Tuesday, December 27, 2005

An Interesting Twist

There is yet another letter to the editor in the Marin IJ regarding their initial article about this blog. But this letter is actually interesting. The writer condemns the IJ for publishing the original article (I agree) and seems to be accusing the IJ of trying to cause the Marin housing market to decline -- "Or is this part of an intentional IJ propaganda to help skew the local housing market?" I find that rather ironic to say the least.

The writer then goes on to point out how painful a decline in the Marin housing market will be for both house owners and non-owners alike... job losses, reduced economic activity, lost homes, etc. I totally agree and sympathise with the writer. This blog and most other blogs that discuss the housing bubble point out the difficulties that will arise if the housing market declines.
No one wants to see nor experience the pain that will result from a declining, post-bubble market, especially this blogger. But that's the whole point. This bubble is a bad thing on many levels and it is the middle class and the poor who will have to take the initial hit and it will likely be the taxpayer who will have to pay to clean up the aftermath. The bubble is the result of a number of factors (e.g., misleading information, a speculative mania, greed, relaxed lending standards, fear, an overly expanded money supply, to name a few) all of which could have been avoided or at least constrained (I absolutely refuse to believe that we are helpless and doomed to aimlessly blow around like leaves in the wind). If the housing market had remained tied to certain economic fundamentals or at least had not been allowed to stray too far from the fundamentals, then it is likely that none of the "bubble blogs" would exist.

There are only two likely outcomes -- either 1) the housing market will continue more or less as it has been, in which case unaffordability and the debt burden will only increase, or 2) the market will retreat back to something akin to being supported by economic fundamentals. If history is any guide and the market retreats (as this blogger and others thinks is the more likely outcome for the immediate future) then we can either pretend that it won't happen or we can deal with it as proactively as possible. If we choose to deal with the possibility of a market decline, then all we can do now is to prepare ourselves as best we can for the unwinding of the market. But how can anyone prepare for that-which-we-don't-want-to-think-about if all we ever hear is that everything is great, everything will be fine, and the only data that we are exposed to is selected so as to support that conclusion? That's one reason why blogs exist...to tenaciously present the other side of the argument, to express opinions and data that are difficult to consider and that maybe are not politically correct but are nevertheless important to reflect upon. Some blogs choose to show data. Some blogs collect the news from around the country vis-à-vis the housing bubble. Some do both. Most make the argument that there is a bubble or at least that the market is so out of whack that a decline is likely. How else to prepare for a potential downturn? By putting our collective heads in the sand and wishing it would go away? Not me, thank you very much.

10 Comments:

Anonymous Anonymous said...

Perhaps I should drive by this Alan's house and take a look... I may want to buy his house from foreclosure later.

Dec 27, 2005, 12:38:00 PM  
Anonymous Anonymous said...

What a twisted concept! If there is a RE slow down (which is inevitable), remember it is Marin IJ's and this blog's fault. I never thought this blog is so powerful that it could move the RE industry.

Dec 27, 2005, 12:54:00 PM  
Anonymous Anonymous said...

Don’t kill/punish the messenger.

Dec 27, 2005, 12:56:00 PM  
Blogger Marinite said...

Don’t kill/punish the messenger.

Exactly. But unfortunately it is easier to identify an individual and pounce on them than it is to step back, think about the real culprits, and address them.

It is also ironic to me that letters like this one have been what is getting published and not our original reply letter to the IJ.

Dec 27, 2005, 1:07:00 PM  
Blogger Metroplexual said...

Marinite,

A housing bubble is only good for two groups of people, people who make money when houses transact and those who cash out. That letter was written by a Marin PoS that you can't live in.

What are they complaining about this is a free country and last I checked you are entitled to your opinion. Let them start there own real estate booster blog.

Dec 27, 2005, 1:50:00 PM  
Blogger marin_explorer said...

"Or is this part of an intentional IJ propaganda to help skew the local housing market?"

LOL...I never expected to hear that one! Obviously, that writer does not notice their header and margin advertisers. Yes, why does the IJ choose to publish letters like these, while inexplicably ignoring the better-balanced responses? I doubt we're the only reasonable, cautious voices out there.

If anyone visiting here has written to the IJ, please let us know what you said. It would be good to get some balance.

Dec 27, 2005, 1:59:00 PM  
Anonymous Caddis said...

What difference does it make? Really? The IJ is a business that has an obligation to sell papers. And obviously this is a subject worth discussing. Just because they print it doesn't mean their wrong or right, they have to sell papers. Now Marinite has struck a cord with those that have very emotional ties to this market. He or she is not the issue...this blog is not the issue...this is a forum that allows us to freely discuss the things that are important to our lives.What people are missing is that we are not going to make the market change...the people that are leaving the state of California are going to make this market change. Job loss is going to make this market change. 15% affordability is going to make this market change. What's wrong is that we can't will this market to continue to grow. If we could everyone would be millionares and there would be no fair market of any kind. The problem is much greater than Marin.

There is good news....

It always comes back. Embrace it, understanding and respect it.

Dec 27, 2005, 9:30:00 PM  
Blogger kmo720 said...

Oh pleaaase... the IJ has been pumping the RE market for years.. first bit of good RE news and the IJ prints it in big, bold letters on the front page... I've seen no less than 50 of those headlines in the last 8 years I bet... the ink and story line on the bad news and the pending RE disaster has been nothing in comparison..

Dec 28, 2005, 8:30:00 AM  
Anonymous rejunkie said...

Indeed, I have been reading the IJ for 25 years, sometimes reluctantly and they seldom, if ever, publish articles expressing caution or concern about the local real estate market. We wet blankets do not buy advertising in the IJ, whereas there is an entire industry built around maintaining high volumes of transactions (title companies, realtors, lenders, to name a few) that buys lots of advertising.

The Surreal Estate column in the Chronicle is worth a read. The author appears not to be a booster of the real estate market and seems somewhat more balanced.

The IJ is a second-rate rag, in general, and probably not worth wasting time trying to get some balance in their editorials. Their journalism and writing is poor -- as has been noted elsewhere, if there were any talent at the IJ, they would have picked up and moved on to the Chronicle, NY Times, LA Times, Chicago Tribune, etc., a long time ago.

They are most useful for advertising my rentals (although I have more success with craigslist these days) and as padding for my Christmas packages.

Dec 28, 2005, 9:37:00 AM  
Anonymous Anonymous said...

How many people in Marin do not have to work for a living due to the substantial rise of property prices? If RE tanks, many people have to get real jobs. What a terrible thought!

Dec 28, 2005, 9:46:00 AM  

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