patrick.net

The military has traditionally provided a lot of opportunities for kids who would otherwise have no chance. Every single ex-military person I know is grateful for the fact.

However, they got before Dubya's army.

Incidentally, higher wages and better armor protection has been a huge progressive issue since 9/11. But why have that when Cheney and Rumsfeld can give another $20 billion to useless contractors (my father is an IT administrator in DC and DoD's useless wastes of money even manages to almost appalls him).

My understanding is that the housing conditions really vary from site to site. Some sites are really bad - mold blah blah blah.

[OT OT] While doing a search for "Uncle Sam Slumlord" (which I seem to recall as being a phrase from the show), I found this gem:

http://www.lp.org/yourturn/archives/000143.shtml

The Federal government owns huge tracts of land throughout the US, especially in the West. Uncle Sam owns nearly half of all acreage in California. If the government opened up even 1% of those holdings for private purchase in California the effect on the superhot speculator's market there would be profound. Perhaps the long-inflating California real-estate/housing bubble might finally burst. This wouldn't "cost" anything to the taxpayers, and would potentially attract billions of voluntarily offered dollars to the government coffers.

Why is nobody talking about the "asset liquidation" option? That would seem to be something that every libertarian -- and millions of ordinary citizens looking for affordable housing -- could support.
Posted by: James Anderson Merritt at November 18, 2005 01:41 PM

Oh of course! Why didn't anyone think of that! That'd make housing affordable instantly! Duh!

Just like relaxing pollution laws would allow companies to build more refineries and lower gas prices. (Hint: The ROIC on refineries is less than that of a T-bill.)

Oh brother.

I've come in late... just some random tail-end thoughts...

In the Australian Defence Force (ADF), you are exempt from income tax for the duration of any active service, which would normally be about 30% of your earnings. You also get some sort of significant combat pay. Do they do that in US armed forces? The ADF is a small 'professional' army which is however finding it hard to recruit at present, presumably because unemployment is low and people don't want to get posted somewhere unpleasant. However, the salaries I've seen in Defence seem reasonably high, and they get generous accommodation subsidies. They often spend the money on high end V8 supercars...

Moving to Oz or Canada is not a bad idea. Oz has strict gun controls, and a reasonable welfare state. Climate and drought is a problem at present. I would recommend Melbourne for affordable quality of life, but equally well most other capital cities would do, depending on climate preference. I don't like hot and humid, personally... then there's also the question of culture, intellectualism and so forth... and transferability of skills and relative reward...

@allah,

Your classification is too simplistic. People are impatient. And not everyone believes what we here believe. I don't believe everyone who is buying a GF. Many are actually getting price lower than what would have fetched 12 months ago. This is called catching the proverbial falling knife.

With economy not in any obvious current trouble, stock market doing well, job situation in BA still strong - and mortgage interest still low, people will buy. The bidding wars haven't exactly gone away, although there EXTREMELY RARE.

The difference is the change in psychology. More people are getting aware of what might be lurking beneath this apparently endless prosperity. There is nothing more to add to this fire. Every fuel has been used. The bubble is simply getting exhausted. The slow crash has begun. Any change - bad stock market, increase in rates - anything can accelerate the downturn.

Person and eburbed,

I know 2 cases in close acquaintance who are move-up buyers in this market. They are buying (one has already bought) house double what their current house is worth. No matter how much gains they have, it's highly likely that their monthly payment is actually increasing. From all I know, they have taken more debt than their current house's worth.

I am not sure I understand this. I would have grabbed this once in a millennium opportunity to use the appreciation to increase my equity in the home. Not to go deeper in the red. Such people who were lucky to have bought 10 years ago, may not feel that lucky 10 years from now.

alien,

I wonder if your Brighton bricks had the same problem that a lot of masonary in SF has, that they used beach sand in the bricks and mortar? I know that a lot of the mortar in older SF housing (older by California standards, late 19th early 20th C) has basically turned to sand because of either the salt content or something in the sand used in the mortar here.

My mom's Cotswold place was very well built. It was probably 100 years older than your Brighton place. It was massive Cotswold stone, really nice looking. Was your place an early Victorian spec construction? It was an extremely popular resort at that time.

