The Great Experiment Is Over
It’s Friday desk clearing time for this blogger. “Sixteen houses and 273 lots ready for building, many of which are in Lapeer County, will be on the auction block April 19 in Rochester, as two southeast Michigan builders look to sell properties in a slow new housing market. Opening bids on the houses and condominiums is $60,000, well below listing prices that were as high as $2.5 million for a nearly 6,000-square-foot cedar log home in Northville.”
“Andrew’s River Estates resident Vern White says he bought a lot in the subdivision as an investment about four years ago and would love to see prices and demand rise. ‘I figured I’d make more,’ he said. ‘Now I won’t even get my money out of it.’”
“When Christine first purchased her three-unit house on University Place in 2004, she was thrilled at the prospect of finally owning her own home. She had a husband of 14 years, a comfortable commuter job in New York City and manageable mortgage payments for her new residence — $2,800 per month.”
“Now, Christine pays $5,109.26 every month for her house. Facing foreclosure, she has exhausted all her savings, is deep in debt and calls her mortgage company every day to try to negotiate a better payment plan.”
“‘It was a good mortgage,’ said Christine, who asked to have her surname withheld. ‘I remember wondering why it was so easy — they just looked at our last two years of taxes. That should have been a red flag.’”
“Realtors and their lenders have conflicting viewpoints when it comes to the real estate market in Denton. ‘This is more of a slowdown, not a crisis,’ said Stacy Curtis, president of Curtis Mortgage. ‘And it’s a slowdown from the record-setting pace of the last few years.’”
“Curtis, who joined others with his own upside-down mortgage on one his properties, said he would stick to his house and others should as well.”
“‘I purchased a investment property for $180,000 in June of 2005. Last summer, it appraised for $194,000; now it is at $175,000,’ he said. ‘I’m holding on, assuming by the end of this year or next, it will be back up.’”
“‘People who live in this area and want to own a home, need to stop listening to the national doom-and-gloom reports and get out and buy,’ Curtis said.”
“East Valley real estate agent Kathy Ciaccio has called Maricopa County about a number of pools, but sees the foreclosure epidemic becoming an epidemic of neglect. ‘Typically, I show six or eight houses to one client on a weekend,’ Ciaccio says. ‘Half of those houses have murky, green pools.’”
“In northeast Phoenix, Bill Hostert, couldn’t believe what he saw when he peered over his fence. ‘This pool was pretty sickening looking, I’ll tell you that,’ he said. Bill says the new, absentee owner from Canada had no idea what shape the pool was in.”
“Now he’s worried about the consequences. ‘The mosquitoes that are gonna be flying around here, the West Nile disease and all that’s flying around, I don’t need that.’ he said.”
“Construction of $1 million condominiums overlooking the Animas River is on hold pending an upturn in the economy. The tipping point came probably a month ago, Mynders Glover, a partner in the Animas Riverfront project, said Monday. He cited the stumbling economy and a weak real-estate market for delaying construction.”
“‘We’ve been following the news all along,’ Glover said. ‘There were different factors, and professionals were asking, ‘Are you really going to build this?’”
“In addition, sales haven’t been brisk at The Villas at La Campanella. According to La Plata County assessor records, three of 13 villas priced in the mid-$800,000s have sold. Two of the units were purchased by the developer’s husband and the husband’s company.”
“Chicago Spire, which will be the world’s tallest residential building when completed in 2012, has come to Malaysia to attract investors in the mega project. ‘We think property in Chicago has good value globally compared to other cities across the world,’ said Edward Lewis, director of global real estate service provider Savills. ‘The dynamism and strength of economy in Chicago makes this incredibly good value.’”
“According to Lewis, the credit crisis in the US subprime market has not affected Chicago’s top-end estate market which is more resilient due to limited supply. He said investors could capitalise on the upside potential of the US housing market which was now at a downturn.”
“Savills Rahim & Co’s executive chairman Datuk Abdul Rahim Rahman said there was further room for capital gains from investment in property with the expected strengthening of the US dollar in the coming years. According to Abdul Rahim, demand for prime properties anywhere in the world will continue to attract investors.”
“‘There are no signs of slowing down. There are not enough properties to sell,’ he said.”
“Countrywide CEO Angelo Mozilo…fought back against his board’s attempts to curtail his pay two years ago by hiring his own consultant…John England, paid for by Countrywide. Later, Mozilo writes to England about having to pay taxes when his wife travels with him on the corporate jet. ‘In order ‘to avoid extraordinary travel expenses,’ Mozilo complains that his wife ‘would have to travel commercial or not at all, which is not right nor wise.’”
“At last month’s hearing, Mozilo testified that he had ‘to pay an enormous amount, a substantial amount of money, to have her on the plane.’ But, ultimately, he conceded that he might have been making too much of a fuss. ‘In today’s world, I would never write that memo,’ he said.”
“The state budget is chronically in deficit, California’s schools rank near the bottom of the states in academic achievement, and a severe water supply crisis is looming, all issues that the state Legislature has managed to sidestep for years or even decades.”
“But lawmakers are Johnny-on-the-spot in responding to matters ripped from the headlines.”
