About the Website

This website was started in December 2008, over two years after the peak in real estate prices in California. Despite the nationally publicized fall in home values, many Sonoma County residents remain uninformed about the true state of the current market. I attribute this to several factors:

First, the people most knowledgeable about a local real estate market are normally real estate agents. Agents don't have an incentive to tell you home prices will continue to decline in the future because then they wouldn't make any sales. Hence, they will generally put things in the best light (i.e. “Now's a great time to buy!”) even when things look to be getting worse.

Second, another source of real estate news is local papers like the Press Democrat, Healdsburg Tribune, etc. However, newspapers derive a significant amount of their revenue from advertising, and their biggest advertisers are real estate agents listing their properties. So once again you create perverse incentives. While papers like the Press Democrat will occasionally run an excellent piece on the troubles in the housing market, if the front-page of the paper described how the $2 million listing on the back-page will soon be worth $750,000, the agent listing the property would quickly stop advertising with the paper.

I don't believe that real estate agents are intentionally trying to mislead people. It is just a fact of life that people tend to view the world through their own prisms. Real estate agents will tend to think it’s a great time to buy and home owners will tend to think that their property has appreciated. It's similar to the way that most parents tend to think that their child is the smartest, best looking, most talented kid on the block... not to mention that they should also be getting more playing time from the coach that keeps benching him or her. We're all inherently biased and our position in life affects how we view the world.

Finally, much like religion and politics, declining home prices can be a tough subject to discuss. You're not going to make many friends telling people their homes could decline in value. It's understandable given you are discussing someone’s personal net worth.

For all these reasons, I don't believe first time buyers in particular have many people looking out for them. Currently, we're going through what I believe is a once in a lifetime event where housing prices will decline for years and stay there for up to a decade. Buying a home too early could wipe out your life savings that you've worked so hard to accumulate. For this reason it's important to get as much information as possible on the benefits and risks of home ownership before taking the plunge.

This site will strive to provide insight into the current housing slump in Northern California from someone who thinks a home is a place to live in, not something to make you rich. If you have any questions, comments, or articles you would like to pass on please send them to healdsburgbubble@gmail.com.

I look forward to hearing from you and enjoy the site.