Bits Bucket for April 22, 2011
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Comment by Professor Bear
2011-04-21 20:17:56
Americans hold dim view of U.S. economic outlook: poll
WASHINGTON | Thu Apr 21, 2011 10:54pm EDT
WASHINGTON (Reuters) - Americans are more pessimistic about the U.S. economic outlook than they have been since the start of the Obama administration and most believe the United States is on the wrong track, according to a New York Times/CBS News poll released on Thursday.
The number of Americans who think the economy is getting worse jumped 13 percentage points in just one month, to 39 percent, the poll suggested.
Just 23 percent said they thought the economy was improving, down 3 percentage points from the previous month.
Seventy percent of respondents said the country was heading in the wrong direction and most think neither President Barack Obama nor Congressional Republicans share their priorities for the country, the poll showed.
The dour mood is dragging down performance ratings for President Barack Obama and both parties in Congress with the 2012 election season already underway, the poll found.
Fifty-seven percent of respondents said they disapprove of Obama’s handling of the economy, while 75 percent said they disapprove of the way Congress is handling its job.
While Washington is consumed with debate over deficit-reduction proposals, Americans seemed uncertain about the impact of cutting the deficit on the U.S. economy.
Some 29 percent of those polled said cutting the deficit would create more jobs, while 29 percent said deficit-cutting would cost jobs and 27 percent said it would have no effect on the employment outlook.
The poll found considerable support for Obama’s proposal to raise taxes on the wealthy — 72 percent of respondents approved of that idea as a way to address the deficit.
…
”
I ran across this in the wee hours from yesterday’s threads.
So it appears to be a 3-way tie between those that think deficit-cutting will create jobs, cost jobs, or have no effect on jobs. And the other 15% just don’t know? This issue appears to be a prime target for manipulation of the electorate.
72% think raising taxes on the wealthy are a good way to reduce the deficit. No mention of where the cutoff is for wealthy.
70% think the country is heading in the wrong direction and our leaders are clueless. 30% think things are looking up?
It sure would be nice if Reuters provided a link to the full survey, with the actual questions and a full set of responses.
quite the link there
Hahahaha! My HTML skills are rudimentary at best.
Hahahaha! My HTML skills are rudimentary at best.
There’s a firefox extension that’ll help with that, if you use FF
And here’s the link to said extension. I’m using it with Firefox version 4.
Hope it’s useful to others. Drum did a great job on it.
“I’m using it with Firefox version 4.”
I see it on the toolbar at the top of the Firefox version 4 screen, but it isn’t doing its thing; any hints?
“Joshua Tree Extension could not be installed because it is not compatible with Firefox version 4.0″
any hints?
email me for the FF4-enabled version. I still haven’t posted it to the website….perhaps this weekend.
So Bear any updates closer to home on the budget battle in California? This headline was from yesterday:
http://blogs.sacbee.com/capitolalertlatest/2011/04/californias-criminal-alien-pop.html
I can’t see how California can ever balance its budget if they spend more than $3.5 billion just to house criminal illegal aliens (I know redundant). I think Californians should be for a simple immigration policy. If a person attempting to come to this country has an IQ significantly above the general population, he or she gets into the country. If not, he/she stay in his/her home country. Instead of importing 1 million people to clean houses etc. import one person smart enough to create a robot or other labor saving device to do the job. Robots do not join gangs or have children that join gangs.
California’s financial support of illegal aliens is one of many policies that make me wonder why I want to live here…
California’s financial support of illegal aliens is one of many policies that make me not want to live here.
Reconquista is in full swing here.
“Can I get two margaritas to go?”
Don’t you mean, “Dos magaritas para llevar?”
It is a national problem: http://www.heritage.org/Research/Reports/2006/10/Importing-Poverty-Immigration-and-Poverty-in-the-United-States-A-Book-of-Charts
I think the core problem in America is that both parties are controlled by religious fanatics. However, that term should include not just people that deny science because of their Holy Book but deny facts because they are not politically correct. Political correctness is a religion and I would put it the same category as extreme Islam. Witness the attacks on Bill Maher for pointing out that Islam does not seem to be a religion of peace when the price for burning a Koran is to kill anyone you can find that is not a Moslem. Neither spending more money in schools or having more discipline and prayer (left and right’s answer) will raise our Nation’s educational achievement if the people we import have low IQs. Policies that raise the average IQ (without brute force such as mandatory sterilization etc) are the only way to reduce social spending without creating third world conditions.
“Witness the attacks on Bill Maher for pointing out that Islam does not seem to be a religion of peace when the price for burning a Koran is to kill anyone you can find that is not a Moslem.”
Hats off to Maher; I hope he doesn’t get killed by the ‘peaceful faithful’ for making statements like that.
How do you know people who clean houses don’t have high IQs? Just because you perform manuel labor doesn’t make you stupid.
I have known a few real estate agents I would never let clean my house.
That is the problem with illegal immigration, we don’t know anything about the people we are letting into the country. However, I doubt high IQ people will be cleaning houses for long so a policy that is based on IQ does make sense. The first generation might clean houses for a while but the second generation will be doctors and engineers. The illegal alien experience is quite different, first generation might clean houses, the second generation cleans out your house by stealing everything in it as a gang member.
manuel labor
Freudian slip?
“Like” (sorry, I’m a Facebook junkie)
Back when I had Polish ladies cleaning my house, some of them had been teachers, accountants, and other professionals. I felt bad for them. A lot of Polish people have gone back to Poland in the past decade. All the maid services are staffed by Hispanic women now (though some are run by Poles).
Dang, I clean my own house and have a graduate degree… I actually enjoy manual labor, the one time I feel I have control.
aaaaaaaahhh, my long-running internal battle over having cleaning help…it’s either that, or a messy dirty house, at least sometimes. With outside help I at least know it’s gonna be clean every couple of weeks. Do I like it? Not especially.
One of best friends does manual labor - landscaping as his second career. He likes the excercise and fresh air and actually accomplishing something tangible. He credentials - PhD - Harvard Business School.
must be one of those “intellectual geniuses” that have been gaming the money system here in the US of A. I can’t think of people more useless and more self-absorbed than those with business degrees. they should all be doing manual labor and save the us from their antics of playing with our economy and our businesses……….
it would be really good if all the MBA’s and PhD’s in business found real, useful work, instead of finding ways to skim off the work of others, providing no innovation or ideas of their own.
sounds like he finally found some work worthy of his true aptitude and skills.
I never quite understood this “Polls show Americans think….” junk. Do they just randomly walk up to folks like Jay Leno and ask questions? Most Americans, including myself, can’t grasp something as complicated as macro-economics or budget policy. They are too busy watching reality shows and being in their own little world.
Especially when they ask stupid questions like do you think that other people should pay more taxes to help solve the deficit problem (i.e., most ppl do not consider themselves wealthy, especially those that respond to surveys). Such a question assumes the amount of deficit was necessary and cutting government spending drastically wouldn’t be sufficient and/or would result in collapse of civilization as we know it, and assumes that the average American is capable of giving answers on what is best for the Country rather than what is best for them. Neither of which assumptions are correct. In my experience, surveys get the the answers the drafter wanted. I never answer yes or no question surveys because I find the questions poorly drafted or not capable of a yes or no answer, resulting in me feeling that a simple yes or no would not accurately reflect my views.
I agree with your analysis about surveys.
“assumes that the average American is capable of giving answers on what is best for the Country rather than what is best for them”
Remove average and I will agree with you wholeheartedly. I suspect even above average Americans will respond with what is best for them and not necessarily for the country. In many cases, it is not clear what is really best for the country, even to experts. Unintended consequences and unknown future events can have a large impact on outcomes. And folks at the top (as measured by intelligence or finances) are not immune to thinking they are more important than they really are. I recently talked to an engineer who stated that if we just had more engineers, all would be well.
I thought the 3 way tie was interesting. It suggests that there may be weak support for deficit reduction. If I were a politician, I might be reluctant to hang my hat on a divisive issue like this or I might perceive it as an opportunity to peel away support for an opponent.
In my experience, surveys get the the answers the drafter wanted. I never answer yes or no question surveys because I find the questions poorly drafted or not capable of a yes or no answer, resulting in me feeling that a simple yes or no would not accurately reflect my views.
Agree with the above.
I’ve also heard that pollsters are having a harder time getting people to participate. Reasons: Fewer and fewer of us have landlines. And, if we’re using cell phones or VoIP, we probably have caller ID — and we use it to screen calls.
“Especially when they ask stupid questions like do you think that other people should pay more taxes to help solve the deficit problem”
Why is that a stupid question? The wealthy are paying the lowest tax rates in modern history. It’s stupid to think ‘they’ shouldn’t be paying more taxes.
What’s stupid is mistaking your own interests for the country’s.
Rates don’t matter. People in dollars not rates. But if like percentages so much please read:
NYT 22 April
Rich vs. Poor in the Budget Debate
To the Editor:
The indignation of those on the left to the mere mention of tax cuts on high-income earners continues to puzzle me. Charles M. Blow’s argument that high-income earners are not paying their fair share of taxes is not supported by the facts.
To begin with, the tax cuts enacted by Congress in 2001 and signed into law by President George W. Bush lowered marginal tax rates for all income earners, not just the “rich.” Millions of low-income earners were dropped from the federal income tax rolls as a result, shifting the tax burden up the income scale.
As of 2006, 46 million American households paid no federal income tax. Those with incomes of $89,500 and up in 2006, representing the top 40 percent of income earners, paid 99.2 percent of all federal income taxes, according to the Congressional Budget Office. Incredibly, the top 1 percent of income earners paid 39.1 percent of all federal income taxes.
If 1 percent of the population pays 39.1 percent of all federal income tax receipts and 40 percent of the population pays nothing, which group is the glutton? Which is the plunderer?
SEAN F. FLAHERTY
Boston, April 16, 2011
“which group is the glutton? Which is the plunderer? ”
The group that pays the lowest percentage of their overall income on taxes- the rich. And who get bailed out to the dollar (and beyond!) when TSHTF.
Most Americans, including myself, can’t grasp something as complicated as macro-economics or budget policy.
Keep reading. Keep asking questions. Google terms and subjects you don’t understand. We are so lucky to have people here and several other sites that take the time to share that I believe anyone who puts the time in can grasp the general picture. A hearty thanks to all here who make that possible, btw.
What I find of many of my fellow Americans is they don’t want to do the work. They know the info is out there but they don’t want to know. Most won’t even look when someone else has parked the info right in front of them. They desperately want to swallow what the MSM spoon feeds to the masses saying yum, yum with nary another thought.
Realtors Are Liars
Realtors are liars and so are people that think whats good for Wall Street is good for Main street .
Well, they do tend to behave strangely at times.
I’m in escrow on a house. The appraisal came in about $15,000 low, and when my agent saw it she went into shock and immediately suggested we submit a request for appraisal review, because when she contacted the seller with the low appraisal he said there was no way he was selling the house for that amount (seller is actually some investment group that bought a bunch of houses and is flipping them en masse). Has anybody heard of this? Who would willingly pay more than appraisal in this kind of market, and how can a seller expect to sell for over appraisal when the house will only finance at the appraised amount (unless there are really stupid cash buyers out there willing to overpay)? I told her I couldn’t imagine why I would want to make the house more expensive, and to tell the seller to stuff it and that I’d pay appraised amount and not a cent more. This isn’t some dream house with an ocean view, it’s a plain old 3/2 in Phoenix. I’ve told this to several people, including another real estate agent, and they can’t imagine what my agent is thinking. At this point I’m thinking of cancelling the contract and moving on, or for that matter just renewing my lease and waiting until things get less stupid (assuming that will ever happen).
I told her I couldn’t imagine why I would want to make the house more expensive, and to tell the seller to stuff it and that I’d pay appraised amount and not a cent more. This isn’t some dream house with an ocean view, it’s a plain old 3/2 in Phoenix. I’ve told this to several people, including another real estate agent, and they can’t imagine what my agent is thinking. At this point I’m thinking of cancelling the contract and moving on, or for that matter just renewing my lease and waiting until things get less stupid (assuming that will ever happen).
Slim from Tucson weighing in…
First of all, I don’t think you’re agent is thinking. Doubt that thinking even enters into the equation.
And go ahead and cancel the contract. Renew the lease too.
Here’s what I think will happen: That agent won’t let you alone, even if you cancel that contract.
Why? Because they’re hurtin’ for sales commissions these days. You came tantalizingly close to being the solution to that agent’s “lack of commissions” problem, and she will probably continue to haunt you until you buy something.
(seller is actually some investment group that bought a bunch of houses and is flipping them en masse). Has anybody heard of this?
In CA 93021 yes they are doing this but Phoenix? ground zero for home crash no I didn’t know they were flipping probably CA investors doing it.
Housing Bubbles Percolate Far From Crises Elsewhere
~ The Wall Street Journal
Housing prices are rising rapidly in Australia, Canada, China, Hong Kong, Israel, Singapore, South Africa and Sweden.
Housing prices are flat—or falling—in Britain, France, Germany, Ireland, Italy and the U.S.