“A political feeding frenzy has erupted over the housing industry meltdown, for example, with dozens of measures that purport to alleviate the pain of those whose subprime mortgages have been foreclosed, even though most of those mortgages should never have been issued in the first place.”
“Whether any of the proposed nostrums would ease the mortgage situation is almost beside the point. Lawmakers, especially those from regions with high foreclosure levels, are scrambling to demonstrate their compassion by throwing bills into the hopper, seeking media notice and political credit for doing something.”
“Legislating in ignorance about a situation that hasn’t yet played itself out would appear to be the height of folly. And history would indicate that hasty lawmaking almost certainly would have unanticipated and perhaps very negative consequences.”
“The Hope for Homeowners Act of 2008 is an ambitious effort to address the crisis created by the collapse of the housing bubble, and the epidemic of predatory subprime mortgages over the years 2003-2007.”
“I…argue the effort to stabilize prices in bubble-inflated areas is counter-productive. Insofar as it succeeds, it makes homeownership less affordable for young people and families moving into the area.”
“If the sale price-to-rent ratio is 20 to 1 (in many cities it is higher), then this house would rent for just 5 percent of the sale price. This means that owners would end up paying 77 percent more in housing costs than a family who rents a comparable unit.”
“In addition, since house prices will continue to decline in these areas as the bubble deflates, it is unlikely that many of these families will accumulate any equity by the time they sell their home. In fact, most of the homeowners in these areas are likely to end up underwater.”
“If prices did temporarily stabilize at bubble-inflated levels, it would only lead to more construction, which would then place further downward pressure on prices.”
“A government house-price stabilization program that tries to maintain artificially high prices would face all the same drawbacks as farm price support programs that target artificially high prices, except the housing market is far larger.”
“Furthermore, it is difficult to see why it would be desirable to sustain artificially high prices, even if it were possible. Sustaining bubble-inflated prices means that it will be much harder for young people and families moving into an area to afford to buy a home.”
“Tess Vigeland: When we talk about the psychology of home ownership, you really have to address this idea of the American dream and that a big part of that is owning a house. Should our notion of well-being be so tied to the idea of home ownership, because it certainly isn’t in other Western societies?”
“Chris Thornberg: Absolutely not. Again, so much of the rhetoric going on out there in the context of the current crisis seems to be wrapped around this idea that ‘My God, we have to keep people in their homes no matter what.’ Home ownership is not the be all and end all. Home ownership is not the Holy Grail. There are plenty of people in plenty of circumstances for whom living in an apartment is a very logical thing to do.”
“The great American experiment with homeownership for all and mortgages for everyone is over. Millions of homeowners will lose their houses. The government is scurrying to minimize the damage to the nation’s economy and banking system. Wall Street is picking shards out of its hide. Academics are straining to find the right historical analogy and tally the losses. And the press is looking for people to blame.”
“Making every American adult a homeowner was always imprudent and impractical; now that’s obvious. Some Americans don’t earn enough to pay for a mortgage and maintain a house; in recent years, mortgage brokers worried little about the first concern and never mentioned the second.”
“Homeownership can give Americans a stake in society and help build savings — but not if they don’t have any equity in their homes. Better to help them open savings or retirement accounts.”
What a week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
HBB
its like therapy.
thanks Ben.
I’ll second that! Thanks to you Ben Jones, we’ve apparently saved ourselves from financial destruction.
I just got home and put some oranges, strawberries, smoothie mix, and Sho Chiku Bai sake in a blender. Now that I’m “fortified”, I’m ready to read all the articles and comments in depth without getting my undies in a bunch…gawd I love Fridays!
You’re not wrong, Ben. There’s even been a Kudlow commentary I can agree with.
http://www.cnbc.com/id/24068585
Bee-yatch, you can’t commute daily from New Haven to NYC. Not unless you can work on the train. Otherwise, you are looking at a 3+ hour commute daily.
In any case, those prices INITIALLY are higher than Manhattan rents so what exactly did you achieve? The joys of being pwned completely and utterly?!?
Jeebus, get me away from the knives in my kitchen!
I know someone who rented throughout his life in New York City. He passed away 3 years ago and left $7M to charity. He did not have any relatives. In my book, he did not die a pauper.
Renting is a choice.
Who is the famous economics professor who gave an interview about three years ago stating that he was a renter, and that he and his wife weren’t exactly “struggling” as he put it jocularly? (In fact, they were absurdly wealthy, as I remember)
That’s awesome.
Both sets of my Grandparents never owned a home, they rented their entire lives. They were born in the late 1800’s and early1900’s they worked hard raised good children and when their time was done they left no debt and very little money. They always paid their bills no matter how tough times were and their wives stayed at home and tended to the kids. At 52 as I look at my Country I wish we had not become so fat and lazy, however there are more good times coming we just need a good attitude adjustment. It’s time to go to the wood shed. Nothing wrong with that, it won’t hurt as bad as we imagine. No extra under-wear it’s pants around the ankle time, it really won’t hurt that long… I know I’ve been there.
“it’s pants around the ankle time”
Whoa, slow down here. Don’t get too anxious for the bust. Lol…
Wait, is this place family-friendly or what?
