Bits Bucket for June 16, 2012
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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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Pardon my cynicism, but has anyone else noticed that since last month’s NAR “Rally to Protect the American Dream” and national realtor’s conference there has been a concerted reportage of “uptick” stories in the real estate press and “data sources”? Suddenly inventory is down, multiple bids abound, prices are firming, momentum is gaining….
It’s almost as though they got together and announced a media campaign with coordinated talking points or something. Rather than touting that hackneyed “the market here is stabilizing” routine, I’d be interested to see the number of actual transactions month over month and year over year, rather than just taking the source’s word (manipulated statistics?) that the few houses that ARE being let back onto the market are selling at inflated prices in bidding wars due to scarcity– and implying that more housing units should be built because of “dwindling supply”.
When every story I read uses the same wording and punches the same talking points, I tend to take the information contained therein with a 50 pound block of salt.
A couple of thougths:
1. I’d be very suspicious of calls for more construction in markets that have high vacancy rates–high vacancy indicates to me that there is plenty of housing (if measured simply as shelter relative to population).
2. I’d be equally cautious of significant discussion of PTB controlling inventory and having a meaningful impact on the overall market. Whether the number is 1.5 million of shadow (CoreLogic), or 500k of REO (extrapolated from Foreclosure Radar), or 7 million of homes that people think will be eventually distressed, all numbers are small relative to the number of housing units in the hands of private citizens. There are 132 million housing units in the US, of which 60-some percent are “owner” occupied. That’s ~78 million decision makers.
Confidence drives this 78 million. If people feel things are getting better, they’ll wait to sell (if they have a choice). If people are confident that prices are going up, they’ll try to buy. People are sheep and run with the herd…IMHO, THIS is what’s primarily driving the market. And THIS is how the MSM can manipulate the market…by attempting to drive confidence.
I’d be very suspicious of calls for more construction in markets that have high vacancy rates–high vacancy indicates to me that there is plenty of housing (if measured simply as shelter relative to population).
Here in Tucson, the local rental vacancy rate is around 15%. And there are only so many tenants bumping around the Old Pueblo. Yet there’s quite a push to build more rental housing, especially for university students.
Good luck with that.
“…MSM can manipulate the market…by attempting to drive confidence….”
I’m still digesting your long, thoughtful post from last night, and in consideration of your also long thoughtful history of posts here(under your various pseudonyms) let’s assume for a moment that your observations are borne out by the facts.
How then to explain your perceived need for new housing units in Sacramento when:
- California is functionally bankrupt, as is its capital city, Sacramento, and a good number of its outer suburbs.
- Thousands of State and county worker/loanowners are facing mandatory furlough or outright layoff in the very near future.
-Current housing subsidies that many of these employees enjoy will almost certainly be curtailed in budget cuts.
- Mexican immigrants (who have accounted for a significant percentage of new house buyers in the valley over the last six years) have left the State in droves, taking their mortgage payments with them.
- House construction and attendant fields (another major employer in the Sacramento River Delta) is at a standstill with half-empty tracts dotting the whole of I-5 through the valley all the way down to Bakerspatch?
With all due respect, given these factors and California’s net out-migration, exactly WHO is supposed to be needing all this new inventory?
Your confidence, at least, appears to have been “driven;” from whence has it derived? Certainly not from objective observation of facts on the ground? Granted, you’ve studied the market in depth for nearly a decade–far more than most of us, perhaps– but what you’re deducing seems very different indeed from what logic would suggest.
“How then to explain your perceived need for new housing units in Sacramento”
I just read through his posts from yesterday. The population argument might hold, but are those people able to buy a home? Do they even want to? If we need more housing, that might be in the form of apartment buildings until we get our economic house in order. The construction industry here would welcome the chance to build either one.
All that said, I live in Woodland, Ca, very close to Sacramento. Things crashed here quickly and fully. Almost as bad as Fresno and Stockton. But there is much new housing (actual houses, somewhere between Mcmansion and modest) going up right around the corner from us. http://www.newhomesource.com/communitydetail/builder-10213/community-51825
Too big, no backyards, and too close to neighbors. But there they are. I have no idea if they’re selling.
According to Centex, they have about 40 lots available. If we were in “normal” times, that should be about a year’s worth. However, there are generally a lot fewer subdivisions available than “normal”, so I would say that even if they are selling 4 per month (a good pace in “normal” times), that, IMHO, would represent pretty weak demand.
To be clear. I have only posted under one name, Rental Watch. No other pseudonyms.
I stand corrected. My apologies.
No problem. I’ve always felt funny about changing my name, so I dont.
Migration (in/out) aside, all estimates that I’ve seen show continued population growth and demand for housing. How else do you explain 5% rental vacancy rates and 2% homeowner vacancy rates?
Consider this:
1. Most unemployment is less educated (ie. renters)–these folks end up doubling up on rentals, etc. to find a place to live;
2. Prop 13 allows retirees to live in their (now expensive) homes for a lot longer than in other states (ie. homeowners with very little income)…if you take retirees out of the picture with respect to home ownership rates, you will end up with even a smaller percentage of owners who are working age. In other words, ownership in California is more linked to the higher end of the wage spectrum than in other states.
3. Prop 13 also gives little need for owners of property to sell, turning them into non-professional landlords (I’ve seen some real dumps in my time). Many buyers are coming from rental properties who are fed up with deteriorating properties, and continued increases in rents. I had lunch with a gentleman with visibility into 12k apartments in the Bay Area, he said they can’t raise rents fast enough…in many cases 10% or more.
People generally go from renting to buying…there is a massive pool of renters in CA–perception will cause many of the more financially sound renters to jump to ownership.
Also consider job creation…CA added ~34k jobs last month, and about 210k year on year. We are still way below the peak (by about a million jobs), but at this point, lots of living situations have been reset (two-income families going to one, and adjusting housing costs, etc.). The spike up in vacancy rates as this adjustment was occurring has come down considerably.
The state can add 15-20k jobs per month (current annual run rate), and 2,500-3,000 housing units (current annual run rate) for only so long before things get extraordinarily tight for housing. We are starting to see this tightness show up in terms of demand outstripping current supply.
How else do you explain 5% rental vacancy rates and 2% homeowner vacancy rates?
Empty houses held off the market, enabled by the suspension of mark to market accounting?
To my understanding this is accounted for–I’d be interested if I am incorrect. The percentages are coming from the Census–I honestly don’t know how they account for REO…
I’m always amazed when I watch “flip” shows on TV, where there are simply empty houses that are trashed. We know some groups who are buying foreclosures in CA…very frequently, like 90%+ of the time, there are occupants when they foreclose.
Anyway, that’s a digression away from your point…
If you assume those homes held off market because of the suspension of MTM accounting are those held by financial institutions as REO, that is approximately 75,000 homes (per Foreclosure Radar). This is about 0.5% of the housing stock in CA.
0.5% more wouldn’t make the vacancy rates high by any stretch.
The 2010 census was notoriously unreliable for a variety of reasons; political backlash from the Rush Limbaugh/TeaParty crowd and illegal aliens who chose not to be counted, lack of trained personnel into rural and remote areas of the state, etc.
I wasn’t even counted, nor were most of my neighbors. And keep in mind that unoccupied houses can’t fill out census forms or answer telephones, nor could their ownership be accounted for in many cases of strategic default and robo-signing, so they weren’t included in the figures.
The census was also taken two years ago when there was still a large influx of Mexican laborers, and before the full effect of the foreclosure crisis hit. So relying on the census figures in and of itself comes with its own confounding variables rendering the conclusions suspect.