Welcome to the two-speed global economy.
When most observers talk about a “two-speed economy,” they are contrasting slow-growing mature or advanced economies (the U.S., Europe, Japan, etc.) with fast-growing developing or emerging-market economies (China, India, Brazil, etc.). Philip Suttle of the Institute of International Finance, a bankers’ association, calls it “a two-and-six world.” In mature economies, growth and inflation are at around 2%; in emerging markets both are around 6%. Whenever anything nudges them off that course, he says, something else nudges them back.
But there’s another way to divide the world: Some economies had a big banking crisis. Some didn’t. And the ones that didn’t are the ones where housing prices are shooting up. Slow growth in mature economies is leading them to keep interest rates low and credit conditions easy. Because they (so far) dominate world financial markets, that means global credit is easy, too easy for emerging markets where inflation—in wages, prices and asset prices—is the worry.
“In countries where the financial system was not seriously damaged during the global crisis, housing prices have risen rapidly,” says Stanley Fischer, governor of the Bank of Israel. “That’s because when interest rates were cut sharply to deal with the crisis, mortgage interest rates also fell rapidly, and people responded by borrowing to buy houses—thereby driving up the price of houses.”
‘there’s another way to divide the world: Some economies had a big banking crisis. Some didn’t. And the ones that didn’t are the ones where housing prices are shooting up.’
What a stupid article. “There’s another way to divide the world”? Another way to fill newspapers with a pointless “take” on housing bubbles. Do they mention that prices dropped hard in the UK and Australia in 2005? How about all those Canadian condo developers that went bust a few years back? Or that Massachusetts fell sharply before most states in the US, but didn’t go straight down like Florida, the Inland Empire or Las Vegas? There doesn’t seem to be any historical recall about these housing bubbles, just spin. A writer could look at any contrast in these markets and come up with a completely unrelated “cause.”
I would reword it but I think there are two types of countries. One where credit bubbles are expanding rapidly, China, Brazil etc. and places where credit bubbles are expanding slowly U.S, Great Britain etc. Can’t really say credit is contracting anywhere since Government borrowing has replaced private borrowing in the explanding slowly category.
Credit bubble in Brazil: http://uk.reuters.com/article/2011/03/25/uk-brazil-housing-idUKTRE72O12J20110325?pageNumber=2
Please note the increase in amount of outstanding mortgages and the level of debt service compared to even the U.S. We better get our house in order quickly because when the credit bubble in the developing world pops, it is going to make 2008 seem like the good old days.
Please note the increase in amount of outstanding mortgages and the level of debt service compared to even the U.S
It can be argued both ways.
Household debt costs (in Brazil) stand at around 22 percent of income in Brazil, according to Sao Paulo consultancy LCA Consultores, compared to 15 percent in the United States at the end 2010.
But income and inflation are rising.
I do think Brazilians are borrowing too much but I’m not sure if it’s on mortgages yet.
Because: (from the article)
Mortgage debt in Brazil is indeed relatively low, standing at about 4 percent of GDP (it’s about 70% in the USA) And mortgages are new in Brazil and commonly require 20% down and I’d say 65% of Brazilians own their home free and clear. So even if mortgages have doubled in the past few years, it is off a base of almost nothing.
And: Brazil is lacking about 8 million homes right now. Many middle-age, middle class and poor people live with their parents.
Bubble? Maybe but Brazil is a country that is hard to figure out
A snapshop of the global housing bubble at a point in time certainly produces a misleading picture of bubble dynamics. For instance, China seems to be where the U.S. was about five years ago at the moment; I expect five years from now, the stories we read about the aftermath of the bursting of China’s housing bubble will resemble in many ways current stories about the U.S. housing situation, though they are likely to be orders of magnitude worse.
It just seems pointless to me to come up with explanations as to why the markets perform differently. For instance, Sedona AZ has fallen pretty hard, but Flagstaff isn’t down near as much. They are 25 miles apart. Could I come up with some macro-economic point as to why? Sure, but IMO it would be a waste of time. The larger issue is, if you have a bubble, it will pop.
“For instance, Sedona AZ has fallen pretty hard, but Flagstaff isn’t down near as much. They are 25 miles apart. Could I come up with some macro-economic point as to why?”
All Real Estate is Local
At $0.01 a used copy and $1.99 new, the price sure is right for this book!
All Real Estate Is Local: What You Need to Know to Profit in
Real Estate - in a Buyer’s and a Seller’s Market [Hardcover]
David Lereah (Author)
2.6 out of 5 stars See all reviews (5 customer reviews)
Price: $21.95 & eligible for FREE Super Saver Shipping on orders over $25. Details
Usually ships within 1 to 2 months.
Ships from and sold by Amazon.com. Gift-wrap available.
14 new from $1.99 21 used from $0.01
Amazon Price New from Used from
Kindle Edition – $10.99 –
Hardcover $21.95 $1.99 $0.01
This is an example of the oddity of kindle pricing: you can purchase a physical copy of a book, shipping included, for half the price of a kindle edition.
“…you can purchase a physical copy of a book…”
Never been a better time to buy/hold physical.
So many of my friends especially the financial types ask me why I bother to spend so much time and energy on this stuff. They do it to make money. It’s their job, they say, but what’s my motivation. They don’t seem to understand if you don’t follow all the ups and downs and connect the interrelated dots and if you don’t develop an understanding of how these numbers and chart figures came to be, you really are succeptible to misinformation.
A snapshop of the global housing bubble at a point in time certainly produces a misleading picture of bubble dynamics.
Well it’s interesting. Back in ‘05-’06 the fact that we were in the grips of a RE bubble seeme OBVIOUS to those of us who hung out with Ben here, but somehow invisible to many. I think that many of us were wondering whether we were crazy, or was it the rest of the world. So we were trying to logically figure out whether there was a bubble, how bad it was, and how it would burst. Now, of course we have the satisfaction of being (mostly) right, but the question is “Where do we, as a country go from here.” Are there any other problems that most people are being willfully blind to, or did we just get lucky on one thing, and should now take off our tin-foil hats?
‘Where do we, as a country go from here’
One of my favorite topics, and where ignoring the mania aspect of what is going on leads us in the wrong direction. Example; if you have a “crisis”, somebody (meaning the govt) HAS to do something, right? It’s really just how you frame the issue. If you look at it from affordability, what’s going on is ultimately good for the economy.
Back to your question; if we look at recent history and bubbles, the best comparison IMO is Japan’s twin stock and RE bubbles. What lessons are to be gained? Too big to fail and moral hazards were disastrous. We’ve made every mistake they made. The PTB tell us they saved us from a great depression. I’d suggest they’ve merely put off the inevitable (like Japan) and possibly set us up for a Japan like multi-decade recession. At any rate, this is the discussion I’d like to see.
Tell them the same thing CarrieAnn: you do it so you’ll make money as well.
Or at the very least, not loose money.
I’m amazed your financial friends don’t seem to realize their manipulations have consequences for the rest of us.
If your financial type friends don’t find this fascinating, I can’t imagine they are any good at what they do. How many of them pulled out before the collapse, and began to reinvest during the stock market bottom? How many even understood what was happening before the masses? Would they prefer you just watch The View? My best guess is that they lost some money or are in a bad job situation, and don’t want to hear you keep talking about it. They want it to all come back the way it was.
“Too big to fail and moral hazards were disastrous. We’ve made every mistake they made.”
Not only that, but they still seem to expect different results, even though they took virtually the same measures.
Sometimes the best course of action is to do nothing.
“They want it to all come back the way it was.”
Indeed they do. And they violently oppose any other outcome. And many more are convinced that the current environment is just a slight bump in the road to higher ground. They are stupid, ignorant of history, delusional and self entitled. Why do they think this? Because instead of thinking for themselves, they are told to “hang on better days are coming” by LYING REALTORS, Stock analysts, sub-contract Federal Reserve media and public relations thugs, etc. And they suck it up. The believe it. To admit the truth would be to acknowledge that they’ve been robbed blind of;
1) Economic Opportunity
2) “Retirement” (which is a big fat lie anyways)
3) __________. (fill in the blank)
Ben, I think one lesson from Japan is that the short term has a way of completely upstaging the long term. Everybody point to the lost decade and the mistakes that the Japanese made that led to it. And yet many of the same people who were doing the pointing are now advocating or making exactly the same mistakes. Sadly, most people are so focused on the short term, or their own interests, that the long term good of the nation is ignored, or given the merest lip service. So we’re pursuing a series of bailouts and stimulus funded by ever increasing levels of government debt of the sort that did NOT do much to put Japan back a long term growth trend.
And I should mention that I don’t pretend to know what’s in the future but at this rate of #@$%ing around, the normalization is decades out.
Eco and Natalie, I asked one of these fp’s what if I was right and he told me if there was another collapse, all bets were off which sort of sounded to me like he would walk away from his client’s losses w/o guilt. This same person tells me he never looks at the macro stuff. What!!!
Of course, because I valued his friendship for other reasons (he’s not my financial planner) I just couldn’t even go there but this is exactly why I watch these things myself.
There are 2 types of people in this world: those who clap at the end of pieces at classical music concerts, and those who wait to clap at the end of pieces at classical music concerts.
There are 2 types of people in this world: Elvis fans and Beatles fans. (not my construction — got it from Pulp Fiction)
There are 10 typs of people in the this world: those who understand binary and those who don’t.
“There are 2 types of people in this world: those who clap at the end of pieces at classical music concerts, and those who wait to clap at the end of pieces at classical music concerts.”
I think you meant, ‘those who clap between movements of a piece at classical music concerts, and those who wait for the piece to end before clapping.’ I always feel embarrassed for the clueless.
P.S. San Diegans clap between movements; San Franciscans know better than to publicly embarrass themselves.
I think you meant, ‘those who clap between movements of a piece at classical music concerts, and those who wait for the piece to end before clapping.’ I always feel embarrassed for the clueless.
I do too. But, then again, a lot of people weren’t brought up on classical music. I was.
It was more like “those who know when to clap those who don’t know when to clap.” At every classical concert I’ve ever attended, there is a three-phase clapping: a few tentative claps from ” idiot know-nots” who aren’t sure the piece is done (usually wrong), followed a few confident claps by “knows” who ARE sure the piece is done, followed by a full-on clapping and hoot-holler when the rest of the know-nots join in with the “knows.”
Conductors have adapted by putting up their batons at the ready almost before the last note dies out, so that even the idiot know-nots don’t clap. Or they turn around and bow real quick so every becomes a know. I find the whole charade pretty amusing.
I thought the meaning was more that 1 a set of people was waiting to clap because they were glad they didn’t have to listen anymore, and the other were those clapping in appreciation. The dragged along boyfriend/husband syndrome I guess you could say..
There are two kinds of people in the world.. those that divide people into groups and them that don’t.
House prices WERE rising in China. Didn’t we have an article on the HBB earlier this week about them going down?
Not so sure about Canada either… seems like a mixed bag from what I can tell.
Here’s an article a reader sent me from Australia:
‘It’s budget time again and with the property market on the slide, there’s a fresh push underway by the industry for government to boost the flagging fortunes of the sector with new subsidies and ensure that existing support remains a sacred cow…it was the group’s suggestions for the First Home Owners Grant (FHOG) that really caught my eye: “One of the most important housing policy instruments in assisting first home buyers with housing affordability is the First Home Owners Grant (FHOG), which was introduced in July 2000″
“The REIA proposes that the FHOG be set at $15,000 for all housing, new and established [up from $7000 now], and that it be indexed to median house price movements annually.”
‘In October 2008, with the property market ailing fast and the economy teetering on the edge of recession, the Rudd government doubled the first home owners grant to $14,000 for established homes and tripled it to $21,000 for new homes. Within a matter of months, the market was taking off again. A record number of first home buyers poured into the market, driving a steep rise in prices.’
‘Of course, the grant wasn’t solely responsible. The Reserve Bank had repeatedly slashed the interest rate, which hit a 49-year low by April 2009…”
“For first home buyers collectively the grant probably did a lot more harm than good in terms of driving up prices. There’s a very good reason why some industry critics have called dubbed it the “first home vendors grant”. Boosting the grant again in a bid to boost the property market – and indexing it to median house prices – would make a lot of financial sense for the industry and vendors, who could expect it to operate as a gift that keeps on giving.’
“But the plan doesn’t hold up as an argument for boosting affordability.”
Housing prices are rising rapidly in Australia, Canada, China, Hong Kong, Israel, Singapore, South Africa and Sweden.
They’re just a bit late to our party, wouldn’t you say?
As Consumers Cut Spending, ‘Green’ Products Lose Allure
The New York Times - April 21, 2011
When Clorox introduced Green Works, its environment-friendly cleaning line, in 2008, it secured an endorsement from the Sierra Club, a nationwide introduction at Wal-Mart, and it vowed that the products would “move natural cleaning into the mainstream.”
Sales that year topped $100 million, and several other major consumer products companies came out with their own “green” cleaning supplies.