The stuff built in the Bay Area in the 1960s and 1970s was a lot of cheap, slapdash speculative construction...These were never built as true places to live in long term, they were built as a quick way for the builder to make money.

SFWoman and eburbed,

Sound familiar? Replace "1960s and 1970s" with this current housing cycle, and you see why I would never by a home built today by the big HBs, only to have some new version of eburbed complain about its crappy construction 30 years later.

Ben's current California thread (#2143) mentions Sonoma County, and about halfway down Athena has really wound up and let fly.

Gotta be a candidate for rant-of-the-day. :D

astrid,

If you are considering coming to Australia, and cashing out your US Pension funds to put them into the system here, there are a couple of things you should consider. Our Treasurer announced some pretty significant proposed changes to the local rules last May, and these will almost certainly come into being because the major Opposition party has said they will support them.

Firstly, there are a whole heap of tax concessions in the Superannuation (our term) area, but these would NOT apply to any money you would bring in with you. Your money would be classified as 'undeducted contributions', which basically means after-tax funds.

Now, there is an overall limit on the amount of undeducted contributions that you can pay into your Superannuation each year. I know this sounds weird, but there are reasons. Hopefully these will become clear further on in this post.

Currently the limit is $A150K per tax year (July-June), but there are both permanent and temporary loopholes. The permanent loophole is that you can pre-pay up to 2 years (and stay pre-paid until you start taking money out instead of paying in). The temporary loophole is that you can pay in up to $A1M for this financial year as a transition concession. Combining the 2 means that the absolute maximum you could pay in this year would be $A1.3M, which is about $US1M.

Until May 2006 you could pay in any amount of undeducted contributions, but there were tax implications which have now been reversed.

So anyone thinking of coming to Oz with more than $A450K of funds that they intended to put into Superannuation should do so before 30th June 2007. Otherwise they will have to feed the funds in over time.

OK, now the reason why there are these restrictions on people putting their own money into the Superannuation environment is the tax treatment of the money once it's in there.

In short;
While in accumulation mode, Superannuation fund income is taxed at 15%. This compares to companies at 30% and the top personal rate of 47%.
Once a Superannuation fund is in pension mode it doesn't pay income tax.
If a fully funded Superannuation fund is paying a pension to a recipient over 60, the recipient doesn't pay income tax on the pension.

So, if you set up a private fund, once you reach 60 neither you or the fund pay any income tax at all. The only limitation is that you have to take out at least a certain percentage of the fund's value each year as a pension. Hence the need to have annual limits, as otherwise rich old people would be instantly putting all their wealth into Superannuation to avoid tax. As it is I consider the rules to be too generous to self-funded retirees.

Needless to say, the financial planners have gone berserk over their prospects from selling this proposition to clients, so I would expect further legislation over the next few years to rein in the "creativity".

Eburb says,

Private (E1) $15,282**
** Pay for Private (E1) will be slightly lower for the first four months of service.

That $15,282 is just base pay. Tax free allowances are added to that. For example, in the Langley AFB area (Virginia), an E-1 gets $1,000 month Quarters Allowance if he/she is married and lives off base. For $1,000/mo in this area, you can rent (but not buy) a newer 3 bed - 2.5 bath 2 car. The Quarters Allowance is higher at bases in higher living cost areas. Now add free family medical to that, and 30 days paid vacation per year.

When comparing military pay, you need to compare apples to apples. An E-1 is an 18 year old fresh out of high school with no job skills. To be congruent when talking about E-1 pay, compare the military pay, allowances, benefits, and training with those of a high school graduate level McJob.

SFWoman,

"My mom’s Cotswold place was very well built. It was probably 100 years older than your Brighton place. It was massive Cotswold stone, really nice looking. Was your place an early Victorian spec construction? It was an extremely popular resort at that time. "

It's a pity that your mom was unable to keep that house. I just saw an ad in Architectural Digest asking almost $20 million for a largish (looks to be a total of 1,000 sq meter at the most) Cotswold cottage.

ajh,

Much thanks for the information.

