82% of recent Bay Area loans are adjustable, not fixed. This means a big hit to the finances of many owners every time interest rates go up, and this will only get worse as more adjustable rate mortgages (ARMs) get adjusted upward.

Who disagrees

1. Buyers' agents get nothing if there is no sale, so they want their clients to wildly overbid, the exact opposite of the buyer's best interest.
2. Mortgage brokers take a percentage of the loan, so they want buyers to take out the biggest loan possible.
3. Appraisers need mortgage brokers for their business, so they are going to give the appraisals that brokers and agents want to see, not the truth.
4. Banks get origination fees but have been selling most mortgages, so they take no risk on those loans. They do not care about the potential bankruptcy of borrowers, so they will lend far beyond what buyers can afford. Banks sell most loans to Fannie Mae or Freddie Mac. The conversion of low-quality housing debt into "high" quality Fannie Mae debt with the implicit backing of the federal government is the main support for the housing bubble. That is going to end as Fannie Mae shrinks.

   Even for loans that banks keep, they have a motive to lend beyond what buyers can afford. Banks designate interest as "income" whether they receive it or not. As long as borrowers do not actually default, additional borrower debt is counted as bank income, and banks can claim higher "earnings". That is going to end when those borrowers cannot even make the principal payments.

5. Newspapers earn money from advertising placed by Realtors�, so papers have a strong motive to publish the Realtors'� unrealistic forecasts. The San Jose Mercury News has stopped publishing the usual colored map showing areas where the median prices have been up or down. It would be too embarrassing to the Realtors� to show what's really happening right now.
6. Owners themselves do not want to believe they are going to lose huge amounts of money.

What are their arguments?

"There are great tax advantages to owning."

FALSE. It is now far cheaper to rent a house in the San Francisco Bay Area than it is to own that same house, even with the deductibility of mortgage interest figured in. It is possible to rent a good house for $1800/month. That same house would cost at least $700,000. Assume 6% interest we can see that a buyer loses at least $4,936 per month by buying. Renting is a loss of course, but buying is a much bigger loss.

Renting:

Rent: $1,800
----------------------
Monthly Loss: $1,800

This is a very conservative estimate of the loss from owning per month. If you include a realistic decline in house prices, as in this rent-vs-own calculator, you'll see that owning right now is a very poor choice.

• Remember that buyers don't deduct interest from income tax; they deduct interest from taxable income. Interest is paid in real pre-tax dollars that buyers suffered to earn. That money is really entirely gone, even if the buyer didn't pay income tax on those dollars before spending them.

  Buyers do not get interest back at tax time. If a buyer gets an income tax refund, that's just because he overpaid his taxes, giving the government an interest-free loan. The rest of us are grateful.

  Under current conditions, a renter would be able to live in a house for 30 years, then buy that $700,000 house outright with the saved principal payments and have avoided $810,846 in interest payments. Rent would be only $648,000 over those 30 years, so the renter comes out at least $162,846 ahead. See an "amortization table" if you don't believe that interest will cost more than the house. This doesn't even count the huge losses the owner will suffer as the value of his house falls year after year for the next decade or more, just as in Japan, nor property taxes, insurance, and maintenance.

  There is no need to wait 30 years to buy a house. As this crash accelerates, prices will fall to the point where it is cheaper to buy than to rent, though that could take five years or more.

  If you don't own a house but want to live in one, your choice now is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc. It is much cheaper to rent the house than to rent the money.

• "A rental house provides good income."
  FALSE. Rental houses provide very poor income in the Bay Area and certainly cannot cover mortgage payments. A $1,000,000 house can be rented out for 25K maximum per year after expenses. The return is therefore 2.5% with zero liquidity and a huge risk of loss.

  If you actually have a million dollars, you can get 4.5% with no risk, no work, and no state income tax by buying a US Treasury Bond. And your money will be liquid and secure.

• "OK, owning is a loss in monthly cash flow, but appreciation will make up for it."
  FALSE. Appreciation is negative. Prices are going down, which just adds insult to the monthly injury of crushing mortgage payments.

• "House prices don't fall to zero like stock prices, so it's safer to invest in real estate."
  FALSE. House prices do not fall to zero, but the value of your equity in a house can easily fall to zero, and then way past zero into the red. Even a fall of only 10% completely wipes out everyone who has only 10% equity in their house. This means that house price crashes are actually worse than stock crashes. Most people have most of their money in their house, and that money is highly leveraged.

• "We know it will be a soft landing, since it says so in the papers."
  FALSE. Prices could fall off a cliff. No one knows exactly what will happen, but the risk of an massive crash in prices has never been higher. As Yale professor Robert Shiller has pointed out, this housing bubble is the biggest bubble in history, ever.

  Most newspaper articles on housing are not news at all. They are advertisements that are disguised to look like news. They quote heavily from people like Realtors�, whose income depends on separating you from your money. Their purpose is not to inform, but rather to get you to buy.

• "If you buy, at least you have a house, but if you rent, you end up with nothing."
  FALSE. Renters in the Bay Area end up with much more money, while living in the same quality house as an owner. At the end of 30 years, a renter would have enough principal saved to buy the $700K house mentioned above and would have spent $162,846 less on rent than he would have spent in interest payments. And he would have lived in an equivalent house all that time. Owners frequently end up with nothing because they lose the house to foreclosure.

• "Prices have been driven by supply and demand."
  FALSE. Supply is increasing rapidly as building continues, and demand is falling as the population of the Bay Area decreases and the salaries of those who remain decreases. Prices have been driven by low interest rates and increasingly risky loans. The dramatic drop in rents and widespread rental vacancies prove that demand for housing is actually much lower now than a few years ago.

  The www.census.gov site has data for Santa Clara County for the years 2000-2003 which shows that the number of housing units went up at the same time that the population decreased:

  year  units   people
  2000 580868 / 1686474 = 0.344 housing units per person
  2001 587013 / 1692299 = 0.346
  2002 592494 / 1677426 = 0.353
  2003 596526 / 1678421 = 0.355

So housing supply in Santa Clara County increased 3% per person during those years. There is an oversupply compared to a few years ago. In a sane market, prices should fall 3% to compensate for the extra supply of housing.

