Buyers Market Should Last For Years: ML
Some housing bubble reports from Wall Street and Washington. Paul Muolo, “This past week Merrill Lynch declared that housing is in a bear market and that a ‘buyer’s market’ for homes should last for ‘years.’ Merrill notes that the unsold inventories of homes continues to pile up, and that resale prices are flattening in the single-family market, while declining for condominiums.”
The Associated Press. “More and more developers are canceling or delaying condominium projects as home sales slow, construction costs soar and lenders balk at financing units that might not sell. What’s making the situation worse is a glut of high-priced condos and too few people who can afford them.”
“In Philadelphia, a city cluttered with condominium construction, Old City 205 won’t break ground after the housing market softened and increasingly picky buyers balked at its price tags from $400,000 for a studio to over $2 million for a three-bedroom penthouse.”
“‘We’ve gone through the biggest real estate boom in the last eight or nine years and some of these projects haven’t started yet. Do you think they’re going to start building now?’ said real estate executive Allan Domb, dubbed Philadelphia’s ‘condo king.’ Domb in Philadelphia said he’s gotten half a dozen phone calls the past four weeks from developers asking if he would like to buy their properties.”
“A big part of the problem is that many condo projects are priced high, in part because developers have to recoup the high prices they paid for land. But most buyers can’t afford it. ‘The sweet spot of the market is probably $250,000 to $700,000,’ Domb said. ‘That’s what the majority of the population can afford. Many condos are priced higher. That’s part of the problem.’”
“As if investors in homebuilding stocks need more to worry about. Now add this concern: Companies writing down their land values because they aren’t worth what they paid for them. It’s not a matter of if that could happen, but how serious and widespread those write-downs turn out to be.”
“Not only would that reduce already weak earnings, but it could lead to further erosion in the ‘book value’ of many homebuilders. Analyst Rick Murray notes that during past housing-cycle slumps several builders took impairment charges totaling as much as 5 to 10 percent of their book value on an annual basis for several years.”
The Washington Post. “The current federal funds rate is ‘in a vicinity’ of the right level even though news on inflation has been ‘disappointing,’ San Francisco Federal Reserve President Janet Yellen said on Monday.”
“‘It might be thought that policy should continue to tighten until the inflation data move back to a rate consistent with price stability. But I would argue that a gradual approach is likely to be better,’ said Yellen, a voting member of the Federal Open Market Committee this year.”
“Yellen said the two-year string of rate increases..should cut demand in interest-rate sensitive sectors such as housing, autos and consumer durables. In particular, ’significant moderation in the rate of house-price appreciation’ is likely to restrain growth, she said.”
From Bloomberg. “Federal Reserve Bank of St. Louis President William Poole said he’s undecided on whether the central bank should raise interest rates at its next meeting in eight days. Poole (described) his stance as ‘50- 50. I’m still totally noncommittal.’”
“Recent data show slowing economic growth, while inflation has ’tilted’ upward, Poole said. Containing inflation is the Fed’s ‘primary’ goal, he added.”
How can the “majority” of the population afford $250,000 for a home???
If interest rates are 2%, and we have 20% inflation, no problem.
If interest rates are 2%, and we have 20% wage inflation, no problem.
The same way the majority can afford a 25,000 car; Close your eyes and sign on the dotted line.
I heard on the radio that the median sale price for a new car was around 28k. That’s quite a bit more than what I paid for the top end of a rather popular family sedan.
$28,000 already? It was just $25,000 last year! There’s no inflation though because the FED fights it. Yup it’s true, Mr. Poole told me so.
If you ever run across the TV show called “King of Cars”, watch an episode or two. It’s a reality show about a Vegas car dealership. Entire negotiations occur without any reference to price or interest rate — it’s all about monthly payment. (No surprise to bloggers here.)
We aren’t even there yet, trust me. Where we are at now is: “How can the majority of the population afford a $750,000 condo/McMansion for a home?” since thats what this boom was all about.
you think 250 000 is expensive! I live in Clagary,AB where the affordable house is now 1 Mil. Thats what the newspapers were saying anyways.
No it’s not. Stop lying, lower your expectations, and move to Okotoks or Airdrie. $250k, reasonable commute, ’nuff said.
Yeah, the guy’s name should be “Dumb”, not Domb.
$250,000 does not seem outside the realm of possiblity to me. A young couple earning say $55k that saves 10% should easily be able to manage paying for that. They’d have saved ~$40,000 since 2001, and would need to spring for a $1350 at 6.7% 30 yr fixed mortgage. That doesn’t seem outside of what they could tolerably buy, in my opinion.
You’re right, but add in taxes, insurance, utilities, and the rising cost of everything else. That is why the fed has to continue to raise rates to tame the inflation bug. That is their number one goal.
“$250,000 does not seem outside the realm of possiblity to me. A young couple earning say $55k that saves 10% should easily be able to manage paying for that. They’d have saved ~$40,000 since 2001, and would need to spring for a $1350 at 6.7% 30 yr fixed mortgage. That doesn’t seem outside of what they could tolerably buy, in my opinion. ”
However these days that young couple will have to factor in the possibility of outsourcing causing one or both to downsize their jobs and salaries, so they will probably have to settle for a $125,000 loan and buy in college Station, Texas.
If you live in an east coast city, it not insane.
I think what the man is referring to is condos. If the range is $250-$750, that would probably mean a studio on the low end.
Do you think 250K for a studio is a reasonable price for a couple that’s making 55K a year?
Right, in San Francisco that get’s you a *tiny* studio. Reasonable? I don’t think so.
In NYC, apartments are priced about $600 a sq ft above 96th Street, and $1,000 a sq ft below 96th Street.
I saw a listing for a 350 sq ft co-op studio for $440,000. $1,250 a sq ft.
Ah yes, but then Philadelphia is not quite NYC. The thought of paying $250k for any kind of condo in Philly seems, frankly, insane. They’d pretty much have to pay me to live in the downtown area there.
Yikers jmr, please, this comparison of NYC prices or SF prices to every other city in the country has got to stop!
Would I pay more to live on Central Park West than in Queens? Yes!
Apples to apples please!
$600/sq foot doesn’t indicate a bubble, IF annual rents are something like $75/sq foot. That just means that you have to be rich to live somewhere that everyone wants to live and that has high salary’s to support prices. If my young couple wants to live in NYC, my $55k (that would be pretty low national average earnings for two young professionals) should be more like $120k-$150k or they are wasting their time.
The bubble comes from the spread between asset prices and annual rents. It doesn’t matter much if the asset prices is $200/square foot (in an area that would rent for $5/sq foot) or $500/sq ft (with rents of $20). That’s the mark of a bubble.
This was also at the NMN link:
‘About 25% of seniors have yet to pay off their mortgages. Back in 1983 just 11% of seniors had not paid off their house loan.’
