Bits Bucket And Craigslist Finds For January 2, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
happy and healthy 2007 from germany
i have made a sarcastic outlook 2007 plus the summary from hussman “risk blindness”
http://www.immobilienblasen.blogspot.com/
Thanks, j
I enjoy reading your blog and trying to brush up on my rusty high school German.
NY Sun says housing slump over. http://www.nysun.com/article/45809
I just me a young guy I’ve known for a couple of years. He works as a teacher. He and his wife expect to leave NYC when it’s time to have children and move to another region. I guess he figures he’s “priced out forever.”
Another Sign Housing Slump May Be at End
By BOB WILLIS
Bloomberg News
December 28, 2006
Sales of new homes in America rose more than forecast last month, another sign that the worst of the housing slump may be over.
We might not be at the bottom, but we’re getting very close to it,” an economist at Wachovia Corp., Jason Schenker, said
Still, the number of unsold dwellings — including homes not started, under construction and completed — remains near a record. A separate report today from the Mortgage Bankers Association showed mortgage applications declined last week.
This article could say:
“Another Sign the Housing Slump will Continue” Insider and boy wonder favorite of the REIC “Jason Schenker” of Wachovia Corp is giving out false predictions that the housing slump appears to be at end due to fraudently data that might suggest a one month increase in sales, however mounting factual evidence that the number of unsold dwellings — including homes not started, under construction and completed — remains near a record. In addition, separate report today from the Mortgage Bankers Association showed mortgage applications declined last week indicates that Jason named above is an REIC insider and will say anything so that he will not get canned from Wachovia.
This is obviously a shame article.
WHO IS JASON SCHENKER? LETS FIND OUT.
Economist
Mr. Jason Schenker joined Wachovia in 2004. Prior to joining the Economics Group, Mr. Schenker held a number of research and teaching positions, including teaching International Affairs and German at UNC-Chapel Hill, instructing Business English to German executives at Idioma Language School in Karlsruhe, Germany and conducting international economic research at UNC-Greensboro.
Mr. Schenker holds a Bachelor’s degree with distinction in History and German from The University of Virginia, a Master’s degree in German from UNC-Chapel Hill and a Master’s degree in Economics from UNC-Greensboro.
Mr. Schenker writes commentaries on a variety of domestic, international and special issues, and is a founding member of Wachovia’s company-wide Automotive and Energy Groups. With an international focus, he writes European reports in English and German. Mr. Schenker has strong interests in the field of energy, and is a contributor to Bloomberg consensus surveys for crude oil, gasoline, heating oil and natural gas.
Mr. Schenker has presented in a number of different venues, including the Federal Reserve Bank of Philadelphia. He has frequently been cited by the domestic and international press including The Washington Post, The New York Times, Bloomberg, The Financial Times, and The Wall Street Journal. He has also appeared on CNBC and as a guest host on Bloomberg television
NOTHING HERE TALKS ABOUT HIS ABILITY AS A HOUSING ANALYST. BOY A MASTER DEGREE IN ECONOMICS, WOW THAT MAKES HIM AN EXPERT. HIS BIOGRAPHY ALSO SUGGEST THAT HE MAY OR MAY NOT BE ABLE TO SPEAK GERMAN.
I would like to kick Jason in the nuts.
I would like to see you kick Jason Schenker in the sack.
He received his PHD in Housing from Goebbels University.
Economist
Mr. Jason Schenker joined Wachovia in 2004. Prior to joining the Economics Group, Mr. Schenker held a number of research and teaching positions, including teaching International Affairs and German at UNC-Chapel Hill, instructing Business English to German executives at Idioma Language School in Karlsruhe, Germany and conducting international economic research at UNC-Greensboro.
Mr. Schenker holds a Bachelor’s degree with distinction in History and German from The University of Virginia, a Master’s degree in German from UNC-Chapel Hill and a Master’s degree in Economics from UNC-Greensboro.
Mr. Schenker writes commentaries on a variety of domestic, international and special issues, and is a founding member of Wachovia’s company-wide Automotive and Energy Groups. With an international focus, he writes European reports in English and German. Mr. Schenker has strong interests in the field of energy, and is a contributor to Bloomberg consensus surveys for crude oil, gasoline, heating oil and natural gas.
Mr. Schenker has presented in a number of different venues, including the Federal Reserve Bank of Philadelphia. He has frequently been cited by the domestic and international press including The Washington Post, The New York Times, Bloomberg, The Financial Times, and The Wall Street Journal. He has also appeared on CNBC and as a guest host on Bloomberg television.
So I can go find any guy who has Masters degree in Economics and pay him to say the housing slump is far from over. Anybody got $5 bucks?
DAVID: Great find.
Thanks, we should get the biography’s of all these bulshxx economist that work for the REIC and refer to them as they spew bull crap. Sad part average Joe American actuallywill believe their crap.
I love how the internet exposes the holes in many of these stories.
Haircut alert! This is in my new neighborhood, and nice home.. Still not worth what was paid, but man, this is a fast way to lose 200K!
Wow, check out this bath! This is a flip gone flop for sure.
I assume everyone knows how to use Zillow, the address is:
930 Mill Creek Dr. Palm Beach Gardens, FL 33410
For those who don’t feel like looking it up, here is the sales history:
09/27/2006: $750,000
10/05/2005: $950,000
07/12/2004: $675,000
So, in a little under 1 year, neglecting all RE transaction costs, this guy went 200K underwater in this property.
And, this is definately going to do wonderful things for the comps here as well.
http://www.co.palm-beach.fl.us/papa/aspx/web/detail_info.aspx?p_entity=52424125030020160&geonav=Y&styp=general&owner=&city=&zip=&method=subdivision&cidx=&sdiv=5242412503&sdivnam=EVERGRENE%20PL%202%20-%20Palm%20Beach%20Gardens&stno=&pdir=&st=&strnm=&sufx=&ptdir=&cty=&rng=&twp=&sct=&blk=&lot=&book=&page=&tangid=&condo=&condoname=&use=&usnam=&sloc=&prd=&pedir=&podir=&famt=&tamt=&fsqft=&tsqft=&srt1=&srt2=&srt3=&stpage=100&adlfilter=
and Zillow:
http://www.zillow.com/HomeDetails.htm?zprop=62855772
Hey Mike,
Email me at david_parker75@hotmail.com and we’ll meet up for cocktails.
we should start a south florida bubble watchers group.
