The Housing Bubble

05? You sold homes in 05 and 06? How did that work out for your clients? Oh that`s right, they stopped paying their mortgages 4 or 5 years ago. The financial system had to get bailed out with money that our granchildren will have to default on and you spent your commision on a BMW.

You sold sixteen homes what did do you get
A pocket full of money put your clients in debt
Saint Peter don’t you call him ’cause he can’t go
He lost his soul with the lies that he told

He was born one morning when the sun didn’t shine
He got a realestate licence and he started his lying
He sold sixteen homes with unpayable loans
And Remax said well a bless my soul

You sold sixteen homes what did do you get
A pocket full of money put the nation in debt
Saint Peter don’t you call him ’cause he can’t go
He lost his soul with the first house he sold

Beachhunter
Don’t take offense, but you started in the bubble. You don’t really know the business or much about what you’re selling. I went to shopping ctr mgmt school (U-SD/ICSC)in the 1980’s and also did mix-use properties. I also know residential, but it’s too scummy for me.

Hey Lying ReaItor……. why are you even here….

“They knowingly and deliberately misrepresent the price of a house. ”

???

Do you mean that, for example, the seller says list it for $300K and the realtor tells potential buyers the price is some other number?

No. I’m talking specifically about advising sellers to sell at a certain price. ReaItors are entirely under qualified to advise on price.

My own view, oft stated, is that the NAR is an industry of dissemblers. Still, let’s not run off any realtors who happen to show up in here. Honest and insightful perspectives from any quarter should be welcome and encouraged.

Then do a quick search on inksex.com for “beachhunter”. He’s offered nothing but off-topic political trash besides reporting back to headquarters.

re: 16 homes…

Jeffrey, Darling,

You’ve outdone yourself. Bravo!

your broker is a realtor broker = realtor ?

One local realtor who sends me listed homes for sale is pretty usless.

I was told to look for homes on redfin and contact the brokers listed as this will double the commision and better my chances at getting the home (shortsales)

@Awaiting-

Our realtor was able to find us a home before it was listed…meaning we could negotiate one-on-one. Had we just been using Redfin, we wouldn’t have seen it.

While this may not seem like much, we live in la-la land right now (Silicon Valley), where there are multiple bids frequently for better quality homes in the better school districts. Our home was <25-years old (in the land of 50-year-old ranchers), and had extensive work done (all permitted, with plans) <10 years ago.

Had the home actually hit MLS, we would have been part of a multiple-bidder situation. Our realtor added value to us in this case.

Unless you are working with someone who is extremely tied into your micro-market, meaning 15+ years in the exact school district you want, Redfin will serve the same purpose as an agent–you are only seeing listed properties anyway.

Didn’t King Midas covet wealth so badly that when he was given the gold touch he “accidently” turned his beloved daughter into a statue? A sad and timeless story…

I read the whole post; was taking aim at this point:

This guy failed at all other business ventures he tried. He just happened to hit the jackpot with one idea.

Just to be clear, it wasn’t an idea that was sold and then he got out, it’s a business that he’s run until very recently as he’s entered his 70’s.

You illustrate something I’ve seen with many of the top 5%ers I’ve become acquainted with. Namely, using their money/influence to buy politicians, to pass laws allowing them to keep more of their money, or to legalize things that are currently against the law.

Of course they have PR people and lobbyist to make it all sound noble, like they are “fighting over regulation” (in the Koch’s case, over regulation means paying the government for pumping oil out of public lands)

He also said that he bought off bond issuers with trips to Hawaii. He couldn’t believe how easy it was.

The fact that politicians can be bought, with few or no consequences, is whose fault?

A) Those who have bought them off
B) The politicians themselves
C) The voters
D) All of the above

It seems to me that most people want to blame A alone, while giving B a pass, and also holding C blameless.

I didn’t say racial bigot — you did.

Truth hurts, huh Bill?

LOL

We are (supposedly) the government so we are (supposed) to agree on what the government (i.e., we) take from anyone and to whom the government (i.e., we).

