Bits Bucket for June 29, 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
Location:Northern Arizona, United States
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Australia’s chronically weak house prices: Is the crash upon us or a long-term flat trend?: Shane Oliver
After the surge in Australian house prices from the mid-1990s into last decade my view was that while the risks of a sharp fall back in house prices were high, the most likely scenario was an extended period of range bound house prices in real terms. If anything most of the surprise has been on the upside – although not by much in real terms. But despite the fears of many, house prices have not plunged like those in the US and elsewhere, despite a bigger boom.
However, the risks are rising again. Prices have slid 6% since their 2010 high and worries that the GFC is about to finally catch up with Australian housing are on the rise again. Excessive house prices and the excessive level of household debt that has come with it are Australia’s Achilles heel.
http://www.propertyobserver.com.au/residential/australia-s-chronically-weak-house-prices-is-the-crash-upon-us-or-a-long-term-flat-trend-shane-oliver/2012062855322
The graph in the article took my breath away; that picture paints much more than a thousand words.
A horrified court room looked on today as a man who had just been convicted of burning down his $3.5 million mansion collapsed and died in front of them.
Michael Marin, 53, was found guilty of arson by a jury in Maricopa County Superior Court. He appeared shocked and closed his eyes as the verdict was read before appearing to put something in his mouth and wash it down with liquid in a plastic water bottle.
Read more: http://www.dailymail.co.uk/news/article-2166303/Arsonist-Michael-Marin-53-collapses-dies-Phoenix-court-guilty.html#ixzz1zAR15IuS
WTF???
Fire investigators said he had started fire at home in 2009 before escaping down a rope ladder wearing a scuba-diving suit
There have been many cases across the country for wrongful convictions for arson, among other false arrests and charges.
I know someone personally and relatively recently who being railroaded by the police and the courts for DWI charges. It cost them several thousand dollars to be the charges. I know them and they were most certainly not guilty.
The point being, god help you if you get caught up in the court system. They don’t call it “criminal justice” for nothing.
To RAL/Florida is Going to Kill Me - I read Bits too late last night to send you good vibes, but rest assured, good vibes I am sending. Keep the faith - one advantage of growing up in an area with tough winters - the climate teaches you to think ahead! You will know what to do to mitigate the damage for your family and for yourself.
This may not be all that uplifting right now, given that the damage may thin out the already scant housing stock in the area you want to live in. But just consider - as a renter, the damage will leave your cash cushion, such as it is, comparatively unscathed. In other words, you didn’t buy it.
Best to you and yours.
I thought Florida is Going to Kill Me was Muggy.
There, I switched it back to avoid confusion. I was using “Florida is Going to Kill Me ®” for a few weeks — I was modeling after Exeter/RAL/Truth because I think it’s funny when he switches handles, although it probably is confusing to non-regulars. I started using it a month ago when I went to the ER after keeling over from heat/dehydration. Then Debby…
Thanks for the good vibes. I’ve survived ice storms and long, deep snow storms, but there is something extra-oppressive about heat and flooding. It’s exhausting, and the clean-up conditions are brutal and disgusting. Compare cutting up a tree in 20 degree weather to bleaching out a swamped garage in 90+ degree weather with mosquitoes and palmetto bugs everywhere. Thankfully it’s been dry yesterday and today.
I feel worse for my neighbs. Two inches made all the difference. I had water intrusion but no standing water in the house and/or backed up sewer in my house. Not everyone in my ‘hood was as lucky, although we all have terrazzo/tile for the most part. Damp Rid is an amazing product. After having standing water in my garage, I can’t imagine what it would be like in a house, and we had electricity the whole time. Like I said, I get it now… the people that left New Orleans. It’ too much to bear.
My kids and wifey were about 100 yards from the Pass-A-Grille tornado, so that was harrowing — they were flooded into their auntie’s house, but it’s stilted, so no big deal there. Just the tornado…
It will be interesting to see what becomes of the two abandoned houses that flank me. The one behind me will probably end up as a tear down, and somebody’d better get on the one next to me or it will crumble off into the gutter, too.
I was modeling after Exeter/RAL/Truth because I think it’s funny when he switches handles, although it probably is confusing to non-regulars.
Glad you find it funny, for me it makes it hard to block him. I find his constant attacks and name calling very insulting and detracting from the inelegant discussion on this blog.
Call the waaaaaaambulance.
Is this the one?
Lotsa ‘OMGs’ in the dialogue…
Tropical storm Debby- tornado hits Pass-a-grille
Yes, one of the transformer explosions was in my wife’s auntie’s ‘hood. More irony: my wife refused to go to Mid-Pinellas because that’s usually where the tornadoes hit.
My son is still very upset about it, not because he understands tornadoes, but I don’t think he’s ever seen so many adults lose their chit, so that freaked him out.
Muggy,
Here is a suggestion: Convince your son how lucky he was to see a tornado up close, and that it was an experience he will be able to share with others for the rest of his life. Encourage him to tell his friends and relatives about the experience, and when he is old enough, to write about it for school writing projects, etc. My guess is that over time, he will replace the terror he doubtless experienced with a fonder memory of the excitement he felt.
I grew up in the heart of Tornado Alley, and headed to the basement on numerous occasions when a warning was issued, but never actually saw a twister. I also lived in Florida as a baby; according to my parents, I slept through the one hurricane which hit where we lived (Cape Canaveral area).
Here is a totally awesome tornado video. Obviously the guy is shooting it, and the hysterical wife or girlfriend keeps urging him to stop, but his fascination gets the better of him. At one point they decide the tornado is moving away from them, only to later realize it is headed straight in their direction.
Tornado from Tropical Storm Debby Winter Haven Florida
In Tornado Alley, the sirens are the signal for everyone to go out in the front yard with the video camera.
You mean, “Tar-naduh!”
I believe that TS Debby flooded Muggy’s rental house.
Maybe it’s better that the existing stock was flooded, since now Muggy knows which areas to avoid.
The irony is that I looked at high and dry areas back in 2010 when I moved into my current joint, but they were too expensive. Being 2 blocks to the Gulf has it’s advantages and disadvantages, obviously.
My house is four feet above sea level. The highest point above sea level in my town is six feet.
“Maybe it’s better that the existing stock was flooded, since now Muggy knows which areas to avoid.”
This is the only house I’d buy after this week, and it went under contract during the storm. Lordy…
http://www.floridamoves.com/property/details/960171/MLS-U7551024/16313-1st-St-East-Redington-Beach-FL-33708.aspx?SearchID=10420364&RowNum=20&StateID=14&RegionID=0&IsRegularPS=True&IsSold=False
Muggy,
$259K that close to the beach. I can see why it sold. I’ve been to the area several times and Reddington Shores is nice. I was last there in 2009, rented a house for a week on Treasure Island for $1000 and that was in the summer which is the low season for FL.
Buy for $259K, rent it out as a beach house…even if occupancy is only 50% you’re cash flow positive.
If you think it’s”worth” $259k, why don’t you explain where the $259k is.
He just did. One way of valuing an asset is by the amount of income it produces. You obviously prefer the “how much did it cost to create this asset” method.
If the market pays you a high return for owning an asset that you have the ability to create, a rational participant would create the asset and capture that return. But you’re a construction engineer and that’s what you so you already know that.
RAL, how much could you build that for?
I’m not kidding, when the times comes I’d love to have you build a house for my family.
Roughly $50 a square if it’s not pile founded…. but it looks like it is.
Here’s one of the last photos I took right before I realized it was getting serious:
http://i864.photobucket.com/albums/ab205/muggyflo/dgf33.jpg
Could you send some of that rain our way? This playing rain songs on the radio just isn’t working. We need some Muggy karma.
You’ll have to ask Ben Bernanke to make it rain!
Muggy
I am totally unfamiliar with tornados and hurricanes and was intrigued with your photo.
I noticed there appears to be a palm tree in the background with it’s three leaves facing different directions, the beach balls appear dormant, and the water does not appear to be being pushed by a wind. But there sure is a lot of water laying there.
Is this a massive water dump without wind? Is flooding the major concern during one of these storms.
On another note, I was glad to see the Canadian water bombers being used on Colorado’s wild fires. You guys have sure helped us in the past with your equipment.
he is. It was early. I had not yet had my coffee. (sniff). I meant well. Sorry Mugs.
I thought Colorado was trying to kill homeowners.
It is.
It’s definitely killing houses.
Hmmm … that should contribute to the “inventory shortage”
Hope everyone in CO is ok. After the San Diego fires of 2003 and 2007 fire is about the only thing that truly scares me. If you get hit nothing is left, nothing. No chance for pets to survive. Little chance of an undamaged room. Not a pleasant death. (OK, neither is being buried alive in an earthquake or speared in a tornado, but I’ll take either of those over being burned alive.)
Sending my best energies your way.
Heartily seconded.
How about this. Now that the Supreme Court has allowed the federal government to take more responsibility for health care, how about getting it completely out of housing (and transportation, and infrastructure, and business/agriculture subsidies)?
