Comments on: Housing Bubble: Reading Between the For-Sale Signs http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/ Common sense advice on money saving tips, how to get out of debt, high interest savings accounts, cd rates, money market accounts, mortgage rates, money management and more. Sun, 19 May 2013 15:54:11 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Jami Harrell http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-128270 Jami Harrell Fri, 18 Apr 2008 10:37:54 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-128270 simeonism microsoma ragamuffinism exsufflation kumyk sublid isotopic shelleater <a href="http://members.tripod.com/trizonna/" rel="nofollow">Trizonna</a> http://www.masonbruce.com/ simeonism microsoma ragamuffinism exsufflation kumyk sublid isotopic shelleater
Trizonna
http://www.masonbruce.com/

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]]> By: Clint8200 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-112535 Clint8200 Thu, 17 Jan 2008 01:41:16 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-112535 The graph is to scale. 100=0. If the graph went to zero then you would be saying a $100,000 home could be purchased for zero dollars. The graph is to scale. 100=0.

If the graph went to zero then you would be saying a $100,000 home could be purchased for zero dollars.

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]]> By: Jubal Harshaw http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-83682 Jubal Harshaw Fri, 13 Apr 2007 12:29:57 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-83682 This isn't exactly on topic but did anyone else notice that x-axis on the "alarming" graph isn't zero based? The way the scale of the graph is setup exaggerates the situation. That is not to say that the graph is inaccurrate or that there is nothing to be concerned about. But wouldn't a graph with the x-axis starting at zero be alarming enough? The graph was printed in the NY Times but it comes from a book, "Irrational Exuberance". I guess the author of the book created the graph in this way for maximum impact because "you have to scare people if you want to sell books (or newspapers)" ;) It strikes me as dishonest. So in addition to worrying about what the housing bubble will mean for my finances I have to worry about how much unnecessary fear I'm developing from reading books and following the news :D This isn’t exactly on topic but did anyone else notice that x-axis on the “alarming” graph isn’t zero based? The way the scale of the graph is setup exaggerates the situation. That is not to say that the graph is inaccurrate or that there is nothing to be concerned about. But wouldn’t a graph with the x-axis starting at zero be alarming enough?

The graph was printed in the NY Times but it comes from a book, “Irrational Exuberance”. I guess the author of the book created the graph in this way for maximum impact because “you have to scare people if you want to sell books (or newspapers)” ;) It strikes me as dishonest.

So in addition to worrying about what the housing bubble will mean for my finances I have to worry about how much unnecessary fear I’m developing from reading books and following the news :D

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]]> By: Alan Cheslow » Blog Archive » The Real Estate Roller Coaster http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-83326 Alan Cheslow » Blog Archive » The Real Estate Roller Coaster Sat, 07 Apr 2007 23:13:03 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-83326 [...] Last summer I shared a graph of American home values from 1890 to present. I found it [...]

[...] Last summer I shared a graph of American home values from 1890 to present. I found it [...]

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]]> By: www.youngmoneyblogger.com http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-39556 www.youngmoneyblogger.com Fri, 05 Jan 2007 22:08:29 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-39556 <strong>Left behind :(...</strong> Its official! House prices rose in the UK by a whopping 9.9% in 2006. That is pretty incredible, most parts of the world seem to be going through a sustained rise in property prices. But what does this mean for the average first time buyer such as mys...

Left behind :( …

Its official! House prices rose in the UK by a whopping 9.9% in 2006. That is pretty incredible, most parts of the world seem to be going through a sustained rise in property prices. But what does this mean for the average first time buyer such as mys…

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]]> By: Portland Renter http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-29286 Portland Renter Thu, 14 Dec 2006 19:13:42 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-29286 We all have "telling anecdotes" of home prices and inventories going up or down. It is right to say that "telling anecdotes" do not constitute proof. Having said that, the fact is this is a classic financial bubble, not supported by the fundamentals and it *will* end badly for many, many people. Please make sure you are not one of them. We all have “telling anecdotes” of home prices and inventories going up or down. It is right to say that “telling anecdotes” do not constitute proof. Having said that, the fact is this is a classic financial bubble, not supported by the fundamentals and it *will* end badly for many, many people. Please make sure you are not one of them.

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]]> By: Lazlo http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6929 Lazlo Tue, 05 Sep 2006 16:53:51 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6929 The reason the other graph seems less alarming is because it is based on a deceptive logarithmic scale. If it were linear like the first graph, it would be much more alarming. The reason the other graph seems less alarming is because it is based on a deceptive logarithmic scale. If it were linear like the first graph, it would be much more alarming.

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]]> By: Keys Corner » Blog Archive » Picture of a housing bubble http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6845 Keys Corner » Blog Archive » Picture of a housing bubble Sun, 03 Sep 2006 17:45:45 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6845 [...] (via Get Rich Slowly) [...]

