So is there a housing bubble ? From my perspective, prices seem pretty inflated but according to the mainstream media types, this is just a minor adjustment. However, for the past week-and-a-half the department of doom and gloom, (i.e the Internet) has been a rumble with various peices about the severity of the potential downturn. Here’s a few:
- Apparently the Adjustable Rate Mortgage (ARM) is a bad idea. Shocker.
- Kottke.org brought this horrifying line graph from the NYT to our attention. All those stories my dad tells about comic books costing a nickel vaguely apply to houses as well.
- What’s with the media saying it’s all good?
Newspapers earn money from advertising placed by Realtors®, so papers have a strong motive to publish the Realtors’® unrealistic forecasts. Worse, Realtors® have a near-monopoly on sale price information, and newspaper reporters never ask Realtors® hard questions like “how do we know you’re not lying about those prices?” The result is an endless stream of stories which minimize or just ignore the crash.
From patrick.net, an intresting and well documented read on the SF Bay’s role in this.
- Mainstream media outlet bashing aside, the Economist calls this the biggest bubble in history, rivaling the stock bubble of the 1920’s.
- And finally to round out this bit of doom and gloom, this economist guy with a crap-ton of abbreviations after his name is predicting very very not fun times economically for next year due to the hypothetical bursting of the hypothetical bubble.
The hell with liquids on planes, Bush, Inc. should be looking at ways to spin this to scare people into voting for them.