Basic Human Greed And Fear
It’s Friday desk clearing time for this blogger. “A weak economy has dealt some bad hands to Carson Valley gaming and some retail sectors, but the good news is that real estate markets may be recovering. Realtor Marsha Tomerlin of Coldwell Banker Itildo. ‘Every six months, it’s getting better,’ Tomerlin said. ‘There is a group of people who know now is the time to buy a house.’”
“She said a large inventory of property with low interest rates is providing prospective home buyers with tremendous opportunity. ‘The market is turning into a mini-bull market,’ she said. ‘The bear is sleeping, but the bull is getting more aggressive.’”
“The mortgage meltdown continues to make headlines. One day after a report showed a 200-percent increase in Nevada foreclosures last year, buyers and economists are wondering if there is a solution.”
“The National Association of Realtors hopes so. It’s rolling out a national campaign to change minds about the housing market. The ads are hitting the airwaves hard. From now until November, expect to see or hear them on tv and radio in English and Spanish.”
“Despite being nervous about getting into the housing market, homeowner Sherie Palm jumped right in and she’s glad she did it now. ‘Basically now is the time to buy,’ Sherie insists. ‘You’re getting more home for your money, your gonna get the location you want, the amount of house you want. Now is the best time to buy because everything’s going up from here.’”
“As Florida property owners celebrate saving 240 bucks a year after voters overwhelmingly approved Amendment 1 on Tuesday, here’s some other news to consider: Nearly 7,060 people declared insolvency in Orlando’s federal bankruptcy court in 2007, a spike of 96 percent from 2006.”
“Felix came here in 1999, found a steady job and, moved by the spirit of the property-buying frenzy, closed the deal on his first home 2 1/2 years ago.”
“He took out two loans — one at 80 percent of the home value at 6.5 percent, and 10.8 percent on the smaller loan. But the perfect storm hit late last year.”
“The construction meltdown affected his job drastically. The mortgage rate on the bigger loan spiked. ‘At some point they’re going to tell me to leave my house,’ he said. ‘I’m against the wall.’”
“Many people recall popping the champagne cork the day they bought their first home. Felix remembers it differently. ‘I know there are people with bigger problems than me,’ he said, ‘but when I bought my home, that was the worst day of my life.’”
“With interest rates going down again, and housing prices also dropping, experts are saying it’s time for those having trouble affording a Cape home to consider buying. ‘There are some pretty good deals out there,’ said Alice Boyd, principal at the grant-writing firm that has also overseen several affordable housing lotteries. ‘I’m trying to push everyone I know to take a first-time homebuyer’s class.’”
“In North Eastham, builder John McShane could not sell the last of five moderate income units. Buyers who had been selected through a lottery process backed out because home prices had dropped enough that there wasn’t a big difference between a market rate home.”
“‘My heart goes out to the developers who are trying to do something good, but they are getting caught by high building costs and the high price they paid for the land,’ Boyd said.”
“Armed with lawn chairs, warm clothes, and snacks, Edwards residents Joe Robinson and Howard Glasser looked like diehard concert goers camped out for tickets — not homebuyers of affordable condos. ‘I’ve been here since about noon, and I’m staying through tonight,’ said Robinson.”
“Eagle-Vail resident Sara McClure was one of the first 10 people in line. She came at about 10:30 a.m. to wait for a one-bedroom condo. ‘I’ve been super anxious about this. There are limited numbers of the lower-priced (condos). I was planning on camping out here no matter what,’ she said.”
“Edwards resident Sophie Ozaneaux has lived on-and-off in the valley for 17 years, but ‘missed the boat’ when prices were affordable, she said. ‘There’s a real need for this,’ she said of the affordable homes. ‘This is still expensive for me. I’m working three jobs to afford it.’”
“The managing director of CB Richard Ellis Vietnam Co., predicts that the scene of long queues of people registering to buy luxury apartments will continue this year as it is forecast that demand for buying houses still far outstrips supply.”
“Townsend described such a fever for high-end apartments as a basic human greed and fear that they would not be able to get into the market. ‘This is a common thing in Asia,”’ he said after a press conference titled ‘CBRE Fearless Forecasts 2008′ in HCMC.”
“Townsend compared the queue to a crowd of people lining up for iPhone and the Microsoft software for fear that Bill Gates would not launch any new software in the market.”
“‘There are not enough houses for the people of Vietnam who have new expectations and new roles. Many and many thousands of hundreds of people are looking to upgrade their lives, and living from bicycles to motorbikes and from motorbikes to cars. So, it’s the same thing in the housing market,’ Townsend said.”
“The number of of over-stretched South African property owners losing their homes under the hammer rises to record levels, reports financial website Fin24. Alliance Group CEO Rael Levitt says so far this month, forced property sales are up 75% compared with January 2007.”
“Levitt says he has never seen so many luxury, leisure properties - typically priced at R7-million plus - on the distressed sales book. Levitt notes that some top-end homes are already being sold on auction at a 25% discount to original asking prices.”
“Says Levitt: ‘Before the National Credit Act was introduced, banks were providing easy money for people to buy rental properties and second homes. Inexperienced investors happily overextended themselves expecting property values to continue to rise.’”
“Although Levitt doesn’t expect a ‘massive’ drop in house prices, he maintains that too many South Africans mistakenly believe that values will move in a one-way direction forever.
“The local credit crisis triggered by this summer’s subprime woes in the United States has hit hard Kazakhstan’s praised banking sector and exposed its reliance on cheap foreign credit and overexposure to the speculative construction and real estate sectors.”
“A shake-up of such magnitude was a first for Kazakhstan. Until this summer, the market has been increasing steadily, and Kazakh real estate was among the most attractive investment plays in Central Asia.”
“People hurt the most by the crisis were middle-class homebuyers: those who were crowded out of the market by the ever increasing speculation, and those who are waiting in vain for the condo that they bought before the market turned.”