‘…however there are more good times coming we just need a good attitude adjustment. It’s time to go to the wood shed. Nothing wrong with that, it won’t hurt as bad as we imagine. No extra under-wear it’s pants around the ankle time, it really won’t hurt that long… I know I’ve been there.’
I’m not going to respond to even one of these gigglesome proclamations, and I’d like you all to take note of my restraint, for verily, I am like a grown-up nowadays.
$3,600 for the 1st mortgage
$1,200 for the 2nd mortgage
$1,300 for the SUV payments
$2,000 For Tiffany and Biff’s Private School tuition
Comments from Olypiagal
Priceless
Brought to you by Mastercard.
You are the best!
“Now, Christine pays $5,109.26 every month for her house.”
This is from the Yale Daily News, and it’s interesting because as a training ground for journalists, they fail just like older professionals to ask or report any serious questions of Christine. For example, she refied her mortgage after she lost her job…no mention if it was a cash-out refi, and how much money she receive. No questions as to how she spent that money. She refied into a subprime mortgage…why, what was the state of her credit? What was the LTV? Was she carrying cc debt, card payments, what? No mention of same. Did she shop around, talk to bank mortgage departments? If not, why? Did she read the loan docs? Was it an adjustable rate mortage? Article doesn’t say. It accepts her at her word that she is deep in debt and over her head, but asks not a single reasonable question as to what was her business plan, since she owned a triplex.
Really, incredibly poor reporting by the Yale staff.
Although the refinance initially took pressure of her family’s financial situation, Christine said that once the interest rate readjusted again, “things got a little haywire.” She was forced to use up all of her life savings and found herself deeper in debt than ever before. As her interest rates climbed higher and higher, she could not keep up with the payments, even when she finally found permanent employment at a local children’s center.
“For the most part, we are average people trying to survive and keep a roof over our heads,” Christine said. “But these mortgage companies are making it very difficult.”
*******
I’m sorry Christine… but the person who made your life miserable is you.
“She may give up on the house and take her family back to the Caribbean, where she grew up.”
Adios, Christine. Don’t let the door hit you on the a$$ on your way out. I really mean that. It could cause brain damage to this retard.
Pfffft…. the public doesn’t need to be *bothered* with such trivial details.
All that Congress & Joe-6-pack needs to know is that she was a victim of the BIG BAD MORTGAGE LOAN OFFICER MONSTER!!
I have felt like the lone wolf saying that over and over. Many of these jokers crying the blues now about foreclosure and/or being upside down had affordable loans. They chose to jump into exotics, I’m guessing to suck some bucks out of the house ATM. Most of us could have done the same or bought anyting we wanted using the same whacky loans but chose not to. People chose to play this game - they were not forced. So what if it looked easy and safe, so what if the loan companies let them get away with screwing themselves. Ultimately they signed on the dotted line.
Definitively driven by greed.
The G7 is meeting to discuss propping up the dollar due to this mortgage mess…
Nice pickings ahead. But much more patience is required.
Got Popcorn?
Neil
“BIG BAD MORTGAGE LOAN OFFICER MONSTER!!”
This immediately conjured up an image of the Stay Puff Marshmallow Man, looming over the house.
“‘It was a good mortgage,’ said Christine”
Uh, no it wasn’t. She was just too stupid to understand that it was a teaser rate.
“…They fail just like older professionals to ask or report any serious questions of Christine.”
I think the finances for a lot of folks in this country are a mess, and that’s why these questions aren’t asked. How financially responsible is the reporter doing the interview? Are they a FB too? You never know.
Nah, it’s like the old days when folks never uttered aloud the word Sex. It’s verboten to question people on their financial whoring around.
It’s because people can’t face the truth. I’m surrounded by denial at work. It’s like a short bus reunion whenever the concept of personal finances comes up.
‘…it’s like the old days when folks never uttered aloud the word Sex.’
Yes, and look what happened! We’re all here breathing on a Friday night, after all, aren’t we? I mean, I’m grateful to be around and all, but still, obviously that olden-time plan didn’t work.
That reminds me how that old cliche: ‘See no evil, hear no evil, speak no evil’, that never made any sense to me. Why can’t I just pick one?
“Chicago Spire, which will be the world’s tallest residential building when completed in 2012, has come to Malaysia to attract investors in the mega project. ‘We think property in Chicago has good value globally compared to other cities across the world,’ said Edward Lewis, director of global real estate service provider Savills. ‘The dynamism and strength of economy in Chicago makes this incredibly good value.’”
“According to Lewis, the credit crisis in the US subprime market has not affected Chicago’s top-end estate market which is more resilient due to limited supply. He said investors could capitalise on the upside potential of the US housing market which was now at a downturn.”
******
This has all the hallmarks of the situation with the Empire State Building, which was first proposed during a different era in which it was finally completed.
