Discussions With The Sheeple On Declining Prices
Readers suggested a topic on the talk about falling house prices. “Discussions with the Sheeple on declining home prices are… interesting. I was talking to an incredibly bright coworker yesterday who is convinced that real estate prices are only going down in really undesirable areas. So he is looking to take a corporate transfer to ‘fly over country.’ If he goes, he’ll pull a staff of about forty too.”
“My favorite quote, ‘I’m ready to buy a million dollar house, but I want a million dollar house, not a shack!’ (Yes, he can afford it too.)”
“Basically, coworkers cannot see declining prices in nice areas. All they can see is the ‘wishing prices’ and the fact they cannot afford. So they’re giving up. They truly believe the NAR propaganda that ‘this time its different’ or ‘its different here’ and are instead planning to vote with their feet.”
“I don’t know how it is at your work places, but for our offices in California and around DC, its all we can do to stop a stampede. Attrition is bad. New sites that are being opened up in ‘fly over country’ fill up in hours; I’m talking thousands of positions too!”
“Note: Attrition is retirements as well as young engineers ‘giving up’ on bubble markets. Both want cheaper housing (with the retirees expecting a nice cash payout).”
“We’re hitting the irrational downside. Note: We truly won’t have panic until late this year (probably the fall), but you can feel the emotions building. Its maybe 5% of the workforce looking to bolt today. By the fall it will be 10%.”
A reply, “I believe this gets to the core of the faulty logic used by nearly every RE koolade drinker. It implies a level of entitlement at any cost. I’m not sure why anyone would want to tie up a million in a friggin shack but they do.”
“And they do it in places where NOBODY could ever afford to buy it if it had to be dumped in a hurry. I see this phenomenon everywhere. A big monstrosity of architectural puke splattered against a landscape of 3/2 ranchers.”
Another said, “Even with price declines accelerating, we’re still at least a few years from prices falling back in line with incomes. For those that have lived in high housing cost areas for a decade, at some point you just want to say ’screw it, it’s time to leave.’”
“Even if you can eventually afford something decent in 3 to 5 years, you’ll be able to buy something far better in that other place. Is there enough else about the higher housing cost area versus the lower housing cost area to justify staying?”
“If you look at how people are voting with their feet, I’d have to say the answer is ‘no’ for many people. The exodus of the California middle class didn’t begin with the latest bubble. This bubble just provided the latest shove out the door. Some who left earlier might come back if prices fall enough, but I don’t think that will offset the number of those continuing to leave.”
One added, “Some of stay because we have little choice: we don’t want to abandon family and friends. It just stinks that we were born and raised in areas that have now become unaffordable thanks to the Bubble. So, we wait, renting… and waiting… and waiting…”
One already left, “I used to work at Raytheon (formerly Hughes) in El Segundo and Fullerton. I quit Raytheon in El Segundo because I couldn’t take the drive and I couldn’t afford to move closer. I then went to work at another aerospace company in OC because I could afford to live close, but had to rent.”
“Then last year my b/f and I managed to swing a transfer to SE Arizona, where we are much happier and better off financially. The only bad thing is that my b/f insisted on buying a house (against my advice) so I am worried that he is going to have some problems when we have to move at the end of the program in about 4 years.”
One had this, “I curiously surfed the LA craigslist Real Estate For Sale last night for nostalgia purposes. $500,000 for a 1 bed/1 bath 1970s apartment conversion in West LA was not uncommon. I bought a 1200sqft 2 bed/2 bath in 1999 for $200,000. I thought that was a lot back then.”
“My work could easily force me back to LA some day, but there is no chance of me buying anything for more than $250 a square foot (in 2008 $s).”
“And if everyone here is not aware, California’s state tax quickly reaches 9%. With California having high income taxes, high real estate, higher than average fuel costs, bankrupt state, crap schools, ever-increasing congestion, etc, fly over country starts to look pretty good.”
One suggested. “Except Colorado. Colorado really sucks. Just about anywhere is better. Really! It is. Try Idaho, or something.”
One from DC. “I work in Northern Virginia near DC, and I have noticed some of the same things you have. I haven’t seen it much in my office, but that’s because a lot of my coworkers have kids in elementary or high school and don’t want to move them. The desire to move among them is certainly there.”
“Among those who are single, married but don’t have kids yet, or have kids that are grown up, they have bolted or I suspect are planning to bolt. A lot of this probably has to do with the idea that no matter who becomes President next year, there will have to be some cuts in defense spending.”
“Even beyond that, you still have the high cost of living, the second worst traffic in the nation, an inability to do something as basic as get transit to the region’s major airport (Dulles), etc., etc. In other words a lot of people aren’t frustrated with their job, but with living here.”
One had this question, “There’s nothing irrational about people moving away from CA and DC in order to have more reasonably priced housing & stay employed. This should have happened quite a while ago. Question is, what took them so long to wake up?”
Another had this tale, “In early ‘01 schoolmate, sold his home in LQ (la quinta) and moved to Iowa. He emailed me that even though prices were still going up in CA, he bought his home outright and put the rest in savings. I was jealous for a second. And proud that he got out.”
The Star Tribune. “Realtor Greg Bauman started worrying about the health of the Twin Cities real estate market when prospective buyers began calling him from California to bid on homes based solely on Internet listings.”
“It seemed odd to Bauman that buyers would skip the step of actually visiting the properties. The phenomenon was yet another sign that speculation in residential real estate was out of control.”
“For existing homeowners, this week’s news that the median sale price dropped 12.5 percent in February to $195,060 was sobering, especially versus a median of $225,000 in 2006.”
“Back when those California cyber speculators were calling Bauman, homeowners and potential buyers were riding a wave of median increases of 8 or 9 percent a year.”
“Before the housing bubble inflated, most homeowners were content with modest annual increases of 3 percent or so in the value of their homes. History suggests that those days will return, but not before we see more foreclosures and additional pressure on prices. Many of those will be first-time buyers who will benefit from newly increased FHA loan limits and low interest rates.”
“The upside to falling prices is that some buyers who were priced out of the market during the frenzy of speculation will now be able to find larger, affordable homes as prices fall.”
“‘When you combine that with downward pressure on prices, the housing affordability index starts to pop,’ said Kevin Knudsen, president of the Minneapolis Area Association of Realtors.”
“Before the housing bubble inflated, most homeowners were content with modest annual increases of 3 percent or so in the value of their homes. History suggests that those days will return, but not before we see more foreclosures and additional pressure on prices. Many of those will be first-time buyers who will benefit from newly increased FHA loan limits and low interest rates.”
“The upside to falling prices is that some buyers who were priced out of the market during the frenzy of speculation will now be able to find larger, affordable homes as prices fall.”
“‘When you combine that with downward pressure on prices, the housing affordability index starts to pop,’ said Kevin Knudsen, president of the Minneapolis Area Association of Realtors.” are… interesting. I was talking to an incredibly bright coworker yesterday who is convinced that real estate prices are only going down in really undesirable areas. So he is looking to take a corporate transfer to ‘fly over country.’ If he goes, he’ll pull a staff of about forty too.”"My favorite quote, ‘I’m ready to buy a million dollar house, but I want a million dollar house, not a shack!’ (Yes, he can afford it too.)”
“Basically, coworkers cannot see declining prices in nice areas. All they can see is the ‘wishing prices’ and the fact they cannot afford. So they’re giving up. They truly believe the NAR propaganda that ‘this time its different’ or ‘its different here’ and are instead planning to vote with their feet.”
“I don’t know how it is at your work places, but for our offices in California and around DC, its all we can do to stop a stampede. Attrition is bad. New sites that are being opened up in ‘fly over country’ fill up in hours; I’m talking thousands of positions too!”
“Note: Attrition is retirements as well as young engineers ‘giving up’ on bubble markets. Both want cheaper housing (with the retirees expecting a nice cash payout).”
“We’re hitting the irrational downside. Note: We truly won’t have panic until late this year (probably the fall), but you can feel the emotions building. Its maybe 5% of the workforce looking to bolt today. By the fall it will be 10%.”
A reply, “I believe this gets to the core of the faulty logic used by nearly every RE koolade drinker. It implies a level of entitlement at any cost. I’m not sure why anyone would want to tie up a million in a friggin shack but they do.”
“And they do it in places where NOBODY could ever afford to buy it if it had to be dumped in a hurry. I see this phenomenon everywhere. A big monstrosity of architectural puke splattered against a landscape of 3/2 ranchers.”
Another said, “Even with price declines accelerating, we’re still at least a few years from prices falling back in line with incomes. For those that have lived in high housing cost areas for a decade, at some point you just want to say ’screw it, it’s time to leave.’”
“Even if you can eventually afford something decent in 3 to 5 years, you’ll be able to buy something far better in that other place. Is there enough else about the higher housing cost area versus the lower housing cost area to justify staying?”
“If you look at how people are voting with their feet, I’d have to say the answer is ‘no’ for many people. The exodus of the California middle class didn’t begin with the latest bubble. This bubble just provided the latest shove out the door. Some who left earlier might come back if prices fall enough, but I don’t think that will offset the number of those continuing to leave.”
One added, “Some of stay because we have little choice: we don’t want to abandon family and friends. It just stinks that we were born and raised in areas that have now become unaffordable thanks to the Bubble. So, we wait, renting… and waiting… and waiting…”
One already left, “I used to work at Raytheon (formerly Hughes) in El Segundo and Fullerton. I quit Raytheon in El Segundo because I couldn’t take the drive and I couldn’t afford to move closer. I then went to work at another aerospace company in OC because I could afford to live close, but had to rent.”
“Then last year my b/f and I managed to swing a transfer to SE Arizona, where we are much happier and better off financially. The only bad thing is that my b/f insisted on buying a house (against my advice) so I am worried that he is going to have some problems when we have to move at the end of the program in about 4 years.”
