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Don't Laugh at Others' Misfortunes

Posted by: Peter Coy on June 6, 2007

People who are perfectly polite in real life can be cruel online. As evidence I reprint, in its entirety, a comment Monday by a reader of the North County Times online about an article on weakness in the San Diego area housing market:

robert wrote on Jun 4, 2007 4:57 AM:


Note that the comment was posted at 4:57 a.m. What kind of ghoul is online before dawn cackling over others’ misfortunes?

Reader Comments


June 6, 2007 10:20 AM

What you fail to understand, Peter, because you work for the Mainstream Media, is the built-in bias of your media to reporting news for upscale people. After all, they are your advertisers and subscribers.

For years, the upscale people who could afford high-priced houses have been snickering through their sleeves at the less fortunate who could not get on the gravy train. A lot of economic class resentment built up, and now that housing is crashing, it's coming out. It's not only to be expected, it's justifiable.

America has become a cruel, class-based society. The upper-middle class has moved closer to the wealthy, while the middle-middle class has moved closer to the poor. The real battleground for class-based society now is the 2008 Presidential election, and guess who will win? The same party that always win elections during times of deep class divides. Unfortunately, none of the Republican candidates can understand that the more class becomes the issue, the less chance they have. I guess they don't read American history.

If and when the U.S. stock market crashes, you will see similar online laughter aimed at the haves from the have nots. It's just payback.


June 6, 2007 11:44 AM

I normally enjoy your articles, but this one seems...simultaneously off-target and somewhat wasted space to start.

For one, that 4:57 time is almost certainly "server-time" and may or may not reflect the local time where the poster is. I'm not certain why that didn't occur to you. If they are posting from NYC, it's 7:57 - if from Europe, well, then it's possibly sometime in the afternoon from the poster's perspective. Your surmise that it is 4:57 where the poster is not a demonstrated fact, however.

Second, who's to say this is a person who is polite in real life? They may be a raging jerk to everyone even off-line. Given what you have to work with you can't truly demonstrate that this case serves as "evidence" of your point at all.

So off the top there are two logical fallacies. Could you coincidentally be correct? Yes, but the "facts" seem speculative.

The more fundamental issue with your post, however, is that the housing market has tremendous abiility to create winners and losers in our society. As someone (myself) who was a "loser" during the huge upswing in the markets (because I was unwilling to take on tremendous/unreasonable debt gambling on long-term continued growth in the market and or my salary) I have been one of those folks who, in the boom, was the butt of the joke.

Of course, I can't prove that the feelings or motives of the poster you refer to match my own, but it's certainly the case that many people who did buy into the boom were/are very smug and unfeeling about the impact the boom had on those who were shut out. Likewise, many people who accepted risky (to put it politely) mortgage deals, even if they are falling on their face now - and thus ending up losers - helped contribute to the whirlwhind boom/bubble and helped to make losers of others. While I have some sympathy for many who bought into the hype, I can't completely ignore that their own actions did have a negative impact on my own circumstances (decreased ability to buy, increased local rents that have pushed upwards steadily chasing home sales values). Likewise, many of them were living high on the hog for years drawing off the ballooning "equity" in their homes while I was on a tight budget despite making a decent salary. (I won't even get into discussing real estate agents, mortgage brokers, etc.)

While the hahaha comment may be unfeeling (assuming we assume what the poster is saying at all), its bigger failing is its lack of clarity. We can assume we know what the cruel joke is, but it's really wasted space. Your response, while a nice reminder of the benefits of civility makes a lot of assumptions about the poster's intent but was it a) worth responding to at all, and b) might you have missed the point?

If the markets do continue to fall, it certainly won't be pretty for a lot of people. But the truth is that it wasn't pretty for everyone as they were going up either. But that didn't stop many who were winning at the time from cheering loudly and partying wildly, even in the faces of those who were losing and being left behind. One shouldn't be surprised if some bitterness came from that, and thus some delight for some at the prospect of the other shoe falling.

Your sentiment for increased grace in humanity is generally unobjectionable, however grace goes both ways, and there seemed to be a distinct lack of it from the winners in the boom. No one should be surprised, then, if a few who were left out let some of their bitterness sneak out. For the sake of integrity/consistency, I hope that next time the market booms you similarly champion the plight of those who are left out of the party as you are here championing the plight of those who may be leaving the party with a hangover (or liver disease).