“It remains to be seen whether Kazakhstan will heed these lessons. The fundamental disbalances that led to the crisis have been laid open. The question is whether the government decides to tackle the problems head on or settles on half-measures and rhetorics.”
“City Assesor Bob Whiteley said this week he sees instances of new buyers paying far more than what he considers a property is worth, which skews the market. He said he does not use such sales in the annual studies he conducts to determine the fair market value of all Belfast properties.”
“Whiteley said the peaks and valleys of the national economy are flattened out in Maine, particularly along the coast. ‘The poor economy of the state tends to insulate us from extreme swings in real estate. I don’t see any loss of value either imminently or in the foreseeable future.’”
“Whiteley blames the recent ‘bubble’ in house prices on the Federal Reserve Bank, which has ‘made the cost of money so small that not only did people take it for granted, but they abused it. We are now seeing the effects of that policy,’ he said.”
“Chaos in the housing market has spoiled the fun for some of real estate’s biggest cheerleaders: flippers. many stepped or were forced to the sidelines, and failed flippers are blamed for causing some of the current crisis.”
“But others have stayed, insisting that there is a winnable off-season game still to be played: Selling’s tougher, but more is available to buy now at the teeming foreclosure bazaar.”
“In Northern California, broker hasn’t seen a lot of flipping in his area, but he has seen banks cutting prices to move properties. He says foreclosure volume is still rising in Sonoma County.”
“‘Thirteen notices of default (are) being filed every day,’ he said. ‘We started 2007 with 3.5 a day.’”
“John Donaldson, a contractor and flipper in Corona, Calif says housing prices are falling so fast in Southern California right now that they’re eroding any profits a flipper might make. ‘I’ve bought homes with a 20% profit margin and in four months that’s gone,’ he said.”
“Husband-and-wife team Kurtis and Cindy Squyres are full-time flippers in the Coachella Valley. Squyres is no construction expert. His wife manages the rehabs and he takes care of the buying and selling. ‘I don’t know the difference between a power drill and a hair dryer,’ he said.”
“The Squyres stick to buying single-family homes in nice working-class neighborhoods that need cosmetic updates. Then they spin the home quickly with ads, fliers, open houses, auctions and staging. And they sweeten the deals with sexy giveaways like flat-screen TVs, spas and other items.”
“Squyres offers extra perks to real estate agents who bring in buyers. Some properties he just acquires and then flips to other flippers, who do the rehabs and then sell.”
“Who are they targeting? First-time homebuyers are their ’sweet spot,’said Squyres, adding that with falling home prices and recent interest rate cuts, ‘all the families that have been priced out of the market for the past couple of years can afford a house now. They just don’t know it yet.’”
I did the best I could this week, even though I am kind of woozie. But it was interesting and busy, nonetheless. My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
Why are you woozie, Ben? What you been drinking? Did it have a little umbrella and a twirly straw in it? I want some! But if it’s a situation where it’s not the fun kind of woozie, then I don’t want some, and then you have my sympathy and wishes for a speedy recovery.
Have someone make you some broth! Quickly, man! We can’t spare you!
Off Topic: Do you think that plans by the federal government and the state of California calling for lenders to freeze mortgage interest rates for troubled home buyers for as long as five years are a good idea? Vote here!
http://www.sacbee.com/103/index.html
The NO’s are way ahead!!
Ben — good luck w/ the flu. I strongly suggest you get flu shots every year going forward. (I have had only two cases of the flu since 1997, and those were the two years I did not get a shot.)
I haven’t had the flu shot since i was 5 (39 now) and have only had it once since. It’s a government created need.
Same boat here, I`m 42 don`t remember ever having one. Shot or flu.
Good weekend,
Lane
Years I get the flu shot, no flu. The two years I skipped getting one… flu.
Get well soon Ben,
Neil
Last time I skipped my flu shot I got rhabdomyolysis & a bit of myoglobinuria. My kidneys didn’t fail, so I dodged a bullet that time. “government-created need”, indeed.
The flu shot is a huge scam created by big pharma. I’ve never had a flu shot in my life and have only had the flu twice. What a sad sight it is to see the local news showing the sheeple lining up to get a shot each year.
If you do your research, you’ll see that it is useless. Pharma has to make a decision one year ahead of time about which strain of the flu they “think” will be the prevalent one in the next year. Most times they’re dead wrong and people are getting pumped full of God knows what for nothing.
Rant off.
I’ve done my research. Where do you think I learned about myoglobinuria & rhabdomyolysis?
Every year for the last six years the Air Force forced me to get a flu shot. Every year, within 1 week of getting said shot, I and my entire family would be in the deep throes of the flu. Before I entered the Air Force (at age 30), I had not had the flu since I was a little kid.
This year, I managed to start my terminal leave from the Air Force just before they could force me to take the shot. What do you know: this year, no flu for me or for ANY of my young children, even though all the families around us had the flu.
The flu shot is totally useless.
Good logic. I’ve never been in a car accident yet while driving drunk as a lord, so I’ll keep driving drunk forever.
I don’t need an inoculation when I have my trusty tinfoil hat.
A friend of our worked with the flu viruses and she says it’s a crap-shoot. They don’t know anymore than anyone else what strain of the flu is going to prevail the next year. So the shots are basically just a guess at best as to which strain of the virus will surface. They just hope to get it right. No guarantees. It’s all a crock.
Thanks as always, Ben. Your “worst” is better than 99% of the propaganda and fish-wrapping paper of the major newspapers.
http://www.latimes.com/business/la-fi-loans1feb01,0,6255734.story
Cutbacks on home equity lines
I e-mailed this to my husband today. We argued last night about whether banks were still making 100% loans. Why would they, I kept asking him, if housing prices are going down? I got the last word with this article.
Article says FBs were using HELOC money as bridge loans, trying to wait out the downturn. The HELOC lenders are doing them a favor by cutting them off before they dig themselves in any deeper.
The money spigot gets shut off. ‘Bout time.