Secondly, you’re relying on state and federal JOBS reports? In an election season?
Wouldn’t “doubling up” tend to DECREASE the need for new housing? Then there are the students that are moving in with mom and dad instead of renting a place of their own. The widows and widowers who are moving in with their kids or the kids family moving into mom’s big house.
And Prop 13 retirees and Boomers are cutting back on housing costs (and trying to get rid of second and third properties,) not buying new ones. Add that to all their single kids who stand to inherit both Dad’s house and vacation home, AND mom’s house and vacation home, and it looks like a glut to me….
The vacancy data is the most recent provided by the Census (as of the end of Q1 2012), not from 2010. The other data I’ve been noting from Census (population estimates and housing estimates are updates as of July 2011). If it’s wrong, then it’s wrong. It’s the best I’ve been able to find without paying REIS massive amounts for their data.
With CA running at 10.8% unemployment, and the last Federal number being so crappy, I would hate to see what reality is if the last numbers were manipulated UPWARDS given that both the politicians in CA and DC have an incentive to make the numbers higher.
Again, it’s the best data I have. Regardless, 30k homes being built per year, in a population growing by 300k PLUS per year cannot be sustained.
Doubling up does decrease the need for new housing, but is unlikely to occur if there is a ton of cheap housing out there and available. Doubling up is done in response to either a) lack of affordable housing or b) rising unemployment. In both cases though, doubling up can allows rents to be driven higher if there is low vacancy rates (higher rents spread over more people). I’ve been in touch with a guy in NY who is part of an organization that manages several billion…he is concerned that doubling up will be a driver of rent inflation as it was in the 70’s (did that happen in the 70’s?).
There was an article written a while back about “shadow households”…kids staying at home, people delaying divorce (I thought this was crazy, until I saw it happen to a relative), young married couples living with one of the parents, etc. These are are more typically sources of new households, which were delayed due to a rotten economy. As the theory went, as things improve, this will unleash more housing demand.
FWIW, the rental vacancy rates according to the Census in CA went up to about 8% in late 2009/early 2010, and now is reported at 5%. Homeowner vacancy rates peaked at about 3% in 2008, and are now at about 2%. If the Census is CONSISTENTLY wrong in their methodologies, this would at least point to improvement in vacancy rates, ignoring the actual numbers. It would also indicate the CA is far better than most other states.
The boomer thing is often cited, and as I noted to the guy in NYC, overblown IMHO (he also made the same point to me). Ownership rates for people over 70 is something like 80%…the mass sales of real estate by the boomers is overblown, IMHO, as not every boomer has second and third homes that they are dumping. The only bit of data from the recent Harvard report (bought and paid for by the housing industry) that came out that I thought was interesting, novel, and something I hadn’t heard or thought of before was that the echo boom generation is actually larger than the baby boom…this will alleviate the “glut” as boomers pass away (which is the likely timing of their homes being sold given the 80% ownership rate).
Are there situations where people are going to inherit multiple properties? Sure. But there aren’t going to be many of them–and the new generations of divorcees and more traditional new households should be more than enough to absorb those situations.
At the end of the day, housing is about shelter. Debunk the population vs. housing units argument, and it’ll turn my head–if that argument holds water (and there are arguments why the shortage is less than the simple math would indicate: more population growth of kids than adults, different ethnic groups having larger families, etc.), all other arguments are about how the chairs are going to be shuffled in a game of musical chairs with fundamentally too many people and not enough chairs.
BTW, I’m not jinglemail…
I’m talking about CA generally. I can’t speak to Sacramento. That market has always made me nervous–we’ve generally avoided it in our activities…too much reliance on government.
One problem that I haven’t touched on in CA is that the housing that does exist is generally in the wrong locations, so what happens is that demand radiates out from the major job centers as those markets still have Nimbyism and little available land for anything other than more density (which is opposed). Housing markets tighten there first. Closer in SF Bay Area strengthens, so then East Bay improves, then Tracy/Mountain House/Manteca and the like, as people get the insane idea about commuting.
Gas prices are a negative, and perhaps for some, telecommuting one day per week can be a counter to this.
Similar Story with LA Basin/the OC and Western Riverside County.
Sacramento has never been much of a commuter market for the SF Bay Area to my understanding. When I was in high school, I worked at a dairy supply store during the summer North of San Francisco, about 45 minutes north, along 101. One of the guys there commuted from Sacramento because he loved the heat…everyone at the store thought he was crazy.
Within the past 6 months or so, I have been hearing of bleed over starting to hit Tracy/Manteca/Mountain House, as builders are starting to build on some finished lots, and reportedly finding buyers. At least one builder supposedly exhausted their supply of finished lots, and has not been able to find more to build on…yet.
My parents live in the Roseville area, and would like to downsize a bit. They have kept their home off the market for a couple of years. I’m not concerned about them…they have no debt, and want to re-buy in the same market–it’s a place to live, not an investment. Last I asked them (maybe a few weeks ago), they haven’t seen much improvement, but they also have seen the number of homes for sale in their own community fall to pretty low levels.
This does remind me, I know a residential market study guy based near Sacramento–he was suffering for years, and started to get work again maybe 6 months to a year ago. He does more than just the Sacramento market (generally the northern part of CA/NV), but since he works with builders, he is generally a leading indicator to development activity. I owe him a call to catch-up…I’ll report back if I learn anything interesting…
Almost off to bed…but all one needs to do is look outside their own front door and around their community. What do you see? That should tell you everything you need to know, trust your own eyes.
Good Night or Good Morning, whatever the case may be.
“all one needs to do is look outside their own front door”
This is what scares me the most. What I see is limited choice because foreclosures aren’t being processed and banks are constricting supply. It’s not just an academic exercise with chartsengrafs — this has a very real impact on my life.
By continuing to lock up housing, TPTB and TBTF are reducing liquidity as we are all spending too much on housing. At this point I won’t need Bank of Dad, but my wife needs minor surgery and I need new tires. There goes all of my discretionary loot for the rest of the year. If housing was priced appropriately I could actually get out there, but some plastic chit from China, and save our country!
The rent… is too damn high!
Alot of empty houses… alot of people who aren’t current on their mortgage.
Alot of liars here and in the media.
Spending your money on your wife’s surgery and tires is getting the money out there. You are spending everything you have. The fact that you like to buy other stuff or save something is relevant for you, but the economy is fine with you spending it all on what you need.
Fine, but houses are still too damn expensive!
Almost off to bed…but all one needs to do is look outside their own front door and around their community.
I see businesses closing and our town government spending money as fast as it can because in 2 weeks a bankruptcy court will stop the spending.
The courts are busy, they are done with the claim from the developer that we now owe $43M to but the LA DWP is suing our local water district over water rights from Mammoth Creek. DWP wants $2M / year for us to use the same water we have been using since the 1800s. The town and others are being sued for $30M by a medical marijuana buisness owner as well.
The only industry here other than building is skiing and the ski area is down $23M this year and the rumors of bad news there are a bit too fresh to repeat.
“The only industry here other than building is skiing and the ski area is down $23M this year and the rumors of bad news there are a bit too fresh to repeat.”
What do summer activities add to area income? Having grown up in Ridgecrest I use to fishing and hike the area from Bishop to Bridgeport quite regularly. Always loved the view of the Sierra’s on the eastern side.One of my former classmates, Butch Hines or maybe he spelled Hinds has an upscale restaurant along the main drag in Bishop.