And this from Fitch Ratings:
‘Fitch Ratings has introduced new model-based stress criteria for securitizations involving USD London Interbank Offered Rate to better capture potential effects of basis risk, which securitizations can be vulnerable to in both rising and falling interest rate environments. While some securitization structures use swaps to mitigate basis risk exposure, falling interest rates may increase compression between assets and liabilities, which may diminish excess spread and potentially lead to a liquidity shortage,’ said Kocagil. ‘Additionally, pay fixed-receive floating swaps can also result in an over-reliance on swap cash flows in a rising rate scenario, making it more difficult to isolate the transaction’s own liquidity risk.’
‘The majority of U.S. consumer ABS transactions, including credit card receivables, student loans, and home equities, are exposed to basis risk due to mismatches between the asset and liability coupon rates,’ said Mezzanotte.’
Not sure what that Fitch ratings report actually means, Ben, but it sounds bad!
Can anyone unravel the gobbledy-gook and put it out in plain English ?
Basis risk is the risk that an instrument used to hedge a risk doesn’t perform in a symmetrically oposite way to the instrument that is being hedged. As an example: single family mortgage piplines used to be hedged by taking short positions in 10-year treasuries. The risk was that a change in mortgage rates on the loans in your pipeline wasn’t perfectly mirrored and offset by the change in rates on the 10-year T’s that you had shorted. The basis risk was that mortgage rates would rise (thus devaluing the loans in your pipeline), but the Treasury rates wouldn’t rise as much (thus not increasing the value of your short position in those 10-year T’s). Now you can hedge with MBS’s.
From the quote, it would seem that some LIBOR instruments or swaps involve other imperfect hedges, and that Fitch is now looking at Monte Carlo scenarios to ferret out true risk.
does that mean they’re introducing new stress tests b/c they realized their current stress tests, which have guided their ratings to date, do not realistically account for potential interest rate swings and/or make assumptions that are less than realistic? should we be looking for some downgrades?
sorta related… FnF’s stress test assumes (at least it did, i’ll admit i’m not up to date on what OFHEO has implemented lately) that the GSEs would not purchase any new mortgages during the “stress period,” other than those they’ve already committed to purchase. What would happen to the housing market if FnF completely stopped purchasing mortgages? btw, the “stress period” assumes a 6% shift in interest rates.
A few thoughts:
1. What is David Learah going to say about Merill Lynch’s prediction? Is he going to spin it some other way? How can you spin away the fact that it will be a seller’s market for YEARS? I cant wait to see this guy eat his own shoe.
2. I’ve been saying it all along: those single-family homes are going to go down in price, but what about those HUNDREDS OF THOUSANDS of LUXURY condos being built everywhere? Who can afford to buy these? At least we got some dense urban development, but seriously, I dont even want to think what downtown Miami is going to look like in a few years.
3. 50/50 on the interest rate rise, with a nod toward the goal of stopping the runaway inflation at the moment. Thats a very likely ‘yes’ to raising rates in my eyes, or at least a good chance. *Sigh* Oh well, just speeding up whate eventually was going to happen anyway.
Wouldn’t you think that since construction/labor cost & materials cost are soaring, home price will not drop for too long? In other words, higher cost will lead to inflation, which is defined as the general rise in prices for good or services. Such rise or inflation will make the current house price relatively less expensive because everything else has also become expensive. As a result, house price should not fall significantly.
With inflation, wages will lag, and the cost of paying for groceries, gas, food, and other bills will take precedence. So, owning a home will be the LAST thing on their minds.
Inflation is a red herring; it’s the affordability that matters, not inflation per se. Homes are simply priced out of reach of most buyers, at least on a long-term purchase basis. What is worse is that due to all of the speculation in recent years (which only made sense when prices were headed through the roof), there is now an oversupply of homes realtive to fundamental demand. No matter what happens to inflation, the above two facts will result in significant *real* price declines (prices measured relative to incomes or to the price of the substitute good, which is the rental rate for comparable housing), just as many “experts” are currently reporting in the mainstream press…
Supply and demand trump seller’s cost. Buyers simply don’t care what sellers paid. They didn’t care when prices were going up, and they won’t care when prices are going down. The whole ARM/IO reset insanity around the corner simply means that there will be plenty of homes on the market, either short sales or foreclosures. As we’ve seen in this bubble (and others throughout history) demand can change much faster than supply. Just as with the south sea bubble, once all those speculative buyers all try to sell at once, prices go down quickly.
The price of building a house is only part of the supply equation. Because of overbuilding for speculators, there’s a glut of unoccupied homes that will soon be added to the market; the owners of those homes will be looking simply to cut their losses and many will sell for far less then it would cost to build a similar home.
Construction labor costs and materials are going down. Lumber and concrete sales and prices have been dropping over the last several months and are expected to drop even farther. More and more houses are being built by illegal alliens. As the market is flooded with more unemployed Americans and more illegal alliens, constuction wages go down.
>Construction labor costs and materials are going down
Not according to this article (read second paragraph) and a some past articles posted today and sometime last week. They all stated that construction cost has been soaring.
according to the world market, they are going down.
No post. Please post it so we can take a look.
I’m not sure what the post will say, but my job requires me to keep track of these prices. Construction material costs peaked when China bought up virtually all of the concrete, steel, copper, etc. near the end of 2004. It was sometimes difficult to get these items until the the end of 1st quarter 2005. Things started to cut loose and prices started to drop at that time. They have been dropping ever since with huge dips in the last two months. A lot of labor cost numbers are hidden because of the number of undocumented workers who work in the construction industry. These numbers have dropped since about 2002 and sharply dropping since about 2004 due to illegal alliens taking over formerly high paying construction jobs.
I just put up a long post with several examples of how prices are coming down. It didn’t post. So to sum things up. From my personal experience… The peak of the construction material costs was the end of 2004 begining of 2005 when China bought just about everything. Things have been going down since that time with huge drops in prices and lead times in the last two months. Labor costs have been dropping quickly since 2004 when illegal alliens pretty much put an end to many good paying construction jobs.
lumber 460 to now 273 ?
how about concrete, is that priced locally ?
tia
Inflation is not rise in price, it’s an increase in the money supply, which is now about to contract. Rise is price is just a by product of increase in money supply.
It’s amazing how many people do not know this simple little truth.
It’s hard for most people to wrap their heads around it, because it’s hard to see an increase in the money supply. What’s easy to see is the effects, although they are not always 100% correlated, nor do they necessarily show up immediately. Thus most people associate inflation with its effects: dollar buys less, things cost more, etc.
It’s hard for the Fed to wrap its head around it, too. That’s why the Fed doesn’t respond to asset bubbles, but yanks up rates in response to any increase in wages, even if these are more than justified by increases in productivity. It doesn’t know the difference between inflation and labor price increases. See: Last five years.
It’s not a truth, it’s just a definition - yours. When people talk about “wage inflation”, they are talking about an increase in nominal wages. When they talk about “price inflation”, they are talking about an increase in a nominal price or price index.
