Bits Bucket And Craigslist Finds For June 6, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
How to lose $240K in 6 months:
5752 CARIBBEAN CT
HAYMARKET, VA 20169
List Price: $599,900
Prior Sale: $840,000 11/03/2006
Listing Date: 05/30/07
-28.6%
http://www.homesdatabase.com/PW6426026
That house would be fugly on its own but the obnoxious garage doors put it on the Fug All Star Team.
Most every newer development in our area are nothing but a huge garage door(s) with a house attached. Ugly is really to kind.
to kind s/b too kind
ugly is to kind as fb is to renter (?)
I think the “rationale” is that you can fit your RV in those mongo garages.
Actually, I see those double-door garages with the minivans and trucks parked outside. They don’t fit. We had a smallish minivan and it refused to go inside a garage like that.
Most people I know with cars parked outside is because the garage is full of boxes and worthless junk, while $60,000 worth of SUVs sit baking in the sun.
The brown grass and twig tree in front are a nice touch.
I don’t think it’s so bad. Mostly too tall and thin. Let’s change the aspect ratio of the photo, stretch about 7% horizontally. And grow some grass. And paint the garage doors gray. Then I’d probably offer $300K. Maybe even $350K.
gotta fit the “his and hers” Hummers somewhere i guess.
What?!? I guess you’ve never seen the garages with dwelling quarters above being constructed on the outskirts of Orlando (practically in the Lakeridge Winery area, about 40min out of town). When you called this house fug, I thought you were talking about one of those…
You haven’t seen an ugly house until you’ve been to Florida. Utah and West Virginia have some ugly trailers, but Florida? Hoo, boy! Have we got some shacks for you!
Stone & vinyl. I’m sure the only stone is on the front.
Yep, never saw that until I moved to NoVA. I was confused at first: do people really think that that is attractive? It wasn’t till later that I realized that it was the builders that were responsible for doing that half-assed.
They do that here in the Ozarks all most new houses. But usually they try to put at least 4 types of outside covering — vinyl, FAKE stone, FAKE brick, and one other highlighting element such as a bit of wood or stucco. Nice.
Anyway, that’s probably FAKE brick on the front of that house.
“But usually they try to put at least 4 types of outside covering — vinyl, FAKE stone, FAKE brick, and one other highlighting element such as a bit of wood or stucco.”
They are doing that all over the country. To me it looks more like the contractor was using up the scraps from other projects rather then highlighting.
I actually prefer fake stone that at least LOOKS like it has coursework to the “flagstones glued to the outside” look that has no resemblance whatsoever to actual masonry prevalent in alot of neighborhoods.
Haymarket is an exburb of metro DC which are being hit the hardest in the area with the bursting bubble, the spike in gas prices and the fact that you’ve got 3 hours in your car each day to commute to & from work.
Haymarket is about 35 miles from DC - I don’t agree that gas prices have anything to do with the sheer lunacy of bidding up the price of a house like that, in a location like that, to $840K. The current, six hundred thousand dollar asking price is still freaking ridiculous.
Sure, some yuppy couple with 200K combined income could afford it, but the same money will buy a nicer house in a far nicer place, provided buyers sober up and look around. Sheesh.
My comment was intimating that the spike in gas prices was contributing to the observed downward spiral of housing prices in the exburbs. It was cheap gas a few years a ago that made exburbs feasible in light of the distance & commute, but now gas prices are causing the reverse trend. The inside the beltway communities are not as hard hit because the people are either using or have access to mass transit and hence are not feeling the bit & their properties are still stable because they are now more desirable in light of the higher cost of commuting.
Joe, for the record, I “sheeshed” at the market, not at you. However, I still maintain that gas prices are a marginal issue and essentially meaningless within the context of housing costs in the region. A thirty mile (each way) commute costs an additional $40 per month with every one dollar increase in the price of gas, assuming a 30 MPG vehicle. That is dressor change compared to $4,000 mortgage payments.
The TIME it takes to commute is certainly a material issue. As they say on Wall Street, “The weakest fall first.” Commute time is the issue with the exurbs, not the gasoline. Exurbian prices fell first, as one would expect. The correction is moving inward to DC and no doubt will continue for some time. I will venture a guess that the exurbs stabilize first, as houses become cheap and offer relative value, even with the outrageous commute. We are still probably years away.
“assuming a 30 MPG vehicle”
DC_Too, I think you are being far to generous regarding gas mileage. It is my understanding that the average fuel economy is far less than this. Most folks who live and work in that area don’t drive small cars, but indeed have a large SUV or truck (or both) to commute to and from work.
SubKommander Dred
DC_Too,
what people in exurbs pay for gas is far greater than just “dresser change”. I live in no exurb, but the latest spike in gas prices are certainly felt to the tune of an extra $150-200 last month. I once calculated, that if I commuted 90 miles one way, my economical Corolla would eat about $300 worth of gas a month. But who of the status-seekers drive Corollas, seriously.
DC_Too,
I did not take you’re “sheesh” as referring to me. I just wanted to insure that my post was clear as it appeared you were attaching a meaning that was the opposite meaning I intended to convey.
I agree the housing price drop will ripple in as it did last time in the early 90’s. The ripple in will be for the same reason as before, pricing became uncoupled from fundamentals. All I am saying is that the higher cost of gasoline has added “fuel to the fire” (pun intended, sorry I could not refrain) in terms of the drop in demand & price that is hitting the exburbs, which this home exemplifes. Any exburb buyer has to add commuting costs (time, money etc) into the equation of whether or not to buy and if they do buy, then the price paid.
Gas prices absolutely will affect housing prices in the exurbs. I’m 100% convinced that the exurbs were a fad, people wanting to live in the country areas with convenience of a city, and do all the other trendy stuff that comes with it. Exurbs were trendy.
Some of my friends bought a lot in a designer exurb subdivision, and they already lived in the suburbs. Well, now they are selling it because it’s just “too far away”. This is going to be a more common occurence in the future, as people realize the idyllic scenes of the exurbs are nothing more than images dreamed in gas fumes from the neighbors jacked-up F350 4×4.
…but the same money will buy a nicer house in a far nicer place, provided buyers sober up and look around.
With some mature trees even. Does anyone even care about the existing landscaping anymore?
I certainly care — I love my 60-year-old neighborhood with its mature trees and houses and yards which have been personalized and differentiated from the generic over the years (and because it’s a well-built house and only 5 miles commute to work, of course). I hate the new developments with their dirt-plus-token-twig landscaping.
I agree that the gas prices probably aren’t the big issue for someone who would seriously consider buying this barn of a house. But the soul-crushing experience of driving into work on I-66 everyday? Gas could be .80 per gallon, and that still wouldn’t make such a commute worth it.
Any indication that 6 months ago it was a “cash back” deal?
I have been asking myself that question, too. Some of these price reductions strike me as very high for the average Jane to absord after 6-18 months of ownership. Something is fishy, unless this stuff is REO.
I think it has a NOD. The first one on the list is on Carribean Ct. and lists for $840k, the same amount the listing above was bought for in 2006.
http://tinyurl.com/2c5u5s
Patch, you are onto the right track. There is a lot of mortgage fraud where the selling price is just below the $250,000 taxable event for a home seller. Fraudsters buy the houses, sit on them 24 months, then unload them to a straw buyer with a fraud loan. The seller gets the $250,000 gain tax free. I don’t think you even have to report the sale to the IRS? Does anyone know about that? Eventually, the bank takes the house back and must sell it at market. I could show you over 100 of these in my neck of the woods.
It looks too gothic for me. It should be rented to a movie studio to use it in the next Batman movie.
About a month ago, they started filming scenes from the next Batman movie down the street from my apartment. Pretty funny walking by the US Post Office with the lettering changed to say “Gotham National Bank”
How many familys on God’s green earth really need 5 bedrooms and 4.5 baths? Who is going to buy all these McMansions out in the boonies? There isn’t just an affordability problem, there’s an inventory mix problem.
