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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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How have the politics of the current administration impacted not only real estate, but the quality of life for most Americans? Here’s one view and I tend to agree with it.
Class Struggle - American workers have a chance to be heard.
BY JIM WEBB
Wednesday, November 15, 2006 12:01 a.m. EST
Wall Street Journal, November 15, 2006
The most important–and unfortunately the least debated–issue in politics today is our society’s steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America’s top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes.
Incestuous corporate boards regularly approve compensation packages for chief executives and others that are out of logic’s range. As this newspaper has reported, the average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade. When I graduated from college in the 1960s, the average CEO made 20 times what the average worker made. Today, that CEO makes 400 times as much.
In the age of globalization and outsourcing, and with a vast underground labor pool from illegal immigration, the average American worker is seeing a different life and a troubling future. Trickle-down economics didn’t happen. Despite the vaunted all-time highs of the stock market, wages and salaries are at all-time lows as a percentage of the national wealth. At the same time, medical costs have risen 73% in the last six years alone. Half of that increase comes from wage-earners’ pockets rather than from insurance, and 47 million Americans have no medical insurance at all.
Manufacturing jobs are disappearing. Many earned pension programs have collapsed in the wake of corporate “reorganization.” And workers’ ability to negotiate their futures has been eviscerated by the twin threats of modern corporate America: If they complain too loudly, their jobs might either be outsourced overseas or given to illegal immigrants….
more
In a nutshell, isn’t it special to have a growing mountain of new housing inventory priced at aspiring CEO levels and a stock market hitting new highs on a daily basis against a backdrop of disappearing jobs?
Been bitching about that for months. For every end user of this type of housing, there are (my guess) 10-12 built as everyone tries to get a piece of that pie. And when you go in these places (the non-architect, custom built ones), you see the same cheapass fixtures, windows, etc. that you see in the tract houses. Only difference is, they charge the rich guy about 500% more and try to hide it under “exclusivity, cachet, gated community, etc.” It’s insulting.
yes it is not sustainable. And to parrot Tx chick - these places have the stock home dept fixtures, cheap wood (if any) no brick chimneys, etc. All you need to do to charge more is put in a 2 story foyer (stupid!) and a granite counter and then charge those insane prices.
All these places were put up using cheap materials, staples, plastic. IMHO, 10 years from now, these ‘gated communities’ will look shoddy as they start to fall apart and their owners will not be able to afford the $$$ they would need to put in to get them back up to where they were - which is not saying much anyway.
His article lays out a foundation, but doesn’t say the root cause. The root cause (including the housing bubble) is the same thing the framers of the Constitution argued about 230 some years ago, and that is who has the power to create money.
Debates from that era are plentiful. I hope people take the time to educate themselves on the topic. The answer isn’t in gov’t (central planning/socialism) redistributing wealth. It isn’t in capitalism supported by the gov’t (essentially the same as previous). The answer lies in giving the people, all of them, the power over money which strangely enough is still what the Constitution says (although most apparently don’t read it).
The full answer isn’t complicated, but it is more than a soundbite or blog entry. It is based on an understanding between economics in the term of private production and distribution of goods which lends itself to liberty and capitalism, versus centrally planned production and distribution which lends itself to lack of liberty and socialism. The question that needs to be asked is what do we, as the people, think we have, where are we going, and are people concerned enough to take an interest. If you take the time, you can’t help but see how the housing bubble is a direct result of who owns the power of the money supply.
I can assure you that in most of Europe it’s exactly the same.
In the Netherlands over the last 10 years or so the economy has been turned around with the US ‘free market’ as the glowing example. Average wages have barely kept up with inflation, and in the last years they have even fallen significantly behind the heavily manipulated CPI numbers. The lowest incomes are dropping the most, and the number of people below the povery level has exploded in the last years. At he same time, incomes for high-level burocrats (both in government and business) have been booming, with wages increasing 20-30% yoy, lots of other incentives like stock options and golden parachutes. Unlike in the US, top level earners in the Netherlands hardly pay any taxes.
The Netherlands is getting rich from the RE bubble, at least that is what they think: the average Dutch family gets 30-40% of their income from simply owning a home (instead of by working). Of course the benefits of this housing boom as spread very unevenly across the population as well. The current right wing government seems to think this can go on forever; elections next week will decide if this policy will continue for another four years.
According to the Dutch realtors home prices in Netherlands are still booming, but the more reliable Kadaster registry just posted the first (tiny) loss in many years for October ‘06. We need a few months to see if there is a real trend change.
I just read that a fund was started by the city of Amsterdam to give out interest free loans to help people buy real estate. This was done the legislators said: “To help with affordability and put some grease in the housing-market which has become a little stuck lately.”
WTF?
this started half a year ago already as an experiment in some areas (including my region). It is a nice example of a policy where all the big political parties agree: the current conservative-liberal government (they love everything that pushes homeprices further into the sky) and the ’socialist’ opposition (they love irresponsible subsidies for ‘disadvantaged’ voters, like ’starters’ on the housing market in this case) are in complete agreement. This policy is expected to become available in the whole country in 2007.
In my area the loans are not only interest-free (for some years), they are also risk-free because if the home declines in value the loan does not have to be paid back. So it isn’t even a real loan. The experience is that these 25-50.000 euro free loans immediately raise the minimum price for starter homes by the same amount, because there is a shortage of ‘affordable’ homes. So it does nothing except giving huge amounts of tax money to the current owners of these starter homes (often local well-connected politicians, and housing corporations that are strongly connected with the big ’socialist’ party).
P.S.: in the Netherlands even a working couple with academic level jobs has trouble finding an affordable home now (affordable being just above ‘POS’ level).
the last comment applies to starters on the housing market; for people who already have a home, or use the home of their parents as collateral, it’s much easier to find something. The difference between the haves (homeowners) and have-nots (renters) has been increasing at record speed here for about 15 years now.
yes, it is unfortunate that that is happening in your country too. It appears as though most “western” economies have the same run up. Something has to give.
Heeh nhz,
I’m a dual citizen and still have a dutch passport. Maybe you guys can send me a nice fat check here in the US, the housing-market is “a little stuck” here too? Be sure it’s in euros please.
The American middle class is dying not because of one administration or another, but because they are completely deluded about what independence is or really means. Most people are in total wage-slavery to the full extent that their incomes allow. In doing so, they mistake the main virtue of wealth (power) with lesser virtues (consumption, and status.)
