Post Weekend Topic Suggestions Here!
And send in your housing bubble photos to:
hbbphotos@gmail.com
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
-
June 2025 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
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
OT
Steve Liesman (CNBC senior economist) after release of GDP numbers on CNBC this morning:
“The word stagflation is one of those overused words, just like….. genocide.”
-You just can’t make this stuff up-
did he really say this?
unbelievable!
It is really funny how all the market gurus are trying to pump up this market. All I keep hearing now is dow 14000. These are some of the biggest slime balls out there.
Stocks are inflation hedges!
Things really are different this time around.
Really good inflation hedges when the Greenspan put is used to pump them up…
TheStreet.com
All the World’s a Bubble
Friday April 27, 10:07 am ET
ByBrett Arends, Mutual Funds Columnist
http://biz.yahoo.com/ts/070427/10353243.html?.v=2
It is merely a question of whether, not when, this global liquidity bubble blows up.
——————————————————————-
Everything is in bubble territory, he says.
Everything. ‘The bursting of this bubble will be across all countries and all assets.’
– Jeremy Grantham
It is merely a question of whether, not when, this global liquidity bubble blows up.
——————————————————————-
Everything is in bubble territory, he says.
Everything. ‘The bursting of this bubble will be across all countries and all assets.’
– Jeremy Grantham
Here is the comparison to 29′. A good read, IMO.
http://www.financialsense.com/fsu/editorials/2007/0427b.html
Wow, that was a really interesting read, probably one of the more informative ones. Too bad we can’t time it.
“The word stagflation is one of those overused words, just like….. genocide.”
1) Overused? I haven’t heard it used since the 1970s.
2) Like genocide? Is he hinting that he expects stagflation to kill the U.S. economy? Like in the 1970s?
Like genocide? Is he hinting that he expects stagflation to kill the U.S. economy? Like in the 1970s?
I think he is using rather dry humor to point out how screwed we are.
Got popcorn?
Neil
I saw the same thing. The one guy was falling all over himself to say that it wasn’t that bad. Do they really believe these govt numbers? Housing hasn’t even gotten really bad yet and it detracted over 40% from GDP. I don’t know why these guys just cannot connect the dots. They must really suck at chess with their lack of foresight.
“No one in this world has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”
It’s hard to see the light when you’re running full speed away from it.
That’s the story! I was astonished to read that the low GDP number was the fault of the subprime blowout. That’s amazing since you’d think it would take several months for the end of the home ATM to manifest itself in the cookbook numbers. Somehow, I think there is something else present. It’s more than just housing that caused the low GDP, but the government and Wall Street minions don’t want us to know. What’s more, the housing crash has barely begun. So if I’m wrong and the low GDP actually was solely the result of the subprime blowout, then just wait for the second quarter numbers, third, fourth, etc. We haven’t seen anything yet.
http://www.kitco.com/ind/Willie/apr192007.html
You have to look at the logical progression of this downfall…
Step 1) buyer uses home ATM’.. but are finally being turned off due to lack of equity.
Step 2) they stop buying cars, trips and HI-Def TV’s (first sign of trouble in Govt numbers)
Step 3) they paying their house payments.
So we are seeing the beginning of buyers going from step 2 and 3… MANY more will follow.
J
Are we all sure of this? Not to play devils advocate, because I am very suspicious that we can get a soft landing for all sectors if things are slowing down, but how bad is the actual net amount of home owners in dire straights vs. normal?
Come on!! Did Liesman really say that??!!! He’s a Jewish man. He, if anyone should know that even if the word genocide, (just like stagflation ) is used , has serious implications and can never be put out of mind. If you are thinking it “may ” be a genocide then I suspect that you are too late already. The same could be said for stagflation.
1.3 % growth w 3%+ inflation
=STAGflation
The 1.3% already takes into account the inflation.
and deflator ?
The 1.3% already takes into account the inflation.”
..but we all know inflation is greater than 3%
exactly, real GDP is already negative and real inflation is around 10%.
The official inflation rate has not been the REAL inflation rate for a LONG time. In L.A. EVERYTHING has increased across the board for years, most dramatically this past year. Every person who pays the bills knows this!
I was just about to add that Sushi at Whole Foods has dramatically increased but then I might come across as elitist!
Why are you talking about useless stuff like food? The inflation numbers don’t include food (or energy).
LA architect, I hear you. A gallon of milk is 15% more expensive now than last year and they want me to believe inflation is 3%? Maybe, if your body somehow acquires the ability to photosyntesize solar energy so you no longer need a trip to the grocery store to get your food, which also uses up “appreciated” gasoline.
Incomes are not up so there is no inflation. Duh.
My parents bought their 1st house in el lay in 1960 for $14k.
It sold last year for $625k.
Do the math.
….let’s order sushi…and not pay for it!!!
(classic line from REPO MAN movie)
An even better film by director Alex Cox…
“Walker”
Straight to Hell was the best! Followed by Repo Man.
Walker was ok. I had a hard time with the canibalism scene at the end.
>>Why are you talking about useless stuff like food? The inflation numbers don’t include food (or energy).
I’d go with Repo Man, then El Patrullero, then Straight to Hell.
“Hi, I’m Kevin! Vacuum, sir?”
“For a Repo Man, life is always intense….”
Movie ranks right up there with “Rancho Deluxe”
Life is like a plate of shrimp.
at least the price of chocolate is going down!
Every cloud has a silver lining!
Gilding the water lily, FLA style…
From the pages of the Drought Impact Reporter:
“Low water levels in Lake Okeechobee have hurt the economy of the area. The guide services and tackle shops have had less business. The fishing is good if you can get out into the lake.”
“The low water level of Lake Okeechobee is revealing hundreds of acres of lakebed and is presenting an opportunity for cleaning up the lake. Some area residents are impatient for muck removal to occur. One muck removal project will begin in Eagle Lake to the north of Lake Okeechobee. A project to remove invasive plants and reseed with more desirable plants is also planned. Low water levels in the region will also permit the redistribution of apple snails, which are eaten by snail kite. The drought has also improved fishing, since the fish are forced into a smaller area as the lake dries up.”
“Dry marsh hiking is one of the activities offered at Grassy Waters Preserve since the drought has severely impacted the area. What were once canoe trails are now bird trails.”
Learn more:
http://droughtreporter.unl.edu/map.jsp;jsessionid=E990B370630B1EF5B0C813478AD5166A
Better idea! Concrete over the dry marsh and build condo’s! Florida needs more housing for all those baby boomers who are going to flood the market as they retire.
Yeah!! We are running out of land, so we might as well use the dry lake!
How timely for aladinsane! This was reported just yesterday.
I’ve got something here for your conspiracy theory and alarms with regard to whether we run out of water in SF this summer, as reported in the San Francisco Chronicle.
********
“‘It was a very dry March, the sixth driest on record. There was a lot less snow falling and a lot more snow melting,’ she said.
But the state water agency isn’t expecting shortages this summer because the reservoirs are relatively full after three years of wet weather.
‘The impacts on a water supply don’t become evident until you have multiple dry years. A single dry year is not particularly a big deal,’ said Frank Gehrke, chief of snow surveys for the Department of Water Resources.”
From:
The San Francisco Chronicle
“SNOWPACK LOWEST SINCE ’88
Some Bay Area water districts call for immediate conservation — no shortages expected this year because reservoirs are nearly full”
Jane Kay, Chronicle Environment Writer
Thursday, April 26, 2007
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/26/MNGK7PFON81.DTL
Hmm, the two reasons given are housing and health care. Housing costs are dropping (because they got so high, nobody could buy a house). So, things are getting better.
Once the health care industry realizes that people cannot pay current prices, health care prices will drop too.
Seems like the problem is 1/2 way to correcting itself.
Will things deflate when the Government prints more money making it virtually worthless?
They should let us feel the pain which would be an unpopular decision but one that will make the country strong in the long run.
“They should let us feel the pain…”
The aim of economic policy these days are to make sure everyone thinks happy days are here forever, thusly encouraging profligate current household financial management and a much worse hangover for the next generation of policy makers to deal with.
While the plutocrats continue to steal colossal chunks of wealth behind the scenes.
With apologies to Mel Brooks:
“It’s good to be the Oligarch!”
“The problem is 1/2 way to correcting itself.”
But a different outcome is possible. You say house prices are falling because nobody can pay, and that medical care will become cheaper because nobody can pay. My diagnosis is, medical care became unaffordable because the payer was nearly always subsidized. The same could happen to housing, perpetuating the unaffordability of housing.
This is a very good point with regard to rising medical costs.
And I suppose it could happen to housing…
The subsidized payor is analogous to the use exotic mortgage products… thereby inflating costs.
In neither case, in the shorter term anyway (and this could be a long time), does the consumer/buyer ever have to pay the true cost.
It’s interesting that we restrict access to medical care, but apparently everyone is “entitled” to buy a home!
There is a major difference between housing and health care: housing can’t be outsourced, healthcare can. Even today some HMOs encourage people to have expensive surgeries in India. They actually reimburce them with 50% of the saving compared to the cost in USA. I’m almost sure they gonna “outsource” nursing homes etc.
“I’m almost sure they gonna “outsource” nursing homes”
Holy crap…I never thought of that but from a purely economic perpective it’s a no-brainer. Most of the costs of long-term care are in labor, and if a person never leaves the building anyway, who cares where it is? Except for all the leave-it-to-Beaver-style extended family that’s sure to be needing to visit all the time…of course.
And gas prices just keep going up up and up!
Also, as things begin to tighten, look for the stock market to come off of it’s highs. What is benefitting many companies is weakness in the dollar. The exchange rates inflate earnings.
Oh well, I guess that makes exports look good and imports look bad. Too bad Detroit can make anything better than a turd on 4 wheels.
The PBS Newshour talked about this last night. They had a couple wonks on discussing the good economy.
Boyce Watkins (Syracuse U): “The average Dow Jones Industrial Average company gets 41 percent of its sales from overseas markets. And if you add that to the fact that the dollar is declining in value, which opens up those markets further for American products, you’re going to see the surge that you’ve seen in the market recently.”
Transcript is up — I’m sorry, I don’t know how to do tinyurl:
http://www.pbs.org/?station=WETA&address=http%3A%2F%2Fwww.pbs.org%2F
Boyce Watkins (Syracuse U): “The average Dow Jones Industrial Average company gets 41 percent of its sales from overseas markets.
Who was saying yesterday that the American consumer was not going to be replaced with another market? Can’t always supply the links but I think we all knew this was going on. Aren’t alot of people on this board conducting overseas business? I know the local businessmen spend more time abroad than home.
So if Joe6pk (or soon a few layers of bosses above him) can’t afford the product anymore, no skin off their backs.
I’m sorry but I’m tired of Detroit bashing. It seems to make people feel smart to make off the cuff derogatories about the american nameplates. In my mind, this is no different than saying real estate always goes up.
If one actually drives many different vehicles, as I have, you will see that there are really miniscule differences between most vehicles in the same class. Reliability differences are narrowing considerably. American nameplates are generally more reliable than european, korean, swedish, british. Toyota reliability is beginning to show cracks. I am beginning to wonder if it’s worth paying $5000 more upfront in order to make it up on the backend at resale. Yes, the impala is a turd. The Hummer is an embarrassment to all who drive it. But there are many very very good vehicles made by the not so big three, er two…one?
Disclaimer: I drive a Nissan. When I bought it was the cheapest vehicle that fit my requirements. I am not a buy-american freak but I would like to if it makes sense. It’s too bad people are flippantly made to feel like morons for buying an american car.
“I’m sorry but I’m tired of Detroit bashing. It seems to make people feel smart to make off the cuff derogatories about the american nameplates. In my mind, this is no different than saying real estate always goes up.”