When most people talk about “inflation” (unqualified), they are almost always talking about a general increase in prices, however they quantify it. Just because “inflation” to you means in increase in money supply, it doesn’t mean that you are right and they are wrong. God did not write the definition of “inflation” in the sky.
Okay… how about a better definition of general “inflation”?
persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
http://dictionary.reference.com/browse/inflation
Or even more simply put and as one of my old Econ profs used to say:
Inflation=Too many dollars chasing too few goods.
> Inflation is not rise in price, it’s an increase in the money supply, which is now about to contract.
If you attempt to give a definition of inflation, it would be good to mention that this is not a generally accepted definition but the preferred definition in some economic schools. To avoid confusion, I suggest to speak of monetary inflation versus price inflation, with the latter one a sustained increase in the general level of prices. No definition of THE inflation is more true per se than another one in the sense of a natural law, but only more true within the context of a school of economic thought.
Sorry Peter,
I already posted before I saw your post. See below.
Andy,
must respectfully disagree. That is Austrian economics. Few economists agree with that simple measure of “inflation”, although, I would agree that money supply plays a part. Japan saw price deflation, even while increasing money supply over the past 5 years.
The money supply was increased, but what really matters is money supply times the velocity of money.
And that velocity depends on people’s individual economic conditions and attitudes, aka “animal spirits”.
High money supply increase and high money velocity == inflationary overheating.
High money supply increase and lower money velocity == what we see now.
This is also a phenomenon of really rich people getting even richer and parking their money. Hence lower interest rates with declining real economic progress and wages. As more wealth goes to the oil states, this will get worse.
That is a pretty misinformed statement unless you think most economists are not quantity theorists of some vein. I think even Keynes could be counted as a quantity theorist, as wrong as his disciples are in almost every area. Certainly, both the Austrian and Chicago schools agree on this point (which is at least a large plurality and probably a majority of true economists). Recall Milton Friedman’s famous quote “Inflation is always and everywhere a monetary phenomenon”.
The concept of inflation you put forth conflates price increases derived from quality improvements, reductions in supply or increases in demand with a monetary phenomena. Hence, its wrongness. Inflation is a concept meant to measure the value of a currency over time, relative to actual goods and services. You would use it as a term measuring both the value of money and the value of goods and services, which saps the concept of any meaning whatsoever.
That is what the financial press has done. Inflation has no meaning other than to say, the price in dollars of some basket of goods has gone up. The obvious reply to that is: so what? That could mean an increase in the money supply. That could mean an increase in demand for dollar denominated goods, services, assets, etc. That could mean increases in quality for the goods measured.
The bottom line is that one can define a term to mean anything. So, technically, nobody can be wrong. Thus, the ignorant financial press has probably redefined inflation from a useful concept attempted to isolate one variable into a meaningless jumble of concepts that really means “nominal price increases in a given currency for whatever reason.”
But if people want to knon what a real economist means by “inflation” it has nothing (directly) to do with nominal prices going up at a given time and everything to do with the quantity of the “money” in circulation.
Some economists say that inflation is not an increase in money supply, per se, but rather an increase in Government liabilities (basically, money supply) as a percentage of GDP. This explains why inflation is usually persistent during economic slowdowns.
Lumber has fallen by almost 50% over the past few years. http://tinyurl.com/g484d. Land prices will crater pretty fast too. As far as labor, contractors will be begging for jobs in the next couple of years. Hold off if you need any remodeling
Inflation is tied directly to the money supply. The money supply is based on credit. A credit collapse will create a deflation, not inflation.
My plumber lowered his price, again, to get the job.
But the biggest problem on the horizon is the swelling backlog of unsold homes: an eight-year-high of 6.3 months for existing homes and 6.1 months for new homes.
David Rosenberg, chief North American economist at Merrill Lynch, said there are 4.3 million condo and single-family homes for sale in the United States, up 37% on the year.
“Every boom, mania and bubble follows the same path,” Mr. Rosenberg said.
“What has undone everyone of these back to the tulips in the 17th century is a massive accumulation of unsold inventory once you’re past the peak of the cycle, and that’s exactly where you are with the U.S. real estate industry.”
Thx, Prof. Piggington
“David Rosenberg, chief North American economist at Merrill Lynch, said there are 4.3 million condo and single-family homes for sale in the United States, up 37% on the year.”
Funny how ziprealty only shows between 900K and 1M nationally. Where are the other 3.3 million+ homes that Rosenberg counts?
Well, I don’t know what the figures are, but of course you have to add new home and condo sales to zip’s resales. And there are the FSBO’s, as well. And ziprealty only covers a few specific markets as I recall. Lots of the country isn’t in there at all.
Zip is only in certain markets.
Pity the poor people who live in Zip-less markets and have to depend on their local realtors to tell them what the state of the market is.
Before Zip started their price reduced and DOM thing, I was copying out Realty sites for neighborhoods and following the price reductions and DOM’s that way. Can you say royal pain in the neck and WAY too time consuming? But it was the ONLY way to discover what the truth was in Seattle.
Thank God for Zip Realty.
Manhattan (for one) does not have Zip. Which probably explains why our poor friends in Manhattan are thinking the market’s not budging much there.
Cheer up though Manhattanhites: A friend of mine is a realtor on the Upper East side. She said last week that the market is “flattening to soft”. Ever the optomist, she thinks only the newly gentrified areas will crash. (Interesting, cuz they bought their place on the upper east side
during the last NYC downturn!).
Her husband (who works analyzing Bank data) and “all of her friends” think Manhattan is in for a big crash.
We’ll see who’s right, the realtor on the one hand, or the Banker and everybody else on the other ! Any guesses on that one?!
Lumber prices are following the HB stocks down http://tinyurl.com/g484d. A contraction in the money (credit) supply is by definition deflationary, not inflationary. Land prices will be contracting as well. IMO we will see lower prices for most goods and services not higher.
I posted the same basic remark twice because the server was locking up. sorry about that
However energy is going up. When you drive, look at all the big trucks and SUV’s on the road. Do you really think they are necessary? How much longer till habits change?
“Wouldn’t you think that since construction/labor cost & materials cost are soaring, home price will not drop for too long?”
Nope. Remember this: Many people bought second and third homes. Specuvestors and older boomers trying to use real estate profits to finance their retirements by selling to greater fools. Combine that with the demographics. Fewer educated professionals in their 20s and 30s to buy the homes from boomers in their 50s and 60s in the future.
“As if investors in homebuilding stocks need more to worry about. Now add this concern: Companies writing down their land values because they aren’t worth what they paid for them. It’s not a matter of if that could happen, but how serious and widespread those write-downs turn out to be.”
“Not only would that reduce already weak earnings, but it could lead to further erosion in the ‘book value’ of many homebuilders. Analyst Rick Murray notes that during past housing-cycle slumps several builders took impairment charges totaling as much as 5 to 10 percent of their book value on an annual basis for several years.”