Americans over consume, under save, and owe onerous sums of debt on their credit cards, mortgages and auto loans. They live in dread of losing their jobs. A missed paycheck or two would be a catastrophe to many people. This gives them a very weak hand when negotiating for pay increases or better benefits: they can’t afford to walk away, they can’t say “no” they have no power.
In pursuing their granite-countered fantasy lifestyles, Americans have pushed so close to the edge of financial ruin that they have become completely subservient to their corporate paymasters. Rather than saving their surplus wages where it will let them participate in the miracle of compound interest, they pay it all out as interest on cheap trinkets and the gaudy trappings of pretend luxury. It’s a beautiful system, really.
Outstanding summary. Too bad you’re reporting from LaJolla, ground zero for that type of lifestyle
It is indeed a beautiful system for those who can truly afford to live in La Jolla, Rancho Santa Fe or Greenwich, CT. Not so beautiful for the rest of us poor saps, though.
I rent.
la jolla will never be cheap to buy, but i wish you well in about 4-5 years should you feel inclined!!!!
To Chris in La Jolla, your post is only partially true.
I agree that most Americans are stupid gluttons, spending every cent they have immediately.
However, let there be NO DOUBT that globalism and free markets have made it very tough on the “little man”.
Case in point; Northwest Airlines. I know a family well who scrimped and saved. The father is a NWA mechanic. NWA went into bankruptcy, and offered the mechanics to take something like a 75% pay cut.
The mechanics walked. And stayed on strike, in unity. All of them were scrimping and saving, getting second jobs to pull through, etc…
then due to “reorganization” the airline was allowed to simply rehire new mechanics. all at cheaper wages.
And they’re going to hire more “international” flight attendants (at pay substantially lower). They are also going to simply fire many of the mechanics and rehire “international” mechanics.
Thus, the lesson was: work hard, train to be an airline mechanic, and then realize there is no way you can compete with international labor, until our dollar is revalued about 80% lower.
Argue as you might, there is no question that the rich in this world continue to get SUPREMELY richer, and the poor get supremely poorer. That said, thus far luckily most poor in America still have a better standard of living than the poor elsewhere… and they have a better standard of living in some ways than the poor of the 1940’s… but it still is stressful.
And FWIW, I’m one of “the rich”, (or at least very very high income earner) at least for now. So I’m not complaining for myself. Just observing what I see.
And what I see is that Americans CAN NOT compete with the 3rd world. We have too many labor laws, human rights, pollution laws. I have been to Shanghai and Guangdong. We CAN NOT compete. They have sweatshops and pour their pollution right into the river, or just dump it outside. If their employees get sick: fired. If their employees complain: fired. If their employees get injured/die on the job: so what. fired. There are 1Billion more Chinese who will gladly take their place.
Sure at some time in the distant Star Trek future workers will become scarce in China, and human rights atrocities will improve… too bad you and I will never see those days.
The problem with globalism free markets is that we have different kinds of free markets right now. We have US style with human rights and pollution controls etc (i.e. government intervention) and we have china with none of those things. Human rights costs money. Thus, we are at a competitive disadvantage to them due to this. The only way to compete, is for us to become more profitable. Thus, no more human rights, no more pollution control, no more human dignity.
Bring on slavery again! It was the best way to make cheap products, by slashing overhead.
Oh yeah, by the way…
while NWA was reorganizing and firing everybody and giving everybody else 50% pay cuts what do you think the executives got? Big fat pay raises.
Typical.
There has been some interesting research that showed that executives make MORE on average if their company does poorly, than if it does well.
The rationale: in down times, the company must pay MORE money to “keep” their executive talent.
Golden parachute! Yipeee!
I got into the wrong business. I simply need to be a CEO, drive my company to BK, and then walk with multimillion dollar parachute. But I’ll wait and do it in 5-10 years or so… by then the parachute will probably be a billion dollar parachute.
That exact process happed at were I work now about 3 years ago. We’re just now “restructuring” the books and running on the black again to the point where things looking good again.
All previous CEO’s parachuted out after thouroughly cooking the books and bumping their options.
Pricks…
THE DOCTOR IS IN THE HOUSE !!! Nice counter punch (Doc) Clouseau;….
Clouseau’s points are true but I don’t think that corporate America is the main reason why the middle class are in dire financial straits. I think most people are hurting because of what Chris pointed to, over consumption. I middle class, I used to be that way. NO MORE, I’m completely out of debt and have several years of savings put away. I own my future, my company’s CEO doesn’t.
The middle class is the main supporter of government and its taxation and wars. May they all lose everything in the housing bust.
“Center for Downward Mobility”
A youtube answer
http://tinyurl.com/y3vc4l
We can all retrain!
I agree completely.
But if Americans had more savings (like several years income in the bank) wouldn’t they be in a better position to influence policy decisions? By better position, I mean that in politics, money talks.
For example wouldn’t they be able to demand that the US push the WTO to adopt a common standard of working conditions and environmental protections?
Wouldn’t this just be enlightened self interest? If you can’t compete with the Chinese on wages, force the Chinese to compete with us on working conditions: force up their costs of manufacturing.
Who really benefits from all this globalization? Sure, Americans get a bunch of crappy Chinese goods on the cheap, and get to talk to marginally fluent Indians in Bangalore call centers, but take that away and who wins? Corporate executives, and the lenders that finance consumption. I was going to say stockholders but stocks are so wildly overblown that I think stockholders are getting rooked as well.
sure, the big Wall Street players, the banks and some corporate crooks are robbing the rest of the world like never before. For them this is even better than plain old colonialism because this time most of their victims will not see what is happening until it is too late to revolt (probably most victims will happily help the crooks because they believe the spin that they will profit too from the new finance economy).
It’s not Bangalore anymore, it’s “Bengaluru.” Perhaps the name was changed to reflect the marginal English fluency prevailing in that city.
huh?
India, Singapore, and China are pouring huge amounts of capital into the education of scientists, engineers, mathmaticians. A huge percentage of thier universities are graduating these hard science degrees (or they send them over here to be educated).
In this country, only a tiny percentage of Americans are graduating with these technical degrees. We are graduating soft degrees; social work, sports medicine, ect. It is ridiculous to assume that we are going to maintain our competitive edge (and our comfortable lifestyles) when this country is math and science phobic. Those countries are going to be developing the technologies, the patents, and reaping the financial benefits. It has already begun.
