Bubble? There’s no bubble.

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Good morning, Steve Spurrier. We darn near spit our coffee out when we read this passage from a letter to the editor in the Real Estate section of this morning’s L.A. Times:

‘In the L.A. market there is no bubble. Further, the situation in Los Angeles does not come close to what happened in the 1990s recession caused by the demise of the defense industry, followed by the Rodney King riots, fires, earthquakes and floods.’

The letter is signed by Susan Stone of Agoura Hills, who is identified as a real estate agent.

We’ll throw this open to comments with one quick comment of our own: We agree that this is not a replay of the 1990s real estate slump. It’s different. This was a credit bubble, a large one, and it popped. Demand as we knew it six months ago is gone. This time the housing slump is quite likely to cause a recession, rather than the other way around -- a housing slump caused by a recession. So, yes, it’s not the early 1990s. The price declines might not be as deep this time; then again, they may be deeper. We haven’t seen this movie before.

Your thoughts? Comments? Insights? E-mail story tips at lalandblog@yahoo.com.
Please note: This is an edited post; the original post mistakenly omitted the words ‘followed by’ in Stone’s letter. Commenter ‘waitingitout’ pointed out the mistake, and we corrected it.
Photo Credit: L.A. Times