Testify, Lex! The nasty tone towards our own people and here in the US is a very disturbing social phenomenon, IMHO. “Jobs Americans won’t do”. “The Rust Belt”. Boomer bashing. Calling each other pigs. etc., etc.
I am heartsick about it. Very disconcerting. So many forces arrayed against us, meant to break the spirit. And so we point fingers and revile each other. I was so stunned by WT Economist’s post and the agreement with it. How vile.
Agreed that Detroit has come a long way. But some of us have long memories of cars that self-destructed within a year during the 70s. I can remember when the Camaro sold new with a 90 day bumper-to-bumper warranty.
The one and only reason Toyota and Datsun ever got a foothold is that their vehicles were more reliable. Detroit tried to counter with the (extremely unreliable) Vega and Pinto.
So pardon people if they don’t feel like giving their custom to vendors that already pooped on them in the past.
In defense of Ford - we have a Ford Escape that is 6 years old now (and touch wood) we have not had any problems with it and the build quality is actually really good. It’s more the Ford garages that service the cars that we have issue with - it feels like they really try to price gouge the service prices!
The problem is made evident by the fact you think a 6 year-old vehicle is old. My ‘93 Camry runs perfectly.
I sometimes think about buying a new car, but it’s difficult to justify when this ‘old’ one works beautifully, has all the features (power everything, AC, ABS) and still has several years left in it.
Not to mention that the Ford Escape is just a rebadged/retooled Mazda Tribute with a Mazda designed drivetrain.
FWIW most cars, regardless of brand, have parts sourced from the 4 corners of the world. Your “Japanese” car has American, Japanese, Chinese, Indian, Canadian, etc., parts, and so do European and American cars.
I used to be a big believer in Japanese cars, especially when American cars were not so good. I have had big problems with Japanese cars that according to Consumer Reports were supposed to be bulletproof, and I am no longer willing to pay the huge premium for those brands. I have NEVER had a Japanese car that didn’t have major problems before 6 years.
Yeah, I guess I haven’t gotten over my 77 Ford Pinto, arguably the trough of Ford quality. Radiator seam failed at 30k miles, engine block cracked at 59k miles. Total POS. Bought it as my first car out of college. There was a bubble then in SoCal for Hondas and Toyotas. Douchebag dealers with waiting lists and charging a markup.
Bought a Honda Civic in the 80s. Lasted me 8 years, 200k+ miles.
I did buy a GM in the early 90s that lasted me 10 years, about 180k miles. Compression finally failed. I never even had to replace the clutch.
Now I have an 03 Honda Civic.
Still driving our ‘93 Toyota SR5. 200K miles. Not one actual repair. Maintenance only. We bought it for our oversized dog, and the truck outlasted the dog. Our ‘05 Corolla gives us 40 mpg.
I believe the U.S. manufacturers are capable of building as good a car as Toyots, et al, but till now, they’ve decided not to do so…….They’ve got a steep climb ahead, producing/selling anything that competes.
Ronin,
If I follow your reasoning, then I shouldn’t buy Japanese either, because they pooped on us by bombing us at Pearl Harbor (where there are still a few thousand American bodies unwater). Isn’t Nissan formerly Datsun, which made its fortune during WWII building fighter planes and other steel-based products? As did Mitsubishi and other Japanese auto makers…
And let’s not forget the 1970s “it rusts the day after you drive it out of the showroom” Chevy Vega. That, and the fact that you needed a net to catch the parts as the fell off.
That being said, I recently rented a Pontiac Grand Am, and I thought it was very solid and handled perfectly, so things are improving.
“Disclaimer: I drive a Nissan. When I bought it was the cheapest vehicle that fit my requirements. I am not a buy-american freak but I would like to if it makes sense. It’s too bad people are flippantly made to feel like morons for buying an american car.”
********
Are not a lot of Nissans sold here made in Tennessee?
And made from parts that come from all over the world?
“Made in America” today is different than your forebearers’ version.
I could put together a long drawn out response as to why GM/Ford/Chrysler are crap. Arrogant management, arrogant union workers.
The cars suck and it shows up in resale values.
Please read the Machine that changed the World (by MIT press I believe) on lean manufacturing.
There’s no arguing Honda and Toyota are make good cars that consistently top reliability surveys.
However, the bias amongst “old timers” against american cars strikes me as being similar to how 82 yr olds still talk about “the Japs”. I think there is some cognitive dissonance going on when one “wants” to believe their car is the best and they made a wise decision by paying more.
The question is whether one is willing to pay the “X market premium” markup at the Toyota lot. The rest of us will be laughing all the way to the bank. The arrogance of the dealers I have been to is astonishing. And in my mind unwarranted. I have driven a Corolla that was unexceptional in every way. In my earlier years I drove a used Cavalier and Gran Prix to 158,000 and 160,000 respectively. No significant problems. In my experience the most problems occur when one is given third-rate replacement parts at the local brake/lube chop shop.
My Nissan has had a catalytic converter problem (warrantied thank God) and AC problems. Built in Japan using lean manufacturing. In it’s last model year. Should have been bulletproof.
The Honda/Toyota Bubble continues to grow. Unfortunately perception = reality to most people and I think GM/Ford/Chrysler will continue to struggle for at least several more years as they battle the years of managerial ineptitude in the 70s/80s/90/s.
I shudder to think if they go under completely.
Perception often is reality.
The GM & Chrysler products we purchased both cratered just outside their respective warranties, whereas the Mitsubishi, Nissan & Acura vehicles have run well into six figures without nary a hitch. I drive *hard*, too.
Don’t even get me started as to the difference in how the dealerships treat you.
p.s.: That said, I grew up in Chevy trucks & Ford cars. I am not at all happy about the current state of affairs.
I think we see the M3 inflation when we look at imported goods. Oil being the prime culprit.
Since Senators Schumer, Dodd, Clinton and Obama collectively learned that their subprime bailout trial balloons were made out of lead, I am wondering whether Fannie Mae and Freddie Mac are proceeding with the unannounced lending bailout schemes behind the scenes and hidden from view within the bowels of Fannie’s unreported financials?
From p. A2 of today’s WSJ (with comments from the peanut gallery in parentheses):
————————————————————————–
Countrywide, Indymac Earnings Slide
By James R. Hagerty and Lingling Wei
(Isn’t Lingling a giant panda bear?)
…
Even as many lenders grow more cautious, Fannie Mae and Freddie Mac have been rapidly increasing their purchases of one type of loan under close scrutiny from regulators. (Does this mean the regulators are closely scrutinizing these purchases and granting their tacit approval?) Inside Alternative Mortgages, a trade publication, reported that the two GSEs issued $58.35b of securities backed by I/O mortgages in the first quarter, up 43% from a year earlier.
I/O mortgages allow borrowers to pay only the interest due during an initial period. That exposes them to the potential for a jump in payments once they must start paying down the principal. It also slows their accumulation of equity, increasing the risks of foreclosures.
A spokesman for Fannie said the company’s purchases of such loans are “targeted toward high credit-quality borrowers.” A Freddie spokesman said the company monitors the loans carefully. “We think we have a very good handle on credit quality,” he added.
What about some Iranian investigation committee to come and have a look in those nuclear ‘Mac and Mae’ books…
It is getting to the point where the FED can no longer hide it’s monetization of the mortgage industry. Sooner or later even the dolts at CNBC are going to start asking questions about the practices of Fannie and Freddie.
They (Fannie) announce a small (20 billion or so) starter program to help the subprime sector and before you know it, they are buying everything in sight. Combine this with the knowledge that companies like Fremont are selling their Subprime business for something like 96% of Par when they have admitted to a 20% default rate and one would have to be a MSM financial analyst to not see what is going on. The FED is at the back door of all of these institutions furiously monetizing bad debt instruments. Too little, too late. IMO.
“The FED is at the back door of all of these institutions furiously monetizing bad debt instruments.”
And scolding the GSEs all the while for creating an uncontrolled source of systemic risk. What a scam!
> The FED is at the back door of all of these institutions furiously monetizing bad debt instruments.
Oh, No!!! The Fed is the Front door. It is the portal built in 1913 with one and only one purpose: to monetize bad debt.
Think about it: US.gov bonds are obligations to pay the debt with instruments ($US) produced only by issuing more of the same obligation. Can You think about any worst debt than that?
Compared to this all back door it creates are just side effects.
Are you suggesting they shouldn’t help struggling hedge-funds?
The expression “hey, at least I am not you” comes to mind when I think about the SHTF prelude appearing in real estate. War on savers will be painful at first dosage, but there is some comfort in knowing you will not be scrambling around looking to how to feed the dinosaur or hand it off to the man.
Looks like your prediction of a stealth bailout through Fannie and Freddie was right on, GS. With a wink and a nod from Congress, the GSEs will go double or nothing knowing an eventual bailout awaits if it doesn’t work out. This resembles the 80’s forbearance by FSLIC (with tons of “goodwill” added to S&Ls balance sheets to make them appear solvent) that ended up in the much bigger bailout, recession, and credit crunch several years later. So many bubbles being blown these days, I wonder which one will pop first?
The Fannie / Freddie bailout scheme is a perfect way to transfer the toxic mortgage debt onto the future balance sheet of the U.S. taxpayer. When Fannie explodes into a major financial crisis, it will be very easy for top policymakers to push through an ad hoc, taxpayer-funded bailout, similar to the $200b that was pledged for rebuilding in the days immediately following Hurricane Katrina. The beautiful thing about this bailout is that it will get all the hedge funds and investment banks off the hook for all the toxic mortgage debt they have traded in over the course of the bubble. It is all about making sure the richest Americans get to keep theirs and screwing anybody not in the top 1/2% of the wealth distribution into paying the tab.
Jeremy Grantham says all asset classes everywhere are in a bubble. But he forsees an “exponential phase” before the burst where the markets party like it’s 1999.
All the World’s a Bubble:
http://biz.yahoo.com/ts/070427/10353243.html?.v=2
That’s already happening.
“The Fannie / Freddie bailout scheme…”
I answered a computer generated telephone call this afternoon that briefly described the new Fannie Mae mortgage product; press one for more details. Funny thing, this was at a secure government facility with an unlisted number.
Happy Birthday to me. I stll keep sending out resumes and still get Nothing for answers.
Try it sometime…the incredible lack of communication skills today, even if you have experience even if you just want to make a contact with a company.
No wonder the economy is staing to tank. Employers just flat out refuse to consider hiring smart people today. And that is EXACTLY what will stall this recession is a mass hiring of smart people.
This is going to be worse then anyone expects becuse we hired so many clueless airheads, that when the SHTF you will realize how useless and what an economic anchor they are.
STOP SENDING OUT RESUMES AND HIT THE PAVEMENT.
Please, start networking. If you want paralegal work, start finding lawyers to talk to. If you don’t know any, start talking to friends, your parents friends, and check with your local councilman’s office for leads. People hire people they know and like…I assume you have the qualifications you need. Check in person with the NYU Real Estate dept.-I forget what it’s called. They offer courses to qualify paralegals–they may have leads, and while there, check their bulletin boards. Call some of the big property firms–Rose, Ticschman, be friendly on the phone with the secretary answering and tell her you’re looking for paralegal work. They often have ideas or leads. Good luck.
I have found that this can be effective with small companies, but where I work HR screens all candidates and we can’t bring in people for interviews without their approval (it wasn’t like this just a few years ago). I am not allowed to drop a friends resume on a hiring managers desk, I must submit it into the HR blackhole.
and we can’t bring in people for interviews without their approval
OH man this hits a sour note….the BIGGEST law firm in NYC did this to me….Skadden Arps
http://www.skadden.com/
They needed a Audio Video tech who was also a paralegal, so you would always be working.
I knew the guy in AV, he wanted to interview me but HR didnt…..seems they wanted a YOUNG RECENT GRADUATE for the job…..
