“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead. Buzz: Housing crash concerns, expressed through online search trends, jumped this spring — back near levels seen in the early days of the pandemic.

Source: My trusty spreadsheet analysis of data from Google Trends compares and combines peaks and valleys of search patterns for two phrases linked to real estate troubles — “housing bubble” and “housing crash” — and two phrases of simple interest in property — “home prices” and “housing market” — back to 2004.

The trend

If you assume online searches can be tied to popular thinking, eyes are on housing almost like (1) a year ago when the economy was locked down and economic fears were sky-high and (2) the days of the bubble-bursting crash of the mid-2000s.

Californians in May searched for these four key housing terms at a collective pace 69% above the 17-year average. This index hit its recent peak at 123% above average in March 2020, as COVID-19 was icing the economy. These searches then cooled to below average from October through January.

However, May’s housing searches were at the highest level, minus the pandemic era, since the mid-bubble-bursting days of 2007. And they’re nearly triple the pre-coronavirus amount of crash concerns of 2015-19. By the way, my search index shows even greater housing curiosities nationwide. That may be because California is far from the hottest U.S. housing market.

U.S. searches for these key terms were 107% above average in May, the 10th highest level on record, and it’s not far from March 2020’s 121% pandemic peak. It’s more than triple the pre-pandemic average. And before coronavirus, the last time it was higher was 2006!

The dissection

A deep dive into the California numbers shows a growing thirst for online clues as to what’s behind the past year’s surprisingly sharp resurgence of home sales and exploding prices.

Housing crash: May’s searches for this phrase were more than triple the historic pace — at the seventh-highest level since 2004 — and more than four times pre-pandemic anxiousness. The “crash or not” debate is red hot.

Housing bubble: Searches in May ran 57% below average, but it’s on the rise — up 250% from March 2020 and almost double the pre-pandemic 2015-19 average. Remember, “bubble” wasn’t the first thing folks thought when the economy was first locked down. But skittishness grows.

Home prices: May searches ran 9% above the historic pace, 6% above March 2020, and more than double the pre-pandemic five-year average. That seems modest considering the past year’s rapid home appreciation. Housing market: With the wildest purchasing pace since before the Great Recession, it’s no shock to see May’s searches for overall housing conditions running 84% above average — the 13th highest level in 17 tears — or 161% above pre-pandemic patterns.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … TWO BUBBLES!

Watching the housing market has become, at a minimum, a pandemic era fad — with polls and a “Saturday Night Live” TV skit suggesting online real estate searches have odd erotic appeal.

Now, my search index is by no means a perfect yardstick for housing anxieties. Yet finding these rising research habits as well as heightened searches for concerns can be viewed as a positive sign.

For starters, you can hope that better-educated market participants make smart spending and investment decisions. More importantly, the sense of unease I see in these numbers could help put a much-needed chill on a feeding frenzy.

What was a remarkable homeownership rebound has evolved into an unnerving and unhealthy housing market.

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

JONATHAN LANSNER | COLUMNIST

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