Tuesday, May 16, 2006

Bubble Sphere Roundup

Marin Real Estate Bubble had April RE data for God's country (aka Marin County).

Check out this chart that shows what percentage of listed housing units that have reduced their asking price. Nice job Crash2006. Data was compiled from ZipRealty.

A 22 story condo tower is planned in the Phoenix metro area. It will be located right near a runway. This project is unlikely to fly.

Overpriced DC reports on about this brainiac who has this speculative idea of living of "that we could make a living by buying condos, living in them for two years, selling for a big profit and repeating. The appreciation would be more than we could make by working and the profits would be tax free. What could be better, right? The RE party is over. Time to take away the kool aid.

Episode 2 Not just the Bloggers anymore discusses the 'mainstreaming' of the housing bubble talk. Right on.

That is all folks.


  1. Hello all,

    I read this blog every few days, and have found it informative for various links and stories. I don't feel one way or the other regarding inflated housing/state of the markets. Just sort of detached observation at so much activity -- and I am a little amazed at how opinionated some people leaving comments are.

    But I have to say that I am beginning to wonder about this blogger's neutrality and motivations. Statements like the one in today's post about the Phoenix condo tower -- "this project is unlikely to fly". Is there any real analysis going into these statements, i.e. research and reporting of new information, or are these just pure opinions at this point? I'm all for informative commentary, but these posts are starting to sound like they just reinforce the bloggers conclusion -- in a way that seems like it's becoming a little bit too much of a personal battle?

    I'd prefer a return to some of the older posts, just reporting interesting links, sales, stories. Without premature conclusions overdramatically stated at the end of the posts?

    just my observations. thanks.

  2. "Statements like the one in today's post about the Phoenix condo tower -- "this project is unlikely to fly". Is there any real analysis going into these statements, i.e. research and reporting of new information, or are these just pure opinions at this point?"

    Keith over at Housing Panic did the analysis and came to a logical conclusion which I fully concur with.

  3. I wouldn't try that condo trick going forward, but with 20/20 hindsite it would have worked very nicely in many places from about 2001 to late last year. For instance, many three bedroom rowhouses in Cap Hill that were selling for low to mid 300's in 2001 (not right around E. Market of course) were selling for 600+ by late 2005. 60-75k a year in appreciation. You'd have to subtract for the cost of work on the houses, which often needed TLC and updating, and you'd have to figure out how to live in the meantime if you weren't working, but all in all a very nice return. I'd happily take 50k a year if I didn't have to work.

  4. These blogs are not an encyclopedic listing of facts and figures only. It's facts and figures interspersed with the bloggers opinions and observations. If the numbers and stats are all you want, there are always links and references to where the data can be viewed without commentary. This is not a scientific, peer-reviewed site that is seeking parity or objective conclusions. David believes a bubble exists and posts information pertinent to his conclusion--most now supportive, some not so much. It just happens to be that he's more correct every day, as more data come out that support his hypothesis. By coming to this blog, you are indicated you have some interest in the housing market. If you don't like David's personal take on it, then by all means, start your own or find another more to your liking. But it's hard to be humble when an event you've been discussing for a long time seems to be coming closer to fruition. The housing bulls have gloated for the past few years that housing bears were all wrong, it's different this time. Well, the jury is still out, but the numbers show a definite slowdown and shift towards at best leveling off. Even price stagnation to allow wages to catch up with prices will be a (not-so) "soft landing" where inflation slowly eats away equity you thought you had, potentially leaving many FB's banking on appreciation to pay back their HELOC owing more than they borrowed.

  5. I await those who come screaming in here about data to back my comment "shift towards leveling off at best". It's looking at the sales numbers that have dropped significantly, in addition to the massive inventories around the area., and seeing at or around inflation single digit appreciations YoY as well as small declines in prices. 4.4% appreciation is less than inflation and wage growth when you take the core from 2005 (3.4%) and add in energy, food and housing costs not included. That is leveling off at best.

  6. Mose - Many three bedroom rowhouses on Capitol Hill were selling in the mid-$100,000 range in the mid-1990's. Hindsight is always 20/20. BTW, it costs about half as much to rent one of those things as it does to buy one, in the present market. And it looks like an inordinate amount of "freshly renovated" rowhouses are all of a sudden for sale up there. Wonder why?

  7. I saw a DC row house on the news last night that collapsed. Poor old lady barely made it out. God bless her soul...

  8. I saw that too. A contracting crew undercut her foundation, and the house basically fell sideways and ended up leaning on the neighbor's house. It had to be knocked down to take the pressure off the neighbor. Sad. None of her belongings were salvagable because there was no way of getting them out before knocking the house down.