Yes age sex/discrimination in law firms is the worst of anything i have tried in my life… …BAR NONE!
dj, I know everyone on the board is opposed to taking on debt, but you might consider law school or some other type of grdauate school. Student loans generally kick in after graduation, so as long as you’ve targeted a career that is not moribund, it might be something to consider. At the very least, from a psychological standpoint, you won’t feel as if you’re spinning your wheels, which you seem to be doing at the moment.
Just a thought.
US Customs and Border Protection is hiring like crazy, and the starting salary is good. FWIW.
Don’t the have age requirements, being that these are law enforcement jobs?
TSA might be different (you cary a gun). Think of all the fun you can have harrassing people who are running late to catch a plane.
Oops, I meant “you don’t carry a gun”.
’seems they wanted a YOUNG RECENT GRADUATE for the job…..’
Of course, those employees work for entry level wages and are usually single (no kids or family obligations to keep them from working unpaid overtime).
Nope, no age limit for CBP. The bonus is that you’re immune to the forces of the real job market.
Seek contract work. Contractors are usually engaged directly, bypassing HR.
I think some of the problem is the huge buffer that the hiring manager often has between him/her and the candidates. There’s the HR dept. of course, and perhaps an outside recruiter, and the resumes are most likely screened by an underling who is instructed to automatically reject anyone who doesn’t have the “3-5 years of experience stuffing fortune cookies”.
Another related problem is the quality of job postings is so poor that it is difficult for candidates to determine if the position is appropriate. The WSJ recently had an interesting article on this topic —
WSJ: Job postings recruit a broader pool of promising candidates when they don’t set strict education and work-experience requirements
I follow this issue because I have on and off managed a job board for hi-tech professionals for 5 years. I am just now re-launching the job board with two main differentiators — 1) focus on only one functional area, 2) all job postings reviewed and modifications suggested back to the job poster.
I changed jobs fairly frequently in my industry (telecom). Only ONCE did a resume, by itself, get me my next job. Ya gotta network.
The trouble with networking is that you can do it until hell freezes over and still have little to show for it. In the meantime, you’re still in need of a job, and your bank balance is going down, down, down…
And the flames get higher
Got Johnny Cash?
Never had a resume and only filled out ten applications in my life. Most of my full time and part time stuff came to me by word of mouth. Think it is call “networking” now….it was then who you knew and if they knew you were competent.
In the hullicinating economy now, competence and ability mean little….
“In the hullicinating economy now, competence and ability mean little….”
That deserves a huge TESTIFY!
Say it LOUD brotha!
Why be competent, when we can offshore all the heavy lifting (you know, all that tough design work that involves analysis and, heaven forbid, math!) to countries where those jobs pay a pittance. My 3rd world colleagues are so poor they have to ride the bus to work (no car).
Read this book and rethink your job hunt strategy (I am 100% serious: Strictly follow this book’s advice and you will have a job within the next 12 months!) It will also permanently improve the quality of the portion of your life spent working, and provide permanent job security. Why not give it a try?
http://www.jobhuntersbible.com/articles/wciyp.php
Get out and talk with people.You need someone on the inside to help you.
Have you tried a temp agency? Robert Half is a good place to start in the nyc area. They are scrambling to find qualified candidates. Wife loves working for them… she can test drive a company before she decides. Keeps getting calls asking her to consider new permanent positions. http://www.roberthalffinance.com
If finance isn’t your thing, try Knapp Consultants or Cornell Assocoiates. Donna Cornell runs a good ship. They’re worth a look.
OH they are HORRIBLE…you just dont get it…….
The people are clueless airheads NOT PROFESSIONALS
I need an ADULT to talk to me not little kiddies.
All I hear from you is how stupid everyone is. Your attitude sucks, and people no doubt pick up on it.
You want a job, then you better learn to like people, all people, because that’s who will hire you. Not everyone you come across is going to be a genius and you’ll have to forgive them for that.
It honestly sounds like the biggest impediment between you and a career…is you.
All I hear from you is how stupid everyone is. Your attitude sucks, and people no doubt pick up on it.
aNYCdj,
Let me give the best advice from the hiring side. The #1 thing I look for is “will this person make my job easier if I hire them.”
If the answer is no, I move on. We FIRED one of our brightest employees; he had such a negative attitude at work we figured every hour he worked cost someone else an hour of work.
#2 thing I look for when hiring? Enthusiasm.
Education is actually pretty far down the list… and I hire technicians to Ph.D.’s. Attitude, respect for fellow coworkers (don’t slow their productivity), communication skills, and then technical skills.
I can get more done with a bright engineer straight out of school if that person is enthusiastic and willing to learn. Now, we just hired a guy with 35+ years of experience too… Funny, he was hired more for his enthusiasm too (although he is a known expert in the field too). Why? Experience counts most if that person can mentor and the pupal learns far faster from an enthusiastic teacher than a bitter one.
Actually, I only know of four people ever fired from my company. One for fraud (idiot… wasn’t worth it), two for bad attitudes, and one for not doing anything in a year (NOTHING!). That’s out of thousands.
My entire point is your future boss already has it tough. He/she is looking for relief. I know I went long winded into making that point. But I’ve yet to meet anyone with budget that doesn’t think along those lines at some level. Don’t come across as a “know it all,” your future boss already has 3 to 5 of those working for him that he’d love to replace. Be the solution and you’ll get a good job and promotions galore.
Got popcorn?
Neil
aka “Lightsaber” on airliners.net
Next to cash, attitude is king.
Well put lost.
Neil, I have to second the advice above. The world is full of jerks, and most of them have jobs. No matter what you think to yourself, a job means you will be surrounded by people who are not necessarily as smart as you, even if they are your boss. Heck, that’s life, dj, you have to learn to work with and for jerks and make things happen. Your personal life an attitudes are for the hours after work.
Neil, I see you liked the Joe Stalin paraphrase and put it on your blog link ;).
Someday, I’ll put up the links to the blogs about where I work. You won’t even begin to believe it.
The best advice I ever got (given to me by a CEO) was that no matter what position I had, my job was always to make my boss look good. This humble attitude, and hard work, has personally led to 6 promotions in the past decade, and a quadrupaling of my income. Attitude is everything.
“no matter what position I had, my job was always to make my boss look good. ”
I’m very sorry, but that little quote absolutely makes me want to barf. There’s a special place in hell reserved for people who sell their souls to make the boss look good, who give not an ounce of thought during their careers to what REALLY needs to be done when they find themselves working for an incompetent boss (and who here can honestly say they’ve never had an incompetent boss)?
And yet, there are legions of automatons out there who go through life who use your little quote as a guiding principle. No wonder the world gets to be such a f*cked up place.
Without thoughtful dissent, what do we have? Nazi Germany, Iraq, Enron, Hurricane Katrina, (insert the name of your favorite human-induced catastrophe here)….
I’ve worked for/through Robert Half before, and I have to agree with aNYCdj - they are pretty lame. Just a body shop leeching your hard earned cash for simply submitting your resume and doing payroll for you. I’ve worked with a lot of recruiters/consulting firms and they are bottom of the barrel.
YMMV - just my opinion.
Hurling resumes is worse than internet dating. Looking at a stack of resumes is the employer’s last resort. Start by meeting people in your industry. Ask for referrals. Do not give anyone a resume until you are asked and already know what the opprotunity is.
Put on your good clothes and find ways to actually meet people.
HERE IS WHAT PEOPLE IN HR CANT GET THROUGH THIER PEA BRAINS:
I am working, freelance and doing many things, but its not what i want anymore. And i have a big gap on the reusme due to helping my mom take care of my now decesed father….but i need a SMART adult to figure this stuff out.
Yes I dj’ed a 40th birthday party on saturday for $530, videotaped one of my favorite Zydeco bands on Sunday, sold $475 worth of stuff on ebay, thanks to the 20 cent listing day. and maybe more….. but then next week i have ZERO income lined up.
http://www.youtube.com/watch?v=25D21pnGZuo
The answer might be right in front of you. Your DJing and working parties, thus you have a large happy “captive” audience. Maybe, when possible and in an appropriate manner, you could “work” the crowd. Just an idea.
HR depts are there precisely to weed out people who can’t figure out a way around HR. Get a clue.
A book that I referred to a friend of mine got him a job in 3 months making $25K more. “Selling to VITO” by anthony parinello.
It’s a book for salespeople that teaches you how to go right to the top, the CEO, the VITO (Very Important Top Officer).
When you are job hunting, you are effectively in sales. The tactics in this book work (been using them for years) and can be easily applied to job hunting. Even better if you aren’t in a sales related field since CEO’s won’t see it coming.
Don’t be embarrased about taking time to care for your father, that makes you one of the good guys!
You could always show the whole period as self employed and explain that you no longer need to make the “more flexible/less income” trade off.
I have changed jobs quite a few times over the years. I never got one through the HR office. Always by talking first to the person that was going to be my boss. I always found that person by referral, asking people in the business who they know and might introduce me to, then asking that person who they know that might need someone with my peculiar skills, etc.
Good luck! Threat the hunt like a full time job.
http://www.toastmasters.org is one of the best and least expensive ways to meet high level business people and network. In my experience, they are always very helpful and getting to know them is usually easy.
Almost always a great group of people. Look for groups that have a regular meeting of at least 15-20 people.
aNYCdj,
I empathize with you. In 2000-2001, I spent all the time in the world sending out resumes and getting no where, yet they seemed to hire just about any worthless Joe. I agree with others here, either know someone on the inside or take your fight directly to the company. Good luck!
I got laid off in January. Took me a week and a half to get an offer. 3 weeks to start.
Try small law firms that don’t have HR departments. Be willing to work part time to get your foot in the door.
Also look into local pro bono groups and volunteer–if you are as good as you say you are, one of the attorneys working pro bono will either hire you, or refer you to a buddy who will hire you.
– Weekend Topic —
Housing downturn accelerating. What happens to alternative reality specu-vesting entrapped-reneurs? Will they come back to reality OR lose their minds?
They will become home sellers. I can already see them all over the high end of ziprealty.com’s San Diego SFR for-sale inventory, as evidenced by the huge proportion of used homes currently for sale that were built post-2000 and listed north of $800,000, to boot. Who buys a brand new home with the plan to turn around and sell it within the next few years, other than a flipper?
You have to remember, for many of them, their entire business model was based on the two year capitol gains exemption timeline… you know, with their owner occupied status and all…
They make their own reality and hence, have already lost their minds. I’m thinking encouragement (granite countertops, stainless steel appliance upgrades, flat screen TV’s, more negative cash flow property, etc.) will be the best medicine.
Will there be a recession in late 2007? In 2008? And what will be its character — a profits recession, or a jobs recession?
Which parts of the country will be hit harder? The Northeast and California, as in the early 1990s? Manufacturing areas, as in the early 1980s and (pre-Bin-Laden) the most recent recession?
What will the political implications be?
Many parts of California are in for a rude awakening…
I was watching a tricked out flashy red H3 on the Pomona fwy a few days ago~
There must have been another $40k in it, on top of sticker price.
Nearly $100k invested in a car that goes just as slow as every other car, on the city of angles parking lots, previously known as freeways.
el lay will fare worst, as it’s a see me-dig me kinda place.
Not much building went on, but i’d hate to guess what part of helocery has fueled it’s economy, the past few years.
Entertainment?
They’d use any reason to get away, perhaps to Canada?
I get your point.. not to nitpick, but an H3 runs around $30k and with a relatively wheezy little 5 cylinder engine, is not exactly a symbol of excess like Hummers of the past. It’s more or less in the same league as a Toyota 4Runner or a Nissan Pathfinder.
My loathing is reserved for Toyota Sequoias, which are much bigger than the H3 and at least in coastal Massachusetts, are the yuppie soccermom vehicle of choice. It needs a sticker on the rear glass from at least one ski resort and a sticker from at least one summer island (Nantucket, Martha’s Vineyard) to round out the obscenity.