And us, we are afraid to make the little dears work to hard in school b/c thier self-esteem might suffer. Don’t push math, its too hard and makes little Suzy feels bad to do hard work. Or we argue about teaching evolution in schools while our students are falling farther and farther behind compared to thier peers in other countries. Enough with self-esteem building in school!
My two cents, Overconsumption and intellectual laziness are contributing to middle class decline.
‘In this country, only a tiny percentage of Americans are graduating with these technical degrees. ‘
When you look at the quality of the Asian engineering graduates, only about 10% of them really have comparable skillsets to western engineering graduates. This brings the total number of comparable engineer degrees in China and the US to about the same.
Our lifestyles will go when the dollar tanks and we cannot afford to import oil and natural gas. At some point, the Saudis, Latin America and Russia et al refuse to accept dollars and demand gold or Euros (with a Euro costing $20 or $40 or whatever). Then the US will truly look like the early 19th century perhaps including a modified (likely economic, not race based) version of slavery.
“When you look at the quality of the Asian engineering graduates, only about 10% of them really have comparable skillsets to western engineering graduates. This brings the total number of comparable engineer degrees in China and the US to about the same.”
20 years ago, that comparison couldn’t be made. US scientists and engineers were the top in the world.
At present, those countries are pouring huge amounts of money into technical training. We know offer majors in video gaming (No Joke!) Think about the rapidly rising wealth in China. How long before that 10% turns into 50 or 100%?
Thier technical knowledge base is increasing on a log curve. Ours is declining. But at least our kids feel good about themselves!
st. louis;….So what do I say to my children,,,,get a engineering degree and move to India for a job ????
Don’t mock a major in video games necessarily. Yes, consumption based but just like the space program, it drives tech and programming capabilities. Much video game tech has contributed to other fields. Now a degree in playing games or something…. that’s different… and ultimately, we only need a finite number. I do worry about the decline in engineering degrees out there (I’m suffering through a course full of MGFs, PDFs, CDFs, etc right now and can feel compassion for those who pursue these hard science degrees).
Asian scientist can not compete with American or European ones…maybe in 20 years if they change their way of teaching math and sciences. My husband has a Phd in Physics and quite a lot of contact with Indian and Chinesse scientists. Those guys are taught how to follow a model and that’s it! no creativity , no critical thinking (specially in China!) and no thinking outside the box. They couldn’t innovate a potato even if they’d want. They are trained to copy not to innovate or challenge any existing technology…Maybe in 20 years…maybe
Except for the ones we train here and send back. As conditions improve, alot of third world PhDs are deciding to head back home. They are bringing American style training home with them and teaching thier students. 10 years ago, they would have applied for funding in the US and set up labs here.
And concerning innovations, in 2002, for the first time, chinese universities applied for as many patents as US universities. They are pushing innovation, we are sitting on our laurels.
We’re cutting funding for new scientists (thus many head home). We are not training are young in science. (I’m seeing more and more PhD students from Asia-many talk of going back). Are we going to see the effects immediately? Of course not. But long term, Asia will be the leader in technological innovation.
I’m a PhD student in Computer Science at a top school in the field here in the US. And regret this decision.
I wish I went into a field like Medicine, since primary care physicians will never be outsourced in our lifetimes. When
Well Now…There ya go St. Louis;…..Badger did it the way you suggest and he knows he’s screwed so your analysis is flawed…I think Doc’s was right on the money….
You got that right badger boy. Top 10 paying jobs according to Forbes are in medicine, dentistry and being a Chief Executive. Engineering and science jobs are the ultimate middle-class jobs. Most (not all) engineers I have met came from blue-collar backgrounds - myself included. Anecdotal evidence suggests oversupply.
http://www.engtrends.com/IEE/0502C.php
Note that was from about 2000. So my guess is right about now, the programs and students are starting to fade.
You should read some reports put out by the National Academy of Engineering and the NSF sometime. The NAE reports about the lack of interest in engineering are really amusing. Reports put out by these groups talk about shortages by looking at US production of graduates relative to China, Japan, etc. In other words, they only look at the supply side as a numbers game. Other countries produce more, so the US should as well. These reports never really assess the demand side. Who keeps telling everyone there’s a shortage? The companies that have the most to gain by having an excess supply.
You’re probably too young to remember, but do some research on the job downturns at the end of Viet Nam and the Apollo program, as well as the end of the Cold War. Let those guys go faster than a greasy turd.
Good news for you in CS though- that’s where most of the S&T job growth will come from. The bad news for IT engineers, the next engineering jobs likely to be off-shored.
http://www.itbusinessedge.com/item/?ci=19172
Some others are going as well. Read the Engineering Dean’s comments about “demand”.
http://www.southcoasttoday.com/daily/05-04/05-04-04/l02ca081.htm
Slavery wasn’t cheap…not at least as practiced in North America. Cradle to grave care, living and food (albeit of generally low quality). 19th century style factories and work conditions for wage earners are cheaper than slavery.
Out and out slavery is always cheaper. False freedom is, however, more productive.
19th century style factories and work conditions for wage earners are cheaper than slavery only because the workers ignorantly believe they are free - they therefore work harder than a slave who knows he’s a slave would.
Plus, the masters save all that time which normally would be spent whipping.
I know this section is for off-topic comments, but damn!
It is reminiscent of this from 1932:
Alphas are so conditioned that they do not have to be infantile in their emotional behaviour. But that is all the more reason for their making a special effort to conform. lt is their duty to be infantile, even against their inclination. And so, Mr. Marx, I give you fair warning.” The Director’s voice vibrated with an indignation that had now become wholly righteous and impersonal–was the expression of the disapproval of Society itself. “If ever I hear again of any lapse from a proper standard of infantile decorum, I shall ask for your transference to a Sub-Centre–preferably to Iceland. Good morning.”
http://mural.uv.es/madelro/bravenewworld.html
When a whole economic system is based on people being infantile, that is what you can get.
I couldn’t agree more, Chris. What saved me from the same fate as my debtor friends and relatives was my father’s miserly ways.
All through my childhood I heard: “Don’t get into debt. You never know what tomorrow will bring.” I grew up equating freedom with absence of debt. After all, I reasoned, if you have no debts, you can quit your job, find a low-pay job you love and just live frugally.
Before there was an Internet, I used to tell people I didn’t know how to invest. “The money just keeps stacking up in our bank account, and I don’t know what book to read or who to trust.” One friend replied, “Ugh…Can’t help ya there. I don’t seem to have a problem with money ’stacking up’.”
