This post over on VodkaPundit made me sit up and think - it's about the ongoing bubble in the housing market:

As recently as 2002, only 11% of the new mortgages in the [San Francisco Bay] area were interest-only mortgages. But today 66% of new mortgages in the area are financed that way. While such mortgages are not as common nationwide, the upward trend extends across the country. Fewer than 10% of new mortgages nationwide were interest-only mortgages in 2002 but that has now risen to 31%.

The author, Will Collier, pulled that from the San Francisco Chronicle. He then lists a bunch of (admittedly anecdotal) evidence of disquiet underneath the booming housing sector. What really got my attention were two things:

• How many new loans are of the Interest Only type
• How many foreclosures he found in some "well off" areas

That latter one made me think - I've noticed more ads recently on local radio and on TV for "quick sales" on homes - the pitch being that you can get a cash payment for a house quickly if you need to (I would guess that these sales go for dimes on the dollar, if that). I hadn't given those ads much thought, but then I noticed the post I linked above - and it was a real epiphany.

I've been thinking that the bubble can't go one - Condos across from the Columbia Mall (a suburban mall, for gosh sakes!) are going for more than $500k. Houses in my neighbohood are selling for more than 2X what people paid for them just five years ago. New houses adjacent to my daughter's middle school are selling for $900k and up, and a small clutch of new houses on the way into my neighborhood - on lots that are a fifth of an acre at best - are going for $900k and up. The last ones I mentioned are off a private road as well, which means that they get no county plowing in the winter, and no road repair, ever. And still they go for absurd amounts of money.

This also clicked with me because of a section of "The Birth of the Modern" that I've been reading. In the early 1820's, there was a huge boom in England, and it rippled out through Europe and into the US. Credit was easy, and all sorts of schemes were floated, including a number of very risky ones in the newly independent (or still fighting) South American regimes. It was all fueled by easy credit. When that came down, there was ruination everywhere, and industrialization was set back by decades (longer in some places, like South America). The housing boom isn't quite like that, and history never repeats itself perfectly - but boy, it was a discomforting coincidence reading about that crash and then taking a look at some of those housing numbers.