Now what? Live within one’s means?
(The horror.)
This week seemed as excellent as all the others.
Thank you for what you do!
Ben,
Take it easy, my wife and I got that flu last year, and it laid us low for 3 weeks.
(and send him some get-well money, people)
want some fresh picked pink grapefruit for the C ?
I have the flu now. After a bout with the measles and whooping cough. I can only surmise that God is punishing me for making fun of Casey Serin.
No, chick, I’m sorry you’re feeling poorly, but I’ve got to question that - if you had/have whooping cough, it’s not a bout. It’s a marathon and can’t really be diagnosed by symptoms until you’re at least six weeks into it. Symptoms usually peak 2-3 months after the two-week incubation period. You will gasp for breath, almost die in your sleep, and wonder why God has let this happen.
By the way, excellent job with your market picks over the last six months or so.
Naw, he’s just getting you back for all the ‘easy’ money you’ve taken from the market. Get well soon and keep focused on trading - the markets need the liquidity!
Dearest Ben,
If and when one gets the flu:
Stay home from work or school, and rest \;
Drink plenty of non-caffeinated fluids. Champagne of the Gods: Water!
Use acetaminophen or ibuprofen to help with fever and body aches.
Wash your hands often to protect other people.
Avoid getting close to other people, especially when coughing or sneezing .
Cover your mouth and nose when coughing or sneezing.
Luv,
Mom
On a more serious note:
REST!
Trust one person to post for a day…dude…you work through the holidays! There are many trustworthy ones…it’s your house and many of us are greatful for the chair…surely there are a few selected ones that could keep the blog up, (for you are benevolent), just ask.
Best Always,
Leigh
P.S. I will airmail you awesome chicken soup!
Get well my friend.
“‘My heart goes out to the developers who are trying to do something good, but they are getting caught by high building costs and the high price they paid for the land,’ Boyd said.”
Oh, yeah? Well, MY heart is staying snuggled cozily inside my torso, entirely unmoved. Same as with my pretty little tears, which seem to be staying snuggled behind my eyelids and are obstinately refusing to be jerked out.
I have never seen many developers who do this out of goodness. Usually a city demands low-income housing as exchange for their approval of a market-rate product.
At this point in the game, builders may ‘cut’ prices but will damn sure maintain their margins. Most of these cuts are out of the blood of squeezed subs, and materials costs.
Yes. Builders often include affordable housing because it is a requirement to get the deal approved or they want tax exempt bond financing, etc. Not for altruistic purposes. We have kids dying for a war they dont believe in, ppl being diagnosed with horrible diseases, reports of genocide, etc., etc., and Boyd’s heart goes out to developers. What an ass****!
Haven’t seen you around as much Olygal, miss your very unique humor.
Olympiagal!!!!!!!!!!!!!!!!!!!!!!!!!!!
“Oh, yeah? Well, MY heart is staying snuggled cozily inside my torso, entirely unmoved. Same as with my pretty little tears, which seem to be staying snuggled behind my eyelids and are obstinately refusing to be jerked out. ”
You give me hope, for my eyelids are exploding. (And my hair is on fire, but I digress).
HA!
The high price builders paid for land! HA!
Thank heavens I do not have darts (er…bullets) to throw at these ones!
Forrest!
Leigh
From the original post:
“This is still expensive for me. I’m working three jobs to afford it.”
This doesn’t sound good. One can work such long hours for so long. Then the body gives out. Sort of like Flagstaff during flu season.
I have heard of couples who between the two of ‘em are working the equivalent of three full time jobs. TINS (triple income no sex)
TINS
Triple income no sex.
Very funny, no wait, NOT funny.
Funny!
Darwinism at its best.
Maybe there is hope to reduce the prevalence of the combined stupid, sheepple, and greedy gene. 
Got popcorn?
Neil
No sex isn’t just for ugly people anymore.
Why all the worrying? With a promise of soon-to-be-delivered stimulus plus more Fed interest rate cuts on the way, the economic outlook is fantastic. Today’s stock market outcome strongly confirms this viewpoint.
http://www.marketwatch.com/tools/marketsummary/
http://www.forbes.com/markets/feeds/afx/2008/02/01/afx4604585.html
I still dont get why the market is discounting the recession (and the bank and credit enhancer problems) and is taking the viewpoint that the worst is behind us. I still think we will retest the lows in the next couple of months, but it puzzles me as did the denial of the housing bubble.
The market discounts a recession by going down before the fact. The question now is whether or how much the market has discounted a recession. If we have only one quarter of negative GDP growth (this one?), then the market probably can go up. Personally, I’m looking for many down quarters over the next 3-4 years, possibly interspersed with many up quarters - “staggier” than stagflation but “growier” than depression. So I’m somewhat bearish.
But the lows are only 4-5% below us - and very few are saying the market is good to go (except Cramer). So the market is hardly screaming higher.
A good read to get a proper perspective:
http://www.thestreet.com/s/kass-near-term-pros-and-cons/newsanalysis/investing/10401561.html?puc=_tsccom
Because they make their own reality most of the time. That’s why this equity market and the housing market has not collapsed. It will only break down when they lose control. That time is coming, just don’t try to time it.
“Don’t try to time it.”
Price it instead.
“The price you pay determines your rate of return.”
- Warren Buffett
HBB, I can’t put my finger on it but today it seems that I need some reassurance that I’m doing things right. Quick history: Sold home in 2004 due to family changes and have been sitting on the ownership fence renting because fundamentals have been so far out of whack. I would like to buy, and can easily afford to, because I have a strong desire to knock out walls / renovate (apt complex wouldn’t be too happy).
Been with HBB since mid to late 2006 and some other blogs and for understand that I need to be patient and that it will work out and wait. However with changes to Tax / proposed bailouts I’m really starting to question the logic. Read about FDIC’s Bair thoughts?