Summer tourism is much bigger than it was 20 years ago. The summer tourist is more prone to camp and fish and as a result they spend far less than the skiiers.
There’s not a lot of “upscale” restaurants in Bishop and I don’t know Butch, hmmmmmmm can’t guess which eatery you are referring to.
‘can’t guess which eatery you are referring to.’
If memory serves me well it used to be across from the bakery, that’d be the east side of the main drag. It’s been eight years since I’ve been able to get up that way.
Must be Whiskey Creek.
Truckee?! Why?
Been waiting through a half-dozen boom/bust cycles to be able to buy in Mammoth. (First lot I ever bought was on Snowcrest in the late 60’s.) Maybe when this bust pans out I can finally afford do so.
But then our fave eatery has closed, so what would be the point?
Saturday morning and in Phoenix for the dry heat weekend…looked out my front door and saw I have a new next door neighbor. The previous one not only listened to cRap noise which vibrated through my dining room wall while I would attempt to enjoy my seafood dinner, but had a preteen son who attracted all the other community kids to noisily congregate outside my door. So far last evening and this morning new neighbor was reasonably quiet. Now I have a the type of neighbor that makes this place a bargain at $950 per month with million dollar homes a mile away (closer to South Mountain).
A black Panamera (spelling?) Porsche was in my lane ahead of me earlier today while I drove back from the gym. Ahwatukee is like it should be.
At my client, with offices in L.A., the OC, and in the mid-Atlantic, they had a five percent layoff, mostly in the commercial side of business. It affected my area. I was told while driving into work about layoffs that day. Did not expect my badge to let me in the back entrance where I usually park there in L.A. Then on Friday my supervisor brought up the subject and asked me when my contract expires. I told him August (within two months). Good news for me. He said he will renew my contract and that means I will work beyond September at least. He mentioned because a software guy is leaving. Well that guy is a junior engineer. The real reason I think is because an incompetent senior engineer was just laid off Thursday and my productivity and skills are far higher than the former employee. That guy was high paid. I was hoping only to work thru the end of Srptember. I am happy! Of course I do not let my guard down. I do not rest on my laurels and regard every week as potentially my last. This keeps my performance high.
I keep this info quiet from my colleagues about my extension until I am told officially. A senior engineer who I eat lunch with regularly has been with that company 18 years but to be honest, he does not have high profile tasks and hasn’t for seven or eight years. He has UCLA and UCB for his resume. Better than my humble Cal State for my BA and MS. Yet I scramble to produce. Long ago I learned as a wage slave that if you want to be highly regarded, you have to be involved, for one, and be working in the lab, for another.
Three more years and I will no longer have to do long distance commuting. My investment income will be high enough for me to buy a luxury car every year, pay my rent, and buy gas and maintenance for the car. I lived below my means all my 53 years so it is about time I start to play.
“I lived below my means all my 53 years so it is about time I start to play.”
Congrats!
A little uninvited advice: buy a lame 4-dr. sedan like an Impala or Taurus and dine/travel more.
Thanks! You do have a valid point. I have a nine year old Toyota and Recently started flying more often back home. Dining would be fine but I dine alone. I dropped out of the romance department since I realized moving around so much broke up a lot of my relationships. When I dine, it is at the classy bars of upscale restaurants.
On the other hand, why settle for the high depreciation rate on a crappy American car, when you can get a new Toyota in the mid-$20Ks, especially given that Japanese cars hold their value far better. This is an especially good time to buy a Toyota, thanks to all the complaining from that American owner who couldn’t tell his gas pedal from the brake pedal. I’d trade in that old Toyota for a new one if I were you.
I’m expecting better buying opportunities ahead, as well, given that the eurozone panic is likely to spill over to American shores, despite the best efforts of central banks to liquidify the fallout. In case the liquifaction effort is wildly successful, your stocks will go up in value.
“Toyota”
I looked at those back in 2007 when I bought my Ford. I could barely fit into anything other than the Land Cruiser.
“Dining would be fine but I dine alone.”
Bill, party of one? Bill? Party of one!
One issue with a nice car is having a safe place to park it. A dull, yet comfortable car has much less of this issue.
PB/Cantankerous, I obviously admire the Toyota line. I do want more legroom for the occasions I go on road trips. My long legs don’t like my car, which is my only complaint. I might have to go into their Lexus line to go from 40 inch leg room to 43 inches.
The other downer is that the beautiful 30-something woman where I work is a material girl and would not give Mr. Cheap the time of day.
Neuromance, my car color is drab and I am happy for that since I have to park street side in L.A. There are a few beamers on the street though.
“The other downer is that the beautiful 30-something woman where I work is a material girl and would not give Mr. Cheap the time of day”
Are you a beautiful 50-something man? Why would she choose Mr. Cheap over someone willing to spend money on her or someone closer to her age?
She is known to date older men, I.e. White hairs. Her jealous colleagues told me. There! My mom was nine years younger than my dad, did my dad rob the cradle? What if they lived on the same block when he was 22 and she 13? But that was not how it turned out. She was 20 when they met.
I was afraid that might come off as hurtful, which was not my intention. What does she see in the older men she dates? Aside from beauty, what do you see in her? Spending differences cause many divorces. Your spending habits do not seem to mesh with a material girl.
I would not accuse you of robbing the cradle if you found a compatible 30 year old. At 30, she is not a child. But I would not expect a 30 year old to be attracted to a 50 year old, either. It happens, but it is not the norm.
As for your parents, the difference between 20 and 29 is not as great as the difference between 13 and 22, which is why the law recognizes statutory rape. Nor is 9 years as great a gap as 20. If your parents had met when your mother was 13, as long as there was no sexual contact until she was 20, there would be no issue with it (although her parents might have objected). Go back a few centuries and women were married off at 13.
Three more years and I will no longer have to do long distance commuting.
What is your plan in three years, Bill? Are you going to work locally, or not work?
I could either work locally or work as I am now but be very indulgent and not worry at all about breaking a lease or driving a new Lexus ISF to the client site. Not sure what I will do or where to live, but I like it out west and far less hot than Phoenix!
Just curious, are cars a big deal in your biz? In K12 education you like like an a-hole if you have a nice car.
Cars are a very big deal to the direct hires in my business. 20-something just bought an Infiniti G37 for $40,000 and trade in. Most of us consultants drive POS cars.
I often wonder about this. Do the direct hires make more money (including their benefits) or do they just expect to be able to make the payments?
Happy, no. They don’t. But still the contractors are cheaper. The reason is there is an overhead charge per each hour worked, charged on the direct hire, not contractor. This is to pay for administration, MIS, finance, and so on. This makes one or two of ‘em grumble to no end. One is always grimy to me. I ignore him. I don’t work for him.
I do not rest on my laurels and regard every week as potentially my last. This keeps my performance high.
Sounds exhausting. But I gotta admit I’d hire you in a heartbeat.
Thanks. It is exhausting. It has gotten less fun since they expect us to work for free but times are very tough
“My investment income will be high enough for me to buy a luxury car every year, pay my rent, and buy gas and maintenance for the car. I lived below my means all my 53 years so it is about time I start to play.”
Congrats Bill. My wife and I have been socking away a lot with a similar goal (allowing our capital to work for us one day, instead of us working to amass capital).
I’ll second the advice given above…buy a luxury car every other year…and do some traveling ;).
My parents saved their whole lives, paid off debt, and now live nearly debt free (only a small loan on a house that’s been in the family for 40 years). I’m always amazed at the trips they are planning.
