We’re Taking A Risk, But We’re Really Buying An Asset
A report from The Spectrum in Utah. “St. George-area housing prices keep climbing, interest rates are expected to jump again, and first-time homebuyers Giovanni and Jennifer Trumbo are feeling the pressure to buy while they can still afford it. The Trumbos, who are in their early 30s, are approaching their 10th wedding anniversary. Their second child just turned 7 months old. They’re currently renting a house where the rent has gone up $300 a month since they moved in. They’ve been dipping their toes in the murky real-estate market waters for months, but the longer they’ve waited, the more interest rates have ticked up and the more buying power they’ve lost, Giovanni Trumbo said. The couple recently decided to start putting in offers and jump into a mortgage.”
“‘We’re taking a risk, we know that. But we’re really buying a house,’ he said. ‘It’s ours. It’s an asset.’”
“The house they’re buying is a Bloomington Hills two-story with spectacular views of the city and its rugged desert surroundings. It was priced at $349,000. The mortgage payments will likely be higher than what they’ve been paying to rent their current home, but not by much, Giovanni Trumbo said. A midlevel manager at Wilson Electronics in St. George, Trumbo said he subsidizes his salary by operating his own business online. Jennifer Trumbo works from home as well. Combine those incomes, and it’s enough for the house, although Giovanni Trumbo said he didn’t think it would be possible on his regular salary alone.”
“Through the end of March, the median sale price for a single-family home was $296,520, up more than 16 percent from last year, according to multiple listing service data kept by the Washington County Board of Realtors. That’s an increase of more than $110,000 since March 2013. The average price tag for homes currently on the market is $512,629. In a county where the average weekly wage is less than $700, according to the Bureau of Labor Statistics, the problem is clear, say those in the industry.”
“It’s a trend that has been going for years, but it has escalated quickly over the past 12 months, said John Hook, an agent with Red Rock Real Estate who was helping the Trumbos with their housing search. A native Californian, he said he sees some similarities between the St. George region and famously high-priced real estate markets like San Diego and San Francisco, where the area’s attractiveness creates a demand for housing that prices out the typical working person.”
“‘I’ve seen it happen,’ he said. ‘If you look out there right now, it seems obvious.’”
From the Associated Press. “Higher mortgage rates are making the already challenging task of buying an affordable home even tougher for many Americans this spring. In metro areas, such as Denver, buyers are rushing to close a deal before mortgage rates get too high. In Dallas, some are embracing longer commutes to find homes they can afford. And in places such as Los Angeles, where the number of homes for sale is down sharply from a year ago, sellers routinely receive multiple offers.”
“A mere extra half percentage point or so can boost monthly payments and add tens of thousands of dollars extra in interest over the life of the typical 30-year loan. At a time when home prices are rising faster than incomes in many parts of the country, that could be enough to shut out some would-be buyers who make the median income in cities such as Seattle and Los Angeles.”
“Chad Zolman got a taste of that while looking for a home in Denver. The account manager made 11 offers since his search began in September, but lost out to rivals offering more money. As mortgage rates started rising, so did Zolman’s anxiety about being able to afford to buy. ‘The rates kept going up, and the more the rates kept going up, the less house you can buy,’ said Zolman, 41. ‘And the less house you can buy in this market, that’s not good. You have to be able to pony up the cash.’”
“Zolman eventually bought a newly built, three-bedroom townhome for $370,000. He got approved for a 30-year fixed-rate loan just under 4.7 percent. He’s not in the clear yet, however. He can’t lock in his rate until mid-May, within the 120-day window before construction on the house is completed. And if rates go higher by then? ‘It is what it is,’ Zolman said. ‘You just have to pay it.’”
From the Idaho Statesman. “So you think you want to buy a house in Boise? Where the region’s median home prices are at record highs, construction is still below precrash levels and West Coast ex-pats are flocking in, flush with cash and amazed at all the real estate ‘bargains’? Buckle your seat belt. And take a little hard-earned advice from Mike Daniels. He is 47, a blue-collar worker and Chicago native who fell in love with Boise, wanted to buy a house on a tree-lined street in the City of Trees and grow old here with his wife, Dee.”
“In June 2017, the middle of the Daniels’ home search, 35 percent of the houses sold in Ada County went for more than their list price. One in five was sold for cash. Houses were spending less time on the market than they had since 2006, the climax of the last housing boom. In Ada County, the median home price in March was $308,950, up more than $11,000 since February and 24 percent higher than the previous March. Only four houses countywide, all used, sold for less than $160,000 that month.”
“Daniels’ hard won advice for buying that dream house: ‘If you know that it’s in a neighborhood where there’s going to be full-price offers and it’s going to go to bidding, you’ve got to come in strong right off the bat. In today’s market, if you’re confident, and it’s what you want, spend the extra 10 percent.’”
“About six weeks after the Danielses lost out, they got a text and an email from their real estate agent. Another agent in her office was listing a house later that afternoon for $264,888, she told them at 10:02 a.m. on July 18. But they were back home in Chicago and couldn’t check it out. So she went on their behalf. At 12:47 p.m. she arrived at the modest bungalow. ‘There’s a line of people out here,’ she texted. ‘If you think it’s worth it, let’s offer an even 300k and we won’t ask for them to pay closing costs,’ Daniels responded. ‘That is a 13.25% offer over asking price.’”
“By 3:03 p.m., Daniels had sent earnest money to the agent. His wife had not yet seen the video. After two days of gyrations, Daniels received a congratulatory text. ‘Schedule the moving truck!’ the agent wrote. ‘You just bought a house 
congrats!!’”
“Realtor Tamara Rowe has more than a few million-dollar stories. There’s the 50-something client who sold her Colorado home for slightly over a seven figures, bought a brand new house in North Boise for $325,000 and plans to live comfortably on what’s left. ‘I just closed on a home Friday, all cash,’ said Rowe, an agent with Silvercreek Realty Group in Boise. ‘The couple is going to buy another house here for their son with the proceeds from their California sale. They’ll be able to purchase two homes for what they had in California.’”
From the Real Deal on California. “When Compass broker Stephen Kaseno was listing a home in Chatsworth a year ago, he got an enticing offer from a prospective buyer. The proposal was for an all-cash purchase on the $2 million property. But tempting as it was, something ‘didn’t feel right,’ Kaseno said. While examining the ‘Proof of Funds’ document from the buyer, he noticed the margins weren’t aligned and although it was typed, something was off. The document had been forged by the buyer to make it seem his funds were available and ready to go, when in fact, he did not. Instead, the buyer was hoping to secure a loan on the property once the home was already in escrow and the seller was at ease.”
“In an effort to compete in Los Angeles’ hot seller’s market, buyers are dangling all-cash offers before pulling back once the sale closes. While not illegal — excluding the forgery — industry pros say the practice could complicate the transaction should the loan get delayed or denied.”
“The phenomenon of the all-cash offer is a cyclical one, Hilton & Hyland’s Zach Goldsmith said. The most recent incarnation involves homes selling for under $3 million, where supply continues to outpace demand. But even as the all-cash deal helps some lucky homebuyers land their dream home, it could be contributing to a ‘false bottom of the market,’ Goldsmith said. ‘It’s over-inflating the market right now,’ he added. ‘If this trend continues, people are not going to be able to keep up so the market will fall a little bit.’”
From the Orange County Register in California. “Californians could be spending at least $50 billion more than they do dining out, going to the movies or shopping. But high housing costs are ‘crowding out’ personal consumption, with more cash going to landlords and lenders instead. If their housing costs weren’t so high, Californians would have enough dollars to buy 15 billion more Happy Meals than it does. They would have enough cash to buy 1.5 billion more Major League Baseball game tickets or 455 million tickets to Universal Studios Hollywood. And every man, woman and child in the state could buy tickets to see ‘Hamilton’ — six times.”