I was originally warming towards seeking a Canadian passport, but based on the great posts here, Australia sounds like a much better deal. Plus, my boyfriend is not a fan of cold weather and has a first cousin married to what his family describes as an "Australian Donald Trump." Maybe it's time to investigate the local (poisonous, biblical, or toupee wearing) wildlife.

Now I just need to talk him into cashing his frequent flier miles for a nice long vacation long under...

"Now I just need to talk him into cashing his frequent flier miles for a nice long vacation long under… "

-long
+down

Apologies to all. Good grief! My grammar is almost as bad as Casey Serin's grammar.

The regular military is not a terribly bad deal except for more senior level officers (if only because the military/civil service hasn't suffered corporate level executive wage inflation). If you're careful with money, you can retire by your forties or start a lucrative second career outside(especially beneficial in these times - when defense contractors are desperately looking for people with ready made security clearances).

In post WWII peacetime, the military has been a good deal and the route to upper mobility for a lot of poor kids. But Dubya's war isn't worth getting killed or maimed over - I'd go so far to say that this strategy is not even worth the death of the Bush twins over - nevermind the 3,000+ troops killed and God knows how many horrifyingly injured.

astrid,

My mom bought the place in 1984 or so, when the pound was about a dollar, it is too bad she didn't keep it, I'm sure it would be worth a fortune now.

Have you seen this today?

http://www.marketwatch.com/news/story/home-builders-say-orders-hurt/story.aspx?guid=%7B531BB129-92AB-4A1C-A04F-292D93CD276F%7D

Cancellations hit home-builder orders
D.R. Horton, Meritage sales hurt by nervous buyers backing out of contracts

By John Spence, MarketWatch
Last Update: 10:19 AM ET Jan 9, 2007

BOSTON (MarketWatch) -- A pair of residential builders Tuesday said they're still seeing home orders decline as buyers anxious about falling home prices cancel their house purchases.
D.R. Horton Inc.'s sales orders for new homes fell 23% during the first quarter from a year earlier, the company said.
The drop comes as home builders facing higher buyer cancellations in midst of a U.S. housing slowdown offer more inducements to sell houses...."

These 'anxious buyers' are a little late to the housing bear party, aren't they?

Astrid says:

The regular military is not a terribly bad deal except for more senior level officers (if only because the military/civil service hasn’t suffered corporate level executive wage inflation).

Good point about the wage inflation. This is why if we did go to a draft, we should not just draft for the infantry. If the country is in such an emergency mode, we need to draft executives as well to run depots, munitions plants, shipyards, etc. And since jobs at this level are typically done by Colonels and Generals, that is the rank and only pay they should get. Just like the conventional draftee, these upper level folks would have to edure sacrifices such as being assigned where needed, interupted careers, time away from famly, etc.

Headset,

What's up yo!

My experience with the military and gov't in general is that it's already "top heavy". We have tons of guys that want to handle things from an "operational" stand point (we just can't find guys that want to gas up airplanes).

I toured Cubi Point in the P.I (after Mt. Pinatubo erupted) and the guide really let us go any where we felt like. With all the vegatation stripped away we saw buildings I never knew existed. I guess even after 4 years all I really knew was the airfield itself. There where so many "admin" offices, it was pretty obvious "pork". I am still amazed after all these years the sheer amount of people that had 9-5 M/F jobs we could only dream of. Bastards.

OT...but very evil.... ;-)

Wondering how many of the 'million dollar homes' currently ablaze in Malibu were for sale?
I tried looking up 'old malibu rd' on ZipRealty, but didn't get any hits.

I said it was evil, but you have to wonder....

speedingpullet,

And did you see the massive effort underway to save those homes! Incredible! You could see fire trucks lined all up and down the road. But don't worry, they'll make out just fine. Gold-man is on his way with a check!

Well, it is very hot and windy down here at the moment - as the crow flies, I'm only about 10 miles away from the fire. As for the speed and size of the response - well , one of those places belongs to Susan Sommers!!.

But that's CNN for you - they cover about 5 stories a day, to the detriment of any other 'news', no matter how much more interesting and relevant other stories might be.
You need only to remember the hoo-haw about the supposed JonBenet killer being brought back from Thailand to see how easily CNN gets sidetracked. I feel sad for anyone who loses a house to fire accidentally, but CNN's 'smouldering ruins of famous people's houses and cars' just goes to show that money always makes news. Wonder if anyone losing a house in say, Panorama City or Valley Glen would get as much coverage....

