by Calculated Risk on 9/19/2005 03:13:00 AM

There have been some interesting housing articles over the last few days. This one I liked the title: Hurricane Watch for Real Estate

"The next hurricane bearing down on the United States isn't headed for one of our coasts — it's aimed for a direct hit on our economy.

Coming after Ophelia in the alphabet, its name begins with an R, as in "real estate bubble." And it's going to leave a path of destruction, starting with plummeting real estate values and hemorrhaging bank balance sheets. Banks have been stuffing those balance sheets with mortgage assets: in 1980, mortgage-related assets were 20 percent of total bank credits; now, in 2005, they are 61 percent of that total."

And there have been several articles discussing the surge in inventories, like this one: Inventory surge signals housing cool-down. The Housing Bubble has recently reviewed several of these articles.

And this article was interesting: Report: Mortgage brokers, appraisers fueling foreclosure increases. Blaming the mortgage brokers seems incorrect. Using the drug analogy (thanks to Tanta) if there were no junkies, there would be no crack dealers. But what might be most interesting is this is happening in a non-bubble state - wait until the bubble states slow - all the poor quality loans will be exposed:

"Aggressive mortgage brokers and appraisers are contributing to the rising foreclosure rate in Ohio, where mortgages fail more than any other state,"

And on a similar theme, this was an excellent article in the LA Times: Cheap Loans Are Under Fire. And then there is James Cramer complaining that housing is slowing (after touting the sector recently): Hope the Fed Sees Housing's Cooled

Stuff's not moving. Especially second-home stuff. It's like the spigot just shut off. And prices are now coming down, maybe dramatically.

There, that's my take on what's happening right now in the housing market, a market that has suddenly gone from great to just plain awful, particularly on the high end.

But take it from someone who has money on the line: The great home bubble ain't a bubble, it's a market, and the market's soft. And in all markets where there's softness, there is excess inventory, which means, alas, lower prices.

And finally, arguing for no housing bubble (via Dr. Thoma): Housing Bubble Trouble? Not if There’s No Bubble

"For the past several years, Chicken Littles have squawked that the sky -- or the ceiling -- is about to fall on the housing market... Yet basic economic logic suggests that this apparent ... bubble is anything but. Even in the highest-price cities, housing is, at most, slightly more expensive than average."

Like Professor Thoma, I'd like to read the actual paper, but in the mean time please call me Chicken Little!