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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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You know you are a Sixpercenter when you put gas in your Lexus $5 at a time.
YKYA a Sixpercenter if you spend your weekends all dressed up and completely alone in empty houses sitting on a fold-out chair you brought along yourself.
YKYA a Sixpercenter when you find yourself wondering if you can really justify spending money on……. ‘glamour photography’.
YKYA sixpercenter when your t*ts cost more than your education.
LOL!
What the heck is up with that?? The only profession that has my silcone and saline is “pole dancer”. If I walk into my local RE office (very bad idea right now in Palm Beach, btw. You could be torn limb from limb when they see a high FICO/documented high income) I sometimes feel like the disco ball is going to drop out of the celing and the collapsable poles are going to come out.
Are most RE agent ex-strippers? Or is RE the stage right before stripper?
and your botox injections are financed;-)
You guys are pretty funny.
YKYAA6%er when you use the words “hot neighborhood” to describe EVERY neighborhood.
YKYA 6%er when the overinflated market is crashing hard, but you’re doing everying you can to convince people that NOW is the time to buy!
Here in Tucson, every neighborhood’s hot. Especially during our summers.
I’ve been away from here for a couple of months–making money among other fun things. I noticed over at Financial Sense online that Jim Puplava is intoning that there will now be no great real estate crash:
I just don’t see the gloom and doom scenario that people are painting, you know, the end of housing as we know it. I just don’t see it. I see it weakening. I see a further slump in housing. I think it’s going to take longer, like I said, we’re already at eight months worth of inventory as a combination of several factors that are causing that: falling home sales, prices weakening and foreclosures. So will it get worse? Yes. Is it going to be a catastrophe? No. And so I see further weakening, but not the disaster that everybody is talking about.
No catastrophe. No disaster. No real data to support his conclusion beyond gut sentiments and perhaps a dig against Mish. LOL. Perhaps Pup is heavily invested in Calif shit-estate?
just remember that this epic mania cannot end until the last bear turns bullish…
I think you mean until the last bull turns bearish
Or until the last bulb turns tulip
Puplava has a strong emotional commitment to the hyperinflation scenario. Anything that conflicts with hyperinflation, such as a deflationary collapse in RE, has to be dismissed as a possibility.
Pup has only wishful thinking. A colleague of mine who works at the California location of my client suggested that I should buy a house with a lap pool (I’m an avid fitness swimmer) in Phoenix. A new hire moving to California needs to sell it. I told the colleague “no thanks, the houses are overvalued here.” He just looked at me in disbelief, and probably sadness. I’m regarded as a cheapskate here - nearly 48, never married, renting $967 per month, with a Toyota economy car (paid for). And the employees in their 20s and early 30s have either two cars or a fancy lexus, one leases a Mercedes SUV, one young one has two houses. It must be nice to pretend to afford those things, but I heard they come from wealthy families anyway. My folks grew up in the depression so I followed their habits. However I have a good net worth, lots ‘o freedom, and can take long vacations in, say, Hawaii, if I want. I am convinced renting vacation homes is far better than buying them, and has far more sense in personal finance.
I am convinced renting vacation homes is far better than buying them, and has far more sense in personal finance. ??
No question about it…Wife and I did the math on a beach House in Capitola….The decision was a “No Brainer”…Invest the money and rent the beach house….
I noticed an interesting divergence with Puplava’s comments starting late last year. If you recall, he was doing these small segments on a nearby housing development for several months in a row. He had several characters he made up that would continually Refi, Heloc, flip, etc. and were in financial distress because of it. He basically laid out the whole bearish argument that we make here every day and he made it very clear where he thought this was heading.
Several months ago he suddenly stopped mentioning RE and dropped the references to the RE development he had been writing about. I also understand from his comments that he purchases a condo somewhere in the San Diego area. I doubt that the Condo enters the picture in any substantial way but I found it curious that he would even consider a purchase given his views at the time?