But America’s eco-consciousness, it turns out, is fickle. As recession gripped the country, the consumer’s love affair with green products, from recycled toilet paper to organic foods to hybrid cars, faded like a bad infatuation. While farmers’ markets and Prius sales are humming along now, household product makers like Clorox just can’t seem to persuade mainstream customers to buy green again.
Sales of Green Works have fallen to about $60 million a year, and those of other similar products from major brands like Arm & Hammer, Windex, Palmolive, Hefty and Scrubbing Bubbles are sputtering. “Every consumer says, ‘I want to help the environment, I’m looking for eco-friendly products,’ ” said David Donnan, a partner in the consumer products practice at the consulting firm A. T. Kearney. “But if it’s one or two pennies higher in price, they’re not going to buy it. There is a discrepancy between what people say and what they do.”
For instance, a 32-oz bottle of Clorox Green Works All-Purpose cleaner is $3.29 at Stop & Shop. A 32-ounce bottle of Fantastik cleaner, by contrast, costs $2.89.
Indeed, outside a Whole Foods Market in the Chicago suburb of Evanston, June Shellene, 60, said she did not buy green products as often as she did a few years ago.
“People are so freaked out by what is happening in the world,” she said, before loading her groceries into a Toyota Prius. Of green products, she said, “That’s something you buy and think about when things are going swimmingly.”
“That’s something you think about when things are going swimmingly.”
“Things going swimmingly” = people having lots of money to spend.
A related point: When things are going swimmingly then a lot of jobs pop up to cash in on the things that are going swimmingly. When things stop going swimmingly then the jobs that depended on things going swimmingly vanish into thin air.
And there have been a LOT of jobs in the past decade or so that popped up due to things going swimmingly - of people having lots of excess cash to spend - and these jobs have been or are soon going to vanish and will not be coming back anytime soon.
Yes. I certainly did no realize how much of our economy became based on money from mortgage equity withdrawal (MEW) during the bubble. Not just a few scrapbooking and pirate stores, but the auto industry and alot of retail is going through a massive readjustment when J6pk can only spend the money he is making, not the money he can borrow.
My brother, sister-in-law and I are putting together a “scrap book” for my parents for their 50th wedding aniversary. We are sending people the supplies (and addressed, stamped return envelopes) so they can write letters, add pictures or whatever. This is my first exposure to scrapbooking culture. I had no idea it was this expensive. Not each individual item, but the accumulation of items you need - the book, extra page protectors, extra pages that you put in the protectors, extra pins that you use to expand the depth of the book in case you want to put in a lot of extra pages, etc. And we aren’t even doing all the fancy patterned pages or little decorative dodads.
Someone has/is making a bundle off scrap booking. As in a ton. Boat loads. Lots.
People do not put a lot of thought into fads.
Try white vinegar and water. The marketing managers won’t make a dime on that.
That “few pennies” in all purpose cleaner is a 14% increase.
White vinegar + water = grease cleaner.
Hydrogen peroxide + water = disinfectant.
Ammonia + water = window cleaner.
Add a drop of citrus oil for scent, or add lemon juice to the vinegar.
If you like suds, swish a bar of plain soap in the bucket.
All of these work better if you heat them to boiling on the microwave, spray them on, and then read HBB for 10 minutes while it soaks.
But environmentally friendly or no, I won’t give up my bleach or my Lime-away. I still have this fear of the old communicable diseases like typhoid or dropsy. And nothing cleans up hard water stains (iron and calcium) like Lime-away.
Good news oxide! You can quit worrying about dropsy at least. Not communicable. If you suffer from it and still want a do-it-yourself cure, make yourself an infusion of the Foxglove plant and drink it (origin of digitalis - treatment for cardiac dropsy). Interesting story of scientific discovery and ethnobotany.
I think of these home made remedies whenever I walk through a pharmacy aisle, and see all sorts of antacids (Tums, Pepto Bismo) for 5 bucks a pack, yet the BEST EVER method for curing an upset stomach: 1/2 ounce of Apple Cider Vinegar mixed into a tall glass of water.
Takes nasty, but it will cure your stomach in three minutes.
Sean
Thanks for the tip. Much appreciated. I also found out that my digestion issues were a lack of probiotics (good bacteria) and food allergies. Amazing what a real Doc checks for. (east-west MD)
Sean, I was recently advised to get Bragg’s Apple Cider found in specialty sections of the grocery store.
http://www.bragg.com/products/products.html
How does adding acetic acid (vinegar) to gastric acid help? I can see how bicarb or other remedies would work to raise pH, but not vinegar. Could you explain?
Two words…Mastic Gum
The premium the average consumer was/is willing to pay for the “feel good” factor was always relatively small.
And as you pointed out, the truly frugal and the truly poor will go back to D.I.Y.
DIY…….I guess this was the change the big OH wanted all along…INDIE America…..
and the horrible music that goes with it…
Some of the indie music is good
Check out Repeater’s Iron Flowers album, New London Fire “Different” etc
DIY movement is interesting. I find myself trying to buy surplus factory parts to build computer controlled milling machines.
sorry…much too wussie for me…
Brand NEW:
http://www.youtube.com/watch?v=ef7kskH40xE
Real green saves money.
Ride a bike, use mass transit, carpool or drive a smaller car.
Live in a smaller house or apartment. Adjust how hot or cold it is somewhat to the time of year.
Cook from scratch, and eat food in season.
Buy less stuff, and lengthen the trip from the store to the landfill.
There are exceptions. Which you can afford, if you do the above.
Marketers are afraid of going green, because going green boils down to sitting at home and doing nothing — ie, buying nothing. I’m still amused by the example of the yoga industry. They’ve been doing yoga in India for 6000 years and they got by fine without helpful widgets. Now, you can’t do yoga without a whole kit of special blocks, blankets, mats (with bag), and of course the trendy clothing.
oxide
Gotta love you this mornin. I am in pretty decent shape. I treadmill 40 minutes every morning at home. $600/16 yrs(life of my last treadmill). My obese friends have to join a fancy gym and Zumba for $ each month, on & off. I do the boring cost effective thing. They have to be trendy. All that image stuff is insane. Just do it!
For a lot of people the fitness thing is really a social thing but if you think about it’s better for you than so many other things people do to be social. I think Zumba or group exercise classes can also lead to more difficult challenges. Body Cuts and Boot Camp aren’t for slackers.
When I started training for my tri’s I got right out of the gym completely. People there thought I’d quit. Because you’re right. Any real commitment to shape or competition requires a lot of lonely hours. But on the off season I’ve still got to get back and work the core stength and all other areas to help fight injury and I could never afford all the opportunities offered at a larger gym at home.
I know a couple of elderly, frugal folks who joined a gym and a swim club because - having spent the money, they will get their money’s worth. They know themselves enough to know that they need the extra incentive.
So true. Only in America would trying to experience nothingness take so much stuff. The same is true of “roughing it,” in the great outdoors. Although in some cases, like camping stoves, the modern gadgets do decrease the impact of a larger number of people on a smaller area of wilderness.
Every time I go to the beach it amazes me that some people seem to bring more stuff than I have in my apartment. But maybe they like their creature comforts and it’s like they have a home at the beach
Now, you can’t do yoga without a whole kit of special blocks, blankets, mats (with bag), and of course the trendy clothing.
And you have to go to a yoga class at a yoga studio. Heaven forbid if you should stay home and do yoga there!
Exactly, conservation starts with using less not buying more. Green has been co-opted and commodified to a very large degree, which is shameful when on considers that store shelves have a whole range of green products on them but the nation has yet to construct a meaningful intermodal transport network.
Indeed, outside a Whole Foods Market in the Chicago suburb of Evanston, June Shellene, 60,
That’s her problem right there.
I’ve been shopping at Whole Foods for the last few months, as a supplement to our normal places. The trick is to stay away from prepared foods and some basic staples that already exist at the low-end grocers. Breyers ice cream diferential: $4. Vogel’s bread differential: $2. That junk adds up.
However, buying certain things are good deals: raw oats, fresh veggies are so cheap (e.g., green beans, sprouts, watercress, kale), and the selection of oils are first rate.
I agree. Whole Foods is what you go for for specialty items like gluten-free, not as a primary grocer. I’m boycotting Whole Foods for political reasons, but I found a MOM’s organic market for the bulk wheat berries and some organic produce.
I never found the veggies to be cheap at Whole Paycheck.
I like Whole Foods’ beer selection.
I never found the veggies to be cheap at Whole Paycheck.
Agreed. Though recently they’ve had 3-packs of red-peppers and such for about $1.50 (from mexico). Far cheaper than the Safeway or anything else around here.
The difference I’ve found is that WF has good quality items - produce and meats. It can be hit or miss in the “normal” chain grocery stores. The safeway by my old apartment (walking distance) was horrible, but a mile down the road the Thriftway had a great selection (though was more expensive).
oxide
That gluten free section at WF is junk food. When my Doc found my gluten issue (blood test), he told me I’d get fat eating it and to stay away. We only buy GF bread mix at WF. I eat GF, it’s called real food.
Me? I like to shop at the Food Conspiracy Co-op on funky Fourth Avenue. Nothing like it, anywhere in Tucson.
Evanston is next door to me. I had to chuckle about the Evanston-Whole Foods (there are TWO of them in the town!)-Prius picture. Very Evanstonian. Now if she belongs to the Unitarian congregation, the picture will be complete. I say this with sincere affection.
Recycled toilet paper?! Ewww!
It’s just a newer way of using up the old catalogs in the outhouse…
“Recycled toilet paper?! Ewww!”
Hey- it’s got two sides, doesn’t it?
Did you know that you can make your own green cleaners for a fraction of the store-bought cleaners? It’s easy and fun. Try it.
My local library had/has a handy dandy pamphlet on how to make your own:
Cleaners
Insecticides
Stain remover
Silver cleaner
Simple fertilizers
Air fresheners
Eco friendly and all from cheap things you can buy at the grocery store or probably have around the house already.
I make my own cleaner. Works good.
50% Isoprophyl Alcohol
50% Methyl Ethyl Ketone
Guaranteed to remove anything from any surface. Including paint.
May cause permanant liver damage. Avoid open flames, or connecting/disconnecting electrical contacts while in use.
Spit cleans everything.
“Fickle”? How can that be?
Didn’t we switch over more fuel efficient cars and get rid of the our Behemoth 250s after the last increase in gas prices?
Oh wait…
I was thinking this morning as I listened to people whining on the morning news about high gas prices. They want cheap gas/energy, cheap food and yet they want their wages to rise, they want the value of their homes to rise year after year, they want their investments to return the maximum possible, they want to drive high dollar cars etc… And still they are unable to connect the dots. Amazing.
They won’t have to connect the dots. The economy will connect the dots for them.
Yep, the gas price whiners are at it again. I always get a Schadenfreude attack when I hear SUV/truck drivers complain about gas prices. The blame game is in full swing once again. Its the speculators, the oil companies, the refiners…oh the horrors!
Personally, I would like to ride my bike to work. 7 miles each way, no big deal in a flat land like Florida. Unfortunately bike lanes haven’t been invented yet, at least not in Miami. Riding along on the road with crazy Miami drivers makes the entire endavour suicidal. I don’t want to become road kill.
On a visit to Germany I came to the city of Braunschweig. They had most of downtown closed for traffic and all major roads had bike lanes. Bikes would be at the same level as pedestrians, so cars would have to clear an 8″ curb before they can run you over. In addition they had a bunch of electric trains run all over the place. Most roads that used to be 4 or 5 lanes were reduced to 2 lanes to make room for train tracks and bike lanes. Also saw some plug-in parking meters where you can recharge your hybrid while shopping or at work. I’ve never seen that many people on bikes. Also keeps the land whale population in check. At the more remote train stations in the suburbs you have big parking lots for cars and thousands of bikes. All very impressive.
I know, I know, none of that can be done in the US. We’re too busy fighting wars in far flung coutries, bailing out criminals on Wall Street and whining about gas prices.
Very well put Mike. It gets more depressing when you realize when residential builder’s build, at least locally, it’s still the big ginormous monstrosities they’re producing even as the burgeoning numbers, built merely 10 years or less ago, sit unfilled.
What are they building in Europe?
Ginormous monstrosities are all they have the floor plans for, what their builders know how to hammer together, and still the most profitable. Nobody wants to build a home that’s 35% kitchen and bath. Costs too much per square foot.
Yet most OLD homes had these features..I grew up in a house with a big kitchen and a bathroom an adult could put a sleeping bag in…and still have room. I knew neighbors who put the washer dryer in the bathroom cause it was so big.
Nobody wants to build a home that’s 35% kitchen and bath.
Of course OLD homes didn’t originally HAVE an indoor bathroom, so often a spare bedroom was converted. Very roomy.
Let’s face it folks, our nation is not serious about alternative/intermodal transport. Why? Because the people are not.
Each day I bike to work and each day my travels take me through the neighborhoods of the working poor. You know the working poor, the ones that drop off the kiddies at day care and then hurry to some service job. The same ones all the pols want to “save” with tax credits, and grants, and programs.