Here’s one person who won’t ever be buying one.
“How many familys on God’s green earth really need 5 bedrooms and 4.5 baths? ”
Just perfect for a new group home or halfway house. A great addition to the neighborhood…
Cover story on the Sun-Times about the skyrocketing cost of groceries.
General Mills to Raise Cereal Prices
http://biz.yahoo.com/ap/070605/cereal_prices.html?.v=3
…and make boxes smaller.
Didn’t you hear Bernanke? Inflation is moderating, haha. In the mean time hug a deflationist; they are going to need it.
Inflation on things we need. Deflation on things we don’t.
“Deflation on things we don’t.”
Like McMansions?
Yep. Nobody needs a 5000 sq ft home, a $50K Escalade, or SeaDoos. People need food, energy, and basic shelter and clothing. No wonder the official inflation numbers are so out of line with reality. Prices are dropping on overpriced things we can’t afford anymore because we are forced to use what little spending power we have on essential things which have been excluded from the inflation statistics.
If you don’t have any debt. Deflation is exactly what you want. Who doesn’t want to be able to buy more with less money. Of course, if you have debt, it makes it that much more expensive.
Deflation, dammit!
Prices will be rescinded. A couple years ago the cereal makers jacked up the prices only to push people into PopTarts, granola bars, etc. Cereal consumption is price elastic (goes down as price rises).
Thankfully I can still get a box of Great Value Toasted Oats for $1.50, and it lasts for two weeks of breakfasts.
I prefer cold cereal and milk in the morning. It sure seems as though over the last year or two that I am getting more of the crumbs at the bottom of the box than I used to. Since cereal is sold by weight, it sounds plausible that they are using this to reduce the actual amount of usable cereal per box. Stealth inflation.
Of course, it’s possible that the road leading away from the cereal factory has a few more potholes these days.
I go by the BSI which is far more accurate than CPI.
The Burrito Shrinkage Index works well in San Diego.
I don’t know if they have Chipotle in San Diego, but if they do, there is no shrink in their burritos.
That place would throw off your other-wise brilliant inflation measuring system.
La Salsa and Robertos, Costanza in a cold pool. Sorry to offend your delicate culinary sensibilities.
Chipotle, pronounced Chi-po-tul by natives, does have giant burritos but instead of shrinking they just stuff them full of more lettuce and rice.
Guess I will be spending more time at those dented-can,
retaped-cereal-box stores.
here is the Sun-Times story:
http://www.suntimes.com/news/metro/415495,CST-NWS-food06.article
“Milk is expensive, produce is higher, meat is expensive,” said Purnell, a hospital administrator who lives in South Shore and drives as far as northwest Indiana in search of food bargains
Typical. Spend an extra $5 in gas to save $0.75 on a gallon of milk.
Fuel costs and rising demand for corn are helping to drive the higher prices, experts said. Corn, for instance, is in growing demand to make ethanol. Because it’s used so much in cattle feed, that’s pushing up prices for meat, milk and eggs.
Looks like all those corn subsidies are working out nicely! Let’s hear it for central planning!!!
Typical. Spend an extra $5 in gas to save $0.75 on a gallon of milk.
It makes perfect sense if your time has negative value.
Those comments always crack me up. You go and spend a couple hundred dollars on groceries about once a month or every 2 weeks. You don’t just go for the gallon of milk. I am way ahead of that $5 extra in gas it costs me to get there. Some food products items are over $1 less. Coffee sometimes almost $2 less. I figure for that extra $5 I save about $50-$60. And my time….maybe I check with the blog a little less that day.
“Milk is expensive, produce is higher, meat is expensive,” said Purnell, a hospital administrator who lives in South Shore and drives as far as northwest Indiana in search of food bargains”
The idiot is probably filling up his flex fuel truck with E85 and can’t understand why food pricing are skyrocketing.
CarrieAnn,
I know that you might make up the additional time and fuel money when buying a full load of groceries. Now, I grew up in this fabled land of cheap groceries (northwest Indiana). Back then, there was more competition. My father would gather up all the ads every Sunday and do the math to figure out where to buy stuff. In the end, it always came down to this. There were at the time 3 grocery stores approximately equidistant from our house. It was never worth the fuel prices to go to more than 1 of them. And it certainly was not worth it for someone from Chicago to drive in and do their shopping.
This particular woman would seriously be spending $5 in gas to save $0.75 on something. She would not be spending $5 in gas to save $50-60 on a full load of groceries!
Yeah, you’re right, Brian. I was responding simply to the comments but didn’t read the link. My apologies.
Driving to multiple stores for the lowest products probably doesn’t make much sense. When I shop, I buy everything in the one place, go without, or ask my husband to buy it on his commute on the way home. Remember, I’m out in Hicksville…only one small, expensive, and not so clean place in town (they rape us).
Back on topic, I’d noticed in the last month prices seemed to be increasing substantially.
Nice to see coffee back down after one particularly painful week when as I stared at the $8+ container of Folgers in my Superwalmart, I sat and wondered if it was finally time I considered giving it up. (I have horrible withdrawal symptoms whenever I’d tried before so this is serious! LOL)
Milk tends to be expensive here, but gas stations sell it cheaper than supermarkets.
It’s been that way for YEARS. My dad used to buy groceries at the West Roxbury Star Market, then walk across the parking lot to pick up the milk at the Li’l Peach on Centre Street.
Where I am (Davis, CA), gas and food is more expensive then in Sacramento. We drive into the city once a month and do a mega shop at Costco. Believe me, it is way cheaper buying locally.
Not a gator-
Those stores are still there in West Roxbury, and the milk is still cheaper at Lil Peach. Since I moved to the boondocks last year I am doing the same- stopping at Cumby’s for milk on the way home from Stop & Shop.
Here in Tampa, that crap is not sold in a different location, but remains on the shelves in the regular stores. They don’t throw anything away, and they don’t reduce prices because something is dented. Sweetbay kept its own brands of pet food on the shelves, though some were made with the tainted Chinese wheat gluten, till they were specifically ordered off the shelves by management (a month later than it should have been), I suspect after the FDA come down on them. The company knew what was in its products and who made them, but kept mum.
I cannot tell you how many times I’ve bought vegetables at Sweetbay only to discover upon opening the package that they’re rotten, or to have a supposed fresh package go rotten in a day or so. I gather to save pennies, they buy old produce in the hopes of unloading it before anybody notices.
I disagree with the article about how much groceries have gone up in the past year. I would guess at least 10%.
A year ago a caller asked Jim Cramer what to buy during a recession. He couldn’t think of much, but said stocks in “generic cereal” makers. I remember in the late 70’s that’s all we could afford.
What I miss is all the damaged and surplus good stores clustered in the civil service area of Lower Manhattan. You had a whole district there in the 1980s and 1990s. “World of Damages” was a favorite of mine; Job Lot Trading was the most famous, and my wife’s favorite. I think Webers lasted the longest.
People gotta eat. So it’s probably a good idea to invest in companies that produce cereal or produce…produce!
Powdered milk stocks? I remember from the late 1970s how awful that stuff tastes, and how it was all we could afford to drink.
Apprarently there is surging worldwide demand for powdered milk. Globalization is now going to bite us in the keister (again). Not only do we have to compete with impoverished 3rd worlders for our jobs, we will now get to watch as our food is exported to the highest bidder.
@In Colorado
Yes but 250,000,000 Chinese have been lifted out of poverty by globalization so every time I hear someone whine about how wages are only keeping up with inflation I try to remember why protectionism is so offensive to the rest of the less fortunate world.
Its only offensive if we practice protectionism. Its OK if they do it however.
Who’s the parent company of Spam?
