Real estate's happy horror stories

As a homeowner, I know it's counterproductive to take delight in the real estate misfortunes of my neighbors. But massive price reductions on a house down the street from me have left a lot of us in the neighborhood gloating. A hulking McMonstrosity that's jaw-droppingly out of place among the modest bungalows that surround it, the house was clearly intended by its owner/builder to be a cash cow. But it's been sitting empty for nearly two years since it was finished, and the price just continues to drop.

Are we total jerks for enjoying the show? Well, sort of. But we can't help it: We have debtenfreude. A sub-category of schadenfreude, that ever-useful German word that means taking pleasure in other people's suffering, debtenfreude is among the latest outgrowths of the economic meltdown.

Characterized by self-righteous finger-wagging at over-mortgaged neighbors, and downright glee at the site of luxury car owners power washing their own tires at the coin-operated carwash, debtenfreude is at once utterly despicable and utterly human. And though it's not exactly new -- people have been judging the acquisitions of others since the first caveman envied his neighbor's stone tools -- the current strain of debtenfreude seems particularly virulent and widespread.

I think debtenfreude may have started to gain momentum during the Bernard Madoff scandal. Despite public sympathy for the duped investors, you also got the sense that some people were feeling decidedly smug. For all the outrage directed at Madoff himself, there was also a sense that his victims should have known better. "Just about anybody who actually took the time to kick the tires of Mr. Madoff's operation tended to run in the other direction," Joe Nocera of the New York Times wrote in March.

But for all the debtenfreude floating around the Madoff story, the petri dish in which the virus best thrives is the one labeled Other People's Real Estate Fiascoes. Whenever I need a fix of this special blend of callousness and cluelessness, I visit the real estate blog Curbed, which has editions in several cities and provides data and (frequently cantankerous) opinions about local real estate trends. One of the site's regular features, PriceChopper, involves showcasing a property that's had a recent price reduction and asking readers to weigh in on whether it's still overpriced.