Well, here’s a news flash - they love their cars, and as soon as they get two pennies to rub together they by another car or a better car (all in a city with a full transit network). The car to them is everything (as evidenced by how they outfit and customize their rides). No one can legislate them out of this mentality - it is ingrained to such an extent that learning to drive trumps pursuing education or even learning English for that matter.
Hollow headed academics can spout theories until the cows come home but the American culture of today is a culture of consumption. And pretty “green” packaging and harranguing by GE’s talking heads on the Weather Channel only serve to make the hypocrisy all the more laughable. Yeah, be green, recycle, cry about the polar bears - but don’t forget to buy the biggest house you can and buy a car worthy of your bastardized social aspirations.
edgewaterjohn,
The working poor do love their vehicles. The Sec 8 rent, EBT card, and lots of tax credits for kids, helps them afford the SUV pymt and gas bill. I presently live in a Hispanic Spanish speaking ghetto, and I see it. Your eyes are wide open. I wish a house of interest would become available at a price worth paying. Ghettos are noise environments
Back when I was a Habitat for Humanity nail-pounder, one of my fellow volunteers noticed something that I couldn’t help but agree with. Here’s what he said:
After a lot of the Hispanic families moved into their Habitat houses, away went the old clunker cars. They were replaced by monster pickup trucks and SUVs.
This particular Habitat nabe also had a fair number of Asian families. My fellow volunteer noticed that they’d keep right on driving the old clunkers so they could keep saving megabucks for their children’s education.
BTW, this fellow volunteer was an auto mechanic. And he drove a vintage truck that he’d restored. Thing was a real beaut, and I wonder who’s driving it since this guy died last year.
I suspect those trucks were bought with no-money down in the heyday of easy construction cash and easy car credit. I saw the same thing in Ohio, where I lived in an apartment complex populated with H1-B’s and their arranged wives from India. They arrived in a clunker car, but soon the “cute-ute” crossovers — complete with vanity license plate — appeared, usually about the same time as the baby.
I presently live in a Hispanic Spanish speaking ghetto, and I see it.”
yes either the 600K house or the low rent subsidized apartments. You can find them pretty easy by the school test scours.
Santa Barabra was like this back in the early 1970’s back then Thousand Oaks was not. is this gentrification ?
Thousand Oaks was new back in the 1960’s when I first moved here. Maybe thats why? As cities get older they subdivide ?
I suspect those trucks were bought with no-money down in the heyday of easy construction cash and easy car credit.
I think you’re right.
And I also recall hearing one of the Habitat staffers saying that the local affiliate only had two foreclosures in its 25-year history. Well, that would have put the two foreclosures during the period 1981-2006.
Since that time, I’ve heard reports of new Habitat families moving into existing Habitat homes. Which tells me that even Habitat, which does a pretty good job of screening potential homeowners, is experiencing an increase in foreclosures.
cactus
We’re in a month to month slumlord apt on Erbes Rd. Most of the bldg is Sec 8. The Americans pay market rent.
I once worked for the Janss family. T O has changed, and not for the better. We’ve lived in these parts since 1984. We can see the same pattern that got us to move out of the SFV in 1984. Yikes!
cactus
I went to Jungleland as a child. Coming from North Hollywood, I thought the drive took an eternity. LOL
Hey, i am from TO too. Post Jungleland days, but not by much.
Decades of social conditioning through television. The fun part will be watching all those years of brainwashing collide with $6/gal gasoline.
No problem, use Obama solution.
Institute $3/gal refundable credit on Federal Income taxes for any registered Democrat plus anyone deemed not rich or not deserving.
“not deserving” should be “deserving”.
“No problem, use Obama solution.
Institute $3/gal refundable credit on Federal Income taxes for any registered Democrat plus anyone deemed not rich or not deserving.”
Yay! When does this start?
Let’s face it folks, our nation is not serious about alternative/intermodal transport. Why? Because the people are not.
I’d argue a lot of this is due to the zoning and the way our cities and suburbs are built out. They simply are not bike/walk friendly in general.
I think it’s fair to say that the zoning somewhat reflects the will of the people as well, but realistically, the city planners and zoning commission could make more of a concerted effort to make areas more dense, more bike and walking friendly, and more bus friendly.
That’s one thing I really like about Seattle - it has a bunch of pretty self-contained “neighborhoods”, and it’s pretty easy to bike/bus around. Of course I now live on the east side where I don’t benefit from that at all, but that’s because one of the side-effects of that kind of organization is close-in rents and prices get too high. We just have too many damn people.
Wow…Get after it and tell it like it is Ejohn..+1
In my ‘hood of 1.5 kids everyone “needs” a Denali or a Suburban to haul one soccer ball around town. just another form of aggressive conspicuous consumption. 99% of the time I only see one person, the driver, in these McTrucks. Gas is $4.20 for regular.
Yet Germany also still has the autobahn.
Intermodal is the key, each mode needs to be exploited to it’s full advantage. The autobahn plays a role in their network, but it’s a supporting role.
Europe woke up to their truck clogged highways, that’s why the Swiss are spending billions to tunnel through the Alps. Meanwhile we rely on a century old tunnel to get trains into Manhattan.
Out west, long haul truck traffic is down significantly, compared to 30 years ago. Most of the trailers /containers going from the West Coast to the Midwest/Chicago, ride the UP/BNSF now.
I can remember driving on I-35 on Saturday mornings back in the late 70s, when there was a semi every 200-300 yards going north, all weekend long. Nothing even close to that now.
Most of the trailers /containers going from the West Coast to the Midwest/Chicago, ride the UP/BNSF now.
There’s a major UP line that runs through Downtown Tucson. I live less than two miles from the tracks. In the late nights and early mornings, it sounds like the trains are going through my living room.
And, compared to two years ago, that line is a lot busier.
I live in Fullerton, CA in the notorious OC. About 70 Amtrack and BNSF trains pass less than a mile from my house each day.
An irritant, yes. Mitigated recently by Berkshire’s acquisition, since that is the majority stake of my 401K.
Better to have the trains than the semis on the highway. Much more earth-friendly, too!
They’re whining because their wages HAVEN’T risen.
Remember, half the working age population makes $500 or less a week.
That was good money… 20 years ago.
This is an incredible article about what is completely wrong with education in Florida: foreclosure, overwhelmed trustee, McKay “scholarships,” a spaghetti restaurant, and high-needs students.
This is how the “market” works in education.
http://www.tampabay.com/news/education/vincero-academy-staff-waits-on-pay-keeps-teaching-special-needs-students/1165225
“Private tuition and donations were supposed to cover the rest.”
The conservatives are pushing turning Medicaid in block grants (ie, limited money which doesn’t cover everyone) and that churches and charity should handle the poor. Then they get on TV and say that socializing this or that will turn into rationing care.
The conservatives are pushing turning Medicaid ??
conservatives ?? I would suggest they are radical neocons…
From Wikipedia on Paul Ryan
“Ryan is quoted as saying that the political philosophy of novelist Ayn Rand was influential to him, calling Rand “the reason I got involved in public service,” and he requires his Congressional staffers to read her book Atlas Shrugged.[13]“
Rand’s philosophy is neocon? I thought it was libertarian.
Something else I didn’t know about him.
“When Ryan was sixteen his father died of a heart attack at age 55. Ryan began collecting his Social Security survivor’s benefits until age eighteen, which he saved for college tuition and expenses.[8]
“
Rand’s philosophy is neocon ??
Not necessarily talking about Ryan…He happens to be the chair…The policy thats being laid out comes much farther from the right (voucher for Medicare)…I am sure buried in there somewhere they are defunding planned parenthood also…
I wonder what Ayn Rand’s position on social security benefits is?
Typical hypocrite. It’s an unaffordable entitlement for everyone now, but It’s what paid for his college.
And has he forsworn receiving his own government pension and using his government health care coverage? I bet not. (But we can’t afford everyone else’s.)
This is how the “market” works in education.
Read your own link, Muggy. It’s a government official– the bankruptcy trustee– holding up funds for the teacher salaries, not the “market.”
But thanks for the 5 minute mental exercise to refute yet another “unfettered capitalism doesn’t work” type post.
You don’t understand McKay scholarships. Thanks for playing.
The idea that special-needs eduction is subject to privatization at all is the root of the problem.
It’s worse, there are many people sounding the alarm that a lot of these “private schools” are nothing but bogey addresses and the registrants split the $ with the parents. It’s massive, massive fraud and at some point (if they aren’t already) the FBI will dig in.
This is the tip…
One more time, guys. READ THE ARTICLE. How is it “privatization” when 1) most of the school’s funds come from the government and 2) a government bureaucrat is standing in the way of disbursing donated money for teachers?
And try adding some information with your follow-ups, as opposed to just “you don’t understand, good-bye”.
I think you are purposely pretending to misunderstand. I’ll be happy to answer your post if you truly want me to explain.
Do you really not understand what is happening at that school?
LehighValleyGuy, this looks like a classic public-private partnership to me. Government funds are sent to a private company to accomplish some government purpose.
And I think the market Muggy is referring to is not the non-payment due to the bankruptcy judge. It is the fact of the bankruptcy due to market forces.
Special education is expensive. Like insurance companies that prefer to cover those who do not consume medical care, private schools prefer to educate students that are easy to teach. A true market economy in education would tend to drive out special education.
Happy– Yes, it’s a public-private partnership, but I would actually call it a government program funneled through a nominally private company. And as with any government program, some things can be predicted with absolute certainty:
1) There will be abuse and fraud;
2) Outraged bloggers will demand investigations, jail sentences, etc.;
3) Said bloggers will blame the problems on “privatization” and the “free market”, and;
4) Said bloggers will then demand … more government programs!
But clearly, the bankruptcy is not due to unfettered market forces. And as for special ed being expensive, yes it is, and so is caviar. In a free market, when people want something, they figure out how to get it. The article notes that tens of thousands of dollars have been VOLUNTARILY donated– without any government coercion– to help the kids. Much more could doubtless be done without the interference of the government and “private” grifters.
If there were unfettered market forces, there would be no bankruptcy because there would be no school, because there’s not profit in it. The special needs children, especially poor ones, would die in the street.
And as with any government program, some things can be predicted with absolute certainty: abuse fraude, bloggers blaming “privatization.”
I agree! Because who’s doing the fraud? The private free marketers looking for profit, not the government. As for the “tends of thousands of donated dollars,” there you go again. The fate of kids should depend on donations. That is, it depends on whether some rich guy would stoop so low as to forgo his second yacht just to score personal brownie points, not whether he wants to actually help the kids.
I also agree that some bloggers are calling for more GOVERNMENT programs, not more public-private partnerships. IMO, the private sector had its chance, and botched it to where they don’t deserve another chance.
1. Yup
2. Nope
3. Yup
4. Nope
If there were unfettered market forces, there would be no bankruptcy because there would be no school, because there’s not profit in it.
how do you come to this conclusion? One could definitely run such a school at a profit….people just have to be willing to pay. How is it any different from any other school in that regard?
“I’ve tried to emphasize this, but the key here is PURCHASING POWER. When the dollar price of a loaf of bread rises from $1.90 to $2.10 that means something to the average American. But when the Dollar Index drops from 75 to 73.97 the average American doesn’t understand it and isn’t the least bit interested.”
~ Richard Russell
Luckily most if not all wheat that goes into American bread is grown here at home.
Unluckily, most of the oil that goes into the farm implements that sow and harvest the wheat, the fertilizer that helps it grow, the pesticides which protect the yield, and the transportation vehicle that delivers it to market, is imported, and hence reflects (or is reflected in) the drop in the Dollar Index from 75 to 73.97.
And that wheat is purchased overseas
Last I checked, we were a net-exporting wheat producer; perhaps you have current data that contradicts this?
I think he means the wheat grown here is purchased overseas?
So like a giant Ebay we get to compete against the world for wheat grown here.
China should be able to afford US grown wheat after all they have many dollars to spend.
Most of our oil is still pumped here.
Just barely, though.
Treasuries Advance Before Fed Meets on Bets Growth Will Suffer
(Bloomberg)
Treasuries rose for a second week as investors speculated that efforts to cut the Federal budget deficit may damp economic growth and awaited a policy statement next week from the Federal Reserve.
Ten-year note yields fell to the lowest level in a month even as Standard & Poor’s put the U.S. government on notice that it risks losing its AAA credit rating. Gains were tempered by advances in stocks. The U.S. will sell $99 billion in notes next week, and the Federal Open Market Committee opens its two-day meeting on April 26.
“You are looking at an economy that’s just getting off low levels,” said David Coard, head of fixed-income trading in New York at Williams Capital Group, a brokerage for institutional investors. “The market is looking for guidance from the FOMC. We’re looking for clues as to when the Fed may possibly begin to change course with respect to monetary policy.”
“Ten-year note yields fell to the lowest level in a month even as Standard & Poor’s put the U.S. government on notice that it risks losing its AAA credit rating.”
This is good, right? Because it means Uncle Sam will not have to go broke by refinancing debt at high interest rates…
“…refinancing debt at high interest rates …”
Wait a minute! What’s with this business about having to refinance debt?
So many times I have heard on this message board that all the Fed has to do to get money is to PRINT it.
