A Look At A Previous Housing Bubble
One blogger put together a chronicle of a previous housing bubble from New York Times articles. One item:
“June 23, 1986, Monday By THOMAS J. LUECK, SPECIAL TO THE NEW YORK TIMES (NYT); Financial Desk Late City Final Edition, Section D, Page 1, Column 3.”
“The largest builder of condominiums in the New York suburbs, Kevork Hovnanian, says his biggest sales problem is crowd control. ‘We want to maintain public safety,’ he said the other day. Again and again, the Hovnanian condominiums have sold out within hours of being offered for sale.”
”And unfortunately, some owners are panicking and selling their apartments for less than they’re worth - which hurts all the rest of us.”
D@mn neighbors screwed up the comps!
Very interesting… was this a nationwide phenomena, or constrained to NJ?
So if history repeats itself, we’re looking at a bottom again around the year 2015?…
As usual, the media hypes up the increases and lays low regarding decreases in real estate, stocks, gold, etc.
Outstanding. All aboard for another fifteen year ride around the real-estate roller coaster. We’ve just taken the chain drive up the first hill. Normalcy prevails. Prepare to hang on tight and……..SSSSCCCCRRRREEEEAAAAMMMM!!!!!!!!!!!!!!!
So if history repeats itself, we’re looking at a bottom again around the year 2015?…
And 2015 will be here before you know it. Remember when there was a lot of hoopla about the new millenium? And here we are in 2006 already. Another 6 years and we have 2012…2015 around the corner.
How time flies…..
BayQT~
This is rank speculation, but that’s what blogs are for, right? I think that 2015 will be the optimal time to buy purely for max ROI. Just like 1999-2000 was the best time to buy this past cycle. But in terms of nominal price reductions things should be pretty well rung-out by 2010. If you buy then you’ll be fine, just like folks who bought in 1995 came out fine this past cycle.
Most of the deline in house prices in Japan happened in the first 2 1/2 years but continued until today 15 years later. Most the decline in the property prices in the Asian Tigers happen in the first 2 years.
I agree… the drop will happen in the first 36 months. Inflation will “take” the rest.
And most importantly, during that 2 year freefall it should be very easy to calm anyone’s spouse down and talk them into waiting to buy a home. If it flattens mostly at that time then it will not be that big deal to buy. If it looses a little bit for a while then that’s dealable, at worst. If it is completely flat and you make no profit if you have to sell, again no problem. Hopefully one can hold on until it rises again before having to move. My girlfriend wants to buy a house with her money from her old house so badly that I have had to read this blog every single day for the last year or so just to keep holding on in my telling her to be patient. This has been a very tense subject, and I know that many of you are having exactly the same experience. When the prices come into range of appropriate prices I am going to let out the biggest exhale and drop a 1000 weight from my shoulders….
You may have seen this elsewhere. If not, here’s Ben Stein in the NYT, 1984, commenting on the California real estate collapse.
http://query.nytimes.com/gst/fullpage.html?res=9E05E3D71538F93BA35751C1A962948260
The article presents an interesting approach. I wonder if there are discrete points which could be abstracted from these articles and compared to the Japan crash and the 1928 Florida crash using the same technique. Would require a Japanese reader and access to Japanese papers and old archived U.S. papers from 1926-1930, though.
‘The music business fell into a depression in 1979, and the brokers said, ”The foreigners are buying. Compared with Paris or Teheran, real estate in Holmby Hills is a bargain.”’
Foreigners are buying? For some reason, that line sounds vaguely familiar…
“CONSUMER’S WORLD; In Today’s Housing Market, Is It Better to Buy or Rent?
February 10, 1990, Saturday
By LEONARD SLOANE (NYT); Style Desk
Late Edition - Final, Section 1, Page 50, Column 4, 923 words
http://select.nytimes.com/gst/abstract.html?res=F3061EF7345C0C738DDDAB0894D8494D81
The decision to own or to rent a home has traditionally been based on three elements: cost, personal preference and investment. But the recent decline in house and apartment prices has made a such an investment less of a sure thing and has helped to convert many potential…”
Didn’t the NY Times rerun this article just last summer? Let’s see what was the next shoe to drop…
“Northeast Housing Slowdown Spreads Into Industry Recession
December 16, 1990, Sunday
By THOMAS J. LUECK (NYT); National Desk
Late Edition - Final, Section 1, Page 1, Column 4, 1607 words
http://select.nytimes.com/gst/abstract.html?res=F30616F63D590C758DDDAB0994D8494D81
A prolonged slump in home sales that began in the New York and Boston areas soon after the stock market collapse of 1987 has expanded into a housing recession that engulfs much of the nation, according to economists and real estate executives. As always, the strength of home sales…”
NO WAY! THEY HAD THAT BACKWARDS — RECESSIONS CAUSE HOUSING BUSTS, NOT THE OTHER WAY…
And finally, five years down the road,
“For Home Buyers, Patience Has Paid Off
By NICK RAVO
Published: May 21, 1995
INTEREST rates are falling. Interest rates are falling. It’s a mantra being intoned by almost every real estate broker, mortgage banker and potential home buyer these days. And unlike other industry slogans — like “now is a good time to buy” or “prices are rising” — this one is unarguable, at least for now. “
more it’s different from the realtor(liers)
This trend seem apparent in the Chandler, Arizona, market, where the townhouse/condominium market declined from 80 to 50 sales in the last quarter. While this means it may be more difficult to sell your condo — it doesn’t mean that prices have been dropping. Condos in the Chandler area have seen a price increase from $119,000 to $179,200 in that same time period.