Weekend Topic Suggestions
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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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Name:Ben Jones
Location:Northern Arizona, United States
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Whitesnake Houston we have a problem.
Can we get a lyric rewrite of the Geto Boys’ Damn It Feels Good To Be A Gangster from the movie Office Space changing Gangster to Bankster?
Realtors Are Liars®
Is this a weekend discussion topic? Would you like to expand on what you want to discuss?
It’s hard to get a good discussion going when we all assume that it must be true.
Nothing I would enjoy more than seeing Dimon’s smug smile wiped from his face. That said, unless the authorities begin at least a staged prosecution of the pigman things could get ugly….
Despite cold weather, Occupy Seattle heats up: Police use pepper spray and arrest 5 protesters
The crowd chanted ‘Jamie Dimon’s got to go,’ referring to the CEO and chairman of JPMorgan Chase & Co.
Several hundred protesters occupied 6th Ave. in front of the Sheraton hotel, forcing police to shut down the road to traffic for several hours.
The crowd chanted “Jamie Dimon’s got to go,” referring to the CEO and chairman of JPMorgan Chase & Co.
“(Dimon’s) a giant thief. He’s robbed more people of his livelihood than probably all the people we have in jail right now. He needs to be prosecuted like a thief,” said another demonstrator.
Unlike some of the more peaceful protests that occurred in October, things got physical Wednesday.
At one point, a protester threw a bottle at police, and police responded in large numbers and dressed in full riot gear. And then police brought out the pepper spray, using it to help control the crowds.
http://www.q13fox.com/news/kcpq-experience-occupy-seattle-the-virtual-way-20111102,0,1958071.story?track=rss
They just don’t get it :
Jamie Dimon isn’t losing sleep over the Occupy Wall Street protests, although the chief executive of JPMorgan Chase says he understands the frustration with the poor economic recovery among Americans
“They’re right. In general, these big institutions of America let them down,” he said. “That’s not the same thing as to say that every bank was bad, every politician was bad. That’s where I would disagree.”
The chief executive, who considers himself a fiscally conservative Democrat, said that contrary to what some think, big corporations contribute to the economy because they “pay their people more, are more diverse, with health benefits. It isn’t like they’re the bad actors here.”
Still, he recognizes not everyone is benefiting from the economic system.
“America has become more inequitable in the last 10 or 20 years. That’s a fact,” he said. “I don’t personally think that’s a good thing. I’ve been a big supporter of progressive taxes.”
http://seattletimes.nwsource.com/html/businesstechnology/2016674404_dimon3.html?syndication=rss
Dimon: I’ve been a big supporter of progressive taxes.
99%ers: If Dimon is with us, who can be against us!
Skye: Define “economy”.
“America has become more inequitable in the last 10 or 20 years. That’s a fact,” he said. “I don’t personally think that’s a good thing. I’ve been a big supporter of progressive taxes.”
right out of the orifice from omaha’s playbook. why does it not work for dimon?
i see…dimon isn’t old and cuddly enough.
btw…anyone know if they have a WWF wrestler yet with the “evil GS bankster” persona?
would be funny and could probably get a 10 to 15 year career out of it.
Does anyone want to try their hand at bottom-calling?
My prediction (I’ve made it before) is that housing that does bottom won’t be worth living in. Good quality housing will be snapped up before it can bottom, especially if there are jobs nearby.
I didn’t understand that at the beginning of this, but I’m starting to.
It’s not really a prediction; it’s happening already. I discovered it only by checking Zillow for my “today’s houses” posts.
That’s what I was trying to say was happening here but for some reason when Carrie Ann says it it gets totally jumped on like I’m the village idiot. People kept pointing at all the inventory saying there was downward pressure. Ha! There’s no downward pressure when 80% of the stuff out there is something you wouldn’t touch w/a 10 foot pole. No body is buying a POS for a third of a million just because all the listings that were nice are already gone. We just take our checkbook and go home. Those of us circling the few well valued listings like vultures do still see a feeding frenzy. And when overpriced houses do cut their prices back to a certain level, you do see those multiple offers come out of the woodwork.
On the other hand even if that’s exactly true, I still expect another leg or two down. I’m not worried about missing my chance. If they magically push us back into a bubble I’ll live in a trailer until I die before I sell myself into slavery to the banks.
I believe that you do indeed see prices holding aloft. Those of us who are farther from the citadel of central government see a different trend that may hit the capitol city last, but is rolling in that direction.
It would be interesting to see a time graphic animation showing loss of “equity altitude” across the country, like watching the shock waves eminating from earthquakes.
Japanese banks took over a decade to write down bad debts. So I imagined our banks could just sit on toxic mortgage debt for just as long or longer.
10 years = $200-$250K in rent.
So how long should we be willing to wait? Does it really matter if I’m a slave to the bank as opposed to a slave to the landlord?
I have seen a few trailer parks around, one even within commuting distance. Maybe it’s worth a try. I’d need a pit bull though.
Assuming you meant to reply to my post here, I’ll admit mine is special. No pit pull required, and a lot fee <= $250/mo for the first 3 years if you move in something new/remodeled. Just starting my third year next month…
10 years = $200-$250K in rent.
OK, but subtract from that whatever you would have to pay in property tax, mortgage interest, and other non-renter expenses if you were to buy. Would the result even be a positive number?
