A few years ago, as the housing market was going full steam and as blogging began to catch on, the bubble blog genre was born. As NAR squandered public relations capital with the consumer, the bubble bloggers pressed on. Every day, their ranks grew and so did their commitment to the mantra: There is a housing bubble.

Their content is often a one-sided argument in front of a friendly fan base, probably consisting of mainly renters, but providing an incredible rate of participation. Their intentions and concern seem real. Its good stuff. Once the hyperbole is filtered out, there is some useful insight, especially from the reader comments. NAR has not figured them out – NAR has met their match.

Lately, mainstream media has taken notice and been been fascinated with the bubble bloggers [SFGate], especially the the big four: Housing Bubble Blog, Bubble Meter/David Lereah Watch and Housing Panic. There are also many other bubble blogs that are just as worthy. As far as I can tell, none of the big four have any special real estate or economics backgrounds or training. They are simply concerned citizens with a message to deliver. All the more interesting that their journalistic counterparts are beginning to recognize them as a media force.

But I wonder: If NAR is running an ad campaign admitting there is some market weakness, but spinning it into an opportunity play for buyers, will that change the slant of the bubble bloggers? Will they meet the Realtors halfway suggesting there will be not be a housing crash?

Are you kidding me? The NAR advertising move is going to provide more fodder to the bubble bloggers for months to come. The NAR keeps serving it up on a golden platter.


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15 Responses to “Bubble Bloggers Clamp Down On Some Respect”

  1. Athol Kay says:

    The question I keep asking myself about the bubble bloggers is “what do they want?” They seem to have no agenda other than trying to wring maximum enjoyment from the collapse of housing in the biggest way possible. They pose no constructive solution to the problem they define. Is it a personal vendetta or a cause to them?

  2. Jonathan J. Miller says:

    Actually thats a great point, that I neglected to include in the original post…the absence of a solution to the housing problem as as they see it…or maybe a price correction is the solution?

  3. skep-tic says:

    “maybe a price correction is the solution”

    bingo. not too hard to figure out

  4. David says:

    “As far as I can tell, none of the big four have any special real estate or economics backgrounds or training. They are simply concerned citizens with a message to deliver.”

    My economic training is two courses in university, reading many books and articles.

    Real Estate – nothing formal just many articles and websites.

    “They are simply concerned citizens with a message to deliver”

    Precisely. 🙂

    David Bubble Meter Blog David Lereah Watch

  5. Francis says:

    I think that bubble bloggers have achieved their influence for the same reason many people get their news mainly from the Daily Show now. The “mainstream” outlets are so brimming with transparently self-serving and obtuse content and hype, not to mention downplaying any “bad” news, that there is a huge demand for an honest treatment of a very reasonable and significant side of this issue.

    Aside from the bloggers, in 2005 to early 2006 the only place you could get straightforward facts about the biggest purchase of most people’s lives was from Robert Shiller, and a tiny number of skeptical magazine articles such as Michael Hudson’s in Harper’s.

    Toss in the thrill of being right on a trillion-dollar sector when so many who should have known better were dead wrong, the schadenfreude of watching the greedy and simple get their just deserts, and the prospect of falling prices if you had the discipline to stay away when renting was ostracized; this gives a heady mix.

    I’d say that one big thing the bloggers want is an honest public discussion of the self-serving interests that inflated the housing bubble and the risk that this carries for everyone.

    That and a price correction.

  6. Jonathan J. Miller says:

    David – that makes the message all that more credible. Often times I find that Chief Economists or spokesman for organizations that have the term economist in their title have to have an allegience to the firm they work for – its the reality of working for someone.

  7. John K says:

    Most of the bubble blogs seem to be people seething with anger. I don’t know why. I sort of do, though. They kind of like feeling better at the expense of someone else. These people probably spent a lot of time watching the stock market, around 1998 and 1999.

    Sometimes I imagine the average bubble blogger (or commenter) to be a 55-year old suburbanite married man, out of work, with a chip on his shoulder. Sitting in the basement building things, with lots of spare time on his hands.

    These blogs would be more fun to read if they at least encouraged a discussion or really served some purpose, except just rerunning the same arguments, over and over again.

  8. Evan Gould says:

    I cannot afford to buy a house in the Los Angeles market under the current conditions. I think bubble bloggers are consumers that may have been priced out of the housing market by real estate speculation. They are waiting for a price correction. I am waiting for a price correction. By the way, I am a real estate agent.