“That’s just one finding presented at a conference at Chapman University in Orange on how to fix California’s housing crisis. More than a dozen speakers from state and local government, think tanks, academia and housing advocacy groups examined the cause of the crisis and possible solutions. Their conclusions? Home building hasn’t been able to keep up with growth, and that’s costing us — big time.”
“‘We have just been fundamentally under-producing housing in California,’ said Mark Stivers, a state affordable housing official. ‘It’s gotten so bad that people making … (up to) $80,000 a year are having a hard time finding housing that they can afford.’”
‘We have just been fundamentally under-producing housing in California,’ said Mark Stivers, a state affordable housing official. ‘It’s gotten so bad that people making … (up to) $80,000 a year are having a hard time finding housing that they can afford.’
Yeah, keep listening to these guys. Even as equity locusts fan out across the country bringing their “trees grow to the sky” thinking.
‘A native Californian, he said he sees some similarities between the St. George region and famously high-priced real estate markets like San Diego and San Francisco, where the area’s attractiveness creates a demand for housing that prices out the typical working person.’
‘I’ve seen it happen,’ he said. ‘If you look out there right now, it seems obvious.’
‘A native Californian, he said he sees some similarities between the St. George region and famously high-priced real estate markets like San Diego and San Francisco, where the area’s attractiveness creates a demand for housing that prices out the typical working person.’
Other than the facts that San Francisco and San Diego are located on the Pacific Ocean and have among the best climates anywhere on the planet plus world-class cultural amenities and universities, anchored by vibrant innovation economies, while St. George is a small town in the middle of the Utah dessert with little water, many days each summer with unbearably hot temperatures, and few cultural amenities, I see very little difference.
Don’t get me wrong…I actually like St. George, but come on!
Professor, you need to come visit St. George again. Lots of good theater (Tuacahn and Shakespearean festival). My father lives in Newport beach, but I’d rather spend time in St. George. It’s a matter of perspective. We have some of the best hiking, rock climbing, outdoor recreation around. Plus, we have open space. I love CA, but you can’t really get isolated. Running on the beach is fun, and I’ll do it. But I like running Snow Canyon or running Veyo and Enterprise, not to mention the myriads of trails here. Even going to Big Bear you’re going to be swarmed. So. Utah is not like that, at least not yet.
‘We have some of the best hiking, rock climbing, outdoor recreation around. Plus, we have open space’
And you’re landlocked. Mania’s always seem to have some kernel of truth behind them. “It’s close to the beach, it’s the weather, it’s running around on rocks.”
Also unless it figures out how to pay for a pipeline to lake Powell, it is water constrained.
There’s also THIS. Maybe the nuclear radiation in question has a very short half-life, or perhaps it is buried forever under the sand dunes of nearby Snow Canyon. Can’t be sure without objective scientific evidence!
Radiation Death and Deception
Thomas G. Alexander
Utah, The Right Place
The fallout from this paranoiac witch-hunting rained deadly radioactive poison on the people of southwestern Utah as public officials prized a perverted interpretation of national security far about the lives of loyal and innocent people. Following World War II, the United States exploded atomic weapons at the Pacific islands of Bikini and Eniwetok; but in December 1950, President Truman authorized the AEC to conduct test in the continental United States. The AEC selected the Nevada Test Site in southeastern Nevada because the federal government owned hundreds of square miles of surrounding desert land, and because it contained, in the contemptuous words of one bureaucrat, “a low-use segment of the population”–the Mormon citizens of St. George, Cedar City, and other sacrificial cities of southwestern Utah. For seven years between 1951 and 1958, the AEC aimed deadly radiation at soldiers stationed as close as 3.9 miles from the explosions and at the people of southeastern Nevada, northwestern Arizona, and southern Utah by detonating atomic weapons aboveground at the Nevada test site. After the United States ratified a Limited Test Ban Treaty with the Soviet Union in August 1963, the AEC continued to conduct underground tests, many of which erupted through the surface to again blanket Utahns with radioactive debris.
As evidence mounted of the deadly poisons these tests rained on the people of southwestern Utah, AEC officials induced their employees to lie about the danger. After establishing a ground-monitoring program in the spring of 1953, the AEC conducted a series of tests in the Upshot-Knothole series. In one of these tests–nicknamed “Dirty Harry”–a radioactive cloud lofted by the explosion hovered over St. George for more than two hours. Fallout reached levels far above those considered safe even by conservative AEC standards. Nevertheless, in an immoral cover-up justified by perverted appeal to national security, the AEC instructed its employees to release vague statements to the public and press. When humans and animals began sickening and dying, an AEC official told subordinates to keep quiet, “in the interest of national defense.” Following this directive, AEC officials falsified data from the St. George monitoring station to make it appear that the radiation could not have harmed anyone.
The people of Utah responded in various ways to the nuclear tests. Most generally, however, they affirmed their love of America and fear of Communist aggression. At the same time, they blanched in fear of leukemia, cancer, and genetic mutation. In the collective mood of McCarthyism and paranoia, the AEC played on the patriotism of southwestern Utahns like musicians on a finely tuned harp while they suppressed information that tended to show the carnage wrought by radiation. Self-justified, they conducted a feel-good, pro-patriotic, public relations campaign through motion pictures, school visits, briefings with influential citizens, interviews, and press releases.
…
The Lake Powell pipeline is a legitimate criticism and a problem. We live in a desert, no getting around it. The downwinders suffered drastically from nuclear testing, but that was 50 years ago. Utah cancer rates are some of the lowest in the country, and Washington County is not abnormally high by any means, just middle of the pack.
I’m not disagreeing that house prices are in a bubble here. But the quality of life is really good. The neighborhoods are good, the schools are good, and crime is low. There are packs of young children roaming the streets in bicycle gangs and doing things that I did when I was younger. I can see the appeal for young families as to why they would want their children to grow up in one of these areas. But the prices make no sense nonetheless.
Has the main Shakespearean festival moved from cedar city to Saint George?
We’ve attended Cedar City Shakespeare productions. Good, but the Old Globe productions in San Diego are better.
San Diego has plenty of LDS church members as well, without the feeling that you are living in a former Brigham Young Mormon colony.
We have lots of family in San Diego and surrounding area. I may be working down there soon, or maybe north, I can’t decide.
When is the last time you’ve been to St. George? We moved here 3 years ago and it has changed dramatically in just that time. It’s the fastest growing city in the US. So characterizations of it 10 or even 20 years ago might no longer hold up.
https://www.stgeorgeutah.com/news/archive/2016/06/26/hsr-love-reigns-louder-at-st-george-gay-pride-celebration/#.WtuKCy7wbIU
Haven’t been there since last December. I normally either drive through or stay over once or twice a year. It certainly has grown since my first visit in 1993.
Your points are all taken. As far as my personal preferences go, the appeal of living in a scenically attractive, less-congestd area like St. George, away from the crush of traffic and high housing costs of California, is appealing. But I’m married to a daughter of the Utah pioneers and LDS church member who would feel right at home there, and I am highly adaptable myself. I’m not sure most non-LDS folks would find the adjustment to St. George cultural norms that easy. And the cool ocean breezes would definitely be missed on days when the thermometer tips 100 degrees Fahrenheit.
“I love CA, but you can’t really get isolated.”
For most people, isolation in a desert LDS community would be hell on earth.
One of my advisors in graduate school was quite fond of beer. After giving a talk at BYU, the folks who sponsored his visit asked him what he wanted. His answer: “I’d love a beer.”