I have tried to be prudent and have been financially blessed (save in 401K and other accounts, pay bills, charitable contributions and no debt to speak of) but seems that with all going on, this has been the naive / wrong approach. Is it still stupid to be conservative? Is it now wrong to stand by your word and pay your debts? I strongly question when you constantly hear who the government programs rewards and the direction they would like to take further, lose on investments via Wall Streets lies, games and deceit, and the Fed’s continued war on Savers.
Is it more appropriate to be a tax dodger? Fraud? Liar and thief? Is it better to ask for forgiveness and claim ignorance / victim than be responsible?
Would like to know that I’m not alone and about others hopes / visions of that doing the right thing is the right thing to do.
Thanks for the shoulder to lean on. Yea I know, get off the cross we need the wood
You know, you seem like a decent guy, and the fact that you’re asking questions like this is scary as hell. Why? This thing only goes two ways (and neither of them include a housing recovery) The first way we let the market work this out, go through some extended pain, rebuild and work toward a healthy economy. The second way is the path the results from the attitudes displayed in your questions. Do understand that if we go the second route the financial armageddon that will result will be unimaginable. Your buying a house will mean nothing. So, I say go ahead with the conservative route and pray we get the first solution because there is no other option now.
Think it through my friend. Don’t be short-sighted like the rest of this f-ed up generation.
You know, I’m going to get Existential on y’all, and say, In the end, We all Die. So, are you going to spend your days worrying about the shmucks who lie and cheat and “seem” to get more? Or are you going to live honorably and do what you know is right. It’s not like you’re Les Miserable and all, contemplating stealing bread because you’re starving. You’re well off, so deal.
Thanks ex and I’ll probably continue to take the high road and shake my head. I hate having the feelings and attidude that others are out to destroy what many of us have achieved by hard work for no other reason that they pissed their’s away but still feel entitled to ours.
I guess the market must be looking ahead 6-9 months ? Or maybe it was the Volcker endorsement of Obama.
The worst is behind us until it isn’t
I believe that Obama should make Emeril the chef his running mate so we can call it the Bam-Bam ticket.
The market is doing this out of kindness, so that I have time to increase my short-side exposure.
The last swoon was great fun, but I was wishing I had more puts.
“Now is the best time to buy because everything’s going up from here.’”
Would you still have bought if it never went up in value or paced inflation at best ?
Bankruptcies going up, foreclosures going up, unemployment going up, prices going up. Best buy now while anyone can
Unemployment up bigtime up here. It’s hard to see it in the numbers yet ’cause there is so many self-employed. Remember, you pull out this housing boom and all we got is low paying casino work and Carson City state jobs (oh, if you got a nice a$$ you can head up to Moundhouse and find some “work”).
By the way, heard a rumor that Home Depot is cutting 500 jobs in Nevada alone. Yet to be confirmed though. Wouldn’t be surprised. The Home Depot I frequent is sooooo dead. You walk in and immediately get attacked by a dozen monkey-spankers ’cause they have nothing to do.
Yeah, it’s bad up here.
Yes, Home Depot looks bad. I painted my house last fall, finished around Thanksgiving. I kept going back to HD for misc items at all hours and days for several weeks in a row and the place was totally empty every time. Instant help, no waiting at the autopay, no lines anywhere in the store. I think HD is in real trouble.
“A weak economy has dealt some bad hands to Carson Valley gaming and some retail sectors, but the good news is that real estate markets may be recovering. Realtor Marsha Tomerlin of Coldwell Banker Itildo. ‘Every six months, it’s getting better,’ Tomerlin said. ‘There is a group of people who know now is the time to buy a house.’”
“She said a large inventory of property with low interest rates is providing prospective home buyers with tremendous opportunity. ‘The market is turning into a mini-bull market,’ she said. ‘The bear is sleeping, but the bull is getting more aggressive.’”
BWAH-HA-HA-HA-HA-HA-HA-HA……(deep breath)…..AHH-HA-HA-HA-HA. LMFAO!!!
Marsha, Marsha, Marsha……..you know, she might be the only realtor I wouldn’t waste a JT on.
Just to set the record straight, ther ain’t nothin’ recovering in NNV. Getting better every 6 months? Looks like Marsha is clocking in some serious time in the casino playing video poker while drinking water-downed rum and cokes, cause she needs to get outside and check things out.
Man, it’s bad here……and now nobody is working. Interesting that although our market has been dead and dying for some time now, the foreclosures really weren’t stacking up. That’s now changed. The only stuff getting a sniff up here is the real low-end cracker-boxes that knife-catchin’ specuvestors seem to think is there next pot of gold.
Heck, I could go on and on, but trust me on this one…NNV has just begun the crash. 2008 is gonna be awesome!
I think she meant “the bull(sh@t) is getting more aggressive”…
Confusedus say: Realtor has no grasp on reality.
“She said a large inventory of property with low interest rates is providing prospective home buyers with tremendous opportunity. ‘The market is turning into a mini-bull market,’ she said. ‘The bear is sleeping, but the bull is getting more aggressive.’”
there’s a lot of bull alright and none of it bovine related.
But it comes out of bovines.
This calls for a bovine intervention.
“But there’s good news for the housing market. Although sale of new homes is still sluggish, resales, the selling of old homes, is rising, according to Realtor Marsha Tomerlin of Coldwell Banker Itildo.”
And the media report this “good news” with nary a statistic to back up this used house saleperson’s claim.
Does the bank’s purchase of a home in connection with a foreclosure constitute a sale? If so, the salesperson may have a valid claim.
Every time I hear something from a UHPS, I feel like I’m watching the movie Brazil.
Pardon me, UHSP (Used Home Sales Person).
Add a few more countries to the list of those suffering from this bubble as well:
Mexico and Ecuador
When my mother tells me about condos not selling in Ecuador, I get a feeling this s**t will last for a while.
And when you have $200K homes in little towns in Mexico (first hand knowledge from a coworker) I know all hope is lost.
Just don’t try to single out the US over this, greed and stupidity are not country dependent.