Funny, every time I see a sequoia car, I wonder why they didn’t try something novel, like standing the car upright, like it’s namesake.
The only Sequoiadendron that resemble it, are dead trees, on the ground.
Great post, we feel the same about that exact SUV here in upstate SC. Who needs 4wd when we have had no snow for three years? They all have status badges all over them with a primped skinny phony on her cell phone driving like an idiot…
IMHO it is where one lives that makes the difference. In the hinterland, the smarter buyers of vehicles buy from the nearest dealership - to buy a VW Jetta when the nearest dealership is 70 miles away is insane, ditto Toyota or BMW. The same is true for farm equipment, if J Deere is closer than IH then you are better off having IH.
I have no problem with the H2 - it is a decent 3/4 ton work truck with an SUV body, and the tax write off is truly superb.
I love seeing the ‘balla’ driving around with the chromed out 22″ rims mounted on these turds. I found out recently there are places where you can rent these tire/wheel packages by the week! Kind of like a Rent-a-Center for car accessories. Talk about howmuchamonth mentality…
GM announced yest. they’re thinking of discontinuing the Hummer.
About time. Everytime I see one of those all I think of is “big car, little penis”. But then I also think when I see McMansions.
Thought I was the only one for whom “small penis people” came to mind….
A jobs recession, followed by another jobless recovery. And like last time, the unemployment numbers will hide the huge numbers of discouraged workers who have given up looking for a job (and who by definition are no longer part of the labor pool) and the underemployed white collar workers working 3 part time jobs.
I agree Colorado…..
“Will there be a recession in late 2007? In 2008? And what will be its character — a profits recession, or a jobs recession?
What will the political implications be?”
Well, traditionally the president gets blamed for the economy, so that’s an easy one. In truth, Greenspan should get the cred for not letting the 2001 recession work its way out… but Bush, leader of the executive certainly could have done a lot to curtail the fraud that really let the boom explode in 2004/5/6. Such enforcement of laws would have required cutting into profits of big business, so I guess that was that.
I think more interesting is how this recession will affect me. I’ve been trying to convince myself that my job is recession-proof, but I always wonder if I’m just blowing sunshine up my own a**. What kind of employment will survive and thrive?
I can think of a few industries that won’t
most of my customers sell health insurance… do you guys think that is safe? I’m assuming that people will cut back in all sorts of ways but you’d think insurance (health) would be one of the last to go.
I can’t imagine doing without mine… the #1 cause of BK in the US is health related debt. I’m sure that’ll change with all the FB’s in the housing market.
I think health insurance will be hurt. People will just cancel and hope for the best rather than go hungry or do w/o things they need now, today. Of course, the industry is trying to make it mandatory, but good luck making someone pay when they can’t. Car insurance is mandatory, and I’ve seen numbers of uninsured that are surprising (can’t recall the figures, but they seemed really high here in Colo. and Utah).
You forgot NM. Huge number of unisured drivers.
Car ins. is mandatory to register a vehicle here in CA but people just rip the reg stickers off other people’s cars to put them on their own to keep from getting pulled over. Wash, rinse, repeat.
Insurance is for the flush times but once the consumer gets squeezed, they cancel.
Just read a report on how Michigan drivers are forgoing car insurance in large numbers.
Employment that will survive and thrive:
Debt Collection (until it is offshored-can’t wait to have someone from India calling me about a debt I don’t owe).
Law firms that specialize in financial & real estate litigation.
Liquor industry.
Section 8 housing (Unless the government decides its cheaper to offshore all the people who won’t be able to afford a place to live here).
Gun industry.
offshore ‘em? like the Back to Africa movement in the 70s when the blacks all decided to get everyone to return to their roots and Africa?
i see Utah hasn’t changed much…
Well I honestly can’t speak for all the other 20 to 30mil blacks, but I like it here…
hey, I’m actually not from Utah, I’m from Colorado and I wasn’t trying to slam blacks at all. when is it politically incorrect to even MENTION minorities?? I was merely stating a fact, that’s what happened, I personally thought it was kind of cool for them to try to reconnect with their roots. Man, you guys need to quit being so defensive.
I just reread my comment and my apologies - it didn’t come across as I meant it to. I was just commenting that it was the only time I’d ever heard of a group talking about going back to their “motherland” - I certainly didn’t mean to insinuate that we should outsource anyone. Just for the record, I was one of the students who nearly got arrested at Colo State way back when - we boycotted BYU because they wouldn’t allow blacks on their team.
The 1.3% surprised me. Didn’t think we’d see this so soon. It’s still very early for subprime fallout to have much of an effect. Maybe it did in March on consumer spending - but that is the least of concerns from this. I’m guessing recession by end of year - hard to see 2nd quarter being positive after the 1st Q report.
As to what type of recession - I’ll go with “borrowing recession.”
And regions… Some of the best places to be may be where real things are produced/harvested and the bubble effect didn’t goose the local economy so much. KS, OK, NE, SD…?
“borrowing recession”
I’m going to have to remember that one.
As Russ Winter and others have pointed out, HEW is falling hard and will continue to contract.
“Official” recession no later than 07Q4/08Q1, depression by ‘09, no economic expansion until 2020.
Agree with your assessment, tj.
What is going to prevent another bubble (Stock Market) to substitute existing bubble (Real Estate)?
All of this money should go somewhere, right?
It seems to me that is what is happening now.
definitely, money supply growth is still accelerating. If you read between the lines, it is very clear that Ben Bernanke knows just one solution for every economic problem, and that is inflating away. US Dollar just made a new all-time low against the euro (another worthless fiat paper, but apparently just a little bit safer at the moment).
Nhz and Wawawa,
Your two posts reminded me of a question I had today when I saw people were rooting for a 14k Dow.
The middle class is being divided. Some will survive in the top echelons while others will find themselves slipping slowly back into lower class status. When we see markets surging, could this really go on longer than we think because we forget the really large numbers of Americans that really do still have the deep pockets?
How many millionaires are there in the United States? Upwardly Mobile … to this 2005 article from MarketWatch, 8.9% of Americans are millionaires. …
ask.yahoo.com/20070215.html
Carrie Ann,
How much of that “millionaire” class counts real estate equity?
I suggest that it’s liquid assets that should be counted. Even folks with paid off homes can’t “liberate” that equity unless they can sell. And if the stock market goes south, there’s another huge hit for the ‘millionaire” set. It’s cash and cash equivalents that will matter. Especially with ever more white-collar jobs about to be outsourced. Even folks who feel comfortable may be looking at a cold,hard slide to the lower end of the middle class. The truly wealthy can weather almost anything. The millionaire upper middle class cannot.
And taxes can only accelerate..both local and federal. The AMT alone will attack upwards of 23 million taxpayers in 2007.
The hits just keep on coming.
“The middle class is being divided. Some will survive in the top echelons while others will find themselves slipping slowly back into lower class status.”
I think people have known that for a long time, but they thought real estate was what was going to pull them into the more desirable side after the division. How disappointed they will be when they realize that leveraged real estate is exactly what will end up pulling them down.
Good point FB.
Alright…that’s what I was trying to get a feel for: how many “millionaires” were truly divested and how many had set themselves up for major risk by sticking to just a few types of investments.
Thanks for comments.
CarrieAnn,
I’m certain that a majority of upper middle class types aren’t even aware of the risks they currently face (and will suffer accordingly).
I totally agree with you about Operation Rolling Bubble at the Fed, but here’s the catch:
http://www.kitco.com/ind/Willie/apr192007.html
wawa is Iroquois for “swan” isn’t it?
Wow! WSJ pg. A2 Fannie Mae and Freddie Mac issued $58.35 billion interest only securities in the 1st qt. Up 43% from a year earlier.
See my post above regarding this striking revelation.
I had a chance to get out in the filed yesterday and I was on the Greenway loop around Orlando. A lot of residential development has occurred along this stretch.
There is one new subdivision squeezed in after another. What is going on out there? Lots of lots. Also, lots of nothing going on. Just lots, street lights and utility cables sticking up like so many sand worms.
How many? I would say that within a mile of either side of the Greenway there are 15,000 lots sitting, stretching from Sanford south to Kissimmee. Just a guess but an educated one based on typical density.
In normal times and this is not it, this would be enough lots for 3-5 years in the metro area. At this point I am guessing that the last lots will not be burnt off till 2015. I recall we absorbed that last lots from the 70’s debacle in the early 80’s and we had nowhere near the number of lots and excess inventory we have now.
In Reunion (PUD) the poster child for ludicrous exuberance homes that were selling for 1.3 million last year have dropped to the mid 800’s and the bottom is not rushing up at us. IMHO just the Central Florida market could take down a national builder and definitely will, soon.
In addition to your mortgage, insurance and taxes, if you live there the road tools will be a killer. I think there’s a toll booth every 100 yards in that area.
Amazing that they expect an economy based on low paying tourism jobs to support all this. The low pay that Disney and other theme park employees receive is the topic of constant discussion in Disney themepark fan blogs. An interesting tidbit: wages for Disneyland cast members (rank and file employees) have dropped in real terms by about 50% in the past 20 years. Where is was once a living wage, it is now little more than California minumum wage. I can’t imagine trying to get by on $8/hr in OC (heck, I can’t image getting by on 100K in OC)
Disney is suing Anaheim over “low-cost housing” in the resort district: http://tinyurl.com/28pkto
Proponents of the project talk about how the low-wage Disney employees “need” some place to live (a related TV news story had a Disneyland employee talking about how he lived with something like 10 people in one local apartment).
I told my wife that Disney should act like a mining company and build the housing itself, then take the rent out of employees’ pay. Double bonus!
“I told my wife that Disney should act like a mining company and build the housing itself, then take the rent out of employees’ pay. ”
—————–
They do. It’s called the College Program.
Here’s a couple:
http://www.tbo.com/news/nationworld/MGB85E2PY0F.html
“We actually have several employees at the Florida Chamber who live in Georgia” because taxes, insurance and property are more affordable there, Davis said.”
A great promotion for the C of C. It’s employees find it’s better to live elsewhere…..LOL
http://news.rgj.com/apps/pbcs.dll/article?AID=/20070426/NEWS10/704260334/1016/NEWS
Headline: “As home prices go up, number of sales dip”
Ya think?…..
The PPT is going to have a twangy time propping up the market today against the stagflation news.
http://www.marketwatch.com/tools/marketsummary/
no problem at all, this FrankenMarket just keeps going up and doesn’t give a damn about fundamentals, thanks to all the liquidity. I think the PPT can simple sit down and watch the party on Wall Street. I wouldn’t be surprised to see new highs for the stockmarket in the next days; after all, we can now be sure that the FED will lower rates so the party gets even bigger. And the declining dollar will be superb for future company earnings, etc. - well, you know the party lines …
Next up: $100 a barrel oil.
Greetings, Mr. Simmons! Loved the book…
“I think the PPT can simple sit down and watch the party on Wall Street.”
Well, not quite. On days like today, when fundamental news would naturally spark a selloff, they have to provide a steady liquidity blast to make sure the Greenspan put policy remains in effect.
P.S. Greenspan put = inflation creation through the stock market. Everyone (with money) wins, and everyone with savings loses. No wonder the U.S. aggregate savings rate is negative!
“with money” (in the stock market)
doesn’t “with money in the stockmarket” mostly equate to “without money” these days? I’m sure that in my country a huge part of stockmarket money comes from highly leveraged homeowners who want to increase their leverage by investing the cash they get from the new mortgage in stocks (like Real Estate or Emerging Market investment funds).
In the US a big chunk of money in the stock market is from 401(k) plans. Remeber, we Yankees mostly don’t have pensions (unless you count Social Security as a pension, or work for the federal government), and we are expected to save for our retirements. Few actually do save. IIRC the average 401K has a measly balance of about $30K.