********
“Empty State Building
The building’s opening coincided with the Great Depression in the United States, and as a result much of its office space went unrented. In its first year of operation, the observation deck took in approximately 2 million dollars, as much money as its owners made in rent that year. The lack of renters led New Yorkers to deride the building as the “Empty State Building”.[13] The building would not become profitable until 1950. The famous 1951 sale of The Empire State Building to Roger L. Stevens and his business partners was brokered by the prominent upper Manhattan real estate firm Charles F. Noyes & Company for a record $51 million. At the time, that was the highest price ever paid for a single structure in real estate history.[14]”
http://en.wikipedia.org/wiki/Empire_state_building#Design_and_Construction
The Empire State Building is such a dull building. It looks like a big hypo-dermic needle. I like the view from 42nd St. at Bryant Park but that is not saying much. Give me the Chrysler Building or Woolworth Building any day of the week. The soulless Empire State Building reminds me of boom time McMansions.
I like art deco and its luxurious implications of power and efficiency. I can appeciate the work that went into the details of the Empire State Bldg, even if it does seem a bit institutional. Napier NZ and very few other places in the world still have well-preserved art deco.
Prague. It has come amazing deco buildings.
“Proposals to buy empty, foreclosed homes — perhaps using taxpayer money — and rent them until the housing market stabilizes have promise.”
memo to the WSJ, from whom this little gem is taken…there are still those of us who prefer capitalism, and the thought of the government as landlord to hundreds of thousands of little crackerboxes is not a happy one. The marketplace itself is a clearing mechanism, and every day, prices are becoming more affordable, which is the good news. Comrades at the Wall Street Journal, it’s time to abandon socialism, and give capitalism a try.
And “… rent them until the housing market stabilizes…”?
Good one!
As if being a landlord is a piece of cake…
Laisszez faire in the boom times, welfare for Wall Street in the bust. It’s for the greater good of all Americans!
That Wall Street Journal was a major flaming pile of $hit. David Wessel, the author, attended Harvard. That’s a big surprise. It is amazing how many people become educated and pointless at the same time.
Only a loser from Harvard could have written, “One option is to require lenders to offer everyone a standard 30-year, fixed-rate mortgage and then allow lender and borrower to “opt out” for another loan, perhaps requiring extra disclosures or imposing penalties on lenders who make loans that later prove inappropriate.”
WTF? Welcome to the real world Mr. Wessel. The only job for which you are qualified is The Village Idiot and the competition is intense. I think some fellow named Yun currently holds that position. Keep trying. You will make it.
You seem highly critical of his ideas without pitching alternatives, and pretty liberal with ad hominems instead of analysis.
I don’t see how his idea is so obviously flawed if it would have made lenders think twice before hawking flawed their mortgage CDOs as AAA debt to speculators. It would help if you pointed out the specifics of your objections to him to those of us in the short bus crowd.
The only flaw I see is how all the barn doors are swinging shut now that the horses are out/
“The state budget is chronically in deficit, California’s schools rank near the bottom of the states in academic achievement, and a severe water supply crisis is looming, all issues that the state Legislature has managed to sidestep for years or even decades.”
———————–
Hmmm,
Which political philosophy (and political party that traditionally embraces it) has been in control of the California legislature for all those decades?
Anyone care to guess?
I’ve been rereading Atlas Shrugged over the past few months a little at a time, and sometimes I have a hard time telling the difference between the real-world daily news commentary and chapters from that book.
I once read Atlas Shrugged. It was the best 3 years of my life.
Hahaha! You’re funny. Say, how’s Mr. Daniels treating you on this fine Friday evening? Has he chucked you down the stairs yet? Or is that for later?
Did you get to the John Galt speech yet? It took a couple of months to get through that. I think I breezed through the rest of the book in about 4 days.
The US is chronically in deficit, with a rapid increase in the last 7 years. US schools rank near the bottom in achievment compared to other industrialized nations. A severe oil and water supply crisis is faced by the entire US. All issues that the current president and his party have failed to address.
Hmmm,
Which political philosophy (and political party that traditionally embraces it) has been in control of the US for the last 7 years?
I wanted advocate a position that I didn’t see the other day in bits (I love bits but I can’t blog from work). The thread was about thrift and devolved into a sentiment of anti-wealth.
I’m a cheap bastard who drives a beater but won’t flinch at dropping $40 bucks for a filet. There are three things I don’t mind blowing cash on: steak, wine and unnecessary health care for my dog.
I don’t mind people that live in McMansions and drive Hummers as long as they paid for it. I think his handle was “Manny;” a lot of people were bustin’ on him for having, “the good life.” I didn’t get a chance to disagree with that.
This is America. If you want to spend your life by yourself, naked, in your own 400 seat home theatre watching Jerry Springer, covered only by a napkin, go for it.
I also have no problem with stupidity as long as you pay for it and don’t throw garbage on my lawn.
My point is: the bubble punished responsible people and rewarded idiots. I just thought we were a little harsh on Manny. He doesn’t sound like an idiot to me. In fact, he sounds responsible.
So by all means, smoke crack and smash your 52 inch flat screen tv. Just don’t bother me, and hell, don’t HELOC the house to do it and then expect a gubmint bailout.
You are right sir, people need to take responsability for their actions. On another note, it makes me mad when people ruin their health with alcohol, drugs, mating, tattoos, lasik, xtreme sports and then expect the tax payers to pay for their mistakes. They also make insurance companies pay up and this causes higher costs for us responsible parties.