My investment income will be high enough for me to buy a luxury car every year
That always sounds interesting to me, but would never work for me because it takes me several years just to get a car the way I want it, and then I want to enjoy it for a few more years. I guess with unlimited funds I could accelerate that process, though.
My partner has nice cars, and I often think that I would like to buy such a thing. However, when I consider putting that much money into a vehicle when I could only (legally) utilize to 25% of it’s capabilities, I feel like it’s just a waste. Even if I had the money just burning a hole in my pocket, would feel dirty spending it that way.
Pardon my cynicism, but has anyone else noticed that since last month’s NAR “Rally to Protect the American Dream”
NAR protects the American Dream like the FED protects the American dollar.
Personal observation from Mammoth Lakes: new construction is as dead as I have ever seen it in 30+ years but there is one hot spot north of here.
I have had general contractor customers relocate to Truckee and I have got a few jobs up that way my self. The latest is a 9,000 sq ft home for an owner that has a 2nd home in Mammoth Lakes. Mountain location in close proximity to the bay area has eastern Placer county doing well in terms of building new high end homes.
And we even have a number of liars right here on the blog. “JingleMale” made the wild false assertion that prices are up and a “recovery” is happening in Placer County Ca. He’s lying. MoM and QoQ prices are lower. I’m not sure why he’d lie unless he’s a paid poster for NAR or it’s many media companies but he’s lying.
Now there are few others here who are attempting to recreate reality for the reading public. They’re lying. You’ll be referred to as a liar by me so prepare for it… RentalWatch.
Just went back to yesterday’s thread with exchanges between JingleMale and Ahansen. LOL. I enjoyed the lively exchanges even if it smacks of NAR influence by JingleMale. My son who just graduated from Pharmacy school took an internship in Sac and found a two bedroom apt to rent for $750 per month. That’s doesn’t sound like people are fighting for rentals so I suspect that housing prices are not moving up rapidly all over the Sac. area.
If memory serves correctly, JingeMale used to post here as paladin. He was helping the authorities bust out mortgage fraud in the Sacramento area. And his efforts were mentioned in Alyssa Katz’s book, Our Lot: How Real Estate Came to Own Us.
Since the paladin days, he seems to have come back as one of those brash, real estate hustling types. You know, the ones who are forever talking about this deal, that deal, and the other deal, and how they have all these rentals and all these tenants and on and on it goes.
We have a bumper crop of such people in Tucson.
I learned a long time ago that it’s best to avoid them. And, if you can’t do that, spend as little time in conversation with them as possible. Because they’re not going to change their tune.
“JingeMale used to post here as paladin”
I find that hard to believe, but if true, it is an illustration of what happens when a person or group loses, or feels they have lost, to their former opponent. They flip and become what they fought or resisted. Interesting. Never seen it to fail, either
Or maybe he’s finally made a lot of money using his knowledge of the market and its players, and like his earlier incarnation wants to warn/share the goodness with us here on the blog.
IIRC the AG and FBI neglected to take up our Palladin’s well-documented case against the fraudsters he kept uncovering here and elsewhere. Under that sort of collusion I’d flip sides, too–and subvert from within.
Personally I don’t sense any of the “buy here now!” urgency in his posts one would expect of a real estate lady, just crowing a bit and letting us know that he’s found God in his own little patch of Eden. In Sacramento. In summer….
Or maybe it’s all a hoax. The only thing I believe anymore are reality shows on TV.
We recently saw a fantastic musical about TV reality shows. Even though I don’t watch TV reality shows, ever, I thoroughly enjoyed the musical.
My friend who did camera work for MTV said all in all it was a lot of fun working on reality shows but you need to be in shape and have stamina….
Sitting on the floor cross legged to get eye level shots while they are playing some stupid game takes a toll on you.
if they were behind schedule you would work 15 hours days sleep and then 15 hours tomorrow…..so you have no life….
Plus they wouldn’t even get you a hotel room…nope a mobile sleeping trailer for you and 6 others individual rooms with bath right outside the shoot.
the good part Mucho mucho bucks with the OT…..
Or maybe it’s all a hoax. The only thing I believe anymore are reality shows on TV.
“My son who just graduated from Pharmacy school…”
Congratulations!
I really don’t understand why so many on this blog cheered when I posted all the bubblicious news in 2006-7-8-9&10…but now diss on me when i report signs of recovery!
I have purchased a bunch of houses and yes I suppose I am crowing a bit….but I am also trying to share with you that the market is improving.
I am not, nor ever have been a UHSP. The market I play in is S. Placer. The rents on my houses are up from the 2009 low of $2,000-$2100, to $2,400-$2500/mon. The market is so tight that my vacancy is under half a percent.
The house i live cost about $380,000 from BofA in Nov. 2010. Zillow says it would sell for $465,000 today. Polly can confirm that….she figured out which house I own a month ago!
Yes, I am Paladin. I have not done much lately, but yesterday I invested 7 hours putting together a dossier on a Newark mortgage fraudster still milking the system. I will submit it to the FBI on Monday. The FBI has used my submissions to bust two fraud rings and five more individuals (soon to be seven). I have six open IRS whistleblower cases active for illegal proceeds of fraud. I doubt they will ever collect from the fraudsters, but at least they have to live with the IRS’ wrath!
Happy Fathers Day to all the Dads.
HMM you are hilarious…. I was quoting the stats YOU posted…take a look at your own link…
http://zillow.com/local-info/CA-Placer-County-home-value/r_1325/#metric=mt%3D36%26dt%3D1%26tp%3D6%26rt%3D6%26r%3D1325%26el%3D0
MoM is up 1.9%
QoQ us up 2.6%
YoY is down 1.0%
This supports everything I am telling you! Jinglemale speaks the truth. HMM needs to open up his mind.
HMaM says….
‘“JingleMale” made the wild false assertion that prices are up and a “recovery” is happening in Placer County Ca. He’s lying. MoM and QoQ prices are lower..’
HMaM, go back and check out the link YOU posted yesterday.
It says right there in color:
MoM prices are up 1.9%
QoQ prices are up 2.6%
YoY prices are down 1.0%
Hard to believe you don’t even read your own links….but you know what Upton Sinclair says……
You’re lying.
RAL = Idiot
Yep, the Zillow data does say that, jinglemale.
Of course, the curve it shows also doesn’t look too kind to the purchases you made a year or two ago; the trend-line is downwards.
But if you are cash-flow positive, and you are investing for the long-term, and you think the bottom is either in or close, it probably doesn’t matter.
“It’s almost as though they got together and announced a media campaign with cooridinated talking points or something.”
Lol. This is the NAR you are talking about, the National ASSOCIATION of Realtors.
Of course they got together and announced a media campaign with cooridinated talking points: This is the NAR; This is what they do, who they are, what they are about.
ahansen
Yes it is orchestrated from the govt, the associations, all the way to the local boards, and franchises. I been to the meetings.
combo- nailed it!
We previewed a home yesterday. Before our Broker-turd even opened the door of the REO fixer, he pushed back on our comment that we refuse to pay list. After our pos left,
we talked to the neighbor (39 yrs-knows the house)and found out it even needs plumbing. It was listed as an almost turn-key price.
All the industry cares about is keeping their relations within the business. They sacrifice all parties involved but their own. They make me sick.
relations s/b relationships
I was percolating revisiting it.
When I mentioed changing Brokers (we have a deal for a rebate), my husband said “why bother, they’re all the same.”