‘doesn’t “with money in the stockmarket” mostly equate to “without money” these days?’
Yes, which is exactly why making sure the stock market always goes up (and Wall Street and hedge fund playas get to keep skimming their bolshoi profits) is a national economic policy concern. Of course, the situation (political pressures for an ever-rising stock market + hard-wiring of future Wall Street profits) would be far more extreme if Social Security privatization had succeeded…
What is PPT? (It is hard to find online since it is the PowerPoint extension).
Thanks.
Plunge Protection Team
http://en.wikipedia.org/wiki/Plunge_Protection_Team
For a weekend topic, I’d like to see all the bloggers here report about what’s happening in their immediate areas. Are there lots of For Sale signs or nothing out of the ordinary? How about home-made signs on phone poles? From their newspaper ads, what kind of incentives are builders offering in their local new-house communities?
Reporters don’t seem to do this stuff any more. They depend on handouts and sound byte quotes. Let’s hear from our own “boots on the ground.”
Ben puts up a thread for this every weekend.
West LA is, well, still really freakin expensive. Does that help?
West LA is, well, still really freakin expensive. Does that help?
Local newspaper says sales down 14% YOY, prices up slightly. In my neighborhood, sales are definitely down and inventory up probably 30-50% more than this time last year. Very few price reductions so far. Local builders are offering surprisingly few incentives on their inventory homes; most ads don’t talk about incentives at all. Foreclosure.com currently lists just one foreclosure and one bankruptcy in my Zip code (relatively rural area).
That’s pretty funny.
Here in Tucson, Slim’s seeing a springtime surge of “for sale” signs, both from agencies and from FSBOs.
I take it that ‘Weed-n-feed’ is as about as effective in erradicating those pesky signs as it is with dandelions?
Seattle / King County -
Median price up MOM, but trend is not looking good… YOY inventory up 44% and existing home sales down YOY
Going to be lots of FB’s up here…
We don’t have enough money to bail out of this. I was in two preforeclosure homes yesterday. These are 1100 sf POS’s. The broker showed up and I said, “I can’t believe what the last owner paids for these.” She said, “Oh it was a fraud”.(broken english)
On just these two junkers they extracted $280,000 over the market value of the properties. This is not an isolated incident. There are lost billions just in this market. And, we are still falling. The bill only gets bigger with each day. So how long are the real people going to hang out when the value of their home is in the toilet. Not long in my opinion. The outmigration will be dramatic here.
“On just these two junkers they extracted $280,000 over the market value of the properties.”
Fraudulently overpriced previous sales = current comps. No wonder nothing is selling near the comp prices!
Where is “Here” ???
My “here” is San Diego, but the inventory glut appears to be national, so maybe “here” is the U.S. of A.
I meant Dimedropped above you stucco……..
SCAL HOUSING NEWS:
Anaheim City Council approves development of a massive multi-unit housing development, including ‘Affordable units’, Near Disneyland. Disneyland has opposed this project as having negative impacts on the tourist ambience of the surrounding areas(WTF?).
Sorry i didn’t provide links. BTW: THAT ENTIRE AREA around Disney nothing but a mass of Motels-hotels. Throwing up another 1000+ multi-units would not alter the area’s tourist ambience one iota, but it would’nt exactly improve traffic flow, which already sucks anyhow.
This is the new Mantra and hot-button issue for CA: ‘Affordable housing’. THERE WAS ALSO A MINOR, ANNOYING DEMONSTRATION IN LA DWTN FOR ‘AFFORDABLE HOUSING.
SUGGESTION FOR LA CITY AFFORDABLILITY CRISIS:
Why don’t they just raze Pico-union or the slummy Warehouse district and throw up massive 30-story Cheap cinder-block towers, 300-400 units per tower, and presto, ‘affordable tenement housing’ for the great unwashed immigrant masses.
I can’t understand Disney management’s position on this. All you haver to do is drive a few blocks away from the “resort” area (which Anaheim did a nice job of sprcuing up) and you are in the jungle. I remember that last time we went I drove over to a nearby grocery store to buy some pop, fruit and snacks to keep in the hotel room. The grocery store (Vons) has an armed security guard on duty (around 9 PM). I then drove to a WalGreens. Same story. Makes me so glad I don’t live in Anaheim (or SoCal).
Anaheim has been a a very densely populated increasingly immigrant-impacted city for some time, with large areas filled with apts and multi-units. Not quite as shabby and rundown as LA inner districts yet but the trend is definitely toward more hi-density multi-unit developments: witness the nearby Platinum Redevelopment plans around Anaheim Stadium.
Disney is attempting to buck an inevitable trend by
stalling the proposal for more dense apt/condo units, including affordable ones,near the Disney Area. I personally do not like seeing more massive multi-unit housing sprout up al over LA/OC as it further leads to more traffic congestion, but LA?OC is already quite Fuc**d as far as traffic anyhow, so it really makes no difference as to how many more Apts/condos are crammed into the LA/OC metro region.
Hong Kong housing, here we come!
It is VERY easy to understand. They own “the strawberry field” that is across the street from this new development with long- term plans to build a thrid theme park.
If this housing goes in, they will be unable to build the third gate to to “neighbor complaints” about noise and traffic and crap like that.
This “affordable housing” is a red herring. It isn’t about 200 affordable housing units that 2,000,000 people will apply for. You’re probably more likely to get killed driving down to file your application than to win the drawing.
It is about the 1300 units that the developer will make about half a billion dollar profit on. They got the land relatively cheaply because you couldn’t build homes on it. Then they greased a lot of palms and used this red herring of “affordable housing” to get all the people that are really bad at math to dream about how much money they can make by winning the lotto that will decide who gets one of these 200 units. Meanwhile, they sell 1300 units at $400K+
If it is really about affordable housing, make them sell all 1500 units at cost. See how eager the developer is to pay all the city’s legal costs them!!!!!!!!!
I don’t think that the Strawberry field is big enough for a decent theme park. Plus I think that the “Disneyland Resort” is a failed concept. Disneyland will always be a “local” theme park, and not a vacation destination like Walt Disney World. Sure, they can sell out the over priced rooms in the Grand Californian and the Disneyland Hotel, but the overwhelming majority of their customer base is local.
So what will Disney end up doing with the “Strawberry field”? That is perhaps the second most discussed topic in Disneyland blogs, the #1 topic being why everybody hates Disney’s California Adventure.
In the Lehigh Valley area of PA, prices are going downhill faster than expected. Our prices have dropped about 20% already. Foreclosures are up 30%, Inventory of home are at record levels and summer houses are not even marketed yet. It’s expected to drop back to 2002 prices level by Jan 2008. These people that bought homes here are watching their equitity go bye bye.
Ben,
I’d like to see stories on “our stories.” I’ve noticed alot of new posters on here and not sure if the old posters (Robert Cote comes to mind) still read but don’t post. I sense we’ve picked up some pretty anxious home sellers that are using the blog as a reference tool.
I began investing in los angeles real estate in 1996. A little remodeling here and there….bought a house in palm springs and sold it two years later for a nice profit….built a house in the sfv in 2002/2003 and used my sorry cousin as my contractor. I almost went
broke. I was planning on living in that house the rest of my life. However, between paying for the much more expensive than i had planned for house and how much i was seeing my neighbors houses go for, i decided i should sell in fall of ‘05. That was scary…that’s when i knew we were in market decline. I had to cut my price quick but i ended up making a huge profit. If i had ignorantly kept that expensive house much longer, i would have been another FB. However, everyone and their mother felt they had the “right” to tell me i was a moron for investing my profits and renting (in a better school district for my son).
Someone posted on an earlier thread that those of us that sold at the top in 2005 were “greedy.” I would have to disagree. I looked at my situation, made a thorough evaluation and realized i should sell and rent until this thing shakes out. Thank God for this board. In the early days, it was the only place to come to meet like minded people.
I’d really like to hear everyones stories.
We sold in Aug 05′…
All my life i’ve been on both sides of the spectrum of business, buying and selling, being equal parts of my equation.
My sell radar was off the charts~
Robert started his own blog, exurban nation. Now he’s Rob
Dawg.
He comments at http://www.bubbleinfo.com, a good blog from an agent’s perspective.
We bought a 670 sf house in East LA in 2003 for $295k. We thought we were going to stay in the area for 10+ years, but jobs didn’t work out and we sold in April ‘05 for $450k. (The house is a 1920’s era termite-eaten shack, but hey, the yard’s big.) According to comp sales in the last few months, its value is back to ~$300k.
When the jobs fell through in summer ‘04, we PANICKED, knowing the bubble would pop any day. We figured March ‘05 would be the turnaround point and we didn’t want to be stuck with $200k in debt on a $100k house, so we rushed to paint and do upgrades to get it on the market by March. Sho’ ’nuff, March was the turnaround. Average time on the market went from 1 wk to 1 month in the area while our place was up for sale. After two weeks we dropped the asking price from $465k to $450k and got a bite a month after putting it up for sale.
Walked away with a decent chunk of change. I still can’t believe someone paid $450k for that tiny shack. Were we greedy? Eh. We didn’t set out to become flippers and we were just happy to get the place off our hands for more than our debt in the place.
We now rent in a nicer area for what we were paying in interest + taxes on the house.
I know I’m a noob here, but here’s a bit of my history:
Got tech degree in 95, hard time finding a job, ran up some debt.
Finally got a job in Colorado, should have started paying down debt but added more instead. [note, I'm actually pretty good with money, I'm just really bad at saying no to my wife who isn't. Learned my lesson too late on that one.]
Bought/ordered new starter home in 97 as Colorado’s housing bubble was just getting going.
2nd mortgaged previous debt, but of course didn’t prevent more from being created.
Home went up in “value”. Ran up more debt. Lather, rinse, repeat.
In the meantime trying to use supply side economics to “grow my way out” of the problem (get MBA, aggressive job switching) :-).
~2002, home stopped going up in value.
2003, wife has serious health issues, including mental (which unfortunately makes her want to spend even more)
Even in my advanced state of denial I now see the writing on the wall. I have enough “resources” (in the form of perfect credit and friendly appraisers) to go toxic loan and keep the music playing for a couple more years, but recognize that a better plan would be to get real with the wife and with myself.
House sells spring of 2005, and I bring a 3-figure check to closing. We move to rental within walking distance of work. After a few months of reality I realize how truly screwed we were and end up having to Chapter 7 the credit card debt that I thought I could service without the house. Wife still doesn’t “get it”. End up having to separate our finances and keep her out of the bill money. We’re now financially stable, but zero equity except 401k. Living pretty cheap and still have little money left over each month (no credit usage at all, still paying student loans). Can’t believe how far my head was in the sand before.
So yeah, I know exactly how screwed these people are that are just starting to figure this stuff out.
So, treat me like Casey if you must, I’ll see if I can come up with excuses stupid enough to play his part in the conversation :-).
Sounds like your wife needs an intervention. Try the book “The Financial Wisdom of Ebenezer Scrooge,” by Ted Klontz, et al. A short and simple book that helps people to understand their dysfunctional relationship with money using the allegory of “A Christmas Carol.”
I’ll check out the book, thanks.
Mental illness can make an intervention kind of pointless, though. I think an intervention requires the “intervened” to have a logical though process going on underneath the BS layer. In my case we’re dealing with an entitled child type of thought process and the best solution I’ve been able to come up with so far is to force her to live on her “allowance” (she doesn’t work) and make her take the consequences of her overspending in hopes that eventually the pain of having little or no money available when she needs it will force some sort of learning process to take place. So far she gets really pissed off every month when her money runs out and she can’t get what she wants, but that doesn’t stop her from doing it again the next month. Hopefully that will change eventually.
Fortunately her child-like thought process also means she doesn’t realize that she could file for divorce and take half the 401k money and live in the manner in which she thinks she’s entitled to for a year or so. I hope she learns her money lessons faster than she figures that out.