They had to drive him from Provo to the outskirts of Salt Lake CIty to satisify his request.
Yeah, that’s a problem for many. The make-up of St. George is quite a bit different from that of Utah County, or even Salt Lake County for that matter. The LDS population is becoming minority in all areas of the state. It’s simple demographics with lots of people moving in. Idaho used to be a Mormon majority state too, but that has changed with inward migration.
Kalaheo, Hawaii Housing Prices Crater 14% YOY As Vacation Property Market Collapses
https://www.zillow.com/kalaheo-hi/home-values/
*Select price from dropdown menu on first chart
‘the area’s attractiveness creates a demand for housing that prices out the typical working person’
It’s just absurd. Yet if you ask a central banker, they never see a bubble.
‘the median sale price for a single-family home was $296,520, up more than 16 percent from last year, according to multiple listing service data kept by the Washington County Board of Realtors. That’s an increase of more than $110,000 since March 2013. The average price tag for homes currently on the market is $512,629. In a county where the average weekly wage is less than $700′
‘In Ada County, the median home price in March was $308,950, up more than $11,000 since February and 24 percent higher than the previous March’
The problem is no one cares. I ask you, who has the job of watching this? I’ve never heard of a regulator or industry person who is responsible for keeping shack prices from getting out of control. Not at any level of government.
And notice how these articles play to the frenzy.
‘‘If you know that it’s in a neighborhood where there’s going to be full-price offers and it’s going to go to bidding, you’ve got to come in strong right off the bat. In today’s market, if you’re confident, and it’s what you want, spend the extra 10 percent.’
‘There’s a line of people out here,’ she texted. ‘If you think it’s worth it, let’s offer an even 300k and we won’t ask for them to pay closing costs,’ Daniels responded. ‘That is a 13.25% offer over asking price.’ By 3:03 p.m., Daniels had sent earnest money to the agent. His wife had not yet seen the video.’
‘‘The rates kept going up, and the more the rates kept going up, the less house you can buy,’ said Zolman, 41. ‘And the less house you can buy in this market, that’s not good. You have to be able to pony up the cash.’
‘Zolman eventually bought a newly built, three-bedroom townhome for $370,000. And if rates go higher by then? ‘It is what it is,’ Zolman said. ‘You just have to pay it.’
Yeah, you gotta roll with it.
‘And the less house you can buy in this market, that’s not good’
Because the bigger the shack, the bigger the payday, right?
And don’t forget keeping up with appearances.
“I ask you, who has the job of watching this?”
Evidently, you and your readers.
I looked up Wilson Electronics, Mr. Trumbo’s employer, on glassdoor. Wages look pretty low, he’s probably make more money driving a delivery van.
And as someone said the other day, everyone seems to have a side hustle these days. When the crash hits and those side hustles shrivel up, it’s going to be interesting to see how people will pay the bills.
When a shack in St. George costs 350 big ones, you know that something is very, very wrong.
On our way to San Diego a few days ago we drove through St. George (where we stopped to eat) and then later through Mesquite, NV. A quick looksie at Mesquite real estate shows 1700 sq foot shacks going for almost 300K. Utterly ridiculous. You couldn’t pay me to live there.
I almost ran out of gas driving through Mesquite last holiday season. It was scary…from ten miles outside of town, had to drive over ten miles to get back to the nearest gas station, in Mesquite!
Albany, OR Housing Prices Crater 17% YOY
https://www.movoto.com/albany-or/market-trends/
“When a shack in St. George costs 350 big ones, you know that something is very, very wrong.”
This St. George story reminds me of Bend, OR.
Not to mention there’s technology coming that will crush th bda industry,what wilson makes
It might have been my comment about the Side Hustle the other day.
What’s interesting to me is it’s not just the Middle and Working classes that are feeling stressed to somehow make even more, even at the expense of quality of life.
A friend and I had lunch with a couple former co-workers a month ago. These guys have been working at a very stable and (time-wise) easy job for the last 6-8 years, where their target pay is in the $200-350K range (and could go higher - my friend and I both used to work there and he once broke $500k for a single year). As we told them about what we’ve been up to - on our own; more risk, but some good upside potential, both expressed envy and desire to find additional ways to get their income into even higher bands. It wasn’t just conversational platitudes - there was some anxiety and stress behind their desire for more.
Thinking about the conversation later, I’ve had a hard time processing it specifically for them - they have what a lot of people would consider dream jobs, and maybe it was seeing how well the people there 20+ years (who had more ’shares’ etc) were doing.
But.. it wasn’t anomalous. I talk to a lot of (sometimes random) people in Tech around here, and it’s not that uncommon a thing. And for more and more of them, I get the distinct impression they they’re not expressing their great ambitions, but rather it’s out of fear of the bear catching up to them from behind. Whether imagined or real, I don’t know how to judge.
Whether imagined or real, I don’t know how to judge.
One of the downsides of a “dream job” is that you know that if you lose it you will never be able to replace it, and thus your standard of living and lifestyle goes with it.
I’m seeing a lot of luxo sedans while here on vacation. It crosses my mind that most who drive them are just a layoff away from losing them; hence why so many people job hop so frequently. Stay put long enough and unless you are a walk on water type you will eventually be shown the door. And one thing I’ve noticed when talking to recruiters is that the first thing they ask is “are you currently employed?” and if you’re not, life will become interesting.
The phrase golden handcuffs comes to mind.
Some of the people who worked there went on to make good lateral moves, others were even lured away by 7+figure stock packages (*cough* zuck *cough*).
The company in question is fairly high profile and pretty secure for the time being. It’s private but revenue per employee has been reported in the media as among the very top. I want to say $2.5-$3M/employee/yr based on my sources.
If either of the guys we had lunch with moved, odds are it would be to a more demanding job. Honestly they have a very good thing going. Some of the job perks are among the very best. About the only reasons I can figure for their comments is a feeling they may have peaked or career stagnation.
The company in question is fairly high profile and pretty secure for the time being. It’s private but revenue per employee has been reported in the media as among the very top.
Would this company be located on the east-side and recently moved buildings…previously located next to a nice steakhouse?
That might be revealing way too much to confirm or deny.
Totally fair — not trying to pull any names out in the open, just curious.
well, you’re observant enough, and so are others I guess. The purpose wasn’t to go all tabloid, and I shouldn’t give so many identifying details when talking about people. You could probably determine exactly who I am IRL from all I’ve posted.
Back to my point- from where I sit, having to move gigs every couple of years mostly for reasons outside my control, I look at those guys as having about as stable and good situation as it gets. So to hear them talk that way really seems out of place. Which leads to the thought: Why are they feeling that way? followed by: How many others that appear very successful and secure are feeling that way?
My roots are very blue-collar, and we don’t think too much about people in the ‘working class’ having a side hustle - it’s almost always been that way for some of them. But when you see it becoming common in the top layers of the professional class, what is that saying about the bigger pictures of life in this country currently?
To hopefully make you more comfortable MGSpiffy, I suspect I have no clue who you are, but did interview with the company I was referencing a little over a year ago.
I’m a SW dev on the east side who (IIRC like you) moved up here from Texas, though for me it was Austin in 2008. I was a long-time employee at a company that went public here a few years ago (5 now maybe? I’ve lost count), and recently moved to a new gig. I’m also the developer of the JoshuaTree extension for Firefox and Chrome which I hope you’re using since you’re replying to older posts — if not, check it out, it will make your life a heck of a lot easier.
