U.S. housing bubble may pop

San Diego Tribune ^ | 6/21/05 | Dean Calbreath

[ambrose]

3326 MALABAR ST Los Angeles, CA, 90063 offered at $225,000

photo 1 of 6

Bedrooms: 3 Bathrooms: 1 Full / 1 Partial Year Built: 1920

PROBATE CASE#VP00953. SUBMIT OFFERS ON PROBATE OFFER FORM. COURT APPROVAL NEEDED. 10% MINIMUM DEP. SUBMIT COMPLETE CREDIT REPORT F/ALL 3 AGENCIES W/PRE-QUAL LETTER. BUYER TO VERIFY LEGALITY OF ADDITIONS. ALL DISCLOSURES NEEDED. FOR VIEWING APPT. CALL LA.

View Home Details $330,000 1029 W 151st Street, Compton, Ca 90220 Map it! Listing provided courtesy of C-21 Action Bedrooms: 3 | Bathrooms: 2 | Sq Ft: 1,200 Comments: No comments provided.

[IMRight]

The report notes that current population growth supports about 1.5 million to 1.6 million new houses being built throughout the nation. But 1.9 million units were built last year and 2 million are slated for construction this year, indicating that a slowdown is in order.

And how many houses become unusuable and need to be replaced? I bet it's more than the difference.

[thoughtomator]

This housing bubble NEEDS to pop or much of this next generation of adults will never get the opportunity to be homeowners, without signing themselves into debt slavery for the rest of their productive lives.

[finnman69]

Those are frightening examples. Who the hell is dumb enough to buy those homes at those prices?

[misterrob]

If it goes POP then they never will be able to afford a home when the economy shrinks into nothing and everyone is ruined.

[Terabitten]

This housing bubble NEEDS to pop

It'll be interesting to watch both the housing and the oil bubbles pop.

[2banana]

Today people wonder how they could have paid $235 a share for a book warehouse with a website back in 2001...

Tomorrow they will wonder how they could have paid $657,000 for a 3 bedroom shack located next to a highway in 2005...

[ambrose]

Speculators buy crap like that and then rent them out to tenants at a loss... so they can sell it to someone else in a year or two for a profit... and the process repeats itself over and over. That 330k Compton POS wouldn't rent out for more than $1200 a month,.. probably closer to $1000.

[TheDon]

U.S. housing bubble may pop

or

U.S. housing bubble may not pop

The word 'may' should be disallowed in story titles.

[thoughtomator]

Yep. I wonder how many people would have bought new homes if prices were not doubled and tripled by speculation? And if gas prices drop at the same time, it could be a recipe for a fantastic renewal.

[TheDon]

It's the land, not the house, that is so expensive.

[the Real fifi]

Housing is very expensive in southern California, but I doubt the market will "pop" rather than stop climbing so precipitously. More people still move there than move away and there is not enough buildable land (even accounting for the fact that Californians seem able to contruct on lots that are vertical, not horizontal).

[softwarecreator]

You are right, it's way out of control.  I still can't understand how the average family can afford a home in California.

I would hate to be one of the people who paid mucho $$$$ for their house when the bubble breaks.

We just bought a home in our area which is slightly below market value.  We got very lucky because the owners were desperate to sell and we got first crack at it.  Otherwise our choices we unbelievable out of wack to what we know the normal housing costs to be.

[Pessimist]

Normally I don't care much about the "housing bubble", since here we don't really have one here in Cleveland, OH. But yesterday I read in the WSJ that some economists now think that because the bubble areas are so pervasive, a pop in those bubbles could actually drag down the entire US economy. If I recall correctly (and I often don't), something like 45% of the current housing value in the US is in what are considered bubble markets (ie > 30% gain over the last 3 yrs).

This will probably end up just like the dot com boom and bust. Rational, conservative investors will end up getting gutted by the market too, all because of the greed and "irrational exuberance" of the relatively few.

[Sam the Sham]

But there is no oil bubble.

China is a huge industrial power. That will not change. So forget about cheap oil until some bright boy figures out a cheap way to get oil from coal or shale.

[softwarecreator]

Frightening is a good word for it, I was shocked when I saw what $300,000 buys in CA.  In my area that shack would sell for less than $30,000, if it sold at all.

[ambrose]

Compton?

[Pessimist]

"I would hate to be one of the people who paid mucho $$$$ for their house when the bubble breaks."

No problem. They'll just walk away from the loans and let the banks (or Fannie Mae or Freddie Mac) take the hit.

And guess who ends up paying for that?

[softwarecreator]

That's obvious because that "house" is worth about $200.

[ambrose]

There is still plenty of land in SoCal. The problem is with our roads. No new roads/freeways are being built, so commutes from cheaper areas are nearly unbearable.