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Canary?

Markets with the greatest deterioration comparing the first quarter and fourth quarter of 2001, based on supply and demand.

Denver multifamily -36%

Sacramento office -35%

Denver industrial -27%

Indianapolis industrial -25%

Dallas office -22%

Dallas industrial -20%

New York office -19%

Charlotte office -18%

St. Louis office -18%

Tucson industrial -17%

Denver office -16%

Ft. Lauderdale industrial -15%

"New home sales, too, topped the one million annual rate last month for the first time ever, and overall housing turnover is now a record 18 percent of disposable income--significantly above the 13-percent average since the last cycle peak in 1989, and twice the 9-percent low seen in the 1990 property bust."

"Moreover, consider that, if we knew that in a nation the size of, say, France, there had been a median home price increase of 25.5 percent in a year and that this, far from deterring purchasers, had led to a 22.7-percent increase in sales, would you say this represented a Bubble--a good old debt-fueled Bubble--and that this might pose risks to financial stability, especially when so many people involved were dependent for work, whether directly or indirectly, on the most battered industries?"

"In which case, what are we to make of the extraordinary 57-percent dollar year-on-year increase in spending on the California Real Estate Rush?"

"Houses are nonproductive assets, financed with a great deal of leverage. What is more, though they release their services in small increments to the owners, they deliver a large dollop of uncompensated purchasing power up front to their builders or to those cashing out of the market, as well as to the Realtors, who netted around $1,200 for each loan originated in the record $2 trillion total last year."

For the full text of the article written by Sean Corrigan go here:

The Trouble With Debt

Richard W.