Sell Now!: The End of the Housing Bubble

by John R. Talbott

Book Overview

How Far Can Home Prices Fall?
What Can You Do to Protect Yourself?

Home prices are seriously overvalued in many regions of the United States. The question is no longer if, but rather how far, home prices will fall and over what time frame this bubble will deflate. Home values have been escalating in real terms since 1981, the year nominal interest rates last peaked. And the greatest price increases in percentage...

• Format: Paperback
• Language: English
• ISBN: 0312357885
• ISBN13: 9780312357887
• Release Date: January 2006
• Publisher: St. Martins Press-3PL
• Length: 208 Pages
• Weight: 0.45 lbs.
• Dimensions: 0.5" x 5.5" x 8.5"

Customer Reviews

Sobering

Beneficially sobering for anyone considering a house purchase, or for a heads up on a crisis that may very well affect us all! More a concerned warning than an investment plan, the author does a good job explaining the multiplicity of root causes for our current housing predicament. Good news for families unable to afford the current overall ridiculous pricing of housing, bad if you've already bought in.

lies, damn lies and statistics

This book mainly argues that the price of real estate has become de-coupled from the "fundamentals" (rental values, income) worldwide, resulting in a bubble that will burst. It also argues that this has been caused and pushed by Alan Greenspan at the Fed. (he lowered interest rates to cause the housing sector to get pumped up, mainly to cause a "soft landing" for the economy right after the dot.com stock market bubble burst). And it argues that non-market forces, such as aggressive lending by banks and mortgage brokers, as well as status-seeking has caused the bubble. All this with a background of a federal government that is not overseeing lending and banking the way it should (as was the case in the 1980s with the savings and loans debacle, and in the 1990s with Enron). In short, Talbott accuses Bush of being "in bed" with the banking industry, and being more a propoent of the banking industry, instead of being a proponent of the average working family. His analysis is brilliant and wideranging, and he does not stop at economics, but questions the American obsession with "image over substance" (highly-leveraged people buying villas and mansions way beyond their means, financed by increasingly complex "jumbo mortgages"). The bubble is here, and when it bursts, it will take the world economy down with it. The Economist has already predicted this, and they also predicted the 2000 stock market bubble bursting. The first signs of it are now appearing in Britain, Australia, and Ireland (not to mention Japan, which has had 18 years in a row of falling real estate prices).

Talbott is Brilliant

Talbott, like the other scholars/economists at the UCLA Anderson School of Management, has got it right! Unlike the housing cheerleaders at the NAR, Talbott gives straight talk about the origins of the housing bubble, and the 8 myths for permanently high housing prices. He explains that the real culprits of the bubble were overly aggressive banks. As of this writing, every day I read something about the FDIC trying to rein in these agressive banks, and how people are getting foreclosed on because they cannot pay their adjustable rate mortgage as the interest rate has gone up. Talbott predicted all of this. He devotes an entire chapter to the Greenspan conspiracy. Why did our smartest and lead banker, Alan Greenspan, tell the American public in late 2004, to get adjustable rate mortgages? He knew people would have trouble paying as interest rates climbed. I knew it too, so I avoided it although I would have saved a bundle initially on the payments. Talbott explains that Greenspan was helping out the banks, and preventing a recession after the dotcom collapse, without worrying too much about the more painful consequences he was creating by later foreclosures and bank collapses from declining real estate. He explains from an economist view why houses are overvalued in our most expensive cities in the US and the world, draws comparisons to Japan whose housing market is declining for the 18th year!, compares us selling houses to each other to a Ponzi scheme, and asks people to evaluate if they are in trouble too. He devotes some pages to the effects of a housing bubble bust on the economy, and the recession that will rise over the entire country, since the majority of new jobs have been created in real estate: lenders, realtors, construction, and retailers/remodelers/car and boat stores who profited as consumer spent their home equity. Talbott makes some other interesting observations that I had not read anywhere else. I am rereading it the second time, and underlining as I go along. I would be delighted to meet Mr. Talbott, so I could ask him more questions about the economy, and the role of the housing bubble collapse on our economy. Straight talk! That's what you'll get from this book. He'll go down in history as one of the only economists who foresaw the effects of the housing bubble. I recommend anyone who owns real estate or is thinking of buying, to read this first!!

mike

The only reason I bought this book was because I saw his previous book and how he was doubted about the coming bubble. Now everyone finds themselve in the midst of this bubble. The book is very informative and is real keeper and you will be more wealthy for the knowledge gained.

Clearing up misinformation

This is a good book and I'm in agreement of the general direction our housing market is going. There's a lot of misinformation in the review below. 1. The Bush Administration nor the Federal government directly control the printing of the dollar. This responsibility is done by the Federal Reserve, which contrary to it's name, is not part of the Federal government. The Reserve lends money to the US Government and is paid back with interest. 2. The sea is rising twice the rate today as it did in 1996, but the current rate is still a relatively slow 1/10 of an inch per year. 3. Most of the displaced New Orleans population are very poor. They do not have the economic capability to increase housing prices. Including housing lost in Katrina, today's housing market are still over saturated and over supplied. 4. The property value used for calculating taxes is different than market value. For instance, my parents home in Queens, NY is worth $650k, but the city's tax appraisal assessment is about $200k. The city listed $650k as the market value. 5. Although China compete for resources such as steel and oil, the increase in cost are largely contributed by the higher domestic demand caused by the housing boom or bubble if you will. I doubt China get much of its lumber from the United States.