Thursday, May 04, 2006

Myth Busters

Fortune magazine has a series of interesting articles. The first is their RE bubble burst survival guide. Notable quote:
There’s no mystery about what it will take to close the affordability gap and bring the markets back to life: Prices will have to come down, and incomes will have to move up. The only question is how much of the adjustment will come from rising incomes and how much from falling prices.
Gee, I wonder which one will adjust first: incomes or house prices?

But the best one in the series IMO is their unmaking of RE myths article. Here are the myths that they debunk (just read the article to understand why they say these myths are bunk):
The sudden shift in the nation's housing markets is exploding some long-held beliefs. The first is that a scarcity of buildable land on the coasts keeps a cap on supply and prevents prices from falling.

A second myth is that today's big homebuilders learned their lesson in past downturns and now launch projects only when they have firm buyers lined up.

A third tenet holds that home values never drop in areas where employment is rising.

The current boom has spawned one new myth of its own: Hot markets will glide to a soft landing...But the housing bulls are relying on wishful thinking.


Blogger fredtobik said...

Welcome to the show Fortune, I bet they will sell a lot of magazines. Then Business Week will see their success and copy it then NYT, then etc......


I just bought my first digital SLR camera, and went for hike today, awesome camera. I took a lot of pictures of "god's country". :p

May 4, 2006, 8:05:00 PM  
Blogger moonvalley said...

Ok, so how is this headline in the Marin papers going to affect the housing values in the area?
I guess everyone wants to live in Marin, the same as all the dumping of convicted sex offenders and parolees in Agua Caliente that has gone on in the past.

May 5, 2006, 4:57:00 PM  
Blogger Tom Chambers said...

This comment has been removed by a blog administrator.

May 5, 2006, 5:29:00 PM  
Blogger Marinite said...

moonvalley -

I know. I thought of making fun of that article. The way people in Marin are getting all of their self-rightous white NIMBY panties all twisted up about it. It is just fine for everyone else to deal with these sex offenders, but here in Marin...well, we're just too good and too special to have to put up with the criminal justice system.

For those of you who want to know if there is a sex-offender living near you, you could visit this link and find out (my good deed of the day after making the above comment):

May 6, 2006, 2:52:00 PM  
Blogger jhawk92 said...

Hey guys, since BofA is so big in CA. You should check out Property Grunt. It sounds like BofA is getting out of lending to RE LLC's.

A big move by a big lender...Now, just keep in mind this is a rumour at this point, but if it's true WOW, the air is shooting out of the bubble very fast!

May 6, 2006, 6:57:00 PM  

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