Have the feds protect you from famine (food stamps), pestillence (health care, clean air and water), deprivation in old age (Social Security) and war (Defense, Homeland Security).
Leave most other stuff to the states.
I’d leave in air transportation to the federal level, but otherwise sounds like a good plan.
I read somewhere that 25-40% of those food stamps make it into walmart. walmart loves the program and lobbies hard to keep it.
Given that Walmart has a 25% market share of all grocery sales nationwide, that isn’t surprising. Plus if you’re trying to stretch your EBT bucks (so you can make the monthly payment on the mythical Escalade) WalMart would be a better choice than a pricey chain like Safeway.
A neighbor was out filming a tornado a few years back.
Faintly heard in the background audio was the wife yelling at him from the basement:
“If you don’t get your azz down here right now, there will be no more BJs for you, Mister……..”
And we’re assuming that threat actually worked!
“Defense” - interesting word.
We used to have a War Department, but it was changed to the Defense Department, and since this change we seem to have somehow gotten involved in a lot more non-defense wars than before the change.
Maybe the name should be changed back to the War Department so as to get ourselves involved in fewer wars.
our wars are really in defense of other nations…at least those that pay tribute to the empire (buy our treasuries).
You think we went to Iraq and Afghanistan and the other recent conflicts to protect China?
Yeah that was thought precisely.
$ 252,400,000,000
i’ll let you figure out who that is.
I’ll throw my hat into the mix. When was the last time the “Department of Defense” fought an actual war, declared by an act of Congress?
There was a reason why our founders and previous generations wanted the power to go to war with Congress and not the Executive branch…
Correct Northeasterner.
And the War Powers Resolution of 1973 cements it yet it is ignored.
When was the last time the “Department of Defense” fought an actual war, declared by an act of Congress?
Never. (trick question)
Weren’t both Afghanistan and Iraq wars authorized by Congress? I remember them voting on stuff.
Weren’t both Afghanistan and Iraq wars authorized by Congress? I remember them voting on stuff.
Both the Afghanistan and Iraq conflicts were authorized by Congress. In both cases, use-of-force was authorized, but a declaration of war was not made…
“Both the Afghanistan and Iraq conflicts were authorized by Congress. In both cases, use-of-force was authorized, but a declaration of war was not made…”
In Afghanistan who were they supposed to declare war on? We didn’t go “to war” against Afghanistan, we went to war against Al Qaeda. Can you declare war on a group of people as opposed to a country?
As for Iraq, are you sure about that?
It seems the US Gov didn’t declare war on Iraq, it authorized the use of military force with the:
“AUTHORIZATION FOR USE OF MILITARY FORCE AGAINST IRAQ RESOLUTION OF 2002″
http://www.gpo.gov/fdsys/pkg/PLAW-107publ243/html/PLAW-107publ243.htm
I’m sure authorize the fuse of military force and declaring war are quite different in many ways. Time for some pondering on that.
In Afghanistan who were they supposed to declare war on?
Matter of semantics whether the international community recognized the Taliban as a legitimate government, but that was the government in charge of Afghanistan at the time of the start of hostilities. Funny enough, turns out reconciliation with the Afghani Taliban will be the cornerstone as to whether the current US-supported government of Afghanistan will survive if and when US forces leave.
I’m sure authorize the use of military force and declaring war are quite different in many ways. Time for some pondering on that.
I find words to be powerful things. War vs. conflict vs. police action vs. insurgency. Are you any less dead by getting shot in a war than bombed in a police action or insurgency? Is the “War on Terror” or the “War on Drugs” more legitimate because we used the word “War”? Are conflicts in Uganda, Yemen, Libya, Iraq, Afghanistan, Yugoslavia, Somalia, Panama, Kuwait, Grenada, Vietnam, or Korea less lethal (or legitimate) because we never declared war, yet put US forces in harms way?
Makes you think about words like Depression, Recession, and Panic, too.
I’m still trying to figure out how Bosnia was for the protection of China.
IIRC, though in 1959 I was only 7 years old, Eisenhower said we were in VietNam for three reasons… tin, lead, and rubber.
True?
No oil? (wink)
Our wars are in defense of natural resources and our corporations profits.
Also known as “Americans and American interests.”
I’ve actually been working on starting a political movement to do just that. I think it’s far more truthful and it honors our history as that was its original name. Nomadic tribesmen with boxcutters and a few tons of C-4 are hardly things that require a trillion+ a year to “defend” against. Should we take measures to protect ourselves and try to prevent it? Of course. Are we in any danger whatsoever of having these people take over our government and occupy our country? I can’t even begin to write about how ridiculous that idea is.
Honestly, picture how many tens of millions of troops that would require and the gargantuan logistics and mobile infrastructure that would require and then go read the CIA world factbook and see what kind of population and (relatively few)resources these countries have, and you can see how impossible it would be.
Sure, they might blow up a few public structures or transportation means, but that does not and never will equal a massive invasion and takeover.
Therefore the massive mobilization of the military is completely unnecessary and a huge waste of money and resources. How about instead we just completely ban immigration from countries known to harbor terrorists en masse: “Sorry, you’ve lost your America privileges.”
And that’s not racist BTW - I don’t care if your skin is green or plaid - if you’re coming from a country with a ton of bad guys and a history of people who want to do us great harm in large numbers, you don’t get in. Period. Exceptions may be made in the case of well documented political refugees seeking asylum.
Is there something wrong with protecting our country this way? What about our “sovereign rights?”
I have to laugh when I hear people say the government should get out of the way of business.
The fact of the matter is, if they did, there would NOT be half the business there is today nor would it be safe, or fair nor have recourse for criminal activities.
Because businesses lie, cheat and steal every day.
So does the government. What’s your point?
The point is you have a FAR better chance at justice, fairness and safety with the government than you EVER will with a business of any size.
This is not something that is debatable or philosophical opinion, but fact. It is such an important fact, that it was the cause of the American Revolution.
A repo man can’t break into your house and take your stuff. A Sheriff can walk right in. With a gun. A lawyer can’t access the bank account of the person or business/org you are suing and give you money. The courts can. You, NOR ANY business, cannot arrest the owners of a business that has defrauded you. The police can.
You do NOT want a corporate justice system. That entire concept is an oxymoron.
Corporations put mandatory arbitration clauses in their contracts. Their customers don’t.
i laugh when i hear that people think the government protects the people from businesses that lie, cheat and steal every day.
Yup. Government is a “partner” that every business has or wants so that cheating and stealing can continue. As long as Government gets a cut, it is happy.
the government’s role should be to protect the citizens from businesses that lie, cheat, still, and polute…but instead…we get cash for clunkers.
The government does perform that role, but certain parties *COUGH*REPUBS*COUGH* have spent the last 30 years dismantling every watchdog agency there is.
“Less government” like “free market” is code for free to eff you up the butt.
the republicans dismantled the DoJ?
that department of homeland security was quite a dismantling effort as well.
Homeland Security is a make-work jobs program for all of those military retirees that wouldn’t be able to find another job in this Republican-sponsored economy.
The DOJ and HS are NOT responsible for consumer safety, standards and prosecution of fraud and fines for non-compliance.
In other words, they are not the:
FAA
FDA
OSHA
EPA
NRC
EEOC
FCC
FDIC
FEMA
FERC
SEC
Do know the functions of these agencies?
FAA
FDA
OSHA
EPA
NRC
EEOC
FCC
FDIC
FEMA
FERC
SEC
And people wonder why companies are sending all the jobs overseas. Gee I wonder why that could be?
“The government does perform that role, but certain parties *COUGH*REPUBS*COUGH* have spent the last 30 years dismantling every watchdog agency there is.”
so the republicans dismantled all of those?
list of agencies under the DoJ:
http://www.justice.gov/agencies/
FAA
FDA
OSHA
EPA
NRC
EEOC
FCC
FDIC
FEMA
FERC
SEC
That’s alone in the federal level. Each state has additional agencies to “help” the masses.
It’s hard to argue with people who are married to the government. They would happily accept the tyrannies from government than see a fellow man become rich or successful.
Why do these government organizations exist?
Because it has been proven time and time again that the “free market” is incapable and unwilling to police itself.
Given the choice of saving a few bucks, and putting their employees and/or customers at risk, and businesses will opt to save a few bucks 95% of the time.
Given the choice of saving a few bucks, and putting their employees and/or customers at risk, and businesses will opt to save a few bucks 95% of the time.
I don’t disagree. And frankly some business can be as evil as government. My main point is modern governments exist solely to support big business not to help the little guy. And it has been proven time and time again. So at this point asking for more of the same is rather misguided.
the largest financial fraud in history is unfolding before our eyes and the DoJ is getting fracking hush money…a DoJ under a Democrat president and i’m suppose to believe it’s only the republicans’ fault?
unbefrackinbelievable.
My main point is modern governments exist solely to support big business not to help the little guy.
Wait, I thought government was destroying business. Which is it?