Depending on the type and degree of mental illness, the author Ted Klontz may be just the kind of person to consult. He is a psychotherapist and the CEO of Onsite Workshops, and his co-author Rick Kahler is a financial planner. In any case, good luck.
Pricing earthquake just noted in my zip code (92127):
Last time I checked (maybe 1 week back), the median listing price on ziprealty.com’s SFR inventory was $1,395,000. It was stuck there for the first three months of the year. This morning, I ran the numbers and note that the median listing price is now $1,304,950 — a substantial drop of $90K (6.5%) over the course of a couple of weeks. The usual disclaimers about median prices apply, but I nonetheless find this encouraging, especially when combined with the large number of listed homes built post-2000 and priced over $800K weighing down the price levels.
Nice! Wake me when it’s a $900K drop…
I’ve noticed developer-owned land parcels are being put up for sale in my area. That to me is another significant market indicator. In two cases I’ve spotted, the parcels are in the middle of a partially-built development in my city. So these weren’t a situation where a builder decided to drop an option on farmland, or not build his exurban development as large as originally planned. This was a major master-planned community that is now left with several acres of vacant land sitting amidst the existing rowhouses and condos, fancy park and pool and other expensive amenities the builder incorporated into this highly-touted subdivision.
Maybe we should be watching the land listings as well as those of existing and new homes.
I have been following land listings in Ca.(mostly Northern) for the better part of a year now….There is big trouble mounting….Its difficult to project where the market is going to bottom in new & resales so getting to a confident price point on the land is difficult….Besides, that price point is so far below the ask that IMO its going to take another year to actualy be able to make a decent land deal….
But next year will be the killer. Apparently housebuilders will have to pay about $3 billion in debt next year, with revenues already down 40$ nationwide. They will have to sell at fire-clearance prices, build, or go bankrupt.
We have a bunch of drought issues, and water will be a problem in the future. We also have energy issues, as too much of the USA depends on natural gas for electrical grid generation. It seems like they could build nuclear reactors that generate electricity, and also use the fuel soruce to drive desalinization systems to convert ocean water. I’m sure dropping this cleaned up water into lakes would have some issues of it’s own, as well as transport … but if it’s needed it’s needed.
Large scale desalinisation of seawater can be done for (very, very roughly) a dollar a ton.
This is OK for urban consumers, but out of the question for agriculture and industries like steel plants. (If you think a dollar a ton sounds cheap; each inch of rainfall is 100 tons per acre. Now think about how many inches of rain the farmer needs over the year to get his 10 tons of corn from that acre.)
I buy 600 KwH of wind generated electricity every month. It costs me an extra $6 per month.
The Census Bureau just released their quarterly housing report. The home vacancy rate climbed to the highest level ever recorded (2.8% vs. 2.7% last quarter and 1.5-1.7% historically)
http://www.census.gov/hhes/www/housing/hvs/qtr107/q107ind.html
Another sign is this- Builders are now offering developed lots for sale in developer owned subdivisions. Yep even the nationals.
Would such a lot be subject to the HOA?
north county san diego is exploding in construction. everywhere i go its cement mixers, tile guys, construction trucks. i thought the builders were pulling back. no sign of that here. how many more millionaire couples can afford 900k? how many more office buildings do we need?
i started reading ben’s blog summer of 06 hoping to learn how to buy a home from scratch. this new home building frenzy is really shocking. what happened to the good old days when we just made fun of realtors?
Where are they building? Last time I was there it seemed like every single hill in Escondido and San Marcos had houses on them. Or are we talking about way east of Escondido, like Valley Center or Ramona?
http://www.santaluz.com/
Ah, its near Rancho Santa Fe. I thought that was all built out long ago.
No. If you look at Rancho Santa Fe’s current SFR listings, you will discover that the majority of them were built since 2000, with a substantial number showing 2007 as the year they were built.
Santaluz = wannabe-Rancho-Santa-Fe
The overhang of current and newly built North County SD inventory in the $800K+ range is going to crush the market.
test1 2
So I was listening to the normal drive home AM talk radio show. It’s 1/2 realtor spew, 1/2 mortgage. The realtor guy wasn’t around, and they played back a recorded show. The mortgage people arrived and they…. they can’t control it like the realtor can. He is the master of spin. The mortgage guys, they seem to be a bit more honest. But they dropped the line, that it’s a good time to buy. I whipped out the dingleberry, dialed in and actually used my real name. On the air, since they didn’t have many callers. I started off with “I’m tired of hearing the it’s a great time to buy line… for a would be first time buyer, it’s the worst time to buy ever, in the history of housing. Prices are based on the mania. Buy low sell high, not buy at 100 year peak prices” and they agreed. I also got in that the beanie baby mania is over, and we are adding 400+ houses a week according to a website I’ve been watching. They agreed, and said there is currently 3 years of inventory on the market in Southeastern Virginia / Hampton Roads! HFS! I almost fell over. I made the point that the market is broken, because when I go to look at a hosue I’m going to be offering 40%+ less than the asking price … and so many people overpaid that they won’t be able to do so. Their suggestion was to offer anyways, because there are going to be alot of desperate people. I turned the last 5 minutes of the show into totally realistic, holy crap this market is DONE baby. When I got home, one of my friends on IRC (Internet Relay chat) had heard my call. I was like, “oh man… people listen to that show!?”
The crazy part is… once you get them in that mode, the mortgage guys were totally honest and feeding me!! Also, I was quick to point out that once prices correct heavily, back to normal, then realtors and lenders should start seeing business again.. so it’s in their interest to beat the sellers down.
I feel like an activist. I’ve been accused locally that all my negative talk is hurting the market. THAT made me smile. And if I get one more stranger talking about bubble bath juice over my Mr. Housing Bubble tshirt, I’m going to scream. The ones that get it — are the ones that have the look in their eyes that they are about to murder you.
“They agreed, and said there is currently 3 years of inventory on the market in Southeastern Virginia / Hampton Roads!”
Wow! It must be different there!! I keep hearing 7 mos tossed around as the time it would take to clear out current inventory on the market almost everywhere in the U.S. Not to say that I actually believe it is that low in most places…
Yea, that threw me pretty far. I thought the average around here was 45 days or something. With ~12K in the MLS, then the FSBO … there are still a ton of condos coming on the market (I think 5K in the pipeline). Also, our area is supposidly loosing population (even though all of the construction has made it a bit nicer). I will have to see if the Virginia Assoc. of Realtors publishes sales statistics month by month. At 12K homes, that is ~340 sales a month.
Hmmm. I just beat 340 home sales a month by plugging in about 6 zip codes into melissadata.com (for March). So that figure cannot be right. Not unless it was a figure with the current rate of inventory being added on top. That might work out (400+ inventory growth per week, at that rate of expansion).
Great work on the radio call in… that was great to read.
I think what you realized is that those mortgage guys are willing to talk honestly if someone else brings them to it. They don’t want to be accused of “hurting the market” by talking clean on their own. With you on the line, they can join in and agree with some of the insanity they know of…
You reminded me that it’s time to bring out the “Mr. Housing Bubble” T-shirt again. I think I’m going to wear it tomorrow in our neighborhood commercial area, as we’ve got warmer temps on the way here in SF for the weekend.
Question for the California gang. Just for grins I went to foreclosure.com to see what’s happening in the famous Beverly Hills 90210 Zip code. Of the 285 listings, probably 80% were Tax Lien listings. Other Zips I have looked at (old neighborhoods in VA, MD, FL) had relatively few, if any, of these.
My question: Is there no significant penalty for being late with property taxes in California?
property tax payments, that is.
I believe you have to be 5 years in arrears, then you still have a 1-year right of redemption after a sale. Completely “toof-us” law.
Its pretty significant…I think its 10% each time on the next due date…..
10% Penalty 1 day late and 1.5% interest every 30 days. 5 years to auction
After 5 years of non-payment, house goes to auction..If you miss your tax payment, believe it is 10 percent penalty. This is in California. 3 houses on my street have failed to pay taxes since April 10 and 1 hasn’t payed for 18 months..Hmmm
Not a topic suggestion, but a little story. Yesterday a friendly man in shirt and tie came up the driveway and introduced himself as an RE agent with a listing in a tract a couple of miles away. He asked if I knew anyone who might be interested in it, and made a big deal about the asking price of “only $609k.” I thought going door-to-door about a single house was a little extreme, but desperate times, I guess.
Sitting in the dentist office yesterday waiting for a root canal, they had a radio station piped in quite loudly. Out of the 20 or so commercials I had to listen to, I would estimate 20 of them were real estate related.. how to sell in a down market, get refinancing before you ARM adjusts, buying foreclosures, more mortgage stuff, etc, etc, etc. This in San Diego. BTW I’d rather sit through another root canal than sit through all those comercials again.
Two “signs” of desperation here in San Francisco on all news KCBS radio this morning, where they played nearly back-to-back real estate commercials.
The first was part of the CAR propaganda “We Get It” campaign. It’s funny to see how they are trying to claim to have the best interests of California buyers in mind. If that were true, they’d tell the most aggressive/interested buyers to wait until at least 2009, and those with patience to wait much longer.
In any case, the second was an HB add for a “$150,000 off sale!” for new houses, probably somewhere out in the far East Bay (think Byron or something). It made a big deal of how the sale is ending on May 5th or so… as in next week, which is about five years too early.
reminds me of the ad running in the local paper here (Colo.) - if you come to our open house, you qualify for $15k off the price of the house - the open house runs for the next 2 weeks.
Weekend Topic suggestion:
“Spinning sound housing bubble remedies to appeal to political activists”
The idea is that with presidential media coverage just warming up and campaign platforms being formulated, now might be a good time to try to push “sound government policies to combat the housing bubble” into the political arena. Policies that will help manage the current crash (not bailouts) and that will prevent future bubbles from occurring.
Most importantly, how to spin those policies to appeal to political activists from both parties. Although the special interests that fund the campaigns will largely dictate the campaign pledges, if we can influence a groundswell of support from political activists for good policies, there’s some slim chance that politicians will one day pledge and then execute those policies because politicians know how dependent they are on activists to “get out the vote”.
For example, if you think that the tax advantages of investing in housing compared to other asset classes helped inflate the bubble, you could sell repealing those tax advantages to Dems with such spin as:
- it will put government finances back on a sound footing after years of deficit spending by Bush and the evil Repubs
- redistribute wealth from the rich to the poor because wealthy homeowners will get a bigger tax hike than poor renters
- Bush’s housing bubble was effectively a huge transfer of wealth from poor, minority renters and future homeowners to fatcat real estate investors and HNW homeowners so this policy will correct that wrong
- academic studies have shown that the average worker does not benefit from housing tax breaks, all they do is transfer money that would have gone to the government in taxes to provide public services for the sick, poor, weak etc. into excess profit for the evil, capitalist banks
One can spin the exact same policies to Repub activists by spin such as:
- the evil Clinton removed the lifetime cap on the housing capital gains tax exemption so it was Clinton that created the housing bubble so that must be rolled back just like all of Clinton’s other tax blunders
- the current tax policies are a huge distortion of the sacred free markets and have caused over a trillion dollars of misallocation of capital into excess housing inventory instead of real productive capacity.
- etc.
I like this suggestion, Oi!!.
The time’s becoming ripe for a change in the propaganda re. housing. For the past several years the “common wisdom” has been that inflating housing prices is “good” for the average American. Unbelievably, nearly everyone bought into the concept.
Now, with all the foreclosures coming about, it’s starting to dawn on some that high home prices may actually a BAD thing! Today there was a whole hour show on CNN about how rampant foreclosures were trashing whole neighborhoods. Right now, the pols are tending to blame the foreclosures on bad loans. But everyone knows the REAL problem is the high home prices. That’s what the flashlightlight really needs to shine on. The high cost of homes and how it’s destroyed people’s finances.