“alcohol, drugs, mating, tattoos, lasik, xtreme sports…”
Just add reckless boating, shooting endangered animals, and driving without a license and you’ve got the South Florida playbook.
“alcohol, drugs, mating, tattoos, lasik, xtreme sports…”
Mating? What governmental department deals with broken johnsons and ripped scrotums?
On another note, Bye. You don’t drink, do drugs, screw, get tattoos, have good eyesight or take any chances such as sky diving or skateboarding and on top of it you want to move to NW Pennsylvania? Why not just become a monk?
I think you meant owning endangered animals. At this rate the Everglades are going to turn into a modern-day Jurassic Park.
I DO mind people who drive Hummers. Let me count the ways.
1. They get huge tax write-offs for “bidness”
2. They spew twice the pollution of regular cars
3. They endanger other drivers on the road, especially since Hummers are clunky, as are their occupants
4. They consume way more gas, and thereby establish a pattern for acceptable wasteful consumption which sets us all up for more disastrous “interventions abroad”
5. They are intentionally militaristic/agressive in design, and appeal to weak-minded people who think that they’re cool. Not.
Saying that ‘it’s a free country” blah, blah blah doesn’t get people off the hook since we all share public roads, and breath the exhaust. I’m sick of subsidizing morons.
SaladSD hates freedom! SaladSD hates freedom!
Just kidding.
In all fairness, it’s impossible to judge other’s consumption and make some of your presumptions. I’m sure the computer you’re blogging on is powered by love and cow turd and constructed of earth-friendly plastic that turns into rice for the homeless when you throw it away.
The good news is that Hummers look pretty frickin’ stupid now, even to the “deserving” motorist.
A hummer should be something that is performed in a back seat, not something that has 4 wheels and a back seat.
Yeah, that’s how my mind works, too!
SaladSD-
Thank you. Its not a Constitutional Right to waste oil (i.e. gasoline), or any other natural resource.
And for the “we drive a lot of kids around” crowd, for pete’s sake, my parents had 4 kids, and we owned a station wagon.
Obviously the kids pick the cars now.
Weren’t station wagons yesterday’s Hummers? I think our land yaught got about 8 MPG!
Actually, station wagons are making a come-back. They are calling them crossover SUVs. Really! But, (shhhh) don’t say it too loudly. They don’t really want people to think they are coming back. That’s why they are calling them….crossovers.
I guess the name still kinda sounds SUV-ish.
Works for me. At least I’ll be able to see around them a bit better than when I’m behind the monster vehicles.
http://en.wikipedia.org/wiki/Crossover_SUV
BayQT~
I think the H2 is just a Chevy Suburban with a different body. I have to admit, I LIKE SQUARE VEHICLES! Older volvos? I like em. Bronco IIs, I liked as a kid due to the square lines. I drive a Honda Accord, and I picked it because the rear end had square lines to it. So I thought the H2 was a neat truck. I never expected it to gain the popularity it did with the crowd it did. I think it’s wasteful, but don’t get totally bent out of shape over it.
For a short period of time I was trying to purchase an Armored truck (cash in transit vehicle) to convert into a SUV as a project. It wouldn’t be a daily driver though. Do the project, get on the websites and in the magazines, and then move on. I never went through with it (and with current diesel prices, thank goodness!). I secretly still would like one. Nothing would be better than pulling away rapidly in front of a walmart and “accidentially” having a pile of money bags rolling out the rear door, to be videotaped from 4 hidden cameras at different angles for youtube.
Sprinter van ftw!
(though given the price of diesel, you’d barely be breaking even when you diff the efficiency gains vs fuel costs.. Well at least the home heating oil season is coming to a close..)
‘There are three things I don’t mind blowing cash on: steak, wine and unnecessary health care for my dog.’
This shows your brilliance, but if you had added ‘and strippers and poetry books’ you would be even more brilliant. You should take your dog out more, help him live a little. He’s a German shepherd, right? Take him to a reading on Goerte.
“Now he’s worried about the consequences. ‘The mosquitoes that are gonna be flying around here, the West Nile disease and all that’s flying around, I don’t need that.’ he said.”
Jeez, some people, all you hear is complaints. Has the guy never heard of Deep Woods Off. Get a repellant with a healthy dose of DEET and spare us your yap.
Better yet, clean up the pool, save your receipts. A couple of years go by where you do the majority of maintenance should give the right to file a lien or something.
Toss a quart of motor oil in the pool. That’ll solve the mosquito problem.
Why not buy a few dozen feeder goldfish or guppies and toss them in the pool? If there is no chlorine left, they will survive and feed on the bugs, mosquitos, algae and you will have a nice pond
Naw, the motor oil will kill the fish.
Don’t put motor oil, itll pollute the environment. Go natural with goldfish or guppies!
Ask a local realtor; they love “helping people.”
Comment by Muggy
2008-04-11 17:55:51
Ask a local realtor; they love “helping people.”
Yes; yank out their lungs and use them to skim off the top of the pool. All those little air-sacs make natural algae gatherers, I should think.
“yank out their lungs and use them to skim off the top of the pool.”