We have been discussing this subject (the effect of falling land valuations on HB stocks) for maybe a year now, and finally the mainstream analysts are beginning to connect the dots and publicize their concerns. So I am wondering when the effect shows up on the stock prices? Because so far, although builder stocks have tanked, they are still far above long-term trend…
Most of them are trading at close to book value right now. But as you stated, that will be a moving target. Wouldn’t surprise me to see them drop 50% from where they are now before all is said and done.
But Jim Krammer just last week recommended building stocks as being oversold, and there was a bump up for about a week. Could Jim Krammer be wrong. BULLYAH!
“This past week Merrill Lynch declared that housing is in a bear market and that a ‘buyer’s market’ for homes should last for ‘years.’
The above statement says it all!!!
The spin doctors are going to find it tough to counter this.
That’s on top of a similar statement from Goldman Sachs over the weekend. And I said then, I think we are just now watching the opening credits roll on this movie called “The Housing Bust”. Up until now, we’ve just been watching the previews.
Speaking of movies, anyone read about those two guys in Upstate New York who just put together a movie about 9/11 conspiracies on their laptop computer? I think it cost them like $6,000.00 to do.
Wonder if we could do that with the housing bust? Posters could contribute footage from all over the country, sound bites, etc. Interviews with fatuous developers, and freaked out FBs.
That would be friggin’ awesome.
Look for Michael Moore to do this. Could be a very populist theme although that would be quite specious.
Why should Michael Moore have all the fun? If those kids could do it on a laptop for $6,000.00, surely we here on Ben’s Blog could do “Housing Bust: The Movie”. That would be great.
Oh, bulletin just in from Florida: The Republican Party has just told Katherine Harris they won’t support her. One of the guys who is for her spot in the Republican Primary is a DEVELOPER by the name of Peter Monroe who managed the S&L Bailout back in the day. And people wonder why Florida is in such deep doo-doo. I’m getting out my waders. It’s going to get really ripe around here shortly.
Many months ago Ben tipped his hand a bit and said that he had been approached for a documentary deal.
How is that going? Nobody more qualified than Ben Jones to be the narrator.
I guess we’ll have to wait for Ben to tell us. He’s got some great regional correspondents here on this blog.
True. Don’t wait for Michael Moore…he’s frying other fish.Ben…do it…we’ll help if you want!!!
Hopefully someone has film crews out right now, taping FBs as they throw their cell phones at RE agents, sellers arguing with each other across their front yards because someone has slashed their price, ruining the neighborhood comps.
What other footage would be worth capturing?
New condo owners complaining that the place they paid half a mil for is so poorly built they can hear the guy upstairs taking a leak.
For Sale signs sprouting up like mushrooms.
Lots of footage of clueless RE agents driving GFs around in their leased Lexus/BMW/Mercedes and totally BSing them.
Shots of homes built so close they have postage stamp yards and the windows line up with the neighbor’s windows for zero privacy.
Any other ideas?
Orion, the possibilities are endless. Footage of the cookie crapper developments, half finished, with gang tags on the walls. Land being bush-hogged. Before and after shots of areas that were developed. Benches with condo lockboxes on them. Contractors stealing materials from competing construction sites. Loan officers sitting with their prey, getting them to sign documents. Foreclosure auctions. FBs when they move in, then when they move out ahead of the sheriff. Gloating flipper sharks after unloading a POS. Like that.
in south florida, i just came back from a seminar on buying condos. broward county has some new ponzi scheme to get poor people into homes, (maintain a slave force for retail jobs). you can only qualify if find a house under 230,000. the median is nearly 400,000. the developer wont push his prices down, but selling only the lowest condo at 150,000. the govt thinks all people are so stupid. now that insurance since wilma has kicked in, (100 - 200% increases) people are leaving. DROP PRICES NOW. they are going to continue this shell game, until everything is said and done.
JibJab gave props to the housing bubble in one of their political dealies last year. I bet someday they do a full-themed episode before this story is over.
Damn, you guys below are good! Beat me to it.
Buy Merrill Lynch stock!!
Could be a great movie; Scene 1)Guy in black cape with black hat, black mustache, black boots and whip. Throwing woman and children out in the snow as he take over by foreclosure.Scene 2) Elderly couple eating dog food to keep from starving since doctor took all their cash and social security money. Scene 3) Children hanging up on parents call for help. Scene 4) Daughter selling herself on street corner for mtg money (dope money) 5) Couple turning on the gas in kitchen to end it all. 6) Kivorkian filing suit against last couple for cheating him. Hilarious, don’t you think??? Would win at least one oscar.
As a nation we have built a house of cards and called it a palace. It’s constructed of asset bubbles and debt and manipulated numbers and financial games.
There’s an article in the NYTimes today about the growing number of middle aged men who simply no longer work. Typically they lost decent jobs a few years ago, jobs like steelworker or mechanical engineer, and they can’t find anything now except Walmart clerk or Starbucks Latte maker. Many of these guys have just been pulling money out of their houses for the last few years to make ends meet.
Can we survive as a nation if we don’t have jobs for 50 year old men, jobs that actually provide for a middle class life? When housing has totally flamed out what will be left? Will half the population work at retail? Who will buy when everybody is wiped out?
I think the really big lie will turn out to be the idea that we can ship most of our nation’s productivity overseas and somehow still have a large thriving middle class. It never made sense. But we did it anyway. Now the centers of actual production are mostly gone, the bubbles are played out, debt can’t be piled up much more and we are looking at a financial catastrophe.
“When housing has totally flamed out what will be left?”
http://www.jibjab.com
Click on “Big Box Mart” in the Classic JibJab box…
Pretty good. I also clicked on the 2-0-6 cartoon and it had a line about the housing market being set to implode.
that was the best laugh I’ve had in a few days
yes - I think you have it right - it started with NAFTA - and don’t discount that our sh!tty schools have been turning out swarms of morons who cannot compete on the other end. We have gutted our nation’s jobs. No more core backbone - never to return - at least for decades.
Retail, tourism and casinos are not real jobs and when ppl have no disposable income, look for layoffs there too.
I am more certain than ever that we are headed for a Big D
I graduated college in 1992. We were in a recession and even though I had an engineering degree, I had to take a shitty $17,500/yr job. At the same time Clinton was signing in NAFTA. “I thought to myself WTF is this a-hole doing? I can’t believe this?” NWO, Bildersburg J.O. That’s what he was doing. Ross PErot was our only hope at the time. That was great seeing an independent get at least 30%. Would have been great if he won. I’d love to see him come back.
We need to get these worthless Yalies out of office (apologies to Yale grads on this blog, if there are any).
Yes - he was the only one concerned about it. The thing is that what is happening now wasn’t even HARD TO PREDICT!!!
When you are #1 and have a great std of living, to compete with the world only means ONE THING. We are going DOWN, baby, DOWN. Why should we compete with lower standards of living? That was always a moronic stance. And no, I am not a protectionist, but sometimes you have to say WTF and take a stand….