At a national level, there is a similar story in the years 2000 to 2005: 2000 115.9M / 281M = 0.412 housing units per person 2005 124.6M / 295M = 0.422

At a national level, there is 2.4% more housing per person now than in 2000. So national prices should have fallen as well.

• "Nobody is making land."
  TRUE, but they are making houses at a record rate, which is increasing supply dramatically at a time when new houses are not needed. We have the highest rental vacancy rates since the 1950's.

• "There's an under-supply of housing. That's why prices will rise."
  FALSE. There is a large oversupply of housing. To repeat: builders are making houses at a record rate, which is increasing supply dramatically at a time when new houses are not needed. The Bay Area has the highest rental vacancy rates since the 1950's.

• "Population increase will fuel housing price increases."
  FALSE. The Bay Area is losing population the fastest of any area in the US right now - worse than Buffalo, worse than Detroit. Immigration won't change this because jobs are emigrating even faster. Rents are falling in part because so many recent immigrants are leaving, with some going back to China because opportunities are so much better there.

  Nationally, there is going to be a huge glut of housing as old baby-boomers sell their houses to use the cash for retirement, putting 20% of houses onto the market for that reason alone. An additional 25% of houses are owned by speculators, who will soon sell because they are losing money. Birth rates are declining in all industrialized countries, with the US birth rate barely replacing the citizens who die.

• "As a renter, you have no opportunity to build equity."
  FALSE. Renters are actually in a better position to build equity because:
  
  
  • Owners are losing every month on a cash flow basis. The tax deduction does not come close to making owning competitive with renting.
  • Owers are losing principal in a leveraged way as prices decline. A 20% decline completely wipes out all the equity of "owners" who actually own only 20% of their house.
  • Owers must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity. Only houses are such a guaranteed drain on cash.
  • You must insure a house, but not most other investments.
  • You must pay to repair a house, but not a stock or a bond.

• "If you rent you are a buyer. You are just buying it for someone else."
  FALSE. It may be true that rent covers mortgage payments in other places, but not in the Bay Area. No one buys with the intention to rent out in the Bay Area because that's not viable. The owner is generously subsidizing the renter, a wonderful thing for renters during this crash.

• "If you don't own, you'll live in a dump in a bad neighborhood."
  FALSE. For the any given monthly payment, you can rent a far better house than you can buy. Renters live better, not worse. All the best neighborhoods have rental vacancies. There are downsides to renting, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash.

  You may worry about being forced to move, but the law says the landlord has to offer you a one year lease at a minimum, and they'll probably be delighted to offer you a two year lease and give you a discount for that. Other people want the mobility that renting affords. Renters can usually get out of a lease and move anywhere they want within one month, with no real estate commission.

  It is far easier and cheaper to rent a house in a good school district in the Bay Area than to buy a house in the same place.

  The biggest upside is hardly ever mentioned: renters can choose a short commute by living very close to work or to the train line. An extra two hours every day of free time not wasted commuting is the best bonus you can ever get.

• "Owners can change their houses to suit their tastes."
  FALSE. Even single family detached housing is often restricted by CC&Rs and House Owner's Associations (HOAs). Imagine having to get the approval of some picky neighbor on the "Architectural Review Board" every time you want to change the color of your trim. Yet that's how most houses are sold these days.

  In California, the HOA can and will foreclose on your house without a judicial hearing. They can fine you $100/day for leaving your garage door open, and then take your house away if you refuse to pay. There's a good HOA blog here.

• "People buy a house for the long term, so things can't crash quickly."
  FALSE. People are now buying houses for the very short term. This is how they justify interest-only adjustable mortgages to themselves. The thinking is, "I will own this just long enough to make a profit, maybe a year or two, so there's no need to get a long term loan at a higher interest rate." The distinction between the long-term owner and the short-term flipper has gone away.

• "If and when the market goes south, you can walk away."
  FALSE. If you have a single loan with just the house as collateral, it may be a "non-recourse" loan, meaning you could indeed walk and not lose anything other than your house and any equity in it (along with your credit record). But if you refinance or take a "home equity loan", the new loan is probably a recourse loan, and the bank can get very aggressive, not to mention what the IRS can do. A reader who lived through the 1989 housing crash in LA pointed out the following nasty situation that can happen:
  • Let's say you buy a house for $600,000, with a $500,000 mortgage.
  • Then the house drops in value to $400,000, you lose your job, or otherwise must move.
  • If you can't make your payments, the bank forecloses on you and nets $350,000 on the sale of your house.
  • The bank's $150,000 loss on the mortgage is "forgiveness of debt" in the eyes of the IRS, and effectively becomes $150,000 of reportable income you must pay tax on.

  It is true that buyers who put zero down and have nothing invested in the house are much more likely to walk away. The large number of new uninvested buyers increases the risk of a horrifying crash in prices rather than a "soft landing".

• "The house down the street sold for 25% over asking, and that proves the market is still hot."
  FALSE. Realtors� try to create the false impression of a hot market by deliberately "underpricing" a house. Say a seller's agent knows that house will probably go for $500,000. He places ads asking $400,000 instead. (Bait-and-switch is illegal when selling appliances, but apparently not when selling houses.) The goal is to first of all prevent buyers from knowing what a realistic price is, and secondly to get buyers to blindly bid against each other. There are four players in this game and three of them are on one side: the seller, the seller's agent, and the buyer's agent. Yes, the buyer's own agent works against the buyer, because there is no commission if there is no sale. There's a saying in Las Vegas: "There's a patsy in every game, and if you don't know who the patsy is, you're it."

  If you want to prove your agent is not on your side, ask to see houses "for sale by owner" or houses listed by discount brokers.

• "I was lucky that my Realtor� told me to increase my bid by $100,000. Otherwise I would have lost, because my Realtor� knew about a secret bid $90,000 above mine."
  FALSE. Your agent gets paid nothing if you don't buy the house, and he gets more if you waste more money by bidding too high. Those are two big motives to invent false bids.

• "The MLS proves things are great."
  FALSE. All sorts of funny things happen in the MLS (Multiple Listing Service, a private database controlled by real estate agents). For example, if a house just doesn't sell, Realtors� can remove its record in the MLS so that you cannot see that it failed to sell. Then the house comes back on the market at a lower price, and unsuspecting buyers think it's on the market for the first time. Their Realtor� can "prove" it's a new listing by showing the MLS record to the buyer: "See, here's the listing date, just came on the market. Better hurry and buy it, this one is hot."