All the industry cares about is keeping their relations within the business. They sacrifice all parties involved but their own.
As with any salesman, their only interest is in closing the sale, and booking the commission.
Any who forget that deserve to be taken.
Caveat emptor.
the media nowadays thinks its role is to be “helpful.”
Perceptions, and all that.
Part of the media’s role, as they state it, is “to shape public opinion”.
It’s okay if one does not bother to form an opinion on his own; the MSM will step in and assign him one.
Why spend time and energy thinking when somebody else will willingly do all the thinking for you?
Media’s job is to sell you something. Even an idea or opinion they want you to think of as your own.
TV is doing it’s job.
“It’s almost as though they got together and announced a media campaign with coordinated talking points or something.”
That wouldn’t be at all unusual. Their job is to improve conditions in the real estate industry. (They are, of course, free to define “improve” as they see fit.) Why wouldn’t they put together a coordinated media campaign to try to get their message out? You can blame the media outlets for running the information they are fed from the NAR, but the outlets are under considerable financial pressure and running lightly edited stuff from an organization that is a source of statistics that are widely reported is a heck of a money saver.
When I worked at the radio station, the publishers would send us media packs with the books. You could decide to interview the author, choose which questions to use and estimate how much time the questions would take on air without ever cracking open the book. We didn’t do it that way (though I usually glanced at the biographical materials), but then we worked mostly off volunteers and had the luxury of getting 20+ hours out of the person who prepped the interview questions. Not what you are seeing in most media these days.
Want to see the detailed financial information of the NAR? Go to guidestar dot org. Register (free). Search for National Association of Realtors. Click on their 990. Some of their employees look like they make over half a million bucks a year. Enjoy.
When I worked at the radio station, the publishers would send us media packs with the books. You could decide to interview the author, choose which questions to use and estimate how much time the questions would take on air without ever cracking open the book. We didn’t do it that way (though I usually glanced at the biographical materials), but then we worked mostly off volunteers and had the luxury of getting 20+ hours out of the person who prepped the interview questions. Not what you are seeing in most media these days.
Another radio hound here.
I haven’t been through guest interview training yet, but it’s coming. Right now, I’m still working on show scripting, music selection, and developing a healthy relationship with potentially dangerous equipment like microphones.
But the station does interview authors. And, if things go well, I may be one of those authors who gets interviewed. Someday.
I’ve heard through the grapevine that, if you’re going to do an interview, you’d best do your homework in advance. There’s nothing worse than opening the mike, then proceeding to sound like a doofus with live guests in the studio.
I’ve heard through the grapevine that, if you’re going to do an interview, you’d best do your homework in advance. There’s nothing worse than opening the mike, then proceeding to sound like a doofus with live guests in the studio.
This reminds me of the stock advice I give to people who are about to inhale helium from a balloon so they can sound like a munchkin- know what you’re going to say before you inhale the helium!
Lions and tigers and bears!. Oh my!
This reminds me of the stock advice I give to people who are about to inhale helium from a balloon so they can sound like a munchkin- know what you’re going to say before you inhale the helium!
That’s why I’m here at the computer, scripting my next two radio shows. Knowing what to say BEFORE opening the mike is a very good thing in my world.
In case anyone’s interested, the first of the two shows will be 5 p.m. MST tomorrow. That’s 8 p.m. EDT, and you can listen online.
Exactly slim…..do your homework…research the guests bio FB linkedin, accomplishments and writings or jobs…The pros will always have some taking points to send you.
They will always get the standard questions…but the good interviews find something really cool they did in the past. Or some tragedy/ awakening and how it changed their lives.
Like some college kid who was big in the anti nuke field turning into the worlds leading expert in nuclear rector disasters and hired by CBS news during Fukishima.
I Learned that a nuclear attack/disaster like Chernobyl does not significantly increase birth defects for the next generation, but will affect those who are pregnant now.
An unctuous colleague of mine once interviewed George Shearing (blind jazz pianist) without knowing who he was, what he did, or that he couldn’t see. Most cringe-inducing fifteen minutes of dead air I’ve ever heard. Fortunately for him, Shearing was a pro, and had a repertoire of anecdotes at the ready, but the lesson was well-learned.
I loved the offbeat research, and way back then, the internet was not nearly as useful for stuff.
I found a Times review of a play Eric Idle was in (Fringe festival) when he was a student to start out an interview with him. He was positively stunned.
The best may have been when I had the interviewer point out to the woman who wrote the Bridget Jones books that the scene her characters loved from the BBC Pride and Prejudice (Darcy swimming in his lake) wasn’t in the book. I’m not positive she has noticed it herself - not important for her plot.
My favorite was pointing to some huge a-hole of an English professor that Hamlet was 30 (not 19 as he asserted) and that there was ample proof of that in the text of the play. He said he didn’t care what Shakespeare wrote, that he knew Hamlet was 19. Made him look almost as obnoxious as he really was. I would have rejected the book, but the decision to book him was made when I wasn’t there.
I’m cynical as as well, but can see some mood swing evidence where I work. We had a National manager’s meeting this past week and the mood was upswing. Orders for machinery are up dramatically and the company is swamped with jobs. The brass told us to not take any more orders til September and enjoy our summer…..fine by me that’s what I will do anyway. These are not guys with deep insight, just barometers.
All cynics, I suggest you read David Brooks’ article from few days ago.
We don’t have a Leadership problem. We have a “Followership” problem.
I have been reeducated.
We don’t have a Leadership problem. We have a “Followership” problem.
I remember hearing that in the army…from a really *bad* leader.
Mingya, who designs this stuff?
http://zillow.com/homedetails/2000-Brent-Pl-Palm-Harbor-FL-34683/47278795_zpid/
Oh, I don’t know. I think it might appeal strongly to someone who was just released from a long prison sentence.
Oh dear. The kitchen looks like a calliope. And the living area looks like a mudroom with all that cheap tile flooring. Especially loved the twin plastic urns flanking the entryway onto the mottled lawn….
“Suddenly inventory is down, multiple bids abound, prices are firming, momentum is gaining”
I think you are right on the media blitz and its effect on the population. Reminds me of a college friend who was taking a sociology class. He told a group of us it was great because he could tell us how anyone could act. We pointed out a random individual walking across campus and said ‘go for it’, his reply was ‘ him in a group first and then I can tell you’.RE’s know how to use the media and have advertising dollars to grease the media’s palm. Greed and stupidity do the rest.
‘Multiple bids’ do abound but are these really bidding wars. They can only result in bidding wars it cash comes to the table at closing. If the mortgage lenders who sell to F&F hold tight on the appraisals their will be fewer and fewer bidding wars among the cash buyers if they cannot flip for higher sales and/or higher rent.
The only caveat is the inspection. I’ve seen the bidding wars play out, where the second in line is up to bat, because the winner can’t reconcile the inspection to the price. The winner wakes up, and says go to hell. I saw one REO go to the third buyer in line, who happened to be young and dumb. They also got a 203K. Debt wasn’t a big deal to them.
Youth is on their side, provding their incomes hold up, and no black swans. Not my style, but to each their own.
I am suprised at the number of buyers willing to pay so much more than just six months ago. The changes are too fast to be healthy. We need stable - not up and down yoyo prices.
Bidding wars are for cash buyers.
The appraisial limits what a buyer with financing can pay on any property. Unless the buyer wants to pay the difference in cash at closing - and who would do that????
