Bits Bucket And Craigslist Finds For June 3, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Scariest article I’ve read in awhile:
Outsourcing Your Life
“Offshore outsourcing has transformed the way U.S. companies do business. Now, some early adopters are figuring out how to tap overseas workers for personal tasks. They’re turning to a vast talent pool in India, China, Bangladesh and elsewhere for jobs ranging from landscape architecture to kitchen remodeling and math tutoring. They’re also outsourcing some surprisingly small jobs, including getting a dress designed, creating address labels for wedding invitations or finding a good deal on a hotel room, for example.”
The dress design and labels for wedding invitations I could sort of see. But finding a good deal on a hotel room? You have to be f’ing kidding me. Wouldn’t it take just as much effort to check out a couple of travel sites as it would to find, instruct, and evaluate someone to do it for you?
No wonder the rest of the world hates the US so much. When I read that, I’m ashamed of what a pathetic little country we’ve become.
On a related note, I buy my work clothes from one of those Hong Kong tailors. My office is one of the few remaining without a casual dress code, so I wear suits every day. The Hong Kong guys are the greatest. The suits are excellent — for $700, the quality of materials and workmanship is much, much higher than the stuff you can buy for the same price at Brooks Brothers, Nordstroms, etc. I’m sure the Hong Kong suits aren’t as nice as Armani et al., but I’ve never bought one of those really expensive suits so I really can’t compare the two.
The first time I tried the Hong Kong guys I was worried that the quality would be poor, that they’d wind up making a 70’s inspired double-knit leisure suit or something, but no — the quality is far superior than anything you can get in the store for the same price, and since a tailor makes it, the suit fits a lot better. Seriously, the quality isn’t “equal,” or “almost as good” — it’s superior.
There are also even cheaper tailors out there, there is one in Thailand that charges $300 per suit. Shirts are only $25 each! You have to travel to Thailand so they can take your measurements, though (the HK tailor I use travels, he comes to LA six or seven times per year.)
The thing is, these places are SO much cheaper than anything in the US. They are the same price, or slightly cheaper, than a low end to midrange off-the-rack suit. And compared to other tailors the difference is astounding, the British tailors (most of whom also travel to the US) charge $4,000 per suit! I’m sure the quality of the British guys is far better, but the HK guys are more than good enough and the fit is exactly the same.
My husband was in Bahrain a few years ago and came home with an amazing wardrobe. He had custom suits, shirts, pants etc that were fantastic quality and very cheap. He told me that the tailor would take his measurements and 2 days later the clothes would be ready. I believe the tailors were all Pakistani immigrants living in Bahrain.
Just a nitpick, they are not “immigrants”. Immigrants are people who come to live in a country permanently and can become citizens. Like your own ancestors coming to the US. These people are “guest workers” who have no right of permanent residence. Their kids don’t become citizens either.
The Gulf countries are full of these people, in some of them they outnumber the citizens.
I go to Bangkok once a year to get suits and shirts. Those prices are about right — a suit that would cost $700-1000 in the US goes for about 300 in Thailand, and a shirt that would cost $100+ in the US goes for 25-30. And the Thai stuff is cut from the fabric whereas the American stuff is off the rack. I refuse to buy nice clothes in the US now.
You can even do cheaper, like $100 suits that would be 300-400 in the US, but what’s the point of flying over there for Men’s Wearhouse quality?
Do that as well, great tailor in Nana district of BKK. 4-5 tailored dress shirts for a $100 USD. Have had some for 3 yrs and still look great. Some have coffee stains now from poor commute habits.
Worth a trip every couple of years. I can also email him and mail cloth samples and he can make and send to me here.
So you paid $3500 for 5 suits so you could go to work?
Find a better job that does not have such requirements. You might even wind up ahead.
Off shoring all your CMT (cut, make, tag) work has been going on for what seems like forever and is one of the first industries I know of to do this as a standard of industry. It’s to the point wear I could produce a line here with a skeleton staff and just fax a technical sketch over and they do everything.
Now, you do have to fly over to deal with your first samples because they never get them right. And before you put it all in the container to send home, you’d better do the QC yourself.
When I did my design degree, most of the class was asian with very wealthy parents. They were all headed back home after school to help run the family business.
I’ve toured the shops overseas as well. The ones we dealt with were walled compounds with the main offices, factories, and apartments for the employees inside and armed guards at the gates. Very reminiescent of the fuedal system.
