Do you get the feeling that some people are actually looking forward to having the housing bubble burst? They seem to treat the issue with a great deal of anticipatory satisfied glee. For example: Caving Floors; Collapsing Roofs.
I wonder if the issue (i.e. belief or skepticism that we are close to a bursting of some bubble) runs along owner/non-owner lines.
David, I'd almost have to agree, but with wide-eyed open-mouthed shock. I don't understand how people seem to think that mass upheaval and chaos is a good thing, if it will save them a few thousand dollars on the bottom line.
I for one, find the situation incredulous, always have.
(btw, feel free to send out atrackback, I hope some of my readers will engage your question)
Posted by: Desert Island Boy | Jun 03, 2005 at 08:16 AM
Did we have "mass upheaval and chaos" last time we had a housing bubble burst? Seriously. That's a real question. Because I don't remember anything like that. I remember reading stories about people walking away from houses that that they were "upside down" on. But mass civil strife? I don't remember anything like that.
I'm a propertly owner in a market (Texas) that is not overpriced so I'm not particularly worried about bubbles at this point. But am a terribly concerned if housing equity vanishes for a bunch of upper and middle class residents of bubble cities? Not really. I frankly can't think of any profits that are less earned than those in real estate bubbles. Except perhaps for Paris Hilton-style inheritances.
Posted by: Kent | Jun 03, 2005 at 05:13 PM
Well, of course, there's a split along owner/renter lines. Owners want the housing bubble to remain to make as much equity as they can, and owners want it to burst to bring property prices down to something they can afford. So if there's a split on who *wants* it to happen, there'll inevitably be a split on who *thinks* it will happen.
Posted by: Adam Villani | Jun 04, 2005 at 11:12 AM
I'm in no hurry for the bubble to burst. Tenants qualify for interest-only loans. They vacate. Landlords fret.
It's a renter's market.
Posted by: AF | Jun 05, 2005 at 12:54 AM
I predict Silicon Valley housing prices will drop by at least 20% within the next two years. There's no timing the exact peak, but I'm comfortable enough that we're near it that I sold my Mountain View townhouse two months ago and didn't buy anything to replace it with - I'm now renting an apartment in San Francisco.
As a contrarian, my primary indicator that it might be a bubble was the vast flood of articles by people claiming it's not a bubble. Methinks they protest too much. :-)
Posted by: Glen Raphael | Jun 06, 2005 at 11:05 PM
This bubble will burst. Like the emperors new clothes, people will be naked to the truth that human beings are smarter than home owners think. Home owners say it is sustainable, they can't even program there vcr! so they don't know. They will act smug like a confidance man, but don't buy a home, it is only for there benefit. To speed up the burst, just hold off for 18 months. It will take you longer to pay if you buy now. Just remember the average age is 57 of the baby boomer. This is there last gasp. So don't buy and make them pay.
Posted by: MIKE PURSKI | Jun 23, 2005 at 01:16 AM
Thanks, Mike. I'm 57 and we boomers will be thinking fondly of you. Seriously, do you really think that people buy a home to help the seller? That it has anything to do with that?
Posted by: David Sucher | Jun 23, 2005 at 07:33 AM
To make it simple. If people buy homes during a bubble it sustains the price for the next seller.
A prime example is a pyramid scam. When the money dries up at the bottom it collapses. Home owners/non home owner lines is a cheap excuse to face the reality that new home owners are renters with a low down payments.Existing home owners are just trading. The danger is using equity to buy useless items. AT 57 you must consider selling your home because as averages are concerned you will not see the next boom. As they say in Vegas it is time to leave the table and cash out. Just remember the house always wins if you stay. In this case the house is the bank.
Posted by: MIKE PURSKI | Jun 23, 2005 at 11:22 PM