I agree it’s concerning that folks with stable, white-collar jobs seem to feel insecure about their income/wealth. Of course around here there’s just so much money I suspect a lot of it is “keeping up with the Jones”…I see a lot of high-end sports cars day to day (Maserati, porsche, M3/M5, AMG mercedes, etc) that it’s hard not to feel the pressure. And I’ll admit that even with household income in the top 1-2%, with housing prices and taxes where they are, feeling the same concern.
Sadly, I think part of the root of the issue is those who have worked hard and are doing well are marked as targets, to be taxed (milked?) to support everyone else. Property tax rates keep going up (no one in this area met a tax they didn’t like!), car tabs, tolls, parking, liquor and sales tax, etc….
Yes, you can live a nice life day to day, but it’s hard to feel that you can ever comfortably get off the hamster wheel
drumminj, thanks for the tip - I just added the extension to firefox.
Now you have me wondering if we’ve crossed paths at some point. In 2008, I was living off Parmer Ln & MoPac and working at a developer in The Domain when the company closed its doors. The recession was brutal to the industry in that state, so I wound up taking a job with that company that shall not be named and moving to Bellevue.
It sounds like we have a similar perspective on life here around King county (as do a few others who post here). Not sure if we’re in same (sub) industry, though I’ve been bouncing around including Mobile, embedded and Web CDN before getting an offer I couldn’t turn down to go back in.
I agree with you on the target thing - the old adage “you go where the money is”, as well as the crazy wealth distortion. I’ve got friends who have have 8 and 9 figure windfalls and it’s a bit crazy when on the one hand you meet up with them and they are still same guys who were slinging code 25 years ago, and on the other hands they’re taking chartered jets to Sundance and $400k falls into the ‘impulse buy’ category.
For me personally it’s be a decade of recovery - at the same time I moved, I divorced a cheating SAHM and got take severely taken to the cleaners. Easily set me back 15 years financially. I acknowledge that, and my rustbelt root to disclose my bias.
“I divorced a cheating SAHM and got take severely taken to the cleaners.”
Good thing you weren’t in California because the rubber hose comes after the cleaners. Then it’s time for victim training, e.g., accommodation and diversity, or you won’t be allowed to see your kids.
It’s quite possible we did cross paths..or at least have driven past each other
I worked across the highway from the Domain for a number of years, then left to a startup up off Parmer, a little west of MoPac. Was working remotely for a startup in the bay area that closed its doors right before making the move to Seattle. Naively I moved up here without a gig lined up…
These days I’m in the web/SaaS world. Desktop apps and embedded development before that.
Hope you find the extension helpful. I started it way back in 2009 when I was unemployed here and needing a project to keep me busy. And you have an email address to reach out if you ever want to meet up for a drink or something — we’re probably 5-10mins from each other.
And you have an email address to reach out
Meant the extension gives you an email address to contact me out..not asking you to post anything publicly here…
No worries. It sounds like we have enough people here to hold a Seattle-area HBB meetup one of these days.
rms- I’m very aware that I could have come out a lot worse - after 16 years in CA I would have been on the hook for lifetime alimony. I really am thankful I was in the Lone Star state with it’s (at the time) 3 year cap on alimony, and fixed formula for support. My ex is a real piece of work - to this day she believes she’s due about $100k a year in alimony, despite the fact she remarried. She made it real difficult with my kids for a good while.
drumminj - heh, I have to think we probably did drive past each other at some point then. Across the highway in the old IBM buildings? Austin a decade ago was quite a bit a different than I’m hearing it is today. Let me ask you this - do you miss anything about the Texas climate?
Since we’re carrying on in a day-old thread now and sharing a bit, I’ll share a little a peek of what (and why) we just bought here. The view from my home-office (work office for past almost 2 years actually) https://i.imgur.com/lrXI72D.jpg I’ve got at least ~100′ separation from any of my neighbors, and all but one at least 50′ vertically.
I had friends over at IBM/Tivoli, but I was on the other side of MoPac at NI. I’ve been back a number of times since moving up here — about once a year (miss the food, and go back and eat eat eat). Downtown sure changed a lot, but I haven’t been up north much when I’ve visited.
Re: the Texas climate…I miss the thunderstorms to be sure, but otherwise not much. I grew up in the midwest, so I’ve done miserable cold and miserable heat in TX. Couldn’t be happier hear TBH. How about you?
There was a Seattle HBB meetup when I first moved up here…would be fun to have another one sometime.
Nice place btw. Have seen your previous comments about buying your place and totally understand. We were tempted to buy last time we moved, but opted to rent for a few more years to see how things played out. Still not sure if it was the right move or not…
Downtown sure changed a lot, but I haven’t been up north much when I’ve visited.
It’s all looking super strange to me. I had an apartment over by Adelphi and Amherst and I just looked at the area in Zillow - The neighborhood was built in the 70s - all 1300-1700 sq ft single story houses .. and all zestimated in the mid 300s … totally WTH? yet rents at my old apartment complex has barely changed in 10 years. Serious disconnect going on there.
I still haven’t found a proper replacement for tex-mex, but the Indian and Thai help.
Like you, I grew up in the midwest. Great lakes and Big 10 and all. I don’t the miss the cold and ice at all, and I don’t miss the Texas weather. When it wasn’t hot, it was miserable in the other direction. And the energy bills. eep.
To be honest, I think WA west of the mountains is one of the most desirable areas in the continental US climate-wise, especially if climate change continues. That thought factors into my retirement plans.
Nice place btw. Have seen your previous comments about buying your place and totally understand. We were tempted to buy last time we moved, but opted to rent for a few more years to see how things played out. Still not sure if it was the right move or not…
I’ll be honest that I still wonder at times if I did the right thing by buying. What I don’t think I mentioned is that it was one of the cheapest detached home sales on the island so far this year, and has a 3/4 acre lot to go with it. I add up all the pluses and it seems a no brainier, but then I look at the uncertain future and the second thoughts flood in sometimes.
Maybe we could lure Ben out this way - that would get interest in a meetup going.
“To be honest, I think WA west of the mountains is one of the most desirable areas in the continental US climate-wise…”
My daughter is at WWU in Bellingham, and she loves the mountains, trees and the rain. It’s a huge change from the summer heat and bitter cold of the Columbia Basin.
There was a Seattle HBB meetup when I first moved up here…would be fun to have another one sometime.
Yeah, I helped organized one years ago, and remember meeting drummin (who had recently moved) and some other folks at it, in Wallingford. I have thought on occasion that it’s been way too long, and we should do a repeat…
in Wallingford
It was at Kate’s or something, right?
Right you are! Good memory, drummin…
Yep, Kate’s seemed a fine choice for many reasons: close to the freeway for people driving from further away; they would let use reserve the back room; and (full disclosure) I was living stumbling distance from there at the time.
Simple solution. Move. $80k is enough to buy a nice home in any American city more than 100 miles from an ocean. Huge country out there and most of it is affordable.
Well not really. Not at all. Less grossly inflated maybe but the median is still triple or quadruple production cost irrespective of location.
Uh…St. George is in the middle of the Colorado Plateau, with no ocean within hundreds of miles.
Ditto Salt Lake, Boise, Grand Junction, Fort Collins, Denver, Colorado Springs, Phoenix, Tucson, Albuquerque, Santa Fe, Dallas, San Antonio, etc., and they’re all bubbly.
Frisco, TX Housing Prices Crater 6% YOY As Housing Demand Plummets To 20 Year Low
https://www.movoto.com/frisco-tx/market-trends/
‘The national mortgage application fraud risk index rose from 138 in the fourth quarter of 2017 to 144 in the first quarter of 2018, according to researchers at CoreLogic. In the first quarter of 2017, the index reading was 132. The fraud risk index has risen in the past six consecutive quarters.’
