If you've ever watched the classic short film The Way Things Go, you can't help but be fascinated by the frightening fluidity with which a precarious but self-conscious house of dominoes will fall, and how fascinating it is to watch as it unwinds. Car-crash syndrome. It gives us an epic tale of constructions and deconstructions, near-misses and satisfying clunks. It is, after all is said and done, a turning mobile gently emanating musical chimes to the delight of the tot in us all.
This is but a long-winded way of saying, the housing market is FUCKED. And I'm dancing the happy dance in anticipation for a market-bottom in a year or two, which will be followed by a globalized recession as consumption contractions shatter the world of fiat trade. One researcher from MIT said that the people in the best position were young, first-time home buyers who can enter that bottom in a year, and rent for now. That's us!
Following Santa Clara housing statistics and Foreclosure.com, you can see that it's a bloodbath out there with median housing prices diving -$47K in four weeks! In the local paper, I saw a whopping y-o-y six-fold increase in for-sale listings in Palo Alto!
For those of you who want to know more about why a recession is going to smack us in the ass, and not on our lips, I recommend this EXCELLENT article by Nouriel Roubini summing up the situation:
Indeed, in a matter of months, the gravity-defying housing boom and bubble turned into an alleged “orderly slowdown”; then, the orderly slowdown turned into a euphemistic “soft landing”; and next, the soft landing slipped into a “slump”; most recently, the slump worsened into a hard landing; while the latest data suggest that the hard landing recently turned into a bust. And soon enough this housing bust will turn into a rout and an unprecedented meltdown.