There are reasons I don’t work in the industry anymore. 1. I hate LA and 2. the only way to survive is enforce poverty.
Gwynster - I work in the apparel industry as well. Where did you move to, NYC?
LOL hell no. Finished a MFA program and moved to No Ca and started all over. I did some consulting work in 96 and 97. I started painting again in 03′. Never do what you love for a living. It steals the joy out of it.
I was guessing NYC if you stayed in the industry. My wife and I both work for the same apparel company - I run IT and Accounting, she is in Sales. Interesting point regarding the need to travel overseas to inspect first samples and do your own QC. Our company still hasn’t embraced this concept which is why we reverted back to producing much of our product domestically. I’ve raised this issue with the owner on more than a few occasions. After this gig is over I will avoid the apparel industry in my next position.
You can hire US firms to do your QC for you but I’d still go over there myself. Once it’s on the container, there is no recourse other then not doing business with that firm again.
Places like Mast, Gap, and other bigger firms keep a sizable office over there to handle the production side. They’ll do spot checks and then a big final check before shipping.
That was an excellent article, wages will not be pressured upwards if you go by the information presented in it. Thus, home prices will have to remain in decline…
Price wars in the labor market, a strong deflationary force.
A message board friend sent me a link of a house in Rancho Palos Verdes - a 4 bedroom 2 bath 2200 square foot one originally listed at 1.39 million now up for sale for $850,000. That’s going in the correct direction.
Elsewhere, my father’s house in Fresno I sold for $75,000 in 2000 was zillowed slightly under $100,000 in 2003 and as high as $291,000 in 2006, but now at $245,000. Over 200% gain, but I think it is worth only about $85,000.
Love to see that RPV link. Live in the area so I could give a decent review. Lotta old couples sitting on homes that they paid $40-50,000 for in the 60’s. Will make for some interesting competition for the homeowners who are waking up to the fact that they bit off a lot more than they can chew…
5241 Silver Arrow Drive, Rancho Palos Verdes, CA 90275 - Prudential California Realty
http://yahoo.idx.prusouthbay.com/details.aspx?firstrecord=14&=&VIP=Yahoo!+IDX&cc=realestate&fclose=n&newhome=n&za=and&searchtype=8&searchgeo=90275&propertytype=1%2c2&sort=5&sortacdc=desc&searchminprice=800000&searchmaxprice=1000000
I get my suits from Alco (poor man’s Walmart) - jeans for $15 (from Mexico) - and also from Western Wear - I upscale to Levis shirts for $25. They last forever - don’t show the dirt, never have to iron, etc. very comfortable and always the utmost in fashion. Am ready for anything, from horseback riding to my monthly videoconference meetings with my NY publisher.
A great article that was very timely for me as I am contemplating my personal squeeze in the teutonic plates of the global economy and the ever declining value of the dollar bills in my purse.
About a year ago my local dry cleaner took pity on my situation and gave me free drycleaning with twice a week pick up and delivery after I complained to him that it was costing me $17.00 to clean my made-in-China dress that cost me $20.00 to buy.
I have been very happy until a week ago when I sent in a leather mini skirt that I had picked up at the vintage store for less than $20.00 and he informed me that he does not do leather in-house and since he sends it out he would have to charge me $40.00 to clean it. That got me to thinking that maybe I could send low turnover items such as this skirt to a cleaners in another country and even with the postage it would probably be cheaper. Certainly if one does not have pick up and delivery the postage would probably be cheaper than the gas to drive to the cleaners and back.
Even when times are bad us girls still have to look good.
Textile production and manufacturing is a really dirty industry and the retail price is so inflated compared to direct cost. I love buying good vintage and then giving the item a hella tailoring makeover.
Hey Ben,
The HBB for-sale photos are nice, but what we really need is a “Babes of the HBB” photo section. Jannifl in her leather miniskirt can be first up.
I am contemplating my personal squeeze in the teutonic plates of the global economy
So what have you got against Germans anyway?
oppsy, tectonic plates as in continental drift.
I know people who have lost millions investing trying to float tutoring firms in India. How do you say “Caveat Emptor” in Hindi?