One had this, “I curiously surfed the LA craigslist Real Estate For Sale last night for nostalgia purposes. $500,000 for a 1 bed/1 bath 1970s apartment conversion in West LA was not uncommon. I bought a 1200sqft 2 bed/2 bath in 1999 for $200,000. I thought that was a lot back then.”
“My work could easily force me back to LA some day, but there is no chance of me buying anything for more than $250 a square foot (in 2008 $s).”
“And if everyone here is not aware, California’s state tax quickly reaches 9%. With California having high income taxes, high real estate, higher than average fuel costs, bankrupt state, crap schools, ever-increasing congestion, etc, fly over country starts to look pretty good.”
One suggested. “Except Colorado. Colorado really sucks. Just about anywhere is better. Really! It is. Try Idaho, or something.”
One from DC. “I work in Northern Virginia near DC, and I have noticed some of the same things you have. I haven’t seen it much in my office, but that’s because a lot of my coworkers have kids in elementary or high school and don’t want to move them. The desire to move among them is certainly there.”
“Among those who are single, married but don’t have kids yet, or have kids that are grown up, they have bolted or I suspect are planning to bolt. A lot of this probably has to do with the idea that no matter who becomes President next year, there will have to be some cuts in defense spending.”
“Even beyond that, you still have the high cost of living, the second worst traffic in the nation, an inability to do something as basic as get transit to the region’s major airport (Dulles), etc., etc. In other words a lot of people aren’t frustrated with their job, but with living here.”
One had this question, “There’s nothing irrational about people moving away from CA and DC in order to have more reasonably priced housing & stay employed. This should have happened quite a while ago. Question is, what took them so long to wake up?”
Another had this tale, “In early ‘01 schoolmate, sold his home in LQ (la quinta) and moved to Iowa. He emailed me that even though prices were still going up in CA, he bought his home outright and put the rest in savings. I was jealous for a second. And proud that he got out.”
The Star Tribune. “Realtor Greg Bauman started worrying about the health of the Twin Cities real estate market when prospective buyers began calling him from California to bid on homes based solely on Internet listings.”
“It seemed odd to Bauman that buyers would skip the step of actually visiting the properties. The phenomenon was yet another sign that speculation in residential real estate was out of control.”
“For existing homeowners, this week’s news that the median sale price dropped 12.5 percent in February to $195,060 was sobering, especially versus a median of $225,000 in 2006.”
“Back when those California cyber speculators were calling Bauman, homeowners and potential buyers were riding a wave of median increases of 8 or 9 percent a year.”
“Before the housing bubble inflated, most homeowners were content with modest annual increases of 3 percent or so in the value of their homes. History suggests that those days will return, but not before we see more foreclosures and additional pressure on prices. Many of those will be first-time buyers who will benefit from newly increased FHA loan limits and low interest rates.”
“The upside to falling prices is that some buyers who were priced out of the market during the frenzy of speculation will now be able to find larger, affordable homes as prices fall.”
“‘When you combine that with downward pressure on prices, the housing affordability index starts to pop,’ said Kevin Knudsen, president of the Minneapolis Area Association of Realtors.”
‘to SE Arizona, where we are much happier and better off financially. ‘
So how is the Moon these days?
LOL!!!
Ah, the miraculous optimism of the human mind…
This reminds me of the cult classic film, Dark Star. It had this bizarre opening and closing song; “Benson Arizona, the same stars every night…”
“I believe the stars shine even when I’m asleep.”
Line from a tune I hear the other day…
‘And I laugh because the moon shines on my face’ -JK
summer moon on face
wordless poet
wiggles toes in sand
patiently waiting for house to appear
-housing haiku-
That’s good lost. BTW, I still have the card/art you sent me on my fridge.
“Dark Star”! You are the first person who’s mentioned that film to me in years. I saw it when it opened (as a short) at Filmex in ‘73 or ‘74. For those who haven’t seen it, this was Dan O’Bannon’s first film as a screenwriter, the one he made as a USC film student, before he wrote “Alien”, and John Carpenter’s first film as a director.
Pinback!!
Arizona isn’t bad if you can handle the burning hot summers and like a dry, desert climate. The best thing is that state has forced out the illegals who moved to CA. Ive lost interest in CA due to it’s problems which now look to be worse than FL. I have my eye on OR or WA state if prices fall enough. But for now, im moving to NW PA
Bye FL.
I swear to god if don’t make yer move to PA soon I’m coming down, hiring some drunken sailors to move you , then open up a case of beer and a can o’ whoop ass.
MOVE OR SHUT THE BLOODY HELL UP ALREADY !!
thats is all
Hey would you help a man out? I am still saving my money in order to make the move! Will you be willing to loan me some money, ill put down 40% and pay you 7% interest
‘…hiring some drunken sailors to move you , then open up a case of beer and a can o’ whoop ass.’
I’m there, baybee. I, too, would like to see Bye FL achieve his beautiful and worthy dreams, and forcefully, if necessary. I qualify for the job in this matter because I spent the day kayaking, and swearing, and I’m drunk. That makes me a drunk sailor, at least technically, today.
LOL moving indeed. And I hear the Detroit Lions are going to win the Super Bowl this year.
Interesting analysis by T2 Partners LLC:
http://www.blownmortgage.com/files/presentation3-2008.pdf
It isn’t pretty folks. There is apparently nothing any entity can do. What will this mean to you and me?
Awesome, thanks!
RE: What will this mean to you and me?
Whew…I muddled thru the entire presentation.
Guess I need some coursework in contemporay finance.
But it looks like J6P needs 1.41% long term mortgage rates to stay afloat.
Un-be-frickin-lievable. I understood about the first 15 graphs and that’s all I needed to know (or already knew). Basically, all the balsa wood in the world they are throwing across the train tracks ain’t gonna stop this juggernaut from running off the cliff.
Zowie! Fills in some gaps in my knowledge nicely.
A co-worker (engineer and manager) came to my office a couple of days ago to “touch bases” on the market. We have this talk periodically. He’s aware that I’ve owned rental property outside of CA for several years, and that I acquired it well before the boom. But here’s the thing. He’s in need of a big shot in the arm to set up his retirement funds so he thinks the best way to do it is to go into the “flipping business”. He knows someone else who’s been doing it successfully for years, but he also trusts that I’ve made smart decisions of my own….and I’m a Black woman, in my 50s, divorced, with money in the bank and discretionary funds. I travel when I want to, own my car and do all with cash.
Back to the office visit: He says, ” So, in light of the market these days, how do you think things look? Do you think it’s a good time to buy now? Are you looking at properties since the prices are going down?” My answers: (1) still not good, and won’t get better for a while, (2) No, and (3) No, the cake’s not done yet.
So we talked quite a while. He wants to meet for coffee/lunch some weekend along with his fiance so we can all chat a bit about what’s going on. It’s kinda interesting when you are seen as a “voice of reason” when it comes to financial issues. I am by no means a financial wiz, but I am very anal about doing my homework when it comes to my money. It really doesn’t take a genius to figure out what was lying underneath the covers back in 2002 and forward. It doesn’t take a genius to read/see through the BS and make informed decisions. And I learned a long time ago that just because someone has a “title” doesn’t mean that they know all, are trustworthy, and are concerned about my interests. Thinking for yourself and thinking clearly goes a very, very long way.
I also want to take this moment to thank Ben for this wonderful vehicle (HBB) and all of the participating bloggers. I have received such a great financial education here. And trust that I parse out much of this invaluable information to friends and family, to help them make informed decisions, as well.
BayQT~
charge them for your advice! Okay that is too predatory. At least get them to pay for your coffee and/or muffin.
Cinch
LOL! Sounds like a plan, Cinch. I’ll work on free coffee AND the muffin.
BayQT~
It is nice when you feel that your advice has actually helped people. I think I’ve been a deciding factor in several friends and family members postponing decisions to buy (and in one case hastening a decision to sell) but of course the majority of my advice falls on deaf ears.
Yes, it is a good feeling. But I wouldn’t worry about the ones who didn’t listen to you. Even if you’ve reached 2 people out of 20 that you many have tried to help, you’ve still been successful.
Glass half full, my friend…not half empty.
BayQT~
It’s a blessing, and a joy to be a blessing when you are a mentor. Good for you!
One suggested. “Except Colorado. Colorado really sucks. Just about anywhere is better. Really! It is. Try Idaho, or something.”
Yeah, Colorado sucks, the only place worse is E. Utah. Tell your friends.
Why does Colorado suck? Seriously, it’s on the list of places I’m considering. (Denver/Boulder area in particular.)
Hey, that was a joke, meant to keep people away from your own best places.
Actually, though, I don’t like the Front Range - lived in Ft. Collins and Boulder while in school. But the W. Slope is nice. But even Colorado’s cities are nice compared to a lot of the country, maybe, haven’t been out and about for a few years. But I’m not an urban kind of person, so you might like it if you are. I think Salt Lake is a nicer place, in spite of the earthquake hazards (no, I’m not Mormon).
‘I think Salt Lake is a nicer place, in spite of the earthquake hazards (no, I’m not Mormon).’
I’m going to go ahead and depart from my normally reticent ways at this time:
Nope.
Very eloquent reply. But it’s a nice fantasy, to think of sitting on my deck admiring those towering mountains. Maybe I should try Tibet instead, hmmm, maybe not, with China around.
Colorado rules, actually. I’m up in the Loveland/Fort Collins area, as is In Colorado (another poster here). It’s okay, not the most exciting place (Loveland), but fairly cosmopolitan for its size (Fort Collins). Of course, this is coming from someone who lived near, worked in, and liked Washington, D.C. for its cultural attractions, so take my comment about “not the most exciting” with a grain of salt.
On the other hand, I can uneqivocally tell you that Boulder is extremely expensive and crowded by Colorado standards. My advice if you move here is live somewhere else and visit there when the urge strikes you, which it probably will less often as time goes on.
The wife and I are considering a voluntary job relocation to SW Denver in six months to a year. After housing prices tank some more, we’ll likely end up buying our final residence out in the hills somewhere down Hwy 285 (Indian Hills/Aspen Springs).
