patrick.net

Peter P,

With all due respect, I think this country has been ODing on patriotic platitudes for about 6 years. Having said that, I wouldn't support Red Whine if he truly intends to follow through with his statement. Muslim Extremists' idea of the good life is not something that 99.99% of the reader here would be comfortable with.

Red Whine,

BTW, I do really like your assessment overall. I think California will find it's equilibrium one way or another, and if that equilibrium ends up meaning I have move elsewhere, so be it. No point crying over spilled milk.

I still do not see what will keep the bubble mania alive except wage increases. It's the price to income ratio that is most important.

The easy money has limits. Even if someone offers me a 1% interest on a 10 million $ home, I still cannot afford it. I just don't get paid enough to pay the interest back. Low interest rates cannot keep the price appreciating forever.

Same with rent increases. My rent needs to double to make even with the PITI payments for the same apartment. Why would the rent double ? Yes, it has gone up. I see myself paying 10% more rent next year. That will not force me to take a suicide loan.

No. I do not buy the soft landing (stagnation) theory. Show me wage increases - apart from some specialized techie jobs. And if my salary doubles, I wouldn't mind buying that 1M home.

Okay, let’s just disregard all the knowledge of economics, history, logic, etc.

Huh?

Randy,

I was trying to see things from the specuvestor's perspective. Also, I thought it might be fun to have everyone explore what they'd do if the specuvestors were right, without getting into why they can't possibly be right.

If that all turns out to be true I'll resort to becoming a popular underground Bigfoot Hunter and Ghost Tracker, but with a distinctively Postmodernist bent.

Since it's Thursday and I'm full of Ikura, I'll predict that the above won't happen.

burbed,

Where do you live?

Peter P:

Seriously, I didn't think you'd be able to top "Be patriotic!" but somehow, you've pulled it off.

"Do you hate boomers far the sake of hating them?" I'm not even sure where to begin. Yeah. That must be it. I needed a group to loathe and picked them randomly from wikipedia.

"If it turns out that the RE bulls were right, we should quickly reverse course and increase RE exposure."

Right! No one is actually PRICED OUT -- we're just fence-sitters waiting for the greenlight to buy a $650,000 condo. Have you ever heard of an affordability index? When they say only 6% can afford to buy the median priced home, that means 94% CAN'T. It doesn't mean "94% just don't feel like it." I get the same blank stare from both my Boomer acquaintances and my math-challenged friends when I throw out numbers, but here goes anyways:

Median condo in Area X: $650,000
Required Down Pymt: $130,000
PITI at 6.5%: $3,287 /mo
Prop. Tax: $677/mo
Subtotal Before Insurance, Maintenance, Etc.: $3,964/mo
(Gross) Median Income in Area X: $70,000/12 = $5,833/mo

What could go wrong here?

Typical Math-Challenged Boomer Responses:

"Just brown bag your lunch for another year!"

"We had to stretch to buy our first home too!"

"Maybe you'll have to postpone a new car for a few years, but you can make it work (even if the monthly is more than your gross income)!"

Notice none of the typical boilerplate responses address any financial
realities, just more nice platitudes that look good on a bumpersticker.

I can guarantee you anybody under the age of 45, OR making double or less than double the median income, doesn't "see opportunities" unless they're on Uhaul.com.

I enjoyed the exercise of taking Astrid's "What if they're right?" hypothetical and trying to extrapolate, but that being said, I can't wait for the Las Vegasization of America to fucking end and this market to tank.

Did you guys see this?
Now, she’s not desperate…is she?

@LLILLL, my response to here,

(erased for explicit sexual content)

The Boomers are just too fucking self-indulged to even fucking care what is going on around them. Their malaise will be their downfall, there is enough critical mass of pissed off people ( think Michael Douglas in Falling Down) for them to ever possibly win. The Boomer's are fucking lemmings at best, right now they all say in unison "we love our jobs, we'll work for another 10+years" this way they can justify the cash of refi's, why not, they are still rockin/n/rollin, gettin high and having blue pill fueled sex. What happens is this, one of them says fuck it and retires, the rest see how much "fun" Steve is having spending his days, not just his nights, having drug and blue pill fueled orgies, they my friends the mother fucking game is on, watch what happens when the boomer's all try to cash out at once. Watch the arrogance crumble "but it's worth 850K, really our appraiser said it is". Then watch them turn on each other.

Another giant boomer pitfall is the assumption that just because all they care about is money, all that anyone cares about is money. This logic fails when groups don't buy the "but it only goes up, you can make money" What The Boomer hoard fails to realize is that there happens to be a large group of people who aren't looking for a house as a vehical to make money, but rather a place to call home.

I recently obtained 3 bureau credit reports:

EQUIFAX : 799
EXPERIAN : 787
TRANSUNION : 780

Hey I have a fucking excellent idea, (erased for explicit content) so we can all have a good laugh.

You are truly scraping the bottom of the fucking barrel with this one. Why not just post a letter from your Mommy saying what a prodigy you were?

Well, America is loaded with victim groups and people who hate victim groups. The majority of the population seems to fall into both groups.

HaHa and X,

Play nice, please.

HaHa,

I think your main problem is that Surfer-X got here first. GC's problem was that LILLL got here first. America's main problem is that Boomers got here first.

:)

LILLL and Surfer-X,

Okay, sorry you two, but I find this all this blatant sexual content rather crude and offensive. I can't control other threads, but I'd rather not have this on my thread.

what is the basis of 12 years, not 15 or 10?

I can predict — you credit scores are all below 700 ….

Actually fuckwad they are all above 800, and unlike you I carry Zero, that's with a Z, debt.

Asshole. hey what do you make again? Just curious AS I HAVEN'T FUCKING READ IT A 1000 TIMES.