Crisp & Cole Real Estate, close family members and staffers have received default notices on more than $11 million in loans.
http://www.bakersfield.com/hourly_news/story/155905.html
year ago, it was all about image: a Gulfstream jet, bodyguards, a half million-dollar car, Armani suits.
Now, 27-year-old David Crisp is floating in default notices. So are family members and employees, current and former…
These clowns have now been EXPOSED!!
There whole empire was nothing but a sham!
Hmm…. have you ever seen Crisp and Casey in tha same room?
I’m confused. He has nine properties in default, yet he just secured a loan to build a pair of 24 story towers. Makes no sense.
“secured” is the key. He claims that he did. He is full of $hit!
He has constantly lied to the media. Two weeks ago he was unaware of these defaults…
You need to lighten up. He did give money to charity, he said. So, he should be all good in your eyes and mine. I’m convinced.
I’ll lighten up when he sends ME money…
You’ve got to wonder who would lend that kind of money to a 25 year old. I wouldn’t lend my 25 year old niece the price of a diet coke. They have no concept of earning money or paying it back.
I think this plays into something that I’ve been thinking about recently. We talk about the “housing” bubble or “asset” bubble or all kinds of bubbles. I think the last 5 - 10 years was all about a gigantic “debt” bubble. Anything that could create debt, whether it was mortgages or stocks on margin, was looked upon as good. Just as a cigarette is a delivery system for nicotine, scumbags like this Crisp jerk were seen as delivery systems of debt. The more debt they could create the better they did.
I plan to rewatch “The Money Masters” on Google Video later today. If I recall right, the premise is that the moneyed interests love debt. It is what gives them all of their power. Losers like Crisp are gods in their eyes until it comes time to throw them to the curb.
That video shoould be required watching for the entire US of A
The print version of the newspaper show 29 troubled properties around town (defaults, tax liens, foreclosed). Most are concentrated in a few parts of town.
Crispy&Cole, being the fine compassionate fellow that you are, could you perhaps leave a sack of groceries on the Crisp family porch some evening? Just ring the doorbell & slip away, secure in the knowledge that you helped this needy family get through these trying times.
Not to worry, I’m pretty sure Crispy&Cole will leave a sack of SOMETHING on his porch (probably light it on fire as well).
BAHHAHAHAHA
LOL. Just don’t do it the same night I do.
“Homeowner Please Help”
http://www.harrybliss.com/main_content.html
(Select “cartoons,” then “View the Bliss collection,” then click No. 16)
LOL that goes up on the bulletin board at work
He is another Casey Serin. In trouble and loving the limelight.
“I’ve always been optimistic about what can happen,” Crisp said. “The next day is a new day.”
Yea what will the next day bring? Maybe another foreclosure notice.
This is a DUMB Idea, mailing your tax info to India to save what $100……what a RISK!
=================================
This year, he decided to have FinTax do his personal income taxes, too. He emailed his earnings and scanned receipts, getting a completed return within two days. The firm charged him about $50, a third of what H&R Block charges for an average return. Since the return wasn’t prepared by a U.S. accountant, he says, he filed it as “self-prepared,” but he says he got all the deductions his CPA used to find him. “They seem to know all the laws here.”
Who is dumb enough to save money anymore?
Rich people are poor savers, survey finds
By Thomas Kostigen
MARKETWATCH
June 3, 2007
The low-to no-savings rate in the United States extends to rich people, too. It isn’t just low-and middle-income people who find it difficult to save money – people who earn a lot say they also have trouble stashing money away.
HSBC Bank reports in a new survey that savings barriers stretch across income levels.
http://www.signonsandiego.com/uniontrib/20070603/news_mz1b4kostige.html
With advance apologies, I do not believe that article. Stanley and Danko wrote “The Millionaire Next Door” in the late 90s. Rich people haven’t changed their characteristics. They usually buy used or inexpensive things and buy clothes from places such as Sears. They live in mediocre neighborhoods and spend a very small percentage of their net worth on real estate.
Income and Net worth are two different things…
That was what I was thinking. The millionaire next door is the plumber making $60,000 per year that doesn’t live beyond his means. These are the people that make $300,000 per year but want everybody to think they make $1,000,000 per year. This is the “style over substance” crowd.
I always think of them as LA residents
Cheap shot but it was too easy >; )
Scratch out “LA” and replace with “Southern California” and you would be spot on.
