The anecdotal evidence from this weekend’s reading is compelling. The housing bubble really is bursting. Now a “bubble” is really an emotional thing - a mania, a crowd madness - where fundamentals are forgotten and huge risks are thoughtlessly taken. What now remains to be seen is how deep the trough that follows the crest will be, both in terms of emotion and prices.

The real estate industry is shamelessly pumping the idea that it is just a “flattening” in prices, that appreciation will merely slow, there is nothing to be worried about, this is just a temporary glitch in the 20%+ appreciation to which every real estate speculator is entitled.

One of the better real estate bubble blogs features a sampling of “lowballs” - situations unheard of in the bubble era where someone goes in with a “lowball” offer, well below the asking price, which is accepted. This is a sample from the most recent list:

MLS# 2107679 - Chatham, NJ
List Price $1,325,000 (Reduced from $1,490,000)
Sales Price $1,000,000 (23.53% Lowball!)
$490,000 off Original List Price

MLS# 2096978 - North Arlington, NJ
List Price $390,000
Sales Price $300,000 (23.08% Lowball!)

MLS# 2083944 - Mount Arlington, NJ
List Price $1,200,000 (Reduced from $1,600,000)
Sales Price $950,000 (20.83% Lowball!)
$650,000 off Original List Price

These are folks pushing the “GMTFO” button - probably wisely. These buyers, who are attempting to catch a falling knife, will probably suffer worse. But it is interesting and telling.