Monday, April 04, 2005

Many Lenders Say Its A Bubble: Poll

Inman News has a story up regarding a study called "Lending Climate in America". "Nearly half of lenders nationwide believe there is a real estate bubble, according to a quarterly survey released today."

Fourty six percent "of lenders who completed the survey said there is a significant overvaluation in the real estate market. 'Belief in the existence of a real estate bubble appears to be gaining some momentum,'" said E. Talbot Briddell, of Phoenix Management Services which conducted the poll.


At 1:00 PM, Anonymous Anonymous said...

What is getting really interesting is that Ben is turning up article after article on the forthcoming bubble burst, but major news agencies are largely ignoring it or still on the side that there is no bubble. Why is it that everyone wants to cover the bull sentiment but nobody will cover the bear sentiment ? The same thing happened during the dot com crash.

I can't believe how much the bubble discussion has increased in the last 2 weeks. It seems to be a snowball threatening to turn into an avalanche.

At 1:48 PM, Anonymous Anonymous said...

My gut feeling says that there is a housing bubble. Looking at all those idiots who are succumbing to the creative financing and motivated by greed for rapidly appreciating prices, I can only hope that they get burned to the bone when bubble bursts.

At 1:50 PM, Anonymous Anonymous said...

It is interesting how quickly this is building. We were at a brunch this weekend, where (as always) someone was describing some new home that they had just mortgaged their life to buy. (Q: Are you going to get any new furniture? A: Can't afford to...) On the way home, my wife and I were (as always) talking about how crazy it was. She said that it was particularly ridiculous given that "you could probably open up today's paper and see an article on the bubble." I disagreed; this is SF we're talking about, and the Real Estate section in the Sunday Chron always seems to have the pom-poms out for the local RE market. But sure enough, the lead story was how much rates had gone up in the last month -- and how exposed so many are in the Bay Area. I think that of the two mass psychologies that have fed the bubble -- "prices only go up" and "rates will stay low" -- the latter is quickly eroding. And it's only a matter of time before it's realized that the prices cannot continue to climb if rates continue to rise. If I had to put it in Dot Com terms, I would say that the RE market now feels like the Dot Coms did about May 2000 -- after the initial pack of absurd Dot Coms had imploded, but before things got bloody for everybody in November/December 2000. Are we witnessing the very beginning of the end?

At 1:52 PM, Anonymous tea said...

Ben, you are doing a terrific job. I am amzed at how you are able to zone in on the relevant information. Just step and take a look at the corpus of your posts, and the whoel housing bubble comes into perspective--greed overcoming fear, maic buying, lax lending, malfeasance, cheerleading by authorities, regulatory authorities not doing their job. Unbelieavble how similar this picture looks to the stockmarket bubble.

At 3:03 PM, Blogger Ben Jones said...

{major news agencies are largely ignoring it or still on the side that there is no bubble)
Yeah, thats why I started the blog.

Thanks for commenting and to you too tea, I hope it is bringing some issues to the fore...Ben

At 3:12 PM, Anonymous Anonymous said...

In my opinion there is no concerted effort to cover up the real estate bubble. The reason most writers are dancing around the issue is because they themselves own property and would not want to contribute or create conditions that would lead to its price decline.
No matter how much they dance around the issue, the real estate market is in for a world of hurt. The word is getting out thanks to people like Ben.
Thank you Ben!!!

At 3:19 PM, Anonymous Anonymous said...

I think it has more to do with the fact that you can't present a good bubble description with facts in a 30 second news blurb and the newspapers get a lot of their advertising from home builders, realty companies and people wanting to sell their homes.

Lets face something: once the bubble bursts, realty is going to be quiet for a long time. Except for the crying homeowners.

At 3:30 PM, Anonymous Anonymous said...

For an interesting debate about gold and the US economy, watch The Great Gold Debate on It was played on April 4th.


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