Is Colorado that bad? It’s got nice mountains and mild winters in the valleys. Ive thought about renting a room for like $700 in Vail/Aspen. I pity the fools who spent $500k on those small starter houses. They are worth maybe $125k
Go for it Bye. Its only a short drive to NW Pa. And almost within comuting distance from Fla. Amost.
Is Colorado that bad?
It depends on which yardstick you use. Most of it is much more affordable than places like California. Regarding living in the Vail valley, as Lost In Utah said, the gap between the haves and have nots is pretty bad, almost third world style: you are either extremely wealthy, or you flip burgers. There is very little in between the two.
Vail? Its an overpriced ski resort right off the highway. Have you ever been? Skiing is great. That’s about it. I don’t get the sense you are pretentous. That’s what Vail and Aspen are all about. Third homes for ppl that think they are special.
Bye, $700?? in Vail or Aspen???
You mean seven hundred dollars? per month?
In Aspen or Vail?
I’m sorry, I feel dizzy. It all seems like a dream.
You can get a rental for 700 smackers?
Wow. I have a few friends who live/own or lived there and some could not afford to live or rent there IF you can find something. Oh,you must be talking about being one of many roommates inAspen or Vail.
Anyway, good luck. Seriously!
Hey Desdweller, you CAN get a rental for that - it’s the back 1/4 of some old bus parked illegally behind the grungiest pub in the valley. And don’t expect to come home and find home there, it may have been moved by the strong arm of the law.
It sucks if you have lived on the east coast and are looking to live an honest to god city with character (or a center). (And wanna be Boulder doesn’t count.) It’s obvious that most of the Denver/Colorado Springs area was built up after the 40’s and it shows in how much driving you have to do to accomplish *anything*.
But if you are okay with suburbs, almost anywhere along the front range is a-okay. The mountains are beautiful but it’s pretty hard to make a living up there.
Out of all the places there, I liked the old, western suburbs of Colorado Springs the best: built up in the 20’s with eye of not spreading the neighborhood 50 billion feet apart. Nestled within an easy and beautiful view of the peak - very nice.
Colorado has the highest rate of teenage depression in the nation. No kidding. Couldn’t tell you why.
Sammy, I read an entire series on that. The author came to the conclusion that it’s the Colo. lifestyle - everyone’s into skiing and other outdoors things. If you’re not “cool” or from a “cool” family, you feel the stigma. Plus the resort areas are so expensive and frequented by the monied set, it’s depressing to know you’re not going to ever be there. The distance between the haves and have nots is very visible in Colorado (I’m a native - what depresses me is seeing all the ruination of beautiful places
).
The distance between the haves and have nots is very visible in Colorado
That’s kind of funny. All the rich people I saw in Colorado looked like they got run over by a goodwill. The poor kids dressed 1/2 decently. *grin*
I agree with you about what’s really depressing about Colorado. My grandmother in law grew up in the Springs. I would have love to seen the place in the 30’s. Now the place is so over run with people…
“I’m a native”
You’re a Ute? Cool!
Hey, I can’t help where I was born. I’m a non-native native.
It’s not just the difference between the wealthy and the hoi polloi. It’s the peer pressure. I just returned from a vacation there, and even *I* felt the pressure: that if I wasn’t snowboarding, bungy-jumping or rock climbing 24/7, I was gonna get all fat and unhealthy and block up the trails and inconvenience the over-achieving super-fit rush seekers. The whole thing can be summed up by a young staff member at a ski lift turning up his nose and at me and calling me a “green bib.” Beginner? Oh come on. Anyone who’s anyone should have been training for the Olympics by the time they’re 16. Didn’t I know that?
Ya know, some teens are just more suited to practicing music or playing D&D. No wonder they’re depressed.
Lost is right. There is little diversity in CO. If you are an outcast or minority there are few outlets.
San Francisco folks still cling to “it’s different here”, and while the local media reinforces that by insisting that while prices in the Bay Area may tank overall, there are still places that will remain strong, particularly San Francisco proper. I guess we can only wait and see.
Then why did Pacific Heights crash 50% last time?
Buyers were less sophisticated then.
It was different back then. I get it.
San Franciscans are hardheaded about their City and their property values, as if everything’s different there. Here is one stat, the brutal reality of which will dawn on SFers before too long:
The median private sale asking price in San Francisco is $809,500, while the average bank REO asking price is $616,743.
So, banks are currently undercutting private seller asking-prices by 24%. Foreclosures are increasing with time. Banks have deep pockets and can and will undercut anyone, now and forever, to dump the growing REO inventory..
If a private seller wants to sell, s/he’d better do something quick before the banks remove most (if not all) qualified buyers from the buyer-pool. Prices are headed down.
Those people can’t sell since they have no equity. They too, will walk away. Those with any equity left can kiss it bye bye.
Argh! I know no one is reading right now, but I have to repeat myself: SF has already dropped by like 11%. Check out the Case-Shiller index. SF is not immune. No one is immune. I can’t tell you how annoying this whole “SF is immune” crap is to me. Seriously, I’m on the verge of yelling at my cat now (not really).
Is your cat still worried about being priced out forever?
HELOC-kitty
Some of us do read these late at night….or later….in great detail.
>>One had this question, “There’s nothing irrational about people moving away from CA and DC in order to have more reasonably priced housing & stay employed. This should have happened quite a while ago. Question is, what took them so long to wake up?”
Ans.: A new generation that by and large thinks differently than the Boomers.
Gen-X, Y, and Millenials:
Are not interested in McMansions.
Do not want to fund Boomer retirements.
Are willing to move to other locations in order to purchase a home - something the Boomers were generally reluctant or refused to do.
~Misstrial
(This answer, in its entirety, was left out of my above-comment)
RE: A new generation that by and large thinks differently than the Boomers.
Of course GenXYZ’er not interested in McMansions-they’re all living with their parents.
How else are they driving all those Bimmers, buyin’ $300.00 pair of dungarees and drinking $16.00 exotic martini’s at fancy nightclubs with $50k in school loan debt.
And unfortunately because there is only 30mil of them and 80 million boomers, they’re gonna be on the short end of the entitlement pay-out whether they like it or not.
Ponzi schemes never end well.
Wait - 30 mil non-Boomers and 80 mil Boomers?
They should do OK in the inheritance arena.
My niece gets my jewelry, my nephew gets my stocks.
They should do OK in the inheritance arena.
This assumes there’s anything left to inherit. Watching my elders a)chase after the housing bubble and b)attempt to retire with no savings makes me assume that perhaps there won’t be.
There are responsible and irresponsible people in every generation. Believe me, there are plenty of Gen X and Gen Y like myself who are freaked about our futures and trying to build some security. There are also plenty of the people like you describe above, and I think the millennials are worse than we were, in terms of getting into debt to go to school and then spending student loans on pizza.
At least when the crash hits, they will be young and able to adapt (one hopes).
I think that a lot of parents, especially the ones who waited (unlike my parents) to have kids, have encouraged their children to believe that they are rich and they can have the ‘best of everything’, when in fact they’re just middle class people, highly leveraged and playing pretend.
We’ll see in a few years how this all shakes out, I guess.
It’s odd - I grew up thinking somehow we were rich or should be so. We were very squarely middle class, though. It took me a while to get over my entitlement complex on our relative social status.
Once I got over that, though, I was free to start to save and head down the road of being rich. I remember my Dad being aghast that I bought clothing a thrift store. I have to admit that I *still* don’t understand that prejudice. (Isn’t clothing used as soon as you wear it once???)
Anyway as parents, we’re aiming for “good enough”. Our kids don’t need every last lesson under the sun. They seem to be okay thus far. Check back in a decade or so.
Are not interested in McMansions.
Do not want to fund Boomer retirements.
Are willing to move to other locations in order to purchase a home - something the Boomers were generally reluctant or refused to do.
___________-
You really do need to get out of your midset of false cliches.
(1) 1907 and the next 10-20 years was the first hgue mass migration to find jobs since the beginning of WWII. All of those who gto college degrees after the creation of federal student loans allowed more and more people to go to college could not return to the hometown due a lcak of jobs.
So your assertion that the 1945-1964 generation did not want to move for jobs is simply false.
(2) Once people marry and produce the rugrats, they get caught in the problem of moving or staying and how it will affect the chiildren. Ergo many stayed put in from their late 30s on simply to keep their children in the schools and homes and social circles they knew.
Also it is a LOT harder for a dual-income couple to move. One has a great career opportunity somewhere but it is a place where the other can’t find anything. Pretty common problem.
(2) McMansions in exburbs are the playthings of the 30-40 somethings who thought their progeny where ‘entitled’ to live in such places. Hardly the 50 year olds buying those places.
Really. You seriously need to get some helpto deal with the problem you have with your parents.
You are so right. (On this blog, I think of you as Ann “Just the facts, Ma’am” Scott.) I am a Boomer, and McMansions have never appealed to me in the slightest. I don’t have a single friend who owns one or lives in one. We mostly prefer small, mid-century jewel boxes; 19th century farm houses; or Federals. Historic houses that require attention, care, love and hard work. The only people I know who live in McMansions are my niece’s 30-something friends (married with young children) in the suburbs of Dallas. Trophy Club, anyone? Like the Talking Heads sang, “I wouldn’t live there if you paid me.”
Watched House Hunters last night, while waiting for The Shining to come on the tely. Cracked me up that this young couple, late 20s perhaps, were so picky about choosing their first home, all of which looked like something a Great Grandma would like, with fussy tract house colonial features. The MBR wasn’t big enough, not enough bedrooms/bathrooms, the kitchen was outdated, on and on. Then I noticed the parents were always in tow, and then it dawned on me, these kidlets weren’t paying for the darn thing, so of course they would approach the whole thing like buying an iPod.
“Really. You seriously need to get some helpto deal with the problem you have with your parents.”
I am sorry you chose to read things into my post that were not intended by me to be interpreted as you have done.
