/15/2006
311 12/30/2006
269 2/2/2007
In twenty years, my prediction is that there will be no Ford Motor Company and housing market whatsover in Dubai. There may not even be a “Dubai.”
Dubai –Is that in Califronia?
Anyway, that is the most over-built place on the planet. It shows you that the building boom, not just the Housing Bubble, is global. All those perto-dollars slashing around the globe are there in Dubai to see.
Jas
With 25% of the population of Dubai from Iran(and in fact 80% of the population are non-citizens)and the majority of the UAE military being made up of non-citizens, I think we might have to be liberating it from someone in the near future.
I say we refrain from “liberating” anyone and focus on our own concerns.
Especially Dubai, the US already has far too many overpriced “luxury condo” already, it does not need any more and certainly does not need to get in the middle of a place like Dubai which pays laborers $4 a day to build 7 star luxury hotels. Sounds like a disaster in the making as soon as the right spark hits it.
“I say we refrain from “liberating” anyone and focus on our own…”
Hey, we don’t wanna “liberate” the Texan’s or Oklahoman’s Oil. Them’s some tough bastards…
Always choose your fight boys….
Dubai has another reason it’s going crazy. (Sort of like London)
It’s where rich middle easterners park their money out of the hands of their governments (real estate can’t be transferred back electronically), and it’s where they’ll hope to park their butts out of the range of jihadi head-choppers when the hummus really hits the fan.
I have to admit that I found this blog sorta by accident .I don’t know what compelled me to type in “housing crash” one day when I was screwing around with the computer .
I can remember the first time I read the posts on this site I wondered if the people were madhatters . I had not been brain-washed by the NAR or realtors about the market because I had not been paying attention to the real estate market .
I can just imagine what a brain-washed ,true -believer regarding the hyped up RE market ,(who needs to be de-programed ),must think when they first tune in on this site .
I remember that at first I found it hard to believe that the lenders were making the kind of loans they were ,but the evidence kept coming in . When I found out the kind of lending they resorted to during this housing boom ,that is when I knew a crash was certain .
The truth sets you free and there is nothing worse than being deceived by the self-serving interest of a group to the point that you can’t make a intelligent decision about your own life on what your own best interest are .It goes back to just give me the facts ,never mind the self-serving spin .
What did lead us all here? One day I did a Google search on “the world’s most angry woman” and it led me to TXChick57’s posts. I’ve been here ever since.
I’m just kidding. She gets such a bad reputation. Check out the earlier post where somebody said that she hates all areas. That’s funny. In reality, she is always mentioning places that she would like to buy into, after this madness has played out. I think California and Arizona have been the most likely areas for “the world’s most angry woman” to buy into.
I don’t intend to start a gender discussion, but I wonder if TXchick57 would be perceived the same way if “he” were Txdude57?
I am sure that there is a way to find out.
Jas
Don’t feel sorry for TXChick57. She is probably the most respected person on this blog. I think all of the regulars love to see her posts. Let me ask you this. Would GetStucco be even more respected if he was StuccoChick? I bet he/she would. It cuts both ways.
Stucco, don’t go running off to do anything drastic just to improve your place in Blogsylvania.
Just curious NYCityBoy ,…..and you don’t have to answer, but why would you be doing a search on “the world’s most angry women “. And than I’m wondering why that would lead to a txchick57 post ,unless it was those flipper bulls that were calling txchick57 a angry women .
Come to think of it ,I remember a year ago on this site a bunch of people were calling txchick57 angry . I think that was at a time when flippers couldn’t take the truth ,and Txchick would blast them with their stupidity and greed .
What happens in New York stays in New York.
LOL
Oh ya… what about this rash?
Okay, okay, I admit it…
I’m really Jane Schmoe!
yes and i’m implodette….
What led me here was looking into how to buy a house— specifically, how to know when to buy a house. I’d looked into books but they were all based on the assumption that you were buying a house, yay, and they didn’t have hard numbers on affordability. My searches led me to nice clear essays on what you should calculate for— 3 times income, like I’d thought— and from there to housing bubble blogs like Housing Bubble Casualty (formerly Another FB.)