It isn’t like he suddenly converted to a RE bull but it was pretty apparent that something happened that got him to stop being publically bearish. Curious.
What’s your favorite property description or Realtor shill?
“Handyman Special”
Usually used in conjunction with a house with MAJOR problems, being sold at a paltry discount to comps.
“Pride of ownership”
Pride goeth before destruction, and an haughty spirit before a fall. Proverbs 16:18
“Priced to sell” and “Won’t last long”
House has been on the market for greater than 6 months. NAR members should lose liscense if employing these terms after first month of listing.
“New On Market” and “Wont Last Long”
both are absolute nonsense…….
“Hurry!! Won’t Last!!!” on a place that has 150+ DOM.
It would be fun to have a topic on the dumbest things we’ve had to endure at our workplaces. The level of stupid comments and just ignorant opinions that I’ve had to deal with is just amazing. People that are otherwise somewhat smart have said and done the dumbest possible things in the past year or two. Sometimes I feel like I’m working with David Lereah clones. I’m sure I’m not alone.
It’s amazing, the amount of dumb comments I’ve heard at work. Here’s the latest:
I’m in higher education (professor), just starting out after finishing graduate school. The administration of our school is VERY worried about losing faculty, and rightfully so. Moreover, they know that the reason why they’ve had high volumes of turnover is the cost of housing. I had a conversation with our number-two administrator yesterday, and he asked me whether I had bought a house yet (code language for “are we losing you too?”). I replied that I hadn’t. So he suggested that I buy the house of a colleague who just quit. That house is listing for 650k. This, coming from the man who decided my salary.
I don’t know of many professors in America who could afford a 650k mortgage on their salary. Perhaps there are some out there, but they aren’t in my field, and they aren’t at any institution that I have ever been a part of. The ignorance, even from people with the highest levels of education on the planet, is astounding.
I know that there’s other professors out there on this board. Perhaps they could correct me.
Jump in here Gwynster……
It would be crazy for a professor to buy a house for over 500K (except maybe for med school profs). Put the money in a 403(b) or in savings for your own kids higher ed. I live in the midwest and bought a 2000 sq ft house with geothermal on 3 acres about 8 years ago for 170k. Maybe it’s worth 200k by now. Prices in the hot markets are rediculous and will be loosing real value over the next 5 or 10 years. Renting is now the way to go for just about anyone moving anywhere. If we get new faculty in our department, I would recommend renting for a few years.
I also find it interesting how the rah rah real estate myths got so entrenched in the American psychology.Was it mass brainwashing because of the advertising ,the fear of being left out ? How did people become to have such a real estate fixation that they were even willing to commit fraud and contract to payments that exceeded their income . This is really weird behavior IMHO and it got silly as time went on . The drones were ganging up on renters or priced out of real estate people acting like they were pathetic souls who had missed the boat,”buy now or be priced out forever “.Remember how they had those articles in the main media newpapers suggesting that renters had commitment problems .I think they are going to call this boom run-up the biggest unchecked ,fraud infested ,mass investment promotion scheme in history .
Housing Wiz’s comment is well-put. And it’s really disconcerting.
I decided not to buy even before I made the move to South Florida. But that decision wasn’t based on vast research, careful analysis, or this blog (which I didn’t find until a few months after I arrived). It was VERY simple math, together with a quick look at median wages and home prices. That was all I needed, and with that, even this over-educated dolt could see this downturn coming. But for those already here, it is almost as if a sense of normalcy has evolved around the collective irrationality.
Glad you were wise enough to see through it my friend . Had more people just refused to buy something beyond their affordablility (as usually happens when markets get inflated ) the market would of contracted a whole lot earlier .The REIC just sought to keep the party going .
As an Australian with many relatives in the UK, I can assure you that the psychology you describe is not confined to the US.
Good topic. Most of my subordinates are CPAs or degreed accountants — people who should know better. However, they’re just amazed and high critical when the hear that I rent. The buying-is-always-better-than-renting mentality is so entrenched in American psyche that people who are financial analysts by trade fail to see what is so clear to all of us on these threads.