They talk about Kyoto harming our economy because of the costs. Well what about the costs of Nafta and the WTO? They certainly don’t care about us as long as big business enriches themselves and their executives at the expense of us little guys. Not to mention how well connected these big companies are and the campaign contributions they make. Dems and Reps are both to blame. We need a party of the middle class, a middle of the road party that truly looks out for America!
Amen Tom. I’ve been saying the same thing for years.
The average American is bent over so far he/she has no clue. The lube has been so plentiful we have no idea how sore we’re gonna be in the morning.
Amen. Instead of improving our schools, letting wages incentivize students to study math and science, we import workers from india or export jobs there. The middle class is being destroyed and anyone who has traveled and studied history knows what awaits. I believe the stock and housing bubbles are a subconscious/unconscious movement of the middle class to try any way they can. And for those lapdogs of bill gates, he pushed hard for tech outsourcing to protect his fiefdom. Fk em all I say.
Clinton did not become US president until 1993. NAFTA was negotiated by the GHWB administration and was an issue in the 1992 election (Ross Perot). I believe it actually came into effect under Clinton, though.
Anyway you are barking up the wrong tree. Go to Walmart and see where all the stuff is made. Call up a call center and try to detect a Mexican accent. US jobs are going to China and India far more than they are going to Mexico.
We’re not outsourcing jobs to Mexico, we’re “insourcing” low-wage workers. Same difference.
I wholeheartedly agree. When we outsourced our manufacturing, and now our technology, R and D, and eventually our stockbrokering, accounting, and Medicine, then we will have nothing to employ the 3rd largest population in the world except for invading 3rd world countries with oil.
When we started outsourcing our manufacturing, it was like taking the credit card out, and mortgaging our future productivity. Quite Scary!
Yes that is the big lie. And it will be a big campaign issue in ‘08, count on it. We can’t sustain this economy selling overpriced junk to each other.
oprah episode today about failing schools, dummies and bill gates on losing our #1 status
Opra is a total idiot with 100 million brain dead women eating up her idiotic socialistic bs. ‘No welfare, personal responsibility, if you work you eat’. A motto for future American greatness.
MBA-Would love to have heard what Bill Gates had to say. Can you list a few details?
The Grim Reeper does indeed stand on the door step.
OOOh! So close to home. One of my brother-in-laws is currently a latte-flinger at a Starbucks: 44, 4 kids, big over-mortgaged house, only job he could find. Hates the job, hates the bills.
That really sucks, the middle is shrinking and the CEO’s doing the outsourcing are getting richer. Heck, anyone can cut people and outsouce and make better profit margins. You don’t need over a big fat CEO to do that. He isn’t that smart.
Too bad he didn’t rent instead of buying.
How did that happen? I think Starbucks maybe a good short sometime in the future, recession will not be good for that company.
And who did this Starbucks worker vote for President in 2004? How does Alfred E Neuman get a free pass on this. It happened of his watch. But never a word on this Blog about the deficit spending from washington. Unbelievable.
Great post, Binko. I’ve always been very skeptical of this “Oh, we’ll become a 100% high-value-added-work sophisticated services economy” argument.
In any society, there is only a small segment of the population that can reasonably be expected to perform such work. The vast majority have modest abilities, and must settle for less challenging work - typically farming, factory work, routine clerical etc. If they can find it, and it can pay enough for a decent living.
The great hollowing-out of the American middle class is happening all around us. It is in plain sight here in my workplace, and in my neighborhood.
The Goldman Sachs economist pointed this out last year. The wealth distribution in the United States rivals Saudi Arabia’s for inequality. As a result, American corporations who have been impoverishing their workers to enrich their CEOs have destroyed their own customer base. They have been dependent entirely on credit to keep afloat. Now, the air is escaping.
Yeah, they all have the illusion that they will be able to make profits in the supply of all those increasingly wealthy Chinese consumers.
How do you say “Fat Chance” in Mandarin?
The Chinese will always ensure that their own companies and people will make the wealth. They aren’t as stupid as Americans. If the only “things” that Americans have are easily clonable “intellectual property” (as opposed to actual physical capital or property), then that means nothing once the Chinese impose mandatory licensing. Already they are big enough to start to impose their own telecommunication protocols which favor their own industries.
They are capitalist-Leninist, or maybe really mercantalist-Leninist. Maybe Adam Smith et cetera are wrong and mercantalism will kill capitalism after all.
“There’s an article in the NYTimes today about the growing number of middle aged men who simply no longer work. Typically they lost decent jobs a few years ago, jobs like steelworker or mechanical engineer, and they can’t find anything now except Walmart clerk or Starbucks Latte maker. Many of these guys have just been pulling money out of their houses for the last few years to make ends meet.”
Looks like Harry Dent’s prediction of an economic crisis is coming true earlier than he predicted. Dent predicts a deflationary collapse, caused by the aging of the boomer population and the birth dearth. On the other hand you have the upcoming peak oil collapse of the middle east that will put upward price pressure on all goods. I won’t stop buying gold bullion and T-bills. I won’t stop buying stocks (I use trailing stop %’s and stick to value stocks). I do think you are right on the money about many of the good jobs disappearing. We will probably become a low tech country in a generation. Our public education could not keep up with the rest of the world and has been losing rank every year. There are probably now more children in the U.S. born of third world immigrants with perhaps at most a high school eduction than children born from college educated parents. I predict we will see wages start to drop pretty soon. When you see wage increases of 1% or less, you will see those $750,000 houses drop in value to $225,000.
Could be worse I guess..Imagine if you had your savings in sct…
Yow…$25-
They had to anticipate this, though. They aren’t stupid, just knowingly misleading people all along.
My prediction? Ignore reality, ignore reality….denial, denial. Even in the face of the obvious truth…
..sorry it cut me off..
Could be worse I guess..Imagine if you had your savings in sct…
Yow…$25- under $4 in 3 months. Dropped almost $12 today
http://finance.yahoo.com/q/bc?s=SCT&t=6m&l=on&z=m&q=l&c=
Wow — apparently not every stock on the planet stays on a permanently high plateau indefinitely, once it has been attained!
Derivatives blow up?
… looking for a buyer has the Street wondering how its complicated financial structure, which includes a slew of subsidiary units based in the U.S. and in offshore tax havens such as Bermuda and the Cayman Islands, may have contributed to its current troubles.
Unwinding that may be the biggest obstacle to a selloff, Sbaschnig says
http://tinyurl.com/fyzcv
As if investors in homebuilding stocks need more to worry about. Now add this concern: Companies writing down their land values because they aren’t worth what they paid for them. It’s not a matter of if that could happen, but how serious and widespread those write-downs turn out to be.”
“Not only would that reduce already weak earnings, but it could lead to further erosion in the ‘book value’ of many homebuilders.”
Well no news has affected the homebuilders in about nine days. Earnings misses, lowered expectations, higher mortgage rates, less spending on new home construction? Nah, they trade with a better than 90% correlation to Nasdaq at this point.
