The Anti-Housing Bubble Bubble
Isn’t it amazing how quickly the conventional wisdom can turn from “there is no housing bubble” to “the bubble is collapsing?”
Bay Area home sales fell 20% year-over-year in January, reaching a five-year low.
As we all know, the first stage in the price collapse is the decrease in transaction volume.
In one indication, she said, there are currently more homes on the market
in San Francisco than at any time in the past five years. It’s normal for the
inventory of for-sale homes to rise at this time of year, but “the difference
now is they’re staying on the market longer.”The number of houses for sale in Santa Clara County has increased
steadily since the beginning of the year, with about 1,820 houses on the market
last week. That’s up from last February, when only about 1,120 were available —
an unusually small number.
As my three-year-old son is fond of saying, “Soon the blood will flow.”
Hi Chris,
How about a bet? I claim that on Feb 20, 2007, the price of my condo (as approximately measured by comparable sales) will be higher than it is today.
Wanna put a dinner on it?
Bill (Grosso)
Bill, you’re on.
We need to define this very precisely, of course.
Something like, “The average price of a 3BR/2BA condo in the city of San Francisco, as determined by the median cost of condos listed in the San Francisco Chronicle.”
Does the Chronicle list median costs? Or simply median prices?
In either case, sounds good to me.
If the difference is outside noise (say, 2%), we’ll say it’s definitive and one of us wins a meal.
Now for the meal definition:
Obviously, if my home has dropped in value, I’m gonna be a pauper and so, out of pity for my financial misfortunes, you should insist on a correspondingly value-priced meal.
If, on the other hand, prices have gone up, I’m going to be used to living richly, and therefore you should buy me a meal in accordance with my then-current net worth.
Or, at least, that seems reasonable to me …
Bill
As someone who has bet a meal with Mr. Yeh and won, you are wise to define what constitutes the payoff meal! 🙂
Hey, that trip to Colonel Lee’s Mongolian BBQ counted as a dinner.
I did offer a choice; I didn’t insist that we hit Colonel Lee’s (though I must admit that it was pretty cost effective!).
It was a fine lunch… but your reputation for frugality has proceeded you!