Bits Bucket for January 1, 2012
Post off-topic ideas, links, and Craigslist finds here.
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
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Happy New Year, Ben and all the wonderful HBB posters!
May 2012 bring you good health and good times with your loved ones.
Welcome to the first day of the rest of your life
Or the last day of your previous life.
Not that one need to wait until Jan 1 to change his ways; That can be done anytime.
I’ve lately been noticing a lot of public-interfacing employees (sales clerks and such) showing subtle signs that they have had tattoos removed.
With this dismal economy I expect to see more of this since nowdays employers can afford to be picky about who they hire.
My guess is big bucks are awaiting someone who can find a cheap and easy way to get rid of tattoos. I’m also guessing that the tattoo rage is about to screech to a halt.
It can cost $1000-2000 to remove a $50 tattoo, not many sales-counter worker bees can afford that.
I was at the dermatologist a few years ago and asked about that, they only rent the tattoo-removal laser for a few days a month. And as of now, green ink is impossible to completely remove. Black ink tats of the jailhouse variety are the easiest to remove.
I’ve wondered if, at some point in the future, we’ll find out that tatoos cause some sort of deblitating neurological or other condition, because of the ink or whatever. Skin has a way of absorbing stuff and transmitting it into the bloodstream.
I had one heavily decorated young lady expound to me about how safe it all was and all I could think of was those ladies and gents from centuries past who used to use powdered lead as a cosmetic.
I’ve been saying this writer isn’t what most think:
‘The students at Ivy League schools are our most devastating ammunition in this looming cultural war. They show the Lower 99 that today’s economic inequality isn’t some horrible injustice but a financial expression of the natural order of man. The sort of people who become Upper Ones are inherently different from the sort of people who become Lower 99s. The clearest sign of this inherent difference is that we begin our adult life by getting into places like Princeton.’
“I’ve been saying this writer isn’t what most think:”
I don’t quite understand what you mean, Ben.
I see this article as satire.
“I see this article as satire.”
Well, yes, but then again, not really. That’s how the guy comes across to me in his writing.
“Well, yes, but the again, not really.”
Okay, I’m a bit lost here. As I see it the writer is not inventing anything, he’s just reporting it - reporting it with a twist, as in satire.
“Okay, I’m a bit lost here.”
Which is exactly how I feel when I read Lewis’s books and articles on matters financial. I THINK I’m reading satire, but there’s always some sort of curve ball. Lewis was an insider, who appeared to become an outsider, who is still an insider.
“Lewis was an insider, who appeared to become an outsider, who is still and insider.”
Reminds me of Tom Wolfe. Tom Wolfe was an insider of the Upper Set and wrote about these folks (”Bonfire of the Vanities”) and was rewarded by the Upper Set by being invited to their parties and other functions.
The book trashed the Upper Set but the Upper Set didn’t see it that way (or they didn’t care); What they were most interested in was what were the real names of the characters in the book - and were any of the characters them.
Many of these folks went around telling people a particular character in Wolfe’s book was really them and spent a lot of time trying to get Wolfe to confirm that it was them.
Bottom line: These folks don’t at all care what the lower ranks think, they only care what their peers think.
“Reminds me of Tom Wolfe.”
I was thinking the same thing, combo. There are similarities between the two authors, btw, one of them being that they are both erudite Southerners with a knack for writing who made good in New York. I don’t think Wolfe had quite the immersion in Wall Street that Lewis did, though.
I’ve read Lewis’s stuff over the years. I note that he wrote this one for Bloomberg. It’s almost as if someone said “Well, we might as well have one of our own writing some of this satire.” And he’s the one.
I think the article works because it gets to the truth.
I think Bloomberg is a good place to carry the article because the readers of Bloomberg understand that it gets to the truth.
“I think the article works because it gets to the truth.”
ED ZACHARY! It IS the truth. Presented as satire. But not really…
“But not really …”
There you go again, you are losing me. If it is satire then that is what it is. How can it be satire and not be satire both at the same time?
Sorry to keep messing with you, combo. I’m satirizing the guy’s ambivalence. To give you closure, this is what I mean:
“It IS the truth. Presented as satire.”
Well, the article is funny, sort of. And one of Lewis’s books was a real insight into the genesis of securitization as we see it today. However, I sometimes have my doubts about the guy. Although he seems to point out and make fun of the failings and absurdities of the financial industry, I sort of get the impression that he’s really an insider.
His article on modern baseball was interesting, though.
One day I was driving a lot so I listened to NPR most of the day. It just so happened this guy had come out with a book telling us all what went wrong with wall street. Because I was listening for so long, I discovered he had 2 long interviews on different shows, the same day.
He proceeded to tell the hosts all the ins and outs of the “crisis”, but more than that, who caused what, who was responsible, using really dramatic words so we could understand how serious he was. This guy had the situation down; a real expert! He’s doing multiple shows on national radio at the height of public interest in wall street misdeeds!
Then the kicker: the host asks him why shouldn’t these people go to jail like the S&L criminals?
“Why we can’t do that, it would stifle financial innovation!” he insisted. And the NPR hosts let it go at that. After all, the expert (he wrote a book!) had spoken.
And that folks, is how the establishment manipulates public opinion.
Yes, I noticed the same thing in one of his articles, that’s the curve ball I’m talking about.
It’s good to have a BS detector.
Ah, now I get it: The reader should seperate the truth of what he says from his conclusions drawn from what he says.
Which is what a reader should do in any case.
Yes, one could sum up the message delivered Michael Lewis’s writings on financial matters as: “It’s all a merry mess, isn’t it, ha-ha, but that’s the way it is and we need it”.
“It’s all a merry mess, isn’t it, ha-ha, but that’s the way it is and we need it”.
Pretty much the exact same message we get from all those who defend America’s current wealth disparity.
“… I listened to NPR most of the day.”
I can’t stand any more than two hours of NPR. I get the vibe that NPR is conditioning the listener as much as infoming him.
The Bay Area (a bastion of Groupthink) is loaded with NPR listeners who all talk to each other using the same buzzwords and point of view that NPR dispenses out to them.
For this reason - groupthink - I can’t take much of the Bay Area for any great length of time: Alternative points of view there are automatically dismissed.
“The Bay Area (a bastion of Groupthink) is loaded with NPR listeners who all talk to each other using the same buzzwords and point of view that NPR dispenses out to them.”
This regular NPR listener would have a field day mocking that sort of Groupthinker political correctness.
BTW, I believe Lewis lives in Berkeley these days (or at least I took that impression when we saw Moneyball last fall…).
We don’t have much choice in radio here with a thin population.
Let’s go back to that time. The only people really calling for wall street prosecutions were tea partiers. And NPR happily depicted them as knuckle draggers. Now media like Fox attacks OWS. The upshot of it all IMO is that no one in the MSM was, or is, really calling for wall street people to go to jail for the mortgage related crimes. And those groups that do want perp walks have an establish media in place to tear them down.
“Let’s go back to that time. The only people really calling for wall street prosecutions were tea partiers”
When was this? I just entered ‘Tea Party calls for’ in my search engine, and as I wrote it the autofill was offering various searches until I entered the word ‘Wall’, as in Wall Street, and the search options ended, and the search brought up only articles concerning OWS protesters.
When was the Tea Party ever calling for Wall Street prosecutions?
From what I have seen those under the influence of groupthink have The Answers.
If these Answers turn out to be incorrect then The Questions that led to The Answers are spun in such a way so as to still make The Answers correct.
Example: The buzzword Global Warming morphed into the buzzword Climate Change.
It used to be all one talked about, regarding the issue, was put into the buzz word catagory of “Global Warming”. Now the Global Warming buzzword is out and the “Climate Change” buzzword is in.
I asked about this and was told - essentially - that it was natural for the new term to replace the old term and no informed person used to old term anymore. To use the old term was to be deemed “uninformed” (aka ignorant) - and to be uninformed (ignorant) is a big no no in the Bay Area.
“Climate Change” trumps “Global Warming” as a buzzword, as you can claim “it’s real” regardless of whether the temperature is rising or falling.
I asked if the earth was warming up and the response I got was “Of course the earth was warming up, all the glacers are melting” and so forth.
Then I asked: Then why not stick to the term “global warming” since that term describes what is happening?
“Because ‘global warming’ doesn’t fully describe what is happening.”
And so it went.
When was the Tea Party ever calling for Wall Street prosecutions?
All I ever seem to recall then complaining about was “big government” and government spending that they did not benefit from directly (i.e “Hands off my Medicare”)
…and how they later fought “Obamacare” tooth and nail, while having Medicare pay their medical bill.
The NPR groupthink and mention of Berkeley brings to mind Boulder, CO, another of David Brooks’ Bobos In Paradise locations.
The “Coexist” bumper sticker is so ubiquitous there one would think it is a city-issued parking permit sticker. Yet being 90%+ white Boulderites don’t do much co-existing.
From a blog post somewhere a few years ago: “The purpose of a liberal arts college education is to give one the correct attitude toward minorities, and the means to move away from them”
“Yet being 90%+ white Boulderites don’t do much co-existing.”
I think that they consider eating at Nepalese restaurants to be co-existing.
Been doing my research over the last week. Looking at and calling about rentals. Got all our paperwork together and started shopping mortgage brokers. Saw one broker on Friday.
As teachers with 20 combined years in our school district and good credit (gotta brag here - my credit score is 816), there are some programs out there for us.
No flaming, please. This is merely an update. I’ve been reading HBB for 6 years now, and value the combined wisdom here. Where else can I turn for the opinions of such a diverse group of people? Many of you know far more than I do, and that’s why I am posting.
We have a life, friends, community, kids in public schools we like (I work at one of our kid’s schools) and jobs with seniority. Leaving our home of the past 20 years means leaving all of that. Many people who can just up and leave their home usually a) have no significant roots or meaningful social life/community or b) are in dire economic straits.
Anyways.
Rent for our SFH has gone to $2600. Rent in a similar house in our neighborhood is easily $2800+. We have been priced out of our beloved neighborhood of 15 years.
We qualify for Teacher Next Door Program: $20 K each (we are both teachers). The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10th year, the loan is forgiven in its entirety.
And this one:
DALP is part of the SF Mayor’s Office of Housing’s first time home buyer program. It was designed to assist first time buyers of low, median and moderate incomes with a down payment. DALP will provide 20% of the purchase price up to a total of $100,000. This will provide most buyers access to conventional financing with attractive interest rates.
The program really acts like a second loan and is secured against the property behind a primary mortgage. However, DALP doesn’t require payments during its first 40 years. Rather, when the home is sold, DALP must be repaid to the program along with a relative equity share. For example, if you were to use DALP as 20% of your purchase price, you would owe the original amount back to the city plus 20% of the appreciation at the time of sale.
Thoughts???
The “Coexist” bumper sticker is so ubiquitous there one would think it is a city-issued parking permit sticker. Yet being 90%+ white Boulderites don’t do much co-existing.
My son’s school is 85% hispanic. The primary reason for that is that most of the coexist crowd pulling their kids out when it hit about 40% a few years ago. I have limited patience for their opinions on my redneck attitude. I’m totally willing to listen to the ones still there, though, even when we disagree. And the ones still there are pretty nice to me, too.
While I was still at my last job I qualified for a midrange income special deal in Boulder (I have no idea why they were extending low income housing deals up the income scale). My conclusion was that the special deal was outweighed by the potential downside. To me it looks like your situation is similar.
Carl,
My son went to an 85%+ Hispanic public high school as well. When it came time for college applications, I’m sure he was weighted as a “diversity*” student, because he got into schools that, given his good-but-not-sterling grades, probably wouldn’t have looked at him twice had he been from a typical upper-middle-class white district.
*Keep in mind that to applications committees, “diversity” doesn’t mean “racial minority,” it means the ability to bring unique experience, ideas, and perceptions to the student body.
“Now the Global Warming buzzword is out and the “Climate Change” buzzword is in.”
With “global warming”, you get wiseguys saying, “hey, we got record cold here in Lexington, so much for global warming”. People hear the term “global warming” and think that the warming should be happening everywhere, when what it really does is cause local weather extremes while warming the average temp. of the planet. “Climate change” at least puts an end to that.
“Why we can’t do that, it would stifle financial innovation!”
I suppose criminal activities can be classified under financial innovation, provided they involve theft.
I would expect nothing less from NPR. They always give an “in depth” look at subjects. It makes them “believable”. I know many “educated” people who use NPR as their sole news source, mock internet sources and hate talk radio. In the end, when the NPR staff gives it’s summary, you are told exactly how to think about it, and most, I have witnessed, became walking mimicking automatons for NPR. I know what’s coming, every time.