I agree. We should also start an “I Bought in 2005 with a Zero Down Pay Option Arm” support group. The membership would be large.
LOL, yeah, offer them drinks in return for thier horror stories of upside down mortgages so others can read them before some agent/broker suckers them into signing away thier lives.
Massachusetts property owners will again see substantial increases in their property tax bills this year, even as home sales have cooled.
“The problem is that it’s so consistent,” said Michael J. Widmer , president of the Massachusetts Taxpayers Foundation. “It’s like college tuition. It’s year upon year upon year upon year. Over a period of time, it really adds up.”
http://www.boston.com/news/local/articles/2007/01/02/property_tax_bills_rising_across_state/?page=1
This won’t help the realtors (note the non cap r) sales this year.
From the boston.com article: “Tax assessments … were based on 2005 activity”
Translation: Massachusetts officials rush to cash in on phony home values before realistic pricing limits property tax grab. [Just like Maryland, see next thread.]
Here’s a top-drawer investment property: cost $650k; cash flow $24k/yr (gross). It’s 1440-sqft divided into 4 units! Hurry now, this one won’t last!!
http://monterey.craigslist.org/rfs/255073873.html
how many illegals can it hold ?
650k /24k (minus expenses)= 2 million year payback
“650k /24k (minus expenses)= 2 million year payback “
I guess its true that Real Estate is a long term investment.
I was traveling quite a bit during December and have the following observations:
London, England
I stayed in one of the better areas of London called Chelsea for about a week and went for a few walks in the neighborhood but did not see any visual signs of the housing bubble i.e. numerous For Sale Signs or massive construction projects which are often reported on HBB. I was also in the City (Wall St area of London) and saw a couple of commercial building projects (one tear down and a gutting) but nothing really unusual.
I asked a buddy of mine about the bubble in London and although he readily agreed the market has gone up substantially in the Chelsea area (he owns three multi million USD houses in Chelsea including his primary residence) he felt the market was reflective of the boom in London in general i.e. the City is booming due to many companies choosing to list in London rather than New York due to Sarbanes Oxley, geographically London is better positioned globally due to the opening of Eastern Europe, and the influx of wealthy foreigners that prefer London over New York or Los Angeles due to travel restrictions and hassles in the US. In addition he credited the world wide credit bubble and underreported inflation as driving the real estate market. A bit of “its different here” but also some valid reasons for the increase in property values of which two are due to the stupidity of the States (Sarbanes and the Patriot Act) making London more attractive for the International crowd.
All three properties my buddy owns are in one of the premier areas of London and he obtained financing denominated in Yen at 70% LTV. Higher LTV is available in Sterling or USD and he mentioned 120% to 150% however evidently higher LTV is not available to him in Yen due to FX risk. The two rental properties are on long term rental agreements denominated in Sterling with substantial (between one to two years) prepayment. According to him the properties are cashflow positive from rents with a yield of about 4%-5% without capital appreciation.
Evidently property taxes in London are immaterial although there is a significant transfer tax on sale. It is my understanding the transfer tax can be minimized or almost eliminated by having the title held by a trust/offshore structure. In the event of sale the trust/offshore company is sold which is not subject to the transfer tax or is subject at a significantly lower rate. I know this was the case some years ago and the transfer tax may have changed in recent years and invite someone with a better knowledge of this arrangement to make a comment.
St. Anton, Austria
Luckily there was a big dump December 7th and 8th and the ski resort opened on December 9th though only about 25% of the area was available for skiing. I arrived on December 9th and did a week of skiing under sunny skies but by the end of the week both piste and off piste areas were completely packed, tracked out and the snow was melting off. Absolutely no crowds so although the area was substantially reduced skiing was great. I stayed at the New Post Hotel which I recommend. The hotel gave me VIP tickets to the finals of the St. Anton Tennis Open and I was within spitting distance of Anastasia Myskina who was a guest at my hotel. FYI she looks pretty good on the court but at breakfast at 7:30 am she looks like any other person. Also Yannik Noah’s rock band played in the VIP tent. That guy can rock!
To all the skiers out there–check into long underwear and socks made with the new silver embedded/nano technology. Expensive but that stuff works i.e. no stinky socks and underwear! Supposedly silver kills the bacteria that causes the funky smell.
thanks / danke
one more sign that the carry trade is omnipresent…..
I travel to London on business now occassionally and some of my staff is assigned there. And while we’re not poorly compensated, our normal London people and our transplants can barely afford rents, let alone buy. At least from my own anecdotal experience, there is an affordability issue there. Unfortunately, London is sorta like NY - I’d never risk calling a significant price drop. Too specific of a locale with resistance, I’ll stick with generalizations and averages.
Regarding the UK. The Daily Telegraph (on-line edition) which, for those who don’t know it, is one of the UK’s better newspapers and pretty conservative. The headline screeched that a possible property “crash”, not a decline btw, was very likely in the UK if prices continue to rise in 2007. It stated that the last time there was a “crash” in the UK was in 1991 when prices fell one-third and it took 5 years to recover. The interesting thing is, a French professor at UCLA built a model/graph several years ago of the growing housing boom and predicted that the UK would crash first. However, in the last year, it was the US market which hit the skids while the UK market continued to rise. He eventually abandoned his research after a couple of years because prices kept going up with no sign of a crash but it could be that he abandoned his research too soon.
That said, I think you have a valid point about London being where the ultra-rich and corporations are buying property but there is also a rumor that a lot of eastern european criminal gangs buy London property. Especially the Russian mafia.
It could be that several of the expensive and “exclusive” London areas like Chelsea, Kensington, Hampstead, Knightsbridge, etc, will be less likely to get hit in a crash because (and I think it also might happen here in the US) we could be entering a different kind of property owning era where the rich upper and middle-middle class live in very, very, very expensive homes and the not-so-rich middle and lower class live in much less expensive homes. Thus, when this property mess is over, we might find that lower middle class and working class property has declined much more than those in exclusive areas. Just another example of the destruction of the lower and middle class. Eventually, I think we will see a LOT of changes taking place in the social structure of western countries. Not good for the masses but great for the Bush followers.
…new silver embedded/nano technology.
