Of bubbles, bread, seeds and cookies

by the Night Writer

One of the characteristics of the dearly remembered housing boom was the sprouting of “McMansions” in former cornfields or alongside golf courses. These were very cool looking homes and we enjoyed touring these during the Parade of Homes, especially those listed at $1 million or more.

It made for an afternoon’s diversion and fantasy, but you had to wonder at some of the value represented. A salesperson was showing us around one $750k model townhome and as we were admiring the well-appointed family room the resident in the home that shared a common wall flushed the toilet. We knew this because we could clearly hear the water running through the pipes and the tank refilling. This is not an unusual experience when you live in an apartment or a townhouse, but not a big selling feature if you’re going to spend $750k. Other times we’d tour a million dollar home with Ben, who is an experienced carpenter, and watch as he pointed out subtle mistakes in fit and finish. In one case there was painted over evidence of a load-bearing wall not doing it’s duty, likely as a result of a problem with the foundation.

I think of these things, and foundations, in the burst residue of the housing and mortgage bubble as the entire economy sags like the wings of a great house falling toward the basement because the center-beam wasn’t set as well as you might think. It’s the latest demonstration of the Biblical exhortation to build your home on solid rock and not on shifting sand. Of course, the Bible is using the house as a metaphor, as am I. Let’s review Matthew 7:24-27:

“Therefore whoever hears these sayings of Mine, and does them, I will liken him to a wise man who built his house on the rock: and the rain descended, the floods came, and the winds blew and beat on that house; and it did not fall, for it was founded on the rock.

“But everyone who hears these sayings of Mine, and does not do them, will be like a foolish man who built his house on the sand: and the rain descended, the floods came, and the winds blew and beat on that house; and it fell. And great was its fall.”

Doesn’t that sound familiar, and in more ways than one? Allow me to extend the metaphor into an analogy: today’s economy is the rain, and the effects of it in our lives are the floods, and the wind is the additional adversities that come to challenge our faith and make us doubt what we are standing upon, or whether the rock is enough to save us.

We have to build with storms in mind, an outlook almost completely lacking in the latest run-up as people seemed to assume that storms had become extinct and that those sets of conditions would continue in perpetuity (just as some now assume the current situation is forever). What is the housing bubble, or any bubble, all about but value driven by high expectations rather than intrinsic worth, or the greater fool theory? In those conditions you’re not building a foundation on a rock; you’re not even building it on sand which can at least be heavy — you’re building it on something as flimsy and as easily popped as a bubble. And great is the fall.

4 thoughts on “Of bubbles, bread, seeds and cookies

  1. I can’t claim the expertise that Ben has, but I have helped friends move out of half million dollar (in 1995) houses and noticed the sheetrock rattling as I walked up the stairs, and have heard similarly opulent houses shake in the wind–on not that windy a day.

    Give me my 1960s homes built right any day over that.

  2. Or my 1940s-era home with lath and plaster walls and double-strength rim joists that withstood a car crashing into it without shaking a shingle!

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