~Misstrial
I thought that WW2 started in 1939, and ended in 1945.
What exactly is the relevance of 1907 to job migration and WW2?
Have you ever thought of composing long posts in Word, spell-checking, and cutting and pasting?
i am going to start calling you “Ad Hominem Annie” if that’s okay?
Talk about hitting the nail on the head.
“You really do need to get out of your midset of false cliches.”
And you really need to get out of the mindset that you have to personally attack everyone you don’t agree with.
Maybe it’s different in the U.S, but a lot of the market speculation in BC is the baby boomers investing. My parents have friends that own three houses, we can’t afford one.
There is nothing irrational about moving away. But people somehow believed that had to be on the coasts. Some is corporate inertia. It takes years for a fortune 500 company to change course. Its like a super-tanker. After turning the rudder, you see no perceptible change in the course for a while. Then the ship turns. Once it starts turning, it doesn’t stop until long after you’ve moved the wheel.
Got Popcorn?
Neil
Paying to live in high price houses that are falling in value the smart ones will/have moved out of California. For those waiting for the “up turn” reality will be there.
Problem is realtors & sellers in out-lying areas will be waiting for Californians so they can jack-up the property prices to the detriment of locals.
Californians: bargain down prices and be prepared to walk-away. Low-ball even in low-cost (to us) States.
Beware of city data forum where realtors posing as average posters trash-talk California only so they can cash-in on you when and if you decide to relocate.
~Misstrial
I have heeded this. Ironic thing is all the people leaving FL for TN, GA and NC have inflated prices there to the point that it’s no cheaper than FL anymore. Prices there have been jacked up while prices in most of FL is crashing big time.
I saw a REO property in Palm Bay, FL at $68/foot and it’s a nice house at that. I could not find anything cheaper in Georgia and it’s the same price in TN and NC. You do get a basement if you leave FL. You also get nice 4 season weather. But my dad thinks Florida has the best weather and that everyone wants to live there. If so, why is FL just as cheap?
One had this question, “There’s nothing irrational about people moving away from CA and DC in order to have more reasonably priced housing & stay employed. This should have happened quite a while ago. Question is, what took them so long to wake up?”
Ans.: A new generation that by and large thinks differently than the Boomers.
Gen-X, Y, and Millenials:
Are not interested in McMansions.
Do not want to fund Boomer retirements.
Are willing to move to other locations in order to purchase a home - something the Boomers were generally reluctant or refused to do.
~Misstrial
I’m not sure how so many people are thinking about “bolting.” Most of the people I know that want to leave San Diego or even NM are solidly anchored to a house.
I hate talking to people about real estate because it makes my head hurt when they parrot all the RE crap that’s gone on. We had a friend out visiting from San Diego last week who assured us that North County hasn’t dropped in value, just leveled off a bit. This is a really bright, successful engineer, BTW. Around NM I still hear, “it’s different” and “everyone wants to retire here.” Let me tell you, NM is not a good place to retire to if you have any health issues. If you need an oncologist or rheumatologist you might as well just fly yourself to Denver or Phoenix because not a lot of top doctors make their homes in this state. Most of the more rural parts of the state have a surgeon or cardiologist fly in once every couple weeks - if that.
Yes, this is true. It is also true regarding services such as hair salons, nail salons (cleanliness), and dentists/orthodontists.
NM also charges sales tax (”professional services fee”) on doctor, dentist, accountant, attorney services. Further, NM has really lousy law enforcement, a sizeable population of illegals and their anchor babies/kids who have wrecked the public education system.
Anyone considering moving to NM should be financially prepared to homeschool or have the children attend private school. As the daughter of a master teacher for L.A. Unified, I would place a 12th-grade education in NM as equivalent to a 6th-grade education in Irvine, Fountain Valley, Huntington Beach, Capo Beach.
You get what you pay for, folks.
~Misstrial
LOL. I freaked out (like ready to scream at the receptionist) when I saw the tax for the first time. But apparently in NM everything remotely doctor related is tax deductible - gas, hotel, snacks, mileage. Then when my doctor sent me to a specialist at UNM in Albuquerque I had to freak out a second time at how prehistoric the facilities were. Seriously not updated since the 70s. Doctor was prehistoric, too. It’s no wonder every town seems to have dozens of “alternative” healers, acupuncture, herbalist, shaman, spiritual healer, you name it. At least they won’t damage you as badly as an incompetent doc.
We’ll probably put our kid in school in Los Alamos when he’s old enough. Criminals seem to have an aversion to living in a place where the FBI regularly goes through the garbage. Since we’re renters we can move wherever suits us best
I guess there’s a reason it still has Mexico in the name, even if it is “new”.
Anywhere there are physicists, there are excellent public schools for their children with above-average (for the US, natch) science and math programs. Los Alamos is a good bet.
Wow, our experiences with Specialists in Albuquerque have been great. Our family members see a Neurosurgeon, and a Cardiologist. We have seen modern, clean buildings and highly educated, articulate physicians.
Hmmm….must be a “different” Albuquerque.
Guessing here from experience in VT: Albuquerque is the major metropolitan area in NM. Burlington, VT has the latest in doctors, facilities, etc. The farther away you go from Burlington, the harder it is to find medical care and the worse the facilities.
Excellent choice! I have a dozen friends in Los Alamos who work at LANL. The public schools are fantastic there. Your children will go to school with the children of some of the brightest people on the planet.
I agree, some very bright kids and a few serious overachievers. Think taking differential equations in HS while reading novels in the back of class. I might suggest you’re sure your kid likes it and can handle it. Some parents freaked out when no one got into Stanford for a couple of years in a row. HS grad class is about 300/yr.
I have three kids in the Los Alamos school system, and it is quite good for advanced students. However, there are many who don’t make it - and much less help available for those who struggle than elsewhere. It’s like many things in Los Alamos, good for some people but quite unbalanced overall.
On a related subject, the lab (LANL) is doing quite badly now. The working environment has deteriorated significantly, and the funding outlook for the next few years does not look very good. I’ve been spending much of my time at CERN lately, and would be happy to sell my house in Los Alamos and move on. However, family issues are making this difficult.
Lots of houses for sale in Los Alamos now. You can even find some reasonable rentals. It is however, doubtful you will find a job a LANL.
Misstrial, I think your info is a bit out of date. I don’t think I’ve seen sales tax collected on medical services for over 5 years now. We can thank former Gov. Gary Johnson for that, among other things. The rest of your rant is dead-on. Just *try* to find a competent dentist! The taxes are not the worry! And good god, the violence is truly unbelievable! We have a good CCW law for a reason here. Ya’ll best not come round these parts unless you are ready to kill or be killed. It’s just the way it is.
Doh! Apparently they just don’t note the tax on your receipts anymore. My bad.
They still tax professional services. I know this from personal experience.
Thank you for your correction.
All the best to you.
~Misstrial
Thank you. Your tolerance is appreciated. I don’t even have the excuse of being a product of the NM public school system. Damn, I really thought they repealed the taxes on med service when they pulled the plug on groc tax. Guess I just bought the hype from the media and never researched it. Thanks again, this blog is a jewel.
Now that’s harsh Misstrial
“Let me tell you, NM is not a good place to retire to if you have any health issues.”
That’s true of most rural areas. In the Columbia Basin you have to plan on a trip to Spokane or Seattle for a heathcare crisis though I prefer Seattle. Having reliable transportation is a must, and planning around winter snow over the mountain passes must be included.
Thats why I haven’t even considered NM. Ive been paying close attention to Pennsylvania, Ohio, West Virgina, Tennessee, North Georgia and a few other states. It looks that Pennsylvania is going to be my choice for now. WV’s taxes are too high. Ohio’s big cities have too much crime and the small towns don’t have enough shopping. GA and TN are as unaffordable as some parts of Florida at this point.
Some of us need to be near the ocean for our sanity. I feel landlocked if I am too far from the coast. Toss in “surfer’s addiction”, and there’s a good reason to stay in California. I guess we could move to Hawaii…
“I hate talking to people about real estate because it makes my head hurt when they parrot all the RE crap that’s gone on.”
It’s pretty amazing how people say the same thing everywhere. That is my favourite thing about HBB, hearing the same RE expressions from other places that I hear where I live.
“priced out forever”
“didn’t want to keep throwing my money away by renting”
“It’s different here”
“I wouldn’t give it away”
“rich people from (insert country) want to invest/retire/move here”
It’s like a very long drinking game, isn’t it?
I know quite a few people that have taken up jobs in the DC reason because they thought it would be a nice place to live. After all, it looks so cool on television, whether it be Scarcrow & Mrs. King in the 80s, X-files in the 90s, or any the current cop shows on the tube (e.g. NCIS).
The truth is, that within several months to 2 years of arriving here, they realize they hate it. It’s expensive, crowded, has horrible traffic, and no culture. You don’t work to live here, you live to work.
Unfortunately, for two-income spouses, it can be hard to find a place that has the right mix of jobs for the husband and the wife. I know lots of couple who feel stuck here, but will bolt the instant the right mix of jobs opens up elsewhere. I heard someone describe DC metro as being like a roach-motel: you can check in, but you can’t check out.
The culture is not bad if you live in D.C. or near-by. Smithsonian museums, national monuments, film festivals, live theater, cherry tree blossoms, embassy events, Congressional hearings, parks–there is quite a lot to do if you are not burdened with a house or commute.
You can go to the Smithsonians and monuments only so many times.
I will say that i’ve seen some good live music at the 9:30 club and the Birchmere. But, I can see a lot of those same acts in Kansas City without having to endure a long metro ride.
I used to live at 930 F St., where the 930 Club was originally. I had the penthouse of that building and the 930 Club was my local bar.
The Skinny Puppy Show at the 930 was my first concert. Many other great shows followed. Good times.
Ha ha, give me a break. Sure, I spent some lazy summer days at National Air & Space Museum, I think mostly for the A/C and getting to talk to friendly foreign tourists, but seriously… and I’ve lived in a number of places … DC has a real lack of culture, unless you count the innovative systems for buying and selling drugs under the noses of the police that the locals have dreamed up.