Cool, eh? The Mogambo Guru was righly speculating on how the military will likely adopt this technology for their uniforms. Makes perfect sense, since soldiers in the field wear them for extended periods and the anti-bacterial qualities would minimize would infections. Got silver??
Oops, that’s “wound” infections.
Lennar to Post 4th-Quarter Loss on Charge of Up to $500 Million
By Peter Woodifield
Jan. 2 (Bloomberg) — Lennar Corp., the fourth-biggest U.S. homebuilder by revenue, said it will post a loss in the fiscal fourth quarter due to a one-time charge of as much as $500 million.
The loss in the three months ended Nov. 30 will be as much as $1.28 a share, the Miami-based company said today in a PRNewswire statement. The charges include inventory writedowns and costs related to land it no longer plans to buy.
It appears that Lennar is dumping a lot of land holdings, with CA pensioners buying a lot of it (hat tip to JMF for this find).
“MacFarlane, CalPERS buy 62% stake in L.A. land JV”, Jan 2, ‘07
http://preview.tinyurl.com/yndaz
“MW Housing Partners, which is co-managed by real estate investment management firm MacFarlane Partners and includes the California Public Employees’ Retirement System, will pay $900 million in cash and property in exchange for a 62% stake in LandSource, a Los Angeles based land bank with a book value of approximately $1.3 billion. LandSource was owned by Lennar Corp.”
Oops!! here’s the whole tiny
http://preview.tinyurl.com/yndazj
“… with CA pensioners buying a lot of it (hat tip to JMF for this find).”
I just can’t wait to find out all the great investments California pension fund managers have made once the dust has settled once the dust settles on the bubble’s aftermath (for some reason the name Amaranth just popped into my mind…).
23000 home sites in the Santa Clarita Valley, yum.
If CALPERS goes broke, it can give each retiring public employee a quarter-acre and a mule. Oh, was that supposed to be 40 acres? Never mind, retirees are too tired to plow 40 acres anyway. Having done well enough in my weird lending niche while lending was still a viable business, I’m thinking my next gig could be providing mules to CALPERS. Let’s see, a male horse and a female donkey is it?
LOL.
doesn’t Lennar know it’s turning around?
selling land , wow
“with a book value of approximately $1.3 billion”
Somewhere else I read the following:
“As of July 1, 2006, LandSource had assets with a book value of approximately $1.3 billion, with its primary investment being The Newhall Land and Farming Company. Under the terms of the agreement, the LandSource assets are valued at approximately $2.6 billion, with a potential increase adjustment to that value of over $600 million.”
http://www.marketwatch.com/news/story/lennar-announces-expansion-its-strategic/story.aspx?guid=%7BA920A27D%2DFAEE%2D41E0%2DAEA4%2D2DCC9718A2C2%7D
Does this means that ‘under the agreement’ they just double the value in their books, or am I all wrong?
Another article says the asset is 15,000 acres of land 30 miles north of downtown LA. Go here
http://tinyurl.com/ycooov for the story.
It also says Lennar and LNR each get $660 million for 62% which implies the land is worth $2.1 billion. That is $142,000 per acre, which is a good price to buy, provided you can build on it.
Ouch! Is it as bad as it sounds? YES and it get’s worse…
In addition to walking away from options and taking write-downs, Lennar is walking away from a JV which will net them about 500 mil. CAPITULATION? Absolutely! Losses would be worse had they not sold the JV.
Why o why would they walk away from this much land if were nearing the trough of this RE cycle? Link: http://tinyurl.com/yher5k
Call me crazy, but I love hearing about homebuilders dumping their land options. Every acre dumped is an acre that won’t (yet) be paved over with 8 garage-with-attached-fake-stucco-McShitHouses.
Has anybody heard anything more about MLN (Mortgage Lenders Network, Inc.)? They were #19 in subprime, but Friday they supposedly stopped all brokered loan activity after their warehouse financing was pulled. I know at one point GMAC was a major source of their $.
Only thing I was able to find was at the following link:
http://www.traders-talk.com/mb2/index.php?showtopic=64515
Only 8 months this company seemed to have a bright future. Yesterday, it went out of business. Less than a month earlier, another leading subprime lender suffered the same fate. New Century Financial, the 2nd largest subprime lender whose CEO suddenly retired at age 59 and a company that I recomended here as a short when it was >40, closed the year at a 52-week low.
(IMG:http://i111.photobucket.com/albums/n138/cbeirn/NEW2.jpg)
What’s the problem in subprime lender-land? Consider the following statement from a mortgage broker who deals with these outfits every day:
“I know a lot of people that went to MLN thinking it was the promised land. It doesn’t take enormous brain power to figure out that any lender that is undercutting their competition on rate by .75 to 1.50 bps, letting borrowers go 100% stated at 600 and using the first page of the bank statements as full doc is eventually going to get their @ss handed to them. Subprime people are exactly that, subprime and their credit sucks for a reason: they don’t pay on time. I think the industry is finally figuring out that they need to go back to treating these borrowers with higher rates and more money down.”
Keep your eyes on WFC, WM and CFC. All of them have major subprime exposure, and all of them have a long way to fall.
Bingo! Just came out on Dow Jones. No new loans. Stand by …
http://preview.tinyurl.com/y2a8kb
“Mortgage Lenders Network USA stops funding new loans”, By David Enrich, Dow Jones Newswires (AP / Boston Globe) about half hour ago.
Ownit just filed for bankruptcy, incidentally, according to Bloomberg. This was the company that set off the whole mini-firestorm in the subprime mortgage sector a month ago. More details at my blog …
http://interestrateroundup.blogspot.com
“MLN officials, including the chief executive and general counsel, didn’t respond to phone calls or e-mails.”
Interesting that they did not name names. Kudos to the poster who broke this story at the end of last week.
Russ Winter, IIRC
????
Posted on my blog Dec 7, 2006:
http://bakersfieldbubble.blogspot.com/2006/12/sub-prime-blowup.html
Russ Winter posted the link to Friday afternoon’s BrokerOutpost discussion group traffic around 07:15 on Saturday’s Ben’s bits.
Seems like Crispy has been on top of this story like white on rice.
Crispy had the mortgage broker scuttlebutt on the MLN story, which I then quickly wrote up on my blog. Still it is satisfying to beat the mainstream press to the story by four days. Guess that’s why we have bloggers, big grin.