Dont forget to factor in the declining dollar into your analysis. How much is appreciation and how much is due to the fact that the value of our money is eroding globally.
The more I find out about the global nature of this bubble, the more annoyed I become at the used home salespeople’s attempt to get the sheeple to focus locally.
This bubble is in India, Europe (esp. Spain), North America, Africa, Asia (in a BIG way), and I’m vaguely recalling South American articles.
Believe it or not, I’d like to go back to just posting just on engineering related blogs… it looks like I’ll be here for years. First for the downturn… then for the investments.
Got popcorn?
Neil
Housing prices and sales volumes thereof have been falling for several to many (consecutive) months. Ireland, Spain, the U.K., Greece, Portugal and almost every ‘developed’ and ‘Western’ country has developed their own property bubbles which are now deflating.
A similar worlwide bubble exists in Commercial properties of all types in these markets as well.
Perhaps now, we can appreciate the extremes to which the Fed, the ECB and other Central Banks have gone and are willing to go to attempt to ’save’ the property markets - unfortunately in their singlemindedness they may cause irrepairable damage to the world’s economy.
“‘There are not enough houses for the people of Vietnam who have new expectations and new roles. Many and many thousands of hundreds of people are looking to upgrade their lives, and living from bicycles to motorbikes and from motorbikes to cars. So, it’s the same thing in the housing market,’ Townsend said.”
Welcome to the rat race Vietnam, one day that bicycle may start looking good again.
“The Vietnam Stock Index is a capitalization-weighted index of all the companies listed on the Ho Chi Minh Stock Exchange. The index was created with a base index value of 100 as of July 28, 2000. Prior to Mar 1, 2002, the market only traded on alternative days.”
Current HO CHI MINH STOCK INDEX 859.62
If the DJIA had done as well over the last 8 yrs, the Dow would be over 100,000. A reason for optimism in Vietnam also the seeds planted for a housing bubble. With the sudden rush of large incomes and capitalism comes the desire to want more.
I suspect the re-education camps will be re-opened, soon.
Private Aladinsane,
You must escape!
At ease, Sir.
The great escape to NZ, happens in a fortnight.
Will be very interested to hear if your views have changed at all on the Nanny State Down Under. Please report.
This will be visit # 10 or 11 in the past 27 years, so I have a little experience…
But how many in the last 5? Sorry, it’s part of my shtick to bash Canada and NZ, both of whom are wringing their hands that they can’t be part of the EU. . .
2 times in the past 4 years, for a total stay of 4 months…
Have you ever been?
Sure, you asked me that before. I’ve cycled over the entire South Island, hiked the Wangepeka Track, hustled pool in Wellington. Decent enough place, but I was happy to get back to Australia.
Paul:
Perhaps the difference between us is, i’m captivated by natural beauty, which NZ has in spades, compared to Aussie.
Hey Lad, can you bring me a souvenir from the Shire?
funny stuff those Vietcong.
After 2 glorious weeks of hand slapping attention getting from the natives, I hit the eject button, and was never so happy to land in Cambodia…
Vietnam? you can have all you want, Ill never return to that horrible unforgiving environment…phht.
ever.
Ho Chi Min Stock Exchange — now there’s an oxymoron. I’m sure the great comrade is rolling over in his grave.
In truth, Minh asked the USA for help in getting the French to leave for a number of years. During his early years of seeking freedom from the French, he carried a copy of the US Constitution in his pocket and would hold it up and say ‘this is what I want for my people’.
Since our leaders did not want to alienate our ‘friends’, the French, Ho Chi Minh was forced to go to China for help.This is why the government of [North] Vietnam wound up being totalitarian ['communist']. Of course, this also eventually led to war of the same name in the late 60’s… I have no doubts that Vietnam would have turned out to be a very different place under Minh if we had helped him when he asked.
No reference, but this I learned on my trip to Vietnam several years ago and don’t have my text handy.
Just wait till the “discover” a whopper sized pool of oil in the mekong delta…just after almost all the vietnam vets have died
I heard this from more then a few of my neighbors who were there.
I hardly think you can compare a mature economy’s growth rate to a developing nation’s.
I was in Saigon last April. What a city. It’s a blast. Everone driving bikes and scooters. We ended up renting scooters to get a feel for the city. I definitely recommend this to anyone going to Saigon. It’s the only way to see the city and get the heart pumping at the same time.
People I know have already been to Saigon and do not want to go back. Memories.
Yes, a number of friends took US government sponsored tours in the 1960’s or early 1970’s to SEA. None ever expressed a desire to return.
Isn’t that the truth.
Just the word Vietnam gives me a chill. When I was a kid, horrific scenes and body counts were on the news every night. For years.
This is generally true in all of undeveloped SE Asia. Get your international drivers license before you go (at AAA) and rent a small motorcycle for getting around.
The sad thing about a “rat race” is that even if you win, you are still a rat.
LOL.
Geez Ben, I thought if you worked out of your house you wouldn’t catch germs.
In any event, here is one of the New York Times “neediest cases.”
http://www.nytimes.com/2008/02/01/nyregion/01neediest.html?_r=1&ref=nyregion&oref=slogin
“They bought their house for $155,000 in 1998, using $20,000 in savings as a down payment. Their mortgage payments started at about $1,000 a month, but over the years, in the thrill of first-time homeownership, the Santiagos made some refinancing decisions they now regret. Their monthly payments swelled to $3,599, they said. The family was living paycheck to paycheck, but they were making it. Then, last year, Mr. Santiago had a heart attack.”
What can you say. They were working class people — he worked for years as a dispatcher for a car service. They saved a downpayment. They bought a house that increased in value. They did everything right, and should have been well off for old age.
And then, they blew through a bunch of money. Now they are approaching old age and about to go broke.
But are they the neediest case? They live in the Bronx, one of the poorest counties in the United States, perhaps the poorest if the cost of living is accounted for. Lots of people like them never had an opportunity to blow through as much money as they apparently blew through.
