When the world's financial sector fell last year, politicians and pundits quickly found the villain: the housing bubble and bust. Yet five years ago, the housing bubble was looked upon more benignly, as our economy's way to power itself out of the tech crash. In 2005, when Robert Schiller, author of Irrational Exuberance, warned that housing prices could drop nationally nearly 40 percent, he was not greeted as a voice of reason, but as a distinct party pooper. The voices of reassurance soon found an excellent meme to dismiss Schiller's Gloomy Gus act. As Frank Nothaft, Freddie Mac's chief economist, said in Business Week: "I don't foresee any national decline in home price values. (Our) . . . analysis of single-family houses over the last half century hasn't shown a single year when the national average housing price has gone down."

No "single year when the national average housing price has gone down"—what a charming factoid! It became the basis for the dizzying pyramid of wondrous mortgage-backed securities and insurance on securities and swaps on insurance on securities and securities on the insurance on the swaps on securities. Never has one factoid cost so many so much.

Alyssa Katz's Our Lot: How Real Estate Came to Own Us performs an invaluable journalistic service by giving us a bottom-up approach to the decade's housing madness. ... (Read the full review)

I wish I had known Alyssa Katz back in 2006, because she has been investigating the real estate market since 2004, and her new book, Our Lot: How Real Estate Came To Own Us, introduces us to more magical thinkers: the middle-class couple who decide to spend their savings on swampland in Florida (I kid you not), the handyman who started buying and flipping and made out great until he could no longer flip. Today, he is stuck with several properties worth less every day.

Me? I decided the market could get no worse after my house sat for a year. So I took it off the market and rented it for another two, becoming one of the world’s least competent landlords (thank goodness nothing went wrong with the house), allowing rent to come in late, covering utilities myself, and always operating at a loss. (Turns out I’m in great company—Timothy Geithner can’t sell his house, either, and has also turned to renting.) ... (Read the full review)

This richly detailed analysis of the recent (and ignominious) history of the American real estate market opens on a note of false optimism: in 1991, after 20 years of toil, urban housing activist Gale Cincotta successfully argued that Congress should require that 40% of the home loans issued by Fannie Mae and Freddie Mac go to low-income buyers. The Clinton administration extended this campaign for higher ownership rates among low-income populations throughout the 1990s. Katz, a journalism professor at New York University, draws on an impressive number of interviews and thorough secondary research to illuminate the disastrous consequences of pushing underqualified buyers into ownership. Many of the topics she addresses will be familiar to readers by now—predatory subprime loans, get-rich-quick house flipping schemes, scandalous mortgage frauds—but Katz writes with authority and empathy. The many people the author interviews, from the single mother in Cleveland who lost her house just two years after buying it to the family living near Sacramento whose new home is already falling apart, become the heroes, victims and sometimes culprits in this gripping account of collective irresponsibility.

Thank you to everyone who turned out to hear me read from Our Lot and offer some thoughts on how politics and ideology, along with a program of financial industry deregulation, made the real estate bubble possible.

I wrote up some notes for the talk, and they sum up two things prospective readers ought to know. One, why did I write Our Lot? And now that I did, what story does the book tell? Each has a two-part answer:

Why I wrote Our Lot

In the fall of 2005, I asked the Mortgage Bankers Association to send me their quarterly mortgage delinquency report. I was looking to see how Federal Housing Administration-insured loans were doing, in the wake of a fraud scandal. But much uglier numbers leaped out from the columns of data—foreclosure rates in Ohio triple the national average, and a subprime foreclosure rate of 13 percent. I wanted to know what was going on, and why. ... (Read the full interview)