Thanks Russ! I am just glad we (bloggers) are all ahead of the media on ALL of these stories. Many of us do this for personal enjoyment and the knowledge that we are doing something right by being different than the sheeple.
I am hoping someone on here breaks the story of one of the top 5 HB’s or Lenders going down. That will be a major story. 2007 will be the year
Crispy,
I stand corrected. Congratulations on getting on this first around Dec 7th. As of now Reuters and Bloomberg at least have posted long stories. Looks like the MSM is off to the races.
RIP, scumbags.
And GMAC is owned by Cerberus……which is selling land to CalPERS…….LandSource was owned by Lennar Corp. and LNR Property Corp., now a holding of Cerberus Capital Management.
One big incestuous happy family?
If you want to explore this futher suggest you borrow an approach from the Intel community and perform some network analysis on the lenders, their backers, the builder and the whole mess. It can be fun to see who is connected to whom and what.
A short history of GMAC/MLN
August 2000:
GMAC-RFC Announces Strategic Alliance With Mortgage Lenders Network USA; GMAC-RFC to Help Lender Become Top-Tier Subprime Mortgage Originator
GMAC-RFC (Residential Funding Corporation) logo. GMAC-RFC, a wholly owned subsidiary of General Motors Acceptance Corporation, is America’s largest private-label issuer of mortgage-backed securities and a leading warehouse lender. The company leverages its strengths in securitization, lending and investment to offer a broad portfolio of innovative capital solutions. The company is headquartered in Minneapolis and operates in the United States, Europe, Latin America and Japan.
Jan. 2006:
Citigroup to bid for GMAC, reports say
MarketWatch
Last Update: 4:06 PM ET Jan 28, 2006
SAN FRANCISCO (MarketWatch) — Citigroup may bid for General Motors Acceptance Corp., the finance arm of General Motors, according to published reports.
“Any deal is likely to be complicated by the need for GM to receive cash instead of debt. Too much debt might hurt GMAC’s credit rating. Private-equity firms typically use a debt to finance their deals.”
April 2006:
GM sells finance stake, board supports Wagoner
Carmaker to get up to $14 billion by selling majority of its finance arm to a consortium; unusual statement in support of CEO.
By Chris Isidore, CNNMoney.com senior writer
April 3, 2006: 12:20 PM EDT
NEW YORK (CNNMoney.com) - General Motors finally announced an agreement Monday to sell a majority stake in GMAC in a deal meant to raise cash and let its profitable finance subsidiary shed its junk bond status.
The deal will bring troubled GM (Research) about $14 billion over time, including the $7.4 billion purchase price and a $2.7 billion distribution from GMAC itself. The buyer is a group led by a hedge fund called Cerberus Capital Management and the private equity arm of Citigroup.
The Portland Press-Herald just ran an article noting home SFH sales dropped 12.5% and SFH median prices dropped 3.9% in Maine in November. Following are some Reader Comments to the article:
Rod of Augusta, ME
Jan 1, 2007 6:39 PM
It’s about time. The prices were in outer space.
People were actually getting interest only and even partial interest only loans to be able to afford them. That means they would never own them. I hope the prices crash. Let’s see if property tax rates tumble in line with the lower realistic values.
DC of Newark, DE
Jan 1, 2007 8:45 AM
Yes, I’m one of those people from out of state who would like to move to Maine. I’ve been looking for two years now, and have been discouraged by high taxes, lower salaries, and outrageous housing prices. I just got a job which will pay me 67% of what I used to make, so I’m glad that housing prices have come down. I would like to own but may still have to rent…depends on what the mortgage broker says.
Roland Beauregard of Saint Albans, ME
Dec 29, 2006 5:54 PM
This might be good news for those Maine out-of-stater-haters. Perhaps the potential buyers from other areas of these United States finally had their fill of inflated asking prices for Maine properties.
http://news.mainetoday.com/updates/008464.html
PortlandMainer-I have always liked your state. For about ten years I have been thinking about finding a small summer place on a lake. Any thoughts or suggestions?
The main thing is, you need to drive at least 6 or 7 hours away from Boston. That radius discourages weekenders and gets you a considerable price reduction. (Have owned Maine properties from time to time.)
az-lender-Thank you for your input.
Lakefront has gotten very expensive in the last 6-7 years. It would be nice to see the prices drop. My suspicion is lakefront prices will drop some simply because second homes are the first things to get cut loose if things get rocky.
Generally speaking, large lakes are pricier than small lakes and the further north you go, the less expensive. If you are only going to use the property once or twice a year, the lake’s location may not be as important to you as say a Boston weekender who may be restricted to southern Maine lakes in view of the travel time. If that is the case, you will be able to find something that is more affordable by going up north.
Some lakes are cold and some are warm. I believe this will impact the fish species in the lake if you are a fisherman. It also impacts swimmability. The lakes are much warmer than the ocean, but if swimming is your number one priority, be sure you look into this. I believe that the depth of the lake is related to its temperature, but also its location. Be sure to ascertain when “ice out” is. On some lakes this can be later than you might think.
For me the ideal Maine lake has loons on it. There’s nothing quite like being on a lakeshore under a billion stars on a warm summer night listening to the loons. If you’ve done this, I’m sure you know what I mean.
Another consideration is whether the lake allows boats with motors. Some purists shun such lakes. However, if a lake is large, it’s impractical not to have a motor. I think here it’s a question of magnitude. If it’s a large lake and there’s only occasional motor boats, it wouldn’t bother me. In fact, I’d want to have a boat with a motor. If it’s a small pond rimmed with homes there might be a lot of noise if there are notor boats.
Some lakes ban Jet skis, not a bad idea. But again, if it’s a big lake and there aren’t many, if you otherwise love the lake I wouldn’t let them stop me.
You may be better off buying an existing home than land. There are all kinds of restrictions with land, e.g., I don’t believe you are able to clear shoreline trees to create a view. Septic is another concern.
You want a lake that is perfectly clean and I believe there are websites where one can find data on this. Fortunately, most lakes are in good shape.
