San Francisco Chronicle: blogger in business

He practiced what he preached, refusing to buy a house. Instead he and his wife rent a Menlo Park bungalow for themselves and their two children. Today, the housing market has indeed slumped, giving his views some credence.

"Nobody calls me crazy now," Killelea said. "I haven't changed; it was just a matter of waiting for the fundamentals to catch up."

Killelea's blog attracts 14,000 readers a day, drawn to his sardonic take on the market and numerous links to news articles that bear out his premise. His site ranks high in Google searches of "housing market" or "housing crash."

The site exemplifies a new real estate Web genre: "bubble bloggers."

There are scores of bubble bloggers who passionately believe the housing market is so out of whack that it is destined to collapse. What Matt Drudge is to political gossip, housing bubble bloggers are to real estate doom and gloom. They range from acerbic to inflammatory but definitely don't mince words. They rail against the real estate industry, sometimes spin conspiracy theories, and lately indulge in schadenfreude about the housing downturn. Bubble bloggers say they inject a healthy dose of skepticism to counterbalance excessive cheerleading from real estate industry professionals.

"Bubble bloggers weren't taken seriously until six months ago, and now everyone's taking them seriously, which is fantastic," said Brad Inman, founder and publisher of Inman News, a wide-ranging real estate Web site. "They really served a purpose when they were a voice in the wilderness."

But many real estate agents are less enthusiastic.

"I laugh at bubble bloggers," said Matt Lanning, a Realtor with Zephyr Real Estate in San Francisco, whose sfhomeblog.com takes a considerably more upbeat view of the market. "I don't claim the world is always going to be stable, but there is no way the San Francisco market will collapse. It's a lot like the sensational journalism we're seeing with subprime mortgages which are far less of an issue than the media is making them out to be."

As for Killelea, Lanning said: "He has not been right about anything. Most of what he does is scour the Internet looking for anything to back up his position as someone who is forecasting the coming apocalypse of the real estate market."

Killelea's rhetoric can be strident, but in person, he is low-key and pleasant. With alert blue eyes behind wire-rim glasses and close-cropped reddish hair and mustache, the 42-year-old seems like an ordinary Silicon Valley tech guy - which, in fact, is his day job.

Killelea does contract programming work but said he can take off months at a time from his $100-an-hour software gigs because he took his savings from renting instead of buying, invested in the stock market and did quite well. His last job ended in March and he's just thinking about looking for a new one.

He would love to work on the blog full time but it brings in only about $1,000 a month.

That revenue comes laden with irony. The blog carries Google ads, which use an automated scan of site content to place ad links, so most ads on Patrick.net feature a selection of mortgage brokers, real estate agents, home builders and "get rich quick in real estate" schemes.

"The sheer joy is that all the people I think caused the problem" advertise on the site, he said. "I can not only complain about them; I can take their money while I'm doing it. They would probably be horrified to know their ad is on my page. "

Killelea spends several hours a day working on the blog: writing entries, responding to every e-mail he receives, reading about 100 news links his readers send in daily, and picking 10 to 20 to post under the banner "Housing Crash News."

Some headlines he linked to on Monday: "We're in deep doodoo," "Worldwide bubble troubles," "The new money pit: Housing bust gets worse" and "Bernanke has snookered us all."

Why doesn't he include news and views from other perspectives?

"I have no pressure to be balanced, and I'm not balanced," he said.

Some of his predictions are so far out there that they seem unlikely to come true. For instance, he thinks Bay Area houses won't be worth buying until the median price is cut in half, to about $300,000.

Could that really happen?

"I have faith," he said, putting his hand over his heart, only half mockingly.

Killelea didn't set out to become an apostle of housing pessimism. He says he just applied the same analytic skills he uses in programming to the housing market after his first brush with house hunting.

In 1999, he and his wife tried to buy a house in Berkeley at the height of both the dot-com bubble and housing mania.

"It all felt rigged," he said. "Everything was set up to get me to overbid and not do an inspection; basically throw caution to the wind. It just felt really wrong. I felt like a sheep among wolves."

After being consistently outbid, the couple decided to rent instead. They found a charming Menlo Park two-bedroom on a tree-lined street for $2,700 a month. After a couple of years when the rental market softened, they asked for a rent reduction and now pay $2,350. "I would be paying out and losing about three times as much" to own the equivalent house, he said. "In some big urban areas like Manhattan and the Bay Area, it may never be cheaper to own" than rent.

After the dot-com bubble burst, Killelea assumed prices would return to normal - but instead they continued to soar as the Federal Reserve lowered interest rates.

"I got out there and started looking at things and realized people were bidding even higher than before," he said. "It was pretty clear so many people were getting in so far over their heads that this was going to end in tears for a lot of people."

He started his blog three years ago and soon found a receptive audience.

"It became a full-blown obsession, not just for me but for other people, too," he said.

Indeed, the blog draws a dedicated group of readers and participants, many of them also renters-by-choice.

"I begin every morning with it," said Peter Christiansen of South San Francisco, who first came across the blog in 2004. "For me, it's become the only source of information on the housing market. I don't need anything else. It's the best source of informed participants I've ever participated in on the Web; people really seem to know what they're talking about."

Like many of the site's participants, Christiansen eschews buying real estate. Instead, the mental health counselor owns a mobile home on a rented site.

Patrick.net creates a sense of community, Christiansen said. "We are people I would describe as value investors," he said. "The one thing that probably holds all of us together on Patrick is that we're mostly people who are really suspicious of bubbles."

Killelea has set up one practical proposal to cut out the middleman in real estate through his site. He calls it Real Estate Dating Service, a place where home buyers can post what they're looking for - price, size, location - and sellers can scan the listings and contact buyers directly. About 730 buyers have signed up, but he hasn't tracked whether any sales have occurred as a result.

Every once in a while his two worlds - programming and blogging - collide. Time was, Killelea was best known as the author of "Web Performance Tuning," a geeky manual that helped him get jobs. Now his fame as a bubble blogger has spread - not always to his advantage.

"Once a guy called me in for a job interview just to berate me," he said. "I don't do this language called Ruby that he wanted, so I said, 'Why did you bring me here?' He said, 'I want to talk to you about your Web site.' He complained about how he had overpaid for a house in Palo Alto and couldn't get out of it. It was not a civil conversation."