Even as the bubble has started to burst, these otherwise very intelligent, very financially prudent, well-educated people still sound like Learh — Pollyannas to end, even as Rome burns around them.
You’ve got to give credit to the Realtors® and their minions; I can’t think of any marketers that have been more effective at brainwashing their audience than them.
I also find it interesting how the rah rah real estate myths got so entrenched in the American psychology.
I’ll tell you how it happened to me before I started reading blogs like this.
My parents bought a house in Los Angeles for $7k in 1948, paid it off sometime in the ’70’s and sold in ‘85 for $90k. To my ignorant way of thinking, they had “made” something like $80k.
In the meantime, they had purchased several other “investment” properties kept as rentals. They cashed it all out and retired to the cabin they had built (by hand) on a lake.
It looked all good to me.
In 1984, I got $52.5k mortgage on an 1100 sqft box in Tucson and sold it for $90k in ‘94. I realized $20k.
You see what I mean? Without subtracting taxes, maintenance and inflation, we buffoons thought we had actually gotten money out of the deal.
Feh.
And, I have to add, by the time I moved to Vegas (’05) I had finally gotten enough experience/sense to realize that there was something “wrong” with housing prices.
I rent now.
We’d had high turn over at my last company. This was said to be due to “the moral issue”.
Well, a year before we’d had a layoff, but were then given more agressive development schedule. Fewer people had to do more work.
A few months after that we were informed that accounting rules changes were making them remove the employee stock purchase program. Which was a nice way for them to transfer money to us without it showing up as cost in the annual report.
A few months later is was annual review time, and we were infrmed there would be no raises that year…Well, the CEO, COO and others were given massive raises to compensate for thier loss in income due to the loss of their employee stock purchase program. So, OUR raises were given to the bosses. Or put another way, we couldn’t be given raises because the bosses had to get theres.
A few months later we’re at a company meeting and we’re told that despite a very good quarter, they’re not going to be paying quarterly bonuses.
Then they announced a new commette was being formed to explore the “morale issue”.
So, we get to the Q&A with the COO. I step up and say “I don’t think you need a comitee to explore the morale issue. We had lay-offs, then were told to do more work with less people so that we could be profitable and pay bonuses. Then we lost our ESPP, so we could be more profitable and pay bonuses. Then our raises were given to you and the other executives so that we can be profitable and pay bonuses. Now we’re told we’re highly profitable, but not getting bonuses.
Here come the stupid comment…. Ready…..
COO: “I can assure you of this. The morale problem is not a compensation issue.”
blah, blah, blah, board controls bonuses.. blah, blah, blah, change in targets, blah, blah, blah future outlooks….
There were a good dozen or more other questions. At least half prefaced their comments with “I applaud the person that made the comments on compensation”.
A month later we had an unscheduled round of reviews, with accompanying raises, and the next quarter we got bonuses.
A year later I was let go in a RIF. I got paid 13 weeks of severence and got a new job in 3 weeks.
OH, I’ve got another one: I have students approaching me to ask whether I would want to buy their condos.
student:”Hey Prof, wanna buy my condo?”
Prof:”Sure, whats the average rent in that complex?”
Student:”$900 a month”
Prof:”Id buy that for 115K”
Student “What are talking about, my daddy paid over 300k”
Prof: “Education is expensive.”
How about the idea that homes generate wealth all by themselves?
‘The belief that new houses add more costs for local governments and schools than they generate in revenue is wrong, a national expert on the subject told a group of area real estate agents and homebuilders last Thursday.’
‘On the contrary, it is the new homes in a community that pay a greater proportionate share of the costs of local services, subsidizing the older neighborhoods, said Dr. Elliot F. Eisenberg, a housing policy economist with the National Association of Home Builders in Washington, D.C.’
‘When people say they don’t want more houses in the community because it will be a burden on the school, ‘don’t take it anymore,’ he advised the real estate agents and home builders. ‘Tell them they are wrong … If they want to stop construction because it doesn’t pay for itself, laugh at them.’