This whole “rich people” thing is quite funny… Half our society likes to act it without having it and our other has it but does’nt act like they have it. Riches come in many forms but in the end its your ability to be truly comfortable with what you posses that determines if you’re “rich” or not.
BTW, be careful with this low savings stat, very misleading…
Right. I don’t like having too much. It makes me uncomfortable. So I give it away.
The usual savings statistics don’t include retirement accounts. The mutual fund industry likes to trot out the low savings number to scare people into contributing more money into savings in the form of: mutual funds.
I like your premise though I think that way more than 50% like to act as if they were rich.
To whom?
I think that years ago, it used to be 50-50. In the Seattle area anyway, i think that it is 80% that act like they have money, and just 20% of us that just want to live our lives and make sure that we save for the future.
“Half our society likes to act it without having it and our other has it but does’nt act like they have it.”
Exactly. Case in point for the latter group:
http://beginnersinvest.about.com/od/samwalton/p/aasamwalton.htm
Lotta understandable anger on this blog as first time homebuyers and young families have had to extend themselves beyond what is healthy for a place to live or raise a family… You really have to have your head screwed on straight to not go with the herd. And, just as in the past, those that have shown patience will be rewarded.
“BTW, be careful with this low savings stat, very misleading…”
A noisy and problematic measure of household wealth accumulation? Definitely.
But there is also a clear signal beneath the noise, quite similar and directly related to the price signal in the volatile food and energy sectors. Unless something has drastically changed in the way the savings rate is calculated since 2005, then everyone (esp. those on the Federal Reserve Board) ought to worry a bit about the savings rate tipping negative and staying there for the longest time since the Great Depression.
One possible interpretation of the signal: The Bernanke Fed has failed to establish a reputation as vigilant inflation fighters, notwithstanding repeated verbal assurances (take a look at gold, gasoline or food prices since he took over at the Fed for a clear indication that cheap talk is failing).
Would-be savers are voting with their asset allocations, as few people are interested in having their savings inflated away by holding fully-exposed $US cash balances.
Cool tidbits about Sam Walton. Unfortunatley, I think he’d be turning in his grave if he knew how his company has abandoned the American manufacturer, a cornerstone of Wal-Marts early success. Truly ironic and sad to see. I’m getting nostalgic as I miss being able to pay $49.00 for a fan that will last a lifetime. Bought a piece-o-crap fan the other day for $24.99 that I believe has not one metal part… Stupid, I know… We have lost the concept of value in this country…
my Wal-Mart stock was up 4% Friday on news of $15 billion buyback plans
it’s all about the profit
I think its a fear of inflation that makes savings seem hopeless at times. It was foolish to even try and save the downpayment especially since one could buy a house without any money. Maybe we will have to study how thrid world workers manage their paper dollars if the FED can’t control its printing press? The problem is deflation is even worse and the FED knows it.
We grocery shop at Walmart. My wife prefers it to the other chains because of the faster turnover (presuming fresher supplies) and so far decent prices.
We apparently have never shopped Sunday afternoons before, however. The number of just wierd occurances were startling to us both.
Kid with roller skating shoes whooshing down the isles.
Fat woman trying on shorts (over her pants, thankfully) in the middle of a main isle.
Parties yelling from one to the next isle what normally socially adjusted people would be talking about in a normal volume two feet apart.
Perhaps the apocalypse is drawing nigh, or maybe this is the Walmart clientel that I’ve always heard disparaged. I could change my habits to avoid this brush with reality, but I think I’ll just go back to shopping on “drinking” nights when the freaks are busy elsewhere.
Clearly.
I bought my bedroom furniture, when I was in college, at a yard sale at a fairly unassuming house. The stuff was nice in its time - solid maple, well-made, just worn from about six decades of use. I haggled like a Persian bazaar merchant and got a good deal. Turns out the guy that sold it to me was a multimillionaire. I still have the bedroom set, though my lovely bride has made me promise to buy a new set once we eventually buy a place.
I’m still using the bedroom set I got in 1983. It looks like something out of The Legend of Ron Burgundy but when you’re asleep, trust me, you don’t notice!
Ours is from 1988 as a gift from our parents. And I still have a bed from when I was single. We sleep on the floor about 70% of the time though.
Ha! My Wife and I have her parents Sears bedroom set from the 60’s, My wife refinished it two years ago. - looks fabulous!