Wait, I thought government was destroying business.
It’s destroying some and protecting others.
“Why do these government organizations exist?
Because it has been proven time and time again that the “free market” is incapable and unwilling to police itself.
Given the choice of saving a few bucks, and putting their employees and/or customers at risk, and businesses will opt to save a few bucks 95% of the time.”
Google Ronald Coase and/or Coase Theorem and see for yourself why you’re wrong.
I’m NOT married to government, I just hate big business more.
As I said, the American Revolution was fought against the world’s first transnational: The East India Company, which at the time, was the de facto English government.
Read the Declaration of Independence very carefully and you will see the chief complaints are problems redressing problems of commerce and the resulting consequences.
This nation has become the very thing it fought to get away from.
“Coase Theorum”
From Wikipedia”
“So a key criticism is that the theorum is almost always inapplicable in economic reality, because real-world transaction costs are rarely low enough to allow for efficient bargaining”
“In their seminal JEI article, Hahnel and Sheeran highlight several major misinterpretations and common assumption, which when accounted for substantially reduce the applicability of Coase’s theorum to real world policy and economic problems”
Nanny-nanny-boo-boo, stick your head in doo-doo…..
“Google Ronald Coase and/or Coase Theorem and see for yourself why you’re wrong.”
Oh come on — even Ronald Coase doesn’t believe the Coast Theorem applies much outside the realm of theory land. The paper assumed two parties known to each other; almost every real world situation involving externalities has myriad players who are relatively anonymous to one another, and a group loyalty dynamic which makes it OK for the insiders to dump externalities on the outsiders without qualms.
Comment by Mr. Smithers
2012-06-29 11:14:40
FAA
FDA
OSHA
EPA
NRC
EEOC
FCC
FDIC
FEMA
FERC
SEC
And people wonder why companies are sending all the jobs overseas. Gee I wonder why that could be?
Why? Because overseas you can pay a pseudo-slave labor force pennies an hour and force them to work 16 or 18 hour days, while dumping toxic waste (can you say heavy metals?) directly into the water table with no consequences.
Forgive the ad hominem, but I really get the feeling that people like you won’t be happy until America the same. But of course with the great free market, it will all work out like a fairy tale in the end with pink unicorns and puppies farting rainbows. If only that mean old government would just get out of the way!
Wake up: All those TLA’s listed above are now wholly owned subsidiaries of the material-wealth-concentrator-o-matic living machines we call (large/mega) corporations.
Want proof? Read this: http://yro.slashdot.org/story/08/08/30/238223/appeals-court-rules-us-can-block-mad-cow-testing
And this: http://www.msnbc.msn.com/id/18924801/ns/health-mad_cow_in_the_u_s_/t/feds-fight-broad-testing-mad-cow-disease/#.T-4s3vWDl8E
And then tell me how great the completely unrestrained concentration of wealth and resources is working out.
Risk of foreclosure looms over 700,000 Californians
Report finds nearly 100,000 Bay Area homeowners delinquent on mortgages
By Aaron Glantz on June 27, 2012 - 12:55 p.m. PDT
California’s housing crisis isn’t over, with 11 percent of borrowers in the state at risk of foreclosure, according to a new report released this week by the nonprofit Center for Responsible Lending, a Washington-based think tank.
The report found nearly 700,000 California homeowners were at least 30 days delinquent on their mortgage payments. That number includes nearly 100,000 Bay Area homeowners, about half who live in the East Bay. In Los Angeles County, more than 180,000 borrowers are delinquent.
In an interview, Paul Leonard, the center’s California director, said his organization timed the report’s release to coincide with last-minute lobbying efforts aimed at legislation that Attorney General Kamala Harris calls the “Homeowners Bill of Rights.” Harris, who successfully negotiated $18 billion in relief to California homeowners as part of a settlement with banks charged with mortgage fraud, has pushed hard for the legislation, which she says is designed to protect Californians at risk of losing their home.
Source: The Bay Citizen
http://www.baycitizen.org/housing/story/report-700000-californians-risk/ - 51k -
Report: Investors buy nearly half of Oakland’s foreclosed homes
Real estate firms turning properties into rentals, becoming “massive landlords” in some neighborhoods, critics say
By Aaron Glantz on June 28, 2012 - 11:01 a.m. PDT
Source: The Bay Citizen
The rental listing advertises a “gorgeous remodeled craftsman-style house” with three bedrooms, two bathrooms, a converted basement, a large deck and a backyard for $2,595 a month.
Eight months ago, this West Oakland home was owned and occupied by Theodros Shawl, a local chiropractor. Shawl bought the house in 2004, his first since emigrating from Ethiopia in 1990. Over the years, Shawl said, he rebuilt the home’s foundation and replaced its aging plumbing and electrical systems.
“I liked the fact that it was an older home, that I could repair and paint and fix there on the weekends. I was always at Home Depot,” said Shawl, 40. “I was living the American Dream.”
Last October, after being sidelined with a wrist injury, Shawl lost his home to foreclosure; in May, Bank of America sold it to a real estate investment firm, REO Homes 2 LLC, a company founded in 2010 by Bay Area businessman Neill Sullivan.
According to a report released today by the Urban Strategies Council, a nonprofit think tank, real estate investors have purchased – usually with cash – 42 percent of the 10,508 homes in Oakland that went into foreclosure between January 2007 and October 2011. Many of these investors are turning the homes into rental properties and charging rent that is significantly higher than the monthly mortgage payments many families would make if they purchased the homes.
“They are massive landlords in neighborhoods that historically have had high rates of homeownership, and very few people are aware of the investor activity that’s taking place under feet,” said Steve King, the organization’s housing and economic development coordinator.
In neighborhoods hit hard by the housing crisis, it would be cheaper for many families to buy a foreclosed home than rent an apartment. The average price of a house in those neighborhoods is less than $150,000. Monthly payments on most 30-year mortgages at that price are usually less than $1,000, while rents on many West Oakland properties approach and exceed $2,000.
http://www.baycitizen.org/housing/story/report-investors-buy-nearly-half-homes/ -
” I was always at Home Depot,” said Shawl, 40. “I was living the American Dream.”
Wow, that must have been a crappy dream since Home Depot sells crappy stuff.
Not mention you have to be some kind of sick workaholic to want to spend your weekends (or any other free time) doing construction labor.
I will never understand why so many people equate “the American Dream” with being a workaholic.
I will never understand why so many people equate “the American Dream” with being a workaholic.
Some people, myself included, enjoy fixing things, building things, and improving things.
So do I. A lot in fact. But not all the time. My job and every day personal responsibility keep me busy enough as it is.
i don’t know, after 8hrs of punching the keyboard and staring at a glowing box, swinging a hammer or a shovel can be meditative.
I did a LOT of construction before I became a bit jockey. I would never say it’s meditative.
But to each his own. My only point is that life is too short to spend all your free time working.
Around here the main competition for Home Deopt is a chain called Lowe’s. Their slogan, which is printed on the top of every receipt, is “Never stop improving.” I think that a lot of people have bought in to that philosophy and are always finding things in their houses that can be improved or “updated”. It makes me think that we may be in a home improvement bubble that’s going to burst soon just like the housing buuble did.
Wow, that must have been a crappy dream since Home Depot sells crappy stuff.
Correct.
Procure at supply houses for material that actually meets specification for 30% less.
Here in Tucson, the go-to place for building materials is Grant Road Lumber. Locally owned and independently operated.
Not always as inexpensive as Home Cheapo, but definitely worth patronizing. I find the Grant Road Lumber people to be a lot more helpful than the folks over at the big boxes.
Who sells good stuff?
I know a guy in my nabe. He has the best stuff.
” I was always at Home Depot,” said Shawl, 40. “I was living the American Dream.”
I had a co-worker like that. He used to take 2 or 3 trips to Home Depot in a week in his lunch break and at least one trip on the weekend. I used to ask him all these home improvements every day, your wife must not like it. He said no she didn’t complain. They divorced 2 yrs ago.
I spent what seemed like every weekend at Home Depot when I first moved into my house. But now, I’ll go there once every 2-3 weeks to buy something small. Last time I went was to get pesticide for the weeds growing in the driveway. It was on a Saturday morning and I can’t remember a time I had ever seen the parking lot so full.
$2600 rent in OAKLAND?
That IS insane!
But according to Truthy, rents are plummeting all over the place. So confusing.
And don’t forget that at the same time as paying that insane rent, you’re supposed to be saving up to buy a house outright, and live within your means.
Well, better skip that $1.75 tall decaf at Sbux…
Still misrepresenting my words I see.
It isn’t any mystery as to why public sentiment toward you housing pimps is that of petty thieves. Although it ought to be far lower than that considering your larcenous lies and fraudulent methods.
Not misrepresenting anything. Your daily diatribe is rent for 15 years and save up to buy with cash. Well, good luck with that when rent for a house in OAKLAND is $2600. I hope you make $12-15K+ a month after taxes cuz that’s about the only hope you have of ever owning a house using your method of rent/save, if you live in the Bay Area.