There is a large controversy going on right now regarding an enormosu development proposed for Moosehead Lake. It’s something like 1,000 homes, with about half of them on the shoreline. The company that wants to develop all of this is called Plum Creek, a REIT and the largest private landowner in the U.S. Although they’ve proposed some conservation easements, many up here are wary as their environmental track record in their native West is terrible. And clearly, that many homes is way too much. I bring this up not to suggest you necessarily try to buy should the development be approved, but rather that you be aware of the impending effect on supply of lakefront homes/lots.
If you don’t already have the Delorme “Maine Atlas and Gazetteer”, be sure to pick one up. They can be ordered from Amazon, although poking around the Delorme site is interesting (http://www.delorme.com/) I believe Delorme now makes these for all 50 states. They started with Maine and it is extraordinarily accurate and filled with great information. You can really get a sense of the location and size of Maine’s lakes by spending some time with the Delorme atlas.
Again the variation in price is substantial. On a large southern Maine lake such as Sebago Lake you could easily pay half a million for a small lakefront home. Ditto for a lake like Kezar Lake which National Geographic called one of the three nicest lakes in the world (http://www.gilmorecamps.com/nicest.htm). On the other hand, you could probably pick up a small lakeshore camp on Roxbury Pond in Andover (aka Ellis Pond) for well under $200,000. Don’t let the name “pond” throw you - these can be very sizable bodies of water. Roxbury would be big enough for me. And if you go way north to places like Island Falls or Eagle Lake, you should be able to get more for your money.
Good luck.
Portland Mainer-Terrific info. Very much appreciated. Happy New Year!
Portland Mainer - great write up! This is the kind of information sharing that makes this blog invaluable. Even though I have no desire to move that far east it was a very descriptive/fact-filled write-up that will really help people thinking about buying there. Thanks!
San Diego RE Bear-Was thinking the same thing and I asked the question. In spite of all the bickering that can occur on this blog, there are a number of truly exceptional folks that post great information. A very special brotherhood.
PG and San Diego RE Bear - It’s a true labor of love and please ask anytime you need some information. And I promise you, I’m not connected to Maine tourism or Maine RE (other than owning a home) and I don’t sell fishing tackle or nightcrawlers!
BTW, if you ever come to Maine, don’t overlook Portland. For years, we had always just driven by Portland on our way up from NYC to the northern backcountry. But one year we stopped in and immediately it became an overnight stop on our trips up. Eventually, we liked it so much we just moved here. With both civilization, country and the ocean for us it provides the best of both worlds. We’ve been here five years and love it. It’s a great adventure to pick up and move. And because it’s a vacation type place, we get a good number of our friends from NY up to visit.
I finally put together a guide about Portland on Microsoft Word which I usually email to my friends ahead of a visit. Anyway, I just posted it at http://download.yousendit.com/DA502F8C6A6793C3
This site (YouSendIt.com) allows one to post files for free for download. I believe the link stays active for a week or 20 downloads. Anyway, I just put it up there for you should you want a peek at what there is to do around Portland. Basically everything on the list is within a 30 minute radius. The descriptions come off various websites, which I’ve noted. Anyway, enjoy.
Anyone reading this can download the file. On a broadband connection it should be about 30 seconds.
Happy New Year!
From US News via Yahoo:
Hated Property Taxes Bite Even Deeper
WIth links to worst hit areas.
Woohoo!
13. Monmouth (N.J.) 6,015
The Median and Average in most towns is quite a bit higher. Asbury Park and Keansburg with their many small properties shift the median down for the entire county.
From the article:
Property tax is deductable, no? Is this a local thing?
Someone paying $10K in annual property taxes, with a 30% tax bracket, will effectively pay “only” $7K, no?
Unless they fall into AMT in which case the property (and income) tax write is partially or fully lost.
But for the most part, yes property tax is a write off on all homes not just first and second like mortgage interest.
Err, property (and income) tax write off
In addition to the AMT, a couple more challenges to the value of the property tax deduction are the existence of phaseouts like Pease (which reduces certain itemized deductions for married AGI over $156,400 for TY 2007) and the standard deduction (married $10,700 for TY 2007). As far as the standard deduction, it is the floor in comparison to itemized deductions. In other words, if your total itemized deductions are $25,000, your net deduction is really $14,300, because the itemized total is instead of rather than in addition to the standard deduction.
Another example of how the reality of the benefits of homeownership have become mythologized beyond their actual value.
From today’s WSJ, p. A1 (rightmost column)
Economy Poised for ‘07 Rebound, Forecasters Say
Weakness in Housing, Manufacturing Is Likely to Take a Lighter Toll
(Same back-and-forth as usual between the worriers and the optimists…)
(01-01) 20:09 PST WASHINGTON, (AP) —
The slowdown that hit the U.S. economy will persist into 2007 as the once red-hot housing market continues to suffer through a serious correction, analysts say.
As the new year begins, many private analysts are forecasting the economy will perform at the slowest pace in five years, a full percentage-point lower than growth in 2006.
Wow I guess there are two sets of forecaster out there imagine that. There all full of crap. What in the hell is a private analyst?
“What in the hell is a private analyst?”
One who gets paid to provide rich guys with an independent, off the record assessment of what he believes is really going to happen next year, rather than to position himself somewhere amid the pack of soft-landing forecasters who are always cited in the MSM.
Then I like private analyst better than the idiots I see on MSM. I will weight their opinion higher.
The NYTimes on the housing crash, global liquidity,and asset inflation.
“Five years ago, the United States economy went through a recession that did virtually no damage to the housing market. In 2007, the question is whether the economy can emerge unscathed from a housing recession.”
http://www.nytimes.com/2007/01/02/business/02stox.html?_r=1&oref=slogin
Inflation alert! The article implies the Federal Reserve has lost control of the money supply.
“There is a perception that central banks tightened in 2006, and that was true of the Federal Reserve and the European Central Bank. But it is anything but accurate about the central banks that matter the most now. “We are in a global market, with the central banks of Japan and China very, very easy,” Mr. Barbera said. “Two central banks are pumping it out hand over fist.”
My first thought — we will be outbid for the oil.
it is plain nonsense that the FED and ECB tightened in 2006: in both regions money supply boomed even more than in previous years (last data says +12% for the FED and nearly +10% for the ECB). Nominal interest rates have nothing to do with tightening, it’s the real rate that counts; both FED and ECB are WAY behind the curve with their rates.