I know the last 20 years have eroded the public’s role in those decisions, but if we are the government (and OWS is arguing we are) we can take back the apparatus of government. And, yes, as government we can take what we want from ourselves.

One problem is over the last 20 years people have been voting to take from themselves and give to the wealthy. They became distracted by “cultural” issues and illusions of their own wealth. One good thing this depression is doing is disabusing a lot of people of the illusion that politics is about worrying about whether someone in your neighborhood is sleeping with someone with whom you do not want them to sleep. Starving people do not have the luxury of worrying about such issues.

I suspect the only people harmed by the idea that we are the government and we can take what we want are those who see themselves as the transnational wealthy class, who want no government to take anything from them, not realizing that everything they have (e.g., all the currency, all the stocks) depends on stable societies, and those depend on governments (i.e., us, in democratic perspective).*

IAT

*I know the libertarians disagree, but the only “functioning” libertarian countries to which they can point are struggling third-world disasters. Funny that the wealthy west, with great health care, clean food and water, and so on, is all composed of countries who have rejected libertarian “I am king of all I see” thinking.

IAT

‘we are the government and we can take what we want’

I think you said it all right there.

‘the wealthy west is all composed of countries who have rejected libertarian thinking’

Yeah, you wealthy westerners have decided who the ‘we’ is and is not. Sign me up. Or do I have to ask your permission first?

‘we are the government and we can take what we want’

That’s how democracy works. We are the government , and we’ve given ourselves the power to tax. And yes, it’s in the Constitution, including the rights the government cannot take away.

I’m starting to wonder if libertarians are democratic. They seem to think personal property is above all laws. Even when that personal property is earned within a democratic society that has voted itself the right to tax.

In Britain one of the protest leaders is calling for a “one-off” 20% tax levy on the wealthiest one percent. While I’m in sympathy with some of the objectives and sentiments of the “Occupy” protesters, arbitrarily confiscating 20% of someone’s wealth just because they happen to have it, on the say-so of the Vox Populi, is fundamentally wrong. A government that can “redistribute” wealth from the top one percent can and will steadily work its way down, as the ever-growing entitlement classes realize they can vote themselves benefits someone else will have to pay for.

Okay. We can make it 20% a year if you prefer. That won’t be arbitrary.

IAT

By west I do not mean California. I mean west as in Western Europe and the societies that trace their cultural lineage to western Europe (e.g., the US, Australia). And, no one has to ask my permission to be a westerner. If you grew up speaking an Indo-European language (e.g., a Germanic*, Celtic, or Romance language) then, like it or not, you are western. Do what you want, you’ll never not be western, because anything you do is overlaid with your early (western) experiences. No need to celebrate or mourn this development — it is just the way of the world. Too bad our lineage provides NO EVIDENCE WHATSOEVER in favor of libertarian societies. I suppose belief in fantasy dies hard.

IAT

*English is a Germanic language.

RE: Taxing the wealthy.

The main goal of Occupy Wall Street has nothing to do with taxing the wealthy. It has to do with ending the corrupt influence that the wealthy have wrought. If the influence of one wealthy man is reduced to exaclty one vote, then I think the taxes will eventually work themselves out.

Big V

Brilliant ! I so totally agree.

I would suggest they start to reduce the influence by yanking some personal liberties of crooked bankers, realtors, appraisers, and wall street jerks. As far as I know not one has faced the guillotine.

Let their ill gotten gains be lost in legal fees trying to keep themselves out of the hoosecow.

If the influence of one wealthy man is reduced to exactly one vote, then taxes will work themselves out…becoming more and more progressive. Why would the bottom 60% pay anything, if they can that easily vote people into power who will tax the top 40% enough to take care of the government needs?

Why not 70/30? 80/20? Eventually you get to a disequilibrium (where too few are taxed), and you get what the UK got in the 70’s (pre-Thatcher), a capital drain, where the most wealthy are taxed so much that they simply take their capital elsewhere.

My US based employer was founded by a UK expat, who left the UK pre-Thatcher exactly because the tax rate on his investment capital was so high.