Or, improbably, to gold stocks. Check out HOV and AEM today. Except for the first twenty minutes, it’s the same graph all day long.
IMO, the HB stocks aren’t going to move on their own unless and until they start giving out warnings for the next quarter. And even then it only appears to affect the builder that gives the warning. Improbable as it would seem, the stocks are acting like all the bad news is already priced in.
FASB 141 one time adjustments. I love GAAP because it is so conservative. No way getting past it unless they lie.
You are from Bakersfield and quoting FAS’s? WOW.
Hey, I became a CPA don’t hold it against me.
That is 2 CPA’s from Bakersfield on this blog. Do you know crispy & cole?
It is possible that I do. I did roam Bakersfield quite awhile. Bakersfield is not so bad. I had a lot of fun there when I was young.
SBG-
That’s two people you have to buy and beer and share your Bakersfield stories!!
FYI: Almost all of them have warned that earnings this Q and this year will not be as good as consensus estimates.
Damn, what a dumb-ass.
“The sweet spot of the market is probably $250,000 to $700,000,’ Domb said. ‘That’s what the majority of the population can afford. Many condos are priced higher. That’s part of the problem.’”
No moron, that’s what they ‘could’ afford, with whacky loans. Now those loans have gone bye-bye. Now they can afford 100k - 250k.
“Recent data show slowing economic growth, while inflation has ’tilted’ upward, Poole said. Containing inflation is the Fed’s ‘primary’ goal, he added.”
If that’s the case, why did they drop rates so low for so long. Ok, yeah, now they’re going to contain the inflation they created. No, they’re job is to create inflation and allow the share holders of the Federal Reserve (ie. the ultra rich Rothchild’s and others in the City of London in on the scheme) as well as the US gumment to take advantage of that. That’s their true charter. To financial make the US a British colony that reports to the crown (not to be confused with QE2).
No longer, the Feds job is to preserve the dollar -the fed needs to borrow 2.7 billion every single day to stay even. If foreign investors lose faith in the dollar because of inflation who will finance our debt? The oil producing countries do not like us that much anymore - tho I don’t understand why -, China has sucked all our dollars and has been diversifying into hard assets (gold, oil fields in africa, grain land in Brazil), Many euro countries (Sweden, Norway, Switzerland have no longer any dollar reserves) , Russia has no dollar reserves - in fact many euro nations are buying ruples - The countries still nominally supporting the US dollar - Japan, UK, Korea, Mexico and Canada have not been buying as many bonds and bills as they did in prior years. If the fed wishes to create a nightmare all they have to do is burn the dollar.
Speaking of builder stocks, I’d like to ask if anyone would like to opine as to which major builder has the greatest amount of dirty laundry that it’s trying to hide. It seems we may be very close to time to make some serious money shorting. Fleck said he’s waiting for the Fed pause to capitalize on the bouce. Opinion?
Builders with heavy exposure to the big bubble markets - SPF, WCI, BHS, TOA. Just my opinion.
That’s a little obvious, wouldn’t you think? That was a great idea a year ago. Do it today and maybe you wake up tomorrow with a William Lyons enema. Be sure to hedge.
I could have said the same think last month and you would have probably had the same reply, but guess what, they went down heavy. I’ll add a little to my answer though….short the ones that have the youngest land exposure, because guess what is coming next….land impairments. Not option writeoffs, that is already starting to happen, but actual land impairments hitting book values.
PHM booked a 22 million land impairment charge for Q2. Land was in Kansis City AND MN.
Right. Try to get as close to a double top on the S&P as you can. 1290s to 1300s. I think this rally could go farther than people think, even into early September, then Katie bar the door.
Fleck likes Gold and Silver. Hes waiting for these stocks to bounce, no?
Wall Street again master’s the art of stating the obvious. Now that the transports are down 20% we should expect lots of downgrades.
From the free press of our neighbors to the north:
———————————————————————————
U.S. home prices in peril
‘Rapid’ deterioration: Potential financial instability would spill into Canada
STORM BREWING FOR U.S. HOUSING: Home prices are flirting with the first-ever national decline, threatening economic growth on both sides of the border.
Jacqueline Thorpe, Financial Post
Published: Friday, July 28, 2006
The United States could be heading for its first outright decline in national house prices on record, according to several analysts watching the rapid deterioration in housing statistics south of the border.
Further weakness in the housing sector could stunt construction activity and slam consumer spending, leading to slower growth in both the United States and Canada, analysts said.
“The slowdown in house price inflation has been extraordinarily rapid,” Gabrielle Stein, chief international economist at Lombard Street Research said in a report this week.
“Unlikely though it seems, the latest data … mean that falling house prices can no longer be ruled out. And if they do fall, then any thought of an orderly slowdown in the housing market must go out of the window. To be joined by hopes of consumer spending holding up in coming quarters.”
Jan Hatzius, chief U.S. economist at Goldman Sachs, said in a report prices could decline for the first time on record in 2007 on a nominal basis — that is, unadjusted for inflation.
Adjusted for inflation, prices have declined in real terms in several periods, including a 9% drop from 1979 to 1984.
http://www.canada.com/nationalpost/financialpost/story.html?id=9df77ce7-5bad-468c-836e-d177681c21f3&k=12968
I occasionally watch Canadian news and often the BBC world news and have found that they will often give better, more direct news about the US than our own media. They don’t have to spin things for their corporate overseers, without the financial or political stake in the stories they can be more direct.
I’ll still take blogs over the CBC and BBC. Their news is still somewhat late relative to events and lacking detail, specifically around real estate.
Old City 205 sounds like a tasty malt liquor.
Good one.
I realize that it is only a matter of time before the economy goes into the “D” mode or close to it for a very long time. However, my wife and I are looking to buy in Spartanburg, South Carolina. Seems that the housing is still affordable, i.e. 150K-215K will get you 3-4 bedrooms with some land. We have already owned and are currently renting in Clownifornia. Anyway, I realize that even with the decreas in salary we will still be debt free, except for the mortgage, about 150K and my wife will still be able to stay home and we will stay have about 500-600 per month disposable/savings after mortgage, groceries, util, etc. We visited there about 2 weeks ago and are ready to go. A job had opened up that I am applying for. What do you guys all think. If I get the job, should we rent an apartment and wait it out, or will prices get lower there? I don’t think they can get much lower there. As I said, 150K-215K will get you something very nice.
I recently saw an analysis of housing prices in different areas that showed LA 50% overprices, Phoenix 25% overpriced, etc. As I recall, South Carolina was considered to be priced about right. You should be able to track the report down with a google search. If the numbers truly pencil out on a 30-year fixed and you think you are staying for a while, it may not be a bad move. I would prepare myself to see the market overcorrect without feeling regrets. I personally think the market nationwide will suffer even if the problem is primarily due to craziness on the coasts.
I think you are referring to the Consumer Reports chart.