From there it’s just a step in addiction to check the blogroll. And now I’ve got numbers to back up the gut feeling of “there’s no way ANYBODY can afford these prices.”
I believe I clicked a link here from Fat Wallet’s monster “Is there a real estate housing bubble, and, if there is, what will pop it?” thread last summer. Man, was that a relief.
I think that I discovered this blog in a link from patrick.net. I’ve tinking RE has been getting overprices since the taxman told me in Dec ‘03 that my house had gone up 50% since I bought it in in ‘99.
The reality is that asset bubbles are happening at a higher frequency due to the more rapid dissemination of information. I go on the web, read various local real estate blogs and then transfer that information to friends and relatives.
For example, this morning I showed my dad bearmaster’s excellent charts on the Redondo beach market (asking prices and sales for January) and noted how once again, no sales over $1.4M for two months running, but lots of inventory above that level.
He’ll go take that information (or a subset of it) to his retirement investment club. So yes, I believe the internet is spreading the news quickly. Most people wouldn’t realize how many companies are getting ready to move employees out of the south bay without the internet; the LA times isn’t reporting on it.
What I love about housing blogs is the shear amount of information being shared.
And who would think more than one or two sub-primes had failed without the implode-o-meter? I would know about Metropolitan, Coast, or the numerous institutions on the watch list without this rapid source of information transfer.
Does Joe or Jane sixpack know about it yet? No. They don’t read! But they’ll here from people like you and me… Most won’t even question… but its happening.
Yet sales slow. Buyers know to negotiate… its happening: NATIONALLY. Realtors ™ want to think that all real estate is still local. Once upon a time only local news was available. Not today… Besides, the work force is 10X more mobile than even a decade ago (I have over six friends working out of the country; I bet almost everyone on the blog knows someone doing that too.)
Got popcorn?
Neil
Neil,
I enjoy your posts, and I have a question for you. How long do you think it will be before it’s going to be sensible to buy a house? And a second question… how much popcorn do you have?
Popcorn? Gotta love those warehouse stores!
Buy in bulk! 
The earliest its going to be sensible would be fall of 2008. I’m not calling that the bottom by any means. But if you look at the new home construction glut, sub-prime resets, incomes, and historical turnings of the real estate market, there is no possible way to make a case to buy before then.
Now many note that the bottom in nominal prices will probably occur in 2009. I’m agree with them. However, with a willingness to negotiate (which translates into a willingness to walk away from 2 or 3 deals), you should be able to get a good deal after summer 2008. Until then, sellers just won’t be interested in cashing out at market rate. (By that point they’ll be tired of chasing the market down and be ready to be out!) I also place a higher utilization value on owning than many of the other posters on this blog. That’s ok; you must make your own decision there. Besides, I’m a big believer in buying when there is YEARS of inventory.
(selection!)
This will be somewhat market dependent and does assume you have a 20%+ down payment ready.
Its tough waiting. Pressure from family is common. Its human nature to want to own. But its going to take a large price drop in any bubble market to make it sensible to buy.
Got popcorn?
Neil
ps
sorry about the late reply, but I do have a life.
3 articles in The SJ Merc real estate section today felt very blog like. One on scam foreclosures, one on appraisal pressure, and one on tightening credit standards. By the way inventory is ticking back up as per their weekly chart.
LOL! how about confirmation of multiple bidders.
Oldest scam in the world!
“Impact of the Internet”— the last few years has been a blessing to those who were humble, open, and question this whole mess for lack of a better word, what was really going on. The central bankers coupled with their fiat money made loans with little or no guidelines as that was their meal ticket for profits. Most loans were sold to mutual funds, hedge funds with little recourse if any. The internet warned,”forcasted” this but few even today question fiat money and how it is created and the power behind it. Retired mortgage broker.
Can anyone else imagine the odors coming out the those Dubai
hi-rise kitchens/apartments once occupied, or is just me?
You couldn’t pay me to live there or give me a unit gratis.
OK, I’ll take it and flip it in a day ….