“On the contrary, it is the new homes in a community that pay a greater proportionate share of the costs of local services, subsidizing the older neighborhoods, said Dr. Elliot F. Eisenberg,”
The above statement probaby has some truth to it in Florida since Florida’s property tax law favors historical purchases vs. current purchases of homes. This subject has been discussed at length so I won’t go there but would like to get on the record that I favor SOH and I am not presently a Florida homeowner.
On the other hand I have read numerous articles about this or that developer groveling for a tax subsidy/reduction or elimination of impact fees in order to make the project feesible.
One of the biggest fricken scams I have ever seen by a school district is there ability to levy “Impact Fee’s” on not only “new Construction” but even additions….The Idea that adding a family room to your house impacts school district enrollment is just a bunch of crap….And what about the new condo development ? Data “Overwhelmingly” shows that these complexes are occupied by empty nesters, singles and young couples but the school district gets $2.50 per square foot impact fee “Paid Up Front” for this development..They are fricken thieves with a license to steal…..
How about we just laugh at him?
That’s probably the strongest part of his argument! With fingers in ears of course.
“With fingers in ears of course.”
And his head up his Lereah…….
‘When people say they don’t want more houses in the community because it will be a burden on the school, ‘don’t take it anymore,’ he advised the real estate agents and home builders. ‘Tell them they are wrong … If they want to stop construction because it doesn’t pay for itself, laugh at them.’
Well I for one cannot wait to buy from someone that laughs at me. In fact, can they sign me up for three houses?
“How about the idea that homes generate wealth all by themselves?”
Soon to be supplanted by the realization that homes generate costs all by themselves, especially when they sit empty with no owner-occupant to privately handle maintenance expenses needed to keep them from collapsing to the ground.
Dumbest Thing Buyers Seem to Fall for in a Slowing Market: Exclusive parties unveiling the project.
I bet the ratio of ringers to potential buyers was five to one at the one I saw last night. (You could spot the ringers because they were dressed in black, plus all the mercedes parked out front.)
http://dcbubble.blogspot.com/2006/04/airline-style-pricing-for-condos-you.html
My apologies that I can’t remember if it was azlender or another blogger in the business that posted a few days ago that realtors didn’t screen buyers for affordability because they would just find a lender who could make it happen and maybe even earn a kickback for it.
I cross posted that (crediting both this blog by name and the posters screen name) on a local “supposed” RE blog on the Syracuse.com site and it was immediately removed. I really didn’t add any further comment myself except to say it was so obvious I couldn’t believe I didn’t process that myself.
A year ago I know people were commenting on deleted posts when they tried to communicate bubble blog facts locally. But it seems to me like the word was out. I’m surprised there is still suppression of information at this point. Anyone experiencing anything similar?
(not me. all my contacts come direct from borrowers)
oh, I’m sorry I didn’t mean to insinuate you were that type of lender…..only that it does happen that way
Brain’s connecting again….I was remembering a post by Housing Wizard
Check out this Phony FLIP this House
http://www.myfoxatlanta.com/myfox/pages/Home/Detail?contentId=3200981&version=2&locale=EN-US&layoutCode=VSTY&pageId=1.1.1
Wow! I hate those flip this house shows, they are part of the problem too…people get the idea of flipping from those shows and think that renovating a home should bring in HUGE profits…I am so pissed right now to know that it is staged and I bet the NAR has some hand in those shows becoming mainstream…also, I am sick of some of the shows on HGTv… rant off
Just think of how much business the Home Improvement stores and home improvement equity lenders got from those TV programs like Flip That House ,and often times they were the advertisers for those shows .
That program ,”What is my House Worth” , also is pushing home improvement . In a bad market ,or I should say in a tight money market the value of these improvement go down and you don’t net as much as you do in a appreciating market .
The Designed to Sell show is really funny .That show makes it appear that by only spending 2k to doll up your house for sale ,you can make a extra 1000% on that investment of 2k.