  9. Me says:

    “The “mainstream” outlets are so brimming with transparently self-serving and obtuse content and hype, not to mention downplaying any “bad” news, that there is a huge demand for an honest treatment of a very reasonable and significant side of this issue.”

    Amen Francis.

    I read the blogs because I couldn’t figure out why my husband and I, two professionals with good six-figure incomes, were having trouble finding a house back in 2004 that wasn’t so significantly more per month than our large rental and that wouldn’t make us slaves to our mortgage. There was nothing in the newspaper about it, and all I heard was the typical “buy now or be priced out, real estate never goes down.” The lack of underlying fundamentals to the giant price increases and bidding wars was not making sense to me. Now it does.

    John, you’re totally wrong – I am not angry, and certainly not at the expense of others. If you bothered to follow the news, you would notice that the “bad” stories just started appearing late last year anyway (whereas I started following the blogs prior to that). I see the bubble as something very dangerous to our economy and future (and our general culture, in fact – this whole get rich for doing nothing atmosphere we live in will get us one day). I want to see a correction so we can get the pain over with and move onto bigger, better and smarter thing, so that my kids (when I have them) have a chance at a life that is not based on a keeping up with the Jones debt mentality.

  10. I imagine that bubble-bloggers want what most people want who blog for non-business reasons: they want to express their views and hear others’ reactions (perhaps especially the reactions of like-minded people).

    More, maybe they want to stimulate discussion about something they think is not being discussed. In the case of the ‘housing bubble’ they were WAY ahead of the curve of mainstream media, which took a long time to swing from the Eleven Year Old Retires on Real Estate Profits (You Can Too!!) stories on one end of the pendulum to the Massive ARM Re-sets Will Hasten Global Warming end of the pendulum.

    Jonathan has consistently questioned the selective happy-talk of the NAR and other grandees of the Real Estate Industrial Complex. As an agent in the REIC I have long appreciated the data-rich reports his firm has done in Manhattan – indeed, his willingness to share and talk about data as if data were more important than anecdote (as if!). And he has been willing to engage (on this forum especially) with people who have different views, especially if they provide some support for an argument other than volume or labels.

    In return, the bubble-folk who respond in this blog and even to his Three Cents Worth on Curbed seem much more willing to engage and discuss than the more typical Curbed rants of the Jane-you-ignorant-slut variety.

    I wonder all the time about “fundamentals” and how they apply in the Manhattan loft market (especially) and I appreciate anyone with insight and analysis; I am just not sure what “fundamentals” even mean in our market. I marvel at the desire of people to forecast the future, not to mention the willingness of many to make the attempt.

    I resolve to read more bubble blogs. What is the best one for Manhattan, folks?

  11. mike says:

    i’ve been an avid bubble-blog follower for several months now, and believed that my local market (los angeles) was entering bubbly territory several years ago. i happened to be in grad school during the big runup (2002-04) here, and so i missed out on the opportunity to buy a home at a reasonable price.

    now i’ve got a six-figure income and can’t reasonably afford anything outside of places like inglewood and gardena. i’ve felt for a while that prices have gone far beyond what people can actually pay for in the long run, and was tired of seeing very little in the mainstream media that questioned the underlying fundamentals of the market and its price runups.

    i agree with others that there is no solution to the bubble outside of significant price declines, especially here in california. the bubble might be good for people that bought a while ago and now have a big chunk of equity, but i think overall is a negative for the economy. how on earth do you attract and keep decent talent in the workplace when for the average well-paid employee homeownership is nothing but a pipe dream?

  12. John Doe says:

    John K Says: November 6th, 2006 at 7:04 pm Most of the bubble blogs seem to be people seething with anger. I don’t know why. I sort of do, though. They kind of like feeling better at the expense of someone else. These people probably spent a lot of time watching the stock market, around 1998 and 1999.

    Sometimes I imagine the average bubble blogger (or commenter) to be a 55-year old suburbanite married man, out of work, with a chip on his shoulder. Sitting in the basement building things, with lots of spare time on his hands.

    These blogs would be more fun to read if they at least encouraged a discussion or really served some purpose, except just rerunning the same arguments, over and over again.

