Dr. Housing Bubble 09/23/08

[Crewleader]

California Housing Report: Still Going Down in Flames. Median Price for the State $301,000. 37,988 Homes Sold in August. 101,724 Distressed Foreclosure Filings. You do the Math.

“There are three kinds of lies: lies, damned lies, and statistics.”

-Mark Twain


There is no question that the current $700 billion USA Housing Motherland Bailout is the biggest story going around. The magnitude of the bailout has quelled other big stories that would have been the day’s topic du jour. For example, Ambac and MBIA were once again put under the microscope given the events going on in the markets. Over the weekend, Goldman Sachs and Morgan Stanley, the last two independent investment banks have changed their stripes. The big investment bank model has come to a fitting close. On the radio I heard someone say, “all those Harvard undergrads are going to have to change their majors.” Indeed.

At the heart of this mess is the housing market. That wonderful housing bubble that sucked a vast majority of our country into a spending orgy once only found in Vegas casinos. Who would have thought that there truly was a one ARM bandit? The entire financial edifice came inches away from “melting down” or so the talking heads would like you to believe. Maybe it came close to melting down for Wall Street but there are many people that are currently unemployed or living on the edge that the system has already melted down. The initial bailout bill pushed by Hank Paulson was for free reign, a check with no blue ink dripping from it for bailing out Wall Street. Not a good way to ask for nearly $1 trillion.

King Paulson this weekend ran into a hitch. As it turns out, there may need to be a bit of oversight for that $700 billion bailout. I’ve only heard a few folks in the late stages of delusion on the intertubes or teletubes have the gall to say, “in fact, we may actually turn a profit here!” Comments like that go in the file cabinet next to Alan Greenspan saying in Feburary of 2004,

“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.”

http://www.doctorhousingbubble.com/california-housing-report-still-going-down-in-flames-median-price-for-the-state-301000-37988-homes-sold-in-august-101724-distressed-foreclosure-filings-you-do-the-math/

[Warpy]

1. In related news, NM is being blitzed by "Move to California!"

ads that try to convince us that if we move there, we'll spend all our time surfing and snowboarding instead of living in our cars and begging for work.

Ahnuld, it's not going to work. We know what's going on there.

[City of Mills]

2. A sample listing in my city

Beds: 3 Type: SFR Sq. Ft.: 1,385 Lot Size: 2,510 Sq. Ft.

Price Reduced: 07/17/07 -- $230,000 to $220,000
Price Reduced: 08/16/07 -- $220,000 to $211,000
Price Reduced: 10/30/07 -- $211,000 to $195,000
Price Reduced: 11/30/07 -- $195,000 to $185,000
Price Reduced: 01/08/08 -- $185,000 to $165,000
Price Reduced: 02/12/08 -- $165,000 to $150,000
Price Reduced: 03/20/08 -- $150,000 to $135,000
Price Reduced: 05/08/08 -- $135,000 to $110,000
Price Reduced: 07/21/08 -- $110,000 to $69,900
Price Reduced: 09/23/08 -- $69,900 to $59,000