The lungs would probably thank you! I reckon they’d enjoy a break from blowing hot, $hitty air.
Careful of guppies - they breed like…..guppies.
If anybody’s ever had an fresh-water aquarium, you know what I mean.
Stock it with bass.
that is funny,
I closed the bits bucket last evening….you should read it.
Bravo to the Modesto Bee:
“A political feeding frenzy has erupted over the housing industry meltdown, for example, with dozens of measures that purport to alleviate the pain of those whose subprime mortgages have been foreclosed, even though most of those mortgages should never have been issued in the first place.”
“Legislating in ignorance about a situation that hasn’t yet played itself out would appear to be the height of folly. And history would indicate that hasty lawmaking almost certainly would have unanticipated and perhaps very negative consequences.”
And to Dean Baker:
“A government house-price stabilization program that tries to maintain artificially high prices would face all the same drawbacks as farm price support programs that target artificially high prices, except the housing market is far larger.”
“Furthermore, it is difficult to see why it would be desirable to sustain artificially high prices, even if it were possible. Sustaining bubble-inflated prices means that it will be much harder for young people and families moving into an area to afford to buy a home.”
Now, if only the politicians would listen. But fat chance of that.
“Legislating in ignorance about a situation that hasn’t yet played itself out would appear to be the height of folly. And history would indicate that hasty lawmaking almost certainly would have unanticipated and perhaps very negative consequences.”
Lol. I missed this through my first reading. Nothing the governments do will help. The best thing would be to start massive infrastructure projects. Build rail, bus terminals (big ones), airports, rail…
Instead, money is being wasted.
Got Popcorn?
Neil
“The best thing would be to start massive infrastructure projects. Build rail, bus terminals (big ones), airports, rail…
Instead, money is being wasted.”
I totally agree, Neil. Maybe we should bring back debtors prisons so that these irresponsible borrowers can pay off their debts by working on our failing infrastructure. That would be a much more effective way to teach them to make responsible financial decisions than the counseling for which Congress also expects us to pay.
“Legislating in ignorance about a situation that hasn’t yet played itself out would appear to be the height of folly. And history would indicate that hasty lawmaking almost certainly would have unanticipated and perhaps very negative consequences.”
Robert K. Merton listed five causes of unanticipated consequences:[1]
1. Ignorance (It is impossible to anticipate everything, thereby leading to incomplete analysis)
2. Error (Incorrect analysis of the problem or following habits that worked in the past but may not apply to the current situation)
3. Immediate interest, which may override long-term interests
4. Basic values may require or prohibit certain actions even if the long-term result might be unfavorable (these long-term consequences may eventually cause changes in basic values)
5. Self-defeating prophecy (Fear of some consequence drives people to find solutions before the problem occurs, thus the non-occurrence of the problem is unanticipated)
http://en.wikipedia.org/wiki/Unintended_consequence
“Opening bids on the houses and condominiums is $60,000, well below listing prices that were as high as $2.5 million for a nearly 6,000-square-foot cedar log home in Northville.”
$2.5 million………Northville……..HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!
This just gets better all the time.
From today’s Austin American Statesman.
Native Austinite John Anderson was a reporter at Forbes magazine working in New York City in the late 1980s.
Now the owner of a computer business in Austin, Anderson emailed me this week, questioning the findings in a survey of downtown’s condo market by local real estate consultant Charles Heimsath, conducted for the Downtown Austin Alliance (DAA).
Acknowledging he hasn’t lost the required journalistic skepticism, Anderson urged me to look deeper in the condo market.
“Good story about the Heimsath study on condos. Very interesting what the DAA/Heimsath are saying. It is revealing that their study “sought to dispel some myths”, as you wrote, which of course means they began with an agenda. Nonetheless, it is fascinating what they are claiming.”
One of those myths, according to Heimsath, is that the downtown condo market isn’t overbuilt, gauging by how well many of the projects are selling.
Anderson responds that he “wouldn’t underestimate (that the) DAA and Heimsath’s desire is to bolster confidence in the condo market by any means possible.
“The DAA’s basic mission is to promote downtown and Heimsath makes his living serving developers - some of whom are the builders of the very same condo projects he “surveyed”. If a DAA/Heimsath study concluded that condos were overbuilt, demand was falling, and they were owned significantly by investors hoping for a quick profit, would they be alerting the Statesman? Never in a million years - bad for business.
“No one knows how this will play out. But it is very possible that the “study” they did was a pure p.r. move designed to reassure condo buyers/owners. And, perhaps, just the fact they felt it necessary to concoct and promote such a study in the first place is an early sign that cracks are appearing beneath the surface in the condo market. Time, and more independent information, will tell.”
Anderson freely admits he doesn’t know more than anybody else.
“I’m not even in that business. It’s just as likely that I don’t know what I’m talking about any more than anyone else.”
But, having witnessed several boom and bust cycles, “I know that booms turn into busts,” he says.
But everyone who comes to S x SW is going to buy a condo here, aren’t they? After all, it’s trendy here, and you can go to trendy places and do trendy things.