Don’t get me wrong, we are nowhere near that level currently, so I’m not saying that the wealthy are packing their bags. Most that I know would accept higher taxes, if it was associated with a simpler tax code, and a comprehensive (and hard to reverse) deficit reduction program.

However, the logical extension of one person=one unit of influence=one vote would result in higher and higher taxes for the top earners, and lower and lower taxes for the bottom earners…careful what you wish for.

Some people are incapable of seeing any further than that.

Of course I have losses and profits. I take the losses and do not socialize them.

Of course, Alpha would have me socialize my profits.

I take all the risk. But that’s not enough for the communist Alpha. I provide capital for companies. This is part of what helps the economy. Of course communists are ignorant on that stuff.

“Alpha would have me socialize my profits.”

If we didn’t pay our taxes, you’d be out of a job, no?

I know C. I worked with TCP/IP. I work with droid apps. I work with Java. And part of what I do is also commercial (but you did not know that). Software Development Lifecycle is …(are you ready?) software development lifecycle. I’ve been in environments when it was discouraged to do proper software engineering but encouraged to hack. I’ve been in other organizations where proper process is necessary.

I saw all types of software techniques and I have participated in all.

I have no fear of being 100% commercial. In fact the organization I came out of ten months ago just went all the way commercial.

Keep hoping for my suffering. Are you blue yet?

26 years in the career. Worked in many engineering organizations coast to coast as a federal employee and as a private employee and as a consultant. Discussed investing with colleagues on breaks, after work, at lunch. And I know. Many of them buy stocks. I’m the only one who also buys gold (well I haven’t bought any gold for over two and a half years…).

P.S. I try my best to be an equal opportunity bomb thrower, but if one party offers lots more targets than the other, so be it.

Don’t forgot the public “don’t touch my cheese” union goons

“Well, there yers go again $lickerybanana…” Ronnie Raygun

Is this your plan for doubling employment in America $lipperyBanana?

http://amazingdata.com/mediadata35/Image/hot_weird_funny_amazing_cool8_rednecks-ruled-world-19_200907302203419314.jpg

So now the banks are to blame for high student loan debt? How about blaming those entities that charge so much for an “education” that nearly everyone needs to go into hock to pay for it.

In Canada we can lend ourselves money from our self administered RRSP (401K) on a mortgage basis ie a first or second. Our RRSP is protected from bankruptcy. The interest rate is periodically set by the government and payments to our Trust company have to be made just as if it were someone else’s money.

In essence, we borrow from ourselves and are held liable to repay ourselves.

There is a gigantic legal difference between letting a person withdraw penalty free to pay off their own student loans and letting a random owner of a 401(k) account withdaw without penalty to pay off someone else’s student loans. And unless the child is still being taken as a deduction on the parent’s income taxes, there is little to distinguish parent/child from random adult/random adult under the income tax code.

The real issue being, do you limit it to only parent/child? Why? Why not brother/sister? Why not aunt/nephew? Why not old person/paid care giver (yes, there could be fraud issues)? Only legal children? What about a step-parent? Former foster parent?

“The real issue being, do you limit it to only parent/child?”

Which gets back to my earlier point: Why limit the 10% penalty waiver to homeowners in trouble? There must be lots of non-homeowners in difficult financial straits who could benefit from a penalty waiver.

It is just one more step to treating 401(k) money like any other money a person has.

Was there ever a robust market in people selling off the rights to their pension stream of payments? My guess is there wasn’t because 1) you don’t know if the person is going to die and therefore cut off the payments and 2) it was likely not allowed under the pension rules as undermining the whole point of having a defined benefit pension which is to have money to live on while you are too old to work.

X-GSFixr,

I wish you were right, but all signs point to HR departments only increasing formal education requirements. Since the 1970s many jobs requiring a college degree did not really require it to do the job. On this point see:

Collins, Randall. 1974. “Where are Educational Requirements for Employment Highest?” Sociology of Education 47: 419-442.