Now we have more money than I ever dreamed possible, and we easily make ends meet on one income. My father wasn’t much of a parent, but a debt-free life is one thing he did give me.
he’s joined berniie sanders now there are 3 (I)s in the senate>>>
pols will always offer to change the cost of things and fools will forever believe them”
don’t be fooled
The electorate expects them to shift the cost…. and they will comply as they should.
America suffers from the mass delusion that we can remain the world’s wealthiest nation without investing much effort. While the rest of the world now produces most of everything, we fight over pieces of a shrinking pie. A “good” job in the US is more likely to involve redistribution of the pie than anything productive. It is always tempting to think we could solve some problems by soaking The Rich, and in our minds, The Rich are always the people just above our own level. I remember when John Kerry proposed a surtax on persons earning over $200K/year. Since very few persons earn $200K/year, one would’ve thought this would be a wildly popular proposal. However, we have all learned from past experience that the likely outcome would be unexpected. For instance, the $200K/year might be defined as applying to a family of four, and if you happen to be single, an income above $50K might be subject to the surtax. (Not the only possible unexpected and undesirable scenario.) It does seem weird that the builders go on producing more and more houses priced to accommodate ONLY those persons earning more than $200K/year. Maybe we can attribute the timing of the housing bust to Kerry’s election loss in the sense that a further tax on the $200K+ set would’ve forced them to bury their money in extra houses ! sorry to ramble … it does get us back to our general (I think) agreement that tax policy fueled the run-up in house prices, to everyone’s detriment.
All very great posts regarding the condition (stupidity) of the masses. However, crawling out of the pit of debt/stupidity and sewer of consumeristic idiocy requires leadership. Leadership we haven’t had in decades. In fact, the opposite is true as we are encouraged to spend frivously on junk by a system designed to bankrupt the masses. Just turn on the stupid tube and you’ll immediately hear “no money down” or “the consumer needs to keep spending to keep this economy moving”. (gag)…. Anyone else fed up with being described as “the consumer”? I know I am. Everyone knows there is a serious problem yet our incompetent leaders stay isolated from us in their own bubble of delusion. We are a nation first, the economy and consumerism is further down the list yet everyone seems to have it reversed.
I listen in to both sides of talk radio, far left and far right and they have just one thing in common…
The majority of commercials on both tend to be aimed at people with debt, i.e.: “we can combine all of your payments into an easy to manage once a month payment and keep creditors away” or some other variation on the theme.
We are NOT a nation first; we are individuals first, not part of any collective. You must pine for the USSR.
The builders build these big houses because people have been buying them like they buy SUVs. They’ll follow the auto industry into the toilet when people stop buying these houses and treat homes as a consumable, not an investment. Some new style builders will pick up the pieces and build affordable and smaller housing that will be in demand after the market tanks completely.
“Infinitely richer” is loaded hyperbole, indicating an ax to grind, especially if we believe that there are still only maybe 300 billionaires in the country.
We’ve danced around it in a couple replies, but in all the class envy drumbeats we are missing the big, big, killer of the middle class: excess taxation. Compare tax rates of now, 50 years ago, and a hundred years ago. No wonder people feel they need to go into debt to live beyond their levels.
We often read, including in these blogs, that the house is the largest investment most people will ever make. Or if you like, the largest expenditure.
I disagree. I believe government is the largest investment, or expenditure, that people make in their lifetime. Year in, year out, even if the house is paid off. I will submit that housing is only a distant second.
I worked with an Indian H1b. He marvels at the high taxation in the US, compared with what he is used to.
We can make choices to reduce our cost of housing. Reducing taxes is a lot harder.
Bottom line, lamenting a dwindling middle class while completely avoiding a look at the effects of taxation is either shallow or disingenuous, and rather than actually wishing for a change is probably just pushing some specific political agenda, middle class be d****d, sir, be d****d.
” killer of the middle class: excess taxation”
Exactly. It’s now time for the wealthy elite to pay theirs.
CC, if a country could tax the rich into prosperity, then Sweden, France, and Cuba would be the richest countries on the planet. Whether you or I like it or not, there is a point of diminishing returns whereby higher tax rates decrease economic growth and job creation and, through a feedback effect, actually reduce revenues brought in to the Treasury. If the goal of taxation is to maximize revenue consistent with a good economy for all and not revenge or punishment for those with more, then we should keep our eyes on that ball.
Now we can disagree about precisely where the point of maximum efficiency is, but I think we’re to the point of diminishing returns. We could confiscate all the wealth of the top 5% but that would kill the economy. If you kill the golden goose, then no more eggs and then how do we pay for the welfare state?
I agree that reforms need to be made in terms of executive compensation so CEO’s buddies aren’t on each others boards rubber stamping ever higher salaries and option grants. And CEO’s caught backdating options (or otherwise committing fraud) should go to prison for a very long time because they are guilty of massive theft.
But the problem none of our politicians will face (because if they do the voters will reject them) is that we’ve simply made more promises than we can possibly deliver in the future.
I disagree with the conventional wisdom that politicians are at fault and the public deserves better “leadership.” What leadership has meant since FDR is give the poor and then the middle class supposedly free money and services. That well is dry. We need to be honest with ourselves that we can’t afford what is already promised. And the huge debt binge people have engaged in is just a continuation of that theme that they can live well and someone else will foot the bill. It is unsustainable and the debt binge itself, instead of saving, is largely what has put people in their current wage-slavery bind.
But people don’t want to hear that. They want to hear they can have what they want and somebody else will pay for it. But government is not a magician that can invent goods and services to give away, it must take it from someone who has it to redistribute it. And there is simply no more blood in that turnip.
“Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” — Frederic Bastiat
Those are nice metaphors John but the problem is, those that espouse the ideology you chose to defend, wore out said metaphors long ago. Clearly, no tax policy that includes the elite/wealthy is acceptable to you and those that carry water for their cause.
Captain Credit,
There are so few rich people that they could pay no taxes and it would not matter. Best tax policy is 10% rate for everyone.
We could confiscate all the wealth of the top 5% but that would kill the economy.
—————————-
I question this oft-repeated theory. How, exactly, would this kill the economy?
I’m not necessarily advocating taxing all the weathy people, just want to know how it would “kill the economy”. One must assume they “rich” are actually productive. I think that is a stretch. When one actually observes — IN REAL LIFE — who is doing all the work (production), it seems to be the poor. The wealthy are dealmakers, at best. Not sure that their sense of superiority is actually warranted.