That show has usually 6 or more people working on the house without charging any time for labor .
I think that painting a house goes a long way toward making it look clean . Also you can over-improve for a area and in down markets appraisers don’t care so much about upgrades in determining value as much sq. footage, how many bed and baths etc. becomes more important in caping area values .Sure a buyer might pay more for a upgraded kitchen but the lender might make the borrower put down more to pay for it if the neighborhood values are at a max.
So true regarding the improvements, Wiz.
In a “normal” market, forget the GCT/SS nonsense. The best thing is to paint and put in some neutral carpeting (only if the original carpet is bad, esp if it smells).
Too many people got caught up in the “designer home” fad. Personally, I want a blank slate when I buy, and intend to discount all the “pergranitee” junk which I will have to rip out in order to make it a comfortable, livable place for a family.
Amazing about that show. I only saw one episode with that guy, and he struck me as full of sh*t. You’d think A&E (or whoever puts that on) would have done some better research.
Fraud, fraud everwhere.
I’d like a discussion as to how we hold the folks responsible for the breakdown in lending standards accountable for their actions. And the fraudsters — and those who aided and abetted the fraudsters — as well.
I just get the sense that — as with the S&L collapse in the ’80s — a lot of people are just going to be able to skate away to the next scam (or even to “honest” work).
How can we make sure these folks — from CEOs to regulators to scummy loan processors to fraudsters get what they deserve?
Along those lines:
‘The chairman of the U.S. Senate Banking Committee took issue on Thursday with Federal Reserve Chairman Ben Bernanke’s defense of the Fed’s oversight of the subprime mortgage sector, arguing the central bank failed to fulfill its regulatory duty.’
‘In a statement, Dodd said federal law ‘requires the Federal Reserve to write rules to protect home borrowers from unfair or deceptive practices,’ taking issue with Bernanke’s characterization that the Fed was ‘authorized’ to write such rules.’
‘For far too many years, far too many risky and abusive subprime loans were made without a reasonable analysis of the borrower’s ability to repay the loan,’ Dodd said.’
How about the impact of the immigration bill just proposed that legalizes 12 to 20 million people who jumped the fence. Maybe the 2.5 million empty houses on the market could be used to house these new citizens and thereby fixing the housing bubble. Who will pay you ask? Look in the mirror.
During the immigration rallies protesters touted that immigrants spent billions of dollars as concumers and that we’d miss that if they were deported. Now they’re saying they can’t afford the $5000 fine. So do they have billions to spend or are they to poor for the fine imposed?
Illegals are criminals–they’ll change their story to suit the needs of the moment.
“The enormous cost of granting legal status to millions of illegal aliens is being wholly ignored. Nearly two-thirds of illegal immigrants are low-skilled workers. Based on a detailed analysis of the net cost of low-skill households, Robert Rector of the Heritage Foundation estimates that the typical illegal-alien household receives $19,588 more in benefits than it pays in taxes each year. He explains that these costs would increase dramatically when an illegal alien reached retirement. Rector estimates that if all current illegal aliens were granted amnesty, the net retirement costs (benefits minus taxes) could be over $2.5 trillion.” [NRO Editorial, May 17, 2007]
The people here illegally already are not the ones to worry about. The ones who will flood across the border to take advantage of this new law are what I worry about. The spineless Repubs and the Demos never addressed the issue of taxpayer-subsidized health care for illegals, who are soon-to-be new low income Americans. The Repubs have become George McGovern Democrats.
I’m going to do all I can to avoid taxes. I do not want to sanction those people.
you say that last line as if you dont already live that way.
Avoiding taxes….its a way of life.
Evading Taxes…..the term feels like life.
Those are public costs and benefits, based on the fact that these migrants don’t earn much. Those in the private sector benefit from higher profits as investors, and lower prices as consumers. The benefits of immigration are private, the losses are socialized.