This idea could really pick up some traction in the next few months.
Perhaps it’s time for bubble bloggers to pitch in here with ideas to get the ball rolling. Coming up with politicaly acceptable ways for politicians to re-frame this is a really good idea.
But everyone knows the REAL problem is the high home prices. That’s what the flashlightlight really needs to shine on. The high cost of homes and how it’s destroyed people’s finances.
———————-
Amen! We do need to spread the word that “affordable housing” comes in the form of lower prices, NOT higher debt that is cloaked in artificially low monthly payments!
gascap,
Never before in my life have I been so irritated with commercials that I just have to turn them off. “Cash-out refi’ing” should be a move of last resort, if that. It used to be whispered about in hushed tones: “they took out a second mortgage on their house”. Now it’s pandered every day: “spend all your house’s value, then sleep in a car!” (if you’ve even got one of those left, of course . . . )
The only commercials I watch are on youtube with 4 or 5 star ratings. Getting rid of the TV was one of the best things I’ve done to myself in my life.
After Feb. 13, 2009, the FCC and Uncle Sam will do that for you. Goodbye free over the air analog television and say hello to not so free digital (gotta get a digital tuner which does not exist yet for sale….Best Buy does not want to carry them because it will interfere with selling crappy digital sets yet).
Kill you TV!!! Let Uncle Sam do it.
I’m still seeing the commercials.
Cash-out refi to take a vacation. Cash-out refi to remodel the kitchen. Cash-out refi to build a deck. Cash-out refi to send the kid to college.
Worse, I’m still seeing ads about $300K loan, no-down, poor credit, with payments of $1600 a month. Yeah, for 2 years, then they double.
It is almost like with builders. They have debts they have to make payments on, so they continue to build and sell into a saturated market, or they fold.
Banks are taking huge hits on loans, so to stay in business, they have to keep making new bad loans to get finance charge revenue to cover the losses on the last batch of bad loans.
I think I heard an ad yesterday that said you could have a payment of $450/month on a $150K loan. At no point did they mention the negative amortization.
Also, heard another ad touting some RE “guru” who could make you “rich, rich, rich!” with her (?) foreclosure-buying program.
This in San Diego.
Who wants to buy an overpriced vacant home? There are 2.2m to choose from currently for sale on the U.S. market.
That 599,000 YOY increase in vacant homes looks roughly in line with the current annual excess of new home construction rate over new home purchase rate. Should we expect 1.2m vacant new homes by this time next year?
————————————————————————————
ECONOMIC REPORT
Home vacancy rate rises to record 2.8%
2.2 million unoccupied homes were for sale at end of quarter
By Rex Nutting, MarketWatch
Last Update: 10:56 AM ET Apr 27, 2007
WASHINGTON (MarketWatch) — The vacancy rate for owner-occupied homes rose to a record 2.8% in the first quarter from 2.7% in the fourth quarter, the Commerce Department reported Friday.
A year ago, the vacancy rate for homes typically occupied by their owner was 2.1%, a record at the time. The median asking price was $185,200.
The vacancy rate for rental homes rose to 10.1% from 9.8%, the highest in two years. The median asking rental price was $659 a month.
Of 127.3 million housing units in the United States, 17.6 million were vacant at the end of the quarter, including 2.2 million vacant units that were for sale, 4 million for rent and 4.2 million seasonal homes. The number of vacant homes for sale has increased by 599,000 in the past year, up 38%.
http://www.marketwatch.com/news/story/home-vacancy-rate-rises-record/story.aspx?guid=%7B26D8A226%2D055D%2D477C%2DAB93%2D81EBF739C9A3%7D
“The vacancy rate for owner-occupied homes rose to a record 2.8% in the first quarter…”
How can an owner-occupied home be vacant?
Pot farms as placeholders?
Exactly! You get a quicker ROI than waiting for house appreciation. http://tinyurl.com/2wl9xc
Meth labs might be more profitable, at least until they blow up.
Ouray, Colorado is called the Switzerland of America and sits in a bowl surrounded by huge mountains. A beautiful place, it’s gaining fame for its ice climbing. Only 300 people. Up the road 10 miles is Ridgway, also a very pretty place (800 people) and becoming a haven for people priced out of Telluride (some 45 miles on up the road). Prices in both places aren’t cheap, it’s hard to find any type of housing except a trailer (rare) for under 400k.
I mention this for context. A couple of weeks ago, the Ouray/Ridgway paper had an article about the housing boom and how it wouldn’t affect here because “it’s different.” This week the numbers came out - the county had 18 sales in March, down from 80 a year ago. And prices are softening (I see lots of reduced ads).
Yer on the street reporter, Lost in Utah, bringing you the breaking news - Yup, we’re in a housing bubble even here in the tourist areas of Colorado where it really is different.
Yer on the street reporter, Lost in Utah, bringing you the breaking news - Yup, we’re in a housing bubble even here in the tourist areas of Colorado where it really is different.
Yep… what happened is quite a few people pulled Florida 1925; get property where the wealthy want to buy and thus make money off the affluent. Problem is, 40% of the effluent’s assets are tied up in real estate investment plus more for their primary residence.
Telluride is gorgeous. I can understand why people would want to frequent it; but it requires enough funds to be able to charter a plane at whim or a career that allows for long time lags for travel and isolation from the major urban centers.
I’m alternating between Schadenfreude and fear. Why? This doesn’t even begin to get going until August (that’s the earliest when enough NOD’s have become NOT’s and then REO’s).
I do not believe the Dow will be above 10,000 as we enter 2008.
Got popcorn?
Neil
aka “Lightsaber” on airliners.net
“I’m alternating between Schadenfreude and fear. Why? This doesn’t even begin to get going until August (that’s the earliest when enough NOD’s have become NOT’s and then REO’s).”
Me, too. I’m sitting on cash, waiting for things to fall so I can buy something, but what else is going to go down with the housing bubble? BTW, thanks to this blog, I’ve undergone a huge paradigm shift re. housing. I used to think that owning land/a house was a form of security. Now things are different.
affluent = effluent. Awesome typo. ; )
LostinUtah,
Can’t grow tomatoes in Ouray, or Tohellyouride, or Crusted Butt or Durango…..these place are going to die when the cheap oil goes away as it is doing now. Remember they are all over 7,000 feet and have one month growing season between frosts. Everything from heating, groceries, Xboxs, rubbers and coffee makers/Starbucks have to be trucked in. No rail….boy you guys in the Rockies are screwed if you have to live in 1930’s standards again.
If you believe in global warming, these higher altitude places will be the only places you can garden w/o the heat killing everything. It’s already happening in some areas - although some places are actually getting colder. But my dad’s family survived the Depression years growing their own food on a farm near Steamboat SPrings - winters there were minus 50 degrees. It can be done, but I’d rather not try. But tell me a place where everything ISN’T trucked in these days? The railroads are dying.
I wouldn’t say rail is dying. I read something in the past six months that said rail freight in the last few years is up. I cannot recall if there was an analysis of why, but could think gas prices have something to do with it?
*********
“U.S. railways carried 427 billion ton-miles of cargo annually in 1930. This increased to 750 billion ton-miles by 1975 and had doubled to 1.5 trillion ton-miles in 2005.[1][2] In the 1950s, the U.S. and Europe moved roughly the same percentage of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8% of freight traveled by rail.[3] In 1997, while U.S. trains moved 2,165 billion ton-kilometers of freight, the 15-nation European Union moved only 238 billion ton-kilometers of freight.[4]”
All I could find was the above on wikipedia:
http://en.wikipedia.org/wiki/Rail_transport_in_the_United_States
And this source has a decent chart (Ton-Miles of Freight by Mode: 1975-2025):
http://www.bts.gov/publications/the_changing_face_of_transportation/html/figure_01_ton_miles_of_freight_by_mode.html
Good news, as a train fan, I hope it makes a comeback - the most efficient way to haul stuff. I recently drove by the local headquarters in Helper, Utah for the Utah Railway - it’s for sale - a really cool, old brick building. Toyed with the thought of buying it…
W Buffet is getting into railroads right now.
Hey Lost! I find your posts very interesting because my family and I are considering the Durango area (to include all the areas you mentioned in your post although durango seems the best fit for us). We found the prices laughably high although were weren’t surprised given prices in other areas of the country with less to offer.
Anyway, please keep us updated on the bubble there as you see it unwind. I find myself alternating back and forth between my concern about the warming trend (and my desire to escape the heat) and growing food if it doesn’t warm, even though greenhouses would work just fine in durango, IMO.
It’s really nice country up that valley north of durango. Right now though the sellers still think someone is going to come along and fund their retirement. I couldn’t believe the idiocy I witnessed, price wise, in that golf area (glacier) they are building as well as the condo project at DMR. Hopefully next year or the next will bring some sanity back to that area. Thanks for posting and please advise any new info!
A lot of those towns (like Silverton) can be completely cut off from the outside during the deepest part of Winter. I would say that during those months few trucks would be able to make it thru the “Million Dollar Highway”. Durango is much more accessible (at least from the 4 corners area).
As oil sails into the stratosphere I think we might see a return of the railroads, both for cargo and passenger use. This could provide a lot of jobs laying new track and building new stations.
I wonder if Boeing and Airbus execs lie awake at night worrying about the future cost of fuel? Or do GE Locomotive execs look forward to expensive oil?
Used to have rail service via 3 foot gauge all through the San Juans from 1940…abandoment started in 1948 though 1969 of the Denver and Rio Grande/Rio Grande Southern rail network that serve all these towns. All you have left is a disconnect Silverton line which just goes from Silverton to Durango and that is it. Coal even has to be trucked in!!
I stand by my ideas that most of the high mountain west will be abandoned because you cannot live their long and in great quantities of people without cheap oil and a highway system.
Colorado mountain towns in a bubble is breaking news from 1998.
try about 1965 (birth of Vail and Telluride ski areas)
I’m still kind of messed up, very dizzy but even in this condition, I can see this probably is an excellent time to speculatively short. Bought some more index puts 30 minutes ago.
I’ve heard of “drunk-dialing” before, is there an equivalent for trading?
Takes a lot of guts going against the market. I’m sitting on too much cash right now, what indices are you buying puts on and what is the duration? Was gonna short AAPL yesterday. Would have been a nice short term play.
tx,
My thinkorswim account should be active early next week. Can’t wait to LEAP on that action!
What I don’t see enough people talking about is “Housing Affofdability Index”.
Remember in the DotCom days when profits didn’t matter anymore. In the new economy it was all about revenue growth. Well, give me a a hundred million buck and let me sell $10 bills for $5 each, and I’ll generate ALL KINDS of amazing revenue growth, but eventually the $100 million is gone and it collapses…. 2001 = POP!
Now people are ignoring the basic long-termd river of housing prices, affordability. The median household has to be able to afford the median house. When that gets too far out of whack, prices come down.
They are out of whack now.
Check out the chart from 2003.
http://www.frbsf.org/education/activities/drecon/2003/0312a.gif
And where has it gone sence the 140-ish of 2003? 106.
For the “west” it is a composit 74. I’ve read that San Diego, L.A., Orange County are sub-30. Median household income is less that 1/3rd what it would cost to buy the median house.
NO WAY is that sustainable.
From Cagan’s “Fire Burn” analysis (see if you can Google it) of SoCal in the early 90’s, affordability in LA went from around the high teens to back over 50%, if I recall, by the mid-90’s (house prices started to rise again, finally, by ‘97).
Today in LA affordability is around 10%, if not lower.
It may get back up to 50% again, and would do that mostly through lower home prices over the next half to full decade or so. Unless the Fed stealth inflation program actually works.
let me try again, just for everybodys info, how much rent do you pay? I pay 1500 for a nice townhouse, but it’s high for me. Seems unless I want to live in the ghetto, this is the going rate. How about the rest of you? (so cal area)
2K per month for a big house in DFW. I am overpaying but I don’t want to be stuck with a lease so the LL is getting a premium so I can leave when I want.