‘CoreLogic also noted more frequent reporting of inflated income characteristics, including relatively high incomes from small employers and incomes that are inconsistent with residence histories.’
‘More borrowers are also misrepresenting the type of loans they are requesting. The incidence of borrowers seeking loans for owner-occupancy when in fact they are acquiring a rental property is also increasing lender risk. Interest rates are typically lower for owner-occupants. CoreLogic noted that this is a particular issue in the Wichita area, where fraud risk rose by 46% sequentially.’
I’m hope we see more and more public mention of things like this, especially the loan type fraud and related.
There’s been a ton of (global) money looking for returns sloshing around, combined with a number of other factors that have more people looking for any way to create income streams / ROI.
Combine that with VRBO/AirBnB/etc and you have plenty individuals motivated to lie about intent because they believe they have an easy way to make money.
I think I mentioned before about the extra layers of rent-seeking middlemen and apartments around Seattle I’ve stumbled upon being re-rented despite leases that forbid it.
GREED.
You say “GREED”, I say “DUH” …
“‘We’re taking a risk, we know that. But we’re really buying a house,’ he said. ‘It’s ours. It’s an asset.’”
Thanks to our Fed, the guarantor of ever-increasing asset prices, buying a house is a sure path to riches!
Fed’s “Wealth Effect” = Total Bust For The Middle Class
By Staff of EconMatters
Thursday, April 19, 2018 4:18 PM EDT
The Federal Reserve has been determined to create “Wealth Effects” throughout the economy since 2008, which has left the majority of Main Street on the sidelines.
The Fed’s objective was to make American households feel wealthier by pushing up the valuations of stocks and bonds. However, this paper wealth mentality has worked beautifully for Wall Street and the 1% but has destroyed much of the middle class as wealth inequality continues to skyrocket.
In fact, former Federal Reserve Chairman Alan Greenspan has gone on record to warn of a massive bond and stock bubble thanks to historic low-interest rates. I guess the idea of rising paper wealth to drive a wave of renewed borrowing and spending hasn’t quite worked out as planned.
Sadly, as the below chart points out most households have been squeezed as the majority of the wealth created has only gone to the top 5% of households earning in excess of $200,000 annually, meanwhile the bottom 95% have suffered.
…
Even in the “top 5%”, the gains are very unevenly distributed.
Many “top 5%” like us (2%, and as of 2016+, in and out of 1%) that come from professional employment (tech mostly) have not been in that rarefied air for very long and/or are loaded with commitments that get prioritized before investing. (A bunch of kids, major medical, an ex-spouse, house, etc it all it takes).
The situation, deliberately caused by central banks, has benefited a pretty tiny, well-connected elite and as others who were in a fortunate position, but it’s created multiple negative economic feedback loops for the vast majority of the population. I have no idea if its just return to feudal times, or they’ll be a serious backlash and correction some day.
I have no idea if its just return to feudal times, or they’ll be a serious backlash and correction some day.
Look at it another way. The serious backlash and correction of the flaws in the later period Roman Empire directly turned into “feudal times”. After the Pretorian Guard stopped getting its pay packets, they disbanded and went to work for local warlords, some of whom later became kings and “Holy Roman” Emperors.
The Federal Reserve has been determined to create “Wealth Effects” throughout the economy since 2008, which has left the majority of Main Street on the sidelines.
By my definition they’ve been determined to create wealth effects much longer than that. It’s just that since 2008 it’s gone parabolic in order to avoid the consequences of a negative wealth effect from going the other direction. Thereby ensuring a real doozy when the rubber band snaps. But for now we just keep stretching it…
By my definition they’ve been determined to create wealth effects much longer than that.
Y2K liquidity floodgates, anyone?
California loses jobs in March, though unemployment stays at a …
Los Angeles Times-18 hours ago
In particular, Sohn said that dynamic has helped cause a sharp slowdown in the tech industry, which is concentrated in the expensive Bay Area. … they could accept jobs in other states and pay a fraction of California’s housing costs,” a group of tech chief executives wrote in a January letter
San Francisco, CA 94109 Housing Prices Crater 16% YOY As Bay Area Tech Wreck Drives Unemployment Higher
https://www.zillow.com/san-francisco-ca-94109/home-values/
*Select price from dropdown menu on first chart
When I was in Santa Clara a few weeks ago I mentioned relocation to cheaper locales. No one seemed interested. A big factor was the availability of jobs. After last years mass layoff almost all my Santa Clara colleagues found new jobs in just a week or two, vs. the Broomfield, CO colleagues who needed months and had to compromise on what they accepted.
Yup. I’m surprised the California people are aware enough of what goes on outside of California to even recognize that. I thought they only did it because they wanted to remain in the center of the universe.
Agoura Hills, CA Housing Prices Crater 25% YOY As Drug Crimes Escalate
https://www.movoto.com/agoura-hills-ca/market-trends/
Apparently the tech industry malaise has spread to San Diego.
I’m sure it’s nothing a little corporate bloodletting can’t fix.
Ailing Qualcomm to undergo big layoff
A thousand could be let go
By Don Bauder, April 18, 2018
Updated April 19, 2018
Qualcomm, which just recently was saved from a foreign takeover, began laying off employees today (April 18), according to media reports. Bloomberg, which appears to have broken the story, says the number could hit 1000.
The company, whose earnings have plummeted, has 33,800 full and part-time employees. A layoff of 1000 would affect 3 percent of the global workforce, according to Business Insider.
Thelayoff.com is a website where employees of thousands of companies can express complaints about activities at their companies. The Qualcomm site today had entries such as this: “I saw around 90+ people get notices today. Very sad. We the people who remain behind don’t know what’s in store for us and are also worried.”
Another: “The company [is] going to get broken up.” (This writer suspects the various parts of Qualcomm will be sold or spun off.)
Another: “Extremely poorly handled.”
…
I remember when Qualcomm was the pride and joy of San Diego. I turned down a job offer there about 25 years ago to work on the Eudora email app, because I would have had to also do IT work.
https://www.thelayoff.com/qualcomm
A period of rising interest rates is a great time to have low- or no household debt, plus a positive net worth supported by liquid savings, and not tied up in poorly-diversified, big-ticket, lumpy assets, such as houses, which are vulnerable to falling knife price dynamics in a recession with no way out for their stuck owners.
Financial stress is rising for low- and middle-income U.S. households
Paul Davidson, USA TODAY
Published 11:44 a.m. ET April 18, 2018 | Updated 12:59 p.m. ET April 18, 2018
Nine of the ten highest-rent cities in the U.S. are in California.
Despite an improving economy that should be easing the financial struggles of all Americans, a growing number of low- and middle-income households are plagued by high debt and have little or no savings.
The financial strains have especially worsened for those near the bottom of the income ladder.
While wages for low- and middle-income Americans are rising, they’re not keeping up with higher costs, like rent and utilities. That means these households aren’t riding the hopeful trends lifting many families: unemployment tumbling to 4.1% today from 10% in 2009; debt levels close to record lows; climbing consumer confidence and spending.
They are people like Alejandra Mejia of San Jose, Calif., whose paycheck can’t cover higher housing costs. Or Dawn Thorp, in Phoenix, whose disability payments don’t offset higher gasoline prices, electric bills or rent.
According to a UBS study, such households could fall behind on loan payments, reduce their spending and slow or even undercut a U.S. economy that seems to be firing on all cylinders for the first time since the Great Recession ended in 2009.
“You have a large share of the population who are struggling to meet their financial obligations and has seen modest to no improvement,” says UBS Credit Strategist Stephen Caprio.