No Slithers…. you are misrepresenting my words and we all know it.
Your daily LIES and misrepresentations of housing has all been documented. And this isn’t about me my friend. This is all about YOU and your persistent and perpetual misrepresentations and lies.
“No Slithers…. you are misrepresenting my words and we all know it.”
Thank goodness truthy is here to make sure no one is misrepresented.
Why would you not want Oakland families buying foreclosures rather than renting? To me, it’s a win-win!
Five months of price increases for South Florida real estate
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 5:52 p.m. Tuesday, June 26, 2012
West Palm Beach —
For five consecutive months beginning in November, home prices, if not overall economic hope, rose in South Florida.
The 3.2 percent price increase in April from the same time last year as measured on the nation’s leading housing index, was called a “convincing upturn” by economist David Blitzer, and a sign that the so-called “sand states” are revving for an extended rebound.
“Let’s not put blinders on. We’re still 50 percent below the price peak,” said Jack McCabe of McCabe Research & Consulting in Deerfield Beach. “Five months of a positive line is definitely noteworthy, but at the same time there is a lot of additional data to cloud that.”
South Florida’s home prices peaked on the index in December 2006. At the time, the statewide median sales price reported by the Florida Realtors for a single-family home at $241,100. Palm Beach County’s median price was $368,200.
Last month, the statewide median sales price was $147,000. Palm Beach County’s was $206,000.
McCabe said home prices will waiver as foreclosures work their way through the court system and short sale bargains increase.
In the June economic overview by the Florida Office of Economic and Demographic Research, it was noted that 21 percent of the state’s mortgages are either late on payments or in foreclosure _ the highest in the nation.
“The bottom is not a straight line, it’s jagged,” said McCabe. “We’re still seeing ups and downs.”
http://www.palmbeachpost.com/news/business/real-estate/five-months-of-price-increases-for-south-florida-r/nPff7/ - 73k
I am going to have my Dr. write me a prescription for a house now.
True story. A friend’s wife mysteriously got better of her illness (depression like) after they closed on a house.
+1 I’ve seen it happen too.
If money-printing is a win-win (every market of any type is up this morning worldwide) for eveybody, then why didn’t they think of this sooner?
Zimbabwe has done it for yrs.
Maybe its a black president thing…
Uncalled for.
And all of the good ol’ white boyz before him always ran surpluses?
FWIW, Obama is also “white”. Unless is mother wasn’t his mother.
Unless is mother wasn’t his mother.
Brother from another mother?
I think Obama has inherited the worst part of both races.
Corruption is colour blind; well except for green.
A Huge Break in the LIBOR Banking Investigation
Rolling Stone | June 28, 10:15 AM ET | Matt Taibbi
This is a huge story:
On Wednesday, Barclays won the race to reach a deal with U.S. and British regulators, beating UBS, which was reportedly the first bank to begin cooperating with international antitrust authorities. Barclays agreed to pay at least $450 million to resolve government investigations of manipulation of Libor and the Euro interbank offered rate (or Euribor): $200 million to the U.S. Commodity Futures Trading Commission, $160 million to the criminal division of the U.S. Department of Justice and $92.8 million to Britain’s Financial Services Authority.
I wrote about the Libor investigation in the current issue of Rolling Stone, in “The Scam Wall Street Learned From the Mafia,” about muni bond bid-rigging. Throughout this spring, while the Carollo bid-rigging case played out in a Manhattan courtroom, negotiations between banks and regulators were going on in this far larger cartel-corruption case. It’s been clear for some time now that a number of players had begun cooperating, and the only question was which bank was going to settle first.
Barclays employees agreed to manipulate the rates they submitted to the banking authority that oversees the daily Libor report for seemingly anyone who asked them to monkey with it: senior Barclays officials concerned that the bank would look weak if it reported too high a borrowing rate; interest rate swap traders trying to improve Barclays’ derivatives trading position; even former Barclays traders begging for favors. We’re talking naked, blatant manipulation. Here’s one exchange cited in the DOJ filing:
Trader: “Can you pls continue to go in for 3m Libor at 5.365 or lower, we are all very long cash here in ny.”
Libor rate submitter: “How long?”
Trader: “Until the effective date goes over year end (i.e. turn drops out) if possible.”
Submitter: “Will do my best sir.”
This is unbelievable, shocking stuff. A sizable chunk of the world’s adjustable-rate investment vehicles are pegged to Libor, and here we have evidence that banks were tweaking the rate downward to massage their own derivatives positions. The consequences for this boggle the mind. For instance, almost every city and town in America has investment holdings tied to Libor. If banks were artificially lowering the rates to beef up their trading profiles, that means communities all over the world were cheated out of ungodly amounts of money.
$ 360 trillion in transactions are tied to LIBOR.
It’s not shocking to me. I’ve been saying it for years: it’s ALL rigged and gamed and the name of the game is “FU”.
I hope that Lie-bor goes the way of those lying bond rating agencies.
Wait a minute!
Why doesn’t this give me the warm and fuzzies?
———————
Overseas buyers seek shelter in U.S. real estate
Marketwatch | 06/29/2012 | Howard Gold
Buyers from all over the world are snapping up U.S. real estate the way prospective brides yanked discount wedding gowns off the racks at those Filene’s Basement sales of yore.
Yes, some of the buyers are the super rich, like the Russian billionaire who allegedly bought an $88-million New York penthouse for his daughter. But others — upper-middle-class professionals and small business owners — are scooping up condos, townhouses and single-family homes. They’re buying in suburbs as well as cities. Nearly 40% are using their new homes as primary residences.
In a recent report, the National Association of Realtors said international sales hit $82.5 billion in the 12 months ending March 31, up from $66.4 billion the previous year. Canadians were by far the most frequent buyers, representing one out of every four dollars of international real estate purchased. Chinese nationals, Mexicans, Brits and Indians followed.
Half of all foreign purchases were made in four states: Florida (which got 26%), California, Arizona and Texas. International buyers have helped revive the once-moribund real estate markets of Phoenix and Miami. And most of them pay cold, hard cash.
U.S. real estate can be a great investment for foreign nationals. The real estate crash that began several years ago has produced some extraordinary bargains.
Mostly Canadians and investors buying in Phoenix.
The news that foreign buyers are flocking in to buy U.S. real estate makes me think now is a bad time to buy. It would seem more prudent to invest elsewhere, then relieve one of these foreign greater fools of their falling knife investment property a few years down the road.
The worldwide bankster criminal syndicate, and all of their friends, are realizing that the US of A is a “safe haven”, a place to head for when the local peasantry start revolting.
And what’s not to like? Lots of nice places for the Robber Baron class to live in the style to which they’ve become accustomed, a government who wants to be your partner, and a large percentage of the local wretched refuse believe that the only way people get ahead is by “hard work”, so if you are a gazillionaire, you must have earned it..
All it takes to get in is money.
“And most of them pay cold, hard cash.”
A lot of that cold hard cash is from a HELOC on their not yet deflated Canadian property.
Drug dealing prostitution…protection
And most of them pay cold, hard cash
Yesterday I got a letter from a C/B realtor about how he could sell properties in the area. Two of past sales he listed (as his) were sold 6 months apart for $400K and $525K with $400K the newer of the two sales.Both properties were about the same sq.ftage and lot size; both zillowed about the same at $390K. Point here, zillow just goes by sq.ft. and an expanded comp area, people on the ground have more insight.On the surface that sounds like the buyer of the $400K house got a screaming deal but that’s not the whole story. I went through the houses and wouldn’t have bought either as I’m quite picky on what I wanted. The $400K house for me was a teardown and I didn’t even like the lot. The people that bought and moved into that house will enjoy it because for some a roof is a root, a door a door, etc. but not the same for a car as a BMW is not just a car but a step above the ordinary. My point is TRUTH would like to confine housing to price only and some are willing to pay for location, quality of built, turn-key condition, etc. And to TRUTH, we are not talking about bubble chasers, just people who want to find a place to live and raise a family. By the way both houses are across the street from each other.
A BMW is a car that will cost you a $1500 to get new brakes…
Only if you take the car to the dealership to get fixed… take it to a local garage that specializes in foreign cars and it will be much cheaper.
True, but you can still get a brake job for a regular car for under $200 at most shops.
Catalog this under “Why I gave up on European cars and embraced the Japanese”. TCO is generally lower, along with initial purchase price while overall reliability is generally higher.
Same here. I really love German cars (except Mercedes), but TCO is ridiculous.
Same here for the same reasons.
new BMWs come with 4 years of maintenance, including brakes.
new BMWs come with 4 years of maintenance, including brakes.
I was offered that for an extra cost on the CPO car I bought in January. I declined, but I was curious how they deal with the guys who go to the track multiple times a year. Are they really going to give you a brake job approximately every quarter for free? There are a lot of guys who take BMWs to the track…
new BMWs come with 4 years of maintenance, including brakes.
