THE GREAT HOUSING BUBBLE: WHY DID HOUSE PRICES FALL?
The Great Housing Bubble is a fantastic resource for anyone looking to understand why home prices fell. The writing has exceptional depth and detail, and it is presented in an engaging and easy-to-understand manner. It is destined to be the standard by which other books on the subject will be measured. It is the first book written after prices peaked, and it is the first in the genre to detail the psychological factors that are arguably more important for understanding the housing bubble. There have been a number of books written while prices were rising that used measures of price relative to historic norms and sounded the alarm of an impending market crash. Economic statistics and technical, measurable factors show what people did, but they do not explain why they did it. The Great Housing Bubble analyzes not only what happened; it explains why it happened.
The author of The Great Housing Bubble, Lawrence Roberts, works in the real estate industry, and he lives, Irvine, California, the center of both the housing bubble and the subprime universe. Irvine's residential real estate market witnessed one of the most dramatic increases in prices of any market in the United States. His unique location and his position in the industry make him uniquely qualified to discuss the housing bubble.
The Great Housing Bubble is an easy read. It was developed section by section through a series of posts on the Irvine Housing Blog. With the feedback provided by 3,000 daily proofreaders, the writing is clear, concise, and accurate. Much of the work reflects the collective wisdom of this large and diverse community. However, the book is also a fully researched and supported academic work. Statistics used in the work are cited, and conclusions are drawn from academic literature and documented in an extensive bibliography and end notes. These academic research papers are used to support the author's arguments and lift the work from a series of unsubstantiated opinions to a collective, unbiased, and widely accepted view of the housing bubble.
The Great Housing Bubble concludes with a series of recommendations for preventing future housing bubbles. There are both regulatory and market-based solutions. These include changes in standard appraisal methodology, the revamping of our current system of loan standards and documentation, and a call to regulate the sales tactics of realtors. These solutions are carefully explained, and although they would be difficult to implement politically, if these proposals were adopted, future housing bubbles would be very unlikely.