The only really cool thing you have in DC that you don’t have elsewhere are all the free talks given by scientists and researchers employed by the Feds.
D.C. has the strangest vibe of any big city I’ve visited in the US. I attended a conference there 2 years ago and was staying in a hotel near Dupont Circle. Got completely lost trying to walk back from a nearby restaurant and got the cold shoulder trying to ask locals for directions. Like we were invisible. Finally, this random guy, who happened to be a Vietnam vet, walked us back to our hotel. The Mall was also a disappointment. The lawn was full of weeds and poorly groomed. I was embarrassed that foreigners would see such a shabby looking public space devoted to our national capitol. The Devil is in the details.
All I remember of DC is gigantic tourists in shorts and tank tops gobbling down chili dogs in the 105 degree heat. Oh, and thousands of wool-clad morons reenacting Civil War battles in the stifling humidity.
How did you leave out the Kennedy Center, several legitimate theaters, numerous part-time orchestras, professional sports teams, thoroughbred horse racing, many cheap or free chamber music concerts, numerous ethnic/cultural festivals, and night clubs and restaurants of every type imaginable. Plus, most of it is accessible with safe public transit. For culture/entertainment DC has surpassed Chicago and is now the “second city.”
“Second city?” Surely LA has about 10000 times as much culture/entertainment as DC?
RE: they realize they hate it. It’s expensive, crowded, has horrible traffic, and no culture. You don’t work to live here, you live to work.
I’ve finally figured out there are 4 keys to a good life.
1.Good health
2. A good spouse
3. A good job
4. A good place to hang your hat.
Much easier to keystroke-than it is to accomplish.
Good list, but I would add
5. Wonderful child.
I would elaborate: Heathy, beautiful, wonderful children.
Funny. I would add…
5. No children (They detract from the first four points).
Definitely need the children. (My first is on the way!)
I would add #6: Sense of security.
Got Popcorn?
Neil
Gee Molly, I suspect you are operating from no data. Pretty selfish attitude there. Neil, thanks for #6; you will enjoy your child in ways you can’t imagine. My daughter has been my life and joy since the day she was born. She is now eighteen and headed for university with a full scholarship. She is the most wonderful thing that has ever happened to me and I am hugely richer for knowing her and loving her and having the responsibility for her. I know it sounds trite to people who have not had children, but until you do you are incomplete. I know lots of you will reject this with lots of sarcastic remarks, but truly you do not know of what you speak.
Definitely need the children. (My first is on the way!)>
Congrats!! When’s the baby due??
“5. No children (They detract from the first four points).”
Agreed.
“Pretty selfish attitude there.”
How sad when people feel someone is “selfish” for choosing not to have children. Goes perfectly with the title of this thread.
How sad when people feel someone is “selfish” for choosing not to have children. Goes perfectly with the title of this thread.
Crips. There are days when I wonder about this planet.
The bottom line: choosing to have children or not have children is a choice you make for your life, not a statement of moral superiority.
Having zero children does not make you superior to your neighbor down the street with 4 or 12 or whatever (although they are probably more tired than you.)
Children are also not an obnoxious alien, life form. They are people from the moment they are born - please remember you were once a child, too. I will give you that the *parents* of obnoxious children leave much to be desired.
For people with the 12 or 4 or whatever children: you are not more complete or more generous than your neighbor down the street with zero children. Children make demands of you in way it’s hard to imagine before kids but the only person who “completes” you is yourself. It’s quite possible to fail at parenthood.
Thanks for listening. Please breeders (that’s me) and non-breeders go play in your separate boxes for the rest of the blog.
Congrats!! When’s the baby due??
8/8/2008, Olympic baby!
:) 
Ppl with children always think those who don’t are at a loss.
Why is that?
For whatever reason(s) it is what it is and some should not have children that have had ‘em.
“Pretty selfish attitude there.”
How ironic. I’m not denying that your daughter is great, but did you happen to notice that all your comments about her included lots of “I” and “me”? Let’s not “kid” ourselves, people choose kids for their reasons and no one else’s. Isn’t this, by definition, selfish?
Congrats Neil.
Also, 8’s are a fortune #.
“I would add #6: Sense of security.”
No kids, no spouse, and no major career.
A substantial savings account and in this environment, no sense of security.
google “hierarchy of needs”
you guys have Takoma Park, Adams Morgan and Alexandria (town proper), just to name a few.
Napalm Fairfax, Arlington, Prince William, Prince George, Montegomery Counties and start over again…Okay to drastic a measure.
Lived in NOVA for half of my life, and I remembered loving western Virginia most (Washington and Jefferson National Forest).
Cinch
Hey, WFC is okay by me…
Old Town Alexandria is alright, but kind of limited in its own way. I used to go there to get away from the oppressive suburban blight.
Now PWC, you could definitely napalm that and nobody would cry. Ditto Stafford County, I suspect. Fugliest bedroom community in the USA.
Shenandoah Nat’l Park is absolutely beautiful.
Culturally, there is no place on earth that can compare to Italy. You have no time to visit the places there, because you will die first. Even if you have the money to quit working tomorrow.
What is Alexandria like? I might be moving there (USPTO position)
It has lots of plants, and mosquitoes in the summer. Upper middle-class type of joint.
I was at the bank this morning (SunTrust) and I talked with the young man who was helping me with some CDs.
He appeared to be about 25-26 yrs old, was recently married, and moved to Fl from Cleveland about 1 year ago. After we chatted for a bit, he asked me if the current crisis in banking and housing was something that was associated with the presidential election. I could tell from his expression and demeanor that he was sincere in this question. I realized that this was an indication that we have a whole generation or two that are naive about what we are facing.
I asked him if he was familiar with the term “100 year storm”. When he said he had, I told him “This is it for the economy”. I told him that when he was my age (62), he would tell his grandchildren that he had lived through this era although we don’t know yet what the term for it would be.
He said that he and his wife were considering buying a starter home as the prices had really fallen and it seemed to be a good time to buy. I told him now is definitely not a good time to buy IMO and he should wait at least until the end of 2008 and then re-evaluate. He said that worked for him as they had to save a down payment anyway.
Tell him to start looking at houses in the bay area when they are not absolutely insane compared to median income then does it make sense to start looking. This beast won’t be dead till it has a stake through the heart.
Why did he relocate to FL? Everyone, including me is leaving FL for cheaper locations!
Dunno, he said his parents still live in Cleveland. I did not get more detailed info. He was commiserating with another customer who walked by (he obviously knew him) about 24″ of snow back home.
By the way, Bye I have lived here 62 years and I’m not leaving.
I moved from North Carolina to Florida two years ago & I’m staying too. Many of the problems that Florida has (except hurricanes) can be found all over the country. I’ve lived plenty of places and I like Florida just fine.
Thats because you can buy in Florida just as cheap as NC. Those who left FL for NC are moving back to FL.
How cheap will NC get?
This is also a generation thing. There is still is a generation gap, in the 1960’s it was the boomer vs their parents. Now it boomers vs latter generations. With the boomers expecting the latter generations to cover their financial ass.
How many boomers expect a twenty or thirty year old to devote huge part of their income to buy their house so the boomer can retire in comfort.
It is the anti-theses of the 1960’s.
Considering the prices were driven up by 20-30ish year olds doing suicide mortgages starting in 1998/99, you can’t say that anyone based their ‘plans’ for anything on the expectation that people would be that stupid.
Uh huh…..someone bought a house in 1985 with the expectation that around 2001 a bunch of ‘just gotta have’ 29 year olds would take out mortgages no sane person wold consider so they could buy the house they believed they were ‘entitled’ to have and thus drive prices through outer space.
Yep. People now in their late 40s up through age 62 really made their retirement plans starting back in the early 80s and 90s based upon such an expectation.
Prices go up with inflation. That is how it works. The house we bought in 1985 cost more than the seller had paid for it in 1958 - like about 6 times more. What do you expect? To buy something at the same price as someone paid 20 or 30 years ago? You need a lesson in the fundamental effects of inflation.
Quit whining. You can thank those in their 20s through early 40s for the orgy of buying. If the REO next door sold for a certain amount, you can’t expect the 62 year old neighbors to take less for the house they bought 30 years with a 20% downpayment just because YOU feel ENTITLED.
Some time in the future prices will be back in line with income and back in line with historical appreciation rates. But you STILL WILL NOT buy a house 2010 for what someone paid in 1980. Not gonna happen. You will pay at least 230% more (assuming 3% compounding inflation) - and probably more if the geographic area has changed and the amenties such as shopping and transportation have improved or demand for that area has increased because it has become more desirable or if the owner had made bona fide improvements such as adding more sq. footage.
No age group of individuals expects anything from you in terms of buying a house so they can use the funds in retiremenr. It is WALL STREET that wants you to spend most of your income on buying a home.
You really really need professional help to deal with whatever the problem is that you have with your mommy.
Um, check Detroit or Buffalo housing prices. I would guess you could find properties they aren’t much more now than they were in 1980.
“You really really need professional help to deal with whatever the problem is that you have with your mommy.”
Wow, I think Ben needs to take another look at your posts.
Think its called “flaming.”
~Misstrial (HBB poster since 2006)
“Quit whining.”
Yes, I would say Ann’s posts are laced with flaming. It gets old.
Think its called “flaming.”
No, in keeping with the shrinky/therapeutic tone, call it “projection.”
Hmmm, classic narcissist technique…
You really really need professional help to deal with whatever the problem is that you have with your mommy.
I had a very good high school teacher that taught what people say about others conveys not reality, but is instead a reflection of their own thoughts, feelings, and convictions. It’s old fashioned idea that says you might be able to understand someone’s character from what they say about others.
So what am I supposed to think of you given the above statement?
Ann - your comments or more condemning of yourself than those you judge. Enough already. I hope this isn’t the way you behave in legal debates.