Mine was a hand me down. What’s crazy is that it’s a Stickley but looks like a Mackintosh piece.
Mine is a thermarest mattress - cost $40 new…
Yikes! For the unfamiliar, a link to an IMDB pic of
… bedroom set … out of The Legend of Ron Burgundy …
The bed from when I was single had to go. My wife drew the line on that one. We did get a top-of-the-line King size mattress & frame, but no headboard/frame, yet.
Another frugal idea: Autos, how many of you feel a car is a major investment, and should last 10 to 20 years ?
Bought Tahoe in ‘95. Payed off 9 years ago. All gravy now. still looks great, runs great. To spend 30 - 40 K to replace ? NUTS. Put a bit of $ in the beast this year, plan to hold onto it another five years, which will = 17 years!
A car is not an “investment”. Investments are things that have reasonable chances of producing positive net returns.
I view a vehicle as a tool. Even though the tool itself depreciates, lots of people can’t capitalize on their educational investment unless they have one.
an auto can be an investment if it’s used to create or save money
‘A car is not an “investment”. Investments are things that have reasonable chances of producing positive net returns.’
Like houses, for instance?
“an auto can be an investment if it’s used to create or save money”
As in “no car / no job”?
Ours has turned out to be an investment. Bought a 1992 Ram 150 (not running) for $995. My S.O. adjusted the timing in five minutes and it ran fine for the next 4 years. Sold it last month for $1895
A Ferrari Testarosa is a very good investment and cost only a little less than a house:-]
shoouldn’t that read “Ferrari Testosterosa”?
“I do not believe that article.”
Is there anything in particular that you don’t believe?
And are you saying that all (or the vast majority of) “rich people” are just like the Stanley and Danko straw man? Because it seems like there could be a few “millionaires next door” who save money faithfully and also a surprisingly high percentage of those who earn over $250K who save little. Where is the inconsistency?
This article has been posted here before with comments.
There is nothing in the article that supports the title “Rich people are poor savers.” All the article says is that “rich” people would save more except they have bills to pay.
This is true for poor people as well. I think all of us would save more if we didn’t have bills to pay-such as utilities, tax, fuel, tax, clothes, tax, food, and tax. So by the other’s giant leap of a headline, we are all thereby poor savers.
Of course if we did not pay any taxes we would not have roads to drive our cars on nor lights that turn red and green. No car = no work for most people. No work then no need of a car. No cars then no need of roads and lights. Which all means no progress and human beings do bad things when there is no progress. Just look at where many of the unemployed young men in the Arab world are going. They are going to Iraq to kill Americans. I think I will happily continue to pay taxes.
I would have thought that everyone knew that “no taxes” is not the same as “no roads” or even “no traffic signals. Do you really think that no companies would/could provide these services at a profit if the government did not monopolize them?
Let’s assume private companies did provide these goods & services. Would there be universal standards? How could we prevent monopolies without govt intervention (like cable companies charging almost $100 for basic internet access and basic, no premium channel, cable)? How’s that telephone and airline deregulation going for you? Better service? Better prices? Not sure about that.
Until someone can make a compelling case for deregulation, I can see no reason for privatization of necessary goods and services.
NATION’S HOUSING KENNETH HARNEY
Appraisers sue over marketed information
June 3, 2007
WASHINGTON – A federal class-action suit is focusing fresh attention on an issue that’s important to homeowners nationwide: Who – or what – tells you how much your property is worth? Is it a live human being? A digitized substitute? Does it really matter?
http://www.signonsandiego.com/uniontrib/20070603/news_1h03harney.html
Does anyone know if foreclosure sales are part of the FAR monthly sales when they are reported in Florida?
http://sandiego.craigslist.org/rfs/343843462.html
Someone posted this for San Diego’s Craigslist, it is another sleazy mortgage come-on. I wonder if the rates quoted for the credit scores are true, or if it is just designed to bring in calls…
“New Government Sponsored Programs Are Answering the Sub Prime Apocalypse”
Chumming for more fish.
They’re referring to FHA. Problem is, the FHA limits won’t get you into even a starter shitbox in most places.
I guess that is why some Congressmen are working hard behind the scenes to raise the FHA limits and, while they are at it, to throw away the downpayment requirement.
My wife and I went to a bunch of open houses here in South Florida. We had a great time talking with the Realtors®. It was absolutely amazing how they all perfectly adhered to FAR’s talking points and how frequently they lied.
