Housing Doom Housing Bubble Blog

In today’s Washington Post:

"Let the punishment fit the crime. That is where the passion comes from," said Debi Averett, who launched the blog Housing Doom ( http://housingdoom.com) after getting priced out of the Phoenix market.

While the interview was more lengthy than this, The Q&A for these points was something like this: [Gotta take notes next time]

Q: What do you think of Paulson’s plan?

A. [In a nutshell] I don’t see foreclosure as a bad thing for borrowers, the plan only provides a psychological boost to the market, it affects too few borrowers to make a difference, it doesn’t address the real problems and takes away necessary consequences.

Q. Why do you think your readers are so passionately against it?

A.  They don’t feel responsible people should pay for the mistakes of the irresponsible.  They also believe that these borrowers need consequences. They feel that you should let the punishment fit the crime.  That is where the passion comes from.

As for my being "priced out" of the Phoenix market- here’s what I think the report would look like if I were asked about breakfast at the airport: [It’s been reported I was "priced out" on other occasions as well.]

Twist:  So I’m looking at the muffins at the airport and think, "$4.50 for a muffin?  No way I’m paying that!  I’ll just have pretzels and juice on the plane."

Reporter’s summary:  "A bitter Twist becomes pretzel-eater after being priced out of the muffin market!"

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It’s friday, and Doomers all have "The Plan" proposed by the Bush administration on their minds.  If Mark Zandi chief economist of Moody’s Economy.com is right though, it won’t end up amounting to much:

"I think the plan is good in theory," said Zandi, "but, in practice, it’s going to come up short. There are too many impediments to its widespread adoption by investors and servicers."

Obstacles include contractual obligations between servicers and investors as well as logistical difficulties. When loans have been sliced up and resold through the securitization process, it can be hard to determine who ultimately has the authority to decide what modifications are possible and still in the best interests of the investors.

Furthermore, said Zandi, "There’s no stick in the plan; it depends on moral suasion."

"Moral suasion" hasn’t motivated the lending industry a great deal in the recent past, so I doubt it will move them much now.  I’ll bet you dollars to …[Wait a minute, I need a different metaphor, at the rate we’re going, it’s going to take a couple of dollars to buy a doughnut.] At any rate, I’ll bet this isn’t the last we hear of bailout schemes.

So Doomers, what do you think?  Where does "The Plan" go from here?  The market?  The economy?

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The Greater Las Vegas Association of Realtors (GLVAR) has released it’s November numbers, and it won’t be a surprise to anyone that the market continues to be in bad shape.  Expect the bulls to focus on inventory moderating [‘Tis the season, and nothing to get worked up about] and that sales have been fairly flat the last few months.  While the bulls might say the market is "stabilizing", I believe the more accurate term would be "flatlining"  Here’s why:

[Who says I’m all "Doom and Gloom"?  Note today’s festive holiday colors!]

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