christopher heiser <christopher AT heiser DOT net>
Date Published: June 28th, 2006
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Housing Bubble

Blanco has been sending me some very interesting articles as of late, and I've spent some time looking at the housing scene from a national and local perspective. Some very interesting trends are happening.

At a macro level there appears to be a lot to be worried about. The confluence of strong home prices and low interest rates has swelled the debt of the nation, with many using their gains in home equity to finance their spending and credit. Lenders like Fannie Mae have taken these volatile individual mortgages and consolidated them into securities which mask the fragility of the market. ( has a good overview of this and other scary things.)

In the local region, things are far from rosy. The cycle in Marin County points to an imminent correction that is already underway. However, some data closer to home suggests that things aren't all that bad. What's interesting about these last set of graphs is the fact that we've seen another 5% increase in median house price in the first quarter of 2006. But the number of units on the market is the highest it's been in almost three years. Days on Market is also rather flat, whereas in previous years there was a distinct rebound after the usual holiday slow-down.

So, does it mean that we'll see reduced or even negative growth this year?

by Christopher Heiser on June 28 03:41
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