Amen to that. UK broad money supply is growing at roughly the fastest rate since 1990 (13.1% year-over-year in the most recent month) … ECB broad money supply is surging at more than 9% YOY, also the fastest rate since 1990 … and money growth in virtually every other major world economy is also strong (Though of course, the Fed conveniently decided M3 was unimportant several months ago and stopped reporting it).
Meanwhile, private equity takeovers/LBOs are surging. Commercial real estate values are soaring. Risk assets are jumping in price. Fear and volatility is non-existant. So yes, I’d completely agree that money is anything but tight despite all the short-term rate hikes. I wrote about this a little while back, in fact, at:
http://www.moneyandmarkets.com/press.asp?rls_id=575&cat_id=6&
Maybe six or seven years ago we started getting “this perfectly ordinary military news release was published on condition that the perfectly official spokesperson’s name will not be revealed”, implicitly claiming leaked (and therefore credible) information. Will the usual public econo-analysis now routinely claim to be “private”?
Apologies if this was posted on an earlier thread:
Mortgage ‘tricks’
How to protect yourself from industry’s shady salesmen
from MarketWatch:
http://tinyurl.com/y7u842
From today’s AP wire:
For certain sectors of the economy, job losses will have a much bigger impact, however… Economists at Goldman Sachs estimate that housing-related industries - construction, furniture manufacturing and sales, real estate agents, mortgage brokers - will see more than 1 million jobs evaporate over the next two years because of the housing slowdown after five boom years for sales.
From today’s AP wire:
For certain sectors of the economy, job losses will have a much bigger impact, however… Economists at Goldman Sachs estimate that housing-related industries - construction, furniture manufacturing and sales, real estate agents, mortgage brokers - will see more than 1 million jobs evaporate over the next two years because of the housing slowdown after five boom years for sales.
I would like to wish a happy new year to David Lereah and anyone else who thinks the housing market is a leaky balloon…
http://www.icq.com/img/friendship/static/card_16961_rs.swf
I guess the little bear that goes into an infinite loop of happy talk after all the balloons are popped must be DL’s alter-ego.
MLN update (brokers oupost):
Good morning everyone.
Here is what we know. We are currently not funding residential mortgages. We are also being looked at by Lehman Brothers and other investors on Wall Street, but it will take a while to hammer out details. Our emails are down completely, and we don’t have access to the computer system.
That’s where we’re at so far. Are there going to be any lenders that will be honoring MLN approvals a la when Own It and Sebring went down? I would like for my brokers to have a home for these files with minimal interruption. Please let me know asap so I can put them in touch with you.
Thanks,
Eric
Eric Frederick
Business Development Manager
Company Unknown
ericfrederick@yahoo.com
602-748-9780
Mortgage Lenders Network has instant rejection on all email this morning. They have a meeting with all employees @ 11:00 AM this morning. Could be termination day or perhaps they are on their last heartbeat. Will keep you informed.
AA
the employees are fried!! SEEEEE YAAAAAAAAAAAAAA!!!
Visiting brother-in-law who bought his 4500sf home in something like Ventagio Villagio (US Homes development) at the Mountain’s Edge Master Planned communities in LV. He bought his place for about 800K after the upgrade and the swimming pool/jacuzzi addition. 8XXX Luna Sera. On this short block alone, there are 3 For Sale signs. In the evening/night, there are hardly 25% homes are lit. Both sides of his neighbors are from investors from Cal. As we drove out to the main gate, he pointed out at least 10 more homes were bought by Cal investors. Once the Cal’s $$ dried up, they will be forced to sell the LV first.
UK home prices up and Money supply up 9% + !!!!!!! wtf
Sorry OT, but it sure takes a long time for the bits bucket to fill up without Gekko’s posts!
Not to worry GS, you will no doubt pick up the slack.
I’ll try to keep my posts short to make room for your posts…
Happy New Year to everyone. I am just back from my holidays with my family in Spain (btw houses (mainly condos) prices rised a bit more than 9% during 2006 in the main cities). Of course two issues arised during the family conversations: grandkids (my parents want them now!) and housing. We moved four months ago to a Chicago suburb but my father (usually very very conservative in his investments) insisted that we should buy a house asap because prices always go up (I didn’t translate the conversation to the hubby). I tried to convince him that the house market in the US was heading down and we were not planning to buy a depreciating good. He doesn’t understand that the rental market is totally different between the US and Europe (highly regulated). I failed to convince him it was better to wait and save money for a downpayment. Affordability sucks in Spain too but people get a 50 years mortgage, pay the mortgage with one salary live with the second salary (so no room for errors) and get financial help from their families. After ALL my relatives and friends asked about when we were buying a house I opted to say that we needed to move next spring to another suburb to be closer to our jobs and we needed to rent first to check neighborhoods first. It has been a nightmare! When we said we pay 1400 a month for a 1600sqf townhouse with two attached garages, they say it was very expensive (it’s very very affordable with our salaries), although one of my cousins who lives renting in Madrid said that was cheap compared with similar houses in the Madrid suburbs. I will not talk about housing again with my family, they have no idea of the US market or what a bubble is!
I feel your pain, my in laws split time between london and spain, my FIL keeps hammering us to buy (we sold and relocated here this year) and we keep telling him that prices are falling and we need to wait. He does not understand, and he thinks London will just keep going up also… sigh.
Hello NAM,
Nice to see you back…
If your old man was so insistent on your purchasing a home because it’s a solid investment, why doesn’t he pony up the cash?
WTF if that’s great of an investment, he will reap the returns, no?
“After ALL my relatives and friends asked about when we were buying a house …”
I can empathize with you. Whenever I visited my family in Italy, I had to endure all their pontificating and sermonizing on American politics, culture, etc. (no housing bubble crap, though, because they knew I already owned more RE than they did). I would just sit at the dinner table, like: can somebody just pass the tortellini and STFU about politics per favore.
Correct me if I’m reading too much into your post, but it sounds like your European relatives are the world’s last experts on U.S. real estate the way mine are on, well, every subject pertaining to America. (the $hit I put up with for a good plate of pasta!)
Phillygal,
Yes, they do not know anything about the US RE market. And I feel frustrated when I try to explain the fundamental differences. They just assume it should be the same than in Spain or Europe and also assume that the population density is the same (even after visiting the country!). My father was tempted to actually invest in American US after he saw the prices in Atlanta. He knows a lot about his business but not about RE as he has never had to buy any (except one condo in Madrid he bought after I adviced him in 1995 “buy now when everybody is selling”).