It is a bit dated but still pretty valuable info, good luck finding it.
OCDan,
probably should rent for a while and get to know the area well. Plus, there will probably be a recession in a year and the prices will be cheaper.
As a starting point, compare your best guess of how fall prices might fall where you are buying in the event of a housing correction to what it would cost you to move twice (once into a rental, then later into a home you purchase), including whatever you are willing to pay to avoid the agony of a second move…
Of course, if it’s your heartfelt plan to make the house you buy your home, and stay for 10 years or so, then by all means get on with it. Making money is one thing - putting off making a life is no thing at all.
Ah, but how solid are you on the religion side? Be aware that is fundie USA country.
They have a thing close by (in Greenville) called Bob Jones University (University? nothing could be further from the truth) that is a world leader in fundie-cult- religious nuttery.
If you can be a good ol’ southern type boy you’ll be safe. O/W, watch out. I grew up in that part of the country (actually, Alabama), left for 23 years in the Army, retired back to Alabama. And 20 years later, I still wonder sometimes.
The big ‘fundie’ as you put it in SoCal, or SM is Scientology. Tom Cruise, Trevolta, many more Hollywoodites are members.
You’ve obviously never been to the OC. Orange County, CA can stand up to and hold its own against any fundamentalist county in the USA. Theirs the Crystal Cathedral, Saddleback (Mega) Church, etc. Oh and lots of people in the OC are trying to move out because Latinos are moving into Santa Ana, Anaheim, etc. and they’ve just gone and ruined everything
If it were me, I’d try to find out what the size/type house you want would have cost in the year 2000 and not pay more than that. I’m in the reversion-to-the-mean camp and believe prices could hit bottom at around 1997 levels. Who knows — Spartanburg could already be there, in which case I’d rent temporarily, shop hard, low-ball a lot and buy when I had the warm fuzzies about the purchase.
Suggest renting a house, not an apartment (esp w/kids). I’ll bet you could still rent for far less than owning. If rents and PITI payments are in-line, you could purchase.
I would caution that things are different when you are actually living there than when visiting. Renting gives you a chance to really get to know the area & new job prospects.
Strongly recommend renting. Good luck!
One minor difficulty with Spartanberg would IMHO be the BMW plant. The market for high end cars has been inflated by the huge amount of MEW (mortgage equity withdrawal) going on. If demand flags and they start loosing shifts I suspect that could affect the local housing market.
I should add that we will be able to put anywhere from 20-35% down and have excellent credit. We are not looking for a 500K home, just something we can live in for the next 10+ years or even live until retirement.
Now that some of the RE “investors” are just beginning to surface in the news (because even they have now discovered they’re F’d), and we see that they “own” 5-10 properties, kind of makes you wonder about that 70% homeownership rate which was so proudly touted. Where does this figure come from? Loan documents that say “it’s my primary residence” vs. how many folks we got in dis here Country? I guarantee all 10 of those properties were the investors “new” primary residence…… ya kinda get a little better rate. I’ll bet we see this percentage drop back to where it belongs, right along with prices, and not solely due to the single house FB.
Loans obtained with fraudulent statements allow the bank to go for damages as well as prevent the borrower from “non-recourse” status. Truly F’d.
The summers in SC are hellish- the heat lasts from May to October, and the humidity is horrendus- also southern culture is something not suited for everyone, especially those from the Northeast and west coast. In eastern Connecticut you can buy a new home 2700 square feet, 3 bedrooms 2 baths, garage, for 299K on 1/2 acre. Think long and hard before the deep south- and look at the alternatives- for almost the same amount of money-you might be surprised.
Peter, I’ve been giving Connecticut some serious thought. I have some family up there. I think you might be somewhat correct about southern culture not being suited for everyone. Those of us who migrated to Florida from up North don’t realize that essentially Florida is just a Middle Atlantic state with warm weather. I think the priced out Middle Atlantic/New England Florida migrants who settle in other Southern states are going to be in for a big shock culturally, over a period of time. Plus with the warm up in climate, Connecticut winters aren’t as bad as they used to be and don’t last as long. I’ve heard you only need the constant heat for about 3-4 months, as opposed to needing the constant AC for about 6 months.
I am in CT. Will be 100 tomorrow and our winters have been abnormally warm.
There’s a slightly higher %age of educated ppl here - good healthcare, good schools (well, what is ‘good’ anymore?), pretty decent std of living….
New England in general is not too bad. There isn’t a ton of work outside certain corridors, however…. But in those corridors, the cash is pretty good.
The Christian Science Monitor has a good take on the housing market status quo (sorry if previously posted):
(A photo of a bunch of For Sale signs lined up along a San Diego street is shown at the top of the article, with the following caption:
ALL IN A ROW: Year-over-year prices for San Diego County homes fell in June for the first time since the boom began. It’s the first California market to decline. DENIS POROY/AP)
USA>Economy
from the July 26, 2006 edition
Housing market slowdown rippling across the economy
All four US regions have now seen existing-house sales drop since a year ago.
By Mark Trumbull | Staff writer of The Christian Science Monitor
BOSTON – A nationwide housing boom gave the current economic expansion its biggest boost. Now, a housing dip is raising the prospect of a slower economy ahead.
After another monthly dip in June, sales of previously owned homes have fallen in all four major regions of the United States from a year ago, with nationwide sales volume down 9 percent, according to a report released Tuesday by the National Association of Realtors.
Home prices have flattened, up just 1 percent from a year ago, when housing activity peaked.
And in some metro areas, such as here in Boston, home prices have fallen on average over the past year.
These trends are rippling into the broader economy. Home builders, among the most impressive contributors to gross domestic product (GDP) in recent years, are scaling back their plans. And millions of consumers face indirect effects: With interest rates rising even as home prices stall, fewer people can borrow on home equity as a source of free cash. Many others - those with adjustable-rate loans - are now being hit by a jump in their mortgage payments.
…
“We don’t think it’s going to be a disaster. It’s just going to be bad,” says David Wyss, chief economist at Standard & Poor’s in New York. Although a housing bust has often been a precursor of recession in the past, “it hasn’t been recently.”
THIS TIME IT’S DIFFERENT!
http://www.csmonitor.com/2006/0726/p01s01-usec.html
I was in Carolina Beach NC last week and the number of homes (duplexes) (excludes condos) was unbelievable. I drove 1 mile and counted 30 homes/duplexes/empty lots for sale. Carolina Beach Dr. North either on the water or across the street from the water.
Palmetto
The winters in central eastern Connecticut are much milder then 30 years ago.
Last winter we where a zone 7 here- with the lowest temps 3, 5, and 10 degrees. It was 75 in early November- and we had about 6 weeks of winter from early December to Christmas- then 2 weeks in Februrary.
Gardners here are growing many strange new things-like cold hardy palms, yucca and Giant sequoia!
Many on this blog think all of New England is expensive- Actually Only Boston metro is, Cape Cod, Fairfield county CT ‘Greenwich’ and thirdly Providence RI.