The first thing nearly every agent explained to us is that we had to buy right away because of the proposed property tax reform here in Florida. They all explained that we had to buy now before the reform passed or risk “being priced out forever” (this exact term was used more than once). In response, I asked why other places, outside of Florida where they have very low property taxes, were experiencing a similar downturn. Their responses sound like a broken record, “Real Estate is local; you can’t judge South Florida based on the market in other places.” We also heard so other favorites like, “They’re not building any more land” or “Stop paying someone else’s mortgage.” It was simply amazing how frequently they repeated all the mantras that we all mock on HBB.
We also started asking questions about the homes — stats that are easily verified on Ziprealty.com or the Broward County Property Assessor website. We asked how long the home had been on the market, how long the previous owners lived in the home, and about comps in the area. They all answered the questions quickly and with authority, but hardly any of their “facts” checked out. They lied through their teeth.
My wife, who isn’t a regular HBB reader, was absolutely floored by how often the Realtors® repeated the matras (I prepped her before we went) and how frequently they lied. Even I was shocked; in reality, they are even worse than we portray them on HBB.
I love calling out realtors on their lies at open houses, in front of the looky-loos. I’m not a Richard about it, just ask some innocent questions and then matter-of-factly rebut the stock NAR-manufactured responses. The stricken look on the face of the RE harpies is priceless. Quite often I’ve had other attendees follow me outside wanting to know more. I always refer them to this blog.
I am not from FL, but I can relate with you when it comes to the excuse the realtors come up with. I visited several homes from Maryland to Delaware and we drilled them with questions that would leave them speechless. For example, we visited The Red Lion Chase in Delaware and ask for prices, the agent told us that prices went up, we asked “Why?” and there were no answers.We also asked about cost of living vs wages in the area and we got a dumb and shocking look. I guess they were not expecting us to do our homework. By the way they were offering all these upgrades and custom features which did not impress us.
Most realtors do not have college degrees. I have always said that it is the only type of job that any idiot can do and make a lot of money. Now most of these idiots who like to deal with flippers can be flippers themselves at any burger joint!
So what is the state of property taxes and reform in FL? If the taxes are oppressive and unjustified (which I’m sure they are if the rates have remained the same over the last few years), then I can actually see how cuts could stimulate housing. Not that it cancels out the mountain of other problems facing housing.
Go Gators!
>
How do you know if a salesman is lying? A: His lips are moving.
Misread that the first time. Thought you said, “Her hips are moving.”
More Clues on the Uncured Foreclosure Issue:
http://wallstreetexaminer.com/blogs/winter/?p=808
“The recent Univ. of Michigan consumer survey checked in at the lowest level in several decades on this score. If the housing malaise isn’t getting you, high inflation and expenses in real terms surely will.”
I don’t remember reading ‘lowest level in several decades’ in the MSM;
your graph clearly indicates we are on track to retreat to consumer sentiment levels not seen since the double-dip recessions at the beginning of the Reagan era (1980-1982).
By contrast, the only recent article I saw in the SD Union Tribune on consumer sentiment indicated it was on the increase (maybe last Thursday — same article that snuck in the news that SD home prices fell 6% YOY between the first quarter of 2006 to the first quarter of 2007 according to the S&P Case-Shiller index).
Chandler (Phoenix) is doing its part to make housing less affordable.
Impact fees are now $19,538 for a single family house.
http://tinyurl.com/3bjg5c
“City officials estimate there is only room in Chandler for about 15,000 more houses.”
Oh well, that’s good, if they build them all immediately it can expand the PHX inventory by only 15%. But, as we all know very well, “85249 Is Toast”.
Oops make that 25%.
Fun with Realtor.com
So I’m playing around on that site, and decided to see what they had as a community profile for my neighborhood (zip code 32578) They list an average sale price of $451,395, and average size of 1974 sf, making for a price per sf of $228.
Which makes me wonder just where they’re getting their numbers from because single family homes have never ever gone for that much here. I live in what’s considered to be the nice part of town where you often pay a 10-20% premium over the rest of the rest of the zip, and the realtors who specialize in that area say it topped out in the $180/sf range at the peak of the boom. And another local realty firm puts the average price for an 1800 sf home in that zip in the $310-$330K range, and even that seems high for the current market.