So cash still rules in the housing market.
josap
From your typing to reality, I hope. But we’ve been told by our pos broker that appraisal limits are screwed up from the uptick in comps, from the small price jumps in a given neighborhood. He said the objectivity is awash again. I wish I didn’t believe him. We are cash and close and these micro bubblicious prices in So Ca are getting old. And don’t get me started on the flippers.
Let’s get this day started off on the right track….
Realtors Are Liars®
….. Ok…. Proceed.
Modesto Realtor Charged With Fraud
http://www.modbee.com/2012/06/14/2242568/agents-arrest-ex-modesto-real.html
Los Angeles County courts begin downsizing
Presiding Judge Lee Smalley Edmon said it was one of the saddest days in the history of the Los Angeles Superior Court. She expressed concerns for the people laid off as well as consumers who will face a slowdown in resolving civil cases.
“Could we be heading toward five year delays getting to trial?” Edmon asked. “I certainly think so.”
http://www.breitbart.com/system/wire/D9VDRTO80
Or maybe the word will come down from On High not to make so many arrests for stupid, victimless violations and misdemeanors that tie up the court’s schedule.
You know that kind of logic is beyond most executives today…But I have a dream…
Not if the lay offs are for the civil court.
Will it also slow down bankruptcies? Is that good for banks?
Housing prices “stabilized”
Rentals getting more expensive. Why?
Net effect is to make a house purchase appear as the smart choice. After all, the whole economy is dependent on turning people into debt slaves.
“After all, the whole economy is dependent on turning people into debt slaves.”
The whole economy is dependent on CONVINCING people to WILLINGLY BECOME debt slaves.
Previous generations of Americans possessed a healthy fear of debt and were reluctant to enter into debt situations because of a legacy of nasty consequences that were handed down to them from previous generations. But the latest generation of Americans - up until recently - had absolutely no fear of debt at all, in fact many were convinced not to carry a huge pile of debt was as sign of financial incompetence.
But … that seems to be not the case anymore.
Those who do not learn from history are condemed to repeat it, and so forth.
“Rentals getting more expensive. Why?”
1. People buying rentals are doing so because they are perceived “safe” investments in real estate. The Fed is making the holding of cash very painful. This is driving cap rates down, and prices up to own rental property.
2. Landlords are acting with their own best interests in mind. Landlords are able to raise rents without losing occupancy. If raising rents resulted in people moving out to buy homes on a net basis, landlords would stop doing it.
Slight refinement to #2:
Landlords will continue to raise rents as long as it increases their net revenue, occupancy notwithstanding. If a landlord is 100% full, they will conclude that they are undercharging, and will raise rents. The self-storage industry to my understanding has perfected this type of revenue maximization, where they will literally target occupancy at something like 88%. If they are running at 95%, they will push rents until some people start to move out, if they are running at 80%, they will offer more and more concessions to drive occupancy higher.
We haven’t yet begun to see the full impact of this development, IMHO.
Crisis Wiped Out 18 Years of Household-Wealth Gains, Fed Says
Jeff Kearns
Tuesday, June 12, 2012
June 12 (Bloomberg) — The financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8 percent plunge from 2007 to 2010 that was led by the collapse in home prices, a Federal Reserve study showed.
Median net worth declined to $77,300 in 2010, the lowest since 1992, from $126,400 in 2007, the Fed said in its Survey of Consumer Finances. Mean net worth fell 14.7 percent to a nine- year low of $498,800 from $584,600, the central bank said yesterday in Washington. Almost every demographic group experienced losses, which may hurt retirement prospects for middle-income families, Fed economists said in the report.
“The impact has been a massive destruction of wealth all across the board,” said Lance Roberts, who oversees $500 million as chief executive officer of Streettalk Advisors LLC in Houston. “What you see is an economy that’s really very, very stressed for the bottom 60 to 70 percent of the population that’s struggling just to make ends meet.”
…
Poof.
We had some old friends over for dinner on Thursday evening, one of my wife’s long-time close friends, her husband and their kids. They were visiting SD from the Bay Area. The husband and I both have way too much education, which naturally led us into a rollicking discussion of the dismal U.S. and global financial picture.
He was especially downbeat about the U.S. student debt picture. He wanted to know whether I thought at some point that student debt would be summarily forgiven across the board, in order to avoid the alternative of a permanently-depressed U.S. consumer economy. I told him I seriously had no clue whether this was likely or even possible.
I’d be curious whether any HBB posters have strong opinions, one way or the other. For instance, what is to stop Uncle Sam from declaring a student debt jubilee at some point, in the interest of freeing up young people’s lives from years of indentured servitude?
If one puts up as collateral for a house he finances (something that can be repossessed) what does one put up as collateral for debts run up for education purposes? Future income, maybe?
But if there is not enough future income to pay back the education-related debts then what should/will be the outcome?
If college-related debts are destined to be forgiven - and the word gets out that they will be - then I forsee tens of thousands of “professional students” emerging from out of nowhere and flooding into the education system.
“Future income, maybe?”
Exactly…unless you can’t find a job that pays enough to provide for living expenses and debt repayment.
‘I forsee tens of thousands of “professional students” emerging from out of nowhere and flooding into the education system.’
The education bubble might be reflated before it even pops.
True story; the college in my home town had a student that held the record, in the 80’s, for being in school the longest without getting a degree. He would change his major just before completing a degree. At the time students in Texas only paid 5% of public school tuition. This guy had been at it for 17 years!
“But if there is not enough future income to pay back the education-related debts then what should/will be the outcome?”
Soak the parents ’till they’re drowning, and then attach the future wages of the student. What we have here used to be known as indentured servitude by our ancestors before the practice was outlawed as rapacious usury.
Friday, Jun 15, 2012 12:30 PM PDT
Students share their debt woes
Paperwork signed in blood and other sad tales from the front lines of the student loan disaster
By Andrew Leonard
“I have a Tuition Answer Loan from Sallie Mae. I knew I was in for trouble when the fines for late payments were taken out in limbs from my body and I had to sign the paperwork in blood.”
I have only read a fraction of the thousands of comments submitted to the Consumer Finance Protection Bureau in response to the government agency’s request for information about the general public’s experience with private-sector student loans. But I think I can safely identify a few main themes.
1) Dealing with Sallie Mae, the nation’s largest provider of private student loans, seems to be an unpleasant experience for many people.
2) The most common adjective used to describe how it feels to watch one’s outstanding amount of debt rise even as one scrimps and saves and hustles to make payments is “hopeless.”
3) The educations paid for by student loans may not have left many Americans well-prepared for finding a job that comes with a salary high enough to pay off their loans in a lousy economy, but hundreds of thousands of people have definitely mastered a few things about how the world works. Specifically: There’s a big difference between government and private-sector loans; high interest rates are a killer; and private lenders do not have your best interests at heart.
Lesson in ruthless amoral capitalism? Consider it learned.
Sadly, most of the respondents to the CFPB’s request for comments were unable to express themselves in the same tone of bleak, black humor as the respondent whose words kick off this post. (Another comment from the same person: “To compare my feelings for Sallie Mae, think of it this way … entities such as cancer [and] HIV at least have some treatments and cures!”) The vast majority of people who took the time to submit their comments are simply stuck and looking for any help they can get. They’re unemployed or working at minimum wage jobs, and they feel duped. The parents who co-signed their loans are now getting harassed by collection agencies. They’re angry at a government that was quick to bail out the banks but seems to be standing by while an entire generation gets crippled by debt.