…
“Despite an improving economy that should be easing the financial struggles of all Americans, a growing number of low- and middle-income households are plagued by high debt and have little or no savings.”
This is what a recovery looks like, eh?
Yes until we really close the borders and limit immigration.
It must really suck to carry a high household debt load in the face of ever-rising interest rates for the foreseeable future time horizon!
Treasury 10-Year Yield Sets 2018 High, Traders Focus on 3%
By Liz McCormick
April 20, 2018, 12:51 PM PDT
Updated on April 20, 2018, 9:01 PM PDT
Treasuries traders have a new level to focus on: the pivotal 3 percent mark on 10-year notes.
After the benchmark yield plowed to a new 2018 peak just above 2.96 percent on Friday — its highest since January 2014, chart watchers are turning their gaze to the next round number on the horizon. Investors including Jeffrey Gundlach at DoubleLine Capital and Scott Minerd at Guggenheim Partners have previously highlighted a 3 percent 10-year yield as a critical level for the bond market.
“We’ll be heading to 3 percent pretty quickly now,” said Peter Tchir, head of macro strategy at Academy Securities Inc. “Moving above 3 percent though will be tough, as there are resistance points around 3.05 percent. This rise in the long-end yields should take some more pressure off the curve-flattening trend.”
The spread between 2- and 10-year yields has risen for three straight sessions, rebounding from 41 basis points on Wednesday, the smallest gap in more than a decade. The spread ended Friday just shy of 50 basis points.
A rally in commodities to multiyear highs this week added to pressure on government debt by stoking traders’ inflation outlook. While metals prices have given back some of their gains, bond traders remain on alert. The breakeven rate signaled by 10-year inflation-linked Treasuries reached the highest since 2014 this week.
Yields are rising as the Treasury increases debt sales to finance expanding government deficits and as the Federal Reserve trims its bond portfolio. The central bank is also signaling further interest-rate increases.
…
Uncertainty is the enemy of financial euphoria.
As interest rates rise, investors can’t decide whether the bond market move is cause for confidence or concern
- Treasury yields rose Thursday after hawkish Fed speakers emphasized that more rate hikes are on the way.
- The 10-year yield jumped to a four-week high of 2.91 percent.
- The 2-year has also moved higher, and the gap between the 10-year and 2-year yields narrowed to an 11-year low.
- Even though it has moved higher, the 10-year yield has not moved as aggressively as the 2-year, suggesting to some bond market pros that it reflects the eventual slowing of the economy, inevitable after a Fed rate hiking cycle.
Patti Domm
Published 11:38 AM ET Thu, 19 April 2018
Updated 1:23 PM ET Thu, 19 April 2018
…
Mind the gap,flat as a pancake= next year will sck
Is there enough hand lotion on the planet to satisfy the needs of all the Wall Street interest rate worriers?
US STOCKS-Wall St falls on investor nerves about interest rates, tech
April 20, 2018, 04:34:00 PM EDT By Reuters
* Tech weak ahead of earnings, Apple off on iPhone demand worries
* Consumer Staple sector underperforms broader market
* Bank stocks outperform on higher bond yields
By Sinéad Carew
NEW YORK
April 20 (Reuters) - Wall Street’s three major indexes declined on Friday as investors worried about a jump in U.S. bond yields, with technology stocks leading the decline on nerves about upcoming earnings reports and iPhone demand.
…
Rising interest rates may slow down home buyers
2:01 PM ET Fri, 20 April 2018
CNBC’s Diana Olick on factors affecting home sales, including an interest rate hike and an increase in the cost of materials.
Do higher interest rates dampen a woman’s desire for a home?
No, just her husband’s ability to pay for one.
Fed on path to rising rates. Here’s why
Thursday, 19 Apr 2018 | 5:00 PM PT
Kathy Jones, Charles Schwab & Company chief fixed income strategist, and Edward Campbell, QMA managing director, weigh in on what’s likely driving interest rates higher and how it could impact the markets.
This incessant media blather and worry about higher rates is a joke. Look how low they are, still.
The good thing is that intermediate Treasury yields are considerably higher than a year ago. Now it is possible to park short-term cash in Vanguard and get more than goose eggs in return.
Bond funds don’t fare as well during a period of rising interest rates as a ladder does, unless the manager is always holding to maturity; can that be assured with any Vanguard funds? Not that I’m aware of… With TreasuryDirect, you know you can hold to maturity, rather than suffer the vagaries of the bond market pricing.
“…high housing costs are ‘crowding out’ personal consumption, with more cash going to landlords and lenders instead. If their housing costs weren’t so high, Californians would have enough dollars to buy 15 billion more Happy Meals than it does. They would have enough cash to buy 1.5 billion more Major League Baseball game tickets or 455 million tickets to Universal Studios Hollywood. And every man, woman and child in the state could buy tickets to see ‘Hamilton’ — six times.”
Luckily we never go to McDonalds, my family members are not big MLB fans and once is enough times to see ‘Hamilton,’ IMO. A couple of visits to Universal Studios Hollywood over a lifetime is also sufficient.
I also am grateful for our landlords, who pay the bills for high property taxes, landscaping service, HOA, home repairs and maintenance, and numerous other expenses, plus the risk of a large decline in property values in the next recession, that we don’t have to shoulder as renters.
One thing that has caught my eye in San Diego is the relative lack of beaters on the roads. We visited someone at an apartment complex in Pacific Beach. I was surprised to see high end German luxo sedans parked in the parking lot.
Puttin on the Ritz by leasing luxury cars is definitely a big deal here.
When I lived in SD I marveled at the coin people would drop on their rides - and here they were, stuck in traffic next to me in my beater. They were projecting an image of themselves to the world and had to run pretty hard to make that nut - no different than buying some ginormous zero lot houses that sprout up like cookies from keebler elves east of the 5.
I came to understand it a bit more as the years progressed - people spend a lot of their lives in their cars there, so I cant blame them for wanting a nice environment - its essentially a mobile home (lol!).
Me, I gtfo’d from that madness. Work from home, bike before lunch and surf after work. Even if you win the rat race you’re still a rat, and the best way to win is to not play other peoples games - cut your own path.
I would never own a nice car in the city. Ever. I’d buy a 10 year old, lightly used sedan from the original owner with ~100k miles and all maintenance and repair receipts. Hell if I would pay through the nose for a beautiful vehicle that sits outside and is subject to the weather and the blatant disrespect of a large population of what amounts to animals.
I’ve been watching the market closely since 2008. I live in LA. I truly cannot believe what is going on. Typical scenario: went to see a house listed for 1.2 (only out of curiosity). Mid-century flip in the valley. Nothing special. The other people at the open house were young 30-somethings pulling up in Maserati’s and Bentleys (Benz’s don’t mean much here anymore). The agent said there were already 3 offers on the house, 2 all cash. I believe her. Homes go in days around here. Even undesirable areas (where you have to put bars on your windows) are going for 500k. A number of us are considering leaving. We just can’t compete with the foreign money here. These are people for whom 1 mil is a drop in the bucket.
These are people for whom 1 mil is a drop in the bucket.
Money laundering criminals.
“Homes go in days around here. Even undesirable areas (where you have to put bars on your windows) are going for 500k.”
That’s because the FHA guarantees the barrio and ghetto, and it’s off to the stars from there.