Still, I tune in, from time to time, to listen to their “take”. It keeps me attuned to propagandist techniques.
Dio:
NPR IS the 1%.. and that’s the very scary part. Alternative out of the box thinking is evil to them. And they would never hire one that can think for themselves.
I would cut off all funding for PBS NPR and demand they return the station licenses to the public. Lots of people are shut out of commercial broadcast since the Clear Channel /Cumulus purge of nearly 2000 employees over the last few months…and the internet doesn’t cut it…..100 million cars still have radio in them and small AM stations which should be turned over to local community broadcasters.
“NPR IS the 1%.”
NPR = liberal Democrat contingent of the 1%
FOX = conservative Republican contingent of the 1%
NPR does better than MSM but still has plenty of holes.
PBS however had some of the best coverage of the bubble and the cause of the collapse. They even had people on before the collapse. They also have good stuff now.
NOw
http://www.pbs.org/now/politics/housingboom.html
Thornberg interview 2005
http://www.pbs.org/now/politics/thornberg.html
Dean Baker laying out the blame
http://www.pbs.org/now/shows/412/housing-recession.html
Matt TAibii
http://www.pbs.org/moyers/journal/12182009/profile.html
see end of article
Current
http://www.pbs.org/newshour/rundown/2011/10/chinese-housing-bubble-a-troubling-update-from-beijing.html
Do any of you people actually LISTEN to NPR? Are we getting the same programming? It seems pretty centrist right-slanted from where I sit, with business and pro-America international commentary predominating. But then, KVPR (my “local” station,) is in the reddest of the red regions, so the affiliate likely chooses content for its conservative slant.
I agree 100% that the “Newshour on PBS” sets the journalistic standard for broadcast news and commentary– and always has.
“The upshot of it all IMO is that no one in the MSM was, or is, really calling for wall street people to go to jail for the mortgage related crimes. And those groups that do want perp walks have an establish media in place to tear them down.”
Add to this the fact that the government seems completely unwilling to incarcerate any of the 1%’er lawbreakers, and it all makes me want to stop paying my taxes- to hit them all where it really hurts.
from the article:
“The whole point of going to Princeton for the past several decades has been to get a job at Goldman Sachs or, failing that, JPMorgan. That Princeton students are now identifying their interests with the Lower 99 percenters is, in its way, as ominous as the return of the Jews to Jerusalem. ”
This is exactly the sort of change in consciousness that the OWS movement has brought about.
Exactly, and I suspect that OWS will be back this Spring.
Meanwhile the ranks of the Lucky Duckies will grow at a hefty clip while the real cost of living will continue to rise faster than the gov’ts bogus inflation numbers.
Meanwhile the elite will continue to tell us that everything is just fine and dandy. And publish their bogus confidence numbers, etc.
Those occupiers need to occupy a shower and get a job.
Go back to mom’s basement loosers!*
Seriously dude, didn’t you get the memo? Class warfare is sooo 2011. Bootstraps are this year’s spring fashions.
“This is far and away the strongest global economy I’ve seen in my business lifetime.” — Henry Paulson, July 12th, 2007
* representative sample of enlightening reader comments from any Denver Post article on OWS
Total buncha bollocks.
If they could get jobs at GS, they would. They can’t so they are OWS.
Buncha crybabies and opportunists really. That’s Princeton in a nutshell (university founded for Southern “gentlemen”. Didn’t even allow women until 1969. Backward then and backward now.)
Happy New Year! Bah Humbug!
Princeton was founded as a Presbyterian Seminary IIRC.
If they could get jobs at GS, they would
I think part of the problem is that they can’t get any kind of non-menial job but have the huge Ivy League student loans to repay. If they had good jobs, of course they wouldn’t be protesting … duh.
Princeton was founded as a Presbyterian Seminary IIRC.
I have a friend who is a Princeton Seminary grad.
We idolize people who say things that do not make sense, rather than concluding that they have a lose screw or two.
“things that do not make sense”
Like your post? Who is being idolized?
Sorry Alpha. I didn’t mean to slight you.
Are you still drunk from last night, Blue?
Maybe!
The Recession Kids Grow Up
How the economic downturn has shaped Generation Y.
Slate
“The recession has taken away job opportunities for us, and it’s also changed the kind of jobs we want. In 2007, 47 percent of the graduating class at Harvard planned to enter either finance or consulting professions, according to a survey published by the university newspaper, the Crimson. In 2011, that number fell to 21.7 percent. Finance has traditionally been the most popular field for Harvard alums, but in 2011, education surpassed Wall Street as the most common choice for graduates.
At least among my friends, one of the casualties of the Great Recession is the allure of investment banking. It’s tougher to get a job in the field, but it’s also more difficult to justify the profession as a way to spend one’s adult life. None of us needed a degree in finance to recognize the havoc that American banks inflicted on the country…”
http://www.slate.com/articles/business/the_hive/2011/12/recession_kids_how_the_economic_downturn_has_scarred_gen_y.html
but in 2011, education surpassed Wall Street as the most common choice for (Harvard) graduates
Isn’t a pricey Ivy League education a mismatch for a relatively low paying teacher’s job? Isn’t that what cheaper regional schools are for? Why would you borrow 100K to train for a job that (in my neck of the woods) starts at 30K and tops out at 60k if you only have a BA degree (A PhD can get you into the low 70K range, after 30 years).
The can be education consultants! Bringing the wisdom of their Ivy ed schools to the nation’s peons.
Isn’t a pricey Ivy League education a mismatch for a relatively low paying teacher’s job?
Based on the career paths of people I’ve known, I think that a lot of these people will work Teach for America jobs for two or three years and then go to law school. That would work nicely if there were deferments available for student loans.
Believe it or not, not everyone in the Ivies is there for the money! (Particularly not the teachers.) I know this is hard to imagine, but some actually attend for the superior education, or for the inherent satisfaction of improving one’s understanding of one’s world, or with the idea of making a contribution to society — and and not for the “training.”
Higher education is not a dollar cost/benefit undertaking, and those who view it as such should probably not be borrowing money to pay for it.
Higher education is not a dollar cost/benefit undertaking, and those who view it as such should probably not be borrowing money to pay for it.
Most of us never had the option to look at college as anything but cost/benefit. Sounds like you’re saying Ivy League isn’t for us unless we can get a full scholarship.
How about a more representative sample than Harvard, of say U of Texas or Ohio State? The Gen Y’ers who may have hoped for modest $40K starting salaries but are instead stringing along on service sector Lucky Ducky wages are better examples than what the article discusses.
There is no shortage of New Year’s serial bottom callers stepping up to forecast a housing market bottom in 2012.
Prices and sales of homes expected to rise in 2012
Posted: Sunday, January 1, 2012 12:00 am | Updated: 8:39 am, Sun Jan 1, 2012.
By KEVIN POST, Business Editor
Real estate industry professionals won’t feel any nostalgia for 2011, which saw the double dip in home prices continue and sales fall more than 4 percent.
But at least the year ended with numerous indicators showing prices stabilizing again and sales picking up.
Forecasts by Fiserv and the National Association of Realtors say prices will start rising in early to mid-2012. The NAR reports sales already have turned around with a dramatic 17 percent gain in the third quarter.
The Economist magazine, which tracks prices of homes globally and since 1975 has estimated their fair value based on incomes and housing rents, says U.S. home prices “now look cheap.”
So 2012 looks fairly certain to be an improvement over this year for the existing homes market - once the still fairly dismal current conditions pass.
Fiserv, whose Case-Shiller home price indexes show the second dip began in 2010, expects U.S. home prices to fall another 3.6 percent by the second quarter of 2012 - but then rise 2.4 percent in the following 12 months.
…
There will likely be no shortage of such articles for the foreseeable future.
I’ve noticed the same thing. For the record, the rental house I’m occupying (legally), bought for 130k in May, 20k in Home Depot renos, and on the market for 190k, has had two showings in the past week. The market in the Phoenix area is heating up, not that it should, but articles like the one above seem to be lighting a fire under those with more access to credit than access to research.
I’ll be on the foreclosure flight (Phoenix to Chicago) this week, will report back the real estate stories I hear.
The Economist magazine, which tracks prices of homes globally and since 1975 has estimated their fair value based on incomes and housing rents, says U.S. home prices “now look cheap.”
Maybe compared to bubbly places like Toronto, Vancouver, Sidney, London or Beijing. The fact that in most of the USA they still aren’t selling might indicate that they are still unaffordable.
The problem is that rents are skewed to the upside right now. As the supply of rentable homes has decreased (stuck in foreclosure/abandoned/etc) rents have risen. This same thing happened back in 2002/2003 until the housing market really took off, which drove down rents as renters bought. Now the trend is reversing. Rents will be sticky in the short run, but will soon start to fall as homes come back on the market as investor owned rentals. Never mind the insane amount of multi-family housing going up nationwide right now.
If I was gambling, I’d short the rental REITs. Just like the homebuilders of 2007, they won’t be able to manage their inventory.
Notable exceptions would be NYC, DC, Boston. Anywhere where there are too many restrictions to building.
2012 - The Crash of the U.S. Housing Market?
From Glenn Beck’s Fox News Channel program on June 16, 2009 - a graph showing the upcoming crash of the United States housing market thanks to incompetent buffoons like Nancy Pelosi, Harry Reid, Barney Frank and Chris Dodd who were told many times this was coming and chose to look the other way as hundreds of thousands of people were outright handed mortgage loans they had no possible way of repaying and had no business owning a home.
According to the forecast we’ve only seen the worst offenders hit the foreclosure mark so far. The next stage comes in 2010 - just prior to the midterm elections - when people who actually tried to pay on their homes will begin to fall into foreclosure — with another group set to arrive there in 2011 just prior to the total collapse in time for 2012.
There’s that date again folks — 2012! Coincidence? Not likely!
Those Mayans were an overly optomistic lot. Their doom came centuries before they predicted, alien invasion and all.
Don’t Pay Your Mortgage
Prophetic advice offered as of October 2008 about how banks would lack the resources to foreclose on people who stopped paying their mortgages.
To walk away or not to walk away…the answer depends on whether you live in a non-recourse state.
WALK AWAY FROM YOUR MORTGAGE
Uploaded by Mitchell Sussman on Oct 4, 2010
An educational lecture from attorney Mitchell Reed Sussman on the legislative enactments that permit homeowners to “walk away” from their mortgage debt.
This is not intended as legal advice nor shall it be construed as a legal consultation. For specific applications of the principles set forth in this video consult with an attorney specializing in this area of the law.
Homeowner Destroys House Before Foreclosure
Uploaded by klastv on Jun 23, 2008
The owner of a local mortgage company is about to lose three of his homes to foreclosure. The notice came as a surprise to some of his renters, but what is really shocking is what’s happening at one of the homes.
This guy is less resourceful or lazier than most of the house strippers.
Usually they strip out the good stuff and even sell off the kitchen cabinets. This guy just wants to wreck the place.
I sincerely hope the noteholder can go after him for a big fat deficiency judgement for the next 20 years.
What amazed me, though, reading the article commentary is the people who think its great, the people have been screwed by the bank and they deserve to destroy property for the sake of getting even, somehow.
I’ve seen similar comments on this blog.
“I’ve seen similar comments on this blog.”
Not from me. My thought when I read about people who destroy $100K+ in somebody else’s property is, why don’t people serve prison time for committing felonies any more?
Just another symptom of our society, refusal to pay ourselves respect results in total lack of respect for others (and their property).
Don’t kill yourself if you can’t pay your mortgage.
Mother, 53, Kills Self Before Foreclosure
Uploaded by newsincomedy on Jul 24, 2008
A 53-year-old wife and mother fatally shot herself soon after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead. Carlene Balderrama
Private market solution to the problem of using scarce government funds to pay for bulldozing vacant homes: Encourage owners in foreclosure to bulldoze their own homes.
Man Bulldozes Own House Over Foreclosure
Uploaded by MidNightRider2001 on Feb 19, 2010
An Ohio man says he bulldozed his home after a bank began foreclosure proceedings and says he won’t let the bank take his carpet business either.
Another loser screws the creditors. Amazing. He should be in jail.
The part of the story we don’t hear is that he is already grossly over-indebted. He’s going bankrupt, I am sure. They are going after his business, too.
So, what’s the real story. He owes more than he can sell the house for.
He spent the money he says he gave them. If he sold, the proceeds probably already have a claim against them, so he can’t sell.
Solution: destroy the collateral so that the people who lent me the money to mismanage his business are losers, too.
It’s an attitude that will kill this Country. Lawlessness.
The Banksters should be put on trial and forced into receivership, but that’s another issue.
While I certainly don’t agree with what this man did, I do find it funny.
Filed under: Congress are whores
Washington Post - Growing wealth widens distance between lawmakers and constituents
“Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity.
Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.
The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.”
“Growing wealth widens distance between lawmakers and constituents”
Follow the money. How is the realestate market doing in DC?
In the D.C. area it’s buy now or be priced out forever.
Also remember, any time they talk about a “cut” in federal government spending or a particular federal program, they really mean just less of an increase than had been previously planned or assumed.
Whenever I ask FedGov employees if they worry about their gravy train ending, they just laugh.
‘Whenever I ask FedGov employees if they worry about their gravy train ending, they just laugh.’
I hope they laugh long time.
Comment by Prime_Is_Contained
2011-12-31 09:58:22
“When I have more time I will tell you about the townhouse me and my guys cleaned out yesterday after the people who were food stamp eligible were evicted and the story their neighbor told us. Until then…”
TEASE! Eagerly awaiting…
On Friday 3 of us cleaned out a townhouse in Palm Beach Gardens for a gentleman who owns 4 units and rents them out. This unit was rented to a young woman whose mother (who had passed away) had worked for a wealthy woman on Palm Beach. The wealthy woman paid the rent. I won`t get into the condition of the unit too much and just say there was a lot of new but broken stuff along with kids things left behind and it was a pig pen.
Now about the neighbor. When we arrived and started removing the trash a scared looking woman stuck her face in the door. You could see the relief on her face when she looked at me and said… “Thak god, I thought they were back.” It`s a duplex unit and I apologized for not knocking on her door to tell her what we were doing but explained that I had told her husband the day before we would be there in the morning.
After 5 nasty hours the unit was cleaned out, the carpet was removed, the kitchen was no longer a science project and the dumpsters were full. (We have to go back Monday and patch the holes in the walls and replace the front door) The lady from next door came out and began to tell us what had happened since they bought the place (I looked it up) on 02/24/2011 for $58,000 (these units were going for $240k in 2006).
She said the day after we moved in the Palm Beach Gardens police knocked on her door and told her… If you have any place else to go, go there. We cannot guarantee your safety if you stay here.
She went on to tell us about 2 of the regular visitors there who had been murdered (at another location) and the nightly beatings that the woman and her soulmate gave to each other (probably why there were 4 brooms in the unit, all broken in half and a brand new flat screen with a nice spider web pattern) along with many other signs of destuction. She also told us about one particular fight in the front yard where the woman had her dress completely ripped off (she didn`t have anything on underneath) as they attacked each other. The 10 to 15 daily visitors who in her opinion were not there for PTA meetings and drugs openly enjoyed right out front.
I asked her about the little girl who lived there because of the Mickey Mouse and Hello Kitty decorated room. She said she was 6 and always asked if her 2 daughters could play, the “Mom” and boyfriend took her to stores to shoplift according to the woman. Trying to make an already too long story shorter, she had been succesful in getting DCF to take the child about 2 weeks ago. The childs grandmother had contacted her while she was in the process and wanted to help but feared for her life. They had to pick the child up at school because they could not get them to answer the door and said by law they couldn`t break in, there was an extensive security camera system installed around the unit.
Anyway there`s more but I type slow and it`s New Years day. Have a great day and pray that little girl ends up in a place where she is taken care of and not abused.
Hmm S&M dungeon? crack den? fetish porn? Maybe they got paid to do this,(webcam) and laughing all the way to the bank?
Wow… They sound like some real winners, alright!
Can you imagine buying and sharing a duplex with folks like that??
Thanks much for sharing, jeff!
Will 2012 be the last year U.S. households can walk away from their debt without paying income tax on the defaulted amount?
Better hurry up and walk away from that mortgage before it is too late!
The Mortgage Forgiveness Debt Relief Act and Debt Cancellation
If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.
The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.
The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:
What is Cancellation of Debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.
Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.
…
U.S. homeowners are not the only economic entities facing severe negative equity positions these days.
BARRON’S INSIGHT
JANUARY 1, 2012
Home Builder Stuck in the Basement
By ROBIN GOLDWYN BLUMENTHAL
The nation’s housing market has lately been showing signs of life, and investors have bid up home builders’ stocks by an average of nearly 50% over the past three months. But in the case of Hovnanian Enterprises (HOV), which is up 20% in the same period, investors may have gotten carried away. The big builder, with operations in 17 states, looks to be headed for a severe cash crunch.
The stock—down by two-thirds this year, to under $1.50—could easily fall further. The storied company’s market value already has plunged to just $138 million, while debt, all in the form of bonds, stands at $1.6 billion.
Vicki Bryan, an analyst at research firm Gimme Credit, points out that the company hasn’t generated enough cash to cover interest costs, now running about $150 million a year, since 2006, the result of weak demand and stepped-up land acquisitions considered vital for its future. So, it has been dipping into the cash on its balance sheet. Last year, cash levels fell by a third, to $302 million.
While it could sell some of its roughly $250 million of raw land—or slow its acquisition and development of new land, now running at about $400 million a year—that could badly crimp future growth.
That’s why Ms. Bryan thinks a bruising recapitalization is inevitable. The maneuver could involve converting bonds outstanding into equity, heavily diluting existing shareholders’ value. Ms. Bryan goes so far as to call Hovnanian’s stock “worthless.”
…
Home owners in denial about how far the value of their houses have dropped are holding back the real estate market from bottom out. Time is on the side of patient prospective buyers, who always have the option of renting until owners move past the denial phase of the housing bubble stages of grief.
And I have some news for the 80% of consumers whose survey response was that now is a great time to buy: It will be even greater once current owners come to grips with reality and stop holding out for 2006 prices which will never return. When this happens, there will be many more homes to choose from, as myriad baby boomers are sitting in supersized empty nest housing they will not want to hang on to throughout their waning years.
Bridging the great divide between home buyers and sellers
With mortgage rates below 4% and prices near bottom in many markets, it’s a good time to buy a house. But many owners won’t sell because they can’t get the price they want.
By Kenneth R. Harney
January 1, 2012
Reporting from Washington—
Where do you side in the great real estate buy-sell divide of 2012? If you’re a homeowner considering selling sometime in the new year, are you apprehensive that you won’t get the price you need or want, and therefore it’s possible you won’t even try to sell?
If you’re a buyer, do you agree that with 30-year fixed mortgage rates now below 4% and home prices near cyclical bottom in many areas, 2012 offers extraordinary opportunities, even if listings are fewer than you might prefer?
A new study by the Research Institute for Housing America, the think tank affiliate of the Mortgage Bankers Assn., documents a profound market fissure caused by owners’ fears and hesitation — what researchers call “negative selling sentiment.”
Nearly 80% of consumers in the study’s survey think this is a great time to buy a house, but more than 92% of homeowners think it’s not a great time to sell.
The study was conducted by Syracuse University economist Gary Engelhardt using extensive data from the University of Michigan’s Survey Research Center, which is generally recognized as an authoritative source on consumer attitudes.
Engelhardt said that compared with earlier post-recession periods, owners have been more deeply shocked by the extent and severe side effects of foreclosures, short sales and unemployment. In the aftermath of earlier recessions, such as in the early 1990s, 40% to 60% of homeowners remained relatively positive about their prospects if they chose to sell — far higher than the tiny sliver who see it that way today.
Many owners “have not adjusted their price expectations downward” to keep pace with local declines in property values after the mortgage bust, Engelhardt said, thereby contributing to the sharp divergence in their real estate visions compared with those of buyers.
This is consistent with the results of a study conducted in mid-2011 by Zillow, the online real estate and mortgage information company.
Zillow found that sellers nationwide were having trouble coming to grips with what market forces had done to their property values. They knew prices had declined, but they didn’t necessarily think those devaluations applied to their houses.
For example, people who had purchased their homes in 2007 or later thought their homes were worth about 14% more than their actual sales value. People who bought homes before 2002 were slightly more realistic, but still overvalued their houses by about 12%.
How are such seller perceptions affecting local real estate market dynamics today? For one thing, they are keeping owners out of the game. But they also are bringing more motivated and committed sellers to the fore. Glenn Kelman, chief executive of Redfin, a national realty brokerage in Seattle, said the shortages of listings in some markets are the product of owners “waiting for better times to sell.”
…
All this talk about a great time to buy misses one fundamental point. What about the owners who have extra properties or wish to downsize, who will put their home on the market the minute a rebound is sensed?
I suspect this one action will cause another round of price decreases, even in an “improving” market.
Exactly Moman,
Forget what flippers are still solvent. Even before the bubble there were gazillions of fools with a “2nd house/vacation house”. Most of the self-entitled dopes were in their 50’s back before the bubble. It’s my opinion that the unused, empty inventory is staggering in size.
INVESTING
JANUARY 1, 2012
Fasten Your Seatbelts, It’s Going to Be a Bumpy Year
By GREGORY ZUCKERMAN
2011 was a year of surprises. An Arab revolution no one predicted. A downgrade of the U.S.’s formerly pristine debt rating. European debt troubles that threatened the future of the continent’s common currency.
Perhaps the biggest surprise of them all: The ability of the U.S. stock market to all but shrug off that turbulence, even as most foreign markets fell.
Sure, U.S. stocks sank at various parts of the year, including the period after the debt downgrade. But a late-year rally left major averages about where they began, as if the year was placid, not full of panic.
Last week, stocks fell 0.6% leaving the Dow Jones Industrial Average up 5.5% on the year. The Nasdaq Composite closed the year down 1.8%, and the Standard & Poor’s 500-stock index was flat (actually off 0.003%).
Predicting what 2012’s surprises will be is no easy task. Last year’s Sunday Journal outlook warned of rising interest rates and falling bond prices. But the experts were confounded: U.S. government bonds continued to rally.
We did get some predictions correct, such as anticipating China’s ability to rein in inflation without causing a severe economic downturn. It’s not clear whether Chinese leaders will continue to have such success in 2012, however.
Here are some possible surprises for 2012 and beyond, based on views of some leading investors and analysts:
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I predict 2012 will offer many opportunities for dips to buy U.S. stocks.
So now you’re replying to the CIBT posts with the PB handle?
How many identities do you use here?
I was merely trying to avoid offending anyone who thinks I post too often.
I hope you find time to get a real life in 2012.
By the way, you didn’t answer the question.
You know precious little about my real life, aside from the obvious fact that I post a lot more here than you want me to post.
But you are free to assume whatever you want. Just try not to make an “ass” out of “u” and “me” in the process.
Ol’Bubba: I find your irritation over the number of posts I make here somewhat irritating. Are you confused into thinking that I am somehow limiting the number of posts you can make? What’s it to you whether I make one post or a brazillion a day? Are you still trying to figure out how to use the Joshua Tree Extension? It doesn’t require a rocket scientist’s brain to figure it out.
If your point in complaining about me posting too often was to irritate me, then congratulations: You scored a point.
GS/PB/CTIB-
I wouldn’t want to assume, which is why I asked you how many identities you post with on this blog. I’m aware of three.
This all started months ago when I specifically directed a question to a particular person and you could not refrain from commenting even when asked not to do so on that particular thread. That prompted me to note that you do indeed post “a brazillion times a day”.
I understand that you’re going to post here early and often and on and on. It’s what you do.
Let me ask you this- are you irritated because you perceive me to be irritated as you stated or are you irritated because I called you out for responding to one of your own posts with one of your different aliases?
Happy New Year.
Happy New Year to you too, Ol’Bubba. And sorry to get so cantankerous earlier. It’s just an acting job — I wasn’t really so irate as I suggested.
I am actually in a fairly good mood so far this year, using only a modicum of socially acceptable drugs (small amounts of caffeine and alcohol). I’m looking forward to improving trends in my personal life and relationships.
I do occasionally later have second thoughts on my own posts, and throw them into the mix. My goal here is to stimulate thinking and discussion from a perspective which I find missing in the MSM. If I do that, I have accomplished my objective.
I most sincerely encourage you or anyone else who doesn’t like what I have to say to skip my posts.
So how many identities do you use here, and what are they?
I read WAY more than I post, and appreciate the number of items you contribute, CIBT/GS/PB. Don’t stop.
I retired the Get Stucco identity years ago when a troll co-opted it and began submitting pro-REIC posts under my handle. I take it as a tribute to Get Stucco’s lasting influence that folks here still remember him.
Just for fun, I invented a handle called Hopeful back in Fall 2006, and pretended to be a Realtor™. But the HBB reaction was so vitriolic, that I quickly retired Hopeful.
CITB is my normal handle these days, though I bring Professor Bear out of retirement on occasion when the point I have to make is more bearish than cantankerous.
Does that satisfy your curious curiosity?
Why is it that dire housing market predictions typically strike me as well-reasoned and entirely plausible, while rosy serial bottom caller predictions for a bottom before the end of 2012 seem like something the bottom caller pulled out of his ass without any reasoning whatever? Is it just that my professed bear status has jaundiced my perspective?
Published: Sunday, January 1, 2012
Housing probably hasn’t hit bottom
By Steve Tytler
Every year I write my annual housing market review and projection for the coming year.
First, let’s take a look at what I predicted last year for the 2011 housing market in my column published on Oct. 14, 2010:
“I was hoping that I might be able to report that we had finally reached the elusive ‘bottom’ of the housing market by now, but we are not there yet.
“I think we are in for another year of slowly falling prices next year. I do not expect a dramatic crash in home prices, but I think there’s a good chance that home prices will continue to drift downward by an average of about 5 percent.
“But again, home price appreciation/depreciation will vary widely from neighborhood to neighborhood with some doing much better and some doing much worse than the overall average.”
I was pretty close to the mark. According to Standard & Poor’s/Case-Shiller index the most recent stats show that home prices in the metro Seattle housing market declined 6.2 percent from October 2010 to October 2011.
We don’t have end of the year stats for 2011, but that’s pretty close to my prediction of a roughly 5 percent average drop in overall home prices for 2010.
Case-Shiller includes everything from Everett to Tacoma in its Seattle housing market, and as we all know there is a very wide range of different neighborhoods within that broad region.
Some neighborhood home prices lost much more than 6.2 percent while others fared better. Therefore, it’s always hard to make general statements about the overall Puget Sound region housing market.
Still, I’m going to go ahead make my annual prediction for the 2012 housing market.
Once again, I wish I could say we have finally hit “bottom,” but it’s too early to call a bottom. You can only truly know that the housing market has hit bottom after home prices are appreciating on a consistent basis. Unfortunately, we are not there.
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Seriously there are two things that can get housing to rise.
1. Higher incomes - Not happening
2. falling interest rates and looser lending and convincing the public that the worst is over. Also a long stretch.
This is a 20 year slog just like Japan, if we’re lucky.
“This is a 20 year slog just like Japan, if we’re lucky.”
Exactly! Makes you wonder why it is taking the dumb MSM so long to catch on. I guess the serial bottom callers, who so far have called a bottom ‘by the end of next year’ in every year since 2006, have flummoxed them.
More distortions from the HBB gang:
It’s really nice when we can come up with opinions about things. I like to hear what’s on people’s minds, no matter if I strongly disagree.
But, yesterday, when discussing the “oil” situation and various government responses, someone posted, first that BP would like to see the price go up, and then, someone else posted that BP was the Largest campaign contributor to Obama, even more than Goldman-Sachs.
Simply NOT TRUE.
BP isn’t even in the top 25.
The truth is, that of the money that BP does give to political action groups from their political action group, which includes EMPLOYEE contributions, Obama got 77,000 dollars. Big deal.
The biggest contributor was University of California….1.6 million, followed by GOLDMAN_SUCHS….1.0 million, followed by Harvard University….878,000.
BP didn’t provide a fraction of University and Bank funds going to Obama. It’s just another leftist lie. It’s interesting that 4 Universities are in the top 20, all Big Ivy league teams. All Democrat strongholds.
Of course BP contributes to campaigns, just like all these other folks.
But, then, Goldman, JPM, and all the “banksters” and Union employees of Universities are the “good guys”, and BP is an “evildoer”. Isn’t that the way you really see it? It isn’t people giving contributions, or even the concept of greasing the wheels, it’s WHO is greasing the wheels.
I don’t love BP, but I don’t hate them either. I like to buy gas. They provide gas.
With Super PACS we have no idea who has donated what, which is exactly why they exist.
See Steven Colberts discussion of the Superpac.
Realtors Are Liars®
$29 Trillion and Counting
Dec. 19—In July 2009, the Special Inspector General of the Troubled Asset Relief Program (TARP) caused a furor by reporting that the bailout of financial institutions by the U.S. government and the Federal Reserve stood at $23.7 trillion. Since that time we have seen a flurry of duelling claims, ranging from the Ministry of Bailouts’s absurd claims that the bailouts cost taxpayers virtually nothing, and may have even turned a profit, to the recently released study by the Levy Institute,[1] which puts the total at $29 trillion.
The Levy study, along with those by Bloomberg News and the Government Accountability Office, have shed considerable light on how much money the various bailout facilities have spent, lent, or promised, and who got the money. The sums involved are staggering, as is the extent to which U.S. taxpayer money was used to bail out foreign-based banks. The Treasury and the Fed have a lot of explaining to do, preferably in criminal court.
As measures of the true cost of the bailout, however, all of these studies fall short. The least of their problems is that they all rely on the official figures released by the Treasury and the Fed, two notorious liars. But since what they admit is damning enough, it will do. The more significant problems with these studies are: 1) They do not measure other ways in which regulatory policy, and the economy as a whole, are being manipulated to facilitate the looting of the public by the financial system; and 2) They do not measure the effects upon the present and future, of policies which destroy people in favor of saving financial claims.
http://larouchepub.com/other/2011/3850bailout_29tr.html
Happy New Year, HBBers!!
And thanks to Ben for another great year on the blog…
Oops, meant to post this at the bottom of the posts and put it up top. Sorry for the re-post:
Been doing my research over the last week. Looking at and calling about rentals. Got all our paperwork together and started shopping mortgage brokers. Saw one broker on Friday.
As teachers with 20 combined years in our school district and good credit (gotta brag here - my credit score is 816), there are some programs out there for us.
No flaming, please. This is merely an update. I’ve been reading HBB for 6 years now, and value the combined wisdom here. Where else can I turn for the opinions of such a diverse group of people? Many of you know far more than I do, and that’s why I am posting.
We have a life, friends, community, kids in public schools we like (I work at one of our kid’s schools) and jobs with seniority. Leaving our home of the past 20 years means leaving all of that. Many people who can just up and leave their home usually a) have no significant roots or meaningful social life/community or b) are in dire economic straits.
Anyways.
Rent for our SFH has gone to $2600. Rent in a similar house in our neighborhood is easily $2800+. We have been priced out of our beloved neighborhood of 15 years.
We qualify for Teacher Next Door Program: $20 K each (we are both teachers). The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10th year, the loan is forgiven in its entirety.
And this one:
DALP is part of the SF Mayor’s Office of Housing’s first time home buyer program. It was designed to assist first time buyers of low, median and moderate incomes with a down payment. DALP will provide 20% of the purchase price up to a total of $100,000. This will provide most buyers access to conventional financing with attractive interest rates.