We could confiscate all the wealth of the top 5% but that would kill the economy.
—————————-
I question this oft-repeated theory. How, exactly, would this kill the economy?
I’m not necessarily advocating taxing all the weathy people, just want to know how it would “kill the economy”. One must assume they “rich” are actually productive. I think that is a stretch. When one actually observes — IN REAL LIFE — who is doing all the work (production), it seems to be the poor. The wealthy are dealmakers, at best. Not sure that their sense of superiority is actually warranted.
I certainly wouldn’t consider the wealthy superior–what with all of the Paris Hilton and Donald Trump types. But their net worths add to the supply of capital that can be used for constructive purposes (building plant and equipment, jobs, etc.), and pays income taxes yearly to the government. Confiscate that wealth and no more yearly annuity for the Treasury. If the government has it they’ll spend it and come back for more the next year but the capital that created the yearly taxes will be much diminished.
The fact that income must be earned to be taxed and that it is much more likely if a good chunk of capital is in private hands rather than government hands is one reason I prefer less rather than more collectivism. Another is more the diffusion of power argument from Hayek and Friedman that having economic and political power not all in the government’s hands is better. Not because the wealthy are good people or anything, but that having most if not all political and economic power concentrated in the hands of the government is much more worrisome as power corrupts. Take a look at China, Russia, Cuba, etc.
Perhaps Sweden or France should be our economic role models, and anyway it looks like with President Hillary getting another bite at the socialized medicine apple in a couple of years we’ll probably see how that works for awhile. We’ll probably also get a carbon tax or Kyoto-ish agreement of some sort. It does seem that the pendulum is swinging in that direction.
Maybe a vast increase in taxes and spending on social programs really will make us all more prosperous. I doubt it, but then I’m human and I could be wrong. We shall see.
Why wait out the housing bubble other choices are available.
The mobile hermitage.
http://www.resourcesforlife.com/groups/mobilehermitage/index.htm
Oh I love those little houses. I saw one on TV.
In my own state of Missouri we have the regally named Westwood Manor, where seniors housing sells for under $40,000. Among Westwood Manor’s bragging rights, according to the service/community link, is the proximity of “Waffel House.” Glad to know I won’t be hungry when the SHTF!
http://www.westwoodmanor.com/
Why dont we put together an editorial identifing all of the key factors that led to the bubble? We could highlight the key causes and likely effects in a crisp consice format and then send it to every newspaper across the nation. MSM tends to ignore alot of the root casues and seems not to want to recognize the true colapse that will take place. We have taken this thing as far as we can amongst ourselves. Lets be proactive now and get this snowball a rollin on down the hill.
How much for a full page ad in WSJ?
Wouldn’t that be powerful? If a page was drafted that hilights issues (housing bubble or credit bubble), and we all chipped in $20 or $30, could we get it run? YIKES. 2005 price, around $184,000 for a full page ad
Scratch that idea. ( http://tinyurl.com/yhbbam )
What are newspapers? Something they had last century, run by leftist lovers of big government?
I think think the article by Jim Webb is a bunch of liberal mumbo jumbo, true to an extent, but filled with distortions and exaggerations.
If you go to the link you’ll find he starts one of the paragraphs “The politics of the Karl Rove era”. To me this is a tip off that this guy is just spouting liberal media buzz words. I totally discount the entire article once I see something like that.
The richest have gotten richer, and the middle class is heading into a tough time, but the whole world has benefitted from the economy of the United States, and the last time I looked Karl Rove had nothing to do with that.
Does anyone here remember the Jimmy Carter years? 21% interest on homes, high inflation, high unemployment? We survived those years and we’ll survive the upcoming years.
I have never understood the lefts desire to demonize the people on the right. Just stick to the facts Mr Webb, they should speak for themselves.
Out!
Well, he’s a newly elected senator, probably doing some preliminary PR before he starts work. Just as well to take whatever he says with a grain of salt. IMHO this is going to be an issue the Dems hammer on in ‘08.
I admire Karl Rove immensely. Not his politics, the man.
Does anyone here remember the Jimmy Carter years?
With great pain, disgust and loathing. I remember well.
Yes I do. Paul Voker was head of the FED, the cigar chomping SOB that raised interest rates to the MOON, caused a nasty recession (I lost me job, & had to wait about a YEAR before the economy recovered). Yes Voker broke the back of OPEC, but at a horrible human price.
Yup IllinoisBob;….That SOB almost cost me everthing…..
Ah yes, the Fraser years (here in Australia) when John Howard (our current Prime Minister) was Treasurer. What a terrible time for anyone trying to get a job while the Right was in power.
Politicians vary in ability and vision, but luck plays a bigger part than most people on either side will acknowledge. To use the Australian example again, we voted Fraser out in 1983 when he set the election date literally a week before a bad drought broke. (We don’t have fixed terms here.)
Yes. The red-baiting, hateful behaviour and language on the right, the smug, patronizing attitude on the part of the press, the massive influx of party hacks into positions of power in Washington, the reliance of the president on shallow bromides and moral posturing rather than substantive policy.
Unfortunately, it was the way of the future, and not some sort of anomaly.
“hateful behaviour and language on the right”
Apparently you don’t read much of what the left produces.
Its a rare day when the right isn’t accused of being dopes, bigots or (the universal solvent of smears) “Nazis”.
I won’t defend extreme statements by some on the right but the frequency and degree of venom spewed by the left (including their “leadership”) exceeds by a factor of ten the “hateful” statements by the left.
Jag,
Yes, you’re right, the left is totally ignorant to their own faults in this area. One of my best friends has so much “HATE” to GW, Rove, Rummy, etal and he’s totally blind to all of it. Whenever we talk about politics, which isn’t often, he becomes a drooling psychopath.
Unfortunate because we can’t have a logical discussion about it. It’s all feelings and beliefs that he gets from Air America and MSNBC.
OK, so here’s the plan. How about if we just let those despicable liberal media types dominate the airwaves with partisan lies and bile for ten years or so like Limbaugh and O’Reilly and their cohorts. Then we can call it even and move on.
albrt,
Sorry if this talk gets you going (I can sense the tension already), but your side has dominated the airwaves forever. The MSM includes the NY TImes, the LA TImes, the Washington Post, the Chicago Tribune, CBS, ABC, NBC, CNN, MSNBC, and many other small media companies. These company’s distortion of the news is legendary in my circles, but it’s totally obscure to your team.