In fact, this situation probably predates the 1970s. Gordon and Howell, in their 1959 book titled Higher Education for Business quoted a businessman as saying:

Industry places a high value on the college degree, not because it is convinced that four years of schooling insure that individuals acquire maturity and technical competence, but rather because it provides an initial point of division between those more trained and those less trained; those better motivated and those less motivated; those with more social experience and those with less.

The increasing numbers of persons with BAs is only pushing up the requirements employers use to winnow the field. All this is useless credential inflation.

IAT

Some time around twenty-five years ago I heard a statistic that about 30% of the people in the American workforce have college degrees, but only about 20% of the jobs in the economy require a degree. I mentioned this to my cousin a few years ago and he asked me where I got this information. I spent some time with Google trying to find relevant data, but I couldn’t find anything. It almost makes me think that somebody is trying to suppress the facts. The one article that’s out there is this one - http://chronicle.com/blogs/innovations/why-did-17-million-students-go-to-college/27634

It shoe=ws that 30% of flight attendants and 14% of letter carriers have college degrees.

Which would you rather hire, a guy with 30 years experience in a highly technical field and no degree, vs. a newbie with a degree, but zero experience?

For Corporate America, the choice is always “B”. Common sense has nothing to do with what’s going on.

One of the reason I left the aerospace OEM I worked for, was the abrupt termination of the career path. (That, and the 700hrs/year of O/T as a salaried-exempt.)

Up until 1998-99, all their Field/Customer Service reps were guys that had worked in their Service Center network for 15-20 years, actually turning wrenches on actual airplanes.

The company was bought out, and decided that FSEs needed to be “engineers”; so all the old guys were kicked/bought out, and a herd of newbie EEs and AEs took their place, parked behind computers with an “Expert System”.

My job became immediately more difficult, because of the suddenly increased number of calls (several per night) I was taking from customers every night, wanting technical support, and the newbies engineers coming down on the floor every night asking me and my crew chiefs questions, because the answers to their questions weren’t on the “Expert Systems”.

My experiences since leaving the OEM and dealing with Gulfstream Aerospace and Dassault Falcon lead me to believe this is an industry wide problem.

X-gs:

I think you were at the beginning of this trend, you almost never get a knowledgeable person right off the bat today.

So the only way to deal with this level of stupid. Is to eat well, go to the bathroom, then have bottle of soda and water and maybe a life saver or two handy, ‘ cause your mouth will get dry and you might start coughing… and expect to kick out 4-5 levels of airheads, clueless, the barely functional, I understand your problem but have no experience..to finally finding the right person…

No need to get angry if you know what you are up against.

———
lead me to believe this is an industry wide problem.

Dude, your 401K is just digits on a computer screen. The government can grab it tonight, and there wouldn’t be a damn thing you can do about it.

And besides, when going forward, nobody has 401Ks anyway, how many of your fellow citizens are going to continue to support the tax exemption?

Do what I did in 2007, and avoid the rush. Take the 10% hit when stock prices are still artificially pumped up, and stick the cash (dollars, euros, yen, whatever) in the mattress.

“And besides, when going forward, nobody has 401Ks anyway, how many of your fellow citizens are going to continue to support the tax exemption?”

Whether they support it or not going forward, I doubt they would retroactively yank the tax exemption (i.e. change the tax rules on past contributions). I don’t know if it would spark violence as Bill in PHX/Tampa suggested, but it would spark a major political backlash against the politicians who supported the move.

There’s been all kinds of political backlashes that the politicos are ignoring. The 401K stuff can be added to a long list.

Color my cynical, but somehow responsibility will be deflected, and the guys who created the problem will be re-elected.

Bill, The possibility of your market holdings in anything invested in paper certificates like stocks, bonds, options etc. could blink out of existence with the press of an Enter key. It’s a non-zero possibility, still statistically small but looking at CDO prices for sovereign debt it’s the highest ever. Higher that 2008 in fact.
I point this out as it was at least one factor in my decision to put $19,000 into a 5500kw solar array rather than bonds and CDs. Since I think you are a renter your options are more complicated but I like to think of my array like a gas/oil well that will produce for years and years.

i think it is above board to think that government will go after your 401k. they — include the judicial branch — cannot even agree on anything.