People pay a bunch of moola to go to a restaurant here in LA called Darma Greb and say it’s great…Just don’t order the Goats Head Soup…. i mean unless you’ve already have had it, and like it…
Course the smell of Michael Jackson’s cheif cooking up what ever american dish he wants might sicken you…
(since I hear he lives there part time)
I would think that roasted boy buttock would smell fairly delicious actually.
ok, you won. you grossed imploder out..
What, you don’t like tasty Middle Eastern food?
Okay, I’ll admit Halal meat can sometimes be less than appealing. If you want to eat holy food, I’d definately go for the kosher hot dogs.
As they say in Gainesville, “if you’re not a Gator, then you’re Gatorbait.”
I think that Goheer fellow is mentally ill buying a house online by clicking without even remote negotiation is great for the people with the asking price. But I doubt his white ellephant is built.
The internet, speed and the available information and knowleged opened and shared is great…but common sense is STILL required to Operate.(2 keywords back there)
The high technology prebuilt Visa card purchases via the internet verses brick and motor inspection of FULLY EXISTING(keywords) structures is STILL banking your financial Future on the “Goodwill and ‘Honesty” of others in the REIC foodchain dispite PJ evening research and a highspeed driveby.( danger $igns and Good Luck… hee hee)
This trendy technique might be fine for the movers and shackers of the world that can AFFORD to GAMBLE( more keywords) but not for the average joe6pack and family who are rolling the dice with “scared” money and living from paycheck to paycheck from disaster.( Ex-used car salesmen in disguise next paragraph)
This process is NO DIFFERENT than the prebuilt 30-40% off Condo Buy-In’s of the great Florida condo Bust of the 1980’s and today. Whether via visa over a computer screen or Mr Friendly and “just sign here Charlie”, the process is STILL a Contract as a great many bigger fools are about to currently re-learn the HARD WAY.(Miss Lay’s 10th Grade HS Business & Finance for Dummies)
There is no substitute for common sense and “Show my inspector, my lawyer and me the Frigging bricks and mortor BUILDING” as I DIDN’T arrive on the last Pumpkin Wagon and I DON’T Deal in Hog and Corn Futures with MY MONEY. (Bye bye)
The internet is like listening in on those old shared phone lines. Knowing the stories from the coasts and relating to them in almost real time. Faster than a Sunday potluck, more precise than a lunchtime easdropping, the internet brings facts. Without the charts and facts from the internet (using this blog) there would be no counter to the MSM and the people making gobs of money relating to real estate.
The trends are easier to hide without the internet.
Me times ten thousand or more.
Definitely. My husband and I were remarking the other night that we all were so sheltered from truly necessary and important information before the internet.
Common refreain around our house: “Whatever did we do without the internet?”
Silly & totally O/T, but we even met online (in the days when you didn’t have to pay for it). We never would have met, if not for the internet. Best thing that ever happened to me.
I found this site the same way…I wanted to know if others thought things were totally out of whack as well, and similar to housing wizzard, i googled housing market crash…and found ben’s site…i tried posting for the first week or so, but for some reason they never showed up…then i tried again recently and it started working, but i’ve been following this site daily for almost a year…it’s nice to see that it seems we weren’t all whack jobs after all in seeing that something was amiss…
the reason i thought things were whacked was when i moved out to sacramento, and found these RE HOs trying to get me to buy a 450k+ shitbox…i actually made a freaking offer on a (10 acre mobile home) place if you can believe that…thank god i didn’t become an f’d buyer…i lowballed the guy 415k, he was asking 499k…out in North Lincoln, CA area, the guy countered with 495k…i walked…this was about 8 mos ago…drove by the other day out of curiosity…still for sale, now asking 400k…this market has consistently dropped since i moved here…i’m renting 4 bedroom for 1800 bucks / month…not gonna buy till i see the median below 250k…should be about 2 years IMHO.
thanks again ben for this site…
crush
My story is similar. Someone told me my house was worth way more than I thought it might be … so I turned to the internet to learn more. Found this blog (and others) read till my eyes crossed and decided this group was most on target. Thanks you guys … I sold early and made a bundle. It’s tucked away in CD’s and now I’m waiting for Neil’s popcorn and the rest of the show. We learned that renting leaves us with a lot more time and money. Live is good but without the internet the ending would have been different.