In the town of Coventry (eastern CT) A new colonial, 2750 square feet, 3 bedrooms 2.5 baths, fireplace hardwood floors 1st level, garage on 1/2 acre 315K
I have seen new raised ranches here in nice rural towns for under 280K on 1/4 acre 3bedrooms family room etc
Not to knock the deep south- but its just not for me-
Housing thr
I agree Peter. CT hit a zone 7? I thought I was a 5……
I have family in Greenwich, so I know what you mean. I lived there myself, briefly. (Hated it) Crazy place, article in Vanity Fair about the hedge fund crowd was a real show stopper. I have another family member in Bethel, they recommend it highly. I also like some of the shore areas south of Providence, RI. Thinking of making an exploratory visit. The reasons to stay in Florida are evaporating quickly. And those prices are pretty good.
Here in LA my friends and colleagues have essentially ONE topic of conversation these days: their escape fantasies. Some of them are very well thought out, down the price per acre and the cost of raising llamas. Some camps favor Portland, some are more inclined to Austin. Some are pretty basic: Hawaii or Costa Rica, regardless of whether or not the fantasist has actually been to either place. But what unifies all of these fantasies is the underlying stress. I’ve never seen my friends and colleagues manifest such obvious stress before. Bags under their eyes, weight gain, graying hair. I’ve had more than one friend fall off the wagon recently, and right now I’m seeing a blizzard of divorces. Granted, 90% of this might be attributable to the fact that we’re all cresting 40, have kids, etc. But the constant refrain is how much everyone hates LA, and how their F*king mortgages are killing them. Personally, this is getting ugly for a lot of people I know. I truly did not think I would be going into my 40s, successful in my career, with a lovely family, and surrounded by people I love and respect, and that I would see such angst, anger, and bitterness on a daily basis. It is sad.
Longtime LA residents will not like Portland, OR.
Portlanders won’t like them.
I know I lived it. Not my website but sums it up pretty nicely.
http://www.knick-knack.com/rants/places/portland-oregon-sucks.html
Sunsetbeachguy,
I lived in Portland for three years and worked downtown (NW). I grew up in a small town about 50 miles south of Portland, so I was at least used to the weather. Downtown can be pretentious, but the blue-collar areas in SE Portland are OK. People in the rest of the state are much more friendly and easy going. The beer in Portland is unparallelled.
The biggest problem with Oregon is all the tweakers. If you decied to live in a small community virtually anywhere in the state, you are going to have to deal with the tweaker culture (small percentage of the population, but tweakers are some of the worst people on the planet).
tweakers, try kingman az. meth labs are the biggest employer in north kingman, ie butler, birdland.
I’ve spent quite a bit of time in Kingman (parachute testing on Red Lake) and can see what you mean. It’s either work at the wire factory, sell real estate to California investors, or run a meth lab.
Wow! Read every comment. Certainly won’t go there again. As I recall, in 1976, my girlfiend and and I had just bought donuts and coffee after checking out of our motel room at at 9AM.
We were viewing the amazing scenery in our new Honda Accord while enjoying the treats. Net result: $73 ticket for 73mph. No mercy!
User friendly = NO
TheCoast of Oregon = To Die For
Portland in Particular = Off Our List
The RE industry said people moves every 7 years. Don’t know
where they got these data, but most of our neighbors are still here, 10,20, 30 years.
Really? Im in LA right now actually and I completely love it. Its been TOO HOT these past 3 weeks, but other than that, gorgeous weather, some cool nightlife, love it all around. Then again I rent. To all those home owners who look down on renters, all I have to say is: have fun with that mortgage. Hahahahahaha *serves himself a pina colada and sits back to watch the show*
yes you’re right. escape plans might blow up with RE crash though?
No MBA— Coastal Connecticut is now a zone 7 up to about 15 miles inland- according to the USDA zones at the ARBOR site- New London is a 7, as is New Haven and Stamford- while Hartford is a 6- A zone 7 - lowest temp during the winter is zero, zone 6 minus 10. Zone creep in southern New England- global warming…. zone 5 would be parts of western Mass, into southern New Hampshire and Vermont.
Vioviv……your “friends and colleagues” are probably “closet flippers” who are now finding out the awful truth about real estate (it CAN go down!…..and fast!)
Palmetto- yes Greenwich is another world LOL
Some homes in eastern Connecticut
see link Willington is in eastern CT semi rural
http://realtor.com/Prop/1056346689
also Coventry eastern CT
http://realtor.com/Prop/1055394412
Not bad, Peter. Definitely worth taking a look at. I assume a buyer would have to finish the Willington house, though. But I must say, it seems you get more for your money up there than here in Florida, which never used to be the case.
No Palm
the Willington house will be completed by the builder
the price is for the completed home- you just move in.
check this out 3 acres! http://realtor.com/Prop/1063405647
Good luck-southern RI is nice as well.
Palmetto One last one-nice home
http://realtor.com/Prop/1064013240
Wow, Peter, those are all outstanding! Thanks so much for the tip. Coventry looks and sounds lovely, my kind of place.
In many ways New England is a good place to live, but for a young person starting out it’s a tough place to make it. New England is that it’s chock full of NIMBYists. It seems like nothing can be done without some group getting pissed off and dragging the process out to eternity.
New England is old and it’s only going to get older. School enrollments are falling. Every single New England state has (over the last few years) lost population in the 25-44 demographic.
I like New England (especially New Hampshire) but I feel as though the region has lost its economic vitality.
“In many ways New England is a good place to live, but for a young person starting out it’s a tough place to make it.”
Which is exactly why I moved to Florida many moons ago. However, this real estate bust, combined with the effects of global warming, just might end up infusing New England with some younger blood, even Midwesterners looking to escape the dustbowl conditions. I predict a re-migration to both New England and the Pacific Northwest when all this shakes out, mostly driven by climate.
As to the the NIMBYs, they have their good points. At least New England doesn’t look like Florida and other parts of the country as a result of the housing boom. Not that the developers didn’t try with all their might. But they were no match for the “dragging out” process that goes on. According to some of my family members, that’s how the battle was fought and won. Now, here in Florida, the local governments couldn’t bend over fast enough for developers, and you only have to take a little trip through the state to see what the results have been. If there’s one thing New Englanders understand, it is how to use government for the benefit of the people. That older population up there may be getting gray hair, but at least they are intelligent enough to know how to use government in the interests of their communities and families.
Palm
At another blog I talked about climatic refugees in the future- if the heartland of the country becomes a hot dry wasteland- and places like Arizona, parts of California become too hot and dry, and Flroida is sunbjected to sea rise, storms and heat- yes I agree there will be an exodous to the Northeast- especially New England, the Canadian Martimes, the Pacific NW- and coastal northern California. From what I see you are a pioneer in starting that trend. Considering Real Estate is cheaper here then in Florida says much. Good luck- at Garden web I have met people who left the gulf coast for eastern Connecticut.