So which is it? Does the Fed have to borrow money like everybody else or can it just print it?
Go to google.com and type “qe2 explained” and you’ll find out for yourself.
I converted my worth less $$ (no, not worthless yet) into gold and silver a long time ago, how about you?
Shadow inventory…… It’s still there. Some of it occupied, some empty.
Sounds like a great argument for purchasing gold. Or real estate investments.
The dollar, less almighty: Big investors see possible long-term currency weakness
By Steven Mufson, Thursday, April 21, 8:41 PM
Last month, Warren Buffett went shopping — abroad.
He flew to South Korea for a factory opening and called the country a “hunting ground” for investments. He also pronounced post-earthquake Japan “a buying opportunity,” and then traveled on to India, where he said he was eyeing more acquisitions.
This is Buffett’s way of betting against the U.S. dollar. Armed with about $38 billion of cash at Berkshire Hathaway, he can use dollars now to buy companies that will generate profits in other currencies for years to come. (Buffett is a director on the Washington Post Co. board.)
“I would recommend against buying long-term fixed-dollar investments,” Buffett said at a public appearance in New Delhi. “If you ask me if the U.S. dollar is going to hold its purchasing power fully at the level of 2011 five years, 10 years or 20 years from now, I would tell you it will not.”
…
He flew to South Korea for a factory opening and called the country a “hunting ground” for investments ??
And how many billions is it that we spend with our military bases there ??
“Sounds like a great argument for purchasing gold. Or real estate investments.”
Did somebody call me?
It’s certainly an argument for borrowing long term at today’s fixed rate on assets/companies that generate strong cash flow.
Here’s a twisted bit of Realtor™ logic: Since the post-crash bounce in housing prices was artificially engineered by the government, a subsequent decline in housing prices after the interventions are withdrawn does not qualify as a double-dip in prices.
Hmmmm…
Morgan Brennan
Closing Table
New Housing Data Shows A Springtime Bounce Back, Not A Double-Dip
Apr. 19 2011 - 9:45 am
SOUTH SAN FRANCISCO, CA - MAY 04: A sold sign…
February housing numbers were as gray, gloomy and cold as the winter month they represented. Existing-home sales were down 9.6% month-over-month and new-home sales registered lows not seen in nearly 50 years. Some of my real estate reporter colleagues at other media outlets were quite fast to assume this data meant a housing double-dip was upon us.
My humble yet informed opinion? Double-dip prognostications about the national market as a whole have been rather hasty (not to mention you need a non-artificially induced rise in prices to actually have a second dip). After speaking to the cache of realtors and real estate experts in my rolodex, February’s chilly data seemed more like a reflection of a tough winter in a tough market. And indeed February traditionally tends to be a slow month thanks to the weather, housing crisis or no. The regions hardest hit last month — the northeast and the northwest – echo that fact as well.
…
“Here’s a twisted bit of Realtor™ logic: Since the post-crash bounce in housing prices was artificially engineered by the government, a subsequent decline in housing prices after the interventions are withdrawn does not qualify as a double-dip in prices.”
I happen to agree with her. She was just saying that last year’s rise in prices was induced by governmental intervention rather than free market forces, and thus should be discounted.
“Should be discounted…”
We are singing off the same sheet of music on that point.
However, if the technical definition of a double-dip is that prices bounced up and are now crashing again, I don’t see why the question about what caused the double-dip should matter regarding the other question about whether we have seen a double-dip.
I read it to say that she would back out the governmental incentives in graphing housing prices, and that if you did, there never really was an upward bounce last year. Thus, it is silly to say we are in a double dip because we never had a prior rise based on free market forces. I think you basically agree with her, but for the fact she is implying that things are looking up for housing even after you back out government incentives today, and blamed some statistics on the weather, as to which I do not know your view.
The Fed’s dollar debasement program is encouraging wealthy folks who already own homes to buy another or two as an inflation hedge; meanwhile, first-time buyers are sitting on the sidelines (or Mom and Dad’s basement), hopelessly priced out by personal circumstances and unaffordable prices.
Housing Recovery: Not here yet
Posted by Stephen Gandel Wednesday, April 20, 2011 at 12:53 pm
Buyers still wanted (Getty Images)
There has been a lot more talk recently about whether we are on the cusp of a housing market recovery. I wrote that I believed the housing market would rebound in 2011 back in December. Earlier this month, my colleague Bill Saporito wrote a story about how two developers who had called the crash correctly were now betting on a huge bounce in housing prices.
Well, the developers and others will still have to wait. The National Association of Realtors released their numbers on the housing market today. There was a glimmer of good news. Housing sales were slightly higher than analysts expected. And home prices were up from a month ago. But compared to where the housing market was a year ago, both housing sales and housing prices were down significantly. Homes sales were down 7% from a year ago. Prices dropped another 6%. The median price of US homes sold last month was $159,600, down from well over $200,000 at the height of the housing market.
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One telling data point from the latest housing report is the numbers on who the buyers are. In March 2011, the percentage of homes bought by first-time house buyers dropped to 33%. First-time home buyers made up 44% of all sales a year ago, helped by the tax credit. The surprising thing is that while home prices are lower than they were a year ago, the number of investors will to bet that the housing market has bottomed is not up that much. Investors accounted for 22% of home purchases in March, up from 19% a year ago. Considering that home sales overall dropped. That really isn’t much of an uptick. Just a few thousand homes across the entire US. With home prices so far off their peak, I would expect a bigger jump.
So who has been filing in the gap? People who already own homes. The percentage of people who were existing home owners buying a new home jumped to 45% in March, up from 37% a year ago.
This says something about what is driving the housing market. People don’t buy houses just because they are affordable. In fact, the driving force behind people buying houses still seems to be if they think housing prices will go up. That’s why you saw a big uptick in repeat buyers and not such a big uptick in investors or first-time home buyers. Repeat buyers don’t care if housing prices go up or down. They already own a house and will be affected by price swings whether they buy a new home or stick with the one they’ve got. It is the investors and first time buyers you have to watch to see if people think housing prices are set to rise. When prices do rise, that will draw more buyers back into the market.
So for a good predictor as to whether the housing market will rebound soon, perhaps the best indicator is not housing affordability, but first-time home buyers. This month’s data says, once again, the recovery is not yet in sight.
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“not such a big uptick in investors ”
The bottom feeders are waiting on the shadow inventory. I still wonder when that shadow inventory is going to turn into shadow tear-downs.
A lot of what’s going on around here is directly related to loans. And since GSE and FHA are the bulk of those, the rules make or break many deals. I’d guess locally that most offers on foreclosures fall through due to some condition requirement not being met, sometimes more than once on the same house. Another thing related to that is inspectors/appraisers. They sign off on the condition, but the new rules don’t allow the lender to pick an appraiser. This has added a level of objectivity that wasn’t there before.
Then there is plain Jane bank REOs, and their incompetence. I was recently asked to de-winterize a foreclosed house for inspection. I got out there and the buyer was on the property. The house had a well, which had frozen and burst the pump. This guy had a week to close, so he had fixed all the busted plumbing himself and got it inspected, and it passed. He explained that if he hadn’t taken it upon himself to do this, it would have never happened in time. I can say he is certainly right; by the time a bank gets around to inspecting, putting problems out for bid, accepting those, getting the work done, months could pass.
Cash buyers shoot past all this stuff.
Stupid technical question, how do you winterize a well? You can’t exactly poor anti-freeze in it like a toilet bowl, or drain it so there’s no water in it.
Maybe put a transparent cover over it? Let in the light and keep in the heat, sort of like a greenhouse?
Or, if the draw from the well is from the bottom then fill the top of the well with styrofoam balls. The Styrofoam balls would float on the top of the water and insulate it.
Just kicking around a few ideas.
To winterize the pump, you pretty much drain all the piping down to the well and disconnect the wiring so that no one can turn on a dry pump. The well itself won’t freeze because it’s underground. I guess you do the reverse to dewinterize it.
http://www.ehow.com/how_5668584_winterize-well-water-pump.html
Yeah, I misstated the well part. It won’t freeze, but all the above ground plumbing might. In a perfect world, it would be just the reverse of a winterization. But these are foreclosures. So the main thing I am looking for is an improper winterization, like the one at this house. The pump wasn’t drained so it froze and busted in two. The breaker to the hot water heater wasn’t turned off, so when the electric was turned on, the elements were not in water and burned up. And then there’s the pipes. I’ve seen multiple occasions where the water gets turned back on, everything looks normal until water starts coming out from behind a wall. Newer water meters have indicators that tell you if even a tiny amount of water is flowing through. You can then immediately shut it off. But I’ve seen pin-hole leaks ruin two floors of drywall too.
A true de-winterization includes firing up the furnace, water heater, checking the ice maker in the fridge, etc.
“The pump wasn’t drained so it froze and busted in two. The breaker to the hot water heater wasn’t turned off, so when the electric was turned on, the elements were not in water and burned up. And then there’s the pipes. I’ve seen multiple occasions where the water gets turned back on, everything looks normal until water starts coming out from behind a wall.”
This is a great example of the many things that can go wrong when houses sit unoccupied for extended periods of time. Did Uncle Sam realize that by throwing a wrench into the market’s attempt to reach equilibrium at prices which reflect current demand, that millions of homes would sit vacant and physically deteriorating at a much more rapid pace than owner-occupied housing does, throwing aggregate real U.S. housing wealth down the toilet in the process? You would think Uncle Sam would learn from artificially supporting the price of milk products that price supports lead to unutilized surpluses…
This is a great example of the many things that can go wrong when houses sit unoccupied for extended periods of time. Did Uncle Sam realize that by throwing a wrench into the market’s attempt to reach equilibrium at prices which reflect current demand, that millions of homes would sit vacant and physically deteriorating at a much more rapid pace than owner-occupied housing does, throwing aggregate real U.S. housing wealth down the toilet in the process?
Plus positive infinity!
“price supports lead to unutilized surpluses…”
Letting it rot helps clear up the surplus?
That post is “spot on” Ben….That is exactly what is happening around here…
So I guess the best way to cash buy and not be stuck with a lemon house is to PRETEND that you need a mortgage. Get all your appraisals and inspections together, make the FHA code folks happy, allow the seller to say a tearful goodbye to the squirrels, move in your stuff…. and pay off the mortgage two months later.
Of course, that only works if you’re buying for primary residence. If you’re some rich guy in Singapore looking to invest sight unseen…rotsa ruck.
“So I guess the best way to cash buy and not be stuck with a lemon house is to PRETEND that you need a mortgage. Get all your appraisals and inspections together, make the FHA code folks happy …. and pay off the mortgage two months later.”
We attempted to buy a house that way. We did it partly in an attempt not to tip our hand while making the offer and partly because we were considering taking on the mortgage and putting the cash in retirement or college fund. So our offer contained a contingency on a mortgage that we didn’t need.
Then the seller’s agent wanted a pre-approval letter. We told our agent to tell her to have the sellers sign acceptance of the offer first - so our personal financial information isn’t in some bankers file cabinet before a deal is reached. Listing agent refused to present the offer without a pre-approval letter, and delayed our offer by at least three days. We told our agent to “forget it”. Next thing I know, the offer got presented.
The place is still on the market, asking less than their counter-offer to us.
That tactic might still work, but we didn’t want to take it further. Ultimately, it probably makes no sense to pay $2,000+ in lenders fees for a two month mortgage - better to withdraw the mortgage contingency, or take the mortgage and find other uses for your cash.
We are one of the first time buyers out there. We finally found a place to buy after renting for the last 10+ years. We’re buying because:
1. We found a great place to purchase in the best if not one of the best school districts around.
2. The home will allow our extended family to visit comfortably, giving our kids frequent contact with their grandparents.
3. The house is large enough that we will never outgrow it (I can watch my kids grow up in it).
4. The house is new enough that it doesn’t need any work.
5. We can afford it (25% down, with a multiple of that left after the purchase, and a 30-year fixed rate loan).
Whether we are at the bottom in prices, or they fall another 5-10% doesn’t bother me. The home is clearly an asset that we’ll take care of, but I don’t consider it an investment, instead, it’s finally a nice place to raise our family. I was ready to offer more if there was competition from other buyers…there was not…it was off-market (not listed on MLS).
I know of four other bubble holdouts that are in a similar position (not buying during the bubble and saving their money). Two of them have now purchased. I’m next. Two of my other friends now mulling over when to purchase.
Check out the following:
http://www.nmhc.org/Content/ServeContent.cfm?ContentItemID=1152
There are 39 million or so renters in the US, a fair number of whom make more than $50,000 per year (about 25% of apartment renters, I’m assuming a higher percentage of the renters of homes). There are a fair number of those folks who never lost their jobs during the recession. Perhaps this is 75% or so who had steady work through the recession, or 29 million renter households with stable jobs? Of these, how many were renting as a stepping stone to ownership and have had the discipline to save their money to amass a down payment over the past several years (many stretching back to pre-bubble)? 10%? 20%? 30%? Call it 3 to 9 million?