Yeah and note that I said my life is in my 401k and IRA. I won’t sit and cry if that is all gone. It’s my life. Instead of sit and cry I would react. I would have nothing left to lose by revolution. With or without other white collar professionals who have built up a healthy nest egg in 401ks. I’ve known people like this for decades building up stocks and not selling like chicken littles for any downturn. So I’m not alone.

As I found out during my divorce, “possession is 9/10s”.

Just ask anyone who has had money confiscated illegally by the government.

“I would have nothing left to lose by revolution.”

Many people are already there. And the membership ranks grow by the day.

“Instead of sit and cry I would react.”

Hope you are an NRA member, or else you’ll be reduced to throwing rocks while hiding behind a bandana like the Palestinians.

That is a far more politically viable approach than explicitly ‘going after’ 401(K) monies. This is why I advocate broadening the Isakson-Graves proposal to include any and all debt which currently looks as though it would otherwise never be repaid. What is different about mortgage debtors that they deserve their own discriminatory preferential treatment?

A lot of freed-up 401K money will pay for divorces and related expenses. (That’s where most of mine went)

So, you are “Anti-Family”.

I agree with combo…..

At least until 401K owners are a small minority. The it won’t be announced, other than a page 43 reference in the Federal Register.

By then, the howls of the 401K owners will be drowned out by howling about a lot of other things.

they are easy to pick.

“What is different about mortgage debtors that they deserve their own discriminatory preferential treatment?”

The Fed’s Bernankecide of the dollar means that people who thought they’d put away enough away to afford them a modest “golden years” retirement are going to be bitterly disappointed. They’ll still get a SS check, it just won’t buy more than a tin or two of catfood.

Science on the scale of colliders does have to be subsidized by government. Basic research will not pay off in timeframes acceptable to private industry.

It may sound odd for an avowed Ron Paul supporter, but some of these science-driver programs are, in my humble opinion, good and necessary government investments. Much more so than bailing out Wall Street grifters.

You probably have some good novels and some bad novels on that bookcase. I’m not suggesting that because you bought a few bad novels, you should be banned from buying them. Yet, somehow, you seem to think that because some purchases of government are bad, all purchases of government are unjustifiable.

IAT

One big difference is if I buy something, I’m not asking you to pay for it.

Back to what started this;

‘good painters, good sculptors, great poets…these things we really venerate in our country and are patriotic about…… It has nothing to do directly with defending our country, except to make it worth defending’

This is flimsy reasoning. Equating the pet science project of the day with paintings or patriotism? Make the country worth defending? He should have run to the middle of the room and jabbed a flag pole in the floor while he was at it.

One big problem — if we didn’t have the interstate system (and/or the web) built with federal implementation and research dollars, you’d only be able to buy stuff produced near you because everything else would be prohibitively expensive. Don’t believe me? Move to Guinea-Bissau and see how long it takes to get your amazon.com ordered, let alone delivered, to the libertarian paradise.

IAT

Ben frames the issue as “the pet science project of the day” in reference to the $250 mil. super collider. His criticism of the use of patriotism to justify the expense is well placed. Maybe
it pisses him and the other center-right tax payers off that a few .0001% of our taxes are steered to these pet projects.
I think it was patriotic to oppose the Iraq/Afghanistan wars back in 2003 and would argue it still is. DoD budget has doubled in 10 years and this pisses me off. Are you with me on that?

Got to go. Squidbillies in on Cartoon Newtwork.

We can argue about how much should be spent on what. That’s democracy, where we prioritize matters and make tough decisions. To claim as a matter of principle that “The government has no business sponsoring research” is quite another beast. That view implies that if tomorrow there were a new horrible disease that was uncurable and very painful, the “no government research funding” zealots would, if they have integrity, oppose such funding.

I am all for principle, but the foundational principle is democracy, not property.

IAT