Thanks Roger H. I’ll look up the article - it sounds like a crack beneath the surface to me…
I’ll try to post the link to the full Austin American Statesman article Roger H cited - I’ve noticed other posters having trouble including a link for the first time, so bear with me.
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/realestate/entries/2008/04/11/native_austinite_john_anderson.html
Frankly, by 2010 or so, it will be possible for just about every family to own a home. The problem wasn’t that people who weren’t affluent owned homes. The problem was the prices.
Baker’s idea of “own to rent” sounds like it would completely kill mortgage lending for a long long time.
“The great American experiment with homeownership for all and mortgages for everyone is over. Millions of homeowners will lose their houses. The government is scurrying to minimize the damage to the nation’s economy and banking system. Wall Street is picking shards out of its hide. Academics are straining to find the right historical analogy and tally the losses. And the press is looking for people to blame.”
Ahem - Why don’t we blame the Democrats, liberals, and left-leaning political correcticos of the press and universities for a starter?
1. The concept of redlining was part of mortgage banking for good reasons. Of course good reasons have never stopped the left from promoting their failed policies.
2. When you shift mortgages from cold economics into the throbbing nether world of political correctness, you get an American Nightmare. If people can’t read English, why are they signing loan documents in America? Ditto for ILLEGAL aliens.
3. Listen to Schumer, Clinton, Boxer or Pelosi.
They FEEL SORRY for “struggling homeowners”.
Great. Let them write personal checks to their favorite charity. I say the American taxpayers’ money ISN”T THEIRS TO GIVE. What a radical right concept, huh?
4. Social engineering, applied to failed mortgages and mortgagees, will only perpetuate the problem it purports to ameliorate, JUST LIKE every other frickin’ $$$ scam the left promotes in the the name of equal this, equal that, or “save” whatever.
5. When the Republicans spend money like drunken sailors just like the Democrats do, of course it’s just to get votes. No, I don’t support the political whores. But I’ll never vote for a Democrat.
Political rant off; have a great evening
I don’t share your vitriol, Tea. They are all candidates 1st and legislators 2nd regardless of the party. It’s a practical necessity now - you are constantly running for office and you start running for re-election the day you take office. It’s constant begathon to pay for so much unnecesary spin and spat. I say 6 week publicly funded campaigns and that’s it. A bunch of public forums and real debates and vote. Take the money grubbing out of it.
Sounds great. There seems to be a lot of noise about campaign finance reform from time to time, with various pols out front with the sound bites, then suddenly no one has a thing to say about it.
Oh, please. You don’t think the GOPs and their cronies haven’t enjoyed the pleasure of illegal alien slave labor, and the windfall of selling NINJA loans? Gimme a break. As long as GOP hypocrits spout off about the sanctity of marriage, the sacredness of fertilized eggs, the right to bear semiautomatic assault weapons, and 24-Hour-Terror, they’ll never get my Vote. I’d vote for a real Republican, but they haven’t been around these parts for, say, 40 years.
The difference is that the Republicans borrow the money they spend, and they spend it somewhere we never heard of; or on the their friends; or both.
While we’re at it, I’d like to start blaming liberals for that damn painful sore I keep getting in the front of my nostril. No one knows what it is, it hurts like hell for a week or so, it ain’t herpes, so what the hell is it? damn democrats.
Seriously, are you that blind, are you so programmed that you can’t even make a judgment on the merits of the candidates? It’s only about party? You’d vote for Lowell Weicker over someone like Lieberman? or Sam Nunn? And people wonder why our government sucks. Blind loyalty to a party that’s essentially just the other side of a two headed monster. And this goes for anyone who’d say that they’d never vote Republican as well.
I’m having another beer. A 5.5% alcohol beer. Because you made me sad.
Our current national economic situation is more a product of theories developed at the University of Chicago than of any left-leaning university real or imagined. Emphasis on “imagined.”
The “Press” should be looking in a mirror right about now. They’re the ones who regularly quoted David Lereah, building co. CEO’s and other pro-housing “experts” without ever reporting a single dissenting view. Even now, the media still reports it when the NAR calls a bottom — without once mentioning in the article that the NAR is an extremely biased industry player who is not an impartial source of information.
I used to think the media was in cahoots with the big players … lately I just think they’re ignorant and stupid. They have no idea when they’re being manipulated. They think they’re “just reporting the facts”, even though they’re regurgitating carefully spun press releases verbatim.
The media is as much to blame as the banks. The difference is that the banks knew what they were doing and got rich. The media are still scratching their heads and trying to figure out what’s going on.
This is rewriting history. Back in the early 90s when lending was more balanced the charge to ease regulation and extend lending into subprime was led by conservative business advocates. At first it worked well for everyone because it recruited an entirely class of new customers and the tighter standards and higher interest rates of these loans made them extremely profitable.
The bubble swept away lending standards and common sense. Regulators, lenders, agents, and most of all buyers and sellers all share the blame for this debacle. Most of the finger pointing is not based on evidence, but ideology and so isn’t really realistic or helpful.
How sad. If you know anything about history you know that redlining did not begin for “good reasons” unless, of course, you believe there is good reason for racial segregation.