“Prices go up with inflation. That is how it works. The house we bought in 1985 cost more than the seller had paid for it in 1958 - like about 6 times more. What do you expect? To buy something at the same price as someone paid 20 or 30 years ago? You need a lesson in the fundamental effects of inflation.”
So in other words, yes the boomers did expect the next generation to pay for their homes at inflated prices because that’s just the way the system works. Granted we did have overshoot on this most recent boom, and thankfully you have graciously shown us that is was all the “youngins” fault.
Keep throwing all those numbers around in your posts Ann, they’ll stick to something.
Can we all agree that every generation from the greatest generation, the boomers, gen X, and gen Y all jumped on board the insanity train? We don’t really need to single out any generation as being responsible for the outright greed that fueled this mess. The greedy and the foolish fueled it and they crossed all generations (and always will, one’s born every minute).
60 year olds, remember the couple that HELOCed their paid for 120K home and lost it? Not Boomers or Xers, just greedy and foolish.
Let’s not break down it to silly squabbling on HBB, there are far more important things to talk about.
I should add that given the inflated expectations of the 20-30 somethings, you probably wouldn’t have bought the house we did in 1985. 3 bdrm, 1 bath 1400 sq ft and nothing had been changed since it was built in 1958. And if you did buy it, you would have been whining about financing the bills from the contractors where we did every bit of work rehabbing the place from new subfloors to insulation to wiring to moving walls to laying tile to installing plumbing.
AnnScott, I wouldn’t be so sure about your reasoning. People thought that the S&P 500 in 1982 couldn’t possibly be at the same level as in 1966, especially given the ravages of inflation over that time period. And, stocks historically have been proven to be far superior to housing for return. Now, I don’t expect 1980 house prices to return, but there will be a fall far more dramatic than almost anyone believes.
Around here (Eureka, CA), most people that make even $60K have nearly all their net worth tied to housing, typically in the form of a large, wasteful primary residence from the 1950s and a couple of investment properties. Boomers in particular seem attached to this idea of “real estate always going up” and have inherited most of their wealth from their parents. One bubble after another seems to have doomed the Boomers; first stocks now housing. It will be the Gen X, Yers that will be supporting these people in their retirements. And, eventually, their real estate will be pried from their cold, dead hands at low prices.
Please spare me the generalizations of the 20-30 somethings. I, a 30-something, make about 7x the bay area median income and i’d be perfectly happy to buy/live in a 1400sqft condo. I choose to rent until real estate is a better value. Inflated expectations? Don’t think so. You may want to tone down the self-righteousness a bit.
Oh, oh! Medication time!
You know not where of you speak. You’re forgetting about the multitudes of 40 and 50 somethings who ALSO felt entitled and helped drive up real estate.
Many people nearing retirement cannot afford to retire because they have maxed-out credit-cards to the tune of $ 50,000. Stupidity and greed know no age limits.
And I’ve known plenty of 30 somethings who bought beautiful, old homes and spent hours and hours rehabbing it themselves. Conversely, I know lots of 40-50-60 somethings who bought McMansions!
Oh, I wanted to increase income via the fix/flip routine, but somehow, I thought I had to come in with a down payment, so naively, I saved and then watched in shock at all the increases in home values by the minute.
As my re friend in NYC said today, she would always ask ‘why don’t you qualify these buyers’ and the response to her was ( in the last 2 yrs) ‘not to worry, they WILL be qualified, everyone can get qualified’…and that is in NYC.
I have friends’acquaintainences(sp) etc as we all do that got on that “lucky train” and sold at the right time.
That is a very crass generalization. I am 26 and would love to be able to afford a 1400sq foot rancher that I could fix up. However when you are expected to pay ridiculous prices for said rancher, and both of you have to work full time to pay the mortgage, it isn’t a very realistic dream. I wish the bottom would drop out of Canadian RE.
I’m a boomer but I am not one of what you describe. I rent, have a diversified investment plan (including government securities and precious metals outside retirement), and I accept full responsibility for my thoughts and actions.
I am slightly pre-boomer (62) and I don’t (and have never) expected anyone to cover my financial ass. This generalization is a gross misrepresentation of a truly work ethic oriented generation who accomplished a whole more than you seem to think. Wait until you have your era in the rear view mirror before you rush to judgment!
“And they do it in places where NOBODY could ever afford to buy it if it had to be dumped in a hurry. I see this phenomenon everywhere. A big monstrosity of architectural puke splattered against a landscape of 3/2 ranchers.”
These homes are in like type neighborhoods and usually not sitting across from a 3/2 ranch but when I pulled this Fayetteville-Manlius school district list of homes available I thought the numbers were unsustainable for the area. Median income is, I believe, $72k.
http://cnyhomes.com/Listing/Search/search.cgi
Does it remind anyone of bubble zone pricing?
My apologies, link doesn’t work. Let’s just say there were pages of homes over $500k-$1 mil + in a very small town.
I’m looking to make a move from Silver Spring, MD just north of DC down to VA to make the commute easier for a new job I’m about to accept in Arlington, VA (just outside of DC).
I agree with the posters above about this being an awful area to live. Unfortunately, there are a lot of jobs here in the defense industry of engineers and they pay well. This new offer increases my salary +20%.
But, trying to find a place to rent here is awful. The prices on 2 br apartments in an area close to work are 1800 or so. To get a townhouse with a garage for my bike seems to be around 2000-2200. All of the posters on craigslist for rentals seem crazy.
I’ve checked realtytrac for the foreclosures in the zipcodes I’m looking at and I notice a TON of foreclosures and bank owned property. With all of these places sitting on the banks books it seems like such a waste. Put them on the market so I can live there already!
I’m getting the feeling that there are a LOT of people trying to rent out places for amounts that will actually come close to covering their mortgage as they are still planning on riding out this storm… I’d sure like it if I could get rent a place for less than what a mortgage payment should be.
I see zero deflation all around me. I do however see tons of cars sitting on the parking lot known as 495.
Don’t try to rent in Arlington proper. Despite the place being really ratty the rents are INSANE.
Try going out the yellow line to Huntington. Maybe find a housemate? I met a number of people who shared houses or townhouses.
Also, what about the rents at Franconia-Springfield? Super convenient location and there used to be a LOT of young professionals (& not the ‘trendy’ ones, either) living there. They walk to the Metro.
You might try renting out a basement apartment. I know several people who have done that — if you look around, you can get a pretty nice place for a lot less.
Hi. I’ve grew up in Wash DC, (Fairfax County, VA) The city has improved greatly. I guess I am a snob having lived in NY, Paris, and San Fran. DC has improved so much since the days of Mayor Marion Barry (the crackhead.) Streets are no longer falling apart, tons of new development. It shocks me how nice it has become. Though it was like a third world city for a long time. Public schools still problematic in many neighbohoods. The city has improved so much that the prospect of staying here permanetly for work no longer bothers me. There is lots to do - both culturally and outdoor rec. My big complaint is the weather / climate. Really miss bay area. Yes DC is exspensive. But prices falling - not enough yet to buy. Traffic is bad if you plan to work downtown and are not near a metro station.
I have a relative that is a diplomat. He was sent back here for several months of retraining before going to his new assignment. While he was here, the government provided him with a condo. The building was relatively new, and to him it seemed relatively empty, as if he was the only person living there.
I have a feeling rental prices will collapse soon — too much competition in the DC area.
I don’t know what the commute would be like to your new job, but you could try someplace just outside the beltway. I was searching Longandfoster.com, and there are plenty of houses for rent in Burker for
We were just looking for a rental at the end of last year in N. Arlington so I totally feel your pain. (Our realtor actually found us a decent “deal”–$2600 for a small but nicely-laid out ranch. We saw some amazing sh!tholes along the way, though. Arlington landlords have NO shame in their game. I love how they act like they are doing you a HUGE favor by letting you see their rental. Aggravating!)
Have you looked in the Shirlington area? Lots of new & empty condos and a nice commute. It seems like there should be a ton of rental supply in Clarendon area too due to all that condo overconstruction but we were looking for a house so I didn’t really check out that area.
There were also a lot of townhouse rentals in the Vienna area near the metro (or you could bike to Arlington to work on the bike path from Vienna). You could also try the Falls Church neighborhoods between 66 and route 50. Non-Falls Church city (Fairfax Cty) rental prices are cheaper b/c the schools are crappier, so if you don’t need the public schools that might work for you. Be careful though b/c some of the areas are shady.
Anyway, good luck.
A bit off topic but certainly related to falling prices and its effect on banks: seeing Bear Stearns near failure really drives home that some of these other struggling big banks could easily end up in the same situation, with very little warning. I keep about $50k at Citibank in my primary day-to-day banking accounts, but they’re clearly getting desperate now that they are, as Barron’s eloquently put it, “begging sheiks” for funding.
I’m starting to think seriously about moving to a new, stronger bank. Wells Fargo seems like the strongest big bank at the moment, but I am really turned off by their excessive fees for everything, even for balances above $25k (their best package).
Where else might be a good bet in the Bay Area? Not really interested in a small bank or credit union unless it will reimburse me for non-native ATM fees.
JB; why not stash the bulk of your money in a smaller/less costly bank and keep a small amount at B of A for your convenience banking?
Put that money into foreign funds. Capital gains of 10% over the long run.
Bye, if the dollar is so low, isn’t buying foreign funds a bad exchange rate? I have a roll over coming up but not sure my dollars count anywhere but Target and rent.
The exchange rate is not really relevant - what’s relevant is whether you think it will go up or down from here. I actually do have substantial holdings in the CurrencyShares FXA exchange-traded fund, which tracks the Australian dollar, and also pays a pretty nice interest rate, close to 5.5%. Might as well take advantage of the fiscal responsibility of the Australian central bank!
jbunniii, how about you get yourself 50 1oz Krugerrands or equivalent?
Just sayin’.
It’s ironic that this blog — which basically discusses the effects and after-effects of speculation each day — has so many gold proponents.
Those who participate in speculation, should be prepared for any ill consequences.