Lots of people lived large, lots of people invested to get rich quick. Who is to blame for that? I feel sorry for those who got herded up by the “buy now or be priced out forever line,” and bought at the peak without falsifying their incomes, thus becoming house poor. But no one else.
Question, have all these NYT “neediest cases” been homeloaners? Do they include hardluck renters too?
There are renter cases too.
Some of the cases are real “bad luck hard decisions” kinda thing. Nothing too wierd; just people caught in a bad trap.
This one is not one of them. F ‘em!
Please someone explain the “refinancing decisions they now regret” that resulted in 1000 to 3599 per month! Sounds like they got a TON of cash that went where? Did they not realize there was a payback element to this?
No way dude. Buyer pays that at closing and more. Keep up with the times. Reminds me of the realtor yesterday that said I just assumed I could refi my teaser rate so I would never have to pay more.
This is the main reason the devil does so well. After all what a small price a soul is to pay … Bwaaa haaa hhaaa!
One of my fav films ever: the original “Bedazzled” starring Peter Cook as the Devil and Dudley Moore as a fry cook who sells his soul for 3 wishes, that of course, always go awry…Cast of characters includes the 7 Deadly Sins, with Raquel Welsh as Lust.
“I feel sorry for those who got herded up by the “buy now or be priced out forever line,” and bought at the peak without falsifying their incomes, thus becoming house poor.”
Why? At the end of the day, it was still greed that motivated them.
I got the same line as they did. They got a house that they couldn’t afford, and I stayed put in a rental knowing that the tide would turn eventually. Now I get to pay for their stupidity, while the Fed desperately tried to keep the tides from turning. Fair?
“And then, they blew through a bunch of money.”
It didn’t have to be this way. They didn’t have to choose the path that led their house payments to jump from an affordable $1,000 per month to an unaffordable $3,599 a month.
“Now they are approaching old age and are about to go broke.”
Choices have consequences.
The biggest problem with all of these clowns that “bought” a house in the past few years is, as they are being foreclosed upon, they often lament that they’re “losing” their homes, when in reality, most of them had oh so little skin in the game.
Revolutions have started in more curious ways, I suppose.
“‘My heart goes out to the developers who are trying to do something good, but they are getting caught by high building costs and the high price they paid for the land,’ Boyd said.”
————————–
Well, there it is again. My theory is that raw land will be the major bearer of price erosion, since the cost of acutal materials like concrete and lumber can only go so low. So where will the 40 to 50% total reduction in new house costs come from? - a 90% reduction in the cost of the lot.
There are a few lots in “luxury” neighborhoods around my area that are currenlty listed in the high 300’s for 1/3 acre. When this is over I expect those lots to go for $50k or less. Put a nice 2400 square foot 4/3 in there, and you have a $300k house nestled among $1.2 million (in 2005) “mansions”. And if the current owners get all “CC&Ry” on you about minimum sqft, just tell them “ok, you can live next to a dirt lot for 5 more years”.
Az, just north of where I sit are a 1/2 dozen 1 acre ‘executive lots’ developed early 2006. They opened at 350K, were 300K about 6 months ago, and now sport a small sign saying ‘Drastic Reduction!’ and $240,000. Something tells me they used the word drastic way to early in the game. By the way, nothing has sold.
I heard things are bad in K’stan… Borat is stuck with 7 condos.
“A shake-up of such magnitude was a first for Kazakhstan. Until this summer, the market has been increasing steadily, and Kazakh real estate was among the most attractive investment plays in Central Asia.”
full-time flippers-2008 = unemployed & broke
“Husband-and-wife team Kurtis and Cindy Squyres are full-time flippers in the Coachella Valley. Squyres is no construction expert. His wife manages the rehabs and he takes care of the buying and selling. ‘I don’t know the difference between a power drill and a hair dryer,’ he said.”
“A shake-up of such magnitude was a first for Kazakhstan. Until this summer, the market has been increasing steadily, and Kazakh real estate was among the most attractive investment plays in Central Asia.”
I think we can safely say this will be a global recession.
We need to reevaluate the “need” of homeownership to the avg American. Secondly, the RE and building industry needs to switch sales tactics. First of all, the average time that the average family stays in a house is now six years. In other words, I’m only one year shy of having rented a house for as long as the average American has “owned”. For me, the finances have worked out for the better. For those who bought, the financial situation will vary greatly on the time frame they bought. So in reality, many bought in the last 2-3 years and now face the reality that no- it WASN’T a good time to buy.
This brings up point no.2, which is that frankly, Americans are old-fashioned. Daddy doesn’t go to work swinging a lunch pail that he’ll eat on the assembly line on which he has worked for 33 years. Mom doesn’t stay home and raise the young-un’s. People don’t retire with pensions, and people seldom know who their neighbors let alone their community to which they are usually transplants from somewhere else.
Yet the RE and building industry, right along with the general media and even the majority of the population thinks that we MUST buy a home… it is our rights as Americans to do so, and it must be done no matter what, and for the sole purpose of adding security to our lives.
This is about the biggest lie of our times. The truth in my mind is that most people would be better off renting. Sure, I like the idea of owning, but honestly, I know that I would not be better off if I did. Most Americans would be the same.
SO when I hear things like ” Now is a great time to buy”, this statement is point-blank too generalized and ignorant to really be much use to anyone. Is it a good time for Jose working the fast food joint? no. What about the single mom with two kids? no. What about a fast-paced 30 year old married couple making dual six figure incomes in SF? no. What about a family with a good down payment, stable jobs, and a mortgage payment low enough to equal less than 30% of income? Probably, but NOT necessarily.
This goes way beyond housing bubbles. Its more about how we lived in the past and how we live now.
The ownership mentality of speak of is much like the RV fad. why oh why would anyone buy a 100K to 250K motorhome ( and there are many on the road) when the registration alone will fund afine vacation. A shirttail family member has one and I once figured his yearly depreciation and costs at $32,000 a year. The bare face the human greed.