Same with Audi and VW. The no-charge maintenance term coincides with the bumper-to-bumper term. As long as you’re under warranty, you’re good. Out of warranty, SOL. Four VW’s and an Audi made for some hard lessons learned.
Bottom line, it works well if you lease. Unfortunately, I drive too many miles for leasing to work…
I was curious how they deal with the guys who go to the track multiple times a year.
I don’t know how BMW deals with it, but Nissan (370Z and GT-R), Subaru (WRX), and Mitsubishi (EVO) all have disclaimers that the void the warranty if the car is “raced”, i.e. on a track on the weekend. They have a number of ways to determine this, but the most common is to get the info directly from local (or not so local) race tracks…
“Same with Audi and VW. The no-charge maintenance term coincides with the bumper-to-bumper term. As long as you’re under warranty, you’re good. Out of warranty, SOL. Four VW’s and an Audi made for some hard lessons learned. ”
Yep. Which is why Audis depreciate like a rock after they’re out of warranty.
So you guys are saying “Run. Don’t walk away. Run!” from my idea to get a used Audi Allroad? Is that what you’re saying?
From a TCO perspective, you’d be better off buying a pre-owned Subaru Legacy Outback. I love Audi’s, but out of warranty, you better have a fat bank account… what’s a Euro badge worth to you?
I was thiiiiiis close to getting an allRoad. Walked away last minute. The heart wanted it, the head knew it costs $1100 for a timing belt replacement
Yeah, and the suspension, while a cool idea, can be a nightmare as well. Love the look of them, but def have to choose wisely and the good ones are WAY overpriced.
Problem is, I want AWD and manual transmission in a wagon so the choices are few. Audi, BMW, Subaru. I do like the new Subaru Impreza wagons. WRX is cool, and would be fun, but way more than I need.
If TCO is important I can’t imagine going with anything other than the Subaru. I love my BMW but there are still days when I think I should have gone with a Legacy GT spec.B instead.
The Saab 9-3 XWD is a very nice car if you want AWD. I’ve owned a couple of 9-3 Aeros and the turbo on those things is crazy good. Not quite as expensive to fix as German cars and a little better quality as well. Don’t let the fact it is /was a GM fool you. These drive like nothing else GM made.
Wrong, it’s a mania. I’m just looking for a place to raise my family, too.
RAL’s knowledge of construction cost shows us all how much disconnect (and by disconnect I mean tulip-style, animal-spirit mania) still exists between price and reality.
I could get a loan for a $300k house. Easily. My realtor still wants to show me those — I only want to see stuff below $180k.
Fire the realtor. My realtor tried that too — showed me a house $100K above my upper limit “just to show me what a $x house looks like.” Then she asked me if I ever considered a housemate. I said, never depend on someone else for the mortgage. Then she wanted to show me a $269K 2-bed condo, with a $300 condo fee to boot. I nearly told her off. After that we started looking at houses in my range.
Slim with a housemate would be like the chemical reaction between oxygen and phosphorous.
Sounds pretty exciting!
Same here, slim. And remember these are 30-year mortgages. Generally housemates of that type require blood tests, copious paperwork, and specialized dresses.
Then talk to him and say look, I won’t spend over $X. Showing me houses above that is wasting both our time.
“Fire the realtor. ”
It’s complicated. I work with him and he’s a strong community leader. He also lives in one of the ‘hoods where I may buy (in 2027).
just people who want to find a place to live and raise a family.
I agree, Muggy. A lady just bought what was a $200k fixer (2009), that was fixed and resold for $290k (2010) for…$590k (!!) in my old hood. So, yeah, some ARE willing to pay for location but good god they are obsessed with throwing good money after…not so good. In my estimation for that neighborhood the place “should” be about $400k TOPS. If I’d have known it was for sale in 2010, I’d have bought it.
Oh, so she puts 20% down (I at least give her props for that) and then still needs a 1st ($417k) and 2nd ($48k) on the house. So, either she took out a 2nd for more renovations, or the bank on the 1st didn’t agree with the valuation of the house and made her find another source of funds, hence the 2nd.
I busted on RAL a little yesterday when I found that CNNMoney article, but that doesn’t mean people aren’t doing absolutely insane things in this market.
Another Bear has fallen.
Yep. It’s hard to admit on here but I am buying a house. Before y‘all get out the knives and billy clubs:
-I am buying for well under 2x income.
-I cannot begin to rent this home for what my PITI & PMI will be. (Yes, PMI. I cannot make the numbers work so it makes sense to give up that amount of cash vs. $40/month. If this changes I’ll just pay down the mortgage to get rid of it.)
-I absolutely believe prices are going to fall in my town since they just began to this summer. (Yep, no decreased prices until now and a very delusional mentality. I’d say my house is done 7% from last summer and more to come.)
-I am moving from a quickly decaying neighborhood into one of the best neighborhoods in town.
-This is not a financial investment. I absolutely believe I will be taking a loss if I sell in the next 10 years - maybe longer. I’m not buying to improve my balance sheet. I am buying to improve my quality of life.
-Currently I can rent it out for $150 - $250 more per month than all costs except repairs and maintenance. I have no delusions this will continue with a major economic downturn, but there are few decent rentals in this town so I think I would have a good shot at renting it if I leave and prices have really dropped.
So why am I buying? Because I want a better life. I’ve spent 10.5 years renting crap boxes. (You try renting anything decent with 4 dogs. Now 5 dogs and 2 cats. No, getting rid of the pets is NOT an option.) I haven’t had a decent guest room in over 10 years. I want a basement. I live 30 minutes from Joplin, and since May 22, 2011 no longer feel that a basement is a want but a need. I want to live in a neighborhood without meth houses, without people wandering around with guns and firing them, without loud parties on Wednesday nights, and without the young bucks 2 doors down who like to rev their motorcycles at 11pm constantly. (All of this has happened in the last month.) I want to stop worrying about a landlord selling my rental and having to find a new place to live with way too many pets. I want a house I can see clients in if I decide to add KS clients to my PT CA biz. I want friends to be able to visit from out-of-town and have in-town people over for dinner or just to hang out.
This house is in really good shape and will not cost much more than renting the crapbox I am in now. I can put in a pet door so I don’t have to go home every single day at lunch and let the monsters out. It’s 1.35 miles from work instead of 4.5. Not a lot of gas and time savings, but definitely some. And fall, winter, spring I can walk to work and get healthier. (Not summer though. I am not good with heat.)
I live simply and between my contributions and my employers’ save 28%/year for retirement. I am being very conservative on my purchase and spending less than $100,000. I’ve been here two years and like the town and love my job so the next five years are assured on my side. Job is fairly stable, but there is always a chance I could get laid off if the economy gets horrible. So there’s risk that I may have a mortgage and no job in a couple years. It’s small but it’s there, just like I believe it’s there for all of us who are not 1%ers. I would say my income is more secure now as an employee than it was in SD as a business owner and even if it’s not I have a biz to fall back on.
So that’s my story. I do think prices are going to fall, but after more than 10 years of living in bad rentals I’m ready to take the hit. I’ll be in a much safer place, surrounded by a much higher quality of human being. I’ll have a basement for tornadoes and a dining table for guests. I’ll have storage!!! And room for all my crap. And room to sort my crap so I can get rid of a bunch of it. And I get to put up a Christmas tree this year and my beautiful decorations! (There is literally no room in my rental for a tree or a kitchen table.)
I know there are people here who cannot see buying for any reason, and I do understand that. I was that way in California and still cannot imagine paying the prices there. But there is a limit to my loss - no more than 100% of the price, and if my adorable little house becomes absolutely worthless there may be much bigger problems in the economy so that I won’t care. But I moved from CA to KS and a big part of that move was for affordable housing, and this is really, really affordable. If I could have bought this house in CA for less than 2x’s income I would still be there. (Although I have to say after the crowds/traffic when I was visiting last week I don’t miss CA at all. The people yes. The SD Humane Society yes. But CA in general, no. It’s not the CA I grew up in.)
On the bright side – Ben you have a guest room waiting if you ever decide to do a Midwest meet-up. And the Californians I know through the meet-ups have an emergency flop spot if CA gets as bad as I think it might. We get more rain than Seattle (mostly all at once in big storms rather than constant drizzle) so water will not be a problem, and I have a basement if the storm gets too fierce. And we have lots more sunshine than coastal San Diego, although after this week I wish some of it would go away. It’s hot!
So that’s my defense. I’m definitely not pro-real estate yet, but I am pro-lifestyle. I do think I am making the best choice for me as several other HBBer’s have done and life is too short to not improve it when you can. Flame away.
You can afford the house and you like the house and the neighborhood.
You made a rational decision with alot of thought.
Enjoy.
No flames here, congrats!
Thanks Oxide.
Now we can come on together and both be the “stupidest bitch(es) that a realtor can buy.”
Although I can’t stand my realtor so I definitely wasn’t paid enough!