So the conservatives get talk radio and Fox News, big flippin deal. I’m not even sure we can include Fox News in our camp any longer because they really are “balanced” in their approach.
Lip
PS: I never called the liberals “despicable” and I don’t understand why we can’t a discussion about ideas. But as Ben would say, this discussion belongs on another weblog. Sorry Ben. I will move on.
I don’t remember them too well due to excessive partying.
Did I miss something?
I just remembered: AMERICA HELD HOSTAGE: DAY 324
Ted Koppel’s claim to fame…Nightline
Bet the youngsters don’t know how ol’ Ted broke away from the pack.
Yes, many of us have forgotten the Carter years. Man, those were bleak days, but we survived.
What do you mean “ol’ Ted broke away from the pack”?
Sorry - ADD rears its ugly head now and then!
Ted Koppel’s show Nightline was birthed from the Iran Hostage Crisis. It started as a special report, after the 11pm news. And he reported every night until the hostages were freed. That nighttime special report on the hostages morphed into Nightline.
Before then Ted Koppel was just a standard issue news reporter or something. But I’m pretty sure his hair was always red.
No, that makes sense, I just didn’t know what you meant.
In other words he took advantage of the situation like we call can do in this country.
“New foreclosure filings in Palm Beach County nearly doubled last month as homeowners struggled with declining home values, plunging sales and soaring inventory, a report released Thursday shows.”
http://www.palmbeachpost.com/business/content/business/epaper/2006/11/17/a1c_foreclosure1117.html
This probably won’t help the problem:
“Citizens proposes massive insurance increases”
http://www.sun-sentinel.com/business/local/sfl-zcitizens17nov17,0,2337801.story?coll=sfla-business-front
Now that it is common knowledge that SoCal prices have have dropped (even OC price declines are “in the bag”), is it safe to come back in the water? I don’t think so.
I believe inflation-adjusted prices have to drop 50%+ to realign with SoCal incomes, but the idea is so far outside the realm of the plausible to most folks that I don’t even bring it up in conversation.
The only reason for me to doubt my hunch on this is that it is quite likely that at least some of our nation’s top economic policy makers have a vested interest in reinstating a high rate of home price inflation, rather than face the pain of the bubble’s demise — especially the ones with a limited remaining term in office, and also the ones who will bear culpability on the morning after. Even so, it is increasingly obvious that that the record oversupply of McMansion inventory will only get worse if they respike, and the guiding principle should be to slowly deflate the balloon, rather than to pump it up with more and more hydrogen until it pops like the Hindenberg.
P.S. A historical footnote:
“The Hindenburg was originally intended to be filled with helium, but a United States military embargo on helium led the Germans to modify the design of the ship to use flammable hydrogen as the lift gas.[1] This also gave the craft approximately 8% higher lifting capacity.”
http://en.wikipedia.org/wiki/Hindenburg_disaster
Beyond a brief sucker’s rally, I just don’t see it. The speculators have left the game, and everybody who can
afford a housequalify for a loan already has one.Sure, there are a few people waiting on the sidelines, but do you think there are enough to inflate the bubble again?
At this point, I think it comes down to demographics: The boomers have had their last hurrah, and there just aren’t enough Gen-Xers to fill the gap. I’m thinking that this is going to be a 10-15 year slide.
Great time to be saving money, though.
Chris –
Don’t you think there must be an epic behind-the-scenes battle waging at the FED as we speak between those who prefer to let the housing market correction run its course (”we don’t target asset prices here”) and those who want to respike (”there is a concern that the housing slowdown will affect a wider level of economic activity”)? I have no way to predict how this debate will be resolved, or what might come out of it in terms of stealth housing reflation policy.
But even if they drop the rates to zero, I just don’t see this market coming back any time soon. I mean yeah, low rates will be marginally stimulative, but with home ownership rates at 70%, are there many more buyers to be found?
So long as sensible people making less than $200,000 per year are priced out, there should not be many.
I’ve been on the sidelines in LA for 2.5 years, have a ton in the bank, and they could drop the rates to 0% and I wouldn’t buy. Its like going to the horse track and having somebody offer you interest free money to bet….what intelligent person would take that deal?
I agree, dumb money is in already, smart money is on the sidelines for a reason…natural selection….
maybe you won’t buy, because your capital would be at risk as long as the price is too high (price won’t get much lower for sure if rates decline strongly). But there are tons of other people who have no cash that WILL buy when rates get close to zero. Experience in Europe has proven that this formula works extremely well. There are always starters who will be eager to enter the market if you make it totally free (no money down and no buyer risk involved).
The no-money-down buyer is at risk of becoming a debt serf, but most of them have apparently not figured this out or don’t care.
well, maybe that is a significant difference with the Netherlands - over here they risk nothing as long as they have a mortgage below EUR 275K or so (all losses paid by a semi-gov fund), and for more expensive homes/mortgages the maximum risk is 3 years of very limited serfdom (handing over all income above social security level). Sounds like a great bet to me for those that are buying million euro homes with no money down …
Sure, there are a few people waiting on the sidelines, but do you think there are enough to inflate the bubble again?
I recently directed someone to this blog because I thought he’d “get it”. Talked to him last night. He still doesn’t get it. Just another rose-colored-glasses Average Joe. I said to him last night, when debating whether prices will fall (me) or stay flat (him), “How can they not fall? First time homebuyers are priced out - who’s left to buy?” His response, “Second time homebuyers!” People do not get it. Either that or I don’t.
That’s not much different than people who take stock positions and then try to make the chart support their view. People hear what they want to hear.
Would it be possible once a week (maybe on the weekends) to get a Time Capsule post, where Ben might post where we were 1 year, 2 years and 5 years ago. I think it would be interesting and would add perspective.
The blog started in early 2005.
Time capsule post is interesting, particularly the ones with pompous REIC prognosticators.
Someone with good search skills could just do it in the bits bucket everyday.
This thread has already started off on the political side, but here goes:
http://www.realcities.com/mld/krwashington/16030431.htm
about a block of houses owned by republican congresspersons, now going on sale. Prices struck me as pretty high for congressional salaries (as in well over $500,000).
that’s great!
also, how about a weekend topic re: who’s actually buying right now and when we expect to see their names submitted for the annual Darwin awards.
Most congressmen are multimillionaires before they even get to congress. Once in congress they get paid 165k /year. When they get out they can usually do much better than 165k/yr with a lobbying or consulting gig.