  There is nobody checking that the MLS shows true selling prices. The MLS prices are often just wrong.

  Furthermore, the MLS will not list any house for sale by owner or for sale through a discount broker, except perhaps those listed by Help u Sell. Those cheaper prices are just not in the system, because if you save money, they lose money.

• "The Bay Area is a special place that will always be expensive."
  TRUE, but it was just as special ten years ago, so that does not account for the current housing bubble. Even at half of current prices, it will still be expensive.

  Many people are confused about the difference between high prices and increasing prices. Prices are high, but they are not increasing. They are falling. This makes housing a bad investment.

• "There's always someone predicting a Bay Area real estate crash."
  TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

• "But housing was high when interest rates were 21%."
  FALSE. Inflation was much higher then, so fixed debt was easier to pay off with increasing salaries. Now we have stagnant salaries and adjustible mortgages.

  House price increases exactly mirror the increase in mortgage debt. According to the Washington Times: "Consumers have doubled their mortgage debt from $3.5 trillion to $7 trillion since 1996, borrowing and spending profusely on the assumption that house prices will keep rising." So the increase in house prices is not backed by assets. It's backed by debt. The debt in turn is backed by the houses. It's just smoke and mirrors.

• "My dad made money on his house, and it will work for me too."
  FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

  Year  Median House Price    Median Income   Multiple
  1980        148900              24743        6.0
  1990        457800              55333        8.3
  2000        910000              90377       10.0
  
  
  
  
  
  
  Most bankers use a multiple of 3 as a "safe" 
  price to income ratio. We are well beyond the
  danger zone, into the twilight zone. Another
  rule of thumb is that a fair house price is
  between 100 and 200 times the monthly rent.
  If a house rents for $2000 per month, 
  then a fair price is from $200,000 to $400,000. 

• "The government will make sure housing prices don't fall, because all the powerful people in the government have houses and want to keep values up."
  FALSE. There have been many local crashes, and the government can't stop them. Nor would they necessarily want to; the current Republican administration would probably be happy to see blue states like California, New York, and Massachusetts crash and burn, and those states are where the worst bubbles are.

• "Look, housing continued to rise after the dot-com crash, so it will always rise."
  FALSE, consider the turkey in the farmer's barnyard. He thinks the farmer will always come feed him and not ask for anything. Then Thanksgiving comes. Whack. Past performance is no indication of future results.

• "Rent can go up, but a 30-year fixed mortgage payment cannot."
  TRUE, but irrelevant. House owners lose even with a fixed mortgage, because the price of a house falls as interest rates go up. Most people want to sell within 7 years of moving in, and many have to sell because of job loss, illness, or divorce. No one can afford what the owner paid for it, so the owner has to take a large loss. Renting it out will not come close to covering the mortgage. Bay Area rents have fallen 23% in the last 4 years.

• "You have to live somewhere."
  TRUE, but that doesn't mean you should waste your life savings on a poor investment. You can live in the same kind of house by renting during the crash. A renter could save hundreds of thousands of dollars, not only by paying less every month, but by avoiding the devastating loss of his downpayment. In fact, it's currently cheaper to live in a nice hotel in most parts of the US than it is to make mortgage payments in the Bay Area.

• "Newspaper articles prove prices are going up."
  FALSE. The numbers in the papers are not complete and have murky origins. Those prices are "estimated" from the county transfer tax and making that tax public record is optional. A buyer who does not want you to see how little he paid has only to ask to put the transfer tax on the back of the deed and it will not show up on computer searches of the deed, which show only the front. Others voluntarily pay more tax than they have to, in order to inflate the apparent price to fool the next buyer. At a tax rate of about $1 per thousand of sale price, as in San Mateo county, you have to pay only $100 extra tax to make your purchase price look $100,000 higher. Another common occurrence is for the buyer to get a large cash payment back from the seller. So the house price looks high in the paper, but in reality the buyer got a huge rebate.

  Even though you can in theory go to your county building and get selling price information, in reality they will give it to you in a painfully slow and inconvenient way. For example, in Redwood City's county building there are PC's where you can look at data for any particular house, but you cannot print, you cannot save to a floppy disk, you cannot email data out. All you can do is write things down manually, one at a time. And that's how real estate interests like it. Your elected representatives are serving them, not you. Please vote against County Clerk Warren Slocum in San Mateo County unless he fixes the Redwood City computers to allow you to save data.

• "My appraisal proves what my house is worth."
  FALSE. "An appraisal in its typical residential real estate form is little more than a comparative analysis conducted by someone with no skin in the game offering confirmation that other lemmings are paying too much for their houses as well." -from an article on morningstar.com

  Anyway, as transaction volumes decline, the first few low sales will have a large and sudden impact on appraisals.

• "If one house sells for a million dollars, a million houses are worth a trillion dollars!"
  FALSE. If all of those million houses were all on the market they would sell for far less. Less than 5% of all existing houses were sold last year. The other 95% are merely assuming they can get the same prices.

• "It's not a house, it's a home."
  FALSE. It's a house. Wherever one lives is home, be it apartment, condo, or house. Calling a house a "home" is a manipulation of your emotions for profit.

  Also, Realtor� is a commercial term, not a real word. Note the "�" symbol.

• "If you don't buy now, you'll never get another chance."
  FALSE. This argument was also popular more than a century ago in 1889 in Los Angeles, just before a huge crash. There are always sellers and there are always buyers. Prices are always corrected when they get beyond what buyers can pay. In fact, they're being corrected right now.

• "Property in the Bay Area is a luxury good, and so will be less affected by economic downturns."
  FALSE. 82% of last year's Bay Area mortgages were ARMs, and ARM loans are not taken out by the rich. People on the border of bankruptcy take out ARMs because they can't afford fixed rate loans. The rich don't have loans at all.

• "Housing will be permanently higher since downpayments are now obsolete."
  FALSE. The first big wave of default will cause downpayments to suddenly seem like a good idea again.

• "House ownership is at a record high, proving things are affordable."
  FALSE. The percentage of their house that most Americans actually own is at a record low, not a high. We do have a record number of people who have title to a house because they have dangerous levels of mortgage debt, but that is no cause to celebrate.