The gold chart looks just like Shiller’s Housing Bubble chart:
http://www.kitco.com/LFgif/au00-04.gif
Just sayin.
there are very big differences between gold and housing:
For starters, gold lasts forever.
But more importantly: gold is a bet on the future of the us dollar. The reality is that unless youre broke, you’re speculating on something. Being in cash is extremely speculative. Frankly I prefer gold…
Thirdly, betting against gold is another way of saying ‘it’s different this time’. I don’t think it is.
Hi, Sweeney.
Speaking of Sheeple, I hear Bear got in trouble by deciding to go big into mortgage banking in Spring 2007. Not Spring 2004. Not Spring 2005. Not Spring 2006. Spring 2007.
I presume that those who made that decision earned more in bonuses the last two years than most of us will earn in our lifetimes. And yet they piled onto the sinking ship AFTER the whole debacle had sunk in to the MSM!
HSBC is another previously well-run bank that is getting sunk by having bought subprime lenders. But at least they bought at the top.
And the WSJ says the former head of Bear Cayne had to be reached on the golf course to joing a board decision to beg for a bailout or face bankruptcy. I don’t know about you but I’m at work on workdays, unless I’m out of town or have something to do at home.
This is the latest BS that the local scum are promoting in my little corner of the world. Be sure to click on the “reasons to buy” link. This just proves that all of you who think that your particular area is different are being misled. It’s all about US.
http://www.buynowupstate.com/
Greenville, SC? I know someone online who bought a nice house on 3 acres for around $230k She said it was a bargain compared to their smaller Florida house they sold for $275k.
When everyone wants to buy in Greenville, It’s just another location I have put on my “avoid” list. Very few people want to buy in NW Pennsylvania so I am getting a reasonable price there. Don’t buy in locations where the herd mentality has flocked to.
termite, I’m in Greenville too. Geez, is it possible we could have a HBB gathering even here? BTW, I bought my $250k house here in June, and based on what I see for sale now, I overpaid by between $10k and $20k. I guess it’s better than the $60k I overpaid in Florida in March ‘06. I just keep chasing it down.
Sell your house, rent and wait for the bottom. Don’t catch a falling knife, pass it to someone else.
“There’s nothing irrational about people moving away from CA and DC in order to have more reasonably priced housing & stay employed. This should have happened quite a while ago. Question is, what took them so long to wake up?”
The answer is that they were enjoying the gravy train of their equity rising faster than inflation. They all didn’t succumb to maxed HELOCs and/or serial refi’s. Now that the ride is over, they may as well leave.
Interesting that many of the quotes are from people who believe they will still have a job over the next few years. Or at least jobs which still pay enough where they can afford to buy $500,000 1 bedroom sfh. When you see that Chrysler (for example) is offering buyouts to current employees so they can re-hire people at 50% less wages and VERY limited benefits, the writing is on the wall.
Seems very few of the sheeple realize the dire straits the US economy is in at this time. Not surprising when you get the Washington whores like Bush, continually spouting, “The US economy is strong.” It ain’t.
Of course, this administration is doing the usual George W. Bush two shoe shuffle spin as usual. Not sure who has the best propaganda machine - the NAR or GW Bush but both are liars.
One or two quoted above seem to have discovered the answer - which is when property prices drop to where the average income can afford to buy, then we will see some movement. What isn’t mentioned, is that prices might drop but so will incomes and that means a bigger property bust than anyone has imagined. We are in for a BAD recession and even property prices around 1999 might no longer be affordable which means a serious breach of support.
Here’s the problem with the current state of the USA. It’s financial institutions are in total disarray and, like Bush, they have lost all credibility. The Fed has also lost all credibility. These moves (interest rate drops) do not convey the feeling that the Fed is in control. It conveys the sense that the Fed is panic struck. Caught like a deer in the headlights. Around the world the USA has lost all credibility. The US dollar is now a banana republic peso. What else can you call it when toilets like Bolivia have signs stating, “No dollars accepted.” Actually, it’s worse. Banana republic pesos are actually worth something because those countries do not have the massive debts of the USA. The US dollar is worth very little once you strip out how much the USA owes on it’s I.O.U’s to places like China and Japan.
We are watching a once in a lifetime sea change where the world is eventually going to de-couple from the US in several ways, including dumping the US dollar for trading oil for some other more stable currency or, more likely, a basket of currencies.
Sadly, the average American is not yet willing to accept that change and hasn’t got a clue about just how serious the financial state of the US is at this time in history. I explained to a friend the other day (who was complaining about how the Arab oil sheiks were gouging) that much of the increase in gas prices was because the oil producers are simply moving up the price of oil as the dollar drops in value. He had a look of complete non-comprehension on his face as if I was talking some theory concerning rocket science.
My theory is, that for almost 50 years (Vietnam being a classic example) the US thought all you had to do was throw money at a problem and it would be solved. Truth is, it didn’t solve the problem but, at least, the USA had money to lose. That “throw money at a problem” mentality still exsists but, sadly, another element has been added because of people like Ronald Reagan (deficits do not matter). That element is, “throw money at a problem and if it isn’t working print some more money and throw that as well.” Ben Bernanke proves the point with his, “Throw money out of helicopters,” quote. Those days are over. What Bernanke and most of the USA doesn’t understand, is that the world watches those dollars fluttering to the ground and cannot even be bothered to bend down and pick them up. The world is awash in US confetti money and what was gold (the US dollar) all around the world has now changed to base metal.
It affects the USA because it means a serious decline in the standard of living for the section of society which was the strength of the USA. The middle class. That big chunk who made $60 an hour in manufacturing (gone). Who contributed to a well financed pension scheme (gone). Who had good medical insurance (gone). Who could fill up their vehicles with cheap gas (gone). Who could afford good vacations in cheap places like Europe (gone). Who could afford to give their children a college education (gone). All of those things mentioned have gone forever and they are NOT coming back.
Btw, I mentioned Bush and Reagan but don’t get me wrong. If Clinton or Obama (God forbid) gets in, things could go from bad to worse as they attempt government bailouts by having the Fed print more confetti money.
Is any of you saving and investing in foreign funds? If the US dollar is so bad, why is it not yet 3 dollars to the L pound?
Give it time.
Actually, let me re-phrase that. The British pound is really in no better shape than the US dollar seeing as the UK is the “51 state” anyway and closely linked to anything which happens to the USA.
That said, a lot of foreign money has been flowing into the UK but that might slow down because of the credit problem. UK property is very dependant on foreign money and much of the UK’s wealth has come, in recent years, from the City Of London’s financial district. I also heard that a lot of UK property was purchased by people from the middle east who “skimmed” all the US taxpayer money which has been poured into Iraq over the last 5 or 6 years. You might remember that Bush had pallet loads of $100 “bricks” (the money was in blocks the size of a brick, plastic wrapped and the wooden pallets were 6′ tall and 6′ wide) shipped over on planes to Iraq and a lot of those “bricks” went missing. If you buy property in the UK or Paris or Rome or even Ireland, there’s little chance the source can be traced. If any of those “skimmers” buy assets in the USA, there is a chance they might get caught and the assets seized….so they keep the money out of the USA (but they would like to thank the US taxpayer or Ben Bernanke for the gift.)
Actually, I’m more than surprised that the British pound has held up this long because, like the USA, they also have a serious financial situation. Massive national debt and massive credit card debts. Added to that, they didn’t go along with joing the Euro which has doubled in value in just a few years. The UK pound is more closely linked to the US dollar which is NOT good. Thus, the UK pound could very well hold hands with the dollar as it dives into the deep blue sea.
My guess is that the iraqi’s that skimmed is the tip of the iceberg. I’m guessing that the amount of $$$$ skimmed by good old Americans was much larger. I’d love to get a peak at the accounts held in Dubai.
Because the # is a sh***y currency too.
then banks sent our factories to mexico and china and now they are about to follow suit. BWahhhahahahahah. Wall Street had no respect for main street and now they are going to get their just rewards.
Mike , agree 100% with your post .
Middle Class, anyone else out there? Given the salaries people regularly disclose on this blog–more often than not in the 100K plus range–I’m apparently an endangered species. Adapt or die, eh? Salaries, IMHO, have also been disconnected from fundamentals.
Not to worry with the collapse of the dollar we will all soon be millionairs.
Turkish millionaires…
Globalization has been happening since before Columbus.
Maybe we should try to wind the clock back to when everything was perfect. 1986?
Uh… let me guess. You’re a Democrat, right?
I always think it’s dumb for single engineers to move out of California because they want to buy a house. When instead they can rent cheaply in zip codes where home prices are expensive! Why do people think they have to buy a house? And give up a great climate such as Redondo Beach so that they could buy a stupid house? Most people think you have to own where you work. Where is that rule? I violated it for the last 8 years or so. I rent in two places.
Thats because you can *own* a house elsewhere for way less than renting in CA. It would cost me $1000 a month to rent a starter house in Florida, but only $200 a month to own the same house in NW Pennsylvania. Huuuuuuuuuuuge disparity, it’s shocking.
Take a look at the local pay sometime. You’ll see the disparity sometimes isn’t so huge after all.
On the downside, you have to actually reside in California.
Dang, I knew there was a catch!
My rent for a studio a mile and a half from the beach in 2005: $1020 per month. My income that year: $223,900. Neighboring condos (in the complex next door to my apartment complex) were selling for $600,000 on up. This was in west Torrance in California.
That’s only 2.7x your income!! Why didn’t you buy??
Yeah, I see the smiley face. You and I know that I figured the buy prices were too high while incomes did not go up commensurately. I knew this back in 2004, the first full year I lived in that beach city neighborhood.
Amen to that. Count me as an engineer and renter in SoCal. Most of my friends have bought, some in less than ideal places with respect to ‘neighborhood stability’, often spending in excess of $500k for the privilege. I had been reading about the bubble since 2004 (thanks, Piggington!) so my healthy skepticism helped me make the right decision. It turned out great for us - I am renting a comfortable condo about six minutes (and never more than 15!) from work for less than half the cost of owning (and no depreciation worries!) while saving up quite a bit. 25% down? No problem. We’ll be ready - when sanity returns and my little Excel sheet shows black print, not red.
