"McMinnville is being overrun by McMansions"
[ Jack Bog's Blog: Another one bites the dust ]

I tend to think that Alan Greenspan has something to do with it. The home building craze has its roots in the perceived desirability of stimulating the economy, in the short term, through fueling home building, which spreads money (Greenspan money) around to lots of people. (Greenspan is used here just as Pepsi, Coke and Pop, are interchangeable . . . perhaps Milton Friedman money would do just as well as a descriptor.)

The problem with building spec homes from a developer's perspective is how to unload the final product. The solution is to turn everybody into spec home buyers, flippers, both short term and longer term. The special capital gains treatment of residential homes have seen many adjustments to accommodate the plan for . . . for a sustainable bubble.

Lifting the poor by displacing them and guaranteeing profitability to the displacers. Wonderful plan . . and how progressive?

Clackamas County officials hope the new transit service will spur additional development along Southeast 82nd Avenue. Part of the Clackamas County portion of the light-rail line borders a neighborhood that for years has battled crime and drugs.

The county plans to include the area in a new urban renewal district, which could add affordable housing and fight the blight along 82nd Avenue. Some developers already have homed in on the area.

Reliance Development, a Portland firm, plans a 276-unit condominium project north of the mall. Land south of the Town Center station is zoned for high-rise office buildings, said John Rist, Clackamas County's light-rail project manager.

Surprise Surprise Surprise.

The relationship between housing prices and incomes in the Portland area has never been more stretched. While low mortgage rates have kept the party going by holding down the cost of borrowing, the affordability picture is more sensitive to a change in rates than in at least two decades.
[ First-time buyers must stretch further to own, leaning hard on interest rates ]

ALT

Double it.

The gap between housing prices and incomes has moved to its highest point since 1979, the earliest year analyzed by The Oregonian. In 1979, the median home price was 2.4 times the median household income. As of July, the ratio stood near 4.7 times -- the same as the nation's.

Stale talk, mostly.

The Coming Dollar Crisis? - As is often the case, the most interesting things I learned at last August's round of conferences came not in the formal conference sessions but in the informal small-group conversations before, around, in the interstices of, and after the conference. Take the Federal Reserve Bank of Kansas City's "Greenspan Era" conference. It was held in Jackson Hole, at the Jackson Lake Lodge in Grand Teton National Park, in the shadow of the Grand Tetons, which are perhaps the most impressive mountain range in North America. ("Perhaps" because the Canadian central bankers present pointed out the Canadian Rockies from Lake Louise... [Brad DeLong]

It must be offical then, the housing bubble, because Forbes says so. I do wonder how many folks got in their short positions during that last few months so as to make a killing?

The housing sector exchange traded fund ($HGX) dropped 3 percent today, Friday, August 5, 2005.

Can the Fed negotiate a soft landing for real estate, or will their ongoing tightening prick a bubble and cause a hard crash in housing prices? No one can answer that with certainty. But historically, it’s difficult to let the air out slowly, even with aggressive Fed easing. In spite of a record 11 discount rate cuts in 12 months, the landing for technology stocks was anything but soft.

Forbes.com: Wall Street's Fate Caught Up With Housing

Comment to JackBog: Erik and Sam's Portland

[I wrote this earlier but thought it was too long. Now it seems I'll only be preaching to the choir, something must be wrong.]

Businessweek offers this . . .

My House, My Tax Burden

Before you get euphoric about your home's booming value, consider how rising property taxes may crunch your retirement budget

If you've owned a home in Alexandria, Va., or Virginia's Fairfax, Loudoun, or Prince William counties over the last few years, congratulate yourself on a great investment. According to data compiled by The Washington Post, the value of the average home in these areas is estimated to have increased from 114% to 131% since 2001.