Housing Doom Housing Bubble Blog

A nation that forgets its past is doomed to repeat it. - Churchill

December 21st, 2007

This Isn’t Exactly “Grapes Of Wrath”

Talk about sensationalized reporting.  Check out Reuters version of "Grapes of Wrath":

Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.

The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.

The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck’s novel about families driven from their lands by the Great Depression.

As more families throw in the towel and head to foreclosure here and across the nation, the social costs of collapse are adding up in the form of higher rates of homelessness, crime and even disease.

The story started to tug at my heartstrings.  While I have a "You win some, you lose some," attitude towards those who lose money on their investments, I hate the thought of children losing their homes to foreclosure and being forced to live in tents.  Then the article continues:

 

While no current residents claim to be victims of foreclosure, all agree that tent city is a symptom of the wider economic downturn. And it’s just a matter of time before foreclosed families end up at tent city, local housing experts say.

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December 21st, 2007

Op-Ed Friday: Help Save Housing

It’s Friday, and Doomers will want to know that a solution has been found to the whole housing market collapsing.  This is from yesterday’s Arizona Republic-

Here is a moderate solution to the real-estate market:

There are more than 58,000 homes on the market. If each and every person who does not need to sell his or her home, or can wait to sell, takes his or her home off the market, the market will correct very quickly.

What we would see is all the homes that the banks have had to take back or the short-sale homes. After a few months, we would have a strong housing market. In fact, if many Realtors would educate their sellers about this, everyone would be happy.

Sellers would get closer to their asking price, buyers would feel more confident when making a decision to purchase, and Realtors would not be throwing their hard-earned money out the window to market a property that will not sell.

While the Republic didn’t mention it, L noted that Grandon has been a realtor since 2004.

So that’s Grandon’s two cents worth, but what about yours?  What links, stories and issues should we be looking at as 2007 comes to a close?

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December 21st, 2007

The Difference Between “Innovation” and “Irresponsible Lending”

I was a student at Brigham Young University back in the late 1970s. [Do me a favor and don’t calculate how long that’s been.] I occasionally found myself in trouble over a provision in the dress code at the time- while men were allowed to wear jeans, women were not.  However, "feminine cut slacks of denim material" were permissible for women.  There was some debate as to the difference between the two categories, and enforcement was capricious and arbitrary.  Unsurprisingly, BYU ended up changing the policy to allow all jeans, whether the jeans were "feminine cut of denim material" or not. In the end, the difference was all in the eye of the beholder.

I couldn’t help but think of that particular distinction listening to Bernankie here lauding "innovation" but deriding "irresponsible lending".  Weren’t the big "innovations" in lending brought about by the thought that you didn’t necessarily need to follow the pesky old guidelines that were supposed to keep lending responsible?

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