Motels rooms are like $50-75, and in lieu of buying an RV for $150k, you could just drive a car and stay @ motels for 2,400 nights, instead.
Yeah, my folks thought our relatives were looney-tunes for dragging around a load, I mean, an RV. We much rather stay in a bedraggled Route 66 motor court. Ah, memories….
BEDBUGS
Can’t live with them, can’t get rid of them.
One downside to Hotel Motel rooms is that since the population around the world is traveling and DDT etc can no longer be used for bug spray, BEDBUGS are making a huge comeback.
It ain’t pretty and it follows you around. Once bitten, twice shy.
RVs after they have lost their initial value, ‘might’ be a decent value.
But you are correct, halfway, about hotel costs. But they too have gone way up, along with the Heloc craze
Don’t get all Howard Hughes on us.
LOL
Just got bitten in England
and thinking of washing my hands.lol
Used RVs can be a good deal. They are a lot of fun, and can take you places where there are no fleabag motels, meanwhile providing superior accommodations. You also save money on food while traveling by cooking for yourself.
Once a new RV buyer realizes the price of upkeep and the RV has a few years on it, you can pick one up cheap, use it for a couple of years, then re-sell it without taking too much of a hit.
In lieu of an RV or a cheezy motel room (trouble there is you never know what you’re getting with the cheap ones and with a kid in tow I’m not into a lot of drive-around comparison shopping) we bought a vintage Apache pop-up for a grand. My husband had a blast putting a couple of hundred worth of sweat equity into the thing, and now we have the perfect little cabin to tow along with us! Yeah, the motorhomers sometimes look down their noses at us, but: a) they obviously have no taste for kitsch and b) we don’t have to tap into savings to fill the gas tank!
I just talked a friend who wanted to buy a cabin in the woods for vacationing by asking her to make a list of all the places she’d like to vacation (Tetons, Yellowstone, Alps, etc,) and then add up what a trip to each would cost for the next 20 years. It still came out to way less than the cabin, and she could go all over the place. She was pretty stoked.
“She was pretty stoked.”
Don’t you mean shock at your calculation?
Cinch
No, stoked at how many places she could visit for the money. She decided not to do the cabin. Stoked = snowboarder talk for all fired up. lol
“why oh why would anyone buy a 100K to 250K motor home”
Especially since you can rent one for just the amount of time needed. Then give it back till with no further obligation or expense.
And you can return it “fully loaded!” Sorry…can’t help myself. Could never get my head around the “crap shute” that you had to pump out every couple days. ewwww
where do you think Blackwater comes from?
cuz it goes where folks fear to tread.
$4 per gallon this summer, diesel? A typical RV has a 75 gallon tank. That works to be about $300 per tank with range of ~400 miles?
Cinch
Some turbo-charged diesel RV’s can get 13 mpg, which would be 975 miles on a 75 gal tank, which would be 31 cents a mile in fuel cost at $4 a gallon. Heavy vehicle owners like to lie about their fuel mileage, though.
No friggin way. Why do old people get all hung up buying these things. Then the old man has to start wearing a dumb ball cap with flip-up shades. If I ever get that old and bored shoot me please.
Montana, start early, get those wrap around sunglasses.
LOL
And how we may be forced to live in the future with now a globe reaching for and competing for resources.
Buckle up!
“Many people recall popping the champagne cork the day they bought their first home.”
The time to celebrate is when (if) the mortgage gets paid off. Until then, they’re just caretakers for the bank.
‘I’ve bought homes with a 20% profit margin and in four months that’s gone,’ he said.”
That would be all that built in equity everyone is talking about.
Haha, yikes, vapor-tupperware
If you’re only building in 20%, you’re almost guaranteed to lose money, or have to wait forever to get access to it. These are gamblers about to get bounced out of the casino by the house, as it were.
From the article on people camping out for “affordable” housing near Vail:
“The West End has 12 studio and one-bedroom units selling for $180,000 to $190,000. The largest, 3-bedroom units are selling for more than $430,000…It shows how scarce affordable housing is in the valley that people are in line for 700 square foot apartments that aren’t even really affordable.”
What does it say about human psychology when someone would pay that much to live near Vail, Colorado, commute at least 1/2 hour to work on typically icy roads, make 10 to 12 dollars an hour, pay an average of 30 cents more per gallon of gas than most of Colorado, pay 10 to 20 percent more for groceries and everything else, pay higher taxes, and breathe the air pollution from a valley with bad winter inversions with a freeway going through the middle. It’s not even that great of a ski area, especially compared to Steamboat, Highlands, and Telluride.
Got a friend who had a job offer in Vail, did 6 months and moved back “home” to where it is affordable and not crowded with so many workers/families stuffed into a 1 bdrm condo.
Vail not that great a ski area? That’s kind of like saying the Tournament Players Club (just behind where I live) is not that great a golf course - because of course there’s Augusta, Pebble Beach, St. Andrews, etc.
You have to go to Scotland to play St. Andrews, you merely have to go a few hours further to ski Steamboat, Highlands, Telluride, and even Silverton. All better. Vail is a lot of hype. Not the best unless you’re a beginner/intermediate and don’t really know the difference. It also has a corporate atmosphere that takes the rating down a few notches.
Edwards resident Sophie Ozaneaux has lived on-and-off in the valley for 17 years, but ‘missed the boat’ when prices were affordable, she said. ‘There’s a real need for this,’ she said of the affordable homes. ‘This is still expensive for me. I’m working three jobs to afford it.’”
and the mania continues!!!!! when wil people learn!!!!!
Imagine there’s no housing bubble
It’s easy if you try
No sinking economy
Above us, a 20% down rule applies
Imagine all the people
Living within their means
Imagine it wasn’t in every country
It isn’t hard to do
Nothing to overpay for
And no Realtors to abuse
Imagine all the people
Living life w/o deeds
You may say that i’m a dreamer
but i’m not the only one
I hope someday you’ll join us
And the world will live w/o loans
http://www.youtube.com/watch?v=558Kgx2×3CY&feature=related
That was so great Aladinsane.. but the url didn’t work.
