The housing bubble and subsequent bust has been a mainstay of the financial headlines for the past six years. Most pundits were chirping throughout the bubble - and saying during a good chunk of the bust that housing prices could only continue to rise. There were a few level-headed individuals who did see the housing mania for what it was and some of the names are familiar; there are the big media names such as Robert Shiller and Nouriel Roubini, the blog experts, including; Mike Shedlock and Karl Denninger. There are others, maybe less familiar names, who foresaw the housing bubble and bust that have earned equal billing, including Patrick Killelea - the founder of Patrick.net.
I receive the Patrick.net daily newsletter; an excellent resource which highlights housing and economic news stories. I was curious to find out the story behind Patrick.net, so I asked Mr. Killelea if he would be willing to discuss the origins and future of his website with me. He kindly agreed to share the Patrick.net story. I'll refer to Mr. Killelea as Patrick, since that's the name of his website. I sent Patrick some introductory questions and then we expanded on those questions during a phone conversation.
Patrick is a native Midwesterner who moved to CA during the dot-com bubble in 1997. He'sa 43 year old with an engineering degree from U. Michigan. He's a computer programmer and is the author of a book about website performance problems, titled: "Web Performance Tuning," which is in its 2nd edition and available for sale.
I asked Patrick what influenced his decision to start Patrick.net and why he focused on the housing bubble
"I had the patrick.net domain name since 1995 or so, but didn't do much with it until late 2004, when the bubble was painfully obvious, yet the realtors, the press, the government, and the Fed were all in denial."
While Patrick is not a real estate professional, he's well aware of why the housing bubble took shape and who's to blame for all the hype and misinformation, "I just couldn't stand the quoting of realtors in the press as if they were an objective source of information. They're not, and I wanted to say the things they were not saying."
"I have no background in real estate at all. You don't need a background in real estate to see that houses are overvalued by a factor of two or three in places like the SF Bay Area. Renters are being subsidized in a big way by their landlords. These things became clear because I was surrounded by the real estate bubble."
Although it may be obvious to many, I thought it worthwhile to ask Patrick why people are so taken in by the real estate is the way to riches mentality.
"Because it's money without work. Sounds nice. And it was true as long as salaries and population were rising and interest rates were falling, as they did for many years. But now the US population is mature, and may even decline. Salaries are falling, and there's a big unemployment problem that will take years to clean up. And interest rates have nowhere to go but up."