The real estate bust in all its many colors, second installment

I'm thankful to see the housing bust. Maybe it will put an end to the destruction of perfectly good homes in my neighborhood, which are being torn down to make way for big-footpring McMansions that have hardly any lot left after construction. They are cheaply built and overpriced, and represent a colosal misallocation of capital. Why should low-wage asians be saving in order to support this wasteful, profligate use of capital by us Americans?

Ted Harwood is correct. Those huge new houses are cheaply built and overpriced. Many of those homes will be falling apart within 10 years. They were made by shady construction companies with underskilled workers and low quality materials. Houses were made with no more care than a house made with cards, popsicle sticks, or Legos.

Many of the inspectors were either paid off or were overworked from inspecting so many properties. This resulted in the small but essential things of a house getting overlooked. I suspect that many of these newer houses will have foundation and structural problems that will result in the destruction of the house all together.

The boom was just one big pyramid scheme.

Over inflated house prices were result of over exaggerated demand not a need - people think they will make money via buy-to-let and then sell.. but unfortunately everybody thinks in the same way and result - we have insolvency hitting the Everest.

I think future economists will look at your data set and the data set that will be evolving over the next several years and proclaim that the Fed kept interest rates too low Even now. Granted had we had interest rates one to 1.5 percent higher during the last six years, we would have had less joy in the markets and in home construction, but there would have been a lot less blood being spilled. But it is very hard to wean people from free or low cost money. And because politicians love low cost money (even the Republicans have caught the Deomcratic populist disease) we still have it.