“‘There is a group of people who know now is the time to buy a house.’”
Some comments just stand alone.
these people are no different than me.
secure in the work environment, kids on the way, grandma needs a place that somebody else has to take care of, and they rent for 30% of the take home, and they can buy for 10% down AND THE SAME PAYMENT..they should buy a house.
I settled in last year, the old place will be paid off in 10 years, after my refi.
Rationalization is another word for lying to yourself.
Well, I’m a newbie here. I bought my current house in 2008. I live in south central Kentucky. I paid 92 K. It is 1300 sq ft 3bd, 1.5 bath in the best public schools in the area. I affectionately call this house, “my project house”. It needs and needs (new kitchen cabinets, counter top, totally gutted the bath, water heater, etc). Put 20% down and have a 15 yr mortgage at 6.125, so P&I is $625/mo, add another 80-100 for taxes & insurance. I’m still glad I bought it. Sits on .66 of an acre and has 100′ of river frontage. Prior to buying, I was renting a 3/2 house on .1 acre for $725/mo. My son complained that our neighbors partying kept him up at night. It was in better condition than my current home, and in the same school district. Divorce had placed me in my current circumstance. I sold the marital home in early 2007 for 270 K. I had paid 228 K for it in 1999. (same school district as rental and current house). Area household income is about 38-42 K/yr. Avg real estate transaction is about $130 k.
I certainly share the sentiments of folks on this board that housing is unlikely to appreciate, and in most areas needs to fall to correct to area rentals and area income. Every month $250 or so goes towards principal on my note. I don’t believe one could do much better for their housing needs.
Back in 1988 I bought in Albany NY area. I bought a 3/1 for $102 k. The area had had a real estate boom prior to my buying. (job relocated me to the area in 1988). With 38 K income, I could afford the bottom 10% of the market. I paid 3 points to get a 30 yr mortgage at 10.5%. The market tanked, and I recall that four years later in 1992 I refinaced at 6.25 %. Some of my neighbors could not refinance, because they were still “upside down”. They were caught in the worst of position. They could continue to make their payments, but could not refinace to a lower payment, because the mortgage exceeded the value of the house. Long story short, I sold this house in 1999 for 118 k. This spring & summer, the buyer had listed this house for $225 k. PS- it did not sell.
good luck all
Holy cr*p man, here in many parts of delusional So. Cal. you’d have to add a “0″ to the end of that price tag for something like that. No matter what happens, for 92K I tip my glass to you and say Congratulations!
*sigh* I really need a new state.
Trapper, sorry to hear about your divorce. Sounds like buying a house in your situation (and even more so, in your area) isn’t a bad thing, which is more than most people can say that are buying right now, and that it’s well within your means. I’m glad it’s a better situation for your son as well. God bless.
Good story - pretty area - Bowling Green? - probably only 100 miles or so from two major cities (Louisville and Nashville), and low taxes - beats the hell out of Albany. Good luck with your fixer.
dude, we’re headed your way
I play guitar hero:
http://www.youtube.com/watch?v=6lbvSBNLLoo&NR=1
“Despite being nervous about getting into the housing market, homeowner Sherie Palm jumped right in and she’s glad she did it now. ‘Basically now is the time to buy,’ Sherie insists. ‘You’re getting more home for your money, your gonna get the location you want, the amount of house you want. Now is the best time to buy because everything’s going up from here.’”
I now present to you,the 4,450…(SPLAT - bus running over woman)…4,449 knife catchers!
Spoken to mimic the infamous ‘I give you these 15…smash…10 commandments!’.
Interesting…
http://tinyurl.com/2q34dr
Jubak’s Journal2/1/2008 12:01 AM ET
Is US entering Japan’s nightmare?
Japan’s bust started with a real-estate boom, lax lending and the propping up of financial firms — and its recovery took a decade. The Fed’s rate cuts keep the US on the same path.
By Jim Jubak
Jubak’s Journal
2/1/2008 12:01 AM ET
Is US entering Japan’s nightmare?
Japan’s bust started with a real-estate boom, lax lending and the propping up of financial firms — and its recovery took a decade. The Fed’s rate cuts keep the US on the same path.
By Jim Jubak
http://tinyurl.com/2q34dr
I really feel like going off tonight.
First Hoz gets checked on a Sprott call early in the day, classic stuff. Chick calls a top in gold, yesterday I think it was, classic.
Get Stucco sells the treasuries that he is so fond, classic.
\.
the top is in, bond market blowup, equity blow-up, and its never been a better time to buy a house…
tell me,
“what is so?”
Voz
Buy now or be priced out forever. Todays highs will seem like the Mariana’s trench on Monday. They’ve built all the land they’re going to!
Do you want your children to grow up in a miserable place and have to mave every year never knowing what you’ll be paying next year.? Buy, Buy Buy!
Have a great weekend my friend. Jusque Lunes.
“Despite being nervous about getting into the housing market, homeowner Sherie Palm jumped right in and she’s glad she did it now. ‘Basically now is the time to buy,’ Sherie insists. ‘You’re getting more home for your money, your gonna get the location you want, the amount of house you want. Now is the best time to buy because everything’s going up from here.’”
And she knows this because her realtor told her so….. (thank you dear for catching a falling knife, somebody’s got to…)
Business Week cover story about why housing may fall 25% in next few years.
Implied in the semantics (of “every”) is that she’s witnessed contiguous 6-mo. over 6-mo. spans of ever better results. Sept. 2007 through Feb. 2008 were better than April 2007 through Sept. Incidentally, that’s what we’ve noticed too.
I like the bulls and bears talk from the Realtor®’s mouth. This is where Joe Kennedy says sell.