Homes and Homers: Life After Steroids
You know that feeling. It’s that queasy, rubber-legged, vertigo sensation you get just after stepping off of Cedar Point’s Blue Streak roller coaster. It all started when you sat down, buckled in, and then began your ascent on that slow, staccato uphill climb - clack, clack, clack, clack, clack, clack. The suspense was palpable, strangers conversed loudly and nervously, you could see the whole park from up there, and even some boats bobbing eerily in the distance. As the mutant spinal cord of a track methodically and obediently approached the zenith of its physical and legal limits, it appeared to pause momentarily just past the apogee – as if re-checking to see if the stove was turned off – before plummeting from this crescendoed perch, hurtling passengers – willing and not – towards its slithering depths, with whiplash promises and head-snapping assuredness.
Well folks, the ride has finally come to an end for both Homes and Homers, and that uneasy, exhausted feeling in the pit of your stomach portends to linger for a while. After years of tape-measure homes and tape-measure home runs, the irrational exuberance tied to these two national pastimes has finally arrived at the Opening Day of Reckoning. Like April showers and May flowers, springs’ warm sunny days traditionally welcome buyers and baseball to homes and homers…but not this year. In 2008, spring’s buying season is instead destined to usher in the boys of the summer of our discontent.
After years of outsized performance and record-breaking statistics, 2008 will be remembered as the year the music died for both homes and homers for one simple reason – no more cheating. Following months of very public congressional hearings involving several high-profile players, Major League Baseball has finally decided to get serious and crack down on the widespread use of steroids and other performance-enhancing drugs. For fans of the long-ball, this means a depressing return to reality and mortality, and an end to the superhuman feats of strength and speed. Never again will we witness a 60 home run season (let alone 73) or baseballs that fly hundreds of feet beyond the outfield wall as if injected with liquid energy – because, it turns out, they were.
For years, baseball teams, managers, and trainers were all motivated to “look the other way” as lats, stats, and bleachers inflated to capacity – because doing so benefited everyone in the ballpark food chain with one important thing – money; lots and lots of money. They rode this gravy train as long as they possibly could - even lying under oath to enjoy one more go-round, and when the ride was finally over, they turned on each other in a massive finger-pointing effort to pass the blame. The game of baseball – America’s Pastime – had once again been tainted by scandal, and once again in the name of greed.
Just like America’s Pastime, the “American Dream” is also entering 2008 on the disabled list. After years of “looking the other way,” the entire housing and banking ecosystem has now imploded with a resounding CRUNCH! Like dot-com day traders, and the California gold rush before it, thousands of starry-eyed speculators kept injecting a steady supply of HGH (Housing Growth Hormones) into the market, creating outsized performance and Herculean gains in just a few months. Just like baseball, everyone in this “un-real estate market” food chain was also motivated to perpetuate the biggest pyramid scheme since the Egyptians, and all for the same reason – money; lots and lots of money. Banking CEO’s speculated on funding risky home loans, hedge funds speculated on buying these 30, 40, and 50-year loans, brokers speculated on writing these Liar Loans, and buyers speculated on buying (and often flipping) these loans and homes. The players had their agents, and the banks had their appraisers – all incentivized to get top dollar for their clients, even if it meant cheating a little…or a lot. After breaking records year after year in housing appreciation and banking balance sheets, the scandal has finally been uncovered, the congressional hearings have started, high-profile personalities have been ousted, and the finger pointing has begun in a massive effort to blame someone else. After desperately wanting to RECEIVE the big bucks in both banking and baseball, suddenly everyone is ready to PASS the buck, which is how we got in this mess in the first place.
In 2008, both the Commissioner and the Chairman will have their hands full as they work to restore order and integrity in Bonds and bonds, and to level their respective playing fields. With no more liquidity in the needle and no more liquidity in the market, it’s a farewell to inflated ARM’s for both batters AND buyers. Unfortunately for us, this will mean both home and homer statistics will come back down to earth, as players struggle to keep up their home runs and RBI’s and consumers struggle to keep up their home mortgages and refi’s.
You’ve got to admit – it’s been quite a ride, as the clack, clack of the roller coaster harkens back to the clack, clack sound that baseball cards used to make affixed to bicycle spokes riding through the neighborhood, except today’s neighborhoods are different, as “For Sale By Owner” signs have been replaced with “Fore Closure By Bank.” It’s clear that things will never go back to the way they were, but here’s a suggestion to help us get back to normal. How about requiring the price of all “comparable homes” sold over the past 5 years – like homers – be listed with an asterisk *