We just finished a 1 year lease in downtown Seattle for $2500/mo, but it was a luxury apt. Luckily, I convinced my wife to move into this new place in Cap Hill for $1400/mo. The neighborhood is much nicer and I like it about 1000x more.
It’s a 950sq ft 1bd den…. the first place was 1100 sq ft on high rise with view of mt. rainier. Views are overrated… so is pretty much everything.
I pay about 710 for a 400 Sq foot studio apt in the eastlake neighborhood in Seattle. Views of Lake Union and the aurora bridge, fireworks on the 4th of July. Its a bit high for a studio in my opinion but the amount of quality rentals in the 600-800 range in Seattle that aren’t in shoddy apt bldgs are few and far between. The ones that do list for this range go very very quickly. Now If I was willing to pay between 800-1300, there are tons of listings on craigslist for this, but at this point I dont want one of my entire paychecks going for rent.
As a comparison for buying though, brand new condos right up the street from me with the same views sold from 400,000-850,000 for 1-2Bdrms.
Patricia, we pay 1950 for a 2bed condo in Westwood.
From 2001-2003 I rented a 1-bedroom apt in Scottsdale AZ for $550. 2003-2004 I moved up to a 2-bedroom for $650.
Toward the end, apartments all around there were going Condo with starting prices of $150K+.
“Wait”, says I, “people are buying places for $1000 a month P&I, $200+ associatin fee, $100 a month property tax…. $1300 a month payments on a place I can rent for $600?!?!?!?”
Looking in MLS, none are for sale now. I’ve heard almost all have converted back to apartments.
$1300/mo for a 3br/2ba house on a culdesac in (northernmost) Huntington Beach. Of course, I’ve been here since 1/94. (It was $1100 when I moved in).
Well, I don’t pay anything, which is exactly what my place is worth. I live in a trailer on a friend’s farm (he has a nice house, where I go to check up on this blog)- he pays the utilities - it’s a funny deal, he doesn’t want to have to rent it out, as it’s so crappy he’ll get methheads or illegals, but his mom wants him to rent it out. She’s in Orange County, but owns the place (the farm), he manages it. She likes me, so as long as I’m here, she’s off his back. I told you it was a funny deal. But I have all my stuff in boxes in the trailer, so it’s kind of like living in a storage unit with nice views and lots of space around it (1,000 acres, tons of dust when they plow, though part of it’s a tree farm, with sales tanking). My previous existence was in a very nice place (which I sold) - this is kind of cool, though. I just look at it as I’m getting in character for writing a novel about… well, I haven’t figured that out, yet…
I pay between $500-1,000/month for my motor home depending on what part of the country we happen to be in. Unfortunately that doesn’t include SAT TV, Cell phones or Broadband Internet Card. Right now we just pulled into Springfield, MO but we are heading towards Halifax via Minneapolis about mid-may, no idea what to expect price wise. Of course diesel is extra!
We pay $1550 for a 3 bed (with tiny office in basement) 2 bath house in NE Portland. Its really a cute house and in good shape. Figure its what we’d be paying in a mortgage had we bought it in 2001. We have a kid and two pet rats so an apartment was not our first choice, plus we can easily afford this.
$1750 for a brand new 2bd condo in Miami (not large, 1st floor, reasonably good nbhd).
Would prefer a larger place, but it’s hard to find anything with better than 1:200 rent:wishing price ratio.
So, a nice house (the one which will be listed at ~800k these days) may perhaps be rented at $3500. Still don’t see enough desperate sellers in Miami to drive the rents down.
Just under 1700 for a 3 bedroom craftsman in Ravenna area of Seattle. More than I wanted to spend, but it’s near perfect for the fam.
1850 sq ft house on .43 ac in Medford: $1295/mo. Well built/great neighborhood. (sort of high-end 70’s, with JennAir and double ovens and tile, etc. with actual huge WOOD beams). Owner couldn’t sell it for the wishing price of $434K a year or so ago…. Comfortable place to wait it out
$1700 for a large 2+2 condo in the Hollywood Hills.
$2,100 for a 4/2.5 SFH in coastal North County San Diego. We got if for $2,000 in 2004, which was market rate, but rents have really taken off since then. A same-model house around the corner from us rented for almost $2,800 & was rented out within 2 weeks in 2006.
Anyone getting any calls from annoying mortgage brokers?
On Tuesday I got a call from Lenders Direct - direct to my F&@king cell phone! I’ve had that number now for almost a year and a half and that was the first solicitation of any type.
“Get a low 1% refinance rate now!”
I played along and hit “1″ to speak with a rep. “How much is your house worth sir?” “$600K” I replied. “and how much do you owe on it?” “um… around $400K” i said. “and how much cash back would you like sir?”
I reported them to the FCC for illegal auto dialer/telemarketing fraud, etc.
oh yeah, I’m a renter since 2003.
i locked in at 1800.00 for 1500 sq ft. in carlsbad. ocean breeze, nice weather and golf course view. old elevator, run down building and im terrified of my landlord. his emails threat of suing me or otherwise reminding me that i will pay 50.00 dollars everyday my rent is late.
ive been renting since the reagan era so i doubt i’ll miss my payment. he told me he is a loan closer in OC and LA. what exactly is a loan closer?
>loan closer
most likely an a$$hole and soon to be FB, so watch your back. Does he own other properties? I rented from an two different FB’s in San Diego between 2004-early 2006. Both went upside down on their “investments”. One took nearly 2 years to return our deposit (after legal battle we won).
renting since 12/04. The crazy part is I bought my condo in the last slowdown (crash) for 68k. My mortgage was 560 a month. But my neighbor was a meth addict. Lucky me. Just for the peace of mind I sold, made a tidy profit (140k) and have been renting since. Prices are still in the 500’s, but I do see some 4’s which was unheard of last year. San Dimas area. I love it here. No gangs, work 2 minutes from home, and really nice people.
Hay, I grew up in San Dimas… SDHS class of ‘85. Lived off Lone Hill and Arrow Highway back when it was mostly strawberry fields. Nice area. But too expensive for me.
Nogales, class of 85, out in the barrio…..
ps. I live on Arrow and Sunflower, right down the street
No gangs in San Dimas? You are kidding right?
absolutely not kidding. Mostly middle upper class families. I grew up in La Puente, and West Covina. Gangs everywhere, graffiti everywhere. I work in a grocery store, and the amount of WIC, food stamps, welfare checks, goes to the pregnant 17 year old girlfriends of these hoodlums. I now work in San Dimas, and it is almost non-existant.
ben’s spam filters are working. test
Here’s my topic suggestion: the shift in attitude in the press and in channels that live off the REIC like HGTV. “Designed to sell” is still all about how much money people make selling their homes, but the last couple of “Buy me” episodes I saw showed realtors working their asses off and very nervous sellers. In one of them, the house was not sold at all and the couple were stuck with it although they had already started building their “dream home”. I think most of us were so ready for this turn of events that we are not fully understanding how huge this change of perception is. All of a sudden, you read or hear about “down market” and “collapsing housing” all the time. We are at the turning point were the psychology begins to change, which has been discussed a lot in this blog.
You have to figure that those shows were shot at least six months ago, so if they were anxious back then… I surmise that once they’ve had a couple of non-sales, they’ll cancel the show. Then we’ll get to see “Short This House” or “Designed to Foreclose” or “Just Walk Away.”
I watched a “Flip That POS” or some such the other week. The first-timer ended up with a beautiful little house at the end of the block…next to the railroad tracks…in Pico Rivera. (Hah!)
Some of these folks are starting to get it. . . slowly.
http://boards.hgtv.com/eve/forums/a/frm/f/9384011632
Txchic, I have a question for you, if I may. An aquaintance of my sister told her to put 50 bucks a week in Ameritrade. Do you think he meant the actual company? does this make sense to you? sorry so vague, but I don’t have a clue when it comes to this stuff. I have a feeling if I gave you 50 grand you could turn it into something substantial….:)
NO…Suze Orman is pushing savings in Ameritrade in her new book she is pushing.
thanks for the info
http://tinyurl.com/3bmvx9
Very good series in the Denver Post:
http://www.denverpost.com/foreclosures
Nice to see someone in the media doing their job.
Small Hat
Wow!
They really are doing their job. And because the wave hit their area first, the Post started the series last summer. There’s even a section on the impact the series has had on public action, etc.
Housing markets with fast rising foreclosure figures in the near future are going to look like Denver’s presently.
“Special Report: Foreclosing on the American Dream
Colorado leads a national wave of foreclosures that is leaving neighborhoods blighted and forcing many homeowners into financial ruin. In an ongoing series, The Denver Post examines why the state’s foreclosure rate leads the nation and how it is affecting Coloradans, their communities and the economy. Aggressive building and lending practices, lax regulation and a high rate of mortgage fraud, among other factors, are pushing thousands of homeowners into foreclosure.”
Paying $3,000 a month to rent a house that sells for 800K. Wow. Landlord has had it a long time, and has other properties. I don’t think he’ll panic and sell. I’m in Oak Park(the southern california one), end of a cul de sac, a third of an acre. Not that you asked, but I’m short the indexes, short KBH, short CFC (ouch, sitting tight), and long silver mining companies-buying those on this dip. Good luck to all.
OK, just got back from a tour of the town I’m in (Montrose, Colorado). Drove all over the place for my “feet to the street” analysis. This little cowtown (pop. 10k more or less) saw at least 50 subdivisions crop up in the last year or two. It was amazing, because this isn’t really a tourist town like Durango etc. but is more of a regional center and ag town. So today I visited about 20 of the 50.
It was just like you all have been posting from your places around the country - homes sitting vacant and some building going on, but nobody looks very interested anymore. Two years ago you’d see framing crews of 6 or 8 guys working as fast as they could go, now it’s a few guys sort of half-heartedly hammering nails. Very few Mexicans, except doing some groundswork. Some big McMansions sitting empty (relatively lots for this town) with for sale signs, a few with for rent, some with reductions. Big subdivisions with only a few houses built, all the lots with for sale signs. WalMart and Home Depot very quiet. I posted here a few days ago that the town was dead, it still is, and it’s beautiful weather. Most of the traffic is mom and pop types, no construction trucks, etc.
Funniest thing I saw was the big new major league golf course (for here), the Bridges at Black Canyon, with only a few big houses built, and a third for sale. This was an idea some developers had years ago and tried to proceed with and went broke, a new bunch bought it up. Looks like they may be hurting, too. This place has about one golf course for every 2000 people, and it’s NOT a retirement community.
Made my day. I hope I’m not being too schadenfreude (sp?) but it really burns me to see all this crap on beautiful prime farmland. I think we’re a bit behind some of you, but it’s coming. So maybe I can afford a house one of these days, but I haven’t seen anything that I’d even want, so far. I wanted to take a photo of one subdivision, it’s called American Village, where the entire street is for sale. The street is called “American Way.”
Thanks for the post, interesting!
what potential black swan event could hurt the economy, housing and/or stock market?
Do you want the full list? Forget it — my hands started hurting just thinking about typing up the short one…
Worldwide asset bubble?
http://www.TheStreet.com
Bubbles are all about having a market dominated by ‘the greater fool’. Yes, you buy it now, but a greater fool down the road will pay yet more for it. That’s a bubble.
With more people around the world becoming wealthier, this could be the new paradigm.
If true, there could be new and different opportunities to make money. “A fool and his money are easily parted.”
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=270113498100
Here’s an FB who is literally selling the front door to their house, to spite the bank that is foreclosing on them. If you check out their other auctions they are selling the fence, and the air conditioner to the house! I wonder what other measures FBs will be taking in the future to “get back” at the people who they think did them wrong.