Personally I don't know that you should have bothered responding to that vacuous post in the first place, but in having done so, you do seem to stumble into a much bigger issue that you don't seem (here) to have thought through, or at least cannot address reasonably in 1.5 paragraphs.

Best wishes,

Geoff B

June 6, 2007 12:13 PM

Rich is correct - there's a lot of pent-up anger directed at those who made a lot of money during the housing boom.

Some of it is reactionary. Log onto and check the housing forum some time. It's nearly unreadable. Most of it is a lot of name calling ("hey jealous bitter renter thanks for paying my mortgage now I'll go for a drive in my ferrari..." vs. "hear that you're underwater, enjoy living in a cardboard box when they FORECLOSE! HA HA HA!"). I don't read the site anymore, it's amazingly negative.

There's also clearly some jealousy. Free markets are rough. I spent two years getting an MS in engineering and another four working. SOmeone who invested my student loan in the housing market (heavily leveraged, of course) probably outearned me, with a lot less effort. This doesn't actually bother me the way it bothers some people (flippers do take on a lot of risk). But no question this is motivating some of this anger.

And then there's resentment of the people who wanted to buy but decided prices were too high. A lot of people believe (in many cases, correctly) that wild risks (no down payment neg am arms to people with bad credit) drove prices to heights that kept out more traditional (should I say responsible?) buyers. No doubt they're happy to see a bit of comeuppance.

It sure does show an ugly side, though.


June 6, 2007 1:38 PM

Amen rich! (ironic name...haha) Perhaps he would feel better if the original comment was:

Either way, "schadenfreude" is going to be the new buzzword which we'll be using over the next 5 years. Get used to it.

Jim D

June 6, 2007 3:04 PM

For every person who bought a house at twice what it should have cost, there's a person waiting for prices to come down to more historically valid levels, so they can buy.

Is it a misfortune if gas prices fall? How about the price of corn - is it a misfortune, or a boon? It depends on whether you're selling or buying, doesn't it?

It's not a misfortune for me - and to call it a misfortune shows a bias in favor of home owners. And that bias explains the schadenfreud you're seeing online - for years now, would-be buyers who balked at unrealisticly high prices were called fools, both implicitly in the media, and explicitly by homeowners. Now that prices are coming down, many who waited are pretty happy about it - because it means that they have a shot at finally owning a home - but only if prices keep falling.

As for the timestamp, if it's 5am in San Diego, what time is it in North Carolina? Lots of people read the paper first thing in the morning.

Go back and look at the news stories for real estate for the last 10 years - where was the respect for the misfortune of all the people who didn't or couldn't take out an interest only loan to purchase a house? Few and far between. If you like, I'm pretty sure I can find crowing articles from your own magazine that ignored the misfortune of the non-owner, within the last two years. (And "Ha ha" would have been a reletively mild rebuke in those days. "Throwing your money away" was the more common line.)

Peter Coy

June 6, 2007 8:21 PM

Great, thoughtful comments from PG, Geoff B, log, and Jim D. Thanks.

I'm happy that our blog hasn't degenerated into craigslist-style rants. One reason for that is that we try to give people something to think about other than the best ways to flame each other online.

The most insightful comment, I think, is that falling prices aren't a misfortune for everyone, and to say they are betrays a homeowner's bias. Guilty as charged. My only defense is that everyone, homeowners and renters alike, would have been better off with flattish prices than with this crazy boom and bust.

By the way, I did think about the time stamp issue when I put in that throwaway line about 4:57 a.m. I was guessing that 99% of the people who read the North County Times online are San Diego-area locals. (And that the newspaper's server was using a PDT time stamp.) I could be wrong though, in which case I retract the "ghoul" line, which wasn't very nice in the first place.

Brian R.

June 8, 2007 5:33 PM

What a pleasure to read so many thoughtful, well-stated comments. That home prices remain much higher than they should be in relation to incomes means that recent buyers and those buying in the near future will, for a long while, be directing a wholly disproportionate percentage of their incomes to housing costs. That is and will continue to be the net effect of the housing boom. You have the same quality of house, yet you get the pleasure of paying twice as much for it. Just a few, short years ago, most people could comfortably cover their housing costs. They could therefore set (at least some) money aside for their children's education, buy a boat (however modest), take two or three trips a year, and still put something in the kitty for the approaching "golden" years. Now, however, the nation has just experienced two consecutive years of negative savings for the first time since the early 1930's. Huge numbers of people are living in beautiful homes, driving gorgeous cars, and sporting expensive attire, yet otherwise don't have a pot to pee in. The recent housing boom obviously created a lot of paper wealth, not to mention cash in hand, but how much of that paper wealth will remain in place is questionable. What seems certain, however, is that for a long time to come we will be paying a disproportionate amount of our incomes for housing. How that could benefit any but a very few is beyond me. Why shouldn't millions of us sense relief in seeing some sanity, however little, return to the market? People can choose to invest in the stock market; as for real estate, there is no choice to make - - we have to live somewhere.