• "Long term rates are still at historic lows!"
  TRUE, but irrelevant. Most new mortgages and refinancings are now short term, and those will definitely be affected by rising short term rates.

• "The limited land in the Bay Area means prices will always go up."
  FALSE. Japan has a very severe land shortage, but that hasn't stopped prices from falling for 14 years straight. Prices there are now at the same level they were 23 years ago. If we really had a housing shortage, rents would be going up, but they're going down instead.

• "It would take another 911 terrorist attack or a major earthquake that wipes out this area in order for the price to fall by 50%."
  FALSE. Even with a 50% decline in prices to $350,000 or so, the median price in the Bay Area will still be roughly double the median price in most of America, and the median Bay Area household income of about $70,000 will still not be sufficient to buy a house. So a 50% decline is well justified by the fundamentals.

• "Housing is an excellent hedge against inflation, so you should buy now anyway."
  FALSE. Interest rates go up with inflation, and higher interest will be the last straw for ARM mortgages in the Bay Area. Their defaults and foreclosures will drive down the cost of housing for everyone else around here. Remember that 82% of recent Bay Area mortgages were adjustable. There is little chance that salaries of ARM owners can keep up with inflation because of two billion people in India and China who would be happy to do their jobs for much less money.

• "Houses always increase in value in the long run."
  FALSE. House values are actually constant. Adjusted for inflation, prices in Holland, for example, rose less than one quarter of one percent annually in the 350 years since their tulip bubble. Warren Buffett and Charles Schwab have both pointed out that houses don't produce anything. They do not increase in intrinsic value. Unless there's a bubble, house prices simply reflect current salaries and interest rates. Consider a 100 year old house. Its value in sheltering you is exactly the same as it was 100 years ago. It did not increase in value at all. It did not spontaneously get bigger, or renovate itself. Quite the opposite - it drained cash from its owners for 100 years of maintenance and taxes. Its price went up about as much as salaries went up.

  My grandmother always used to complain about the cost of milk. "Why, when I was a girl, a gallon of milk cost a dime! Just look at how much people are overcharging for milk now." I asked her how much people got paid back then. "Oh, about $15 a week", came the reply. Hmmm, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run."

• "Maybe we should just accept that we missed out on a great opportunity to get into the real estate in the past N years."
  FALSE. Did we all miss out on a great opportunity to get into the stock of pets.com or other Internet companies with no business model? The question is what is likely to happen in the next few years according to fundamental economics. The last guy to buy into the bubble will get hurt the most.

• "I just want to own my own house."
  TRUE, most people do and that's fine. Buyers will get their chance when housing costs half as much and they have saved a fortune by renting. House ownership is great - unless you ruin your life paying for it.

What should you do?

If you own, consider selling so can actually keep some of that funny money that appeared out of thin air. It would be a pity to watch it vaporize back into thin air. There is no real profit until you sell.

If you want to buy, look around and see that house prices are falling. Why hurry to buy now? Save your cash and buy for much less in the future. Find a nice cheap rental, sit back, and enjoy the show till then.

Comments? Mail p@patrick.net. Please send me good links about the housing bubble and I'll include them here. I prefer links that do not require any registration

Housing Crash Blog

Housing Bubble News Links:

Fri Feb 24 2006 Goodbye Mr. Greenspan, Hello Higher Interest Rates
Fri Feb 24 2006 Average American Family Income Declines
Fri Feb 24 2006 Mortgage backed securities losses hitting investors
Fri Feb 24 2006 Weak condo market drives intense marketing
Fri Feb 24 2006 Houses flooding onto market
Fri Feb 24 2006 New Bankruptcy Law Isn't Working
Fri Feb 24 2006 Report on Fannie Mae Cites Manipulation to Secure Bonuses
Fri Feb 24 2006 Investigation of Fannie Mae points to former finance chief, controller
Fri Feb 24 2006 San Diego listings up, sales down (see "Monthly Sales" link)
Thu Feb 23 2006 Santa Cruz house price drops for third straight month
Thu Feb 23 2006 Is median price drop a blip or an omen?
Thu Feb 23 2006 High-risk mortgages spread to Ohio's small towns
Thu Feb 23 2006 "Sell Now!" book from John Talbott
Thu Feb 23 2006 A Toxic Mix in Ohio
Thu Feb 23 2006 Builder sued by unhappy buyers
Thu Feb 23 2006 Explaining the coming housing meltdown (PDF)
Thu Feb 23 2006 Judge Denies Motion to Dismiss Fannie Mae Suit
Thu Feb 23 2006 For Minorities, Signs of Trouble in Foreclosures
Thu Feb 23 2006 Developers throw in extras because condos are not selling
Wed Feb 22 2006 684 price reductions in Cape Coral alone in the last 24 hours
Wed Feb 22 2006 Silicon Valley's 'Buyers Are Leaving' Market
Wed Feb 22 2006 Sellers dumping houses
Wed Feb 22 2006 40-year loan has no money down
Wed Feb 22 2006 Tucson's housing sizzle now fizzling
Wed Feb 22 2006 Houseowners allege fraud in Dominion suit
Wed Feb 22 2006 Financing to build condos withers
Wed Feb 22 2006 Inflation likely to mean further interest rate hikes
Wed Feb 22 2006 Wisconsin shows dramatic drop in house sales
Tue Feb 21 2006 Sacramento prices down 25% instantly
Tue Feb 21 2006 A Bubble With a Fuse
Tue Feb 21 2006 History is repeating itself
Tue Feb 21 2006 Fannie, Freddie Keep Up Lobbying
Tue Feb 21 2006 Good time for foreclosures ... if you're brave
Tue Feb 21 2006 The US Real Estate Market - Bubblicious
Tue Feb 21 2006 Yet another builder forced to cut prices
Tue Feb 21 2006 Mortgage time bombs
Tue Feb 21 2006 Real estate investors scammed
Tue Feb 21 2006 Europeans likely to raise interest rates
Mon Feb 20 2006 FL Real estate market flooded with sellers
Mon Feb 20 2006 Housing prices adjusting -- and that's OK
Mon Feb 20 2006 43% of first-time home buyers put no money down
Mon Feb 20 2006 Financing to build condos withers
Mon Feb 20 2006 Holders of highly leveraged loans may get costly lesson
Mon Feb 20 2006 Panicked sellers throwing in perks
Mon Feb 20 2006 San Fernando Valley house sales slide
Mon Feb 20 2006 Vacancies and Overextended Borrowers
Mon Feb 20 2006 Debt and denial
Mon Feb 20 2006 Sales of existing houses drop in January
Mon Feb 20 2006 Exposing Bernanke's Lies During the Testimonies
Mon Feb 20 2006 Buyers scarce in California
Mon Feb 20 2006 Thorns Aren't Good for Bubbles
Mon Feb 20 2006 The Construction Conundrum
Mon Feb 20 2006 California house sales hit four-year low in January
Mon Feb 20 2006 "Limited Time Only"
Mon Feb 20 2006 Bay Area house sales hit five-year low
Mon Feb 20 2006 Rising house cancellations felt in Vegas
Mon Feb 20 2006 SF newspaper finally admits housing trouble
Mon Feb 20 2006 DC area house prices fall 8% in two months
Mon Feb 20 2006 Condo market dying
Fri Feb 17 2006 Coming Home to Roost
Fri Feb 17 2006 Rise In Short Sales Indicates Troubled Housing Market
Fri Feb 17 2006 Mass. Housing Market Slump Deepens
Fri Feb 17 2006 LA house prices fall to lowest level since last July
Fri Feb 17 2006 S. Florida Prices Falling
Fri Feb 17 2006 Central Valley Prices Falling
Fri Feb 17 2006 Housing Boom is Over, Analysts Say
Fri Feb 17 2006 How To Ride A Housing Bubble
Fri Feb 17 2006 Housing surge could be a lot of hot air
Fri Feb 17 2006 Rates up; 30-year mortgage at 6.28%
Fri Feb 17 2006 Orange County Housing prices slip 6% in January
Fri Feb 17 2006 Australian crash in full swing
Fri Feb 17 2006 Peak Water?
Fri Feb 17 2006 Japanese surplus and US housing
Thu Feb 16 2006
Thu Feb 16 2006 How much more does it cost to own than to rent? A lot.
Thu Feb 16 2006 Builders sling deals as market cools off
Thu Feb 16 2006 2005 slump in Mass. housing market deepens in fourth quarter
Thu Feb 16 2006 Market Insight: Fears of a US housing slowdown
Thu Feb 16 2006 Washington Mutual cutting 2,500 jobs as housing market falls
Thu Feb 16 2006 Shelter Glut Could Prove to Be Bubble's Demise
Thu Feb 16 2006 Margaritaville
Thu Feb 16 2006 Bernanke says further rate hikes may be necessary
Thu Feb 16 2006 A One-House, $400 Million Bubble Goes Pop
Thu Feb 16 2006 Demand Plummets For Loans To Purchase Houses
Wed Feb 15 2006 Toxic Loans Threaten House Prices
Wed Feb 15 2006 240 Days of Housing Inventory Stats in Sacramento
Wed Feb 15 2006 The housing market continues to deteriorate
Wed Feb 15 2006 Housing Market in a Downward Spiral?
Wed Feb 15 2006 San Diego new-house prices took sharpest month-to-month dive ever recorded
Wed Feb 15 2006 KB Home reports jumps in cancellations, lower orders
Tue Feb 14 2006 House Prices Do Fall
Tue Feb 14 2006 Marin House Sales and Prices Plunge
Tue Feb 14 2006 Builder insiders selling
Tue Feb 14 2006 Bernanke determined to continue interest rate hikes
Tue Feb 14 2006 Big Bang Theory: Housing Bubble meets pin
Tue Feb 14 2006 Desperate sellers offering agents bonuses to find buyers
Tue Feb 14 2006 Foreclosures on the Rise Nationwide
Tue Feb 14 2006 For Men, a Fear of Commitment
Tue Feb 14 2006 Minneapolis "for sale" signs surging
Mon Feb 13 2006 Misvalued House Causes Ind. Budget Woes
Mon Feb 13 2006 Notes from a housing bubble's bust
Mon Feb 13 2006 The Democrats: Trapped in a Bubble