I have no tears to shed for congresspersons selling their houses just after the peak as they have made a killing on them in the last few years.
with such a salary and some assumed cash for downpayment, I think most of them would qualify for at least a $ 2 million mortgage in the Netherlands. $ 500K sounds like the right price for a second or third home for such people …
I actually read an interesting book called “Green with Envy”.
It has a whole chapter about Congressperson’s financial lives.
It seemed to indicate that although there are a lot of GWB’s and Clinton’s and Kerry’s (i.e. richies) in there, that there are also a lot of mom n’ pop small business folk and rural folk there too with very little money…
it chronicles a few of them, and they live anything but the high life. IN fact, it shows that a large number of them bunk up together in studio and 1BR apartments to save on mony. (they make 165k/year, but they also have to keep 2 homes, one of them in D.C which is expensive… they also have to pay to fly their family back and forth, although they can fly free… they also can’t accept many gifts, including not even smallish dinners from friends… they also have to give donations to lots of groups for political reasons, and they have to buy expensive clothes to look the part)
anyway, who knows the truth, but I was surprised at how LOW on the hog some of these folk live.
That said, after congress, it’s a smorgasbord of $$$ for many of them.
and nobody is crying for the richies.
Well the dems in Illinois are eating up this bubble. The governor’s wife, Congressman Luis Gutierrez and no other than Barack “The Golden Boy” Obama have been caught with their hand in the RE cookie jar. They bought properties at substantially reduced prices from an indicted developer. Oops!
wtf
Do you have a link to that news?
Just after the elections…mmmm
Guiterrez deal
http://www.chicagotribune.com/news/local/illinois/chi-ap-il-rezko-gutierrez,1,4218942.story
Obama deal
http://www.chicagotribune.com/news/local/chicago/chi-0611010273nov01,1,2852476.story
Thanks Ken.
from the article:
“”I walked in with my wife — as any other consumer could have — and purchased the unit at the listed price, with no considerations,” he said. “In fact, the price had gone up from $399,000 to $434,000 within two or three weeks of the first showing.”
He closed on the home in March 2003 and sold it last March for $610,000, netting a 40 percent profit — far larger than other neighbors who have sold.
He characterized the deal he got on his home as a “pre-construction” discount because he agreed to buy in September 1999, before the 17 units were built. He said the homes were priced at $304,900 to $519,000 at the time and that other buyers also got discounts. No one paid as little as he did, however. ”
The last line says it all…pity I cannot vote…yet.
The week the Obama story broke WLS radio had George Stephonopolis on and told him about the deal. Obama was scheduled to be a guest on “This Week” that Sunday. Unless I missed it, which I don’t think I did, Stephonopolis never asked him about it.
This kind of stuff happens all the time for both sides. Good thing we’re going to have the “most ethical” congress there ever was. LOL
Bubbles the Clown where are you?
We need another appearance.
How about Bubblefucious?
Commentary on today’s numbers from MVille
Off the charts
The Housing Starts and Building Permits numbers are stunning even for someone such as myself who’s expecting Armageddon in the housing market. The visual here is necessary to frame the magnitude of what’s happening. Some thoughts on what this might mean:
In the early 90s crack, things really got bad only after Building Permits bottomed out.
During the bubble the builders told us they were not building spec properties, that it was all real demand. If that’s the case, then it stands to reason that demand had vaporized, which is consistent with what we hvae been saying for too long: manias in housing have never gradually cooled. When the party ends, you can turn out the lights.
I hear the positive spin on these numbers: if they stop building, inventory will be absorbed, and we will fall back into a perfectly balanced market. It’s possible, I suppose, I mean Santa Claus is only 40 days away.
How many jobs will disappear as the real estate market “cools?”
When will the Fed blink in the face of what’s happening to housing? Will it take a financial accident?
TXC comment:
“if they stop building, inventory will be absorbed, and we will fall back into a perfectly balanced market.”
Even if that happens (the author was being sarcastic), “perfectly balanced” won’t bail out the legions of the stupid and FBs who are now trapped in very high prices.
I was wondering what actual prices are compared to the % drop being reported.
Here in Queens NY, the prices of homes my wife and I are looking at went from around $250,000 -$300,000 in 97-98 to $700,000-$800,000 in 05. That’s close to a 300% increase. These houses are now down around 20%. I have not seen these kind of numbers reported.
What do you think real world price changes are compared to these “average” and “median” changes being reported.
I expect prices in Queens to go down 40% in real terms. But I don’t think the stats will show that.
Keep in mind the reported data trails the real world by a few months.
Example: The price is negotiated and put under contract in Early June and closes 60 days later (in August). The Augest numbers are reported in Late Sept.
So the data you read in Late Sept is from negotiations that occured a few months before.
I understand that. But what I’m saying is that when there is a YOY drop of 3%-4% reported in real world terms that may translate to 10%-15%.
As I said, there has been a tripling of prices in Queens, But I see numbers of 50% - 60% reported. A real disparity between the stats and the real world.
this has mostly to do with statistics and manipulation.
In the Netherlands the price increase for individual homes in my area over the last 15 years is +600-1000% (hardly anything below 600%, some exceptions at +1500% already; current appreciation in my area is still +10% from last year). However, the national realtors (NVM) stats - which are the most widely publicized - show appreciation at just +90% or so over the last 10 years (most of the price jumps occurred in this period), and the official ‘Kadaster’ which includes all homes sold in the country shows an increase of +300% or so over the last 10 years. Go figure …
The major problem is that with the national averages we are not talking about the same homes: big homes from 1990 were split into maybe 3 or 6 small apartments, a lot of rental (old, flimsy and relatively cheap) stock entered the market around 2000 and until 2000 all homes that went over EUR 450K were removed from the statistics because they were supposed to be used ‘for business investment’. On top of that, the realtors now define the average national home price as ‘the average price of the median 50% of homes sold by NVM realtors’ (so the 25% cheapest and 25% most expensive properties no longer count). All these factors have masked the surge in prices, and they will probably mask the downward trajectory as well.
I think the housing stock in the US is a bit more ’stable’ than in Europe, but probably some of the same statistical problems apply. Don’t trust the statistics!
Is anyone else starting to see early signs of capitulation? In 2 DC area zips which I follow I’ve recently seen a few homes offered at considerably lower prices than the others. Ex.: In one neighborhood $339,000 for an older 3 bedroom 1 bath where $369 had been on the low side — or, in the other neighborhood $399,000 for a gorgeous townhouse, where the cheapest unrenovated had been $410,000. (The latter is where we sold our townhouse as is in June 2005 for $395.)