(W)hormel
Hormel. I was raised on that stuff. I’ve actually had the urge to try it again. As I recall it wasn’t THAT bad.
Fried Spam & eggs…seriously good food!
Food, energy and property prices are not included in inflation numbers and trillions of $ in debt isn’t something we should be too worried about (according to Washington and the Fed.) In fact, things are so wonderful in the US economy, we are living cost free! However, I think the cost of shoe laces might be included in the inflation numbers but I’m not sure.
As a side note observation, I’m starting to notice there are a LOT less people in the major supermarkets AND I really noticed that a lot of the produce is NOT being bought.
As usual, we are being lied to by both Government and the Fed until it comes to the point where things are so obvious they have to say something which bears a grain of truth as Helicopter Ben was forced to a few days ago when he made the, “Housing is proving to be more challenging than we anticipated”. That’s Washington hack talk for, “Jeez, it so bad out there we can’t lie and hype and get away with it anymore.”
Yes, helicopter Ben is yet another Washington Hack. The King is dead (Greenspan) - Long Live the King (Bernake). Washington hack out - Washington hack in.
Inflation numbers are bogus, but there are a lot of complex reasons why that is so and why that is hard to fix. Bernanke calls inflation troubling at this time. When Greensplurge left Bernanke cranked up the rates until the tanker started to turn around and then left them there.
There are a lot of problems and discrepencies with the Fed, but your analysis is child puke. This is the kind of thing that makes the vital information exchanged here look to so many like just another part of a dumbed down “blogosphere” that is entirely berift of rigorous thinking.
but your analysis is child puke
Which dovetails neatly with the thread about oatmeal below!
Bernanke cranked up the rates? Please…rates are nowhere near Volcker territory. In fact they are way too low. If BB really wanted to tame inflation he could cut money supply growth, instead of increasing it. Instead, they stop reporting M3. LOL. Sorry Mole, but you are way off.
I guess I need to change my normal routine (cereal) and purchase oatmeal instead.
That’s what i don’t understand. Why do people buy those over-priced, GMO’d cereals when they can get organic oatmeal from the bulk bins at the natural co-op store for 80 cents a pound. it’s so bizarre, and their kids eat all that worthless crap, stunting their growth.
Oatmeal is the one cereal I buy regularly, and I have noticed the home brands from the big chains here in Australia have gone up 40%-50% in the last 18 months. (I don’t know about the brand-name prices like Quaker, because I never buy them.)
Fruit and nuts are up as well, but not as much. (Except for apples, for some reason, they are at least twice what they were 2 years ago and never seem to be on special any more.)
Except for apples, for some reason, they are at least twice what they were 2 years ago and never seem to be on special any more.
Apples are kept fresh for long periods by storing them in air-sealed refrigerated warehouses. They then reduced the oxygen content of the air and increase the CO2 content. Humidity is kept high, and you have to keep it very cold. Very energy intensive, so the costs have definitely increased.
In the Chicago area, we have a bunch of apple orchards nearby, in Michigan and Indiana. When apples are in season, you can buy freshly-picked (and incredibly delicious) locally-grown apples very cheaply. When not in season - yes, pretty expensive!
For me the nearest big orchards are over 100 miles away by road (or 50 by 4WD track).
We have 2 orange crops, Navel and Valencia (in a gap between the 2, subprime Navels are all that’s left…) and a 25 pound box is $6 in California’s Central Valley, in the right locale~
I’ve noticed many orange orchards for sale, in my drive bys,
from little 5 acre ones to mammoth ones…
Why do people buy those over priced cereals? For the same reason they elected GW Bush. Brain washing by the media. Not the “Manchurian Candidate” type of crude depravation brain washing. Much more subtle. It’s done with slick ads, a winning smile and a soothing voice instead of a cattle prod. The same approach you get from your realtor who soothingly tells a naive buyer, “Now is a great time to buy,” followed by the next message, “Interest rates have never been lower.”
It’s done in such a way that Ronald MacDonald the Clown can convince people that MacDonalds is keeping their kids healthy with their fat drenched burgers and french fries. 30 years down the road after a life time of eating that crap (rent “Super Size Me” if you want to know what a diet of MacDonald’s food does to your kids health) and arteries are their clogged - where are MacDonalds? Still selling silent death via happy, smiling Ronald MacDonald to the next generation.
Still, I suppose the average uninformed, semi-literate should have freedom of choice and, of course, it doesn’t hurt the corporations bottom line if they are semi-literate and are unable to think for themselves - even though they have been convinced by the media they CAN think for themselves and they know GW Bush is going to be a great President.
Why do people buy those over priced cereals? For the same reason they elected GW Bush.
Or maybe it’s because they like the cereals and can afford them? WTF does that have to do with Bush? (No, I don’t like him either, but this is more oatmeal/child puke.)
“Why do people buy those over priced cereals? For the same reason they elected GW Bush. Brain washing by the media. Not the “Manchurian Candidate” type of crude depravation brain washing. Much more subtle. It’s done with slick ads…”
Becasue, as we know, Gore & Kerry didn’t use ads.
They didn’t, when they should have. They took the high road, and won.
Supersize Me in no way showed that eating MacDonald’s was unhealthy. It showed that going from an almost vegan lifestyle with plenty of exercise to a high meat and carbohydrate lifestyle with a lot less exercise throws your body for a loop. (i.e. Huge lifestyle change in a short amount of time.)
If they really wanted to show whether or not MacDonald’s food was healthy or not they would have devised a meal plan with a sustainable calorie level as well as mix in foods that MacDonald’s doesn’t serve to complete the diet. The same Supersize Me results could have been achieved by only shopping at a butcher and bakery for a month. Of course attacking mom & pop owned butchers and bakeries doesn’t sell videos.
It is not MacDonald’s that is a problem. The bad choices people make are the problem.
It takes twice as long or even longer to cook and eat oatmeal as it does to just pour cereal out of a box.
Fortunately, there are always cereal coupons in the paper and there are always sales on top of that… it’s a bit like Coke or Pepsi, I rarely buy them unless they are on sale… and they are on sale at least once per month.
Nonsense. The rolled “old-fashioned” type that’s 80-90 cents in bulk can be cooked in a microwave in 3 minutes. Stop buying that “instant” crap that’s had all the nutrients processed out of it for the sake of perceived convenience. Put some raisins and maybe a little brown sugar in it and the kids won’t whine.
Maybe it’s different in the US, but I’m fairly sure the “quick-cooking” oats I buy are just rolled oats passed through a shredder. The cooking instructions on the packet are actually identical.
(And in passing, breakfast oats is one food where microwave ovens do it better, rather than just faster.)
From Wiki…fast food with a purpose!!!
>>
Post was cut off…from wiki…Kellogg opposed all forms of xx, believing it led to diseases. Though he and his wife were married for over 40 years, they never had xxual intercourse and had separate bedrooms all their lives.
Kellogg opposed all forms of xx, believing it led to diseases. Though he and his wife were married for over 40 years, they never had xxual intercourse and had separate bedrooms all their lives.
Why are you writing “sex” as “xx”? Is it some weird religious thing like Jews writing “G-d”?
No way.
I thought ben’s blog was cutting off my post because of FCC rules.
At the risk of sending demand sky high and the prices too - Have any of you tried Weetabix? Yum, yum!
ahh….Weetabix, the cereal of my childhood.
IIRC, Whole (Paycheck) Foods sells Weetabix, but other than that you need to find a shop that specialises in UK stuff to find it.
Which is a pity, as its fab. And now organic, too.
Why are you writing “sex” as “xx”? Is it some weird religious thing like Jews writing “G-d”?
Because his handle is “rxx”.
Sheesh.
I have to disagree about cold cereal being “worthless crap”.
The main ingredient in Lucky Charms, for example, is rolled oats. Also included are 50% of a kid’s daily requirement of folic acid, among other vitamins and minerals. One serving has 22g carbs and 1g fiber.