Mon Feb 13 2006 Once-torrid housing market cools
Mon Feb 13 2006 Timing is everything
Mon Feb 13 2006 House listings dwarf sales
Mon Feb 13 2006 Experts say South Florida housing market cooling off
Mon Feb 13 2006 Inventory surges in Oregon
Mon Feb 13 2006 Prices fall in Arizona
Mon Feb 13 2006 Signs pointing to a slower market in Florida
Mon Feb 13 2006 Government wants to sell thousands of acres
Mon Feb 13 2006 Craigslist shows 199 reduced prices in Bay Area, up from 165 on Jan 31
Mon Feb 13 2006 Glut of unsold houses sets Jan. record in Denver
Mon Feb 13 2006 Only 10% of residents can afford Orange County house
Mon Feb 13 2006 Phoenix Jan. sales fall 56% from 2005
Mon Feb 13 2006 Senate panel probes Fannie, Freddie foundations
Mon Feb 13 2006 Buying a House Gets Easier As More Houses Stay on the Market
Mon Feb 13 2006 Bond market thinks Bernanke will raise rates aggressively
Fri Feb 10 2006 Fed May Need to Raise Interest Rate More
Fri Feb 10 2006 Meritage Fires Back
Fri Feb 10 2006 Oracle to lay off 2,000 people
Fri Feb 10 2006 Mortgage demand cools since October
Fri Feb 10 2006 Sellers learning the hard way that party is over
Fri Feb 10 2006 Desperate house builders lowering prices
Fri Feb 10 2006 Toll Brothers Takes Hit in New-House Purchase Contracts
Thu Feb 9 2006 Speculators are now becoming sellers
Thu Feb 9 2006 Cooling Housing Market Drops the Stock Market
Thu Feb 9 2006 House inventories rise sharply in many major markets
Thu Feb 9 2006 Lawyer seeks to break MLS monopoly
Thu Feb 9 2006 If you don't think the housing market has cooled off dramatically, just ask Robert Toll
Thu Feb 9 2006 2 Web Sites Push Further Into Services Real Estate Agents Offer
Thu Feb 9 2006 Realty fraud continues
Thu Feb 9 2006 Higher house prices mean higher property taxes
Wed Feb 8 2006 Vacancies and Overextended Borrowers
Wed Feb 8 2006 "Fairy dust of rising house prices is floating away"
Wed Feb 8 2006 "Some will save $150,000," causing neighbors to lose $150,000 in appraisal value
Wed Feb 8 2006 Hear BHS say there are no current reductions in house prices
Wed Feb 8 2006 Web page showing lowered BHS house prices (same day as conference call)
Wed Feb 8 2006 Webpage showing huge drops in BHS DC and San Diego closings
Wed Feb 8 2006 More builders entice house buyers with upgrades, TVs
Wed Feb 8 2006 Upscale houses harder to sell, owners taking big financial hits
Wed Feb 8 2006 Building Materials profit disappoints, shares fall
Wed Feb 8 2006 Housing Bellwether Cuts Forecast Even More
Wed Feb 8 2006 Stocks open flat as house builders hurt
Wed Feb 8 2006 What the TV Talking-heads and Wall Street Economists Wouldn't Show You
Wed Feb 8 2006 The Housing Boom Preceding The 1980-82 "Depression"
Wed Feb 8 2006 Long-Term, 1995-2007 Pictures of the US Housing Supply-Demand
Wed Feb 8 2006 Countering Lies with the Facts (Data)
Wed Feb 8 2006 English mortgages offered on 125 percent of a properties value
Wed Feb 8 2006 Total money in circulation
Wed Feb 8 2006 Ohio builders slice prices in hopes of luring back buyers
Wed Feb 8 2006 Even in paradise, the housing market is cooling off
Tue Feb 7 2006 Desperate house sellers turning to religion
Tue Feb 7 2006 Sacramento default notices are on the rise
Tue Feb 7 2006 Bush budget proposes new Fannie, Freddie regulator
Tue Feb 7 2006 Sacramento jobs slipping as house sales slow
Tue Feb 7 2006 Fed rate moves, housing crunch cloud future
Tue Feb 7 2006 National Foreclosures Increase In Every Quarter Of 2005
Tue Feb 7 2006 Australian housing crash continues
Tue Feb 7 2006 You may pay a price for that non-standard mortgage
Tue Feb 7 2006 The bank counts interest as income even if you haven't paid it yet...
Tue Feb 7 2006 House insurance premiums skyrocket (but not for renters)
Mon Feb 6 2006 San Diego down 10% in 5 months
Mon Feb 6 2006 Smart investors ditching real estate
Mon Feb 6 2006 House prices falling in Calaveras county
Mon Feb 6 2006 Why Is This Legal?
Mon Feb 6 2006 Mainstream press slowly discovering ongoing crash in Florida
Mon Feb 6 2006 Federal Reserve likely to lift interest rates again in March
Mon Feb 6 2006 Number of bankrupt English families hits record
Mon Feb 6 2006 German property fund panic
Mon Feb 6 2006 Slower market tempers investors
Mon Feb 6 2006 Cooling real estate market pulls welcome mat for new agents
Mon Feb 6 2006 Now more than ever: Start saving!
Mon Feb 6 2006 Property appraisers feeling pressure from lenders to overstate values
Mon Feb 6 2006 England bankruptcies show sharp increase
Mon Feb 6 2006 Hot house markets to cool down...how will your house fare?
Mon Feb 6 2006 Canary In Coal Mine for National Housing Woes
Mon Feb 6 2006 Time To Buy Foreclosures?
Mon Feb 6 2006 Experts foresee a wave of loan defaults
Mon Feb 6 2006 More Bay Area houseowners struggling to pay mortgages
Fri Feb 3 2006 Real Estate Tremors
Fri Feb 3 2006 Get A House On the Cheap
Fri Feb 3 2006 Sacramento house sales plunge 57 percent year over year
Fri Feb 3 2006 Desperate condo sellers use human signs
Fri Feb 3 2006 Australian Housing Blog
Fri Feb 3 2006 Jobs and wages during the recovery
Thu Feb 2 2006 Will Investors Seek Greener and Less Risky Pastures as Housing Market Cools?
Thu Feb 2 2006 Housing market develops a slow leak
Thu Feb 2 2006 Contracts to buy houses declined for fourth consecutive month
Thu Feb 2 2006 Rate hikes may cool housing market
Thu Feb 2 2006 Foreclosures Hit 12-Year High in Massachusetts
Thu Feb 2 2006 Candian agency sees chill in new, resale homes markets
Thu Feb 2 2006 Real estate investors fret their money is lost
Thu Feb 2 2006 One million dollar price reduction (on $2M house)
Thu Feb 2 2006 Are you kidding me?
