Search Results for: housing bubble

Photo by Joe WilcoxApr 10, 202210:23 pm

Pop Goes Another Housing Bubble

The current housing bubble—and there absolutely is one—bears only modest resemblance to the previous catastrophe, which I warned about in a lengthy August 2005 analysis. Rising mortgage rates already are deflating the 2020’s-decade bubble, but the pop is unavoidable without fundamental changes in the actual market or the myths used to explain existing dynamics.

Since before anyone heard of SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19, which economic and societal disruption super-inflated the housing bubble, I had warned about a dangerous trend that ignores common sense observation of national demographics: Among the two largest segments, Baby Boomers are dying off and Millennials aren’t having many kids. As population growth stalls, there will be less demand for housing because there will be fewer people to buy. Meaning: All the babbling about not enough inventory has set into motion an overbuilding frenzy that is sure to deflate home values in the not-so-distant future. Before pandemic lockdowns, I had thought within 10 years. I now expect less than five—if we’re lucky.

Responsibility by Joe WilcoxFeb 2, 20154:48 pm

Perpetual Prosperity Psychology and the Housing Bubble

Something about the housing bubble narrative bugs me: Conspiracy. Evil bankers conspired to bilk Americans by financing home loans to people who could never pay, to then repackage bad mortgages as good investment products. While I lauded Matt Taibbi news analyses in 2010 and 2013 for exposing financial institution malfeasance, the blame game always seemed to ignore one other party’s culpability: Borrowers.

New research paper “Changes in Buyer Composition and the Expansion of Credit During the Boom” is a fascinating post-bubble autopsy. Its conclusions, if they survive the test, rewrite the bubble narrative, which revision makes more sense to me.

Living by Joe WilcoxAug 25, 20063:44 pm

Housing Bubble Myths Pop

For more than a year I’ve warned that the housing market would retreat with wicked vengeance, with reverberations moving through the US economy as it did earlier in other countries. Today’s Fortune story “Getting real about the real estate bubble” rips apart some of the myths sustaining the bubble.

Shawn Tully whacks the hell out of four bubble myths: “As long as job growth is strong, prices can’t go down”; “the builders learned their lesson in the last downturn. They won’t swamp the market with new houses when the market turns”; “low interest rates will keep values rising, or at the very least, put a floor under prices”; “restriction on development in the suburbs ensure low supply, and guarantee rising prices”.

Econolypse by Joe WilcoxNov 12, 20059:55 am

The Housing Bubble Pops

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.

Money by Joe WilcoxAug 13, 200512:26 pm

Pop Goes the Housing Bubble

Last summer, my wife, daughter and I scoured the Washington suburb of Bowie for a house to buy. After a month of house hunting, we decided to stay put in our rental house, located in a nicer neighborhood and much closer to downtown Washington (We live off of Connecticut Ave. just three miles from the city).

The decision not to buy came with great angst. Rising real estate prices made the potential equity gains look promising, and we were simply ready to be homeowners. But the math simply didn’t work. When factoring in taxes and insurance, our monthly mortgage would have approached $2,200, compared to our $1,100—starting this month, $1,200—rent. We couldn’t see how our quality of life would be better doubling our monthly housing payment, even factoring in potential equity gains or tax breaks.

Photo by Joe WilcoxMay 17, 202110:17 pm

Welcome to the San Diego Housing Boom (I Mean Bubble)

Gulp. San Diego home prices are skyrocketing far worse than my recent essays report. For some unexplainable algorithmic reason, a short news clip from the local Fox affiliate popped up in my YouTube feed, reporting rapid rise in the median home price. One year ago: $671,000. One month ago: $800,000. Currently: $825,000. The clip doesn’t cite a source and my quick online news search didn’t find one. By my math, the annual increase is 22.9 percent. Yikes.

Let’s look at one property on North Avenue in my neighborhood of University Heights. On Dec. 29, 2019, I captured the Featured Image, which because of uncharacteristic underexposure by Leica Q required extensive post-production correction and refinement. Vitals, aperture manually set: f/5.6, ISO 100, 1/125 sec, 28mm; 10:21 a.m. PST.

