Econolypse

The Housing Bubble Pops

Leave a comment

Serious are the signs that the housing bubble has started rapid deflation here in the Washington, D.C., area. Summer 2004, my family chose not to purchase a house in Bowie, Md., because, even then, I was convinced that housing prices were way over-inflated. Since, I’ve warned plenty of people the end would rapidly come.

Earlier, I expected the housing bubble to stay inflated into 2006, but Hurricane Katrina’s widespread economic rumblings appear to have put on the squeeze. As recently as October, New York-market deflation forebode coming trouble. 

Friends I warned over the last 18 months generally responded: “Yes, but that could never happen here. Washington is a unique market”. Unnnnh! Sound the Jeopardy buzzer.

Friend of mine in Bowie, Md., had to drop his selling price by $35,000 to get a contract, after the house sat on the market for more than 30 days. Six months earlier, the house probably would have moved within days and for more than the selling price.

My daughter started her trick or treating in an affluent Kensington, Md., neighborhood, where lives a friend. House on the corner selling for $550,000 hadn’t, as of Halloween; one interested buyer in its month on the market.

Trouble is here. The housing bubble is definitely deflating. My question: How big will be the pop? And when?

Photo Credit: Jeremy Zawodny

Leave a Reply