The residential real estate bubble has finally started to pop! Some readers will know that I am a long-time author at Patrick.net, one of the biggest real estate bubble blogs. I've authored many dozen articles there, including a few which involved a good amount of original research and analysis. One notable result has been The Bubblizer model (Excel), which has been featured on this blog since the beginning.
But now we've entered a new phase of the housing bubble blog-o-sphere. I call this phase "The Coming of the Trolls".
The popular bubble blogs have been literally overrun by Trolls. No small wonder given the ever growing number of realtors and mortgage brokers with lots of free times on their hands. But I'm also sensing the forward edge of a wave of generally pissed off would-be buyers and desperately trapped sellers.
There are people who want to buy and now cannot because the mortgage standards have reverted, at least partly, to a more reasonable level. Instead of thanking their lucky stars that they didn't become a "FB" (use your imagination) like so many other buyers in the past 2-3 years, they lash out at those who they blame for turning off the music. And who better to blame than the "bubbleheads"?
There are sellers, or rather people who can't sell for a fantasy bubble price, and are pissed off for whatever reason. Some are FBs who are having trouble getting sleep knowing their ARM reset is looming, and now they'll not be able to refinance out of it. Some are just upset that they waited too long and they can't get what their neighbor did last summer. Most of the rest are just greedy. They could sell for a reasonable price that would make the house move, but they won't. Because they think they somehow deserve a 50% per year return on their house.
Well, too bad. Market fundamentals cure all forms of temporary insanity eventually, and the next 12 months will be a real textbook example of "shock therapy" for the millions of home owners who bet on ever rising house prices.
But, I fear the era of open, loosely moderated blogs on this topic is also drawing quickly to an end. There are just too many pissed off people with way too much time on their hands. So, if fellow financially responsible folks wish talk this crash down, feel free to use this forum. I have an open code of conduct clearly posted, and Trolls need not apply. I'm also looking for authors, so if you're interested please email me.
Randolfe_ (aka: Randy H)