As I said, I'm being evil and devisive - but I know that there are several 'beachfront' Malibu properties on Zip...one of which has the dubious honour of being the oldest MLS in the search - listed on 10/17/03 (1180 DOM) and has had two price increases since then - from a paltry 6.2 million to 7 million. Guess 7 million is the magic price for a quick sale, not.
Interestingly enough, only about 1.5 miles away from the fires....

I predict more than a few of these behemoths will get cripsy-fried before the end of this.....not just Malibu either. Very little demand for multi-million, 16,000 sq ft 10 bed/12 bath mansions at the moment.

To her credit - Susanne Somers said 'well, I dont have a child fighting in Iraq and no one got hurt, so we'll rebuild' (to paraphrase).

Good to know that, unlike CNN, she has a good grasp of what's important in life

speedingpullet,

Decades on Market?

Susanne might have been more accurate in saying she doesn't have a "grand" child in Iraq?

Anyway, I agree. There isn't much if any demand for these "McAlbatrosses" be it in Malibu or elsewhere. They are attempting yet another MEW based development out in Lincoln City, OR for those that could use a laugh. They say the surfing there is as good as Maverick! (Only a "little" colder perhaps?)

www.oliviabeach.com

Aren't these prices per sq. ft. about equal with The Hamptons?

DinOr,

A new business opportunity, Torch, Inc?

No questions asked, just 10% of the proceeds.

Headset,

I have a buddy in Vegas that knew a guy back in Chicago he called "Roman" (as in Roman Candle?). I guess the guy's claim to fame was that no one ever got hurt when he was doing one of his little "jobs".

One of the things I definitely miss about the old overvaluedblogspot was the author's uncanny ability to seek out homes where proximity to water (of any kind) were the primary factor in pricing! Granted I'd like to have a home in Malibu too (not sure what I'd do w/it) but so many of the homes he'd point out were on some canal or back water!

The Olivia Beach development looks to be the 3rd or 4th this "crew" has worked on and these homes anywhere else would go for about 225K (vice 470K) even a few blocks inland! It's just amazing to me how our heads go right out the window when a water view is involved! (It's just not that big a deal).

ajh,

any chance the Labor opposition may put up a decent fight in the coming election? I happened to land myself in a pre-dominantly labor state (QLD) over the vacation with the uncontested Premier Beattie, and everyone I talked to seem to have a disdain for Howard, but I suspect that may be due to my sample bias.

Check this out!

It's a MLS search system based on keywords and other stats. You can search by "Motivated Sellers" - and find places that have dropped the price by 10%

http://www.mls-2.com/staticpage.jsp?pageName=bargain_hunter.jsp

AAPL is soaring today.

Let's see if this translates to a bump in Cupertino housing prices.

OT, iphone is really cool, I would love to get my hands on one.

IMHO, AAPL should not have tied itself up with Cingular, this is a huge strategic blunder. A phone like this is able to sell on its own, it should work with all networks. The Cingular partnership makes no sense whatsoever.

I don't think Cupertino housing price is driven by AAPL, it is not a requirement of the employment contract that all AAPL employees should stay within 2-mile radius of where they work.

So I'll guess that Apple chose Cingular because they also want to sell their gsm phone in Europe. However, a lot of us here don't like Cingular, so I'll never buy the iPhone on that point, let alone for the $500 msrp.
It also looks fragile. I dropped my Motorola 30 ft onto concrete and it still works perfectly.

good post, ha ha

“Once mortgage holders realize that their homes are worth tens of thousands less than the amount of their loan they are likely to “mail in their house keys rather than make the additional mortgage payments.”

That assumes that they're rational. Dangerous assumption!

Someone please help me understand this.

Zillow shows the following sales for a house in my neighborhood (1366 Glenmoor Way, 95129):

Sale History
09/14/2006: $150,000
07/25/2006: $1,300,000

I just know it was listed for $1.25 mil, then sold (once) to the folks now living in there...

