The Washington Monthly

June 29, 2003

ANOTHER SIGN OF THE APOCALYPSE....The LA Times reports today on the latest fad in house buying and selling in Southern California:

Welcome to the world of value-range pricing — which, for better or worse, has become a fixture in Southern California's overheated real estate market. Homes are advertised in a range: There are two prices, low and high, and buyers are asked to offer something in between.

....Agents say it comes into use whenever the real estate market heats up to boiling, but that it has never before been so popular in Southern California.

"The concept is really catching on because it's very difficult to pinpoint the value of a property in today's marketplace," said Alice McCain, a real estate broker with Prudential California Realty in Northridge. "The definition of value is what a buyer is willing to pay and what a seller is willing to take. How can we determine what that is if we don't offer some parameters to get the process going?"

This is exactly the kind weird stuff that starts happening when a bubble is about to burst: the old rules stop working and people start making up new rules because they think there's been some kind of fundamental change in how the market works.

This is a very bad sign for the housing market....

—Kevin Drum 8:48 PM Permalink | Trackbacks | Comments (0)

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