Dr. Housing Bubble 01/06/08

[Crewleader]

Dr. Housing Bubble 1 Million Visitors! 200th Housing Post.

If you were to ask me in September of 2006 if I would still be blogging, the answer would have been no. From multiple estimates, there are approximately 50 million to 70 million blogs out there. It seems like there is a bubble in blogs! Many blogs do not survive past a few months because it does take commitment and a solid readership. That is why I wanted to take this moment, how fitting that it is the 200th post, and thank all readers to this site. Whether you agree with the content or not I do appreciate each and everyone of you that take the time to read the articles. I was looking at the numbers today and there are 3,053 comments left on this site since I started blogging. Many of you have contributed to the housing dialogue even when it was unpopular. Thank you for doing so.

When I started this site, there really wasn’t too many “bubble blogs” out there. You had a handful of bloggers yet the majority focused on general economics, gold, and other financial issues except the major housing and credit bubble that we were living in. In the matter of two years, this blogging niche exploded. It would be easy to take all credit for the explosion of traffic but realistically people hungered for an alternative source of media and many realized that this housing market had gone off track. If you were to look at it scientifically, bubble blogs exploded just about the time the housing market peaked. Now I know many other sites have surpassed that 1 million hurdle but I think this is a big moment for the site.

Now why blog about real estate especially about real estate in California? I invest in out of state rental property and believe that real estate bought at the right price, is the best investment you will ever make. If I didn’t believe this, I wouldn’t own real estate. I may be one of the few so called bubble bloggers who actually owns any property. So why not move out of the state? I am a native born Californian and believe many readers are in the same boat. I love the area. This is my home. I have no problem leasing a home in an area of my choice while gaining the benefits of real estate with property bought elsewhere at the right price. In fact, the majority of the 10,000,000 residents in Los Angeles County rent. This is always an argument levied on those that do not own. Leasing is the equivalent of flushing money down the toilet. No, getting a risky mortgage at a peak price is the equivalent of flushing money down the toilet. However, California has gotten to a point where middle class families cannot afford a basic starter home without going with exotic financing. The argument many housing bulls will throw out is that income doesn’t matter. Well once all the creative financing died down income does matter; in fact during the ABC presidential debates yesterday both Republicans and Democrats polled mentioned that the economy was the number one issue. And if you want any hard evidence of a bubble, just take a look at our Real Homes of Genius section where we track over priced homes throughout the state. Countless people that I know and you may know, had such a psychological desire to own a home that they bought homes in the last few years disregarding all evidence that a bubble was imminent. Many felt that if the housing payment became too much, they would simply sell. Others had dreams of making a hefty sum where home appreciation hit 20+ percent on a year over year basis. For those of you not in the California area, there was a period where homes were going up $100,000 on a yearly basis. Three years in L.A. County where the year over year appreciation rate was 20+ percent. From October of 2002 to October of 2005, appreciation rates measured on a yearly basis hovered around 20 percent. In fact, in June of 2004 we hit a 32.3 percent year over year gain! Surreal. Something was not right about that. And the fact that housing has steadily been declining for a year shows how we were in fact in a bubble fueled by easy financing and to a large extent, greed.

What to Expect for 2008?

http://www.doctorhousingbubble.com/dr-housing-bubble-1-million-visitors-200th-housing-post/

[Quakerfriend]

1. THx Crew for all you do! Your blog helped me sail through

the buying and selling of 4 properties btw. Fall 05- Winter 06.

Most importantly, I knew what was coming and adjusted the asking prices downward slightly for easy selling. It worked! And, we got out of properties we might otherwise have ended up holding for a very long time.

Thanks again!

[Crewleader]

2. Hi Quakerfriend

I am very happy to hear that! Thanks for letting me know...Dr. Housing Bubble has helped so many with his knowledge and his opinions continue to inform us what is going on in 2008.

Congrats to you Quakerfriend....and you too Dr. Housing Bubble for your site that many enjoy here at DU. :toast:

[NMDemDist2]

3. hmmmmm I think I recognize one of our favorite DUers over there in the comments

section LOL

Congrats to DrHB on his readership and his 200th post

:yourock:

[Warpy]

4. You did

and I think he's providing a real service, so that's why I cranked there instead of here.

I'll bet there really are people out there who backed out of "sure things" because of his blog and will survive financially because of it.

Kudos to him!

(and I loved the post with the hornet up the drawers analogy)

[drhousingbubble]

5. Thanks DU and Crew for the support!

Appreciate the comments and the readership from Democratic Underground. I think people are hungry for change in this country and looking at Iowa, this is resonating stronger and stronger each day. Suddenly, everyone is a "change" candidate but if I recall, Obama was the only one echoing this call when everyone else was trying to undermine his youth and lack of experience. People can tell when someone is genuine and he is in my opinion the most intelligent and authentic of all the candidates.

Did any of you see the ABC/Facebook debate this weekend? I almost fell out of my seat when Charlie Gibson was talking about tax raises for wealthier households in the Democratic debate and he said, "what about a family of 2 professors making $200,000 a year..." and even before he finished the idea, the audience started laughing showing how disconnected the media, Wall Street, and even old school Washington D.C. is with mainstreet USA. He tried to take it back but it was too late. The elitism was already out. That hypothetical family he was talking about represents only 2.67 percent of the entire United States. He should of used a more reasonable range say from $60,000 to $100,000.

Times are changing. The Fed can't do much since the problem here isn't liquidity but solvency. Not much use giving lenders more access to funds when consumers are unable to make payments.

It will be a busy year. Recent polls are showing the economy as the number one issue. Not much use discussing anything else when you can't pay for the basic necessities of life.

Thanks again for your support and here's to a great 2008!

Dr. Housing Bubble

[NMDemDist2]

6. yeah, we love ya over here and it's getting really scary out there

Congratulations on your blog's success and hopefully we can look forward to another 200 of your great essays

:yourock: