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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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US household wealth takes biggest hit since 2008 as stock and home values drop
By Dave Carpenter,
AP Business Writers
13 hours ago
WASHINGTON (AP) — Americans’ wealth last summer suffered its biggest quarterly loss in more than two years as stocks, pension funds and home values lost value.
At the same time, corporations raised their cash stockpiles to record levels.
http://finance.yahoo.com/news/us-household-wealth-takes-biggest-170743179.html - -
Corporations agree with Combo.
The lying realtors are striking up another siren song: If you don’t buy that retirement home now, you might just miss your chance.
Retiree Havens Go on Sale
“Even if you’re a decade or more away from quitting time, you may be thinking about buying a retirement home right now.
The prices for condos in popular retirement areas like Napa, Calif., and Naples, Fla., have come down 44% or more since the boom, substantially more than the average 32% that home prices have fallen nationwide, according to the latest data from Fiserv. And mortgage rates recently hit record lows once again.
For baby boomers in particular, “Many realize that they’ll never see this scenario again in their lifetimes,” says Jim Gillespie, CEO of Coldwell Banker Real Estate.”
Linky: http://finance.yahoo.com/news/buying-retirement-home-140900966.html
Lol. They used to say that one should buy because prices are going up. Now they’re saying one should buy because prices are going down.
It’s always a great time to buy a house! Just ask any Realtor!
ReaItor,
Why are you advising the public to buy when prices are falling?
What a realtor tells a prospective buyer is not “advice”. The realtor is paid to advise the seller. From what I hear, realtors are advising sellers to drop the price, and drop it agian, until they get ahead of the market.
The realtor is like a matchmaker being paid to hookup an Old Maid with a “this is your last chance” pitch. You can do the math, but there will be someone who can’t.
Our buyer’s broker always advises us to pay list, or we’ll lose out. Last time we made an offer, we cut $30K+, and then he said “that’s a fair offer”. We rescinded do to noise issues before acceptance.
He’s very knowledgeable about construction, HVAC, code issues, etc…, and we’re getting a sizable rebate, or I’d hang my license and shower daily.
I don’t believe the downsizing to practical elder housing trend is here. Most folks think we’re a decade early and can’t deal with the concept of leaving a two story oversized McMansion. Their egos are fragile.
I don’t believe the downsizing to practical elder housing trend is here.
I don’t think so either. I guess it may have something to do with my mother calling those places “too mono-generational.” Or, when she’s not into rattling off so many syllables, she just calls them “booooorrrrringgg!”
Mom and Dad still live in the house I grew up in. It’s too stories, my dad’s getting frail and absent-minded, and I don’t even want to go there when it comes to suggesting that they sell the place. Why? Because it’s their toe-tag house, and that’s how they like it.
Slim
I hear ya on stubborn parents. I feel for you watching your dad decline and view his diminishing health (both physical and cognitive). The thing is, safety. Yet, they could not replace their monthly nut, so its a yin yang thing. And it’s home to them. Been there.
Numerous friends refuse to think of themselves as one-story dwellers.
The fallacy that two-story homes are exercise. That’s what a biking, dance, or walking is. Give me a break.
Weekend Topic (sorry Ben for the “noise”)
When will the one-story or adult community rush start?
Ther Redevelopment Assoc. (type of group) says the REO’s that convert to affordable housing will make it harder for them to siphon $. Interesting speech about how bad the GDP #’s really is.They seem to think the REO bundle to rental thing is real and will effect the affordable rental market.
My parents are over 80 and live on a half acre ranch style house in Thousand Oaks.
I have never lived in a big house my whole working life and view their yard as too big to take care of. They complain about it all the time but maybe old people who are 80 just like to complain ?
I don’t know if they will ever down size even though they can transfer prop 13. they still say the taxes will be too high ( they won’t ) as they pay only 900 bucks a year on a 3/4 of a million dollar home. pretty sweet.
Plus my mom can feed the hoards of racoons and rats , birds and whatever else comes to her back door.
I tell her not to do that but she does what ever she wants
greatest gerneration
Plus my mom can feed the hoards of racoons and rats , birds and whatever else comes to her back door.
I tell her not to do that but she does what ever she wants
I have the same discussion with my mother. She has a bird feeder that does a great job of feeding the neighborhood squirrel population.
I’m of the mind that bird feeders are well-intentioned, but not as good for the birds as we think. I mean, come on. They’re birds. They fly around and eat insects and seeds. It’s what they do, and they’re perfectly capable of finding this stuff without our interference.
cactus
At least they are in a one-story rancher. The yard on the other hand sounds like a lot of work. Hopefully, they enjoy the buffer from their neighbors and the world.
btw, older people do like to complain. I think it’s their hobby. LOL
Sorry Blue but “ReaItor” created the mindset and has the most influence over the process of buying a house.
I don’t know if they will ever down size
I don’t think that all 80 year olds are built the same but I know that conversation has been going on around my circle. A lot of times, learning new patterns and ways to do things in a new environment feels overwhelming.
A walk to the bathroom in the dark at night in a place that isn’t on automatic pilot is made all the more scary if you believe there’s a chance you could fall and take 20 min or so to get back up.
For my friend w/the 90 year old mil in an old Adirondack rambler, the thought of seperating from the memoires appears overwhelming. The kids dread when the day comes they have to go and clean the place. My friend describes much of what the mother in law considers priceless as junk but she tries to be kind w/her about it as she recognizes that at 90 memories can sometimes be the best thing you’ve got.
If you have neighbors that know you well and check in on you this may be of more comfort that a more manageable home where you don’t know who lives next to you. I get the idea the limitations that come w/old age makes situations we take for granted somewhat frightening.
I don’t think we’re going to run out of condos anytime soon. And, furthermore, why uproot yourself and move clear across the country to spend your later years among people you don’t know? Why not just stay where you are and age in place?
Because if you spent the majority of your life living in a refrigerator, you probably really do want to find out if you can get cooked by the sun in a warmer climate and get skin cancer before you die.
good enough?
Maybe so, but who knows what the next ten years would bring? Retirement plans could change completely in that time. You get sick of golf, wife gets cancer, kids need a place etc.
And how much does 10 years of upkeep, utilities, HOA fees(!), and interest payments add up to? None of that is equity — that’s all wasted cash.
No, this is just a ploy to sell condos.
You’re right slim, older folks need and want the connection to family, friends, and neighbors, not to mention they really get dependent on their medical practitioners. Moving away breaks the connectiveness.
What is the most absurd form of conspicuous consumption you have seen with an HBB theme? I flew for Thanksgiving so I had a chance to peruse the Sky Mall catalog. Here are a few of the contenders:
Wood (or wood-like) end tables that you can also use to crate your dog, because heavens knows, you can’t have an actual dog crate in the room your dog stays in - about $500
Brobdignagian Sports Chair - folding chair to bring to sporting events that is too large for even a person who is over 6 feet to be comfortable. But, hey, it will probably look proportional in that great room or the double height Foyer - about $150
Programmable 5 meal pet feeder - the text implies this just lets you spend time with your pet since you don’t have to take time to feed it every day. I’m pretty sure it is there so you can abandon the dog for almost a week at a time assuming it is well trained to relieve itself on the indoor “lawns” also for sale - feeder only is $60
Cast iron giraffe toilet paper holder - I was going to eliminate this one since it actually holds extra toilet paper and therefore serves a real function, but the extra TP really should go under the sink so it is only needed if you over renovated your bathroom to have no storage space at all - $30
Almost anything in the Design Toscano section, but especially “The Peeing Boy of Brussels” Statue and Fountain. Really. - $200
But I have a favorite. This just seems perfect. It is a kit to make you modern garage doors look more like carriage house doors. Kits include “no maintenance” hinges and handles with the “appearance” of cast metal. I think these are probably decals, but they might be some other form of plastic. So you can change your regular flip up garage to look like a garage that has double swinging doors even though it still flips up and there isn’t even a way for it to split down the middle. Which fits right in with the pretend window stickers. You can paint the trim to match your house, but the windows are fake…excuse me…faux. - set of two pretend windows is $275 and the garage door hardware is $220. To match what they show on a pretty ordinary garage mahal (3 cars spliit into a two car space and a one car space) you would need 3 sets of windows and two sets of hardware for a total of $1265.
Can anyone beat that?
Professional-grade kitchen appliances for people who don’t cook their own meals. To increase the value of the house for resale. To someone else who doesn’t cook.
In the “outdoor” high-end kitchen/BBQ with granite counter-tops that people use maybe 5 weekends a year…(at the vacation house)
Beat that!
I laugh whenever I see a six-burner stove, and those little “prep sinks.” Anyone who installs a prep sink obviously never prepped anything — you’re just asking to wipe up the floor. And the six-burner stove? I don’t have that many pots. Even if I did, I could never keep track of six things on the stove at once.
-$3000 electric gates at the head of a drive way while the rest of the lot is wide open
- Custom signs with gentrified calligraphy stating “_____ Farm”. (What are you farming? Ag? animals? I don’t see any farming going on here)
-Any architectural gingerbread. “Custom” means a bunch of additional $$$ for contractor. And what do you get? Lame architectural that will go out of style very quickly. Stick with timeless architecture.
Not absurd consumption but lame and herd-like
-Granite (of course) instead of epoxy resin
- Hydronic radiant heat (”It’s got radiant heat in the floors!”)
-”It’s got hardwood floors as if they’re a new building material”
“Stick with timeless architecture.”
It drives us nuts to see a cute 1960’s rancher that a flipper or F/F tries to make into something it was never meant to be. Brick, siding, style appropriate hardscape and facade looks so much better. It will never be a one-story McMansion. Get over it.
Awaiting, it’s even worse to see NEW one-story houses which are designed with those exact same features, and are trying to be one-story McMansions for 55+. Especially hated are the gable windows which are supposed to open into an upstairs, but open onto attic space, in the name of one-story living.
Polly, to be honest, I actually like the combination end table/dog crate. There’s an element of Craftsman philosophy there — make the necessary components beautiful.
I think that the crate an actual dog uses should be washable in case the dog was sick or otherwise leaking fluids. I don’t think the end tables have plastic or metal liners, which means you would have to find a way to disinfect the particle board it is made of. Just doesn’t seem like a great idea.
Sounds like a design flaw that could easily be addressed with a washable liner, though…
p.s. Particle-board is cr*p to begin with, so it shouldn’t matter if the dog gets sick on it.
oxide
I’ll keep my eyes open for what you descriped. Who designs this cr@p!
You don’t have to look far:
Nesting gables galore:
http://www.homeplans.com/plan-detail/HOMEPW07680/coveted-cottage
Looks like it should have a second floor but it doesn’t (never mind the strange octagons inside):
http://www.homeplans.com/plan-detail/HOMEPW03005/a-unique-layout
Another one which looks like it should have a second story and doesn’t. Not even a staircase:
http://www.homeplans.com/plan-detail/HOMEPW14817/serene-sun-terrace-and-spa
On the dog-crate story, $500 is too much, but I’ve seen them for less. And really, it looks like something that a handyman could make himself out of some planking and fancy dowels.
Oxide
Thank you for finding these examples for me and all the others. Nice looking homes without the faux windows on top. They have nice style.
Stucco Canyon McMansions were all I’ve ever owned. Now I want something that welcomes me home with charm.
My favorite entry in the Bad Taste Boutique (well, other than the gold-plated rotary telephone with the Mona Lisa in the middle of the dial,) are the “manufactured” McMansions that sprang up like bad mushrooms here in our rural community.
Imagine all the architectural embellishments we’re grossing out about made manifest in a snap-together Barbie house. “Triple-wides,” they called them. Some even have prefab partial second floors you can snap on to the existing trail…,er manufactured home.
They’re not cheap, either. These atrocities were selling in the 3-500K range– without land, labor, or infrastructure.
Coated cardboard pillars hold up the pre-fab plastic archways, elaborate interior “elements” are concocted from particleboard and styrofoam. Composite granite, (though I never saw one with stainless steel sinks, they did sport those fake slate jacuzzi baths in the “master.”) “Log” exteriors made out of fiberglass panels. The chandeliers in the two-story “foyers” are made from acrylic bronze-colored composite, and don’t even get me started on the resin trophy racks to hang over the fake-log fireplace….
The things remind me of nothing so much as the pneumatic housewives of Orange County. Layers and layers of expensive-yet-cheap cosmetic glop and glitz to hide the essential bad bones underneath.
Huge fluted pillars on a plain box house. Timeless.
I can see decorative columns or columns with capitals on a library or university but on a house? WTF.
Blue- LOL No taste, not just bad taste. We’ve seen that ourselves.
And if it’s a flip (So Ca) they use the term “adjacent to”… a remake of a Levittown home in a marginal neighborhood. Gotta love the sucker who buys into it.
Wood (or wood-like) end tables that you can also use to crate your dog, because heavens knows, you can’t have an actual dog crate in the room your dog stays in - about $500
Whenever I see that, I feel like hollering “What’s the matter with a toilet paper box?”
The back story: When my mom taught school, she befriended the custodial staff. Why? Because they were the source for those big toilet paper boxes that mom re-purposed as dog beds. You could get two beds out of one box.
How did Max the dachshund feel about these beds? Well, he thought they were delicious! He loved chewing on them well into his adult years.
Cost of the toilet paper box dog beds? Free. Or priceless. Take your pick.
Dog boxes look like crap. Plastic or wire dog cages look like crap. Yes, they would fit in a living room with a Sauder bookcase or something cheap from IKEA, and yes there are people for whom looks aren’t all that important. But lots of people have a formal living room or a well-kept family room with nice furniture and want to keep the nice look. Why not have a dog crate blends in?
Why have a dog in a formal living room? Have you ever seen what those things EAT?
I was thinking that too, a. But wouldn’t banishing the dog from a room make the dog feel left out?
I was thinking that too, a. But wouldn’t banishing the dog from a room make the dog feel left out?
Indeed it would!
Getting back to the aforementioned Max the dachshund, we used to barricade him in my dad’s den when we had parties. Well, Max knew a good time when he saw one. He figured out how to push the barricade out of the way so he could join the festivities.
Yep. Wiener dogs are cunning. And obstinate….
Our next door neighbor’s donkey, Izzy, used to open the screen door from the patio when they were entertaining, and join the revelers in the house. Probably after the canapes.
Programmable 5 meal pet feeder - the text implies this just lets you spend time with your pet since you don’t have to take time to feed it every day. I’m pretty sure it is there so you can abandon the dog for almost a week at a time assuming it is well trained to relieve itself on the indoor “lawns” also for sale - feeder only is $60
Abandon the dog for a week? Yeesh!
If that’s how you feel about your dog, then why bother having one? It’s okay to be pet-free. Really, it is.
Yes, I can.
I want to beat your conspicuous consumption, but on a pauper’s budget.
Solution:
Take one photo of your favorite Lambourghini and blow up to lifesize print. Take on Photo of a Mercedes Maybach and do the same.
Paste copies over the garage doors and be the envy of everyone who drives by your house.
Just be sure to keep the electric gate closed so no one really finds out that they’re just really good photographs and never really leave the driveway.
I had thought ’bout putting them on a rolling scroll with other pictures, so you could rotate the “inventory”.
Let’s see, oh!, the Maybach is out today, but there’s a vintage Bentley in stall number 3. The man must be the next Rockefeller.
Hah, diog.
I once had a neighbor who succumbed to his mid-life crisis and ordered the new Bentley. Had to wait six months for it to be delivered.
When it finally got there to much fanfare, he discovered that the chassis is too long to fit in a standard US garage. Hilarity ensued….
The stickers are already out there, check it out. My Other Car’s a Jet
I’m partial to the croc that ate my car.
Hah! I saw that one too, Polly. At that price you could be well on your way to buying a new garage door, for heaven’s sake. Talk about tacky, and faux faux faux.
That is one of the wackiest, tackiest things I have ever heard of. Garage-door stickers—what WILL they come up with next???
Sky Mall catalog”
They have the weridest stuff in there
Hey, dont be making fun of the hot dog maker, that toaster style thing is quality.
My favorite for Useless Item Award are the steps that let the dog climb up on the bed. Why would you want to make it easy for the dog to be on the bed? They shouldn’t be on the bed in the first place.
Is the eurozone debt crisis over now?
Dec. 9, 2011, 10:37 a.m. EST · CORRECTED
Banks drive Europe gains as EU summit ends
Goldman Sachs upgrades banking sector to neutral
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — European stock markets rose Friday afternoon, buoyed as investors took a positive view on progress made over the sovereign debt crisis at the European Union summit and a gauge of U.S. consumer sentiment hit a six-month high.
The Stoxx Europe 600 index (XX:SXXP +1.14%) rose nearly 1% to 240.08. The index fell 1.5% on Thursday after Mario Draghi, president of the European Central Bank, dashed hopes for more aggressive purchases of government bonds. The ECB cut its main refinancing rate by 25 basis points to 1%, which was expected.
A choppy session turned sharply higher towards the later part of Europe’s trading day, with banks and oil stocks largely supporting the Stoxx 600. Upward momentum was cemented as a U.S. consumer sentiment survey revealed the highest reading since June, driving Wall Street higher.
Meanwhile, European leaders pushed ahead for plans to implement tough new fiscal rules, though fell short of getting all 27 members to amend the EU treaty. Officials said 17 euro-zone nations, plus six others will take part in a new inter-governmental treaty on fiscal discipline.
Euro-area and other European states also pledged additional resources of up to €200 billion ($266.73 billion) to fight the sovereign debt crisis.
Stocks in Italy, a country that has particularly come under pressure amid the crisis, shot higher, with the FTSE MIB index (XX:FTSEMIB +3.31%) soaring 2.6% to 15,373.39, led by a nearly 6% rise for UniCredit SpA (IT:UCG +6.96%) and a 6% gain for Intesa Sanpaolo SA (IT:ISP +7.86%).
Frances Hudson, global thematic strategist with Standard Life, said equity markets are taking a constructive view of the summit. “In a world of black and white we’re certainly not white, but the shade of grey is somewhat lighter,” she said.
“I’ve had an extremely different reaction when I’ve talked to the bond side who are totally, totally underwhelmed by progress made,” said Hudson. “We’re still seeing big divisions between what the bond markets and what equity markets are reading in.”
…
Frances Hudson, global thematic strategist with Standard Life, said equity markets are taking a constructive view of the summit. “In a world of black and white we’re certainly not white, but the shade of grey is somewhat lighter,” she said.
Shut your pie hole, Frances, and go make a grey souffle with Sean Snaith.
I’d like some discussion on people that have lost their jobs that were making a lot of money (in banks as VPs, or corporations) suddenly realize that they are not in demand. My own view is that these people were all fluff
and were employed due to the sham economy up to 2007.
One hears stories (and they keep a log of it) about how unsuccessful they are. Obviously some are genuinely talented that cannot find jobs due to their age and salary requirement. But there has to be a kernel of truth that many of the older, highly paid, laid-off people did not update their skills to what is really required in today’s market place. Some may try but cannot compete with the graduating class.
-s
Doesn’t that imply that if they’d done the right things to update their skills, they could get another job at the same or better salary? What if the truth is that there’s nothing they could have done, and they only made that much money due to a temporary market condition? It’s not like the graduating class is stealing those VP jobs from the guy who didn’t keep up his skills.
If anything, IMO they updated their skills too much. Lots of those VP’s started out as ME EE CE engineers, or similar STEM positions. The higher up they rose, the farther away from their original STEM jobs they got. They would have a better chance if they tried to go back to their STEM quals. However, actual STEM pays a lot less than management of STEM.
I’m one of those people trying to make the leap into management. In my case, I just like people and schedule challenges a lot more than making broken stuff work.
But there has to be a kernel of truth that many of the older, highly paid, laid-off people did not update their skills to what is really required in today’s market place.
I’ve known more than a few well-paid older folks who haven’t grasped the idea that computer literacy is no longer an option. It’s a necessity. Especially if you want to have a job.
They’ll just have to run for office then.
True. As seen in California and the US congress. In this sense there is no difference between a third world country and our country.
One wonders, perhaps this is why there are not many women in politics. Women, in general, are more compassionate and considerate than men in almost anything. Less testosterone in politics/ public office would be be wonderful.
This is certainly true regarding computer skills not average skills, but good skills. Now a days I see people (older and supposedly experienced) that say well I know excel, word and can write a report etc. when they have only opened excel and entered a few random numbers. No one is going to give them a job. I would certainly not hire them.
I was thinking perhaps that someone knows people like this. My question is whether they are oblivious to the current job skills that are required to get a job.
On a slightly different note, my feeling is that businesses purged these highly paid persons (more old than young) when they realized that these persons skills were only “talking” and not doing. When the economy was going gangbusters, these people were hiding behind the productivity of their colleagues. Now that the tide has gone out…
I’d like some discussion on people that have lost their jobs that were making a lot of money (in banks as VPs, or corporations) suddenly realize that they are not in demand. ”
they get promoted in good times to manager and then bad times come and see ya later
What I still don’t understand about the current state of the global housing bubble is: who is still lending money to areas of the world where the bubble has yet to pop?
I’ve asked this question before and gotten no real answer. We know that in the US, banks were bundling loans and selling to suckers such as Fannie/Freddie, pension funds, and foreign bag-holders like the Germans. Is it wrong to assume that all of these groups have wised-up?
From what I’ve heard, Canada doesn’t have anything that remotely compares to Fannie/Freddie in size. Nor do they have the resident giant investment houses or banks to subsidize their buying spree. Yes, the Chinese are buying some properties in BC. I don’t believe it to be enough to support the housing prices of an entire province. My friends in Vancouver speak of local lawyers and accountants spending many multiples of their income on high-rise condos. Where do these loans end up?
In Canada, the taxpayer backstops mortgage loans through a government agency, I do believe. Besides, Canadians are more virtuous than anyone else (in every way), everyone wants to live there and everyone wants their commodities. What could go wrong?
Backstopping doesn’t mean they provide the money, though. And I was under the impression the government guarantees only a small percentage of loans in Canada. Who is investing in these loans?