Friday, December 09, 2005

MSM: We just know the housing bubble will burst

Question: when the dotcom "boom" was going on in the 1990's and Alan Greenspan warned of the overheating and "irrational exuberance" of the tech stock sector, does anyone remember the MSM trumpeting the "inevitable" bursting of the tech stock bubble? Me neither.

Well, they are now convinced that the housing market will shrivel up any day now. Amazing how much the difference is in such a short period of time! If I didn't know any better, I'd swear the change has something to do with the party of the incumbent administration! Nah...couldn't be?

Oh yeah...the story:
The expected downturn in the housing market could end up costing 800,000 construction and finance jobs, putting a big dent in economic growth over the next two years, a report from UCLA said.

But even with economic growth slowing as much as 1 or 2 percentage points, the nation should be able to avoid a recession, according to the widely watched report from UCLA Anderson Forecast.

The authors of the report admitted that they had forecast earlier this year that the slowdown in the housing market was going to start in mid-2005, which now looks like it was a little premature. But they noted that recent reports from home builders, real estate agents and the government indicate the slowdown may have now begun.
Well thank goodness the slowdown has begun! Do you have any idea how much longer my drive is to work because I get stuck behind work trucks, dump trucks, cement mixers, etc., working on all of the new subdivisions that are popping up faster than Bill Clinton's bimbo eruptions?

Finally, I can tell them to get out of my way and go get a new job, because the houses they're building (most of which have already been bought ahead of time) are all for naught, since the bubble is about to burst! My commute just improved, thanks to this bit of news!

Seriously, though, I have to wonder if this UCLA report actually went outside of LA! I read something recently (I'm going by memory here, so forgive me) where some markets were experiencing lulls in the real estate market (including LA, Dallas, etc.) and others were experiencing booms (including Jacksonville, Reno, Tampa, etc.). My impression is that local real estate markets are driven by local factors, such as the local job market and local interest rates.

Anyway, I don't recall such pessimism during the tech stock bubble until after Clinton left, despite the folding of many dotcoms in late 1999 and all of 2000 (Clinton years). Now we have a red hot real estate market, and the MSM is just counting down the days until the bubble bursts.