Buying for less than rent is a good idea if you plan to stay. I did on in NY in 1994, between bubbles.
Just hope you have the homeownership costs right, and your public services don’t collapse.
-This is not a financial investment. I absolutely believe I will be taking a loss if I sell in the next 10 years - maybe longer. I’m not buying to improve my balance sheet. I am buying to improve my quality of life.
I can definitely respect that if it’s done knowingly and if the bank (and not the taxpayer) takes the loss if for any reason you walk away later.
In your case that sounds extremely unlikely but unfortunately I’m still competing with those for whom it’s not as unlikely.
Enjoy…
Thanks Guys!
Writing that kindof felt like I was going to a long-time AA meeting to tell them I had started drinking again, but I could handle it.
“-This is not a financial investment. I absolutely believe I will be taking a loss if I sell in the next 10 years - maybe longer. I’m not buying to improve my balance sheet. I am buying to improve my quality of life.”
And this is the piece of the puzzle that many here don’t get or don’t care about.
Yes, I could rent a studio apartment in the ghetto for $300 and own a 25 year old POS car, not have cable, never eat out and own nothing but a pair of jeans and a t-shirt. And my balance sheet will look absolutely spectacular in 40 years. But I will have lived a miserable and pathetic life for that 40 years.
So I choose to live in a nice house, drive a nice car, eat out, and live a generally fulfilling life. And my balance sheet won’t be as spectacular in 40 years. But when I’m on the death bed I’d rather have memories of a good life than an extra few 0s at the end of my bank account balance.
Don’t be a moron. SD RE bear DID scrimp and save for 10 years renting while prices were out of control. Prices have moderated a bit, but there is still additional value in waiting a bit. The argument now is what is that value/quality tradeoff. In the under 100k areas it’s probably good now. In the over 300k areas, probably still a good bet to extract more falling price value.
It’s different here in San Diego than in Kansas — a lot different!
Yes, I could rent a studio apartment in the ghetto for $300 and own a 25 year old POS car, not have cable, never eat out and own nothing but a pair of jeans and a t-shirt. And my balance sheet will look absolutely spectacular in 40 years. But I will have lived a miserable and pathetic life for that 40 years.
So I choose to live in a nice house, drive a nice car, eat out, and live a generally fulfilling life. And my balance sheet won’t be as spectacular in 40 years. But when I’m on the death bed I’d rather have memories of a good life than an extra few 0s at the end of my bank account balance.
I get it, but those aren’t the only two choices. There is a small but non-zero chance that there will be a black swan event sooner than 40 years. An event that will result in a truly horrible quality of life afterwards for those that chose to live it up now. Of course I recognize there are other black swan possibilities that will result in a horrible quality of life no matter which decision you make. I personally am aiming for a happy medium where I’ve used money to enjoy life while still preparing for situations where debt is extremely undesirable.
But I don’t want to base my future plan on an assumption of no black swans.
“Prices have moderated a bit, but there is still additional value in waiting a bit. ”
Sure, if all you care about is maximizing balance sheets. My point was that even though waiting anther year or 2 or 20 might do that, I’d rather enjoy life and lose out on some of the balance sheet awesomeness that comes with renting.
Re: Black Swan event… if it does, everyone will be hurt, renter or buyer, saver or spender. Might as swell enjoy life now if post event we’ll all be destitute.
Re: Black Swan event… if it does, everyone will be hurt, renter or buyer, saver or spender. Might as swell enjoy life now if post event we’ll all be destitute.
Yes, but we may not ALL be destitute. In fact I’m pretty sure TPTB won’t be if they still have their heads. The question is whether anyone else can thread the needle?
So I choose to live in a nice house, drive a nice car, eat out, and live a generally fulfilling life.
We Americans need to find cheaper ways of fulfilling ourselves.
“We Americans need to find cheaper ways of fulfilling ourselves.”
By living in studio apartments? Knock yourself out.
What’s wrong exactly with living in a nice house? I spend 50%+ of my life in my house. I don’t see what’s so horrible about wanting to be comfortable there. I have two small kids that spend hours and hours in the backyard playing. An apartment wouldn’t have that. A rental with a yard might, but I wouldn’t invest the money I invested in making the yard what it is now…swing sets, sandbox, planted a few trees to have shade. In the winter we go out a little further down on the property where it’s sloped and toboggan. And at the very edge of teh property there’s a creek that is a kid’s dream come true for finding frogs, samalandars and things like that. Plus with 2 dogs it’s great to have so much room for them to run.
Yeah, sure the kids don’t need all of that. But I won’t apologize for giving them all of it. I can afford, I’m not stretching myself in any way. To me the enjoyment my kids get from the yard is worth 100X more than the couple of thousand dollars I’d have extra in my bank account had I not built out all the things for them.
There’s more to life than your balance sheet.
I can afford, I’m not stretching myself in any way.
If so, then who cares what weirdos on the HBB think? The problem is there are a bunch of people making the same choice using the same logic whose choice WILL become my problem later on…they ARE stretching, but I’m the one taking the risk. And they’re driving prices up…
And they’re driving prices up…
Yep, as was my point in my anecdote today. I really don’t care how people spend their money but that doesn’t mean, at least as far as housing is concerned, that they aren’t having an effect on the broader market. The lady in my anecdote just set new perceptions, expectations, and possibly comps for an area I want to buy in again at some point.
“There’s more to life than your balance sheet.”
Thank you Mr. Smithers! And if I retire here the higher price/lower interest rate will all make it a wash and it will be paid off long before retirement.
And I see what Mike is saying, but he probably doesn’t realize just how bad “dog property” is to rent. I’m not moving into a mansion. Well, maybe a(n) 1,100 square foot mansion. But I agree that defining ourselves by the car we drive or having the McMansion needs to change. I just want a decent abode that allows me to sleep at night without worrying about gunshots.
Way to go Bear… Congrats and may you build many pleasant memory.
Thanks Zee!
Studio apartments are not so bad. I am the king of cheap living. Air mattress and one barstool in my L.A. studio. My job situation is very unstable.
But my income is high. I started building up cash a couple weeks ago - have to pay the second half of my Roth conversion in 2013.
1/6 of my net worth would buy a very nice house and I can afford north Scottsdale. But I would hardly ever live in it so why bother?
I work in different cities. Hardly drive long trips over 25 miles. Why bother getting a luxury car? My focus is on health and building up enough residual income so that my average annual gain is higher than my annual income.
Mr Smithers said: “What’s wrong exactly with living in a nice house?”
When it’s too expensive. That’s the core lesson of the Housing Bubble Blog: Don’t buy housing when it’s too expensive, regardless of how nice it is, or how much the wife nags you to buy, or how much your peers snicker at you at parties.
BTW, I didn’t have to live frugally for 40 years to afford to buy a house for cash. I lived in various conditions (frugally and “normally”) for 23 years before my savings peak happened to match a housing trough. Now I have housing that will serve me for 30 years, ideally 40. No mortgage. No renting. No finance charges or HOA fees or any other such excessive cost.
If I had bought into housing early, as you intimate I should have, then I would have been screwed in too many ways to relate here. Wrong state. Wrong economic conditions. Wrong career. Renting and moving was the way it had to be, and that’s normal for people during their 20s and even 30s. More than normal, it’s probably ideal. Of course, you don’t rent the high life. Renting sort-of being that you’re “throwing money away”, naturally you shouldn’t pay a high rent. And once you realize that, naturally you conclude that when you mortgage, you also shouldn’t pay a high purchase price. But it’s going to take Americans a long time to understand they aren’t rich and will never be rich, so they should stop making payments like they’re rich.
But it’s going to take Americans a long time to understand they aren’t rich and will never be rich, so they should stop making payments like they’re rich.
Nice.
Sounds like the Oil City plan has been implemented.
But you are in southeast Kansas, damn near Missouri. Any house, whether purchased or rented, can easily be subject to proximity to meth labs, loud parties, and loud motorcycles/quads.
Sorry about raining on the parade
OTOH, if you like fishing/swimming/hanging around the lake, the area is pretty nice. And one thing that most of the people from high income/high home price areas don’t realize is how inexpensive really nice places can be out here. And the property taxes (compared to the coasts).
The problem is getting a mid/high income job, which you have apparantly solved.
“Any house, whether purchased or rented, can easily be subject to proximity to meth labs, loud parties, and loud motorcycles/quads.”
Absolutely agree with you X-GS. But I’m moving out of El Cajon and into La Jolla (the KS equivalents.) Yes, LJ may turn into a slum, but it’s going to be nice a lot longer than EC. The neighborhood I’m moving to is few renters and mostly tenured faculty (college town.) Overall it will be safer. It may be a slum in 2 years, but I may be dead in one. (Kindof hoping not.)
However, the taxes are ridiculous. 1.7%! Of course, I’d rather pay 1.7 on a $100,000 house than 1.1% on a $400,000 shack in SD.
University town? Lawrence? It’s supposed to be nice, congrats. I’m debating leaving CA for some place like that in the midwest, but I worry about finding gainful employment there.
Nope, not Lawrence, although that would be nice! A very small SE Kansas town called Pittsburg. Not Pittsburgh! One half hour from MO,OK, and ARa, so nothing here but lots within two hours.
I’m a small town girl at heart - grew up in Tustin when it was still a small town. KS is very different, but it’s a good difference. I.e. if a kid (college age) sees me heading for a building when I am 50 feet away and they are leaving, they will stop, open the door and wait for metro get there. Very surreal!! But, not much to door and lots of backwards thinking. So pros and cons. Employment is a pain without specialed skills so that scary, but it depends on what you do. If you ever want to discuss this I can be reached at sd.re.b at hotmail dot com. I like the change, but it’s not for all and I’m pretty anti-CA a this point.
Me to get there. Dang, do not like auto-correct on new iPad. Plus it’s so slow!!!
Not much to do. Hate this iPad!
Sorry you had to move from the place you grew up, Bear. I fear Portland is quickly going that route as well. And wow, that does seem Oil City-like. How’d you pick that area?
Oh, and I’m an iPad detractor as well even though I have one. I mean, I couldn’t care less whether we’re going full HTML5 at some point or not, why would you prevent your users from using the full internet?
However, the taxes are ridiculous. 1.7%! Of course, I’d rather pay 1.7 on a $100,000 house than 1.1% on a $400,000 shack in SD.
I pay 1.65% up in Washington state, but we don’t have an income tax.
“Flame away.
”
Naw… I’m probably within a year or two of this myself.
You sure Muggy. Lots and lots of sleepless nights which are only getting worse as we get closer to the close date. And having to listen to the stupidity that is realtorship is frustrating to say the least. Cannot believe how low the IQ is on mine and how entitled she is. On the other hand she found me a house that was off the market so she definitely earned (part of) her commission. But what a slimey profession!
I am pretty secure job wise and have been here long enough to know I can stick around pretty easily another 5-10 years. How are things in your neck of the woods job wise?
“How are things in your neck of the woods job wise?”
Florida’s current Gov. has removed tenure for K-12 teachers — we never totally had it anyway, it’s called a professional contract.
Anyway, my wife and I are grandfathered in, and we loose that if we leave our current district. So, as long as we don’t do something ridiculous (like snort bath salts and hijack a bus full of kindergartners), and stay in district, we both have 30+ years in front of us. We will be set for raising kids, sending them to college, taking modest vacations, and having a modest retirement.
If we buy a house in Florida, it will be our starter and ender home for sure. We’ll spend summers in upstate NY (not this summer though, wifey is taking two classes). Not a bad life…
I’m less concerned about jobs, and way more concerned about Florida in general. There are a lot of things here that get you killed, things that are only here.
I know we won’t get in over our heads and buy something silly. It will most likely be a 1,400-1,600 sq. ft. 3/2 in a non-flood zone, no HOA, no traffic, in an area with decent (not necessarily the best) schools.
The only variable is a pool. Anywhere else in the country and I wouldn’t want the maintenance, but it’s Florida.
The one thing that really keeps me from buying, is that several people have said I’d make a great superintendent, people that have had many years in education, in several different states/districts… that’s exciting to hear, and I do get the chance, I wouldn’t want a house around my neck.
Of course, I’d just stop paying and rent it out for 8 years until, until, until… uh, I’d just keep renting it out and not paying.
“and we loose that”
Lol, Goon, you’ve got me all messed up.
I think all of our spelling/grammar have deteriorated with blogging. And now none of us can spell loose. Lose. Loose. Lose. Whatever!
I tried to snort bath salts, but only had Calgon which did not take me away.
I can’t imagine you or your wife committing those mistakes. Taking out a realtor maybe, but not hijacking more kids!
Any idea how long the promotion will take? 1-2 years I can see waiting. 5-10 would be tough. Being an FB would not be attractive on you.
I say go for the pool. Learn to clean/maintain it yourself and save a bundle. If your not going to be therein the summer find a college kid witho pool skills to house sit for free rent. Having the pool means your the coll house and your kids and friends stay there instead of somewhere with an open bar. (This is of course for when the kids are older.)
But the real question - do you really want to be in upper management?
Good luck!!!
I saw the photos, and can attest that it is a lovely place. You can get a lot more for your money in Kansas than in San Diego.
Thanks PB! It was great to see you last week. Sorry you had to spend so much time with buyers and newly boughts! If you get a chance to see Kevin’s house you should - very retro with lime green carpet. Not my usual style but i liked it and it works for them. Hope you can buy sooner rather than later, although I hate to find out what would rapidly bring prices down to the correct level!
When things do collapse and Jo, Fred, Kevin and I have all lost our homes we’ll be knocking on your rental!
“Sorry you had to spend so much time with buyers and newly boughts!”
The pleasure was mine, and I truly feel no resentment towards people who buy homes, especially if I don’t have to help pay their mortgage.
“When things do collapse and Jo, Fred, Kevin and I have all lost our homes we’ll be knocking on your rental!”
And if prices and rents go totally crazy skyward, pricing us out forever, I will console myself with the sage words of the librarian where I work: ‘Possession is 90 percent of the law.’
06/29/2012
Irritation in Berlin over Euro Summit Compromise
Politicians Demand Delay in German Bailout Vote
Members of Germany’s Left Party protest against the EU fiscal pact before a planned vote to ratify the treaty in parliament on Friday.
dapd
Members of Germany’s Left Party protest against the EU fiscal pact before a planned vote to ratify the treaty in parliament on Friday.
Politicians from both inside and outside Chancellor Angela Merkel’s government are calling for the vote on the euro bailout fund scheduled for Friday evening to be pushed back. Too much has changed since the marathon summit in Brussels, they say, and they need time to sort things out.
Info
Following Friday morning’s compromise deal at the European Union summit in Brussels, a number of politicians in Berlin sought to delay a key vote on euro rescue efforts planned for Friday night. They are angry over changes to the agreement, which now eases bailout conditions and also calls for the permanent euro bailout fund to provide direct recapitalization for shaky banks.
Members of Germany’s opposition, the Social Democratic (SPD) and Left parties, as well some politicians within Angela Merkel’s own coalition partner, the Free Democrats, called on the chancellor to delay the vote on ratifying the permanent euro bailout fund, the European Stability Mechanism (ESM), and the fiscal pact.
“The open question now is whether or not we can vote on the ESM today or if that is not the case,” said Carsten Schneider, the SPD’s budgetary policy spokesperson.
Jürgen Koppelin, a member of the Free Democratic Party, called for a delay in Friday evening’s planned vote to okay funds to shore up the ailing euro, saying his party did not want to see the watering down of the criteria Merkel agreed to Friday morning in Brussels. “The position of the FDP up until now has been that the criteria cannot be eased,” he said. “Talks within the coalition are necessary.”
“My immediate advice is to postpone the vote until next week and not to hold it now,” he said.
…
Prepare For The Coming Housing Collapse
http://www.businessinsider.com/another-housing-collapse-is-coming-soon-2012-5
From the article:
What is Really Happening Now
We hear that California markets are showing signs of revival and that prices are rising in certain markets. Let’s see. Here are the latest figures from trulia.com.
In Los Angeles, trulia reports that the average price-per square foot for homes sold in February through April was down 9.3 percent year-over-year for 3-bedroom homes and down 8.7 percent for 2-bedroom homes.
In San Francisco, allegedly one of the hottest areas in the nation, the 3-bedroom average price-per-square-foot was down 4.7 percent year-over-year and 1-bedroom price-per-square foot was down 8.1 percent.
Price-per-square-foot statistics are the best way to compare prices because it does not matter how large the house is. Median prices are skewed by square footage as well as by the percentage of distressed properties sold.
Here in Connecticut where I live, double-digit price declines are commonplace:
Fairfield County – down 10.7 percent year-over-year
Darien – down 13.5 percent New Canaan – down 15.7 percent Norwalk – down 13.8 percent New Britain – down 15.3 percent Branford – down 15.9 percent City of New Britain – down 15.3 percent City of Hartford – down 14.4 percent
These statistics come from Wm. Raveis & Co.’s website – raveis.com. They are the largest family-owned brokerage firm in the northeast with offices in 7 states.
Their reputation for integrity is excellent. Try it. You can search any town/city in six states in the northeast plus Westchester County in New York. No indices here, just the raw data.
For what it’s worth, I just checked the NAR stats. They show declines in the markets that haven’t adjusted (ie. NYC) and stabilization in markets that had cratered.
Check data for Cambridge and Marion in MA for examples of areas that are seeing gains in prices. Anybody have ideas as to why? What is different about these towns as compared to the rest of eastern MA?
Why won’t these second liens be discharged in a bankruptcy court?
Oh dear.
http://news.yahoo.com/dude-casual-sounding-bankers-emails-tell-chilling-story-000024187.html
LONDON - The emails sound casual: Dude reaching out to dude, begging for favours and offering rewards ranging from coffee to fine champagne.