There are many of research articles that have found the contrary. Why don’t you check out the Migration Policy Institute or the Urban Institute for a more informed opinion.
Personally, I think all economists are a bit whacked. Everything they really don’t want to deal with they can call an externality and leave out of their formula.
I got too excited and posted my comments below…..here they are for all to lambast.
Try this one on:
The immigration “Deal” about to spill out of Congress.
As a staunch fiscal conservative for most of my adult life, I was always anti-immigration; however, over the past few years my thinking (and I believe the Republican Party) has changed. Conservatives are going to take over the immigration debate through INCREASED amnesty deals, as well as, REDUCED barriers to become a US citizen.
Why?
The creation of an immigrant lower class will support help support the transfer payments scheme that currently exists. What? Yes, create an immigrant class that will:
1. Continue to “buy” into the housing market….at the low end of course in order to create more churn through the system.
2. Pay into the unfunded liability we know as Social Security
3. Stem the tide of exporting low skill/ low wage jobs overseas.
4. Lastly, and most importantly, CONSUME MORE.
Well that’s it in a nutshell. Now, blast away you isolationsts.
I partially agree. There are good things about the low-skilled illegals like you posted. But along with them came a lot of crime and gangs. Add to that several families in a house - would you want something like that next door to you? That is a big reason why I don’t buy a house in an urban area. You cannot decide who moves in next to you. America is not like the way it was when I was a kid. I’m forced to rent in upscale apartments, where the smallness and higher prices and lease agreements prevent 12 people per household. Eventually I will start renting an apartment outside the United States and use it as my alternative address. I like some Central America places, the Carribean, and certain nations in South America, such as Brazil. I’m working too many overtime hours to visit those areas for now. It’s been this way for over 4 years! So I stash my cash for the big escape later.
How about the status of Home Depot, Lowes and similar stores? Home Depot at the least must be desperate based on their latest commercial. (It’s the one with the woman who rents an apartment who decides to improve the apartment complex’s garden.) I have NEVER seen a commercial from Home Depot or a similar store target renters like that.
I think it has at least been mentioned here before, but Toyota is giving out incentives on Priuses now. With gas prices going up, they can’t find people to buy a fuel efficient car. I know they are making more of them than they did when dealers had waiting lists and bidding wars on them, but that is one heck of a change…
Part of the problem with selling a Prius now is the next generation is reputedly going to get 80 mpg, so why buy one of these?
I live in the DC/Northern VA area, and I think the problem at least locally is that most people who bought hybrids here did so because hybrids could be taken on HOV lanes even if you were the only person in the car. Now, with so many hybrids on the road the gov is thinking about changing that back to HOVs only so the main benefit is lost.
I saw that commercial and thought it was humorous that Home Depot was now pimping to lowly renters like me…
Will rising interest rates (thanks to a growing inflation risk premium)
drive the final stake through the heart of the housing bubble? Or will govt-subsidized rates rescue the situation? The suspense is killing me…
———————————————————————————
BUSINESS BRIEFING
30-year rates hit 5-week high
May 18, 2007
Rates on 30-year mortgages jumped to the highest level in five weeks, Freddie Mac reported in its nationwide survey. Thirty-year, fixed-rate mortgages rose to 6.21 percent this week from 6.15 percent last week. It was the highest level for 30-year mortgages since they averaged 6.22 percent the week of April 12.
Rates on 15-year, fixed-rate mortgages rose to 5.92 percent from 5.87 percent. Five-year, adjustable-rate mortgages rose to 5.92 percent from 5.89 percent. One-year ARMs, which had shown the biggest upward movement last week, were unchanged this week at 5.48 percent.
http://www.signonsandiego.com/uniontrib/20070518/news_1b18bizbrfs.html
Do I detect cracks in the symbiosis? Maybe that is why long-term T-bond yields and mortgage rates are lurching upwards?