Most of the comments that I read came from people who do take responsibility for their debt. They just wish they’d been better informed as to what they were getting into when they were 18 years old and signing on the dotted line. They feel that financial aid counselors did not give them the full scoop on the difference between government and private loans. They are shocked that the same lenders who were so eager to shower them with cash turned so cold and inflexible when hard times made repayment near impossible. They are rueful, stressed and disillusioned.
Some representative comments:
“We all invested in the ‘American Dream,’ and now that dream has transformed into a Debt Nightmare.”
“I am frustrated and upset that I did not understand the full implications of this loan when I received it.”
“I graduated 3rd in my high school class, in the top 10% of my undergraduate class (1st in my major), and did relatively well in law school. I do not feel as if I am entitled anything … however, I did not expect to struggle so much as I move into my 30-somethings. I question whether my education will be worth it in the end, as I struggle to stay afloat. I am forced to search for higher paying employment outside of the career path I hoped to follow. Until I do find higher paying employment, my life will continue to be in a holding pattern where I live paycheck to paycheck so that I can pay off my educational debt.”
“Sometimes I don’t eat dinner or lunch for a few days so I can afford to pay the loans. I try to avoid bothering my elderly grandmother, who co-signed a loan, with harassing phone calls telling her that creditors will come for her and her money if her grandson doesn’t pay his bill.”
“These companies are disgusting and predatory. If Goldman Sachs can get a bailout of trillions with no strings attached, why can’t I get $50,000 so I can actually buy a house and spend money on the local economy instead of sending my money into a black hole of a bank?”
“When I was eighteen, I did not understand the difference between a private and a federal loan. Every adult I knew was in some kind of college debt, and I accepted that I would be, too.”
“When I went to college I didn’t realize that I was making a choice between owning a home and going to school. The amount of debt I have is practically insurmountable and will take my entire life to pay off.”
“I am not asking anyone to take on my debt or erase it the way the gov’t has for the banks. I am asking my gov’t to stand up for its constituents by lowering these high-interest-rate products that are criminal in nature.”
And so it goes, on and on and on. A generation of Americans who feel trapped and hopeless and for whom the words “Sallie Mae” have become a curse.
…
“For instance, what is to stop Uncle Sam from declaring a student debt jubilee at some point, in the interest of freeing up young people’s lives from years of indentured servitude?”
NOTHING! If the unitardy expletive can hand a million or more illegals an amnesty by expletive fiat, this is absolutely something he should do, and do NOW. Why? Well, to quote the expletive, “It’s the right thing to do for the American people”.
I am glad you brought it up. Because I will make this a political cause of mine. I think it is important. I’m gonna badger each and every one of my Congresscritters and anyone else I can badger on this issue. Thank you for suggesting it.
Are you planning to encourage or to discourage the student debt jubilee?
Encourage. Cancel the debt. Now.
“It’s the RIGHT thing to do for the American people.”
“Encourage. Cancel the debt. Now.”
Would you mind holding off on your earnest plea until I convert all my dollar-denominated savings into hard assets?
Sure, as long as you buy up some of that shadow housing inventory.
The question is How do we foreclose on a college degree??
Hand back the degree in exchange for cancelling the debt.
Of course Employers could demand you have a valid degree to be hired, and you would not have one.
I have always said lawyers could work as paralegals for 1/2 the pay and be debt free, this could work for a lot of other jobs.
Well if you have a medieval Art history degree and working at Starbucks…well you could still work there without the debt.
I would be fighting mad if they just wiped it away, or allow BK, it would really offend me for them to get handouts and there is no job training money for those who are responsible.
what is to stop Uncle Sam from declaring a student debt jubilee at some point,
I’ve long thought that student debt will be forgiven at some point– but most likely through a work-off public service program (like Teach For America or the military MD.)
It’s simply too big and too critical a demographic to cripple. When G’ma and G’pa America realize that THESE are the people paying their SS and Medicare, some debt shifting is bound to occur.
But I also believe that a college education per se will no longer be considered either a right or a necessity, and only the truly qualified, talented, or wealthy will be able to attain a relevant degree. The vast network of second, third, and commercial tier colleges will morph into trade and technical institutions as the worker-bees seek their traditional level in society. America can only absorb so many communications majors.
The vast network of second, third, and commercial tier colleges will morph into trade and technical institutions as the worker-bees seek their traditional level in society.
Many would acquire more useful skills in that case. I’m for it.
“It’s the RIGHT thing to do for the American people.”
LOL, things are never what they seem. I just read a whole screed on PuffHo about how Obama checkmated Rubio with that amnesty announcement. Didn’t even occur to me that it was more of a chess moved against Republicans than some sort of compassionately motivated voter grab. Guess we won’t be seeing a Romney/Rubio ticket. Nor will we see much outrage from Repubs about the issue. On that basis, fine with me. What does it matter anyway? Illegals don’t give a flying crap about the law and neither do US politicians or business interests. Illegals = political pawns.
Bye, Rubio. And don’t let the door hitya where the Good Lord splitya. Romney’s probably getting ready to write Obama a thank you note. Obama effectively neutralized the immigration issue for the elections, booyah!
Sometimes the palmster enjoys a good joke at own expense. Here I am, foaming at the mouth and about ready to gnaw on the carpet when I read about the administrative amnesty, I’m calling my Congresscritters and screeching about Obama’s kill list and UN supervised trade deals and of course the illegal immigrant get out of jail card, which was the capper and I’m telling the congresscritters’ phone goons their bosses should just step down and spare us the sham and expense of electing and paying for congress and their staffs, blah, blah. Face is so purple, you can’t even see the speckles.
Then I read the PuffHO Rubio article. And I do an Emily Litella: “oh. that’s different”.
Turns out, Obama made a pre-emptive strike and b*tchslapped Rubio and the Republicans on this issue, and as a result we won’t have to hear all the bloviating that comes with making a campaign issue out of it. It WAS the right thing to do for the American people.
I don’t think the politicians are thinking in statesman-like terms. It’s more like, “The people are idiots. What BS do we need to feed what constituency so we can continue to enjoy the office. Because if I don’t do it, someone less deserving will, and take it from me.”
“what is to stop Uncle Sam from declaring a student debt jubilee at some point”
I don’t know, but if that happens I will be pissed. My wife and I lived like college kids for 3 years when we moved to FL to pay off her student loan and a car. No cable, no eating out, carpooling, no smartphones, nothing… 400 sq.ft. apartment.
I’d be curious whether any HBB posters have strong opinions, one way or the other. For instance, what is to stop Uncle Sam from declaring a student debt jubilee at some point, in the interest of freeing up young people’s lives from years of indentured servitude?
I don’t think anything would stop them…but since it seems like the entire system is designed to enslave, I’m having a difficult time seeing them want to do that when everything seems to be working out as planned.
“Almost every demographic group experienced losses, which may hurt retirement prospects for middle-income families, Fed economists said in the report.”
Luckily for these potential retired folks there are money managers/advisors that are GUARANTEEING a ten-plus-percent-return on money handed over to them for “safekeeping” (choke), (and that’s AFTER some rather hefty management fees are extracted) hence this massive shrinkage of net worth is really no big thing. Party on.
Hard to understand how this can be true. 18 years ago I was in my fourth year of dollar cost averaging. I was a DOD employee. By 1995 my net worth was $50,000 and peaked in 2000 at $400,000 then declined in 2003 to $250,000 and then quintupled a year ago. It was a matter of living below ones means and saving. No one held a gun to my head and told me to buy a house, SUV, or breed like a rabbit. So the fault lies with those who chose not to save.
