Krugman: That Hissing Sound (Housing Bubble)

[RamboLiberal]

http://www.nytimes.com/2005/08/08/opinion/08krugman.html?pagewanted=print

This is the way the bubble ends: not with a pop, but with a hiss.

Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started.

Of course, some people still deny that there's a housing bubble. Let me explain how we know that they're wrong.

[merbex]

1. I'm seeing it in my hometown

I have NEVER seen so many houses for sale in this town;the local paper publishes the weekly sales/closings and on average 4-5 a week which is way down from what this town normally sees


I heard from a local realtor that over 145 homes are currently for sale. Evidently that is a huge inventory for our town

Prices are ridiculous

I live 20 miles south of Boston on the coast

[formercia]

2. looks like a lot of people are going to be caught without chairs

when the music stops.

[pretzel4gore]

3. question: what % of economic activity is dependent on real estate?

the busheviks want to spin the drop (hell, lie outright and call us a 'booming economy; a fib is as good as a whopper now) until they escort geeb (bro of john ellis bush, or 'jeb' gettit?) to the door...they want to pile on news and more news to buy time while bush (he's already in the 'retirement' mode, i believe) gradully does a ronald reagan and fades from public awareness....that's what they want, and pigmedia will try to affect it by, well they'll lie if it's necessary)
goddam it, why won't someone fight for the usa? how can its sworn enemies always get off? the usa was not and is not evil (yes, evil happened, but life is to get wiser)

[Demeter]

4. Now that Auto Industry Is on the Ropes

a lot.

[Inland]

5. Ya gotta read Krugman.

"Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero?"

[Inland]

6. I live in "Flatland", and I still think there is a bubble

Living western Chicago suburbs, there's still a difference between real estate. True, there isn't any geographical barrier between me and Iowa, but commute times and lack of any amenities beyond a five small-store strip mall within a half hour's drive is making housing in the city or town center skyrocket.

[hadrons]

7. how can I get the editiorial without going thru the Screw York Times?

[nyhuskyfan]

8. Here's another link...

Krugman is syndicated, so you usually can get it in a number of places...

http://www.iht.com/protected/articles/2005/08/08/opinion/edkrug.php

[Demeter]

9. Part of the Bubble Bursting Is Because People Are Losing Their Jobs

It's a known fact that the unemployed can't keep up the mortgage. So where is this bustling, recovered economy anyway? As someone in F;atland, I have to tell you, it isn't here. We've got our own bubble and it's been deflating for 5 years now, almost to the day the Bushbots took over.