The program really acts like a second loan and is secured against the property behind a primary mortgage. However, DALP doesn’t require payments during its first 40 years. Rather, when the home is sold, DALP must be repaid to the program along with a relative equity share. For example, if you were to use DALP as 20% of your purchase price, you would owe the original amount back to the city plus 20% of the appreciation at the time of sale.
Thoughts???
Yeah. Prices are grossly inflated and falling in the Bay Area.
Why buy a house today when you can buy later for 65% less?
“Thoughts???”
$133K+ home equity loss per Bay Area owner occupant household is a pretty substantial haircut!!!
sfrenter,
There isn’t enough information to do any useful analysis. Maybe you will have more to share after you shop for a while. My first impression is that you are bursting at the seams emotionally and not doing the cold math.
If rents are pressured up in your area, might it mean that many others have figured out it makes no sense to buy in today’s market?
The programs you mentioned are loans, to be paid back way in the future. The temptation to consider them to be free money in your analysis of monthly budget is dangerous. You’ll be paying those loans back long after your children are grown up.
Have you played with the NYT rent or buy calculator to see what you can afford to buy without losing your shirt over 30-40 years? My guess is you’d have to get into a house under $500K and pray prices do not go down to get an even break. Isn’t the average SFH in SF a lot more than that? If you can not afford the going rent in your community, it seems unlikely that you can afford the carry on a mortgage/taxes/insurance/repairs/upgrades & etc. You need to be your own worst devil’s advocate on this.
You imply that even though you have a great credit rating, you haven’t much saved. Buying a house with stretched finances is like starting a business without sufficient capital; little unexpected problems can lead to financial disaster.
How old are you? Will you both be earning your full salary for the next 30+ years? Are you willing to gamble everything on that? If the economy continues to decline, tenure may save your jobs, but your union may consent to pay cuts. It happens.
The big thing of course is if you want to leave in 10 years with insufficient money to bring to the table…..although SF is a really nice city.
sf, if you stay your “loss” from the increased rent will be about $10k over three years. How much do you think housing will decline in the same 3 years? Even a 5% loss on a $300k house is $15k. And you’re probably looking at 15% on a $500k house…
Rent, dude, rent.
Will rents come down in San Francisco? Ever?
I have lived in Manhattan (grew up there) and lived in SF since 1989, and have never seen rents come down significantly in either city.
If the cost of renting is comparable to the cost of buying (which is what we are looking at), it’s a wash, esp. since we plan on being here at least 10 years, if not the rest of our lives.
Either I pay the landlord or I pay the bank. 40K of the money we will get for down payment assistance is interest-free and forgivable after 10 years.
No matter how I slice it, home IS an emotional thing. Yes, it becomes more so as you get older, and especially when you have kids.
Had I been 10 years older, I would’ve bought in the late 90’s and been set. But the housing bubble has put us in a holding pattern, and meanwhile I am getting older, rentals have gotten more expensive, my family has gotten bigger, and the chances of finding a decent rental are looking mighty slim.
IF we found a decent rental with a landlord that wasn’t a nut job, yes, we’d take it.
In 2009, everyone said wait and rent. Same in 2010. Ditto for 2011. Capitulation has occurred in FLA and NEV and many parts of CA.
Will San Francisco proper see major price drops? Or just flat for the foreseeable future? Am I going to wait until I am in my 50’s to buy a house, each year thinking, “next year it will be affordable”, all the while paying 25K a year in rent?
The decision to buy a home is more than just a financial one. I’ve been renting for the past 30 years, and most of it has been pretty good. But I AM ready to have my own place, and yes, that is an emotional decision. The older I get the less I am happy with renting.
“40K of the money we will get for down payment assistance is interest-free and forgivable after 10 years.”
uh yes, and I’m sure that’s intended to make it all good for you deciding to teach in SF, but since you’ll be down $80K the day you sign, and possibly $40K per year for a while after that, it’s not a knife to your throat. Do teachers in SF actually make $150K to $200K a year?
Buying on emotion is very human, no one here can criticize you for that. So, you are in your 40s. The credit expansion started before you were born. The trouble is borrowing to buy what you cannot afford going into a generational credit contraction.
For short term happiness in the home it’s best to tell the wife and kiddies that this is a shrewd time to buy in SF, for all the usual reasons. That will help ease the complaints when food/clothing and vacation budgets are cut back. Hopefully those are not priority emotional needs too.
Leaving our home of the past 20 years means leaving all of that. Many people who can just up and leave their home usually a) have no significant roots or meaningful social life/community or b) are in dire economic straits.
or c) are a lot younger than we are
http://www.dailypaul.com/196569/moneybomb-on
Ron Paul money bomb closing in on $6 million, even as the Establishment GOP’s Hollow Man candidates join the political elites and corporatist MSM in increasingly shrill attacks on Dr. Paul.
Markozy is presently warning the eurozone to assume the crash position. Maybe it’s different over there this time, but I recall after Paulson, W and the Bernanke made similar dire prognostications for the U.S. economy in Fall 2008, the next six months saw a wicked drop in the headline U.S. stock market indexes.
ft dot com
January 1, 2012 4:11 pm
Europe’s leaders warn of tough 2012
By FT Reporters
Europe’s leaders warned 2012 was likely to be tougher than 2011, when spiralling borrowing costs forced political change in Italy and Spain and threatened the survival of the euro.
In a sombre address on national television Nicolas Sarkozy, president of France, said the gravest crisis Europe has faced since the second world war “is not over” and Angela Merkel, German chancellor, told German voters “next year will no doubt be more difficult than 2011”.
The euro crisis in 2011 forced borrowing costs higher for Italy and Spain and led to the dismissal of Silvio Berlusconi’s centre-right government in Rome and the fall of the Socialist administration of José Luis Rodríguez Zapatero in Madrid.
It also undermined sentiment in the euro which had a second consecutive year of losses against the dollar and fell to its lowest level in a decade against the yen.
Speaking on national television on Saturday, Ms Merkel said Europe was experiencing its “harshest test in decades” but would ultimately be made stronger by the crisis.
Mr Sarkozy, who is facing a tough re-election campaign later this year, said French voters were more anxious at the end of the year than they were at the beginning.
“This extraordinary crisis, without doubt the gravest since the second world war, is not over … you are ending the year more anxious for yourselves and your children.”
…