The Great Housing Squeeze: Available homes for sale remain tight while rents continue to go up. When capitulation turns into mania.
By“Capitulation: the action of surrendering or ceasing to resist an opponent or demand.” There seems to be an air of capitulation floating around the air. No, not the toxic fumes floating over Porter Ranch but something akin to giving up. It is actually a weak form of giving up since you are talking about hipsters and house humping adults looking to overpay for a crap shack. Forget about the fact that last month the median price on your typical California home fell. No, it is time to buy now or be priced out forever. You get the selection bias going: I bought at X time and now I’m X times richer. Let us ignore the 7,000,000+ households that recently lost their homes to foreclosure. At least some are willing to admit their “investment” was basically blind luck. At a few open houses, you can see people as if they were entering a cult with their eyes dilating like the cat in Shrek. “Can you please let me buy this place and take on a massive mortgage? Pretty please?!” To be honest, it is rather shocking to see people waiving contingencies and throwing caution into the wind. In many cases, people are buying old crap shacks that actually have a ton of deferred maintenance. One open house, a standard SoCal stucco box, looked like it hadn’t been touched since the 1970s and the aroma of cat urine and dog poop whiffed around the room as people elbowed each other to “examine” the place. The only sense you had was of panic of missing out. In other words, mania…