But what the bankers were allegedly doing was as serious as it gets: fixing an interest rate that affects the cost of half a quadrillion dollars — that’s $554 trillion — in financial contracts around the world, from mortgages to loans.
It’s only a problem if your investment is indexed to LIBOR.
If 1.6 billion disappearing from MF Global isn’t a crime, then this isn’t even a flesh wound.
Invest in the Criminal Bankster Cartel. That’s where the money is. That is the future “growth” industry.
If 1.6 billion disappearing from MF Global isn’t a crime, then this isn’t even a flesh wound.
Not everyone is a bundler to the presidential campaign. The SEC is going after Falcone guy now. Falcone must be kicking and screaming, why didn’t I bundle?
“…fixing an interest rate that affects the cost of half a quadrillion dollars — that’s $554 trillion…”
And Barclays got off for a $450 million fine? $450 million is less than one millionth* of $554 trillion, by the way.
* $554 trillion divided by $450 million = 1,231,111.
I’m holding out hope that the Lilliputians will still find a way to tie down Gulliver before this is over.
ft dot com
June 29, 2012 8:12 pm
The gathering storm
By Patrick Jenkins, John Gapper and Brooke Masters
Flaws in banking fuel the case for structural and cultural reform
“We are being dishonest by definition and [we are] at risk of damaging our reputation in the market and with the regulators.”
Thus wrote one Barclays banker, on December 4 2007, to “manager E”, according to regulatory documents published this week by the UK Financial Services Authority. Five years on it is clear that the subject of those prophetic words – the price-manipulation scandal in the interbank lending market whose vast scale was unveiled by regulators this week – has done a lot more than just reputational damage.
Barclays has paid a record £290m in combined fines to settle investigations by the FSA, the US Department of Justice and the Commodity Futures Trading Commission (CFTC), the US futures regulator.
Now the scandal threatens to unseat the bank’s top management, with some shareholders, commentators and politicians calling for the head of Bob Diamond, chief executive; David Cameron has gone almost as far. “People have to take responsibility for their actions and show how they are going to be accountable for those actions,” the UK prime minister said on Thursday.
On top of the wrongs of the scandal involving the manipulation of the London Interbank Offered Rate (Libor) – a central financial reference point for everything from the rates charged to credit card users to the pricing of commercial loans – in the eyes of many politicians and much of the general public Mr Diamond carries a stigma: he is a banker.
Across much of the western world, bankers have acquired pariah status since the financial crisis began in 2007 – blamed for helping to cause it, and for continuing to pay themselves a fortune, even when governments have bailed them out and shareholders have seen their investments plummet.
Compounding that has been a succession of consumer mis-selling scandals, one of the latest and largest of which in the UK has forced banks into a forecast £6bn of compensation payouts over missold payment protection insurance (PPI). A recent massive IT failure at the largely state-owned Royal Bank of Scotland group that saw customers unable to conduct basic banking business has only added to public questions about competence in the sector.
As such the prime minister’s words were a pithy expression of the mounting fury among politicians over the excesses of what remains one of the UK’s biggest industries, but also one that is increasingly scorned by the public and which policy makers have – as yet – to bring it to heel.
The Libor affair adds a powerful dimension to the reputational disaster enveloping the banking sector – with the potential to eject bank bosses around the world and harden regulators’ resolve to pile yet tougher rules on an already beleaguered sector.
Though it sounds more abstruse than other recent scandals, Libor has a very real-world impact, underpinning the terms of $350tn of borrowing contracts worldwide. Libor rates are set by a panel of banks on the basis of what they disclose to be their average cost of interbank borrowing. But as the documents divulged by regulators in the Barclays settlement suggest, the process was abused by a number of those groups systematically and over a period of many years, both before and during the crisis.
Lord Turner, chair of the FSA, says “we would be fooling ourselves” to assume the alleged malpractice in Libor were not current in other types of trading. “There is a degree of cynicism and greed which is really quite shocking…and that does suggest that there are some very wide cultural issues that need to be strongly addressed.”
…
More
On this story
Libor firestorm engulfs Diamond
Editorial Shaming the banks into better ways
In depth Libor investigation
Q&A What went wrong with a benchmark rate?
Political mood tips against bankers
On this topic
Barclays urged to claw back bonuses
Barclays ignored warnings on rate rigging
BoE governor calls for revamp of Libor
Financial services sector sheds 11,000 jobs
With many more to come…to include LA
——————————
Will Los Angeles Follow Stockton’s Lead of Bankruptcy?
KCET | 06/29/2012 | Jessica Levinson
The City of Stockton, the now-infamous port city located in Northern California, is declaring bankruptcy. It is the largest U.S. City to take the drastic step of declaring bankruptcy. Stockton is facing a $26 million budget deficit, it has stopped making bond payments, and employee pay, and health and insurance benefits, have been cut significantly.
Is Los Angeles next? There is no doubt that it is in bad shape financially — and I mean really bad shape. But for a number of reasons I do not think Los Angeles will go the way of Stockton. Its leaders, hopefully, still have a few more tricks up their sleeves. The key here will be to look at other available options.
The situation in Stockton is unique for a few reasons.
First, Stockton was among those cities leading the country in foreclosures. Indeed it has the second highest rate in the country. Too many people bought houses they can no longer afford. When houses are foreclosed banks lose money and the government loses property tax revenue. That is and was a huge issue in Stockton.
Second, Stockton gave public employees salaries and benefits that the city, in hindsight, simply could not afford.
Here, Los Angeles’ chief administrative officer, Miguel Santana, is pushing hard for both higher taxes and lower spending. Los Angeles is and should consider adjusting the retirement age for new city employees. We are also exploring the option of outsourcing or partnering with non-profits to help run the zoo and other city-run properties.
Stockton joins thirteen jurisdictions that declared bankruptcy last year, and seven that filed for bankruptcy this year. That is a marked increase in the number of jurisdictions declaring bankruptcy. Hopefully Los Angeles will buck this truly disheartening trend.
And the hits just keep coming.
Hope and change - for tax cheats!
————————
Tax cheats given $1.4 billion in stimulus loans
Washington Times | 6/27/2012 | Stephen Dinan
Tax cheats were given $1.4 billion in government-backed mortgage loans under President Obama’s economic stimulus, and the government doled out at least an additional $27 million in tax credits to delinquents who took the first-time-homebuyer tax break, according to a government audit released Wednesday.
Under government rules, delinquent taxpayers are supposed to be ineligible for the mortgage insurance program unless they have reached a repayment agreement with the Internal Revenue Service. But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.
That meant FHA insured $1.4 billion in mortgages for 6,327 borrowers who collectively owed $77.6 million in unpaid taxes, or an average of more than $12,000 each.
The purpose of this plan wasn’t to put people in houses.
It was to give the banks an opportunity to do a Do over/reset on their crap securitized/tainted MERS mortgage paperwork.
Didn’t matter if the new owner paid or not. All they needed was a signature on a new mortgage.
Significantly more housing units were built during the boom to meet demand that really didn’t exist. Who’s to blame for creating that excess supply?
A. Builders (contractors, construction engineers, etc)
B. Mortgage lenders
C. Government
D. All of the above
Seems like you have to go with government, because you KNOW what the rest of them will do, given the chance. Government is the only entity that could and should prevent it. But once they’ve been captured, let the looting begin.
But government, of course, is (or at least was) us. Until we gave it to the looters…
I agree with that. The vast majority of the blame goes to the government for making the rules that facilitated all the insanity. All other parties were mostly responding to that.
What rules were those? Because the Commodities Modernization Act was completely ghost written by the FIRE sector.
Just as the overhauled bankruptcy laws were written by one of the world’s largest CC and retail loan companies.
So yes, in that sense, I guess you could say it was government… only… well… they were elected, weren’t they?
Then they were RE-ELECTED.
Yes, Congress tends to be lazy and often times relies on special interest groups to write laws. But they don’t become laws until our elected officials vote on them and make them laws. You can write your own version of the Commodities Modernization Act and send it to your representative, but that doesn’t mean it automatically becomes law.
And you’re right, it is absolutely our fault. We are the government. Can’t complain if we keep electing candidates from the same political machine that are bought and paid for by big money special interest groups.
“You can write your own version of the Commodities Modernization Act and send it to your representative, but that doesn’t mean it automatically becomes law.”
That’s the difference between me and a powerful special interest group. If they spend the time and money to write up a law, you can be pretty sure it WILL pass (if the congressmen want $ from the special interest group for their next campaign)
Hey, Missmouse, where are you in AZ? I’m in Tucson.
Any construction engineers on the board care to weigh in? Truth? Thought you might have some useful insight into the psychology of someone that makes his living (during the brief moments of the day where you’re not repeating your mantra on various blogs and comment sections) creating more supply of something that he clearly believes there is already too much of? Or do we give you a pass because you don’t appear to be gainfully employed at present?
You’re underwater crack power…. and you’re a liar.