Geoff B

June 12, 2007 11:49 AM

Declinine house prices aren't just a boon for renters - they can actually be good for homeowners who still want or need to trade up as well.

There was an interesting article in the NYTimes about this (I believe that it was called "Trapped in a bubble" or something like that). The article described a group of property owners - often new parents in their 30s, who were looking to trade up. They had spent the last 5 years feeling very pleased with the appreciation on their condos until they realized that the *house* they always expected to buy had gone up by even more. Sure, they'll get to sell the condo they bought for 500K for a cool mil, but the house they wanted to buy went from one mil to two! 500K steps forward, 1mil back.

These young families are still happy to be owners - after all, they'd be in even worse shape if they hadn't bought anything. But it raises a key point (that many of my friends don't fully appreciate) - if you still plan to move up, falling house prices can help you.

I have to admit that in terms of pure emotion, it would be painful to watch my 2bd/1ba house become worth substantially less than I paid for it. But this would make it much easier for me to trade up to a 3/2, which would be very nice when kiddo #2 comes around.

If you need to trade up to accomodate a growing family, rising prices might actually hurt you - just not as badly as they would if you hadn't bought at all. Similarly, falling prices could help you, just not as much as they would if you'd stayed out altogether.

Btw, this whole analysis assumes that you maintain stable finances, and that prices drop a bit, but don't crash (putting you so far underwater that you can't make it back out). If you lose your job and are forced to sell, declining prices can put you in a tricky position with your lender. And ff you're one of the neg-am, interest only, no down payment buyers who is counting on appreciation to stabilize your finances, a slide in prices is, of course, disasterous.


June 18, 2007 10:06 PM

Peter, I always appreciate your articles, but this one does seem to be a little suspect.

I am pretty relaxed, however I have started to resent those real-estate shrills who lied, begged, and borrowed their way to owning a couple houses and basically rubbed it in everyone elses' face that they were the new millionaires on the block type. As a renter, I also soured on hearing people continutuosly dog renters as people 'too stupid to buy' or too shortsighted, etc.

What really bothers me the worst is the amount of people who have absolutely no understanding of basic economics (price is determined by supply/demand) and walked around spounting off comments which had no reality. Probably the biggest was that 'real estate has never declined in the US'. Dating back to the mid-60s that is true, at least until 2006. Never declines eh?

So I agree with the guy above - it really depends on which side you are on if you benefit or not. However the coming recession will hurt ALL of us to cleanse out the few that caused this mess in the first place, and for that I AM bitter.


June 19, 2007 12:19 AM

Salary: $60k; mortgage: $1,200 for 1,200 sq ft of entry-level rambler; retirement: $1,200/ month; student loan: $200-500/ month.

Car note: 0
Credit card balance: 0.

$200 cash in my wallet at all times and no burning sensation at all.

I got in 2 years ago and was just offered $50k more than I paid ($70k more than what's owed) and the house isn't even for sale.

I'm not bitter about having to live in a 'marginal' neighborhood in a 'starter' home for a few years.

And I will be able to live in the neighborhood I grew up in with a little bit of planning ($28k in 1972, $330k now for the same house).

My folks timed it right anyway and they weren't even trying.

Good for them.


June 18, 2008 1:17 PM

I was a renter through much of the housing boom, but I did not resent homeowners because I made more money in the stock money. Now, things have changed. I feel a growing resentment towards homeowners because the Democrats want to punish investors with huge tax hikes, while at the same time throwing billions (or maybe trillions) at "deserving" homeowners. Talk about class warfare!


July 12, 2009 4:58 PM

Other people's issues on not
our problems, so if this guy
laughed he was having fun.

I bet you don't know how to laugh
at others. People don't care
about those they don't know, get
it English Birdbrain.

Serious people are boring persons
with a serious outlook on everything.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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