A serving of non-fortified Oatmeal doesn’t have any added minerals or folic acid, and it has 27g carbs and 4g fiber (evens out with the Lucky Charms)
My kids also drink their milk with the cold cereal, which also probably won’t stunt their growth.
I’m a ham and eggs person myself (I don’t eat many carbs). I was very suspicious of kids’ cereals for a long time, but when I started watching carbohydrates I gave up the granola and raisin bran first.
I don’t think that fortification is a good thing. I read many time from the health pros that the best way you get your nutrients is naturally. Unless you have a specific deficiency, loading up on vitamins does not do any good.
Make your kids eat fresh fruits and vegetables, natural oatmeal/kasha, half a cup of sour cream everyday - and they’ll be fine and even better than their peers. Absolutely no need for synthetic additives.
They get a ton of fresh food, that’s for sure. I garden, buy fresh from local friends, and we have a farmer’s market here.
Organic oatmeal…..a bit of organic oil/organic honey…..roast a bit, tossing from time to time…. Favorite granola….. Toss on blueberries, almonds, or nothing… mmm
I consume oatmeal almost every morning. I also eat wheat germ. The price of a jar of wheat germ has increased from $3.29 last spring to $4.29 this spring.
Mmmmmm, wheat germ.
I noticed those high grocery prices before reading about it in the paper. Bad time for those who live paycheck-to-paycheck to also have a gas guzzler and a hungry alligator to feed.
No biggie, them food prices, since they are not included in the real important inflation universe of “core inflation”. Hehehe……
Nice to see the monkeys who jumped on that “buying opportunity” yesterday and pushed the mkt off the lows getting a nice gap down in their face.
I love seeing your anger in the morning. It’s better than coffee to wake me up. Just remember, every gap down for the past year has been a buying opportunity. We bears have been getting blasted. When will the real gap start and Goldilocks get eaten?
My guess is that the 10-year hitting 5.25% yield will kill nearly everything in its path.
In the meantime, I will just be buying 2-year 7% NZ govts.
Az. How do you get into foreign bonds? Do you have to go through a broker? 7% is ideal.
7% Bond in a 10% inflation world is ideal!!! Am I missing something?
What 10% inflation? Give me the proof (web link).
The price of gas was around $1.60 a gallon when we started the milennium, and now 7 years later, it’s around double that price.
Oil is the one item we need, crave and prefer not to live without. (although we managed for almost 40,000 years, somehow)
The inflation rate for oil, has been 20% a year.
Probably not far away from what our real core inflation rate really is, perhaps a bit lower… say 15%?
Here we are with specific examples again but no objective measurements. gas prices up. Home prices coming down though. My rent in 2000 was $878. Now I’m in a better apartment and it’s $966, but this one has a washer and dryer in the unit. I named you an example too, but I did not give an objective measure. You have to have an economic study from an institution that collects data about prices from bread, rents, health care costs, health insurance costs, automobiles, bicycles, mass transit fees, what have you. But you cannot use specific examples. Those are not proof that inflation is 10%.
Bill,
I have pointed you to Shadowstats before. If you choose to believe the government numbers instead, that is your choice. Good luck living by core inflation.
watcher,
The point is that these are *foreign* bonds, i.e., not denominated in dollars. So dollar inflation becomes a plus, not a minus.
Those are great until something like what happened in Iceland last year gets you. Carry trades are a lot like picking up nickels in front of a steamroller.
I love [the sound of txchick] anger in the morning.
It sounds like… victory!!!
(Bernanke don’t surf!)
http://tinyurl.com/2kfkqv
Housing in Europe faltering too?
Ghost Towns Appear in Spain as Decade-Long Boom Ends (Update2)
By Sharon Smyth and Ricard Alonso
“June 6 (Bloomberg) — Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid’s biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.
“We came to look at apartments but found ghost towns,” said Usua, a 27-year-old taxi driver. “You’d need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.”
The abandoned developments are evidence of a housing glut that will lead to Spain’s first decline in home prices since at least 1992, when the Housing Ministry started keeping records. Spanish builders constructed 750,000 houses and apartments last year, more than France and Germany combined, while annual demand runs about 60 percent of that, according to the Finance Ministry.
“The real killer of the housing market is the immense oversupply,” said Gonzalo Bernardos, a professor of economics at the University of Barcelona. “Prices are already unofficially falling.” ‘
You’d need to drive miles for a loaf of bread or cigarettes
Core staples in Spain? He forgot wine
EU tightening, and pork fried rice volatility, inflation worries.
Lemmings are on the edge, one little nudge……..
Hurt
http://online.wsj.com/article/SB118109681582926024.html?mod=rss_whats_news_us
but Seattle is wunderland
they have hippies an stuff
It’s funny - just a few weeks ago, there was a CNN-Money online story that claimed Seattle was NOT experiencing the problems related to the housing bubble. With the rising inventory - it’s only a matter of time.
That graph is somewhat misleading. It implies that Tampa and Miami are doing okay because their inventories are relatively stagnant. Nothing could be further from the truth. Miami has seen a 34.3% inventory increase in the last year — a huge jump from its already massive glut. The Miami MSA has an absolutely astounding 112,565 units on the market right now:
http://www.housingtracker.net/askingprices/Florida/Miami-FortLauderdale-MiamiBeach/
Tampa might even be worse. They currently have 46,582 units on the market and have seen a 56.4% increase in inventory during the past year:
http://www.housingtracker.net/askingprices/Florida/Tampa-St.Petersburg-Clearwater/
I agree, how can you add inventory when every house is for sale?!
Yep, on October 24, 2006, CNN-Money “Business 2.0 magazine” declared Seattle a bubble-proof market, along with San Francisco, LA, Boston, and New York.
“Business 2.0″ was a stupid phrase invented by the fawning business press during the dot-com bubble. Need one really say more?
Yep, but all the sheep will just say that it is a sign of the vibrant economy - i actually heard that over the weekend. I cant wait for the median to drop (even slightly) for 3 months.
thanks for the link. I know it’s hard to calculate, especially with all the REO’s, etc.
but are we closing in on 5M inventory?
I’m in Seattle, and I will totally vouch for this graph. When March came and everyone here was talking about “Spring Selling Season”, I looked out my window… there were a few signs around, but it really was different here. April definitely picked up, but still I was seeing “Sold” signs too.
Then May, I worked a lot of weekends, but just this past Sunday I really got out and was driving around (Shoreline, Greenlake, Ravenna). Holy $#!+, it was just a wall of For Sale and Open House signs, everywhere! It blew me away. Everywhere. Every neighborhood, every block, a complete transformation over the course of 3 weeks.
Not to mention that there are a lot of condos nearing completion right now.
Here is a great interactive graph from WSJ about inventories…put a check mark in Seattle and read the #’s…whew…
Here is a great interactive graph from WSJ about inventories…put a check mark in Seattle and read the #’s…whew…
http://tinyurl.com/3368m8
Too bad those graphs aren’t normalized or plotted as % growth instead of absolute numbers. LA looks like the big scary dog until you check the y-axis and recognize that its inventory has only doubled (plus a bit) in the past year and a half, while Phoenix has more than TRIPLED.
Clearly inventory isn’t the whole story, though. San Diego’s looks nearly flat, but as we all know, its market in general is in much worse shape than LA’s, so far.
I cant speak for greenlake, but the downtown condos (especially belltown) continue to sell out fast. This insanity has to stop.
Ajas–
I think we’re on the same curve here. (outside Syracuse) So far, lots of sold signs, inventory lower than last year. Then 1st June weekend, end of school in sight, and BAM, almost 400 new homes additional for sale. Manlius…a definite bubble, multiple for sale signs at many corners just like we saw in photos last year in bubble zones. This towns looking bubbly too.
