When IrvineRenter approached us to write a review about his book I almost said no. Although I still follow the local housing market closely I really didn’t have the time nor energy to keep up with all the housing blogs. A week or so passed and the book came in the mail and just sat on my desk. And on my desk it sat for some time until I finally picked it up last weekend. I haven’t picked it up since because I finished the whole thing in one sitting.

In this time of economic hardship every financial decision becomes critical in one way or another. Sure oil is no longer $5/gallon, but many folks don’t have jobs to drive to either. I can’t seem to go through a day without hearing of this bailout or that rescue on the news. Because no one really knows when the economy will pick up again, I find it more important than ever to understand the real estate market and not make any bad moves that can put you and your family’s way of life in jeopardy.

Enter IR’s book – The Great Housing Bubble. You can buy it here, here or here. Lawrence Roberts is best known for his posts documenting the real estate crash on the IrvineHousingBlog as IrvineRenter. I have been an IHB reader since late 2006 and I encourage you to visit it if you don’t already. The author does a great job of presenting multiple aspects of the real estate market by taking the reader through the fundamentals and broad concepts of real estate economics, the structural and psychological factors of the bubble and finally how to deal with and prevent another one from forming.

As I read the book I found myself both amused and amazed at the clarity it brings to the current RE situation. Amused because I have yet to empty my personal reservoir of schadenfreude and amazed at how clearly the components of the bubble equation were spelled out. What factors contributed to the bubble and how did they affect the market? How can you protect yourself from making a bad financial decision in the next bubble? The analysis are well thought out and clearly communicated to the reader. I recommend this book whether you are a renter waiting on the sidelines with cash, a home debtor stuck underwater or even a hopeful real estate agent looking for business.

I should have prefaced this earlier in the post, but I do not have any incentive, financial nor personal, to promote this book. What we bubble blog authors write will not change the course of events that have and will unfold in the coming years. My goal is to get the word out to help people understand the real estate market so history does not repeat itself over and over again.

Things have not improved. Our buddies are Meryll, once snotty and too important to hang out with us, are now asking for employment applications. That is on top of the phone calls we keep getting from ex-Lehman guys. 

Anyways, this is a great summary of the current housing situation. Enjoy!

Home values plunge in Southern California
Median home price fell 34% in August from last year, sales up 10% during period but many driven by foreclosures.

“Foreclosure activity remains high, credit is still tight, affordability remains strained on the coast and the job market is soft,” Walsh said. “Some expect prices to bottom out soon … That may happen, but history suggests that few of us will time the bottom precisely.”

Foreclosures accounted for almost 46% of all resold properties last month, up from 10% in August 2007 and almost 44% in July. 

Holy cow. Take out the REO sales and normal transactions are at record lows.

First of all, I want to apologize to everyone for not blogging the last couple of days. A crisis had erupted at work and we’re all scrambling to keep the company from collapsing.

Some of you know that I work for a real estate development firm. Unlike public giants such as KB Homes or Lennar, my company does not have the ability to bleed money for several months in a row. We own hundreds of acres of land throughout California that are basically worth nothing now. Zero. Zilch. Nada.

I have long predicted that many local developers will be forced to close shop due to this housing crisis and, hey, it looks like I got that forecast right (at least for my company).

Anyways, until things settle down here, I will not have the time to blog on a daily basis. 

-TheArcadian

We are currently looking for 1-2 more authors that would like to write for AHB. It can be once a week, once a month or even daily (if that interests you). Please email me if you’re interested: thearcadian@arcadiahousingblog.com.

On August 8th, 2008, we received the following comment from “bwrealestate@yahoo.com”. I can only guess that he/she is a Realtor:

You all are idiots, I have a buyer for this property…and no way to contact you.

Great idea, complain, complain…but offer and do nothing effective.

Thanks

Your worthless.

The comment was left on my 300 N. Altura Road post and although I’m used to constant criticisms on AHB, it still makes me wonder why people get so fired up over these blog posts. It’s not like this housing bubble was a made up story. Every single sane economist, financial guru, Wall Street analyst and media outlet will tell you that home prices across the nation are overpriced and we’re looking at steep price reductions in the current and near future.

Even data from the National Association of Realtors reflect the deteriorating housing situation we’re in.

I don’t visit other blogs and bash the author. In fact, I’m a big supporter of local bloggers and Realtors who actually know what their talking about.

But you know what? It’s ok. Whatevers. Maybe they’re just pissed off that they have 25% of the income they did in 2006 and can no longer afford to lease that 5-series bimmer and their house is underwater with an ARM that’s about to blow up next year.

Let’s forget housing for a weekend. Get off the internet, turn on NBC and root for your country.