    You couldn’t be more wrong in your assessment. All of the big 4 are Gen-x. Most of the lesser-knowns are Gen-x. You’re not even close in your age assessment.

    As for out-of-work renters? Dude, have you even read a single one of them? You are so out of touch, I can only say… go read one and then tell me who they are!

    As for the commenters? Well, those are just people, but the minds behind the blogs are quite smart people. They forgot to include Patrick Killela of patrick.net and Rich Toscana of piggington.com fame. Both Gen-x’ers.

    On the other hand, your age, anger, and professional affiliation are transparent from the tone of your post, even without clicking on your link. Try looking at the man in the mirror when discussing anger and hate.

    The reason that many of them rerun the same idea is that very few have actually gotten it. Surprised that it’s taken 2 years for people to get it through their thick skulls that there is a housing price bubble? You’re not the only one.

  13. quietann says:

    Mostly just repeating what others have said, but most bubble bloggers and commenters are younger (30s, sometimes 20s or 40s) professional people with well-paying jobs who cannot afford to buy. When a household with a 6-figure income cannot afford a house, something is very, very wrong.

    Examples of what is wrong IMHO:

    — Prices driven to unsustainable highs by massive speculation caused by wide availability of ARMs, stated-income loans, and sometimes downright fraud (We are seeing this a lot in Southern California.) — Lack of starter homes being built. SFHs tend to be huge and expensive (and poorly constructed to boot). Even condos are too expensive for someone just starting out in an overheated market.
    — Condos. Many people who are renting apartments look at the increased costs of owning what is for all intents and purposes a glorified apartment, and decide they’re better off not buying. The smart ones invest at least part of the difference between renting and buying, so they’ll be better positioned to buy a SFH when prices correct.

    I think there’s a bit more vicious schaudenfreude right now as things start to go bad and “flippers” get into trouble. In a few of the bubble blogs I follow, the blogger has mistakenly posted a property for sale as a “flip” when it’s actually owned by someone who needs to sell because they are moving, or got totally sideswiped by a “suicide” mortgage. When these people pipe up and say, “Hey, I’m not a flipper!” the bloggers and commenters are generally pretty nice to them.

    As for me personally, I’m a 40-something living in the Northeast; my husband bought our house outright in 1994 when the market had bottomed out here (before we met). Having no mortgage payment is a joy. I grew up in San Diego and got interested in bubble blogs when my father put our family home up for sale for an unbelievable price (close to 7 figures for a house that cost $79K in 1976), got no interest, dropped the price by 15% and still got no interest. He’s pulled it off the market.

  14. drbrightside says:

    I agree Jon K, bubbleheads seem to have that same chippy attitude as a teengage girl at prom night passed over by the quarterback only to dance with the chess champ. They have missed out on one of the greatest runs in real estate history. Hungry for home equity, they feed off every doomsday headline possible, hoping the market will crash (or attempt to make it so) so they can buy themselves (though many never will continually waiting for the “bottom” of the market). The mainstream media as well….I think I’ve seen the cover of Fortune magazine call three of the last zero housing bubbles since 2002. Boy sure would have hated to miss out on that equity run up sitting on the sidelines, oh so sorry bubbleheads.

    I’ve built a blog dedicated to the strength of our economy and have many posts/links about the resilience of our housing market.

    The economy is a product of we are what we think. Don’t let the neysayers get us down.

    http://www.drbrightside.blogspot.com

  15. Jip says:

    >>>quietann Says: November 9th, 2006 at 11:56 am Mostly just repeating what others have said, but most bubble bloggers and commenters are younger (30s, sometimes 20s or 40s) professional people with well-paying jobs who cannot afford to buy. When a household with a 6-figure income cannot afford a house, something is very, very wrong.

    Examples of what is wrong IMHO:

    – Prices driven to unsustainable highs by massive speculation caused by wide availability of ARMs, stated-income loans, and sometimes downright fraud (We are seeing this a lot in Southern California.) – Lack of starter homes being built. SFHs tend to be huge and expensive (and poorly constructed to boot). Even condos are too expensive for someone just starting out in an overheated market. – Condos. Many people who are renting apartments look at the increased costs of owning what is for all intents and purposes a glorified apartment, and decide they’re better off not buying. The smart ones invest at least part of the difference between renting and buying, so they’ll be better positioned to buy a SFH when prices correct.