=============================================================
China widens yuan’s daily trading band
Hikes interest rate, tightens reserve requirement for banks
By Steve Goldstein & Wanfeng Zhou, MarketWatch
Last Update: 10:41 AM ET May 18, 2007
NEW YORK (MarketWatch) — The People’s Bank of China on Friday said it’s widening the trading band for the yuan, hiking interest rates and increasing banks’ reserve requirements, as authorities act to cool the red-hot stock market and lessen pressure from disgruntled trading partners such as the United States.
http://www.marketwatch.com/news/story/china-widens-range-yuan-can/story.aspx?guid=%7BC73CF0A1%2D6002%2D4783%2DB883%2D06583C2A217D%7D
A key to bernanke’s speach yesterday.
Stop high-risk and predatory lending to unqualified buyers.
Don’t reduce the number of people you’re lending to.
How the?
I’d like to see a discussion on what our local politicians have done in real estate… purchase-wise. In Maryland you can look up real estate transactions (unfortuanately by county, so you might have to look in several places) by name. I can’t tell how much of the $150K HELOC everyone’s favorite right-wing, oh-so-moral politician has used, but I can tell that he took the line out in January 2007 on a house he bought in 2005 for $185K (or was it $180K?… sorry, didn’t write it down).
BTW - he lives in a fairly cheap part of the state, you can’t even buy a 1 bedroom condo in the immediate DC burbs for $180K.
Senator Obama got a sweet deal on property from a now indicted developer, Tony Rezko. When Obama was an attorney he also did work for Rezko’s firm while it was operating substandard low income housing.
Hahaha….everyone knows the Feds and politicians were in bed with the flipper types. I know they’ll try for a big bailout later this year but it will fall on it’s @$$. Maybe that’s why they’re charging the illegals fines. Sure helps paying down that $46 trillion national debt.
Xstate
Islamic Republic of South Dakotastan
Live in California?
Read this:
http://www.amazon.com/Dangerous-Place-Californias-Unsettling-Fate/dp/0142003832
Advised and consented by the late Great Marc Reisner, who passed away, a broken mirror ago, and his visions are now reality.
From just 49 cents, for a fine used copy.
Having lived in California , this book certainly doesn’t surprise me. I was living in Pacific Grove in the early 70s doing science field trips in the area. One of the things that astounded this simple midwestern boy was the vast amount of housing built in 100year flood plains, 1000 year flood plains, earthquake fault zones. In talking to people that lived in these areas, the common theme was “we’ll be out before it happens”. The perception of risk, danger and hazard is non-existent.
This is a review of his book if interested.
From the Journal of Homeland Security
http://tinyurl.com/3ysvvu
caution 10pg pdf.
Reits waterfalling. Guess I’ll cover half that position. Nice to actually ring the register.
I’ve got some $65 GGP July puts that are doing well during the last two weeks. Also added some more SRS (ultra inverse Dow real estate) to my wife’s account.
I didn’t see this posted here in the past couple of days. I’m sure that it was posted and/or discussed, but just in case it was wasn’t:
http://www.npr.org/templates/story/story.php?storyId=10118254&ft=1&f=1018
It’s an audio clip of NPR’s interview with David Learh. It’s freakin’ hysterical; he spends all his time defending his prior predictions. Wow, I’ve never heard someone who so full of crap.
His main excuse was, “We didn’t know that the speculative investors were straying so much for the fundamentals.”
“We didn’t know that the speculative investors were straying so much for the fundamentals.”
We told him so.
David should have spent more time reading here and less time babbling nonesense to the press.
While I drove to work through McMansion land today, and looked about at all the newly constructed 3000+ sqft homes, an evil little voice inside my head asked, “Where is the downside to buying one. You could qualify for a prime loan. Even in the worst case scenario where the price dropped and you ended up in foreclosure, the credit markets would be all too eager to reconstitute you as a functional piece of plankton. Why not go for it?”
How should one answer such impulses?
stop, count to ten. Take hold of yourself before you take hold of a thrashing alligator.
Do not listen if you are not open minded.
http://www.youtube.com/watch?v=xcQQ05XtAQ4
Excellent link!