Check out this beauty:
https://www.zillow.com/homedetails/114-W-Alondra-Blvd-Compton-CA-90220/21007092_zpid/
114 W Alondra Blvd, Compton, CA 90220
3 beds 3 baths 1,746 sqft
For Sale
$529,990
Zestimate®: $462,476
Est. Mortgage
$2,117/mo
Get pre-qualified
BEAUTIFUL 2 UNIT PROPERTY! THE FRONT UNIT IS 1 BEDROOM AND 1 BATH APPRX 556 SQFT THE BACK UNIT IS A 2 BED 2 BATH WITH A DEN (POSSIBLE 3RD BEDROOM) APPRX 1190 SQFT!!! THIS HAS ALL BEEN COMPLETELY REMODELED!!! MOVE IN READY W/ALL THE UPGRADES! THIS HOME HAS NEW INTERIOR & EXTERIOR PAINT, GRANITE COUNTER TOPS IN KITCHENS, NEW FIXTURES, CEILING FANS THROUGHOUT THE HOUSE, TILE FLOORING, UPGRADED PLUSH CARPET!!!!!!! A NICE SIZED FRONT YARD W/A NICE SIZED BACK YARD!!!! HOME IS NEAR SCHOOLS,…
Year Built 1922
Price/sqft $304
04/19/18 Price change $529,990-3.6% $303
03/23/18 Listed for sale $549,990+129% $315
03/09/17 Sold $240,000-3.6% $137
01/23/17 Pending sale $249,000 $142
01/06/17 Listed for sale $249,000+13.7% $142
05/23/16 Listing removed $219,000 $125..
05/04/16 Price change $219,000-2.7% $125
03/25/16 Price change $225,000+13.1% $128
03/15/16 Pending sale $199,000 $113
03/01/16 Listed for sale $199,000-12.1% $113
02/03/14 Sold $226,500+88.7% $129
01/11/13 Sold $120,000-12.4% $68
06/25/12 Listing removed $137,000 $78
05/24/12 Price change $137,000+4.6% $78
05/19/12 Listed for sale $131,000 $75
Compton Crimes Per Square Mile 364
California 89
National Median 31.9
https://www.neighborhoodscout.com/ca/compton/crime
Listen. When we even pass the Compton exit on the freeway, we usually duck.
I’m sure that serves to keep housing costs relatively affordable compared to surrounding parts of LA.
Had to check out our old hood for comparison with Compton.
Richmond, CA crimes per square mile = 165.
Way better than Compton, though not great!
https://www.neighborhoodscout.com/ca/richmond/crime
Hope no one steals the outdoor furnace
Is that code?
Holy sheet, Compton at $529,000? LMFAO! My friend bought a nice house in Culver City for a third of that, years ago.
North Ogden, UT Housing Prices Crater 8% YOY As Housing Demand Trickles To Record Low
https://www.zillow.com/north-ogden-ut/home-values/
*Select price from dropdown menu on first chart
Don’t worry - your tax dollars will be bailing them out soon enough.
FBs are the true victims, and NO ONE saw this bubble coming.
I seem to recall that last time it was banks and not FB’s who were bailed out. I recall the cry in this blog that “cramdowns are coming”, but they never came.
I’m glad that you linked to the article about St. George, UT home prices. That is my neck of the woods. Prices here are insane relative to wages. St. George is one of the lowest weekly wage rates in the country because most of the jobs are low paid service. There are exceptions, such as at the hospital, university, or some engineering firms here, not to mention Sky West. Nonetheless, there is a huge reckoning coming, but I suspect it won’t happen until CA prices start crumbling. The home prices are completely untethered from local wages.
I think you are more tied into Las Vegas than Cali prices but I agree with everything else you said
“St. George is one of the lowest weekly wage rates in the country because most of the jobs are low paid service.”
That doesn’t sound like a vibrant economy that would attract folks from other parts of the country or world the way that San Diego and San Francisco do.
sounds like lots of rich retirees are moving in
This is exactly what is happening. They park themselves here in decent weather and take advantage of proximity to a major medical center.
Nothing wrong with that… they’re paying their own way, right?
Via medicaid.
Carmichael, CA Housing Prices Crater 7% YOY On Deteriorating Sacramento Area Fundamentals
https://www.movoto.com/carmichael-ca/market-trends/
“The home prices are completely untethered from local wages.”
This is where I enter the picture and heroically fill the gap.
(at a price, of course 😁)
This is where I enter the picture and heroically fill the gap.
And you do it without discriminating against anyone. You really are a hero.
Mesquite and St George has a lof of retirees. Sell the house in NY, Chicago, NJ or Philly for $800k, move to the desert, buy with cash for $350k.
Local wages are irrelevant in that scenario.
Local wages are irrelevant in that scenario.
As a retiree myself, I would expect that the local payscale would adversely impact the availability of help I might like to hire, e.g. someone to repair HVAC in my house, keep my car in good order, that sort of thing. “That scenario” may also have other drawbacks. My brother always said, “Pay peanuts, hire monkeys.”
But what is the draw to a place like Mesquite?
The 110F+ summer days? Even if you get up at the crack of dawn to play a round of golf, it’s already in the 90’s.
That tap water that stinks?
A town where the only non fast food eateries are in the casinos?
That you’ll have to drive to St. George or Vegas to see a doctor?
Sure, if a shack was 80K, it could make sense to some people. But 300K to live in that armpit?
Las Vegas is an armpit just the same. Nuke the whole area.
Vegas is an armpit, but at least is has amenities. The only thing Mesquite has are low brow casinos.
Of course, should lake Mead’s levels continue to drop, there could be a lot of dry taps in Vegas in the not too distant future.
Unless you want somebody to make your hamburger and fries, fix your car, or stock your grocery store shelves. Those people all need to live somewhere.
Ventura, CA 93003 Housing Prices Crater 7% YOY As Los Angeles Area Market Floods With Flips
https://www.zillow.com/ventura-ca-93003/home-values/
*Select price from dropdown menu on first chart
My old (old!) stomping grounds. Place isnt what it used to be thanks to the progressive tyranny
http://www.dailymail.co.uk/news/article-5641551/Father-stabbed-homeless-man-daughter-sits-lap-California-restaurant.html
The couple recently decided to start putting in offers and jump into a mortgage. The house they’re buying is a Bloomington Hills two-story with spectacular views of the city and its rugged desert surroundings. It was priced at $349,000. The mortgage payments will likely be higher than what they’ve been paying to rent their current home, but not by much, Giovanni Trumbo said. A midlevel manager at Wilson Electronics in St. George, Trumbo said he subsidizes his salary by operating his own business online. Jennifer Trumbo works from home as well. Combine those incomes, and it’s enough for the house, although Giovanni Trumbo said he didn’t think it would be possible on his regular salary alone.’
‘We’re taking a risk, we know that. But we’re really buying a house,’ he said. ‘It’s ours. It’s an asset.’
Let’s be honest Giovanni. You aren’t taking much of a risk. If it goes sideways or your Etsy site goes down the tubes, you can just walk. But if it goes up, you are going to reap that sweet equity! You have to be in it to win it.
Utah jumbo and FHA loan limits by county
Washington GSE $453,100 FHA $323,150
https://www.bankrate.com/finance/mortgages/utah-jumbo-loan-limits-by-county.aspx
was it Giovanni? Or was it pressure from family that want the couple to buy and ’settle’ down.
I am convinced so many of the decisions are about society/family and not the couple
I am convinced so many of the decisions are about society/family and not the couple
So true. I was speaking to one of my patient’s daughters who works for one of the larger home builders in the area. She said she was amazed at the houses that were being purchased by couples here. She remarked, “Some of these people are buying insanely expensive houses and their husband does little more than work as a bank teller. I cannot fathom how people are getting into the homes we sell.”
The trick is that they are not affording these homes, they are scraping by and they are spending 35%, 40%, and even upwards of 50% of income on housing payments, with a side hustle. Just one catastrophe away from a missed payment and a downward spiral.