California life *can* be good, if you make the right decisions, like avoiding the standard traps involved with keeping up with the Joneses by driving a Benz, eating at trendy restaurants and buying ‘chic’ condos. Whenever I pass a C-class on the road, I just laugh - there’s someone who is apparently so insecure that they must project their supposed wealth by driving the only Mercedes they could afford - the truly wealthy buy the E-class (or in San Marino, drive a Camry - who knew?). It is the ‘lifestyle’ that gets you in trouble.
While I’m bearish for the short and medium term, I am hopeful that we can turn this place around in the long term. Southern California has had huge booms and busts for 100 years. While this will be more severe than the region has seen in a long time, the core of the bust is no different from before. It is sad that so many people are leaving for flyover country, but when prices do come back to reality, I see no reason why the area wouldn’t prosper comparable to any other major American city.
Funny thing is that those people going to flyover country will be stuck there and not able to come back to California for the real jobs when the recovery sets in. They will be stuck in houses they could not sell. Silly rabbits - leaving perfect weather for severe ice storms just so that they can buy a stupid house. Emotion takes over reason and is their downfall. I talked an ex girlfriend into selling her Hawaii condo and discouraged her from buying a house in Myrtle Beach, S.C. back in 2006. She kept her $ in CDs.
last time I checked, California does not have laws preventing people from renting. There are incredible beach apartments from Marina Del Rey to PVE and they rent for far less than PITI (and M - maintenance).
lol
But there is a societal urge to buy. Since too many areas have the price to rent very out of whack… Yes, moving in a way is “fighting the last battle,” but I’m amazed at the lag between reality and perception.
Got Popcorn?
Neil
Has Ad Hominem Annie gone away? Is it safe? Yeah, that’s my question? What’s so bad about renting? Lovely day here today in the OC sfr as the prices around me continue to unwind… interesting times.
I don’t think she reads again after posting. I’d be too mortified to post again after getting busted like she does.
But there is a societal urge to buy.
Don’t underestimate this point. I was very proud for a long time that I bought a house so young. (Ignoring how much of an emotional, financial, physical drag it was to upkeep a fixer-upper house with small children.)
I carried around in my head that buying a house was a sign you were “grown up” and you had made it. With the advent of HGTV, I think it’s only gotten worse.
With the advent of HGTV, I think it’s only gotten worse.
ROTFLMAO
What’s funnier, is its true. Nothing wrong with renting. I think my “wait it out bearish credentials” are just proven at this point.
Got Popcorn?
Neil
I still have not seen a Flip This House episode where they show the idiot flipper not making a profit (and their formula for whether or not a profit was actually made is laughable), or an an episode of What is My House Worth in which the homeowner didnt have a home that appreciated(although some lady was pissed today the realtor told her that her home probably only appreciated 20%). HGTV and its ilk is evil propoganda from the housing industry. I watch it as grade B entertainment as I do other things since it doesnt require thought. I wish everyone saw it the same way.
I saw that episode, too. The couple in Hollywood who HAD to sell their 3 bedroom house in order to start a family, right? I guess they were adopting triplets. I liked the Mexican tile bathroom, though
(hangs head in shame).
Todays-08 Piti, not piti for 97…now that would be a rent I would like. But pay in 97 made 97 piti not affordable Then. Just today.
rent vs. PITI is a bad metric since PITI remains constant while rent can & will go UP.
I certainly wish now I could have bought that $150K condo in Westwood in 1988, but I was only 20 then and banks back then didn’t lend money to people with no income and no assets.
Ben and fellow bloggers, I don’t want to be alarmist but the USA is facing an unimaginable financial catastrophe at this point in time. I know this is not relevant to the topic posted above but events have now taken on a terrifying life of their own if one cares to start joining the dots. Essentially what is now happening is no different from what happened in 1929. The deleveraging process we are currently witnessing is essentially the unstoppable unwinding of a massive credit bubble which will continue to the bitter end. Unknown to the public the Fed is at panic stations because the deleveraging is destroying credit faster than it is being created by interest rate cuts and liquidity injections. What makes it worse is that if the Fed continues down the same path it will end up bankrupting the American economy because there is no way it can monetize and absorb the trillions of dollars of cascading losses from CDOs, derivatives, swap contracts and negative yen carry trade positions. I think a good defensive strategy will be to get out of debt fast if you can, like a zebra running away from a lion, and start saving furiously. May God protect you and your families from the coming carnage.
If you think the FED is going to continue to monetize the debt than why pay off your loans. They will eventually become worthless on their own.
I think he said “there is no way it can monetize and absorb the trillions of dollars of cascading losses”
Well we will see ? If the FED can’t then the banks will fail. I think the FED is buying time to sort out the good the bad and the ugly debt.
Way overblown.
The Great Depression happened because the Fed failed to provide liquidity when it was needed most, and it allowed the banks to fail.
The problem is not liquidity, it’s solvency as can be seen from the Japanese 18 year slump. Lenders are not lending and borrowers are not borrowing despite abundant liquidity and that can only be a recipe for economic disaster.
Don’t forget Smoot-Hawley, as most modern anti-globalism folks conveniently seem to..
I gave a morning lecture at Starbucks in West LA on Barrington and National last Saturday with a couple people from Fatwallet forums who were debating whether this was the time to buy. I told them just to give me 2 hours and buy me a coffee and then they could make up their minds. I made a presentation, though it was just on pad and paper (with the addition of the Schiller chart and the Zelman chart) and walked them through the origins of securitization and why it expanded in the last 15 years (depressed interest rates / expanding credit and a need to put money somewhere perceived safe with a decent return). We covered lenders and their incentives, rounded out with moral hazard and finally ended with the charts and conclusions. It was easily 90 minutes and I got them to draw conclusions as I explained concepts. It was really wonderful and I got so animated. People sitting around us started to listen in and I got plenty of scowls, too, from what had to be the local used house salesperson crowd.
I got emails from people a day later saying they learned more in the 2 hours than they did in their econ classes and every one of them said they intended to wait to buy.
CCC
You must be much more charasmatic than I; I’ve tried what you described but cannot get anyone to listen.
You go, CCC (heart icon).
I would like to hear the presentation; sounds interesting.
i sold in studio city Ca,and narrowed my escape down to 2 locatins Asheville Notrh carolina or Pismo Beach Ca, choose the Beach and High Priced calif real estate,Mistake should have went to Asheville whrere the Real Estate Prices are 50% less..Happy I got out of LA at the top of the bubble and thankfully rent a wonderful beach house while watching prices fall fast here on the central coast,will the fall far enough and ever get allign with the 12 an hour jobs they offer in san luis obispo county… maybe maybe
I always thought that real estate was kinda cheap in California before the 1980’s, given the job opportunities . There was a little speculation bubble in the late 70’s that crashed when the interest rates were raised to 17% . But ,again there wasn’t to many foreclosures because people were qualified for their payments . The real estate market just went dead for a number of years until rates went down to around 12% . Real Estate people ate it during that period of course ,or anyone who needed financing had to pay a lot more ,but none of this thousands of people walking on mortgages . With the aerospace layoffs in the late 80’s , California went through a job-related crash downturn/recession for a while (followed by a earthquake in early 90’s) that took until around 1998 to recover from .
Right at a time when California was going to go into one of it’s natural real estate up cycles ,the loan interest rates dropped to low low low rates and the frenzy started . Of course in 2002 there was a big pause in the real estate market because the market had reached it’s max ,and sure enough off the market went for another 51/2 years and it spread Nationwide . I have never seen such a crazy run-up like this because usually buyers just back off or lenders say no and speculators say no thanks if prices go to high .
So anyway ,California got really nuts this time with going beyond it’s natural up cycle.
AnnScott,
You go girl! Don’t let all these youngsters debunk your great posts.
It’s my kids, late 30ish, that have bought $700K condos and HELOCed themselves into debt with fancy cars with me begging them not to.
It’s not a generational thing, it’s an entitlement thing.
It’s not a generational thing, it’s an entitlement thing.
That’s the sort of thing good, attentive parenting is supposed to supersede though, isn’t it? My parents raised me to know that I’m not only entitled to nothing, but in fact that things I’d been given were not even mine in the end (I coined the term “birthday loan”… at age _7_), and the only things which were truly mine were those which I earned the money to buy for myself.
Sounds like a lot of lazy, crap parenting letting kids think they’re entitled to a damn thing if you ask me.. Don’t blame it on the teevee or rap music or anything else, a good parent will slap the entitlement right out of their kids..
More contraction in the credit markets even for those who thought they had a loan secured.
I live in a small town in Idaho. About 12,000 people in all. There are ton’s of homes for sale here.
I was wondering if there are stats that compare:
# of households in city or county to
# of homes for sale
Even if these stats were from a major metro area, it would give me an idea of how oversaturated the RE market is in my town.
Yes I’m thinking of buying a house but will wait. As I told the RE Agent, I’m in no hurry to buy and I’m not looking for a good deal; I’m looking for a great deal. She just smiled at me. My great deal starts at $75 sq ft and gets lower with each new home that comes on the market.
I’m renting a house on a month to month basis. In the last 3 weeks there has been 3 buyers comes through this house. The Agent really looks down on me and my wife. Little does she know I will not buy a house with her name or her brokers name on it…Ever…unless it goes for $50 sq ft.
I can’t even talk to “sheeple” about this! I admire alls y’alls patience with them!
It’s very obvious prices are dropping everywhere. There’s really only one difference between “nice areas” and, say, some Sacramento suburb:
In “nice areas” (for example Palo Alto, CA) houses will sell at *some* price. If priced low enough, there will be a buyer. The price will be a lot lower than many people ever expected.
In “not so nice areas” (Manteca, Gilroy), houses won’t sell at any price.