Where Is The Epicenter Of The Housing Bubble?

By Author: Lawrence Roberts
Total Articles: 4717
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The epicenter of the Great Housing Bubble is located in Irvine, California. One of the primary causes of the bubble was the lowering of lending standards and the extension of credit to people who could not handle the responsibility: Subprime borrowers. The word "subprime" has become indelibly linked to the Great Housing Bubble. It is one of the causal factors that make the bubble unique, and the collapse of subprime is widely regarded as the pin-prick which began the bubble's deflation.

Irvine, California, is the center of the subprime universe. Three of the top ten subprime lenders, New Century, Ameriquest, and Option One, are (or were) headquartered in Irvine. Most subprime lenders have processing offices in Irvine due to the large number of trained personnel living in the area.

Irvine's New Century Financial, formerly the second largest subprime operator, is heralded as the poster child of the bubble. The company name "New Century" implies a new era and a new paradigm. It embodies the fallacious beliefs and ideas that inflated the Great Housing Bubble.

The Great Housing Bubble is a national phenomenon; ...
... however, the national statistics soften the extremes and make the rise and fall look less remarkable. In some local markets, the prices changes are truly extraordinary. A fine exemplar of the Great Housing Bubble is Irvine, California. Irvine is a large, master-planned community of over 200,000 residents.

The high incomes of Irvine residents are reflected in the rental rates for properties which are consistently near the highest in the nation. High incomes and rents translate into high real estate prices, even at the bottom of down cycles. When reviewing the properties in Irvine and the price tags attached to them, it is not uncommon for outsiders to believe a decimal point has been misplaced.

House prices began falling in Irvine in 2007, and they have been falling every since. The lessons learned from the Irvine experience are universal.
About Author:
Lawrence Roberts is the author of The Great Housing Bubble: Why Did House Prices Fall?
Learn more and get FREE eBooks at: http://www.thegreathousingbubble.com/
Read the author's daily dispatches at The Irvine Housing Blog: http://www.irvinehousingblog.com/ Visit Where Is The Epicenter Of The Housing Bubble?.