On the Bubble

It had to happen sooner or later…some poor (figuratively speaking) soul lamenting the fact that she cannot sell her home for the price she wants, the price her real estate professional swore it was worth. (The same real estate professional who boasted to clients that the California market was a one-way, non-stop ticket to the stratosphere.) No, she must lower the price by $35K and cross her fingers…meanwhile, the local media is on scene with a breathless reporter informing us that the housing “slump” is here, and it’s real.

Sweet Jesus, we are dumb and getting dumber by the day. Where was the local media when housing prices were soaring by 20% or more per year, and the ownership class, new and old, was raking in equity and storing the take in silver-plated wheelbarrows, and average folks by the score were being driven out like rats? When apartment owners were jacking up rents – not necessarily because their upkeep or mortgage costs were rising – but because the Market gave them a green light to gouge?

The woman on the TV news, poor soul, probably made three or four or five times as much as she’s had to lower the asking price, so, really, what in the hell is she wanking about? Easy come, easy go, right?

Hell no! Not for the Ownership class. The gains they raked in were due to hard work and smart planning, thrift, frugality and clean living, and by God they deserved every nickel in equity. (Pure blind luck had nothing to do with it!) The American Way, Democratic Capitalism in all its sanctified glory, every person participating in the Almighty Market, doing and getting whatever his or her talents can bring. Gains are American, losses are, well, for poor saps in Mexico and Argentina.

The housing market was never irrational, you understand; by market standards it’s perfectly rational for buyers to bid the price of a dilapidated tract home over a million bucks. Hell yes! We’re a nation of poker enthusiasts and Lotto junkies, we like to lay our money down in hope of reaping a big payday.

The day a house turned into an investment vehicle instead of a place to live was the day the bubble burst.