Photo by Joe WilcoxApr 29, 20229:42 pm

Fenced Out of Affordable Housing

My daughter rents storage space at one of the local facilities. From my infrequent trips to the place over the years, I have observed stark changes. For starters: An increasing number of people, many of them clearly employed, living out of a vehicle and storing their stuff. With the cost of housing so incredulously expensive in San Diego, these working nomads are not surprising to find. What shocks is how many more I see compared to 18 months ago.

Since a new report about residential renting released this week, I will focus on that topic and let be soaring home selling prices for another time. (If you can’t wait: “Pop Goes Another Housing Bubble” and “Simply Stated: San Diego Unaffordable Housing“.) According to Zumper, rents rose 31.3 percent year-over-year in April 2022. “As a result, San Diego has leapfrogged San Jose and Los Angeles to become the nation’s fifth most expensive city”. Ugh, and I know it’s a fact from watching rents relentlessly rise.

Living by Joe WilcoxJul 18, 201712:27 pm

Don’t Believe Housing Market Lies

I once again see disturbing trends rearing their ugly heads in the U.S. housing market. Twelve years ago, I warned about the housing bubble long before it burst—then living in the Washington, D.C.-metro area. Now my vantage point is San Diego, where home prices soar and sales (finally) start to stagnate.

Justification, set against measurable trends, often is a fantastic measure that something is amiss.

Metaphor: In film “The Big Short“, set during last decade, a Florida real estate agent drives around a group of Wall Street investors trying to discern whether or not there is a housing bubble. As they pass property after property for sale, she explains: “The market is in an itsy-bitsy little gully right now”. Eh, yeah. That gully later became a giant sinkhole. This morning, I received a newsletter from a local realtor that claims: “Pending home sales were sluggish in April as low supply reared its head”. Crazy thing, I see plenty of inventory for sale—and for increasingly longer times today than four or five months ago. The newsletter’s assertion rings like a justification worth concern.

People by Joe WilcoxFeb 22, 20107:33 pm

What Worthless Means in Housing Dollars

Their home, meanwhile, which was originally valued at $585,000, had depreciated severely in three scant years. It was now essentially worthless at $270,000. Attorney Wajahat Ali This is the dramatic and sad kind of situation […]

Living by Joe WilcoxMar 24, 20066:59 pm

Housing Prices Decline

After warm weather temporarily boosted home sales in January, reality has returned. According to a CNN Money article, today, home sales dipped in February. More importantly, home prices receded—to an average $230,400, or decline of $6,900 (3 percent)—compared to February 2005.

I am no economist, but I expect an acceleration of the trend. Many U.S. consumers had been using home equity like bank accounts, greatly contributing to overall spending and GDP growth. Trouble signs are everywhere—and well beyond the housing sector. With the exception of some very profitable oil companies, last quarter’s earnings announcements hinted of troubles with consumer spending. When companies like Intel, even Wal-Mart, lower earnings estimate (as they did for first quarter), something’s amiss. And it is.

Photo by Joe WilcoxMay 11, 20229:37 pm

The Cats of University Heights: Sheen

We stay on Louisiana Street, where on the same block you might meet: Cuddles, Honcho, Jingles, Kuro, Regal, Saunter, or Squeaky. All-blacks are often hardest for me to distinguish. This fine feline bears resemblance to Kuro, who was spotted on a nearby property, but without bell collar; so I take a chance that the two are not one and the same.

The beastie backlog remains, but with fewer left to publish. While I have seen this shorthair several times over several months, the documented meeting (and greeting) occurred on Jan. 28, 2022.

Photo by Joe WilcoxNov 14, 202110:40 pm

A Rose by Any Other Name is Gone

Following “The Tree Tragedy” that destroyed the provider of shade (for us) and food and refuge (for birds and squirrels), I was ready to give notice and move out of our apartment. One problem: In December 2020, Governor Gavin Newsom essentially closed down the state for the entire month in response to a reported surge in SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19 cases (e.g., positive tests for infection).

But Spring (e.g., Early Summer in San Diego parlance) brought more birds than any other year—many flocking to a hedge nearby our assigned parking space. Across the street, they, and other animals, used the mighty date palm as a majestic habitat. But South American Palm Weevils infested the tree, which the city destroyed in late July. The bugs are not indigenous and removal of infected palms seeks to slow their spread.