Capitalism 2.0

Real Estate Investment in Possible Non Bubble Areas

By Randolph

According to the 2006 HSBC report, A Froth-Finding Mission, Detecting US Housing Bubbles and associated spreadsheet model, not all local real estate bubbles are created equal.  In fact, the Case Shiller Index reveals that a handful of metro markets may well be seeing price recoveries.  Denver, for example, looks to be one of those on the leading edge of the recovery, having potentially already come through the worst of it.  Others, such as my own San Francisco, have yet to really even start into an honest correction cycle (another CSI view of superbubble San Francisco).

Is it time to start investing, or at least preparing to invest in non-bubbly metro areas?

(Topic suggested by a reader)

Random Observations on Iceland

By Astrid

(This is going to be the first of my two posts on my recent trip to Iceland. This post will focus on Iceland the country. The second post will focus on Iceland the travel destination.)  Link to the pictures.

Iceland is a small Nordic country in the middle of the North Atlantic, halfway between Europe and North America. Aside from the climate (more on that in the second post), I found Iceland to be a thoroughly pleasant and progressive country that will warm the heart of Bay Area folks who love to proclaim "it's different here." The people I meet were well scrubbed, pleasant and English speaking. I found Icelanders on average to be on par with physically attractive than the residents of your typical upper middle class coastal bedroom community, but less tanned and more confident.

It's the PRICE stupid!

By Randolph

Listen to the cacophony of despair oozing out of the mouths of our mainstream media and politicians.  It would be comical if not for the pathetic nature of it all.  All these whining shills and self proclaimed experts seem willing to cackle about everything under the sun ... except for price.  What do I mean, read on...

Pop!

By Randolph

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".

Housing Market Fiction

By Randolph

Fact or Fiction: The US Housing Market is "gently correcting".  In fact, "now is a great time to buy!".

...and here's some carefully staged, professionally smoothed, and attractively presented data from the NAR et. al. to prove it...

But wait a minute, someone has actually taken the time to go get the same source data sets and draw the same graphs.  But they've come to a very different conclusion...

Coldwell Banker becomes first Realtor of “Virtual Real Estate”

COLDWELL BANKER® ENTRANCE INTO SECOND LIFE® MAKES VIRTUAL HOMEOWNERSHIP EASIER FOR MILLIONS OF RESIDENTS

Company Leads Real Estate Industry Into Virtual Future

(press release)

File this in the "this is a joke, right?" category.

SF Bay Area Housing Bubble Battle

As the yen carry trade unwinds, the DOW vacillates wildly, market volatility continues to rise, and the idea of risk returns to the minds of investors world over, we are left with one, stubborn enigma:  The price of houses in the San Francisco Bay Area.

At this point, there is no denying that real estate prices are in a full on correction, nation wide.  Anyone with an ounce of honesty now fully recognizes the existence of a bubble.  The few who doubted the bubble have now seen their stake in the bet that the subprime loan game would last forever vaporize.  All you need to do is Google subprime meltdown for a current counting of the carnage.

One Bubble of a Ride

[Randolph Harrison]

A typical house, in typical suburban San Francisco neighborhood. You could call it "upper middle class". A good grade school, a not so good high school, friendly neighbors, beautiful parks, and everyone seems to forever labor to keep their picket fences white and flowerbeds planted.

This is the tale of a home, purchased in 1996, sold in 2002, and now for sale again in 2007. This is a true story of the real estate bubble, with a real house, real data, real people, and real fortunes to be won and lost.

How Far Will Your House's Price Fall?

It is finally undeniable that house  prices are falling in most of the US.  For those selling their home in this market, the big question now is:  "How far will prices fall?"  Seller instincts are to hold out, insist on a price based on recent sales (within the past 6 months to 1 year), and ride out the storm.  Most sellers seem to expect a resumption of the unprecendented housing euphoria next Spring (2007).

Housing Bubble Economics

There has been a lot of main stream media coverage of the Housing Bubble lately.  I've been covering it for over two years.  A lot of the discussions over at Patrick.net recently have focused on buyers, sellers and prices.  So, let's talk some basic economics...