Another one (1528 Ardenwood Dr, 95129) was listed for $1.6 mil last year, then the "for Sale" sign just disappeared.
Now Zillow says it was actually sold:

Sale History
07/27/2006: $350,000

What's going on? Does Zillow have incorrect data? Is someone trying to save themselves some property tax? That can't work, right?

Does anyone feel like completely redeveloping patrick.net into a phpBB-type format, including bringing all the old threads across, and gifting it to patrick, so posts submit properly? No?

Girgl,

it is an inter-family transaction. When someone's name is ADDED to a deed, only the portion of the home associated with that transfer is recorded. For example, if the home is worth $1M at market value, and it's co-owned by a couple, adding a son's name will imply that the son gets $330K of the value, therefore, a transfer of value of $330K is recorded.

There is also some confusion about whether the loan balance is subtracted from the transfer. In any case, when you see a transaction obviously out of whack from the market prevailing value, it implies a transaction within the family by adding a party's name to the ownership.

OO Says:
it is an inter-family transaction.

That makes sense. Thanks for shedding light on this!

oh, got it - there was a 'magic word' in it after all...

OO Says:
any chance the Labor opposition may put up a decent fight in the coming election? I happened to land myself in a pre-dominantly labor state (QLD) over the vacation with the uncontested Premier Beattie, and everyone I talked to seem to have a disdain for Howard, but I suspect that may be due to my sample bias.

no, no chance, heh. Labor have put up Kevin Rudd as alternative PM, he is calm, rational, articulate, and, most importantly, a fervent 'socia1ist Christian', where Labor hope that he will out-Christian the Conservatives' tokenistic claims to Christianity in the scared, Christian, conservative electorate. Unfortunately, he is a little too dull and colourless and not combative enough to win on the 'charisma' effect, in my estimation. Time will out. The main reason John Howard has stayed in for so long is that he 'appears' honest and sincere to the naive, he is a slippery liar who always talks his way out of trouble with a convincing rebuff, and changes and borrows policies from other parties as needed to keep people happy -- but people don't particularly like him -- he's just someone who appears reliable. He also slashed the govt deficit and brought it back into a healthy surplus very quickly. Other than that, the parties are approximately equal in terms of mediocrity. I find the Conservative Ministers completely unpleasant and unacceptable human beings and always wonder who voted for them -- everyone I know vocally denies voting for them after each election. ;)

Conversely and perversely, every state govt is presently Labor, altho they can't win a trick Federally. I don't know how that works. Except that Labor is increasingly centrist/right wing and conservative in general, having been co-opted by the Right ages ago. And Qld had a particular notorious National Party Premier for a very long time, to be replaced by Beattie.

There has been an increasing mistrust of big party politics in the electorate, and both parties are losing preferences to minor parties and independents, which worries the Labor govts at state level. There could be more seats returned to Greens, Independents and other small parties in the next NSW state election in March 07 (as much as is possible in a two-party-preferred voting system which is not proportional or truly representative).

oops, I meant intra-family transaction.

San Francisco Says:

January 8th, 2007 at 7:39 pm
Did 4th Qtr 2006 California foreclosure rate just beat 1st Qtr 1996?

4th Qtr 2006 91,292

Is that a record? That is a seriously large number.

A Note from the Hinterlands

I've just returned from Charleston, West Virginia, where my brother is a broker for Merrill Lynch and my sister-in-law an associate for a local Coldwell Banker affiliate. I asked them how Charleston was weathering the effects of the current RE market and got faintly puzzled looks from both.

While there hasn't been much interest lately in large, new homes, a number of which have been built since the mid-nineties for non-natives, the sale or purchase of SFHs continues at the same modest rate typical of the past twenty years or so. She has four in escrow at present. None of her clients make use of unconventional financing.

According to my brother, the rise in valuations experienced elsewhere over the past seven years had no local equivalent - Charleston's residential average values have fallen modestly since 2000.

Charleston is a small, urban capitol city. Macy's and Starbucks and Marriott are there. Benz, Lexus and Jaguar also. I wonder if coastal America is aware of such places and also how many fly-over locales are similar. It was like entering an alternative, parallel universe.

I added a note to the comments.

I added a note saying she looked pretty...