Quick Take: I Saw the Bubble Bursting

This past Saturday, I attended a barbecue at my friends' house in Maryland. I was surprised to notice as I pulled up out front that the house next door looked vacant and forlorn. Instead of a for-sale sign, there were pages glued to the front window.

As it turned out, forlorn might have actually translated into "foreclosed," since my friends' neighbors had apparently moved out in the middle of the night. (I can't help wondering whether the site was shown on the new "foreclosure" section Yahoo! (Nasdaq: YHOO) has added to its real estate hub.)

Of course, nobody can know quite what happened, but from there, the conversation turned to the subprime lending debacle and how so many people with riskier credit have been given mortgages over recent years. Many people have mortgages they don't understand and probably can't ever hope to pay once the rates on ARM loans start ballooning. To that point, my Foolish colleague Seth Jayson recently found survey data that revealed that a third of the people polled didn't know what kind of mortgage they had, and 58% of those with ARM loans had no plan for when their payments increased. He also pointed out that the type of alleged underhandedness that the FBI is investigating at Beazer Homes (NYSE: BZH) is probably just the beginning.

On Sunday, I was driving in my own neighborhood and noticed a real estate agent taking care of those balloons they put in front of neighborhoods where an open house is being held. He had a pen or other such implement and appeared to be angrily stabbing at the balloons to pop them. (The best way I can describe the motion is to mention the shower scene in Psycho.)

Obviously, real estate agents remove those balloons all the time, but something about the rather violent manner in which he was popping them made me think of someone who's not particularly enjoying his job these days. Barbecue chit-chat and busted balloons brought to mind the bursting bubble, as years of overheated prices, fast-and-loose lending practices, and (last but not least) some consumers' own greed and irrationality have paved the way for a painful "pop."

Yahoo! is a Motley Fool Stock Advisor pick.

Alyce Lomax does not own shares of any of the companies mentioned. The Motley Fool has a disclosure policy.