[...] (via Get Rich Slowly) [...]

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]]> By: ScottC http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6731 ScottC Sat, 02 Sep 2006 17:31:04 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6731 There's an interesting James K. Glassman column from 2005 that takes an interesting look at the true nature of the "housing bubble": http://www.capmag.com/article.asp?id=4243 There’s an interesting James K. Glassman column from 2005 that takes an interesting look at the true nature of the “housing bubble”:

http://www.capmag.com/article.asp?id=4243

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]]> By: prlinkbiz http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6720 prlinkbiz Sat, 02 Sep 2006 15:55:41 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6720 I don't believe in the bubble. There are economic cycles. We were in a RE market that flooded with speculators. Now it is correcting. I run with a crew of real estate investors (the real ones) who make their living watching and knowing RE markets. This is the time they are stepping in to buy. Buy right, with enough down and enough to hold. I don’t believe in the bubble. There are economic cycles. We were in a RE market that flooded with speculators. Now it is correcting. I run with a crew of real estate investors (the real ones) who make their living watching and knowing RE markets. This is the time they are stepping in to buy. Buy right, with enough down and enough to hold.

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]]> By: Lee http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6697 Lee Sat, 02 Sep 2006 07:28:54 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6697 <a href="http://seattlepi.nwsource.com/local/283265_tinycondo31.html?source=mypi" rel="nofollow">This article</a> was front page news yesterday. "Affordable living" in Seattle. 296sf condos starting at $140,000. JD, is there a chart correlating income to housing prices? It'd be interesting to compare how housing prices as a percentage of income have changed. This article was front page news yesterday. “Affordable living” in Seattle. 296sf condos starting at $140,000.

JD, is there a chart correlating income to housing prices? It’d be interesting to compare how housing prices as a percentage of income have changed.

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]]> By: Emily H. http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6593 Emily H. Sat, 02 Sep 2006 01:09:51 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6593 I really wish that more homebuilders would build smaller homes, say 1200-1600 square feet, not just for the cost savings but because I wouldn't want to heat/cool/clean a house twice that size. Maybe the growing number of single home buyers will help that out--there's always older houses, but maintenance is daunting. That house in Portland is freaking gorgeous. I really wish that more homebuilders would build smaller homes, say 1200-1600 square feet, not just for the cost savings but because I wouldn’t want to heat/cool/clean a house twice that size. Maybe the growing number of single home buyers will help that out–there’s always older houses, but maintenance is daunting.

That house in Portland is freaking gorgeous.

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]]> By: Roger http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6577 Roger Fri, 01 Sep 2006 23:10:00 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6577 I don't think it actually matters really what's inside a standard house. It's shelter, and it's semi-state-of-the-art, just like the houses of 100 years ago were. I'm sure the ice-box was as expensive a consideration as a refrigerator is today. There's a lot of fripperies in houses these days, for sure, but that's just like an options list on a car. You can't legitimately complain about cars costing a ton if you check every option box, and I feel the same is true about insisting (as an example) that a house has to be 2900 sq. ft. to be livable or has to have expensive german appliances. How many people can really afford a $750K+ house? Are there really THAT many families whose household income is $200K+? I don’t think it actually matters really what’s inside a standard house. It’s shelter, and it’s semi-state-of-the-art, just like the houses of 100 years ago were. I’m sure the ice-box was as expensive a consideration as a refrigerator is today.

There’s a lot of fripperies in houses these days, for sure, but that’s just like an options list on a car. You can’t legitimately complain about cars costing a ton if you check every option box, and I feel the same is true about insisting (as an example) that a house has to be 2900 sq. ft. to be livable or has to have expensive german appliances.

How many people can really afford a $750K+ house? Are there really THAT many families whose household income is $200K+?

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]]> By: Susan Carley Oliver http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6576 Susan Carley Oliver Fri, 01 Sep 2006 23:03:21 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6576 As I sit here preening (super low fixed rate on a standard 30 year mortgage) I'm wondering - how can I leverage this situation to my own benefit? I don't wish my fellow citizen ill, but I am curious what kind of opportunities this will create. "I’m guessing that as interest rates rise and balloon notes come due, we will see a rash of “motivated sellers” in the near future." Which means there my be some REI bargains out there in the future. Anything else? As I sit here preening (super low fixed rate on a standard 30 year mortgage) I’m wondering – how can I leverage this situation to my own benefit? I don’t wish my fellow citizen ill, but I am curious what kind of opportunities this will create.

“I’m guessing that as interest rates rise and balloon notes come due, we will see a rash of “motivated sellers” in the near future.”
Which means there my be some REI bargains out there in the future.

Anything else?

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]]> By: S/100/30 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6572 S/100/30 Fri, 01 Sep 2006 21:52:17 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6572 Wow, you pretty much own my dream house. Wow, you pretty much own my dream house.

