champagne in the bathub

I fail to understand opinions such as those expressed in this article with regard to the real estate bubble. Did this come as a surprise to anyone? Maybe it’s because I’ve had an education in economics as well as architecture but how could anyone have failed to see the bubble coming? I remember doe-eyed realtors telling me that house prices could never go down. Really? I’d lived in California so I’d seen the after-effects of the 80s bust. Who were they kidding? Me or themselves? I’m sure they had back-up jobs or at least a lot of savings, right? 

House prices more than double in most global markets while populations effectively stay steady (and even decline in cases). The price of houses in areas in which families make, say, $150,000 rises to $650,000. There’s no way to get a 20% deposit on a house in that sort of climate. Clearly something was wrong (and continues to be wrong with the market—it is far from corrected yet, I expect another 40% fall in places like the New York and Los Angeles metro areas). Seriously, what is there not to understand? I’d rather believe the Fed, the Bush administration, and my doe-eyed realtor friends were all cynical fiends than bone stupid. Did anybody really think the bubble wasn’t going to burst? 

I fail to understand opinions such as those expressed in this article with regard to the real estate bubble. Did this come as a surprise to anyone? Maybe it’s because I’ve had an education in economics as well as architecture but how could anyone have failed to see the bubble coming? I remember doe-eyed realtors telling me that house prices could never go down. Really? I’d lived in California so I’d seen the after-effects of the 80s bust. Who were they kidding? Me or themselves? I’m sure they had back-up jobs or at least a lot of savings, right? 

House prices more than double in most global markets while populations effectively stay steady (and even decline in cases). The price of houses in areas in which families make, say, $150,000 rises to $650,000. There’s no way to get a 20% deposit on a house in that sort of climate. Clearly something was wrong (and continues to be wrong with the market—it is far from corrected yet, I expect another 40% fall in places like the New York and Los Angeles metro areas). Seriously, what is there not to understand? I’d rather believe the Fed, the Bush administration, and my doe-eyed realtor friends were all cynical fiends than bone stupid. Did anybody really think the bubble wasn’t going to burst?