Anyway, I got the impression that the Spanish market was in the “buy now or be priced out forever” phase, even after seeing development after development around my home town. Spain has, since mid 70s, one of the lowest birth rates in the world, so I asked who was buying all those properties and my father told me that a lot of them were bought as “investments” and for money laundry purposes (go figure!). But at the same time my brother in law told me that some people he knows are having some difficulties trying to sell their investment properties because housing has become so expensive people can not get a mortgage anymore and already are getting big increases in their main house mortgages because of the increase in the interest rate (from 300 euros/month to 500 euros/month and you know the low salary level in Southern Europe). I think they are going to have a bubble peak in 2007 and then a burst from 2008 on. Mainly because of affordability not a credit burst as in the US.
The Cozy Hedge Fund-Pig Man Relationship:
http://wallstreetexaminer.com/blogs/winter/?p=255
Russ — I hope you don’t object to a slight rewording of a passage from your post to expose a parallel…
“A potential conflict of interest exists in the way the
credit rating agenciesappraisers are paid. Theissuing companylender that is applying for theratingappraisal pays a fee, and the industry has acknowledged that some companies use this to pressure theagenciesappraisers for a higherratingappraised value. However the industry argues that theagenciesappraisers can and do resist this pressure because their reputations are at stake.”I just hope that I’ll have bought my returned-to-the-mean-price house before all this implodes. Not enough of a gambler to want to wait beyond that for potential super-bargains.
Chip -
are you the poster who said he was contemplating building rather than buying an existing house?
If you are, do you see erosion in land prices in the areas you’re tracking?
Phillygal — the area I am looking at is out of state and I have not been there since July, so can’t really tell you. I am going back in a month or two and fully expect some moderation in land prices. What I’ll look for first is the activity level of the known better-quality volume builders. If their activity is down, as I suspect, then I will bet land prices have followed.
Phillygal — sorry, should have prefaced that with, Yes, c’est moi.
A number of posters here are bullish on the Euro vs the USD. I don’t have enough knowledge to have a useful opinion, but I’d like to hear from anyone with a view about what the just-now admission of Bulgaria and Romania to the EU might do to the Euro. I suppose everyone but me assumes the Euro will last forever.
A timely request Chip:
Rumblings of Euro discontent
http://www.prudentsquirrel.com/breakingnews/02_01_07.htm
Fred — that matches what I suspected. There are an awful lot of dissimilar financial and political interests in “Europe.” Two tribes can behave civilly, but they remain tribes. Further aggravating the EU situation are worries by the UK and presumably others, about poor, unemployed Romanians invading their countries in search of employment or welfare.
For the long haul, I’d sooner diversify to Swiss Francs or Yen than Euros.
check this out
hurry or be priced out forever
http://newyork.craigslist.org/mnh/rfs/256473413.html
From a mortgage broker forum:
“I have a client in Michigan with a BK Ch 7 in 03, with 609 borrower and 601 co mid scores wanting to purchase a bank foreclosure for 110K but appraised value is $121K and they want the difference to do improvements on home. Does anyone do this type of loan in Michigan any longer? Full Doc W-2. Let me know. Thanks”
I guess the bk buyer is using his financial savvy to jump in before all the good deals are gone…..
Per National Mortgage News:
MLN Stops Funding; Future in Doubt
Subprime wholesaler Mortgage Lenders Network, Middletown, Conn., has stopped funding loans, and is talking to investors about a possible sale of its assets, industry sources have told MortgageWire.
another one bites the dust……
CNBC just reported that MLN has “stopped making loans ” because of “lower buying activity on account of rising interest rates” (!!)
They got the story *half* right and it sure sounds less scary than “MLN has shut down because they issued too many crap loans and now it’s coming back to bite them”.
It’s interesting to see how they sugar coat the truth to make it more palatable and way less alarming.
I know there are several employees of MLN clicking around here - I wish you the best.
The material cost of building a house has to be falling these days.
Here is the price of lumber:
http://quotes.ino.com/chart/?s=CME_LB.F07&v=d12
Here is copper:
http://quotes.ino.com/chart/?s=NYMEX_HG.F07&v=dmax
Copper was $1/pound forever prior to the housing boom. I’ll bet $20 that it goes right back there in 2007.
stop throwing money away on rent
http://newyork.craigslist.org/mnh/rfs/256496336.html
Glad to learn that I am not the only soul on the planet who is scratching his head over the “soft landing” prediction…
———————————————————————————————–
IRWIN KELLNER
The year of the conundrum
Commentary: There is little to support optimistic forecasts for 2007
By Dr. Irwin Kellner, MarketWatch
Last Update: 1:38 PM ET Jan 2, 2007
HEMPSTEAD, N.Y. (MarketWatch) — If you believe the conventional wisdom, 2007 is either the year of the soft landing, a Goldilocks economy or will mark the return of Rosy Scenario.
Me, I think 2007 is the year of the conundrum, since the assumptions underlying these views don’t seem to make sense.
http://tinyurl.com/yduuuc
“And if the economy does grow fast enough to justify this rosy scenario, chances are it will push up inflation as well, leading to rising — not falling — interest rates.
Guess what this will do to stocks. End of Story”
End of Story indeed. But then I am guessing Dr. Kellner never heard of the PPT…
“I know a lot of people that went to MLN thinking it was the promised land. It doesn’t take enormous brain power to figure out that any lender that is undercutting their competition on rate by .75 to 1.50 bps, letting borrowers go 100% stated at 600 and using the first page of the bank statements as full doc is eventually going to get their ass handed to them. Subprime people are exactly that, subprime and their credit sucks for a reason: they don’t pay on time. I think the industry is finally figuring out that they need to go back to treating these borrowers with higher rates and more money down.”
http://forum.brokeroutpost.com/loans/forum/topic.asp?TOPIC_ID=81847&whichpage=2
Straight from the horses mouth ! This is the total end of the RE boom. A huge bust is going to follow.
Financial manias such as the housing bubble don’t correct until liquidity is removed and we haven’t seen that yet. We are about to.
“Financial manias such as the housing bubble don’t correct until liquidity is removed and we haven’t seen that yet. We are about to. ”
AMEN!