Appropriately priced good quality housing will always move faster than inappropriately priced housing.
The question one should ask is whether there will ever be a time at some future point when there is lots of appropriately priced good quality housing for buyers to choose from. We haven’t seen it yet, in large part due to the hording of shadow inventory and the glacial pace of foreclosure processing. But I have seen it before (last time was mid-1990s in California) and have no reason to expect that this time will be different. If anything, when a true buyers market finally does arrive this time around in California (as it already has in some pockets, such as Detroit or Phoenix), the selection of homes for anyone left standing who is still interested in buying is likely to be “larger than expected.”
Topic: we are running out of options. What’s left?
“We had to destroy the village to save it”
We haven’t begun to evaluate our options to correct what is wrong and start recovery. We are still availing options to avoid discovering what reality is.
What about individual options? You know Muggy’s tale, and you know my tale. We aren’t spectators. It’s very easy to be the old sage spectator and say “wait it out.” But I’m still looking at rent vs. buy ratio (favors buying), low interest rates (favors buying)*, deteriorating houses (favors acting sooner), escalating rents (favors acting sooner), job security (favors buying for 7-10 year stay). On top of it, every realtor story I’ve heard has said: nobody’s buying. Yet lack of demand isn’t dropping prices either. What is a relative youngster to do?
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*yes I know that high interest rates will drop prices, but the question is: when? I see no sign of rising interest rates in the next two years at least, and probably another year as they rise slowly, and more months before FB’s/banks let go of the inventory. Is this soon enough to make up the difference in the rent vs. buy equation?
There are personal factors that skew the math. So you have to figure for yourself. Example, fear of job relocation in a down market = trapped. Which I understand you only see a level field ahead of you.
I am not merely a spectator. In fact today I looked at three properties. Barn & land, only within my cash budget for such. I need to set up a workshop to practice my hobbies. I’m not worried about relocating either. It is hard to compete with low cost credit!
I don’t have fear of job relocation. Yes, I would prefer to live somewhere else, but I’ve heard people talking about the importance of keeping the job you have.
Worst case scenario: the fit keeps hitting the shan and we get pushed back into the classroom for a few years. At this point I think we’re beyond the nuclear option even with all the current teacher bashing (we outperform our colleagues, which we don’t care about, but we do not fear “accountability” and/or charters).
Best case scenario: we continue to get promoted and do quite well as a family.
In either case, a modest 1,500 sq. ft. 3/2 will do the trick. I still pay $1,100/mo. and live two blocks from a very quiet, nice beach. Nothing PITI-wise comes REMOTELY close to that, accept inland, which I’m not opposed to, but a lot of those houses need tons of work.
So… the house behind me expired. Again. Time to relist it at +$40k. Again.
Would now be a good time to include a home in your portfolio?
Weekend Investor
Nov. 4, 2011, 12:01 a.m. EDT
Why housing deserves a home in your portfolio
Investment moves for those who think now is a time to buy
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Now may be a great time to buy a house, given that years of falling home prices and low mortgage rates have made buying a place to live more affordable than it has been in decades.
And that’s not just a pitch from the National Association of Realtors.
…
Yeah, but those NAR members are really hurtin’. Hence the “buy a house” propaganda. Gotta keep those commissions rolling in.
Oh, you’ll also enjoy the comments that follow this article. They sound like a buncha housing bubble bloggers. Here’s a tasty morsel. Or a bit of red meat…
“Historicly [sic] homes have been fairly valued when they sell at 2-3 times annual household income. How many here live in an area that meets that benchmark right now?”
I’m betting that the answers to this comment will be paltry at best. Cue up the crickets.
And here’s another one:
“Still too expensive! Years of abuse by greedy real estate agents and landlords produced multibillionairs [sic] and millionairs [sic]. They are still holding their loots, because they can afford to sit and wait. They don’t reduce the rents either.”
Anyone want to talk about seasonal issues? Not just holiday shopping, but a general discussion about what the onset of another winter season with even lower interest rates and a ton of shadow inventory will bring and maybe even what we are seeing with rents. I think this is a discussion influenced by location to a certain extent. I doubt Oxide and I are 20 miles apart. Could be a lot closer, but our situations are a lot different because of differing commutes. I’m probably going to sign a 2 year lease in a few weeks to lock in a 3% increase for the year after next (will be 4% for next year). Saw a newspaper article earlier today that the October retail numbers weren’t great and retail might be getting nervous for the holidays.
We’ve talked about “duration” issues before, and it is another 5 months before the north is back in prime listing/selling season again.
Here in Tucson, the snowbird season is about to crank up in earnest. These birds land in seasonal nests all over town — short-term and extended-stay hotels, B&Bs, apartments, guest houses, friends’ extra bedrooms, etc.. They also spend quite a bit of money.
I’ve heard that the past few winters were a bit of a disappointment as far as sales of goods and services to snowbirds are concerned. What’s predicted for this winter? I don’t know, but I’ll monitor the situation for y’all.
A family friend used this video in a college presentation:
He and his professor were shocked that most of the kids in the class had no idea it was going on.
Set to music, it’s a video of Europe including Spain with massive crowds protesting. Puts our OWS crowds to shame and they don’t look like dirty hippies either.
http://www.youtube.com/watch?v=dvb9xpydam8
There are still way too many who have no idea what’s been going on.