I know it is probably a waste of time to respond with facts, but, here goes. Noted researchers Doug Massey and Nancy Denton show that when the federal government moved to support home ownership as a policy to respond to the Great Depression, it did so with procedures that could only serve to increasingly segregate blacks. This result was not produced by simple neglect. The policies were constructed with the express aim of segregating blacks. Massey and Denton report that the first federal program, the Home Owners’ Loan Corporation (HOLC), was targeted to urbanites, and to borrowers about to default as well as those who had already defaulted on their mortgages. However, by refusing to make loans in racially mixed or black neighborhoods, the HOLC institutionalized redlining.
I could go on with the sordid tale of U.S. housing policy, but I’ll stop. All I’ll say is, redlining had no fiscal basis at the start, but once it became institutionalized it became a self-fulfilling prophecy. Deny areas capital, and you will get impoverishment, and then the profiteers will take it from there. Redlining began as government sponsored social engineering, something a conservative with integrity would oppose.
IAT
The pricing point for the Chicago Spire starts at $ 750,000 for a “Suite”…not a Studio, mind you, but a “Suite.” You can only imagine what the remaining price points are.
You know, I guess if someone wants to pay a minimum of $ 750K to live in a building that looks like a giant p-nis in the sky, go for it. The world needs more morons.
““‘It went down to $125,900,’ Del Brocco said. ‘I offered $100,000. They came back at $118,000. I came back at $114,000, and that’s what I got it for. It’s the cutest house.’”
I hope that Holland, MI house comes with many acres of land otherwise it’s a ripoff. She could have gotten that house for the same price in NE TN!
mid may was 799,000
6/10/06 was 836,471
6/14/06 was 840,935
6/17/06 was 846,120
6/20/06 was 850,317
6/22/06 was 855,892
6/24/06 was 860,647
6/29/06 was 866,037
7/01/06 was 858,675
7/09/06 was 870,854
7/11/06 was 882,239
7/13/06 was 886,055
7/14/06 was 890,896
7/18/06 was 895,022
7/21/06 was 900,000
7/25/06 was 905,170
7/28/06 was 910,001
8/01/06 was 903,718
8/12/06 was 915,336
8/19/06 was 920,755
8/26/06 was 925,176
8/29/06 was 951,242
9/15/06 was 955,352
12/1/06 was 925,170
12/2/06 was 915,258
1/01/07 was 857,760
1/20/07 was 900,302
2/14/07 was 932,055
4/21/07 was 1,148,456
4/27/07 was 1,171,189
5/11/07 was 1,192,290
5/18/07 was 1,202,413
5/25/07 was 1,238,121
6/14/07 was 1,256,361
7/28/07 was 1,300,943
8/27/07 was 1,365,670
9/24/07 was 1,405,798
12/07/07 was 1,345,525
12/31/07 was 1,294,918
01/02/08 was 1,240,148
01/29/08 was 1,300,796
04/11/08 1,402,192 today
http://www.ziprealty.com/maps/index.jsp?usage=search&cKey=74rbwvlk
I haven’t posted these numbers for a while and only in last few days or so they appear to be shooting up.
When people display a list of numbers it’s customary to say what they respresent. Is this the number of grass blades on your lawn ?
Might be. No one can tell.
Link: “ZipRealty has 1,403,246 active homes Nationwide”
******
Stanley used to post these occasionally back in the ol’ days.
Like in 2006 or so…
There was also somebody who posted the Phoenix area inventory in late 2005 and into early 2006.
It was fascinating to see it exploding at the same the MSM completely ignored the impending house price crash.
Just fascinating that they were so asleep…
“In addition, since house prices will continue to decline in these areas as the bubble deflates, it is unlikely that many of these families will accumulate any equity by the time they sell their home. In fact, most of the homeowners in these areas are likely to end up underwater.”
Why would anyone want to buy at this point? Unless they were given some knifecatcher encouragement incentives from the gubmint, that is?
if you dont like the hard talk, look away. put the kids down to sleep.
this is a meltdown, this is structural dollar hegonomy problem. Commodity build out requirments to service 2 billion…is a task the globe may not be up the task.
for 5 billion krill, how many whales?
Im 7 out line away. next shooter, please.
Man, this quote was money:
“‘People who live in this area and want to own a home, need to stop listening to the national doom-and-gloom reports and get out and buy,’ Curtis said.”
Translation: There would be no problem for me at all if people with money/credit would just stop paying attention to the facts, and start wasting their money on overpriced homes. If only you would stop thinking and do what I tell you, my life would be so much better.
Well… DUH!
“Tess Vigeland: When we talk about the psychology of home ownership, you really have to address this idea of the American dream and that a big part of that is owning a house. Should our notion of well-being be so tied to the idea of home ownership, because it certainly isn’t in other Western societies?”
BINGO!
Is it just me or is gubment trying too hard too early?
If nothing else, J6P is going to totally loose faith when all these interventions do nothing to stop the market from sliding fast.
Its almost like congress is a bunch of teenagers far too over-eager for their first date with a chick with an easy reputation. They’re… ummm… performing too early.
Got Popcorn?
Neil
http://news.yahoo.com/s/ap/20080411/ap_on_re_us/pothole_woes
Are potholes a leading or laging indicator??