Double amen.
I think 2007 will be known as the year risk returned to the market which will be evidenced by the tightening of credit in the face of declining interest rates. Look out below!
My God, if actual risk ever returned to this market and people actually feared losing money, the implications would be incomprehendable ! Until today I didn’t think things were too bad. Now I have this feeling we are headed for a full on depression.
The trigger will be a few more warehouse lenders shutting off the tap. That will totally kill the RE market and take everything else down with it.
Now I have this feeling we are headed for a full on depression.
I love that moment of dawning realization. Welcome to the “depression camp”.
LOL. Too true, tj.
Yes liquidity is leaving the market. Thank God!
I wonder if GMAC is going to have to publicly comment on its participation in MLN ? Wouldn’t it be something if GMAC itself got into trouble because of RE.
I wonder when the Asian investors wake up to this ? How many mortgage companies have to have their funding pulled before the Asian investors stop adding their funds to the pot, or buying the MBSes. Or maybe the Asian investors are fully protected by having the mortgage originator having to buy back the asset ! Wouldn’t that be a slap in the face !
We are about to find out the answer to the million dollar question that has been posed time and time again at HBB:
Who is the bagholder?
I just hope its not me!
“This is a reality check for the lending industry. Every indicator is there. Easy qual neg-ams and no money deals are going by the wayside as these are the real weapons of mass destruction. It was a nice ride as everyone was so busy refinancing and living off of their homes to be blinded by what else is going on. The survivors are going to be going tighter and the days of turn in an incomplete file and go to docs “subject to” are gone.
A higher degree of accountability and professionalism from all sides will no longer be obligatory but will be mandatory to survive. If Sen. Obama’s bill passes then there will be a greater power handed to the Fed when they want someone. I doubt that this will revert to a Suze Ormond A-only and everyone else has to rent in PotterTown world but the abuses of our business are returning big-time to bite us in the butt.
On the upside, by the end of the year when you say that you are in lending there will be a new perception of respect as the idiots and con artists depart. Know your guidelines and don’t be afraid to say no to a bad deal.”
http://forum.brokeroutpost.com/loans/forum/topic.asp?TOPIC_ID=81847&whichpage=2
Would you believe that GM is caught up in all this ?
“MLN has a six-year-old partnership with GMAC’s residential-mortgage arm, ResCap, through which GMAC provided a revolving line of credit and a committed warehouse lending facility.
A ResCap spokesman who in mid-December said the company continued to purchase loans and provide warehousing for MLN would not comment on the latest developments, AP reported.”
http://www.inman.com/inmanstories.aspx?ID=60822
I bet he didn’t comment !
Its going to be very interesting to see what the markets do tomorrow.
“Its going to be very interesting to see what the markets do tomorrow.”
I predict they shoot up like a rocket on the opening bell.
Some subprime issuers are facing liquidity problems as their so-called warehouse lenders withdraw credit lines. Among MLN’s warehouse lenders is GMAC’s residential-mortgage arm, ResCap. In mid-December, a ResCap spokesman said that “We have a relationship with MLN which includes purchases of loans and warehousing. We continue to support MLN through these programs.”
Stephen Dupont, the ResCap spokesman, declined to comment on the latest developments at MLN.
http://www.chron.com/disp/story.mpl/ap/fn/4438829.html
So the warehouse lenders are shutting off the tap. This is going to cause credit problems for the spring selling season ! Which will cause house prices to fall even further. Which will cause more warehouses to re evaluate their positions and shut off the tap. Which will cause house prices to fall further…
Domino’s are falling faster now.
Quick question. Why do so many rag on GEKKO?
This is hilarious.
Gekko not posting today? No worries, he’s here in spirit…
First mentioned by Stucco, not in response to anything the G-man said, but just, well, because -
Kind of poignant, almost like Stucco misses the G-man…
now PG wants to know why all the hate on Gekko?
Who knows, PG…but evidently he’s such a fixture on the Bucket that even when he doesn’t post, he’s a presence!
LOL
OT -
Ben, I was reading your Money & Metals blog. Scanning yesterday’s Bits, it seems there was some controversy around too much stock market talk vs. Housing Talk here. Since the Money & Metals blog is comment-enabled, why not just direct all the securities talk to that blog when it starts to clutter up the HBB?
Come back Gekko - I’m not letting you off the hook for that 75 large!
Trolls come and go on this blog. Maybe BeaConst, LV_Landlord or even Antonio Villaraigoso will resurface some time soon to liven things up again
On general principle.
LOL
Three words.. Dollar cost averaging.
over and over and over again.
GetStucco,
I wanted to thank you for recommending Galbraith’s book A Short History of Financial Euphoria. It’s a great and easy read. Among the MANY gems in the book is this:
“As to new financial instruments, experience esrtablishes a firm rule … that financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the aforementioned brevity of the financial memory. The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version. All financial innovation involves, in one form or another, the creation of debt secured in greater or lesser adequacy by real assets. … All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.”
Amazing that Galbraith predicted the 1987 crash in the stock market.
“Modern socialism, as I’ve elsewhere said, is when the corporate jets come down on National and Dulles airports.”
Hope this link works for the 1987 crash article by Galbraith - it’s a google search results page; click the first link on that page (leading to the Atlantic Monthly January 1987 archived article):
http://preview.tinyurl.com/ynd4ml
Try preview.tinyurl.com/ynd4ml
You have to read this to believe it. Here’s the beginning:
The owners of nearly 500 mobile homes in one of the last waterfront trailer-park towns in South Florida stand to become instant millionaires if they agree to sell to a developer. But some are holding out, saying there are things more important than money.
The NYTimes has outdone itself. Besides the article I posted earlier on global liquidity, they have posted this gem…
In 2006, a slowly improving job market finally grew strong enough to bring solid pay increases to most workers. Thanks to falling oil prices, meanwhile, inflation plummeted. As a result, the real average wage of rank-and-file workers … has risen more than 2 percent over the last year.
…Absent a speculative bubble, like the one in the 1990s that artificially heated up the economy, pay increases don’t come as easily for most families as they once did.
http://www.nytimes.com/2007/01/03/business/03leonhardt.html
It’s official, wages are up, inflation is down, and there are no bubbles in this economy. Too bad this reporter doesn’t read his own newspaper.