Housing Bubble

Ben Jones’ Housing Bubble blog has an amazing piece about a couple of speculators making a living off their home appreciation, but with no other sources of income. They’ve made $1.3 million buying and selling properties, but all of their net worth is in home equity, and they have a negative monthly cash flow of $5,000 to $15,000. They hold $2.3 million in mortgage debt. What’s amazing is that the mortgage lenders are letting them continue to buy properties with no income other than what they pull out of their properties in loans. As the market turns from a seller’s to a buyer’s market, they’re likely to get crushed pretty quickly. Though at first I thought the new bankruptcy laws could potentially leave them in debt for the rest of their lives, their lack of actual income may save them, and leave their creditors with the short end of the stick. Favorite quote: “Some people call it a pyramid, but I don’t like to think about it that way.”

In another sign that the housing bubble is near an end, Tom Barrack is selling off his U.S. real estate holdings.

MLS listings for metropolitan Phoenix area, from ziprealty.com. Inventory has increased by 79% in a little over two months. 7/20/2005 10748 7/21/2005 10968 7/22/2005 11122 7/23/2005 11424 7/24/2005 11338 7/25/2005 11112 7/26/2005 11315 7/27/2005 11353 7/28/2005 11390 7/29/2005 11471 7/30/2005 11656 7/31/2005 11609 8/1/2005 11599 8/2/2005 11590 8/3/2005 11635 8/4/2005 11714 8/5/2005 11710 8/6/2005 12196 8/7/2005 12658 8/8/2005 12919 8/9/2005 13244 8/10/2005 13099 8/11/2005 13245 8/12/2005 13389 8/13/2005 13846 8/14/2005 13801 8/15/2005 13607 8/16/2005 13779 8/17/2005 13992 8/18/2005 14087 8/19/2005 14279 8/20/2005 14321 8/21/2005 14457 8/22/2005 14336 8/23/2005 14391 8/24/2005 14529 8/25/2005 14617 8/26/2005 14792 8/27/2005 15011 8/28/2005 14984 8/29/2005 14803 8/30/2005 15042 8/31/2005 15099 9/1/2005 15063 9/2/2005 15159 9/3/2005 15404 9/4/2005 15699 9/5/2005 15621 9/6/2005 15513 9/7/2005 15913 9/8/2005 16106 9/9/2005 16489 9/10/2005 16716 9/11/2005 16609 9/12/2005 16697 9/13/2005 16538 9/14/2005 16900 9/15/2005 16952 9/16/2005 17419 9/17/2005 17583 9/18/2005 17577 9/19/2005 17636 9/20/2005 17516 9/21/2005 17664 9/22/2005 17883 9/23/2005 18226 9/24/2005 18204 9/25/2005 18196 9/26/2005 18435 9/27/2005 18483 9/28/2005 18605 9/29/2005 18604 9/30/2005 19192 10/1/2005 19333 10/2/2005 19254 ...

Don Boudreaux, chairman of the George Mason University Department of Economics, weighs in - tangentially - on the housing bubble with this entry in his blog at www.cafehayek.com. R. Chapman (2006-12-09): I have a challenge for the Lippard Blog:To help increase the content and quality of our blogs, would you be interested in engaging in a dialogue on various issues in philosophy of religion?I propose to have mini-debates of 200 words or less on topics like "Is the Universe Designed" "Does the Soul Exist" "What Caused the Universe" and other issues.One of us could start with an opening statement, followed by a reply by the other, and a final statement by the opener. Each contribution just being 200 words.We could alternate who starts the various mini-debates, so no one gets the overall advantage in the dialogues as a whole.Are you guys interested? ...