I found this blog after first reading the Boston Globe housing blog. There was a link there to this site. The Boston blog discussed the slow down and associated emotion but didn’t really explain why it was happening.
When I linked to this site, I found all this incredible in-depth information and couldn’t get enough. My husband is considering an intervention….he misses me.
One of the strengths of this site is that it also links to other blogs. I have become a huge Nouriel Roubini, Russ Winter, and Eric Jantzen (i-tulip) fan due to this site. I’ve dropped my MSM visits and now get my info from the various links I’ve derived from my time here.
Many posters here have been more than generous with their time explaining to us non-industry types why things work the way they do. I can’t say I find that generosity or even willingness to be frank about things in many of the other blogs I’ve visited.
The most immediate reward of reading here was the confirmation that a lot of what I thought was going on but couldn’t prove or find the proper arguments for was in fact going on. The facts were actually scarier than I could have imagined.
Thanks to all that make this blog what it is.
Sacramento is a joke.The market there is way out of whack. People are going to be hosed and homeless on the river soon.Roseville is overpriced by at least 30%.All the bay area money that was speculating is now leaving.
could not agree more
Roseville is way more than 30% overvalued. Peak bubble, houses in the neighborhood I want were going for well over $300K, now down to $250K-$275K with the occasional $300K. Area rents? $950-$1200.
Let’s see, bought a hud condo in 1997 for 68k. My neighbor told me a few years later that he sold his for 90k. I went in the house, typed in housing bubble, and I’ve been hooked ever since.
ps. Sold my condo for 249k in 05
I don’t think the Internet is “affecting” the market, per se, any more than the weatherman “affects” the weather. It is a guage, not a cause, of the bursting bubble. For one thing, only a relatively tiny segment of the public probably uses sites like this one to educate or inform themselves on market trends. The market had started to turn well before the mass media took notice. The onrushing implosion has less to do with negative reporting than being the inevitiable outcome of the debt-fueled speculative binge of recent years.
What the Internet in general, and this blog in particular, have done, is to serve as a catalyst to bring together individuals who independently suspected that the housing bubble was unsustainable. Finding like-minded others, not to mention the extremely timely and relevant information and insights that Ben posted, further crystalized and confirmed our individual and collective convictions that the RE bubble was toast. However, John Q Public is by and large ignorant of this and other HB blogs, and is more inclined to get their information from emphirical observation, i.e. noting the increase in “for sale” signs and seeing the frustration of neighbors who can’t sell their houses.
i bet alot of people got saved from buying into a inflated market when they came to this site by accident or not .
I think alot of on the fence-sitter people needed some feed-back other than the REIC . God remember how renters were looked down on and told they were “wasting their money “and they would be “priced out forever”. The RE hype was getting so thick ,without meaningful challenge from the media ,that people were being brain-washed . If you hear something enough you start to believe .
When I talk to people in the out-side world it’s amazing how many people know the spin of the promised spring bounce back market . Some people are just starting to be aware of a possible correctin in the cards ,but they think we are near the bottom . It’s hard to believe but the NAR/REIC ad campaign does have a influence .
I think the bigger a blog gets the more influence it has because of word of mouth .
Speed of information has increased 1000 fold. The average joe researched (a least to some extent) his decision using the internet. Everyone decided which side of the fence they were on much faster than before. In the final anaylisis… I don’t think it changed a damn thing.
Other people’s knowledge and experience are rarely utilized by others. People WANT to make their own mistakes, and it is their God give right, if not requirement, for them to do so. Learning can be very painful at times.
I have to agree, eventhough I’m on of the biggest bears on the west coast, I have to admit I was tempted at times to buy but alway came to the conclusion that i cant afford the current prices in california even when I’m making some good money. I always came back to this blog to reinforce my veiws and predictions here were right on.. AS for Neil, I like his popcorn phrase as I told my brother–> pay down your debts, make sure your credit is spotless, save for a downpayment and just sit back, relax and watch the show.