I’d say the bubble pain is hitting the Syracuse burbs. Time for prices to get competitive!!!!..if people are serious about selling, that is.
In my neighborhood north of MS in Redmond, I think prices have peaked and are holding steady (for now). New houses, rare in this mostly-developed area, used to be sold as soon as the footings were poured. Now there are some completed new houses which have had for-sale signs on them for weeks.
And four new houses down the street, two of which were completed last summer and sold for $940-999K before being completed, well one of these was recently back on the market for $1.1M for a month this spring and then the signs got taken down (no ’sold’ signs noticed). The third of the four was just completed and went up for sale at $945K (these four houses are almost identical). So looks like we may have hit the ceiling and are leveling off.
The (presumed) flipper in the house that was back on the market for $1.1M had blankets and sheets over the bedroom windows, so I assume that 1) they had no cash, and/or 2) weren’t planning on staying very long. If their house didn’t sell at $1.1M, I’m sure that having a brand-new, identical house across the driveway for sale at $945K certainly didn’t help things any!!
From the WSJ: Easy Al’s sins are rearing its ugly head
TRADING UP
Years of Global Growth
Raise Inflation Worries
Chinese, Indian Labor
Long Damped Prices,
But Effect Is Reversing
For the past decade, low-priced labor from China, India and Eastern Europe has helped much of the world enjoy economic growth without the sting of inflation. Now that damper on prices is beginning to reverse — and global inflation pressure is starting to build.
Companies in many countries are operating at close to full capacity, facing shortages of everything from land to equipment. Western workers and their low-cost rivals both are winning higher pay, thanks to rising demand. In some cases, the global links of the economy are increasing costs rather than lowering them, as far-flung businesses compete for the same resources.
Central banks are increasingly worried about spare production capacity running out — which could force them to raise rates to their highest level in years to stave off inflation. That could puncture the ebullience of stock and bond markets, which have become accustomed to a rare combination of fast growth, low inflation and low interest rates.
http://online.wsj.com/article/SB118109624836326011.html?mod=home_whats_news_us
Is it all Easy Al’s fault, or are we just one little debt-ridden, foreign oil-dependent piece of a global economy and no longer in a position to control our own money supply?
more NO inflation news
so if you live in a tent,ride a bike and NOW, don’t eat breakfast ,everything is cool
http://biz.yahoo.com/ap/070605/cereal_prices.html?.v=3
That’s it, enough is enough, I’m growing my own corn and wheat. By the way does anyone know where I can buy live cattle and chicken. Its time I do the butchering.
I’d be cheaper to buy a hunting license and learn to like venison.
It’s even better to live within earshot of grass fed cows…
Not too close, though.
way way cheaper to just go vegetarian - more humane and better for you and the cows - as Ed Abbey said, “If you don’t like cows, don’t eat ‘em” (in response to watching the West become a huge weedpatch from overgrazing)…
I don’t understand how deflationists get up in the morning; even Bernanke can’t keep a straight face when he gives the ‘inflation is moderating in the second half’ speech. Maybe all those FB’s with ARMs are deflationists?
“Maybe all those FB’s with ARMs are deflationists?”
The broken ARM holders really can’t win, can they? If inflation remains high, rising interest rates will translate into monthly payment resets at budget-busting levels. And if deflation carries the day, they may be able to afford monthly payments for the near term, but will soon discover themselves married to a mortgage with a principle balance far in excess of their home’s resale value.
A couple years ago I considered moving to a local state park as a volunteer in exchange for a campsite. The only expense would be buying the camper (and paying cash for it), but then I would have a paid off home and no monthly expenses. The only breaking part of the deal was the drive to work each day, but even now with the high prices of things that is looking like an option I should consider for a year.
Yet another fire at a San Diego construction project, this time a hotel.
http://www.signonsandiego.com/news/northcounty/20070606-9999-7m6carmel.html
“CARMEL VALLEY – Investigators were digging for the cause of a three-alarm fire that left $8.5 million in damage when it whipped through a hotel construction site yesterday, but they said the blaze did not appear to be suspicious.”
“Yesterday’s fire was the third major blaze involving a project under construction in the region in the past five months.”
“A blaze devoured a multimillion-dollar condominium development in Escondido on Jan. 18. On May 23, a fire destroyed a dozen condominiums under construction in San Diego’s Midway District.”
Yeah, none of these fires is ever suspicious. Odd how these construction projects have just started to spontaneously combust in the past several months. No need to have “Devils Night” here. They can’t even put out one of these fires before the building burns to the ground.
Unskilled labor can have that effect,
“Yeah, none of these fires is ever suspicious. Odd how these construction projects have just started to spontaneously combust in the past several months.”
Dah, were they the work of a FB, builder, or firemen needing the overtime to make their mortgage payment. Gee, if it’s someone in the fire department it would never be ’suspicious’.
They started cutting overtime at my wife’s work and the employees have been complaining to management that they can’t cover their mortgages. Management to them to get a second job. Ah, life is good.
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20070606/BUSINESS/706060408/1003
Foreclosure scams: Kicking people who are already down on their luck!!!
From the article, she gave the man $600.00. The bank offered her a grand to move. Sounds like she’s ahead $400.00 on the deal. She probably said no to the bank and lived mortgage/rent free for a year.
Well no, she’s ALREADY lived rent free for 6-8 months. The $1,000 from the bank was a bribe so she didn’t trash the place within the next few weeks before the sheriff kicks her out.
Per Bloomberg, “appraisals are poetry” in Madrid’s ghost towns.
http://www.bloomberg.com/apps/news?pid=20601109&sid=ar3L878k5YM4&refer=home
This is amazing. I thought housing glut ghost towns were a local phenomenon to the western U.S., and certainly not possible in Europe, where they have “run out of land.” I wonder how many months it will take The Economist to catch on to this trend and report on it? (My guess: About 6 months…)
Ghost Towns Appear in Spain as Decade-Long Boom Ends (Update2)
By Sharon Smyth and Ricard Alonso
June 6 (Bloomberg) — Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid’s biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.
“We came to look at apartments but found ghost towns,” said Usua, a 27-year-old taxi driver. “You’d need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.”
The abandoned developments are evidence of a housing glut that will lead to Spain’s first decline in home prices since at least 1992, when the Housing Ministry started keeping records. Spanish builders constructed 750,000 houses and apartments last year, more than France and Germany combined, while annual demand runs about 60 percent of that, according to the Finance Ministry.
“The real killer of the housing market is the immense oversupply,” said Gonzalo Bernardos, a professor of economics at the University of Barcelona. “Prices are already unofficially falling.”
You do know the Economist (London) has been running housing bubble stories since at least 2002?
Yes, I have the famous June 29, 2005 issue with the cover of a falling gold brick and HOUSING PRICES enscribed on it. That was the first issue of the Economist I purchased and now I’ll be a lifelong subscriber. Get’s a little thick to read on a weekly basis (I call it ‘book of the week’), but informative and they have a different perspective than MSM.
The WSJ editorial board seems to be getting serious about casting doubts on the wished-for helicopter drops. Given the resultant increase in l-t T-bond yields and the near-perfect correlation with fixed-term mortgage rates when fixed-term seem to be the home buyer’s financial vehicle of choice these days, I am wondering if the downward velocity of home prices is about to accelerate?
Years of Global Growth Raise Inflation Worries
By Marcus Walker in Berlin, Greg Ip in Washington and Andrew Batson in Beijing
Word Count: 2,002
For the past decade, low-priced labor from China, India and Eastern Europe has helped much of the world enjoy economic growth without the sting of inflation. Now that damper on prices is beginning to reverse — and global inflation pressure is starting to build.