In both cases I’m seeing some prices begin to drop in response, while other sellers hold out stubbornly for last year’s highs. The result is there are some really nice places available for quite a bit less than some much worse ones. Seems to me it can’t be long before the sellers begin to wise up — or at least their agents get fed up with carrying them!
Yes, two of the condo communities I’ve been tracking are listing their properties at about 10-15% less than when I started looking in June ‘06. But in the more desirable condo and TH communities, the prices downward have been very sticky.
A lot more inventory on Craigslist, though. In my area, the only thing that will drive up prices again is out of town investors…and that crowd has left the room.
The newly minted flipper types are starting to cut prices, some are even slashing and burning. But overall, the old RE adage holds true: LOCATION, LOCATION,LOCATION.
Prices in the fringe areas are dropping faster and more dramatically than in the traditionally stable and “hot” areas.
I wish I could have been a fly on the wall at the realtors convention. Given that the current real estate situation is unprecedented, what was the battle cry this year? And what do realtors say to each other these days when clients and reporters are not listening?
How to use this blog as a market indicator?
I would like to see a discussion on how we can influence any legislation to bail out the GSEs in (2009 or so) with some ginormous taxpayer package so that it addresses affordible housing. A mushroom cloud of foreclosures is rising fast from its stem now and many smaller banks and lending institutions will fail (PMI was underused because of the piggyback loan shenanigans). I think lenders will end up holding lots of low range housing in major cities and any bailout should have an affordible housing component. Thoughts anyone?
Sure, I’ll join in:
NO WAY. NO BAILOUT!
I don’t think that we are going to *need* a bailout. Most of these mortgages are in the secondary market as MBS’s and CDO’s. The hedge funds will take the hit.
Non-issue
Two things…
1. Won’t loan originators have to take back some of the failed paper due to loan fraud (stated income loans, etc.)? We’d need to know the order of magnitude of the possible take-backs in order to judge the potential problem (and the possible resulting bail-out). Also, doesn’t WaMu and quite a few other big banks keep a good portion of the loans they write?
2. The bail out I’m most concerned with is the bailout of strapped homebuyers that thought that they could swing buying a $700K house on a $90K salary…think tax breaks (or forgiveness), loan guarantees, low interest loans, subsidies, etc.
My guess is that the Loan Originators are going to go belly up very early in this game. I’ve thought about it a lot, and I don’t think they are going to be the ULTIMATE bag holders.
“PMI was underused because of the piggyback loan shenanigans”
And that really gets under my skin. The whole reason PMI exists is because loans > 80% LTV are riskier for the lender, so let’s bypass it and have no coverage while writing ever larger loans. It doesn’t matter, we’re selling them anyway. As the Guiness commercials say, brilliant!
Maybe we could start a running total of job losses that can be attributed to the bubble burst, ergh… I mean due to the slowdown in the housing industry. Not just the typical re agent and mortgage people, but also the cabinet makers, cable manufacturers, etc. have announced layoffs.
Anybody heard anything about the possibility of the capital gains exemption on house profits, being taken away by the new Congress?
For my wife and I, when we sold in aug 05′, it was like the icing on the cake…
Yes there has been talk of it…..$500K tax free has escaped many Billions in revenue…..However, if it is replaced by the old roll over rule, it may be mute…..
I really wish they WOULD get rid of that 250K exemption. IMO, that played a large part in kicking off this bubble in the first place.
When they started that exemption, most US homes were priced way below 250K. It pretty much begged for an initial doubling of prices when all of a sudden you could make 250-500K tax free just by selling your home.
Part and parcel of the transformation from house as home into house as “investment” and money maker mentality.
seattle price drop;….The previous rule (Roll Over) allowed you to take ANY amount of gain and roll it into your new home as long as the purchase price was equal or greater…I don’t think the 500K exemption had any impact whatsoever on prices…I think it was purely speculation and easy money that allowed the demand side to drive the market ….
scdave,
I agree with you very much on this one. The tax exemption did not put the extra liquidity into the market like the cheap and EZ loans.
As I’ve said before…where would prices be if buyers had to have 20% downpayments, 3-6 months reserves in the bank *after* the close of escrow, 28%-33% front & back-end DTI ratios on VERIFIED INCOME?
I’m not sure about the previous roll-over (age restricted or???), but if it existed as scdave has stated, there would be little/no net difference with the 1997 exemption, IMHO.
Was talking to a friend that lives in Newhall, Ca., (a city of cops and firemen) about the housing bubble and he told me he knows a lapd fireman that’s been on the job for around 20 years and he told my friend that in 1990-92 (el lay real estate tanked) there were tons of house torched, by owners and that was back in the day when cheating on getting a real estate loan, meant “only” puting 10% down, instead of the customary 20%, compared to the tomfoolery going on now~. The fireman expects many fires of a highly dubious nature, in the years to come…
As someone who’s lived through a house fire, I am really dreading all the arson that is going to come out of this.
A burned structure is hard on the whole neighborhood. Not just the obvious, ie. if you live next door, your house can go up too. But also those burned places stink to high heaven for weeks and weeks and weeks after the fire. Totally unnerving and depressing and scary.
I am wondering if , the last time this happened, they tracked the perpetrators (that is home”owners”) down and what kind of penalties they got.
I’m hoping they’ll get serious about this and nip it in the bud before it becomes all the rage as a partial solution for bad debt.
Would gladly trade first time drug offenders places in jail with first time FB’ed arsonists.
From Australia……….very interesting
http://www.smh.com.au/news/national/next-economic-dip-will-hit-households/2006/11/17/1163266787582.html
Lawsuit rumblings are starting:
Were you sold a Puffed Overinflated Home Value by a Developer
——————————————————————————–
Reply to: hous-234418800@craigslist.org
Date: 2006-11-13, 7:34PM EST
We’re looking for other folks that were “puffed” on a home purchase that was supposed to appreciate to a value to cover the downpayment and never even came close. Also, told it would rent for about the mortgage value and will never rent for near that. We are seeking a competent attorney that can help represent others like us to come out with some fair amicable solution with these developers.
Can anyone can help us prevent a financial disaster? Any good advice is appreciated!
Thank you greatly.
http://fortmyers.craigslist.org/rfs/234418800.html