So just where does $450K come from?
It’s different in Texas!!! From yesterday’s Waco Tribune:
http://www.wacotrib.com/news/content/news/stories/2007/06/02/06022007wacappraisals.html
Money quote:
“What you hear on the national news is a dismal outlook on housing, but that’s not what I’ve heard from builders in the association,” Alexander said. “There’s a housing slump nationwide, but Texas is not like the rest of the nation.”
Yes, they’re still building plenty of homes in this part of Texas. But I’m not sure they’re selling that many of them. Notice the story pointedly did not address sales, only construction.
LOL. Right. The only people I’ve encountered who are bigger bullshitters than builders are gambling addicts.
“…builders are gambling addicts.”
Judging from the carnage on the ground in San Diego, those last four words could stand alone as a complete sentence.
Texas seems especially bad in this regard because there are almost no restrictions or barriers to entry into the construction biz. Unlike in other states, most undeveloped areas around Texas cities can be snatched up and built out by developers with almost no oversight. Land use planning doesn’t exist and there is almost an infinite supply of land. So they are still building like mad around here in an insane race to push their houses out before the market collapses even farther
You could as well be talking about Utah, Arizona, Nevada, the Mojave Desert portion of CA — pretty much anywhere in the desert southwest.
Quite amazingly, even San Diego was actually quite a bit like this the past few years. If real home prices inflate enough relative to the price of everything else, builders will find a way to build even in places where there is supposedly no land left to build on.
http://www.marketwatch.com/news/story/10-myths-wall-street-employs/story.aspx?guid=%7B9AD16225%2D030F%2D4AC6%2D996A%2D6A5C53011E15%7D
Update from MSNBC: “Avg. gas price dropped $0.01 last week.” This may be good news for housing affordability. Stay tuned.
LOL in Glenwood Springs CO where it’s still 3.52 for regular…and yup, I can hear the housing prices crashing all around me as I write this…
Is there any industry in Glenwood Springs other than tourism?
G.S.’s industry isn’t really tourism, it’s servicing the wealthy upvalley in Aspen. It’s an economy that stretches for 100 miles in all directions - people commute to Aspen from Grand Junction and even from Delta (over a mtn pass). Not to mention the Vail influence 65 miles in the other direction.
rant on-
I lived here for 10 years (85 to 95) and finally left in disgust. Just visiting right now, it’s an education in elitism, everyone trying to look like they’re wealthy. It’s disgusting, this used to be a wonderful place (I raised my daughter here). I’ve expressed my disgust with the Aspenization of most of Colorado here before, that’s why I’m Lost in Utah as often as possible (and we’re talking REALLY lost, way out in the Big Empty, away froom the Mormons, too - no offense meant, but that’s a lifeway also too extreme for me).
rant off-
Southern Utah offers some of the prettiest hiding spots in the country…
I haven’t been a faithful reader for sometime, thought I would stop in for a visit. I gave up my little homebased business in Dec 2006, which was in addition to my full time job and I cut back on the overtime, to get a life basically and have been maximally leveraging my now extra time and the money not spent on an overpriced mortgage, FL taxes and insurance to have a GREAT time.
Anyway the reason I stopped by was because a week ago a friend called and said that my subscription to the WSJ was up for renewal and did I want him to renew it? I said YES! I read it everyday, then yesterday I read that the Bancroft family is selling out and it really looks like Murdock is going to buy it. So I thought plan B is that if he buys it I will switch to the NY Times for news, then someone told me that it is for sale also, same kind of deal. I was very distressed, because where will I get my news? Then I remembered Ben Jones Blog. The dimise of newspapers is upon us. Thank goodness we will have blogs to keep some basic down to earth news to read.
Jannifl,
It’s not just the news on this blog that I find invaluable - it’s the commentary & insights across a full spectrum of issues relevant to anyone trying to make their way in 21st Century America. Not to mention the humor that helps put everything into perspective.
this blog saved me from myself- sold at peak and wanted to buy right away, discovered Ben’s wisdom - am making a donation right now…
This blog was the first form of media that provided facts and links indicating the opposite of what the MSM was saying. Ben saved a lot of people from becoming slaves to the bank. It is very significant that HBB was right and most other forms of media were dead wrong - probably payola in the form of advertising dollars from RE industry.