Hey Sammy,
Don’t know if you’ll see this (if I ever post it is usually way after others due to the time difference), but have you read The Tipping Point? I would have to argue, especially given the huge shift (especially psychological and mainstream media coverage) we have all seen in the last six to nine months, that this blog and others helped us reach the tipping point sooner than otherwise. This blog provided an overwhelming amount of information and analysis for why there was and is a huge housing bubble… without it I am sure fewer people would have had an ‘aha’ moment, and then tried to tell those closest to them about it (but then probably stopped telling others b/c for many there is no use).
Just my two cents. I know when I stumbled on this blog about eight months ago I had a suspicion things were a little bit crazy and not normal (and I only read about and talked to people about this, no real first hand knowledge of the true excesses), but this blog was the “Tipping Point” for me that made the coming implosion of the housing bubble a very strong likelihood, and then up and through 100% certainty as I continued to read, analyze and think. I am sure many here have done the same thing.
I purchased my first house in CT in 1989, I remember feeling uneasy about how “hot” the market had become, and angry about how expensive houses were becoming, but there was no info in the MM about any ‘bubble’. Since no one had internet access then, there was no way the find and share info with others, most people had no clue about what was to happen. That house was appraised for $143k in 1989, I got it for $115k and thought I got a good deal. I sold in 1999 for $115.
Now I’m in Tampa and see the same dynamics, only worse, in 2004 I started looking for ‘bubble’ info and found many great sites, including this one, to share information on what is happening. The strange thing is that so many people still have no clue, I suspect they don’t WANT to know.
I suspect they don’t WANT to know.
——————
Bingo. Every time I try to help someone out (like getting them out of a neg-am and into something which would be more likely to save them), they act like I don’t know what I’m talking about.
Been researching the housing market, credit markets, regulations, etc. for a few years now — many hours, every day. People would rather trust their “Realtors” than some jealous, bitter renter who reads blogs all the time.
Oh well. Can’t say we didn’t try, right?
I thank this site for preventing me from buying in the bubbly Sarasota-Bradenton area in early 2005. We were set on buying but I just could not believe the prices and truly was afraid of “being priced out forever”. Although I knew specualtion was rampant, I really thought the hot market could have lasted a couple more years. Once I started digging past the hyped up headlines on this site, I saw the trouble that was mounting. I started tracking local inventory levels and when I started in July 2005 there were only 215 houses for sale in the $300k-$400k range. I have tracked this weekly ever since and the number is now about 2100. A ten-fold increase in the number of houses for sale compared to 18 months ago. I believe overall inventory is up about 7-fold and we have a 2 1/2 year supply of houses. Now we’re kicking back….with the popcorn..
There was an excellent validation of the growing role of the internet in public awareness of the real estate market last week. A local Florida real estate association — Naples, I think — refused to share some of their market data with the state association because they didn’t like how they were reporting the numbers.
I believe their claim was that they didn’t like being lumped in with some other larger nearby and how that made their local inventory seem huge. That’s the claim. But, I am sure the real driver is that they hated seeing those numbers bandied about in the big bad blogosphere.
The real estate industry used to have a fairly tight hold on information. And information is power. It will be interesting to see how they react to losing that information edge over the general public.
And thanks to Ben, and Ziprealty, and Zillow, and all the jurisdictions that put housing sales and assessment info online, and Piggington.com, and the rest of the blogosphere for putting more of that information in our hands.
You may want to check if your local city or County has property resale valued online. In the case of Santa Clara County anyone can go to their web site and dig up prior sales values. May go 20-30 years back. Zillow and Zip only go back 10 years. Not enough since some areas have had bubble building 9 years.
Always read but rarely post. txchick57’s comments are one of the reasons why. Gender doesn’t matter when you are on point all the time and I have never gotten the feeling that she was angry. Just realistic.
The internet is an amazing tool but I have to say that in my pool of friends, acquaintances and family, only one other and myself use it extensively. When I ask why they don’t use it more, they say they don’t know what to look for. Well, I said, X has just been diagnosed with Grave’s Disease so aren’t you interested in finding out what’s involved? And when I inherited next door’s pregnant dog I was on the net finding out about birthing procedures and socializing pups. And the discussion about where the stones for Stonehenge came from was immediately settled with a google. How about talking to people around the world and getting the inside story of how life is for them? The net is instant gratification for info seekers, “seek and ye shall find” but the majority are yet to seek.