Companies in many countries are operating at close to full capacity, facing shortages of everything from land to equipment. Western workers and their low-cost rivals both are winning higher pay, thanks to rising demand. In some cases, the global links of the economy are increasing costs rather than lowering them, as far-flung businesses compete for the…
http://online.wsj.com/article/SB118109624836326011.html?mod=home_whats_news_us
I have stable inflation expectations. I expect inflation to remain high and underreported for the foreseeable future.
Bernanke’s Sense for Now: Hands Off
By Greg Ip
Word Count: 612
Federal Reserve Chairman Ben Bernanke said he remains worried about a pickup in inflation, but he suggested the American public’s stable inflation expectations make it less likely the Fed will have to raise interest rates.
http://online.wsj.com/article/SB118104580628924969.html?mod=home_whats_news_us
Is there anything left to strip out of the core numbers? Maybe if we bring the core constituents down to wheat gluten and sunshine, inflation really is moderating.
I’m expecting them to redefine the CPI to directly consider (falling) home prices. Maybe they could even use CSW repeat-sales method to control for hedonics (i.e. make sure they are comparing similar homes over time).
What does that even mean? Is he saying the Fed will only act if the public perceives that inflation is a problem? Never mind about reality, it’s all about what we EXPECT to happen.
Expectations matter quite a bit, as high inflation expectations can goad the public into making mania-frenzied purchases of multiple single-family residences, precious metals and corporate stocks with the certainty that prices will always go up.
The government encouraged that mania the last several years (excluding precious metals) with easy money and the PPT buying the ‘dips’. It is often said the fun part of inflation is in stocks and real estate; now we have to pay the price with inflation in food and energy, etc. Hoist on the Fed petard…
Time to bring back Jimmy Carter’s WIN buttons “Whip Inflation Now” when inflation was 12.5 % and his only response was to think it lower.
WIN buttons were the Ford adminstration, not the Carter one.
And that was one of the dumbest things President Ford did. Inflation is caused by the Federal Reserve. He should have worn a T-shirt saying “Tighten the Money Supply now!” In those days libs blamed businesses for higher costs while conservatives blamed labor unions. Ignorance was abundant.
Well I’m certainly enough of a believer in free markets that I think that WIN buttons were better than the PHASE I - PHASE III wage and price controls under the Nixon administration. Sometimes doing nothing is better than the alternative.
A friend of mine gave me an article from the Frederick County, Maryland newspaper last week (Frederick News Post). Seems there are 26,000+ houses “in the pipeline” according to the county people. Few of these have permits yet, actually, but they’ve been platted up and approved according to their slow growth ordinances, so builders can start cranking them out as needed.
Meanwhile, he reports that a big new development he passes on his way to work each day (www.lintonatballenger.com) is proceeding at a veritable snail’s pace. Have the builders caught on that the market up there is dying? Or will they keep churning out new houses till they use up the 26,000 approved lots and then ask for more land while prices plunge?
In any case, wishing prices from the builder/developer there are certainly not plunging: $400k’s for a townhouse. Amidst the farms on the outskirts of Frederick, an hour commute from “real jobs”!!! No wonder they’re building them very, very slowly.
prices are down in frederick. 2 bedroom condos were going for 260. My friend lives in a neighborhood past new market off 70 where houses were selling for 600k+ peak. The neighborhood has some listings now for 450kish. Funny though, the townhomes and condos have dropped less then the 600k mcmansions. Nice neighborhood, but I wouldn’t buy there for any price. Frederick to the beltway is an hour on a good day, 1.5 normal and 2 on a bad day. So, on a good day you get 2 hours in a car. Doesn’t sound like that good of a life to me. I would rather buy a old 500k rambler in bethesda.
Where on earth are you going to find a $500K rambler in Bethesda? People are paying over $700K for tear downs…or perhaps they are the ramblers you are talking about that are being torn down to build McMansions, but still, $500K isn’t there yet.
I got a mass mailing card for town houses in Frederick that actually said starting in the $380’s on Friday. I wouldn’t live that far out (I have to commute to DC), but it is the first time I have seen anything bigger than a 1 bedroom condo advertised for under $400K along 270/Rockville Pike no matter how far out you go. Oh, and it was on one of the “last wooded lots.” I guess at those prices, they can’t afford to plant trees in the rest of the development.
$380k for a townhouse in Frederick? Crazy.
The really funny one was the $358,000 one bedroom across from the Grovesnor Metro station. They said they were having a first time home buyers “special” - special financing package, no condo fees for a year, estimated your tax savings, etc. Their analysis showed that the one bedroom would cost about $1350 a month. Of course, that is before the “special fiancing” becomes less special and you have to start paying your condo fees. The last sentence was “stop throwing your money away on rent.” Maybe I should write in “and start throwing it away on a depreciating asset” and tape it up near the mail boxes in my apartment complex?
Naw, I might get in trouble if someone thought it was from the management of my building.
The really funny one was the $358,000 one bedroom across from the Grovesnor Metro station.
Hey, for just a bit more, you can get a friend of mine’s house he’s selling in Rockville, about a mile walk (OK, a bit more) from Metro, frame construction, 3-bdrm, 1-bath, no garage, 1950’s vintage kitchen and bath. What a bargain at $379,900! Hold me back! :-O
Hey, that sounds like my parents’ old house! I think they got $179K for it in ‘97. (Actually, though, I think there were two baths–remodeled–and the basement was finished.)
The vintage sink is a dream. I wish you could buy a sink like that today. Only problem was that it was hung a little too low to install a dishwater beneath. We managed to find a way to stick it in the kitchen anyway. And that bay window in the kitchen. Marvelous! Dunno about that bathroom, though!
Dishwasher in there? No way! And bay window? Nope, a nice, energy-saving 2×3 foot sash window over the sink. Refrigerator on the porch, (clothes) washing machine in the kitchen! And who needs a tumble dryer, hmmph!
This house is puuuuure vintage, this lovely relic from the 1950’s! That’s why it’s “priced so right”.
Polly, you can 500-600k ramblers all over bethesda. Just go to long and foster and look. Now, if you are looking for a place right next to rock bottom, of course it will be a hell of a lot more. In rockville, you can actually find somewhat decent older homes in the 400k range. The nice thing about rockville is the lots are generally pretty big, .2 - .25 acres range. I am talking west of the metro line, not east. The east side is a litte rough. King farm was advertising townhomes (small THs) in the 350s not to long ago (last Oct). They were rental property that was being converted which has sense went back to rental property due to lack of interest.
All that being said, all the prices I stated above are still way overpriced.
I’m in Rockville now. Renting behing the Whole Foods. I have to wait for prices to come down - 1) because I am sensible and 2) because I insist on being walking distance to the Metro. I’m a fed and we get a subsidy if we take public transportation. Anything that isn’t easy walking access to the Metro adds about $400 a month to my commuting costs if I drive to work and about $100 if I drive to the nearest Metro stop.
And I don’t like the area around Grovesnor that much. Except for Strathmore it is kind of dead. From my place I can walk to two grocery stores, a pharmacy, a Bed, Bath & Beyond, several nice restaurants, several more fast food but not McD’s places, and many other shops. I haven’t bought gas in months.
same deal here in philly. denial is high, and ANY house that sells gets a 30 pica “SOLD” love note in the paper. best offense in my opinion is to do absolutely nothing. hold your cash and watch it crash.
hold your cash and watch it crash.
rhymes!
I think you gave us a new slogan.
“hold your cash and watch it crash”
Love it.
NY State Attorney General investigating real estate appraisals, which are a joke, per the NY Observer.
http://www.observer.com/2007/new-york-s-longest-running-real-estate-joke
A little plunge protection, please? (Those charts are giving me butterflies in the stomach…)
http://www.marketwatch.com/tools/marketsummary/
And the 10-year note’s at 4.99%. (I think I can, I think I can…)
Down over 70 points on the NYSE and 10 year bond is 4.99% besides having a bad day yesterday….yep…the worm is turning……recession here we come and the whole RE ARM’s start resetting and crashing.