I saved for 10+ years. There are others like me…the irresponsible get the press, which make people feel that all are irresponsible.
How many of those 3-9 million are going to do what I did when they start to feel better about the housing market, and get tired of their rents being raised?
There is a pool of first time buyers out there. I am still part of that pool until we close on our purchase. There are others–the negative sentiment in the market is still keeping them away for the most part. When sentiment shifts, more and more of that capable buying pool will move off the sidelines, turning the vicious cycle into a virtuous cycle.
Given where prices are already (pretty affordable), the question is not “when will prices fall to to levels that are attractive?” The question is “when will sentiment shift?” Later in 2011? 2012? Later?
Congrats, RentalWatch! I don’t think anyone here would say you made the wrong decision (except maybe Bill the Nomad
). If the price and the reasons are correct, there’s no good reason to wait for the last 10%.
We have been looking for a while and had a wish list of things we were looking for. I thought we would need to give up some things to get others. We found them all in one house. Rather than buy once, and then buy again in 5 to 10 years, we got all we wanted now. We may not move again until the kids are out of the house. We certainly won’t need to in order to get more space…
I would have sprung on that checklist myself Rental Watch. Congratulations and enjoy!
We keep reading about the army of all-cash buyers. Who are these people? Is the fact that they dominate the housing market a sign of a bottom, or of further price declines, once they try to profit off of a quick flip? If many of these folks are foreigners trying to capitalize on federal housing price support measures, would it be prudent for U.S. end-user purchasers to wait until the dust settles on the bubble, or to go toe-to-toe with these short-term equity locusts?
So many questions… so few obvious answers.
Foreign and Domestic Cash Investors
Posted on: Tuesday, April 12, 2011 - Julie Jalone
According the National Association of Realtors the number of investors and international buyers taking advantage of housing bargains has reached record numbers and a big percentage of these are cash sales. Some experts predict this trend to continue and increase.
With lenders still only wanting to loan money to the most credit worthy among us there are fewer traditional buyers which opens the doors to domestic and foreign investors who have cash. One-third of existing home sales in February were cash transactions. The trend of cash purchases could reach 40 percent of all sales. In April, the NAR reported, about 55 percent of international buyers paid cash for US homes.
The cities with the highest percentage of cash sales include, Miami, Detroit, Phoenix and Las Vegas. These are cities where there has been significant price drops and foreclosure rates remain high. A great deal of these cash sales are quick flips where the investor makes a few improvements and has them back on the market very quickly.
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Also worth noting: The Fed’s dollar debasement policy gives a ginormous opening for all-cash buyers into the U.S. housing market.
But who are they going to sell these homes to when they try to profit off their flips? American households are broke, so enjoy riding your falling-knife real estate investments all the way down to the level where end-user American households can afford to buy them from you…
Meant to say “foreign all-cash buyers”…(but could also apply to anyone playing Aladinsane’s strategy of parking lots of money into PMs a few years back with a plan to invest in RE when housing prices bottom out…)
Plus they open themselves up to confiscation by the taxing authorities. Non-resident homeowners (they can’t vote) are easy pickings for property tax hikes.
I look forward to hearing stories of these “investors” getting cut off at the knees.
Stagflation with the prospect of loosing MID and higher taxes on investment gains and higher risk in the stock market, makes plowing money into paying off your house or buying with all cash more likely.
One thing to consider PB. If you are buying on the courthouse steps, you are an all-cash buyer. These homes selling to cash buyers is not an indication of lack of people willing/able to borrow, it’s that the process on the courthouse steps generally doesn’t allow the time for a loan.
So a large number of the cash buyers are simply playing an arbitrage game. Buy a home that readily trades for $130k with a traditional marketing process for $100k on the courthouse steps, and put it on the market with a traditional process.
The “buyers” are not individuals, but small funds put together specifically for this reason. They get $5 to $10 million together, and are targeting 20% returns for the investors. They have groups of people that drive the properties, review title, attend auctions, manage the fix-up, etc. A typical purchase/fix/sell takes about 90-120 days (and these buyers are selling the homes–it’s not a dream). After the fix-up/cost of sale, the home may have a 15-20% net margin. People aren’t getting rich, but they have an arbitrage business while it lasts.
The other cash buyers are looking at this from a lower return/higher multiple perspective, buying homes all cash on the courthouse steps, renting them out, putting debt on after the fact, and collecting cash flow for the next 3-5 years (perhaps 10-12% annual yield), with the intent to sell in 3-5 years, in some cases to the actual person who was going to lose the home (who may structure a lease/option–to buy back the same home).
These strategies are actually showing results, which is why more capital is going into buying housing–the ability to “flip” for a profit is not a dream, but actually happening (and has been for some time).
The strategy makes sense if you can get your arms around managing all the moving pieces. The process allows there to be a strong enough margin that the model can survive a 5-10% fall in prices from here and still not lose money.
Not all American households are broke, or else ALL we would see are investor buyers…that is not the case. There are plenty of broke households, that’s for sure, but there are plenty of other households who are not broke.
To my understanding the “cash buyers” are rarely families who are sitting on cash and want to buy their family home.
My former landlady purchased a property on the courthouse steps. It was a two-house property that had been foreclosed on.
‘Twas next door to the duplex that we lived in, and former landlady didn’t want it to fall into the hands of one of Tucson’s many sleazy developers.
Well, that was in December 1998. Once she took possession, she found out that the place needed a lot of work. Took her years to bring it back up to snuff.
Yes, she was an all-cash buyer, and yes, she was quite the handywoman. But her experience taught me that foreclosures may only be deals on the day you buy them. After that, they’re a lot of damn work.
The good news about the above story was that, for the most part, my landlady had good tenants living next door. One of them was a pastry chef who brought us very tasty samples of his cooking.
There is definitely risk in the deal, which is why the cash buyers are seeking 30% “paper” margins, assuming they will spend some money. With $5MM in the bank, these guys can buy 20+ properties, most of which they actually are able to drive by and check out to some extent.
My main concern with the strategy is that these operators are asking you to commit them money for a period of (in some cases) a few years, so they can make sure they are able to build up a team. As an investor, I’m not confident that the opportunity will be all that attractive for that long.
Due to the cutting of federal funds the State of MA is cutting 2 Job Centers on the Cape where the unemployment numbers look like this. Note in particular the outer cape numbers (Provincetown, Wellfleet and Truro)
Cape Cod Unemployment
Barnstable: 2,397 (9.5%)
Bourne: 1,043 (10.2%)
Brewster: 600 (11%)
Chatham: 328 (9.9%)
Dennis: 894 (11.4%)
Eastham: 372 (13.4%)
Falmouth: 1,607 (9.4%)
Harwich: 861 (13.7%)
Mashpee: 772 (9.9%)
Orleans: 347 (11.7%)
Provincetown: 1,026 (38.1%)
Sandwich: 888 (8.2%)
Truro: 314 (23.6%)
Wellfleet: 373 (20.6%)
Yarmouth: 1,477 (12.5%)
Source: Massachusetts Executive Office of Labor and Workforce Development
Having lived on the Cape back in the day, it’s an area where employment has always been seasonal, due to tourism, fishing, etc. I understand that in recent years it has become more of a retirement area for those New Englanders who wish to remain in the area as they age. So I guess you could add health care to the mix. But my point is, it has never been a high employment area and lots of the natives hand-to-mouth it through the winters. The farther out you go towards P-town, the more difficult it is. It always has been. I notice Hyannis isn’t on the list. Probably doing just fine, always been the “hub” of the Cape.
It’s gorgeous area, much of it, although the summer congestion would turn me off from going there anymore.
I always liked that “Mashpee” place name.
Drove a motorcycle around the Cape last year. Mostly back roads. There were a number of areas where it seemed like every 10th or so house was partly a realtor’s office. For sale signs everywhere.
84% of the P-town residents voted DEM during the 2010 Gubernatorial.
Elizabeth Warren has stated she wants to end too-big-to-fail. Has TTT approved of that idea, too? (And has he paid his taxes in full this year?)
Al Lewis
April 22, 2011, 12:02 a.m. EDT
Warren tells the controversial truth
Commentary: Fighting the banks, protecting the consumer
By Al Lewis
NEW YORK (MarketWatch) — Certain members of Congress keep trying to kill the Consumer Financial Protection Bureau before it is born, but so far they’re losing to a former Sunday school teacher.
“I am not going down on this agency without a fight,” Elizabeth Warren said earlier this month at a Society of American Business Writers and Editors meeting in Dallas. “It is a fight worth having.”
Warren, who draws inspiration from Methodist Church co-founder John Wesley, has been preparing the way for the new agency to open July 21. From the beginning, she’s fended off calls that she go away and battled legislation designed to kill, defund or otherwise neuter her baby.
Reminds me of when our fearless leaders gutted the Securities and Exchange Commission and so many other regulatory agencies and then asked why there were so many Ponzi schemes.
“The plan is, stick with our failed financial system,” Warren said of her congressional opponents and the banking industry that backs them.
Warren won’t accept that plan. She wants banks to be held accountable and consumers to receive honest and clear disclosures about mortgages, auto loans, credit cards and payment systems.
The financial collapse of 2008, she said, was fueled with misleading paperwork. For this view, she’s been branded “controversial.” Oh, and then there were those other “controversial” statements she made when she sat on a panel that oversaw the bank bailouts known as TARP.
“We need two central changes,” she declared in December 2009. “Fix broken consumer-credit markets and end guarantees for the big players that threaten our entire economic system … If we don’t get those two right, I think the game is over.”
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“I am not going down on this agency without a fight,”
Interesting choice of words.
However, dragging my mind out of the gutter, I must say I think she’s learned the lessons of Brooksley Born. I do wish her well.
Brooksley Born- A woman of great integrity, brains, and allegiance to her fellow Americans. I truly respect and admire her. Thank you, palmetto.
I am kind of magenta this morning, after looking at homes yesterday, and needed to think of a fighter for truth, justice and the American way. Brooksley is a good role model of resilience.
The new game in town (So Ca-my area) is to price all new listing around 2,000 sq ft around $400K, regardless of condition, location, or anything. It’s the buyer’s “soft spot” I was told from a UHS. A home across the street from the fwy was so noisey, only a deaf person could live there. “Offered” at $415K. They can keep their offer. (Nice home and yard.)
What I find so ridiculous is that $398K bought 4,000 sq ft in 1998, when the economy was buzzing along and salaries were strong. Now in the midst of a Depression, homes are priced twice as much. Cheap $ and dumb buyers are a toxic mix.
We see that here too. Price all generally similar comps at the same price point regardless of condition. It boils down to the fact that white collar professionals often have no idea what they’re looking at for repair costs. The realtors act like $50k - $75k improvements can be done for short money. Well yeah, the lipstick on a pig improvement might only cost you $3k - $5k but if you really want to fix that drainage problem that’s eating at that foundation, and the fact that older bath has been leaking through the floor for years and now is a much more expensive repair, and, and, and…..
You get my drift. My DH and I have figured if there’s more of them (the clueless) than us the fixers keep getting purchased for a price that puts them beyond what the neighborhood will carry. Of course many of these buyers will just continue to let the place deteriorate around them and put it on the next sucker in a few years. A virtual hot potatoe. Don’t need a noose around my neck mortgage for one of those as that describes my rental.
around 2,000 sq ft around $400K ??
$200. per foot is a steal around here…
$398k in 1998 is just as absurd…..
CarrieAnn
If the fish stinks from the head down, then I get it. NAR must of had a webinar on soft price points for areas. It really infuriates my husband and I to know end. Thanks for chimming in. I use your posts as a data point, along with Kim’s. Good point on repair bill vs. lipstick bill.
scdave- Where are you? I assume the east coast.
RAL- I agree, but at least we got a view home, built in fridge, and we picked everything. Not some recycled dump with all kinds of repair bills.
scdave- Where are you ??
Silly Valley….95000-95054
I agree. It’s very valuable knowing these practices are happening everywhere and it’s not just a local phenomenon. I think the NAR is only recognizing and taking advantage of the dumbing down of the housing consumer. The buyer may be great at opening up markets for his product in Asia but he knows nothing about that quarter to half million and often 3/4 of a million dollar purchase he’s making when he buys a home. He goes at it likes his wife’s designer dress purchase for the company soiree. Does she like it? Will it impress his peers? Can I afford it? Ok, it’s good then. That’s as deep as the analysis goes.
In most homes what we see is beautiful furniture, beautiful art, and nice landscaping. Then you look closer and see systems that are hanging on by a thread. Roofs that are growing moss on them there’s so much moisture in the shingles. Collapsing retaining walls. Roofs w/birds living in them. Sinks and fixtures w/rot under them. Oh I don’t mind taking care of that stuf as long as I don’t pay for an updated house that I have to then turn around and update myself. But that’s where the disagreements seem to lie w/us and the realtors and sellers. Things have sold that way for so long no one believes anything’s changed.
It is true in some price niches that you are lucky just to find inventlory that is semi-nice. But I see that as a seller’s market and don’t want to buy in that environment.
scdave,
My other half was an Engineering Mgr for Intel in his prior life. Loved the $. The stress nearly killed him.