Instead of just getting one person or corporation’s opinion as in TV and newspapers (which I discarded years ago in favour of the net and radio), one can collate info from hundreds of people and get the inside story, often as not.
Diverging slightly, I spoke recently to the realtor who sold me my current property and she had NO IDEA there was a housing bubble in the US or the UK. Sheesh, being in Oz is no excuse for not knowing what’s going on in the rest of the world, especially when it’s specific to your field.
Note: I came across this blog about a year ago via a link on a sharetrading forum. Not only am I up to the minute on the US RE bubble but I’ve also picked up heaps of useful info on earnings/loans ratios and comparing rent with mortgage payments. Relevant stuff regardless of where in the world you are.
I came across this blog around a year ago from a link on a sharetrading forum
oops, delete last line
I found this blog through a Salon.com link last March. It has been my obsession since that date. I’ve learned and laughed so much. This is weird - after I read about the Iowa RE market yesterday morning, I commented to my husband how this blog exemplifies the impact of the internet on the range of our information now. Pre-internet (and this blog), how would I have ever known about all the different real estate markets (and the associated mind-boggling fraud) - so that I know it’s NOT different here? Info from MSM is just brainless bites.
A year ago who would have thought that bubbles and popcorn went together. Neil is the man.
rotfl
Thankfully, my water was put down before I read your post dc2o.
Got popcorn?
Neil
Heck, name an area of life the internet has not impacted.
Mmmmmm, Oh ya… that reminds me…ah… what was that again?… mmmm Oh ya!… http://www.biggins.c…...
then there’s the whole Anonymity deal. Everybody bags on david lereah or whatever his name is. Maybe he believes what he’s paid to say in public, maybe he believes it. I bet a lot of people are on here who might surprise us. Is this not at the top when you google “housing bubble”? i think that’s how i wandered in here a couple years ago, seems like. Bernanke you out there? Alan G? No telling, but occasionally there is some amazing inside info in here, most of which is over my head, but…
The entire REIC reminds me of that old TV ad for Smith Barney, “We make money the old fashioned way…We steal it”
One Ringy-Dingy ..Two Ringy dingies
“Mikey….Hello”
“How do I FEEL about a midnight flight to Gitmo Mr. Lereah? ” ?
Actually, among brokers the joke was that the quote should be “We make money the old fashioned way, we churn it.” ‘Churning’ is the practice of advising your clients to buy and sell stocks for no reason other than generating comissions through sales.
“Please explain to me why people in Europe are totally unaware of the housing bubble troubles in the US. We do have internet here as well.”
I could say the same about US buyers unaware of how badly the Australian RE market is heavy skewed for seller. The auction houses were employing fake bidders full time to doctor up ‘phantom bids’ from people who were not even legit buyers. You can Google up Phantom or fake bids Australia. It got so bad their goverment imposed fines. After that, the fake bidders disappeared leaving 1 or 2 parties. That ended the heated multiple bidders and esculating prices in Australia and prices since have been declining “over night”. Just human nature!
I wanted to add. Do we have a trade orginazation for any other products that give out monthly annual sales volumn and price changes?
Odd concept. I dont hear Detroit issuing a press release stating the volumn and price changes on all current year models. Are there more or less and price higher or lower then lasy year? Does that even matter given each home is different from all else? If anything there should be a warning label on everything the NAR pumps out.
Very few properties in Australia are auctioned and I think most prospective buyers are (1) aware of fake bids and (2) do their own due diligence before they attend. The only reason why RE prices came down is because they ran out of buyers, same as everywhere else….
An interesting story I thought I should share with everyone. My wife and I were talking about homes and home prices over dinner this evening and I mentioned that a lot of loans made out here in SoCal were stated income loans where the borrowers just wrote in their income to make the loan work.
Her immediate reply to me was, “But how do they get the loan verified?”. Yep, I’m married to a smart one.
When someone who’s not a RE person has the gut reaction that such loans are way off base, it’s amazing to me that so many people got suckered in.
As they say, common sense isn’t so common.