Over the past few years, the OmegaFamily has watched, jaw agape, as the housing prices in Hippy Dippy Enclave in the Woods have risen, and risen, and risen yet again.

Our house cost us the grand sum of $125,000 in 1998--an amount that made OmegaDad's family in Oklahoma gasp and exclaim that it had better be a bloody mansion!  For that price, we got 1275 square feet (or is it 1242?) and a neighborhood with...um...character, like the mobile-in-a-blanket a street over that is painted vivid purple.  Or the house down the street from that, another aging mobile home, which is festooned with various pieces of welding art.  Or the (formerly) haunted house across the street which is now occupied by The Shouters, who have innumerable dogs crammed into a 600-sq.-ft. house, along with the 10-year-old daughter, the late-teens daughter who is always dating someone with a macho car, and the early-20s son who is a Marine.

No homeowners association here, thank heavens.  And if there was one, as we have joked, the requirements would be owning at least one Large Dawg (check), a canoe on the porch (check--well, it's in the garage, so it doesn't quite count), and an aging VW bus on concrete blocks in the driveway (no check).  (There is a rumor that one of the houses in HDEW has a septic tank which is, in reality, merely an old VW bus that was sunk into the ground, pipes piped in, and dirt piled on top.  The septic pumping system dude who pumped our tank this summer assured me that this was true, and he had actually pumped out the bus once.)

At the time, the price we paid was about $20,000 below the median.  Our lenders claimed we could afford much more, but to our sensibilities, this was the max we could afford.  We looked for three months, traveling up the hill to Small Mountain University Town on the weekends, scouring the ads, checking Realtor.com.

Nowadays, if one were to go by the asking prices that I have been tracking in a spreadsheet since May, we would be able to sell the house at $300,000.

Yeah, right.

Anyone with an iota of sense would look at these skyrocketing values--150% appreciation in eight years?!--and say the dread words, "housing bubble".

My latest blog reading delight has been housing bubble blogs.  As is my wont, I jumped onto the bandwagon late in the game, discovering them in June or July.  I read them and started garnering facts and figures galore.  Housing sales have currently stalled.  It looks like the peak was about a year ago.  Nationwide median housing sales prices dropped by 9% year-over-year this fall, for the first time in 35 years that the National Realtors Association has been tracking them.

The amount of insane loans that have been being taken out recently is appalling.  125% mortgages...option ARMs with interest-only payments...toxic home equity loans.  I've seen some charts'n'graphs displaying the skyrocketing house prices, displaying the skyrocketing amount of debt the average American has taken out in the past few years, displaying some interesting synchronicities between median housing price changes and (shifted forward 12 months) the Dow Jones...

Since the Dems swept the recent elections, a bunch of bloggers have started wondering when the Republicans would blame the Dems for the bursting of the bubble blog.

Fear not:  We already have someone doing it. 

Anyway, the bottom line:  don't expect your house to be worth what you currently think it's worth if you try to sell it.

Technorati: Housing bubble, HOAs, HELOCs, IO loans