Reverse “Poof.”
“It was a matter of living below ones means and saving. No one held a gun to my head and told me to buy a house, SUV, or breed like a rabbit. So the fault lies with those who chose not to save. ”
Paging Darrell.
then declined in 2003 to $250,000 and then quintupled a year ago.
Quintupled in 9 years??? Really? I don’t think the mix that you have been a proponent of here the past several years has done quite _that_ well…
Or has your rate of addition via savings increased dramatically in that time-frame?
Oh of course, additional investment plus savings. If I keep rebalancing but end up broke, that means the millions of people with the average savings of under $50k will really be screwed. I doubt if that scenario will happen.
If you keep rebalancing, your odds of “ending up broke” are very low. Diversification is good at reducing that risk.
Even if you are shifting into an asset-class that ends up valued at zero, you will only have a percentage in it. But that does raise an interesting question: how much of your portfolio could you lose on an asset class that very slowly trended to zero? Rebalancing would tend to pull more and more into that class. Hmmm… I might have to model that.
Regardless, I think you are doing well for your age and goals. Nice work.
Thanks! You get it. PB gets it, but most people do not get it.
I recall when I posted only one of my asset classes that I invest in, I would get a flurry of responses that it’s going to zero. Well I do not have to tell you which asset class because I posted three very different (opposite) asset classes in three separate posts.
Great experiment. The conclusion is 1) Most people still refuse to understand that markets are all cyclic and 2) Most HBBers are negative about ANY investment. My response to them is to eat prunes.
Rent for a studio in L.A. Where I lived in 2003 was $1,000 per month. I live in a different studio in that same complex, but have A/C, which I expect to hardly use. $1,100 per month. Almost nine years later. Egads! Inflation! Hah! I am not concerned. Nearby houses cost perhaps $550 per month on property taxes and maintenance.
BiLA, you need a family to help drain away that income and keep that nest egg from growing too fast.
Nah. Government, Bankers and Bernanke will make sure it won’t grow too fast.
My PITI + HOA is less than the taxes where you are.
“JingeMale used to post here as paladin”
I find that hard to believe, but if true,
It feels to me like a lot of people have been railing pretty hard to jinglemale and RentalWatch.
But we do need the occasional reminder that challenges our preconceived notions here. Without that, we run the risk of operating like an echo-chamber, reinforcing each others beliefs with the constant repeating of our mantras. I for one value those willing to argue the other side every once in a while.
Do I agree with them? I’m not saying that. But I’m certainly not going to paint them as NAR shills either.
In my area, equilibrium has not yet returned; prices dropped about 30%, but that was only a fraction of what they needed to drop to return to rental-pricing equilibria.
In their area, things are almost certainly different. All real estate is in its essence local. I know that NAR talking point was wrong during the bubble (because global lending screwed things up everywhere). But it is actually true in the recovery. Rental rates vary in different locales because the job-base differs. Housing prices will also differ, though in an eventual equilibrium with rental rates.
Jingle and Rental, I value your sharing your local impressions, even though mine is currently still quite different.
Flame-retardant suit on.
I second your point. And I say that as one who is often accused of being intolerant of others’ views.
I agree. And I don’t get all the flaming, either.
It should be okay to ask questions about their points of view.
I encourage it…please do.
Questions are great—part of a useful exchange of ideas.
The name-calling and accusations are what I was referring to. I’ve definitely seen some of that as well.
Well said.
Thanks–I appreciate people at least listening, and challenging my views (especially on CA). I’ve been living this for a long time, and have found myself more and more convinced about my views. Anyone with well-thought out counter arguments to mine are welcome…the stronger the argument, the better, as far as I’m concerned.
In my career, a group of us sit in a room and throw rocks at every reasonable proposal we see…if it’s still standing, we MIGHT proceed. I am convinced that strong and vigorous debate only serves to shed light on the situation.
Ditto.
Thanks, Ben.
I am convinced that strong and vigorous debate only serves to shed light on the situation.
I’m convinced of that as well. Thanks for hanging around and representing a valuable counter-point…
Thank you Prime and everyone. I am just sharing what I am experiencing in my local market. I made the same posts when the market was cratering and many were suppportive and many others blew me off. I find it curious now, when some of the same people who used to like my stories of a cratering market now reject the signs of a recovery I am observing where I work and live. The market willl not stay on the bottom any longer than it stayed on the top.
Reversion to the mean is a powerful force. I think different people have different views of where the mean is. In California, it is my belief that we have overshot the mean in many markets. Some move back is expected, IMHO. You and I are probably thinking quite alike.
“…You and I are probably thinking quite alike….”
Well, we are both awake and on our computers at 1:58 AM perusing yesterdays bubble blog! Good to have the company!
You’ve both proven to misrepresent the facts here.
Why?
RAL, you remind me of the person in 2006 who said
“There is no housing bubble.”
Except now it is 2012 and you say
“There is no housing bottom.”
You are just the flip side of the same idiot. Just like the same people who thought housing would go up forever, you think housing will go down forever.
Housing will recover. There are small signs of the recovery in many places.
Housing will recover. There are small signs of the recovery in many places.
I agree.
But I also think the bottom will be long and relatively flat when it comes.
I actually think there will be a burst up in prices from where we are today that will then flatten out as a next step up bottom for a while.
The 90’s was a long flat bottom, but while the bottom was occurring, lots of new housing was being built, giving no opportunity for there to be the kind of imbalance in supply and demand that could drive prices. This time around, max pessimism was matched with extraordinary little construction.
I believe there will be very little new construction until prices have risen a bit, and then the addition of new supply will slow down that initial rise.
The wildcard in that theory is whether banks and appraisers get stupid quickly,and people believe that prices are going to rise forever after the initial increase in prices. Then it will be up to the Fed to stop the price increases, and I don’t have any confidence in that happening…
You have to consider that most people here are perm bears.nothing seems to shake that. I am bearish on RE for the next generation (20 years), but bullish on stocks and precious metals for the long term. I invest in government securities because I am not always right and I am too dumb to know how to time the market, unlike most people here
Some headlines from the google news aggregator page, just to relieve a little boredom:
Male Homosexuality Study: Gay Men Have Evolutionary Benefit For Their Families …
No more dumb old dad: Changing the bumbling father stereotype
Steve Wozniak: Visits Horse, Disses Siri
Romney breaks from small-town tour for speech on faith
Why Smart People Are Stupid
New Yorker (blog)
Unmanned US space plane lands near LA
Kim Kardashian Nude Photo Fakeout,
Moral Dystopia
Eve Ensler and Lisa Brown to read Vagina Monologues in Michigan
Havin’ some fun now…
Had a lovely evening at CA Renter’s recently-bought home, along with several other HBB participants of yesteryear. We enjoyed a vigorous discussion of the likely aftermath of the Grexit. It seems I was the only attendee who has not yet bought a home in the wake of the bubble collapse.
17 June 2012 Last updated at 03:08 ET
Greece votes in crucial election
A pre-election poster seen at a bus shelter in Athens Sunday’s election will be the second in six weeks after an earlier vote failed to deliver a government
The polls have opened in Greece for crucial elections which could determine the country’s future in the eurozone.
The main contenders, the right-wing New Democracy and left-wing Syriza, are at odds over whether broadly to stick with the tough EU bailout deal, or reject it and boost social spending.
Opinion polls are banned for two weeks before voting but unofficial polls say the result is too close to call.
EU leaders say if Greece rejects the bailout, it may have to leave the euro.
…