Thu Feb 2 2006 Fed raises rates again
Wed Feb 1 2006 This Just In: People Are Crazy
Wed Feb 1 2006 Thoughts on the Handover Fallacy
Wed Feb 1 2006 House building down 40 percent
Wed Feb 1 2006 Defaults May Rise in West, Mid West Regions
Wed Feb 1 2006 Gold dealers love the housing bubble
Wed Feb 1 2006 Solid foundations or dangerous house of cards?
Wed Feb 1 2006 Fed raises interest rates yet again
Wed Feb 1 2006 Heating bills will stress homedebtors more
Wed Feb 1 2006 Regulatory Actions Targeting Mortgage Companies
Wed Feb 1 2006 Not about housing, but wonderful graphs.
Wed Feb 1 2006 Will Surging Supply Pop The Bubble?
Wed Feb 1 2006 Reports Indicate Glut of Condos in D.C. Area
Wed Feb 1 2006 Mortgage biz fizzles
Tue Jan 31 2006 Craigslist shows 165 reduced prices in Bay Area
Tue Jan 31 2006 Real wages are having trouble keeping up with prices
Tue Jan 31 2006 Housing Boom is Over, Analysts Say
Tue Jan 31 2006 Time to Sell?
Tue Jan 31 2006 Savings rate at lowest level since 1933
Tue Jan 31 2006 Mortgage settlement could fall short for borrowers
Mon Jan 30 2006 "What could we possibly lose?"
Mon Jan 30 2006 Foreclosure Activity Up and Mortgage Defaults To Rise
Mon Jan 30 2006 NYSE to Let Fannie Mae Stock Keep Trading
Mon Jan 30 2006 US regulator says delay likely on Fannie report
Mon Jan 30 2006 Smart Investing Amidst Real Estate Mania
Mon Jan 30 2006 San Diego Condo Inventory Soars
Mon Jan 30 2006 Housing bubble seems set to deflate
Mon Jan 30 2006 High-rise speculators likely in for a fall
Mon Jan 30 2006 "If prices are going down, we don't like to say that"
Mon Jan 30 2006 These days, we all qualify for subsidized housing
Mon Jan 30 2006 Inventory of resale houses in Sacramento area shoots up
Mon Jan 30 2006 December's Story for Housing
Mon Jan 30 2006 "The question is not will prices fall, because they have been falling, but how much prices will fall."
Mon Jan 30 2006 California Housing Starts Fall for First Time in 10 Years
Mon Jan 30 2006 Slump in house sales hits Florida market in December
Mon Jan 30 2006 Development's prices fall just before closing
Mon Jan 30 2006 FL Housing market cooling
Fri Jan 27 2006 Prices plummet 12% in San Luis Obispo County in one month
Fri Jan 27 2006 Palm Beach house prices fall again
Fri Jan 27 2006 McCains having trouble selling mansion
Fri Jan 27 2006 The SEC and NYSE Bend Rules For Fannie Mae
Fri Jan 27 2006 Foreclosures soaring in North Carolina
Fri Jan 27 2006 Condo lending gets tighter
Fri Jan 27 2006 Greenspan Leaves a Legacy of Rising Prosperity Burdened by Debt
Fri Jan 27 2006 Slower housing may cool economy
Fri Jan 27 2006 Californians May Be First To Feel House Loan Pinch
Fri Jan 27 2006 Extreme house selling
Fri Jan 27 2006 Another Week - Another 12 hour sale at Centex
Fri Jan 27 2006 House sales continue to cool in FL
Thu Jan 26 2006 House Resales Fall to Lowest Since March 2004
Thu Jan 26 2006 Banks stalling improved loan regulations
Thu Jan 26 2006 Vegas Condos Go Cold
Thu Jan 26 2006 Florida housing market falling quickly
Thu Jan 26 2006 Housing Slowdown May Hurt Economy
Thu Jan 26 2006 101 dumbest moments in business: Real estate
Thu Jan 26 2006 Trouble on the Home Front
Thu Jan 26 2006 Existing House Sales Fall 5.7% in December
Wed Jan 25 2006 Californians plan exit strategies
Wed Jan 25 2006 Condo investments - how to lose a lot of money very quickly
Wed Jan 25 2006 Mortgage borrowers know that they don't know much
Wed Jan 25 2006 50-year mortgage?
Wed Jan 25 2006 Appreciation stagnates in many markets
Wed Jan 25 2006 Mortgage Lender Settles Lawsuit
Tue Jan 24 2006 Ongoing housing downturn casts pall over US economy
Tue Jan 24 2006 As Economy Thrived Under Greenspan, So Did Debt
Tue Jan 24 2006 Ameriquest admits pressuring appraisers to inflate values of borrowers' houses
Tue Jan 24 2006 US house building tumbles in December
Tue Jan 24 2006 Even more overvalued
Tue Jan 24 2006 TV shows feed buying, selling obsession
Tue Jan 24 2006 Sellers paying for house inspection
Mon Jan 23 2006 The Myth of the Housing Shortage
Mon Jan 23 2006 More than 4 in 10 first-time U.S. house buyers put no money down
Mon Jan 23 2006 Poof - 25% Underwater Overnight
Mon Jan 23 2006 Mortgage default rate shooting up
Mon Jan 23 2006 The Looming Housing Crash Is Happening
Mon Jan 23 2006 Report sees house values falling
Mon Jan 23 2006 December house sales slowed, median price fell in Bay Area
Mon Jan 23 2006 NYC mayor: housing market "dramatically" slowing
Mon Jan 23 2006 Downtown Boston condo sales fall
Mon Jan 23 2006 Marin housing market cools
Mon Jan 23 2006 Bay Area house sales down in December, prices slide
Mon Jan 23 2006 Florida house builders say that slump has arrived
Mon Jan 23 2006 Incentive to invest in houses shrivels as market slows
Mon Jan 23 2006 Signs Point to Drop in Area House Values
Fri Jan 20 2006 Bay Area housing market hit hard in December
Fri Jan 20 2006 Sales of existing houses fall in Sacramento
Fri Jan 20 2006 Housing market slides from 2005 peak
Fri Jan 20 2006 More signs of housing market top
Fri Jan 20 2006 San Diego County leading market down
Fri Jan 20 2006 Dec. Slump Shows Housing May Be Cooling
Fri Jan 20 2006 Real Estate Bubble Final
Fri Jan 20 2006 Real Estate: Buy, sell, hold?
Fri Jan 20 2006 House prices drop in high-end areas
Fri Jan 20 2006 House construction falls sharply in December
Fri Jan 20 2006 93 percent of us cant afford a median-priced house here
Thu Jan 19 2006 Deflating Bubbles, and Tanking Markets
Thu Jan 19 2006 Study estimates risk of decline at higher than 50% in 2 years
Thu Jan 19 2006 Sonoma County house prices fall again
Thu Jan 19 2006 Centex "One Day" Sales