As Neil would say…got popcorn
Ahhhhhh, nope.
“Labor Department’s strong downward revision to first quarter productivity” to the rescue, according to a marketwatch story.
Let’s forget about the inflationary implications of that, shall we?
ahhhhhh, rope.
Mr. Bernanke, the bond market is on line 2. They sound angry…
Excellent. A trend day to the downside developing. Hopefully this will be the mother of all bull traps.
I remember last year our esteemed late friend Hedgefundanalyst said that the market would keep going up and we would all get bullish, then he’d sell (to us presumably). I know that I for one have not been bullish one day of this ridiculous “rally.”
Chicago inventory climbs over 100,000
http://tinyurl.com/3yf27m
Cue Rip Taylor with the confetti.
Noice start to the day. For once the monkey’s buy key didn’t work.
http://biz.yahoo.com/ap/070606/europe_interest_rates.html?.v=12
European central bank raises interest rates.
Will the Fed be forced to follow suit? If not, whither the $US?
This was expected, but it’s certainly going to be harder for the Fed to cut interest rates without putting downward pressure on the US$.
don’t think so, the ECB will just follow the FED on their way down; they will simply keep rates at the lowest value they can get away with. Keep in mind that the ECB is even further behind the curve than the FED (EU M3 growth around 12%, rates 4%), and it definitely shows in the red hot EU stock market.
I don’t know this could be a crack in the bull run for stocks? I’m still in but watching. See my problem is what do I go to cash? US dollars? Not unless I see some interest rate hikes in the future.
I have over half of my TD Ameritrade account in the Vanguard Prime Money Market fund. The rest is in dividend stocks (BAC, NYB, PGH, T, PNW). I keep trailing stops set for major drops of 10% or more. When activated, I don’t put the proceeds back into stocks but add to the money market fund. I only buy more shares of stock with new money I deposit to Ameritrade. I’m happy with that process.
Ponzi finance — the market *has* to go up, else it’ll self-destruct. Same as with housing before it. Moving sideways is no longer an option.
Of course, the bulls won’t give up easily so it won’t implode overnight. Expect more intra-day volatility for now.
Intraday volatility is what I live for
Fed sits on thumb and runs mouthpiece out once a month to really, I mean really jawbone inflation.
markets gonna keep running till revisions of the revisions of GDP are so bad that recession is announced……course the memo gets backdated……
Im still sayin we are in recession, but Kudlow convinces too many sheeple on a daily basis that goldiloks is just fine in the back room fluffing the hedge fund VP’s
Raise them another 25 basis points and that would quickly cause a ripple effect of 10% or more price cuts in houses in all areas of the U.S. Probably increase inventory 30%.
So many people figured the FED would ease by summer to help the housing market, the FED just has to save all the ARM bag holders because… because…
Not directly housing related. but we can all thank our lucky stars that Cyclone Gonu formed where it did and not a few (perhaps as few as 30) miles further North.
We very nearly had a tropical storm going straight up the Persian Gulf towards the oil fields at Category 5. As it is (now Category 1) Gonu is doing some damage, but most of the energy was dissipated when it hit the Arabian Peninsula around Oman.
When markets like Winnipeg are going exponential you know that the end has to be close..
http://www.winnipegsun.com/News/Manitoba/2007/06/06/4237706-sun.html
Oh god! My mother was born and raised in Winnipeg. That has to be hell on earth if there is such a place. If it isn’t the coldest city in North America, I do not know what is.
My cousin in AK was saying that temps havent reached 60 since last Summer.
You know, I actually dream of weather like that. I can’t stand the heat.
Unfortunately I grew up on the 55 north line, and I can’t stand the way the sun just rolls around the horizon a little during the winter.
> I can’t stand the heat (…) and I can’t stand the way the sun just rolls around the horizon a little during the winter.
I recommend dwelling on high altitudes in lower latitudes
I used to travel there on business. They tried telling me that it wasn’t that bad because it was a dry cold. But, actually I liked the city…of course I only visited in summer & early fall.
Sure - It’s like 117 is not so bad in Phoenix because it’s a DRY HEAT. LOL!
Aren’t there a lot oil/energy related jobs in that neck of the woods?
no, that’s mostly in alberta/sask. the big industry in Winnipeg is the government and selling drugs and booze.
Per NAR, a median price decline forecast for this year is due to a “temporary distortion” of more homes selling in lower-priced markets. http://www.msnbc.msn.com/id/19069785/
CNN has this headline:
“Home prices seen getting worse still
Expected drop in home prices nearly double estimate of two months ago; recovery more than year away.”
But then you get the details:
“The National Association of Realtors said it now sees the median price of existing homes sold falling 1.3 percent this year. That’s almost twice the 0.7 percent drop forecast just two months ago, and is worse than the 1.0 percent drop in prices it estimated in May.”
I think the new chief economist needs to check the decimal point in that calculation.
http://money.cnn.com/2007/06/06/news/economy/homes_outlook/index.htm
Why cant the Morons in Guvmint just go and buy every Entemanns donout cakes and pies……Stick them in a freezer then 2-3-4-5 years then look at the prices on the box?
Hmmm. Ultimate cinnamon rolls was 26 oz at $3.99, now 18 oz at $4.29……. i think i can figure out that inflation in UNIT PRICING is pretty high…..but i guess the guvmint only cares about Retail prices…30 cents in 5 years is NOT much inflation
Winnipeg is still going up and so is Vancouver. It’s still a bull nightmare up here. We keep saying were a year behind the US … but it seems we’re lagging even further behind. Beginning to despair we won’t follow, esp. in Van where drug money in real estate is rampant. Anyone have any ideas/analysis about where Canada, and particularly the king of bubble zones Vancouver wil start to break down? We’re baffled.
As long as there are “special” buyers: drug barons, foreigners with cash to burn, etc., you can expect the Vancouver bubble to continue bubbling away. Once your sales become dependent on ordinary Canadians that make $20 an hour then the house of cards will collapse.
I love the shyster mortgage internet ad where a ditzy looking teenager/very young adult is dancing and turns to the camera with a look of shock on her face (a 500K mortgage for only $xxx a month!). I like to think that her look of shock is really when her toxic loan resets to $5000 per month. Anyway, once you have those kind of ads in Canada, then you know the end is near.
As long as there are “special” buyers: drug barons, foreigners with cash to burn, etc., you can expect the Vancouver bubble to continue bubbling away.
Didn’t keep the Florida market going, did it? RIch foreigners, like rich local people, are smart enough to buy low. It’s the Trump wannabees who are driving prices up, and when they run out of money, look out.
I used to think somewhere in BC would be a nice place to retire. All of BC is probably too rich for our blood now. Right now it looks like Windsor, Ont is the only thing we could afford.
Look on the bright side. As the US dollar and housing markets continue to collapse many US housing markets will soon be a bargain for Canadians!
One Canadian dollar was worth 95 (US) cents last week. The way things are going, the Canadian dollar may be worth more than the US dollar soon.
My thinking exactly. Imagine if it gets to 1 CDN = 1.5US!
Wasn’t too long ago that it was 1 US = 2 CDN
No, the most it got to was 1.60 CDN.
I’m sure that there are quite a few in Detroit FBs who wouldn’t mind Windsor.
http://realtytimes.com/rtcpages/20070606_fedsset.htm
Can’t help seeing this mental image of a security guard waking up as the dust settles in the street behind the fleeing bank-robbers…
“Feds Set For Another HOEPA Earful
The Federal Reserve Board has set June 14 for a public hearing on the Home Ownership and Equity Protection Act (HOEPA) frequently called upon to curb predatory lending.
HOEPA was enacted in 1994 in response to reports of predatory home equity lending practices in underserved markets.