You must have/had one those fancy tech jos.
Did the tech bubble fuel the start of SV’s housing prices, or is it just normal? I know it’s insane up there.
Did the tech bubble fuel the start of SV’s housing prices ??
Whew…Kind of a tuff question to give a one line answer but I guess you could say that it did really start way back with the “Chip” invention…
I have been in the same zip code for 59 years…My family tree has been in this same zip code for almost 100 years..
I have watched the valley go from a fruit packing valley to what it is today so you might say it has been a wild ride…
In trying to give you a simplistic answer to your question about housing prices there are many reasons IMO, including yes, “The Weather” but it still comes down to employment & income….
““We need two central changes,” she declared in December 2009. “Fix broken consumer-credit markets and end guarantees for the big players that threaten our entire economic system …”
So why is she demonized (and I mean that literally- they’re really going after her) by the Right?
So why is she demonized (and I mean that literally- they’re really going after her) by the Right?
I think that a big part of the reason is due to her gender. There are quite a few folks on the right (and left) who feel very threatened by a self-assured woman who stands up for what she believes to be right.
Same sort of thing happened to Brooksley Born.
“Certain members of Congress keep trying to kill the Consumer Financial Protection Bureau before it is born, but so far they’re losing to a former Sunday school teacher.”
And who would these seditious traitors be?
For how long can you bounce along the bottom before your bottom gets really sore?
The Week in Charts
April 22, 2011, 8:30 a.m. EDT
In charts: Building permits, home prices and more
Weekly graphical representation of economic indicators
By Steve Goldstein, MarketWatch
Bouncing along the bottom
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Aren’t bottoms 10-15 years long? I wonder if we can get that chart 100 years back and with local data. Florida 1900 - 2010 or California 1920 - 2010 would answer your question.
A lot longer than you can if you buy too early! Talk about a sore bottom!
Interesting sighting at a corner in Long Island City today 3 buildings all with for rent lease 1 is abandoned all locked up and gated… 1 looks almost empty, the other has 3 big signs Available signs on it.
The 4th corner just tore down a building and started a new construction.
I wonder if its because the high school is expanding and they didn’t want the students to cross one little side street to get to classes?????
I don’t think our Canadian RE mkt is going up nor down, but showing signs of weakening by zone. Our spring market is good but not hot - then the rest of the year it will be at best flat.
Can you believe that we are the US’s biggest supplier of oil and we pay about $1 more per equivalent gallon than you do? (I guess we are not blue eyed Arabs).
Exxon Valdez was the biggest oil disaster ever - not because of the damage - but because it shut down 100% of all offshore exploration of probably the biggest oil reserve in the world (gell oil). If Canada and BC lifted their moratoriums then North America could have a very secure source of energy for the rest of our lives, and for all of us.
Canada has massive oil reserves - there has been said that off the coast of BC there is more gell oil than the rest of the world’s oil put all together. Add to that our huge oil sands, almost equally the heavy oil deposits, shale oil, conventional oil in the Arctic and off the maritimes, secondary recovery of existing field technologies - with all of this why is oil so bloody expensive?
Why are you Americans crying about environmental concerns of our oil sands and then demanding more of it? Our oil companies (a lot US owned) are trying their best to deal with new technologies to overcome any environmental concerns.
I think your mfg has been doing better because of the weak US dollar. Most countries cannot seem to adjust to the thinking that it doesn’t matter how much your currency is worth, it only matters if you are the most efficient with IPR, labour, and equipment. A company should not be propped up on a cheap currency because that guy will lose his market to a more secure local and equivalent price supplier without warning (leaving him with unpaid excess plant capacity). This could be signalling the self absorption phase of a global market - and I can see North America with the dominant GDP winning.
Anyhow - I will be headed to Florida shortly - I hooooope my Canuck buck will continue to buy even more of your Yankee bucks so I can spend more of them down there. Turn on the sunshine !
You see, our industries know how to compete - and fairly.
‘Strategic defaulters’ pay bills on time and plan ahead, study finds
http://www.washingtonpost.com/business/economy/strategic-defaulters-pay-bills-on-time-and-plan-ahead-study-finds/2011/04/21/AFcGQSLE_story.html
whyoung
Worthwhile read, thank you. And to you, Mr. Jones, PB and wmbz, a long overdue ,thank you.
However a small gesture and punishment, it would nice to see the IRS tax all these strategic defaulters and at least hold them liable for taxes on this $. After all, they are getting the gift of free housing.
Remember that article on the IRS taxing withdrawals on equity not recycled back into the property.
it would nice to see the IRS tax all these strategic defaulters and at least hold them liable for taxes on this $
then you should write/call your congresscritter and chastize them for suspending the income tax on forgiven debt…
Anyone know how long that is in effect for?
Through calendar year 2012.
How can you tell a Republican by their tax position?
They are in favor of eliminating the tax on capital gains.
Except that loans not paid due to capital losses by bankrupt homeowners are to be 1099ed and taxed as ordinary income.
Heads they win, and tails you lose if you try to play their game without their influence.
My own personal Bits Bucket for the day:
Today is my father’s 90th birthday. His short term memory is shot, he has Parkinson’s and is very frail, but he is still with us. He chalks it up to good medical care, which is undoubtedly a factor. My take on his longevity, in the face of overwhelming odds against him based on his personal and family history, is that he hasn’t yet had his fill of westerns on TV and going out to breakfast.
Does anyone know where REhobbyist has been lately? I miss her.
On Monday evening I am heading across the Pond to the “P” in PIIGS for vacation followed by a conference. Will keep an eye out for newsworthy observations to report when I am back in mid-May. Th euro being at a buck forty-five or so is painful to contemplate but I take some small comfort in having bought euros via Everbank when they were at $1.30.
Safe travels Elanor. Look forward to your reports and Happy Birthday to your Dad.
Not looking forward to the TSA gauntlet but the trip is exciting. I was getting a travel jones and this should satisfy it. Plus I get to scope out some of Europe’s current state of affairs. Cheers!
“…TSA gauntlet…”
Do they search women all the way up the inside of their legs, the way I was searched a couple of weeks ago? I was frankly a bit shocked, though I am too old to get very freaked out about something like that. But if I were a woman undergoing the same kind of hand-to-crotch contact I endured, I am quite certain I would feel violated.
Congratulations to your father. My father just celebrated his 90th a couple weeks ago.
Congrats to your father too! I hope he is still enjoying life.
He does his best. He still walks 2-3 miles a day.
Happy birthday to you dad! Don’t forget to buy him a good scotch though. Last fall, I took my 87 yr old GrandFather to DC for few days. He is very sharp and could still walk for hrs and I had blisters in my feet. His secrets of good health - no smoking, no alcohol, lots of walking, vegetarian last 20 yrs, eats painfully slow (chews a lot)……
Thanks, butters. My dad’s drink is a margarita these days. Not sure when or how he latched on to those, but he loves them! One is plenty though. And blessings upon you for taking your grandfather to DC. I’ll bet that was a great trip for you both.
no alcohol…vegetarian
No alcohol and no bacon? Geez….I think I’d rather die at 50 than live a life like that
My grandmother smoked Camel non-filters and drank Scotch whiskey despite her diabetes and 2 strokes. She still lived till 87 but the last few years weren’t that easy.
Maybe it was the diabetes.
“…90th birthday. His short term memory is shot…”
By contrast, at just under half his age + seven, I impressed myself at the auto shop today by quoting from memory the mileage from my odometer (104,856) to the fellow who wrote up my order. He forgot the number and asked me again a couple of minutes later; I still remembered it (as I did just now). Gotta keep eating my broccoli…
“…he has Parkinson’s and is very frail…”
So does my dad. Did you learn anything from his experience which you are willing to share?
Just that people with Parkinson’s have a tendency to fall backwards, and meds aren’t of much help. Not much wisdom here.
Broccoli is great. Keep munching!
Elanor
My Father died of a Statin drug related Parkinson’s. You are being such a loving Daughter, God Bless you. My heart aches for you. It is heartwrenching.
CarrieAnn
Great post about the beautiful furniture, art, landscaping, but the beauty wasn’t “skin deep” per se. You’re like us. Most interesting. Thanks for the post. Grandma must have had take pride in her kin, you!
butters
How cool of you to enjoy some time with your Gramps in DC. You’re a Mensch.
PB
I am so sorry to hear your Dad has Parkinson’s. Been there. Get the safety bars installed in the bathroom. Lot’s of free resources in Ca. Parkinson’s Groups are a great source. The meetings keep the person surrounded by caring and helpful people. Your Mother would probably benefit. My Mother no longer felt alone in her hell.
“half his age + seven”
You know, that’s the formula for an acceptable age difference in marriage. A 25-year-old should marry at least a 20-year-old. 40-year-old should marry someone who’s at least 27. An 89-year-old should marry someone at least 52 (as in, not Anna-Nicole Smith)…
Your formula doesn’t work very well for an 18-year-old.
I lived in Portugal for 2 years, it is a great place. If you get a chance, go to Sintra, it is beautiful. I believe this time of year the wisteria will be blooming or at least be starting to, which is everywhere up there.
Oh and if you go to Cascais/Estoril (beach towns) Casa Velha is a great seafood restaurant. And make sure you have some red wine, Casa de Santar and Cabeza de Burro are both very tasty.
Enjoy your trip.
Thank you! We are staying in Cascais our first night, then 3 nights in Nazare and will definitely go to Sintra. I really appreciate the restaurant and vino recs too.
Were you working or studying in Portugal?
Another person I know who was unemployed for quite some time (since her Census job ended…) got 2 job offers yesterday. That’s 2 people I know of in the past couple of weeks who’d been unemployed for a looooong time both receiving 2 job offers in one day. My company has started hiring again. Hmmmm…
My company is still hiring like crazy. We’ve hired close to 50 people so far this year.
Drumminj what types of jobs……what skills do they require….
Drumminj what types of jobs……
Marketing, Sales, QA, Software Development, Technical Writing, Project Management, Business Analyst
My company beat the reaper and has since leased additional office space to expand.
There was a net gain of 500 jobs in Colorado in March.
That’s right.
500
Get out the golf clubs!
Good to hear. Please keep us posted.
MARKETS
APRIL 22, 2011
World Is Bitten by the Gold Bug
By CAROLYN CUI
Reuters
Gold continued its upward march in a time of global financial tumult, closing above $1,500 an ounce Thursday for the first time as investors seek safe haven in the metal.
In a remarkable performance for any sort of asset, gold has notched a record high every day this week—on days when investors were alternately gloomy and optimistic. On Monday, as stocks swooned after Standard & Poor’s warned about the credit rating of the U.S., gold reached a new high. It kept rising on Tuesday and again on Wednesday, as stocks soared on impressive corporate earnings.
On Thursday, gold rose $4.90 an ounce to $1,503.20, another nominal record high and its first settlement above $1,500. Gold is up for five straight weeks, and has gained 5.8% so far this year. Gold will not trade in the U.S. on Good Friday.
The reason for gold’s ability to do well in any market lies in its recent role as a haven from concerns about the dollar, inflation and shocks in Europe, the Middle East and Japan.
…
If I had mad money to gamble, I would go long vega and short gold and equities right now, as I am utterly unconvinced that the banking crisis has seen its last aftershock by now.
OPTIONS
APRIL 22, 2011, 11:39 A.M. ET
VIX at Precrisis Levels
BY BRENDAN CONWAY
The stock market’s volatility index has touched levels that haven’t been seen since before the financial crisis, as strong corporate earnings and a rising stock market have calmed investors’ jitters.
The Chicago Board Options Exchange volatility index, also called the VIX, made its first close beneath 15 since July 2007 on Thursday, hitting as low as 14.30 this week. The reading is less than half the levels seen as the market fretted over Japan’s nuclear crisis last month. Traders called it a sign that investors were more confident in the stock market.
“Everyone is long stocks, even the …
…
A risk in time saves nine.
The Wall Street Journal
HEARD ON THE STREET
APRIL 22, 2011
U.S. Rating Pressure May Take Toll in Time
BY RICHARD BARLEY
Blink and you missed it—at least in terms of market reaction. Standard & Poor’s on Monday slapped a “negative” ratings outlook on the U.S. But after a wobble, markets have regained their poise: 10-year Treasury yields are only marginally higher; the S&P 500-stock index is higher; and while the dollar is weaker, that isn’t exactly a new development. Are investors too complacent?
…
“Show me the money!”
BUSINESS
APRIL 22, 2011
States to Business: Give Our Cash Back
By JENNIFER LEVITZ
To the list of those dinged by states’ budgetary woes—from Illinois vendors to Wisconsin public employees—add YUSA Corp., an auto-parts supplier in the city of Washington Court House, Ohio.
YUSA received a $35,000 development grant from the state of Ohio five years ago, pledging to expand a plant and employ 816 people. It’s only at 445. Recently, Ohio sent the firm a bill, demanding $15,915 back.
This was one of nearly a dozen “clawback” orders signed in two months under the state’s new Republican governor, John Kasich. There will be more, says his job-creation director, Mark Kvamme: “We need every single dollar we can get our hands on.”