Thu Jan 19 2006 Bankruptcy Law Backfires Already
Thu Jan 19 2006 43% of first-time house buyers put no money down
Thu Jan 19 2006 Housing prices cooling
Wed Jan 18 2006 BIS warns of house loan risks
Wed Jan 18 2006 Housing market may crimp retail
Wed Jan 18 2006 Suburbs flush with houses for sale
Wed Jan 18 2006 Inflation Concern Rears Its Ugly Head
Wed Jan 18 2006 Detroit house prices tank
Wed Jan 18 2006 Many megamansions for sale, but nobody's buying
Wed Jan 18 2006 Risk of East Bay house price drop rises
Wed Jan 18 2006 US housing market could hold key for the Fed
Tue Jan 17 2006 San Diego prices continue falling
Tue Jan 17 2006 Government of Singapore avoiding US housing market
Tue Jan 17 2006 U.S. Treasury will issue 30-year bonds
Tue Jan 17 2006 Startup firm undaunted by housing slowdown
Tue Jan 17 2006 Investors shifting from houses, bonds to stocks
Tue Jan 17 2006 Even the canny investor falls prey to emotion
Tue Jan 17 2006 Residential Real Estate Glut Can Impact Commercial
Tue Jan 17 2006 Predicting Property Prices
Mon Jan 16 2006 Hawaii house market cools
Mon Jan 16 2006 The Housing bubble will ruin America
Mon Jan 16 2006 Foreclosures on the rise
Mon Jan 16 2006 San Mateo County median house price dips
Mon Jan 16 2006 Foreclosure filings go through the roof
Mon Jan 16 2006 Monetary myopia
Mon Jan 16 2006 National Foreclosures Increase More Than 13% in December
Mon Jan 16 2006 Toll Brothers Sees Slowdown in Contracts
Mon Jan 16 2006 More pain at Dominion Homes
Mon Jan 16 2006 Huge Mass. Land Sale
Mon Jan 16 2006 Sacramento new house sales fall 57%
Fri Jan 13 2006 Interest Rate Squeeze
Fri Jan 13 2006 This year, worrywarts may win
Fri Jan 13 2006 Santa Cruz house prices keep falling
Fri Jan 13 2006 Broward house prices decline
Fri Jan 13 2006 Danger time for America
Fri Jan 13 2006 Bankruptcies to weigh on Wells Fargo
Fri Jan 13 2006 Orange County Student Enrollment Drops Two Years in a Row
Fri Jan 13 2006 Lobbying to Sell Your House
Fri Jan 13 2006 Price dips for single-family houses on Maui
Thu Jan 12 2006 Predatory Lenders Getting Nervous
Thu Jan 12 2006 Economist warns of housing slump
Thu Jan 12 2006 Housebuilders Buried in Land
Thu Jan 12 2006 Real Estate Burst, Upcoming Recession, and Soaring Commodity Prices
Thu Jan 12 2006 Some squeezed as interest rises, house values sag
Wed Jan 11 2006 More and More Unsold Houses
Wed Jan 11 2006 Beyond Keynes To Inflation
Wed Jan 11 2006 Currency players keep wary eye on housing
Wed Jan 11 2006 Naples FL Real Estate Market Report
Wed Jan 11 2006 Madison Housing Trouble
Wed Jan 11 2006 Prepare for Bubbles
Wed Jan 11 2006 Prosperity in George Bush's Economy
Wed Jan 11 2006 Risk of house price fall hitting Spanish economy
Wed Jan 11 2006 The Housing Bubble Will Probably Burst (click "Next" link in lower right to see article)
Tue Jan 10 2006 Santa Clara County prices falling
Tue Jan 10 2006 Buyers Use Margin Loans to Buy Real Estate
Tue Jan 10 2006 Soros: U.S. recession may occur in '07
Mon Jan 9 2006 Housing bubble trouble
Mon Jan 9 2006 Dropping the Real Estate Boom
Mon Jan 9 2006 Supply Outstripping Demand (PDF)
Mon Jan 9 2006 Market to swing back to buyers
Mon Jan 9 2006 Realtors' bubble may be bursting
Mon Jan 9 2006 Lenders lost on Laurel Woods
Mon Jan 9 2006 China Housing Boom Busts
Mon Jan 9 2006 The Stop Button
Mon Jan 9 2006 Prepare for bubbles
Mon Jan 9 2006 Housing market in surplus
Mon Jan 9 2006 No Longer Any Doubt Housing Market Down
Mon Jan 9 2006 DC Condo Sales Cooling After Record-Setting Year
Mon Jan 9 2006 Cave For Sale
Mon Jan 9 2006 Stricter Lending Practices Expected for Condo Market's Future
Mon Jan 9 2006 The Year Of Rebalancing
Mon Jan 9 2006 Risky home loan standards tightening
Mon Jan 9 2006 Mossdale Landing housing market slumps
Mon Jan 9 2006 Warning signs of the housing bubble crash (part two)
Thu Jan 5 2006 America's most over-valued real estate markets
Thu Jan 5 2006 Bay Area Net New Home Orders Plummet (see table in middle of article)
Thu Jan 5 2006 Honolulu house prices slipping
Thu Jan 5 2006 Another F@cked Borrower
Thu Jan 5 2006 Yes, housing boom is "cooling"
Thu Jan 5 2006 Bursting bubble? Bring it on
Thu Jan 5 2006 So Many Lenders, So Few Takers
Thu Jan 5 2006 Loan applications fall 4th straight week
Thu Jan 5 2006 San Diego housing prices down 10 per cent in 4 months
Thu Jan 5 2006 Pundits Missing 2006's Warning Signs
Thu Jan 5 2006 Bay Area Rents vs House Prices
Thu Jan 5 2006 As house values decline, watch the comparable sales
Thu Jan 5 2006 U.S. Economy Faces Large Imbalances in 2006
Thu Jan 5 2006 Weakness in Housing Market Deepening
Thu Jan 5 2006 Protect Yourself from the Real Estate Crash
Wed Jan 4 2006 Fasten Your Seat Belts in '06
Wed Jan 4 2006 Owners' Web Site Gives Realtors Run for Money
Wed Jan 4 2006 Clock is running down on 'cheap' mortgages
Wed Jan 4 2006 Put your money to work for you
Wed Jan 4 2006 Hybrid Loan Time Bomb
Wed Jan 4 2006 Investors at crossroads
Wed Jan 4 2006 Bond Market to Cool Housing Sector
Wed Jan 4 2006 Not just in California
Wed Jan 4 2006 Facing Weaker House Sales, Builders Sweeten Deals
Wed Jan 4 2006 What will drive the U.S. economy as housing fades?
Wed Jan 4 2006 Inverted yield curve to cool housing market
Wed Jan 4 2006 Don't get caught in the housing bubble crash (part one)
Wed Jan 4 2006 Affordable Housing
Wed Jan 4 2006 Reset Button
Wed Jan 4 2006 Hot housing market may be losing steam

more news links

By Patrick Killelea

Thanks to Robert Swirsky-Warner and thousands of other readers for great advice, corrections, and contributions.

And now a little comic relief, courtesy of Rick LaForce, RickL@ci.union-city.ca.us.