Here’s an update on a neighbor’s house I have been keeping an eye on here in Wisconsin. She is divorced, and has had the house on the market since August of 2005. It has the same floor plan as my house, and I noticed recently she has it listed at $174,000. It is about 1900 sq ft, just like mine.
I ran into her in Walgreens where she works at the cosmetics counter. She went through a divorce and her husband (a cop) moved out. We talked about the kids for a while, then I asked about the house. She explained that she was trying to do a FSBO for the first year or so, and just listed it with a realtor back in October of 2006. She said the house gets LOTS of traffic. I asked her if she’s had any offers, and she said “oh yes, but they’re all contingent upon the sale of someone else’s house, and they’ve all fallen through”. I asked how many offers she’s had, and she said “too many to count. I don’t even get excited anymore when the agent calls with an offer. I need someone to make me a cash offer.” Her final comment was “I think we need some young people to come into the market so that people can sell their houses and then move up to houses like mine.” I was thinking: yeah, we do. The problem is, most of those young people have already been sucked into the RE market due to sub-prime loans, and extremely loose lending policies of the last few years. It’s going to be several years before we can re-build that population of “starter home” candidates.
On a closing note, I said “it must be hard having two mortgages” (she has a boyfriend and the two of them moved into another, smaller house nearby). And she said “Oh, no. I don’t have one of those. I just pay property taxes. I got a really good (divorce) settlement”. And I’m thinking “How does that happen”?
Then, I remembered. Her husband, is a city cop. Probably makes $45-50k a year (plus overtime). So, she got the house, and he got to keep his (rather generous) retirement account with the city / state. For the record, he lives in a really small house (I’ve been in it — it’s a dump), probably about 1,100 sq feet in a not-so-desirable neighborhood. So there’s the tradeoff: divorce in the U.S. of A….
“I got a really good (divorce) settlement”
She might not be quite so happy about the settlement when she wants to retire. At present, she is losing $10,000/yr in opportunity costs (assuming money market yields, $150k sale price) taxes and insurance. Not to mention depreciation losses on that house as she follows the market down.
I have a feeling his retirement account is going to be worth far more than that house will.
He won.
‘Piggybacking’ roils credit industry
http://news.yahoo.com/s/ap/20070603/ap_on_bi_ge/cash_for_credit
More on piggybacking, where people with low credit scores can “rent” 100 to 200 points on their credit score by being added onto credit cards with good repayment history. Changing a 550 to a 750 can mean hundreds of thousands of dollars in saved mortgage interest (assuming these people can actually make 30 years of payments).
Facilitating this may eventually be illegal-ized, as the Mortgage Bankers Association considered it mortgage fraud, by hiding material facts.
Funny how the “Credit Score” that has become the surrogate for underwriting is now shown to be worse than useless.
Until the practice is curtailed, some people are building a small nest egg through renting spots on their credit cards.
No worries about another 1-day 4.6% slide in China, as they have “diversified” into the U.S. market now (Blackstone)…
ASIA MARKETS
Nikkei touches three-month high; Toyota rises
By Chris Oliver, MarketWatch
Last Update: 12:23 AM ET Jun 4, 2007
HONG KONG (MarketWatch) — Asian stocks started the week on an upbeat note Monday, with several leading indexes turning in record-setting performances, while Japan’s Nikkei 225 Average hit a three-month high after Toyota Motor Corp. and other exporters gained ground after the release of stronger U.S. economic data and another record close on Wall Street.
Japan’s Nikkei 225 added 0.3% at 18,020.42 in afternoon trading, its highest level since Feb. 27. The broader Topix index was up 0.5% at 1,775.98. Australia’s S&P/ASX 200 was up 0.8% at 6,381.9, after earlier setting an all-time record high of 6,409.2, bolstered by gains in mining and energy stocks.
Share indexes in Singapore, Taiwan and Malaysia also set fresh intraday records. Bucking the uptrend, China’s Shanghai Composite Index slumped 4.6% to 3,816.70 in late-morning trade.
http://www.marketwatch.com/news/story/nikkei-touches-three-month-high-toyota/story.aspx?guid=%7BB2187333%2D6B18%2D4CDE%2DADD7%2D919DAA7F7D48%7D
I haven’t been up to much lately. Eh. I just don’t have anything to say right now. I’ve pretty much been doing nothing worth mentioning. That’s how it is. I haven’t gotten anything done.