…
I’m glad they’re doing this. Not so much because Ohio needs the money (they do), but because a company promised jobs and didn’t deliver. Now if only they could do this at the Federal level…
Oh man could NY use this regarding it’s Empire (job creation) program. But I always thought the state legislators were in on the theft so I won’t be holding my breath.
One explanation for the war in Libya, at least our growing involvement:
http://www.infowars.com/kissinger-calls-for-us-ground-invasion-of-libya/
Not sure I am willing to accept all the conspiracy theories but this war does not seem to be justified by any national interest we have.
Oil
Specifically Italy’s oil supply.
“Oil”
Oil means money, so whoever runs the place will deliver the oil.
The real issue is Israel’s security, and breaking Iran as it becomes evermore modern and sophisticated. Perhaps any many a 100,000 civilians in Afghanistan and Iraq have been killed so that airbases surrounding Iran could be established.
They sent in McCain.
And this Arizonan hopes that he stays there.
Geez, I thought the “‘ol Maverick” was a homie?
Is he a predator drone?
Slim here with the latest in the My Former Real Estate Agent Wants to be My Friend Again saga. To recap:
A few weeks ago, he sent a request for me to join his network on LinkedIn. I put that request on Ignore.
Then, a few days ago, he sent me an e-mail that consisted of one very long paragraph. (Dude, ever heard of the Enter key? It makes these really cool things called paragraph breaks. Try it sometime.)
Long graf was filled with REIC-speak, but I did notice that he’s still a buyer’s agent. But he’s with a different agency.
I deleted his e-mail.
In this morning’s e-mail, I got the latest issue of his e-mail newsletter. It was filled with handy-dandy Earth Day environmental tips that came from the Generic Newsletter Copy Company. Didn’t tell me anything I haven’t already heard.
I unsubscribed from his newsletter.
This guy must really be hurting for business if he’s trying to be my friend again. He wasn’t very interested in continuing the relationship after I moved in here and found that this house had a lot of problems. If anything, he beat a hasty retreat after cashing his commission check.
I get stuff from a Tucson realtor all the time Northwest area. Catalina foothills mostly very old homes with almost flat roofs and big properties, cactus , some brick maybe a pool, view of the mountains and dated interiors. I think they are mostly 100K flips anyway.
The same characteristics that make most salespeople successful also makes them annoying bores.
Realtors take light bulbs home from houses they show.
That’s where they went!
Lol…
Today my wife finally flew off the handle that I’ve been flying off of for a few years now… she wants to leave Florida, but more specifically teach abroad.
So, all you well-traveled and/or international HBB’ers, what can you tell me about Abu Dhabi?
You should be able to make your income free from US federal income tax, but the rules are very strict about how many days you can stay in the US on vacation/leave. My friend who lived in the UK for several years was limited IIRC to only 10 days back in the US visiting relatives. Stay 11 days or more and he’d have to pay income tax on his foreign salary.
Keep saying Caleefornia is the place you ought to be… it’s so bad here it can’t get any worse (can it!?)…
I have former employers (we’re on great terms) that are now entirely LA based, and I have a good high school bid who is moving to San Diego, plus a college friend who already lives in Sand Diego and loves it. It’s a possibility. At this point, I’m thinking “anywhere but Florida (and Alabama and Mississippi).
Wait, aren’t you guys laying off, like, 4 million teachers?
Don’t worry about how many teachers are getting laid off and why. Worry about your unique qualifications, how they might prove useful out here, and where you might find an opportunity to use them.
Whenever many are getting laid off, others are getting their feet into doors…
“Whenever many are getting laid off, others are getting their feet into doors…”
True, actually my current role is to enter where there is much tumult. In short, I am a guy that takes over failing schools. Do you guys have any of those?
“…failing schools. Do you guys have any of those?”
Maybe you belong in the Bay Area, if that’s what you seek. If you could turn this district around, you would make a name for yourself (and I am totally serious here!). And the East Bay is actually a great place to live, provided you can afford to avoid high crime zones.
Welcome to the West Contra Costa Unified School District
Located in greater San Francisco’s East Bay just north of Berkeley, the West Contra Costa Unified School District (WCCUSD) encompasses five cities and several unincorporated areas including Hercules, Pinole, San Pablo, Richmond, and El Cerrito as well as Kensington, El Sobrante and North Richmond. With more than 30,000 students pre-K through 12th grade, WCCUSD serves a diverse population with people of color comprising 86% of the students. Our students bring more than 80 home languages and one in three receives services for English language learners. More than two-thirds of all students are eligible under federal guidelines for free or reduced lunches – an indicator of socioeconomic disadvantage.
…
Despite the recent successes, the district faces significant challenges. Although the achievement gap (between Asian, white and Filipinos at the top of the performance spectrum and Latino and African American students on the lower side) has decreased in recent years, the difference in academic performance between the highest and lowest achievers is the number one issue in WCCUSD. Attracting and retaining high quality teachers and principals is a significant obstacle to improving student learning. Because the district can’t be competitive with higher wealth communities for salary and benefits, recruitment efforts focus on identifying high-mission professionals. We’re looking for people who want to make a difference in the world and contribute to improving the lives and learning of students who must overcome significant barriers to be prepared for college and work.
The West Contra Costa Unified School District is a large and complicated organization that has simple purpose: improving student learning so that all students graduate ready to attend college, or technical and trade schools.
We could use some teachers here to teach English as a Second Language. It’s practically IS a foreign country.
Within easy walking distance of my house is a school that teaches bilingually.
And it’s a private school that’s been quite the positive addition to this area. Part of its property used to be occupied by a convenience store that sold little more than liquor. Place was a magnet for drug buyers, sellers, and other nefarious types.
We neighbors are very happy that this school is here now. And, if they offered adult education bilingual classes, I’d be over there with bells on.
On second thought…
Lessons from California
The perils of extreme democracy
California offers a warning to voters all over the world
Apr 20th 2011 | from the print edition
CALIFORNIA is once again nearing the end of its fiscal year with a huge budget hole and no hope of a deal to plug it, as its constitution requires. Other American states also have problems, thanks to the struggling economy. But California cannot pass timely budgets even in good years, which is one reason why its credit rating has, in one generation, fallen from one of the best to the absolute worst among the 50 states. How can a place which has so much going for it—from its diversity and natural beauty to its unsurpassed talent clusters in Silicon Valley and Hollywood—be so poorly governed?
It is tempting to accuse those doing the governing. The legislators, hyperpartisan and usually deadlocked, are a pretty rum bunch. The governor, Jerry Brown, who also led the state between 1975 and 1983, has (like his predecessors) struggled to make the executive branch work. But as our special report this week argues, the main culprit has been direct democracy: recalls, in which Californians fire elected officials in mid-term; referendums, in which they can reject acts of their legislature; and especially initiatives, in which the voters write their own rules. Since 1978, when Proposition 13 lowered property-tax rates, hundreds of initiatives have been approved on subjects from education to the regulation of chicken coops.
This citizen legislature has caused chaos. Many initiatives have either limited taxes or mandated spending, making it even harder to balance the budget. Some are so ill-thought-out that they achieve the opposite of their intent: for all its small-government pretensions, Proposition 13 ended up centralising California’s finances, shifting them from local to state government. Rather than being the curb on elites that they were supposed to be, ballot initiatives have become a tool of special interests, with lobbyists and extremists bankrolling laws that are often bewildering in their complexity and obscure in their ramifications. And they have impoverished the state’s representative government. Who would want to sit in a legislature where 70-90% of the budget has already been allocated?
…
I can never figure out if the Ron Paulers are for more, or less, direct democracy.
I don’t think they know themselves. It just sounds good to say- ‘this isn’t a democracy, it’s a republic’, or some such drivel, that they then can’t explain.
Vast ethnic and political differences polarize the north and south. California is also too large geographically and population, IMHO.
Muggy -
I have a couple Aussie friends from my time working in Australia that are now in AD. I’d pick AD over Dubai based on what they tell me.
I really love the time I’ve spent as an Expat, both short- and long- term. I’d take the family overseas in a heartbeat. Event though Australia is in the midst of an insane property bubble, I’d return. In a heartbeat.
I noticed one more sign of the times in my rural neighborhood here in Idaho.
Next to our subdivision is a very large turf farm, literally hundreds of acres in all. This was developed to a great extent due to the demand for new lawns during the housing construction boom.
Over the winter much of the sod was plowed up.
Driving past today I saw tall green sprouts in what was once a patch of sod. It’s wheat….
I guess they read the newspapers too. You have to pay attention to what’s in demand today.
“Driving past today I saw tall green sprouts in what was once a patch of sod. It’s wheat….”
Aha! Green shoots of recovery!!
Defrocked, that’s a new one. I’ve heard of realtors being de-liced but …
Kickbacks alleged in a Trooien condo project in Minnetonka
Three real estate professionals were charged Thursday in an alleged kickback conspiracy involving a condominium project by the bankrupt St. Paul developer Jerry Trooien.
The alleged conspiracy involved more than 40 units in the Cloud 9 Sky Flats, an office tower in Minnetonka that Trooien had converted into condos several years ago.
Federal prosecutors charged Sheri Lynn Delich, a defrocked Apple Valley real estate broker, My Dinh Lam, a Minneapolis appraiser, and Ashley Elizabeth Prasil, an inactive Eden Prairie real estate agent, in what is described as a $4.2 million mortgage fraud conspiracy involving the Cloud 9 condos. Delich also faces a charge of money laundering.
http://www.startribune.com/business/120428624.html
Crossing fingers is now a business plan? I am more a rabbit’s foot man myself. Note: selling like hotcakes has returned…
HAPPY VALLEY — Despite new home sales recently falling to a nationwide 50-year low, homebuilders in Happy Valley plan to add more than 200 houses this year.
Although northern Clackamas County has traditionally lagged the westside suburbs of Hillsboro and Beaverton, those areas are running low in buildable lots, according to Ernie Platt, director of local government affairs for the Home Builders Association of Metropolitan Portland.
Since July, Hillsboro has approved 95 permits for single-family detached homes, and Beaverton has approved 24.
Platt called builders plans for northern Clackamas County “fairly aggressive” considering recent history. “But I’ll keep my fingers crossed because it will be a good gauge of buyer confidence. We will all be watching.”
During the worst of the collapse in home prices, people started calling the city “Death Valley.” Eugene Lew of RE/MAX Equity Group said distressed properties in the area are either sold or too dilapidated to restore, driving buyers to new construction. Homes in the $300,000 range are “selling like hotcakes,” he said.
http://www.oregonlive.com/happy-valley/index.ssf/2011/04/three_developers_look_to_bring_more_than_200_new_homes_to_happy_valley_in_the_coming_year.html
Question:
My mom got her annual “State of the Condo Association” statement this week. Usual accounting stuff.
On the last page, on “Notes”, it says that “Two units were sold at sheriff’s sales in January and February…….the assessments due…….are not collectible.”
Any way to search online for the “new comps”, if you don’t know the addresses of the units?
In the last 6 months, several of the units have gone vacant, and are mostly “For Sale by Owner”. Most because the tenant passed away, and the family is trying to sell the unit. This worked until recently because these places aren’t too terribly expensive, and were popular with the local retirees for a variety of reasons.
I’m pretty sure the county records office will have recorded the sale…
Google your area name and “property records” to see if they are online to save a trip to their offices.
Also, I know there is a time lag, but zillow lets you search “recently sold” properties in an area.
http://www.zillow.com/homedetails/7146-University-Dr-Moorpark-CA-93021/16421382_zpid/#{scid=hdp-site-map-bubble-address}
I thought for sure this was forclosed on a and now a flip
Zillow doesn’t show that werid
cactus
realturd dot com has basic county recorder info. It’s there for those who know about it. I’m licensed due to my REIT career. If you need a section starter link, just let me know.
Log in as “guest” if you want to obtain a copy…
The Case against Housing Price Supports
Edward L. Glaeser, Harvard University
Joseph Gyourko, The Wharton School of the University of Pennsylvania
Summary
Economists and politicians have eagerly proposed policies aimed at stopping the decline in housing prices. The government can’t and shouldn’t be trying to stop price declines, according to Edward Glaeser of Harvard and Joseph Gyourko of Wharton.
Recommended Citation
Glaeser, Edward L. and Gyourko, Joseph (2008) “The Case against Housing Price Supports,” The Economists’ Voice: Vol. 5: Iss. 6, Article 3.
DOI: 10.2202/1553-3832.1442
amen
Ah, Moorpark, remember it well. I appraised houses in that area from 1958 to 1964, Remember the flys well, and Moorpark was a great chicken area.
Turned down 1200 houses tin Thousand Oaks and would not make loans on the houses, as the concrete slabs were only 2″ thick.
Wonder what they sell for now.
California lives with its earthquake risk, but it is hard to imagine many other things so terrifying as a tornado at ground zero.
nation
Shocking Video: Apparent Tornado Leaves St. Louis Airport Devastated
By: Nick Carbone
Caught the footage last night. That looked frightening.