Today underserved markets are swamped with failing subprime and nontraditional loans that are failing at historic levels and draining the level of homeownership.
HOEPA amended the Truth in Lending Act (TILA) to impose additional disclosure requirements and other limits on certain high-cost, home-secured loans.
HOEPA also authorizes the Fed to issue rules that prohibit certain acts or practices in connection with home mortgage loans and directs it to periodically hold public hearings to examine the home equity lending market and the adequacy of existing regulatory and legislative provisions for protecting the interests of consumers, particularly low-income consumers.”
On first read through I got “undeserved” instead of “underserved”.
new bubble blowing idea from the Netherlands: buy a home with 70% OFF!! Take care when Fannie & Freddie get to know about this, it might just reignite the US bubble.
People who are currently renting from a Dutch housing corporation (= former government organisations, they own large quantities of state-subsidized rental properties) can buy their own home for FAR LESS than it costs to rent. Don’t believe it? It works like this: people who are now renting an older home are paying maybe 500 euro monthly rent (the real rent is 800-1000 euro, but a large chunk of this is paid by the government). They can buy 30% of their home at a mortgage rate of around 4%, with the usual 40-50% HMD that translates into 2% effective rent. Because they buy only 30% of the home (at currently appraised value), the yearly rent is about 0.7% of the value of the home which is far cheaper than renting. The people in this example who paid 500 EUR/month can buy for only 300 EUR/month. Despite paying only for 30% of the home, they fully own it. Because of the very low monthly payment, there is a whole new group of potential buyers (even illegal immigrants will have no problem paying 200-300 euro per month). The plan is cheered with the remark that this will enable most of the Dutch middle class to afford a home (most of them were priced out years ago already). Great!
The other 70% of the home is lend to the buyers for free by the housing corporation; no need to pay, only when the home is sold and the actual value is known the rest of total amount (difference between the 30% mortgage and sales price) has to be paid. As everybody still assumes that Dutch home prices will increase forever, they are a bit unclear about who gets to eat the loss in case the value of the home declines, but it seems the housing corporation and the tax office are going to pay for this (there is no money to be found with most of these buyers anyway …).
So there you have it, another stupid Dutch idea to fuel the housing bubble and spend loads of tax money for the benefit of the RE crooks and some small speculators (of course, some ex-renters will make money with their leveraged play, I’m sure they can keep the gain because that is what the plan is all about).
Wow, 4% mortgages. If we had 4% fixed rate mortgages here I could see our bubble re-igniting. It won’t happen anytime soon though!
well, our evening news just announced todays ECB rate increase as ‘the highest rates in 6 years!!’ as if this 4% is totally off the scale and politics needs to do something before it affects the mortgage/housing market. Less then 15 years ago a mortgage rate of 10% was considered a very good deal…
In Netherlands, mortgage rates AND savings rates stay stubbornly low despite a red hot economy and surging money supply; you can still get a 10-year fixed mortgage for below the official 4% ECB rate … And from that 4%, the tax office pays 50% so it comes down to just 2%. Several consumer organisations think that the Dutch banks artificially suppress mortgage rates and finance this by keeping savings rates low (around 2.3% on internet savings accounts, nearly the same for every bank). But our financial authorities are just not interested in this kind of manipulation.
Minyanville to Wall Street: Stock market has stages of grief, too…
If we view market moves in the context of three phases denial, migration and panic it would seem that we’re in the latter stages of that trifecta. The bulls seemingly welcome bad news as an opportunity to increase exposure and the most fervent bears have been tamed to buy the first dip.
http://www.marketwatch.com/news/story/stock-rally-may-still-have/story.aspx?guid=%7B0394D4BF%2DC6D0%2D42E2%2D8853%2D6DA9D0681413%7D
http://www.u1stfinancial.com/
Can somebody tell me what the hell they are selling on this site? I can’t figure it out. A friend of mine is thinking of buying a house in Vegas using this method (I couldn’t talk him out of this first mistake).
It’s very unique, instead of a HELOC, they use an ALOC: (Advanced Line of Credit)
…Money Merge Account managed line of credit.
This sounds tailor-made for your friend (only because he sounds bound and determined to hang himself financially). Money Merge Account: right. They want your friend’s money to merge with their bottom line.
Thanks for the advice. I just argued unsuccessfully with him for an hour at my house about purchasing in the first place. He’s convinced I’m “throwing money away on rent” and he really honestly thinks that the LV market is just taking a breather and will go up again next year. At least he’s not arrogant about it. So this ALOC is similar to a heloc? Adjustable rate loan linked to some sort of account you cash flow through? Is the aim to finance the entire mortgage through this mechanism or just a second piggyback loan? I don’t see any advantage to it - I’m just a lousy roadie, not a financial genius but I try not to invest in anything I don’t understand. In that way I’ve managed not to go broke so far. Thanks again for your help and if any one else has any insight into this revolutionary way to screw yourself, please chime in!
Heard about those two years ago. What a joke. Essentially, every bit of income is sucked into his mortgage, and every time he pays a bill or hits the ATM it’s borrowed against the house.
If they ever chose to cut him off they’d already have all his money.
I can’t believe *anyone* would want to buy in LV anyway, with or without an “all in” mortgage. Whatever he pays he’ll be guaranteed to lose 80% of it.
Foreclosure’s Filthy Aftermath
As foreclosures become more frequent, so do the bizarre and shocking stories of abandoned animals, insect infestations, and deplorable living conditions
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070605_228494.htm
602 El Redondo Ave in 90277 is roughly the area I’ve been watching. Here is the sales data:
04/29/2005: $835,000
11/08/2002: $415,000
I attended an open house here in April ‘05 and the sellers were a married real estate couple.
This house is again on the market, for only 6 days, and is already reduced from $899,000 to $799,000!
Can you say Alt-A with an option-arm? Even if they get asking price, these FB’s are $35,000+ underwater.
Slowly taking shape, the (bursting/deflating) bubble is…
P.S. the $400K 2002 number is about where we’ll be, IMHO, in or around the 3rd quarter ‘08.
SOOOOO, txchick57… what’s your read on today’s action on the street?
No need to worry about the Bubble here in Maryland! Nope, we have an exciting, new community finishing up (or being finished? hehehehe…) in Howard County. It is Maple Lawn, and it comes with lots of affordable homes, including townhomes in the $600K to $700K range, and single family homes in the $900K and up range. Very affordable since everyone makes $300+ a year, right?
Of course, these amazing townhomes are 4 levels high, which will be great for older folks who love steps (such as retiring Boomers), and everything is built so close together that you can arm wrestle your neighbors through the windows on your McMansions!
But wait - there’s more! If you show up and look around, you get a $10 coupon for one of the exciting restaurants in the development! Oh, that makes me want to buy a McMansion or three right now!
Note that Maple Lawn supposedly has a few “affordable” homes or homes where they offer affordability plans (probably toxic loans) to the “poorer” people who make $55K to about $87K a year. Yes, I am not kidding - apparently I am poor by their standards, as is everyone up to the median income in Maryland ($60-some K a year) and beyond!
I wish I was kidding about this, but I am not! Argh… when will the madness end?!
Heard yesterday on the radio: “These prime lots sell themselves!”
Can there be any doubt this story will end badly?
Published: 06/06/2007 12:00 AM (UAE)
Trying to relax while watching China’s stock market
By Geoff Dyer, Financial Times
…
Having watched share prices quadruple in two years, more than 100,000 Chinese have been opening trading accounts every day in recent weeks as a new generation of middle-class Chinese has gained a taste for playing the market.
Speculation
But in a nation where the urge to gamble is never far below the surface, the stock market has sometimes come to resemble a casino. People have taken out loans to speculate, while a few individuals have even pawned their houses to buy shares.
http://archive.gulfnews.com/articles/07/06/06/10130241.html
t
test Clinton
test GWB