It may be difficult for anyone impacted by the deflated housing bubble to see the light at the end of the tunnel. But the author of the new book, "Pop! Why Bubbles Are Good for the Economy," says that if home owners, buyers, sellers, builders, lenders and real estate can hold on, there are good times ahead.

"Bubbles have always been good in the past, and historically, we recover from them quickly," business columnist Daniel Gross said at the Urban Land Institute's annual fall meeting last week in Las Vegas.

ULI is a non-profit education and research institute dedicated to responsible use of land and creating sustainable communities. A record 6,700 real estate and related professionals attended the four-day conference at the Venetian Hotel.

Not everybody agreed that the end of the mortgage mess and housing collapse will come sooner rather than later. One naysayer was Michael Fascitelli, president of Vornado Realty Trust, the nation's second largest real estate investment trust and a major owner of commercial real estate.

Fascitelli predicted it will take some time before the housing and lending sectors right themselves. "It's too early (in the cycle) to tell when we've hit bottom," he said, suggesting that the bottom might be shallower and longer than most people think.

But Gross, who writes for Newsweek and the on-line magazine, Slate, said that for all their problems -- the notion that risk could be ironed out of lending, the excess capacity that led to ruinous competition, the flip this, flip that mentality -- the mortgage and housing businesses will recover and thrive.

The hard part, he added, is that collapsed bubbles are unpredictable.

While Gross said his crystal ball was "hazy" as to when the sectors will stop their downward spiral, the economic trend spotter said businesses injured in previous bubbles have always recovered "in a useful way." And he believes the same will hold true for housing.

One factor that cannot be discounted is that the physical and intellectual infrastructure that is created when the bubble is inflating doesn't just go away when the bubble pops, he pointed out. Rather, they remain and become the foundation of new business models that weren't even imagined when the market was growing.

When the telegraph business was in its heyday, for example, lines were run hither and yon across the entire country. But it wasn't until the business went belly up that someone came up with the idea that money could be transferred by wire across great distances. And that business still thrives today.

Mr. Gross said the same will hold true for real estate. "All the houses that were built during the height of the housing boom won't be torn down," he told the conference. "Instead, new ownership will come in with a lower cost basis."

He also pointed out that home owners learned a thing or too about housing finance when the high-flying mortgage market was offering all sorts of products, including some very toxic ones. "The notion that refinancing may be beneficial is now part of everyone's mindset," he explained.

Quoting Winston Churchill, the business writer said housing and lending is not at the end of an era but at "the end of the beginning" of a new one. "Yes, we want to get all this behind us, and we will. But we're still in the clean-up phase," he said.

Mr. Gross is so sure that the current bubble will end well that he is already looking ahead to the next business busts, and he has a few questionable business models in mind. One is the rush to luxury, another is the trend toward globalization and a third is the switch to green.

Not everybody is a luxury consumer, he told the meeting, noting that many consumers are trading down from SUVs to compact cars and scaling back on the size of the homes they purchase. And as far as green being the new "in" color, at least when it comes to real estate, he warned that the movement right now is more flash than substance. If consumers can see a net tangible benefit, he said, the green movement will catch on. But if not, he warned, the air may go out of that trend, too.

Published: October 31, 2007

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.