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]]> By: Cheng-Jih Chen http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6569 Cheng-Jih Chen Fri, 01 Sep 2006 20:56:46 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6569 Matt Smith is right: it's not clear what a "standard house" is, with a 1900 one compared to a 2000 one. Even if we assume equivalent square footage, there will be quality changes. Indoor plumbing? Modern kitchens (compared to 1900-tech stoves and ice boxes)? Heating systems that don't flood the house with soot? Electric lighting? And so on. Granted, it's unlikely these quality changes all happened after 1997 or thereabouts, but it's not clear if we're comparing apples to apples. Matt Smith is right: it’s not clear what a “standard house” is, with a 1900 one compared to a 2000 one.

Even if we assume equivalent square footage, there will be quality changes. Indoor plumbing? Modern kitchens (compared to 1900-tech stoves and ice boxes)? Heating systems that don’t flood the house with soot? Electric lighting? And so on.

Granted, it’s unlikely these quality changes all happened after 1997 or thereabouts, but it’s not clear if we’re comparing apples to apples.

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]]> By: Matt Smith http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6561 Matt Smith Fri, 01 Sep 2006 19:34:36 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6561 I would be interested in knowing how they determined a "standard house". A lot of the houses built today are quite a bit larger than those build several decades ago. I would like to see a similar per-square-foot analysis of the housing proce trend. That said, I agree that the popularity of riskier mortgages, like the interest-only loans, is a sign of trouble. I'm guessing that as interest rates rise and balloon notes come due, we will see a rash of "motivated sellers" in the near future. I also agree on J.D.'s house. It's very nice.. I would be interested in knowing how they determined a “standard house”. A lot of the houses built today are quite a bit larger than those build several decades ago. I would like to see a similar per-square-foot analysis of the housing proce trend.

That said, I agree that the popularity of riskier mortgages, like the interest-only loans, is a sign of trouble. I’m guessing that as interest rates rise and balloon notes come due, we will see a rash of “motivated sellers” in the near future.

I also agree on J.D.’s house. It’s very nice..

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]]> By: BBrown http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6557 BBrown Fri, 01 Sep 2006 18:45:57 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6557 I hate to say it, but we all pretty much saw this coming, perhaps more so in some markets than others. We have entered an age of throwing logic out the window at times and thus entering the trap of such items of interest-only loans and overextended credit. Wow, this is a huge matter for many people. P.S. On my tax site, I did a real estate blog series and did a post on interest only loans if interested, here are the links: http://www.brianbrowncpa.com/blog/?p=31 http://www.brianbrowncpa.com/blog/?p=18 I hate to say it, but we all pretty much saw this coming, perhaps more so in some markets than others. We have entered an age of throwing logic out the window at times and thus entering the trap of such items of interest-only loans and overextended credit. Wow, this is a huge matter for many people.

P.S. On my tax site, I did a real estate blog series and did a post on interest only loans if interested, here are the links:

http://www.brianbrowncpa.com/blog/?p=31
http://www.brianbrowncpa.com/blog/?p=18

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]]> By: The Tim http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/comment-page-1/#comment-6554 The Tim Fri, 01 Sep 2006 18:39:22 +0000 http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/#comment-6554 This topic happens to be of particular interest to me. So much so, in fact, that I started <a href="http://seattlebubble.blogspot.com/" rel="nofollow">a blog about the housing bubble specific to the Seattle area</a>. What really irks me is that not only are houses ridiculously expensive, but the majority of people (especially in Seattle) outright dismiss the notion that we are in a bubble, even today. You're right, no one knows what will happen, but with the insane amount of money that has been so lightly thrown around, and the <a href="http://www.businessweek.com/common_ssi/map_of_misery.htm" rel="nofollow">very large number of people</a> diving head-first into risky loans, I can't help but think that it's going to end poorly. BTW, nice house. As long as you've got fixed payments that you can afford, and a decent reserve fund in case of job loss, etc. (which, considering the nature of this blog, I would assume you do), I'm sure you'll be able to ride out whatever storm is brought on by the housing bubble. This topic happens to be of particular interest to me. So much so, in fact, that I started a blog about the housing bubble specific to the Seattle area. What really irks me is that not only are houses ridiculously expensive, but the majority of people (especially in Seattle) outright dismiss the notion that we are in a bubble, even today.

You’re right, no one knows what will happen, but with the insane amount of money that has been so lightly thrown around, and the very large number of people diving head-first into risky loans, I can’t help but think that it’s going to end poorly.

BTW, nice house. As long as you’ve got fixed payments that you can afford, and a decent reserve fund in case of job loss, etc. (which, considering the nature of this blog, I would assume you do), I’m sure you’ll be able to ride out whatever storm is brought on by the housing bubble.

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