I cannot fathom how people are getting into the homes we sell.
I would have told her to Google “the housing bubble” to help her fathom the depths and inscrutable lunacy of collective manias.
Consider Giovanni’s age. During his post college, adult life, all he has seen are housing prices soaring into the stratosphere. And even if he recalls the previous crash, it was short lived and was likely shoved into his personal memory hole. FOMO becomes a big deal for a lot of people.
And even if he recalls the previous crash, it was short lived and was likely shoved into his personal memory hole.
It was ideally managed to train the populace to buy the dip. And here we are.
‘We’re taking a risk, we know that. But we’re really buying a house,’ he said. ‘It’s ours. It’s an asset.’
Bahahaha … the illusion endures. The house isn’t theirs until I say it is theirs. I won’t say it is theirs until I am satisfied that all the payments to me have been made.
Years - decades - may pass before this is accomplished. In the meantime they get to work while I get to reap.
If they miss a couple of payments, the illusion will be spattered on the wicked, expedient stones of foreclosure proceedings.
Bahahaha … the illusion endures. The house isn’t theirs until I say it is theirs. I won’t say it is theirs until I am satisfied that all the payments to me have been made.
The house is never really theirs. Property tax payments are forever, and ever-increasing.
“Combine those incomes, and it’s enough for the house, although Giovanni Trumbo said he didn’t think it would be possible on his regular salary alone.”
Will those combined incomes stand up to the next recession?
I can say that our household income took a major hit during the last recession, though it didn’t impinge much on our lifestyle, as the layer that got lopped off was all going into long-term savings, anyway. If you stretch your household budget to the breaking point in order to lock into a death pledge, only to find yourself in foreclosure once you stop making payments after your household income drops in the next recession, just remember that nobody put a gun to your head and forced you to do this.
Have you seen those House Hunter Episode Memes? Some are hilarious:
[House Hunters Episode]
Husband: “I own a cat yoga studio”
Wife:”And I am a napkin origami artist”
Husband: “And our budget is 3.2 Million”
Either they’re trust fund babies, or they’re crazy, possibly both.
West Yellowstone, MT Housing Prices Crater 9% YOY As Retiree Delinquency Rates Balloon
https://www.zillow.com/west-yellowstone-mt-59758/home-values/
*Select price from dropdown menu on first chart
I didn’t know anybody ever retired in West Yellowstone. I suppose maybe retirees from somewhere else might move there while they are still healthy and then leave again as soon as they aren’t.
Fun place to snowmobile to, though.
My son and I took a drive to Jackson Hole, WY. I imagine life slows way-down for more than a few months in the winter. It’s very pretty out there in the summer… indelible memory imprint.
Realtors are liars.
…. and every closing a crime scene.
Duck Key, FL Housing Prices Crater 19% YOY As Coastal Property Demand Evaporates
https://www.movoto.com/duck-key-fl/market-trends/
“It’s a trend that has been going for years, but it has escalated quickly over the past 12 months, said John Hook, an agent with Red Rock Real Estate who was helping the Trumbos with their housing search. A native Californian, he said he sees some similarities between the St. George region and famously high-priced real estate markets like San Diego and San Francisco, where the area’s attractiveness creates a demand for housing that prices out the typical working person.”
This housing bubble has entered the parabolic stage. A lot of these markets have been reporting 20%+ YOY price gains. This is insanity, and nobody is saying or doing a damn thing. We’re right back in the same situation as before, but much worse this time around. I don’t know how this ends, but this isn’t looking good at all.
“20% YOY price gains”
Sounds a lot like Toronto and Vancouver last year. And we all know how that turned out…
Now they’re lowering lending standards. Yawn.
Grab some popcorn, Neil.
Subprime is back in the U.S. mortgage lending market, and exploding exponentially at an annual doubling rate, just as one would expect in the parabolic stage of Housing Bubble 2.0.
The Financial Times
Standard & Poor’s Financial Services LLC
US subprime mortgage bonds back in fashion
Yield-hungry investors turn to assets blamed for financial crisis a decade ago
© Getty
Ben McLannahan and Joe Rennison in New York
March 28, 2018
Issuance of securities backed by riskier US mortgages roughly doubled in the first quarter from a year earlier, as investors lapped up assets blamed for bringing the global financial system to the brink of collapse a decade ago.
Home loans to people with scratches and dents in their credit histories dwindled to almost nothing in the aftermath of the crisis, as litigation-weary lenders retreated to patch up their balance sheets. But over the past couple of years a group of specialist firms has begun to bring the loans back, navigating a dense web of new rules drawn up to protect borrowers and investors in the $9.3tn US home-loan market.
Last year saw issuance of $4.1bn of securities backed by loans that would have been called “subprime” before the last financial crisis, according to figures from Inside Mortgage Finance, with the pace picking up in the latter half of the year. The momentum has continued into 2018, with deals worth $1.3bn in the first quarter — twice the $666m issued in the same period a year earlier.
…
The top in this market is MUCH higher than the last peak. This is getting very, very interesting. What’s worse, rents have skyrocketed this time around while they were rather stable last time, which has created even more of a panic buying mentality. It’s really sad that this is the way an economy is run.
Chicago -
http://www.chicagotribune.com/news/local/breaking/ct-met-three-people-shot-20180421-story.html
Headline says: “We weren’t supposed to be here”. That is an understatement - my experience over the last 15 years in Chicago prior to exiting in 2016 was “No one is supposed to be here”.
Why more folks are not vacating that hell hole called Chicago confounds me.
Family ties is probably the #1 reason people stay. A job that can’t be replaced is probably one, as well as simple inertia and fear of the unknown.
I am not interested in ANY areas where crime is high. No thanks.
White collar crime… or the violent kind?
The violent crime, of course. The white collar stuff pisses me off, too, but the violent crime can make day to day life a real chore.
Denver -
I attended the game twixt the Rockies and the Cub last evening - Ummm…..The place was more like Wrigley than Rockies park - alot of blue in the stands.
Heading again tomorrow for the game - 1.10 pm affair - weather much nicer than the 37 deg and cold mizzle of last night.
Still Cubs W - 16-4 just great to behold.
Rj not in Chicago anymore but still chillin for the Cub.
The place was more like Wrigley than Rockies park
I attended a Rockies-Cubs game at Coors Field some years ago. I had the same experience, Cubs jerseys and caps everywhere.
Giovani Trumbo. That’s a cool name.
Trumbo is probably a fake like Zombo
2:34 is where Zombo gets busted.
Zombo’s Transformation
https://www.youtube.com/watch?v=Fz-bNb-Yvg0
Lone Tree, CO Housing Prices Crater 7% YOY As Denver Economy Deteriorates
https://www.movoto.com/lone-tree-co/market-trends/
Co-written by Glenn Greenwald, the independent journalist who reported Edward Snowden’s data about NSA surveillance a few years ago…
The DNC’S Lawsuit Against WikiLeaks Poses a Serious Threat to Press Freedom:
https://theintercept.com/2018/04/20/the-dncs-lawsuit-against-wikileaks-poses-a-serious-threat-to-press-freedom/
The suit strongly suggests desperation. It seems that they know that the special prosecutor has found nothing to bring Trump down. They need to keep the narrative alive that he colluded with the Russians. On Trade and illegal immigration, Trump is on the right side of the electorate and they are on the wrong side. George Soros will not let them change their views to fit the electorate. Just like the Koch brothers would not let Ryan change.
Interesting that this is occurring during a time of rising oil prices:
http://www.arabianbusiness.com/news/394425-property-prices-fall-across-abu-dhabi