Robert Blumen: It's hard to know what to say any more about the insanity otherwise known as "the housing market". Compare this article: Californians' home equity up $1 trillion since 2000, BIA says
In addition to strengthening the economy, the gain in home values makes it highly unlikely that widespread mortgage defaults will occur in the event of a sharp economic downturn, said Alan Nevin, the association's chief economist.
"People have the ability to borrow against their homes," Nevin said. "If times get tougher, they could borrow a sufficient amount to pay their mortgages."
to a piece that I wrote a couple of years ago for Lew Rockwell, intended as satire:
The mainstream economist responded to these charges. "Home owners can simply extract equity from their home by refinancing and use the cash they take out to pay the difference between their income and their mortgage." Home owners extracted $491 billion of equity from their homes last year according to the Wall Street Journal. "Home owners are already using home equity from refinancing to meet ongoing monthly expenses," he continued, "it is a small step forward to start using these funds for the mortgage itself."
I also posited the idea of people quitting their jobs to day-trade real estate:
Eventually, most of the US labor force will be employed in one of a few types of work: real estate developer, building contractor, appraisers, real estate broker, and real estate agent. Their work will consist of the construction, financing (and re-financing), purchase, and sale of residential real estate. Day traders who now trade NASDAQ issues may be able to day trade residential real estate if sufficiently liquid markets and continuous price quotes are available.
Also true to life:
In December, Paul Galasso quit his Costco management job to join his wife, Evelyn, as a full-time real-estate investor.
The leap from salaried manager at a $48 billion public company to residential real-estate entrepreneur wasn't impulsive, Galasso said. The couple made more than $100,000 from five Eastside deals they completed during 2004.
Galasso, 38, is among the growing ranks of weekend real-estate investors in the area who, encouraged by a housing market that continues to sizzle and buoyed by the success of initial deals, have decided to pursue the practice full time.
I think that I should give up trying to write satire.
Calculated Risk (hat tip) has this collage of the most recent bestsellers on the bubbliest topic of these days, adding the note that there are now 436,735 real estate agents in California only.