You fucking belong in the Bay Area, I see no other place for one such as you. Do you have a fucking t-shirt with your salary on it. How many fucking times a day to you tell people what you make? or are we just amazingly fortunate? Asshole go fuck yourself.

Since I was not here in 1970s, does anyone recall how much a burger, a can of coke, gas/gallon cost back then? How much has price inflated in general? The CPI calculation gives me an index of around 3.5x (1970 being 1, 2005 being 3.5), but I'd like to hear from anecdote experience since I don't trust the core CPI number anyway.

Ha Ha, i went ahead and made your very own topic. feel free to post your dribble ad infinitium. . I shall delete all other comments. You are amazing, i feel very fortunate to read the prose of someone that makes such a BA normal salary as yourself.

Peter P Says:
If you think boomers will win, so be it. Design business models to profit from them.

Cocaine-coated adult diapers?
Led Zeppelin-branded walking canes?

LILLL,

Check your mailbox for a longer explanation. There's two separate issues. One has to do with a possibly poorly phrased observation by me. The other is with my thread policing policy.

So X…if I post on the Haha thread, you will delete it?

As long at it is pro-Ha Ha, regaling his magnificence, it stays, any anti ha ha blather will be deleted. Ha Ha makes a lot of money, he deserves this.

SQT,

I guess I'm trying to gauge how we'd feel if the *worst case scenario* happens and if we'd still be able to live with the possibility.

I have my lottery winning scenario all plotted out too. However, my rudimentary math skills prevent me from actually buying a ticket. This is also why I make for a horrible Las Vegas tourist. Damn!

LILLL, I sent it to your info@... box.

John,

I know they'd notice and I make no attempt to hide it. However, there are just areas I'd rather my threads not go into.

John-

I haven't posted many threads, but I will go back and delete the occasional spam that turns up in the ones I have posted.

Image courtesy HARM-X ® Industries, Inc.

Excellent! However, now I'm going to have Harris's leathery face in my nightmares.

who is the woman next to Lereah? She needs a stylist to fix her hairdo.

Katherine Harris

http://en.wikipedia.org/wiki/Katherine_Harris

I'm really shocked that she's only 49. She looks like hell.

Once again I am going to be amazingly cliche'. After reading all of these posts, along with all the other topics we've discussed, I've determined that the best medicine for anyone in CA thinking of buying a home is to get in the car, pack some bags, get a few maps, and drive across the country. They should stop in a few towns, cities, and places in many diffrent states. They should look at how people live, where their kids go to school, and what cocktail conversations are like.
They should drive through neighborhoods, suburbs, and city streets. Then they'll find that outside the confines of the CA borders, none of the housing bubble crisis is ever mentioned. Why? because they don't have a crisis. This issue is only in a select few areas, and in most cases except california, is closely linked to a number of popular cities. Once people get that notion, then the stupidity and belief that housing is precious, limited, and worth paying a zillion dollars for will evaporate. Frenzied animals in small cages usually go bazerk.

Panicearly,

I wonder who the target audience on that realtytimes article is. Who does he think will believe that pathos laden garbage? He is really saying he wants to "punch in the nose" anyone who gives advise to potential buyer that will cost a realtor money, regardeless of how good that advise is for the potential buyer.

Maybe it was just a bad stand up comic routine.

panicearly,
What a load of crap! I read about half of it and had to stop. The best parts were about how that " owning a home brings people out of poverty." If I had more time, I swear I'd write that guy a reply because there's simple too much stupidity in that article to let it be passed off as ligitimate journalism.

burbed,

Sorry, I got sidetracked.

You're right, that 5% increase will likely lead to people burning tires in the streets, chronic unemployment, gang problems, lots of people throwing their fists in the air, revolution, and so forth. Before you know it, there will be trustafarian kids with Free Mumia t-shirts on the streets and every other store will be a Jamba Juice outlet.

Actually, and I know this sucks for you and Peter P and my boyfriend(I think his rent is going up by about 7% this year), I'm actually okay with this in a macro sense. Rents have already dropped a lot from late 90s highs, and this could be the signal of an improving job market and more real demand, as opposed to bubble demand.

newsfreak,

I fear not. Desireable parts of Wyoming got bidden up in the last ten or fifteen years. However, if prices can drop in densely populated places like Tokyo, there's still hope.

The last five years is just such a bizarre ride. I'm not that old but I certainly remember a time in California when people treated their house as a place to live and not an "investment." I just don't know how everybody just suddenly got amnesia.

newsfreak,

The good thing with renting is that the price is only limited to term of the lease. As WWII says, response to higher prices is to pick up and leave. And if the prices go lower, yippee!

I'm okay with speedos and midgets, as long as it's fully dressed and fully hypothetical.

You guys will have a hard time actually offending my sensibilities (I enjoyed Felix the Cat and the Cook, the Thief, His Wife and Her Lover). I just thought my small corners of this blog could do with a little less sexually explicit content, given the uproar that GC managed to stir up.

The best thing I ever did was drive from Boston, to Tennesee, to California. There are miles and miles and miles and MILES of NOTHING. People in cities I believe tend to forget that the country is absolutly masive and for the most part, sparsly populated. I read some statistic that something like only 3% of the US is populated with residential construction.
That leaves only a few reasons as to why people feel they have to stay in crowded areas. One is sheer economic pressure. Jobs and education are in large cities. I can understand that. If you're a liquid xeon rocket scientist and the only company in the world is in San Jose, then you have little choice. But truthfully, most other jobs are exsistant in most other cities both large and small. Many of you are lawyers, and I can't tell you how many times I've driven into teeny-tiny little towns and pass by a small law office. Lastly, comes stigmas and attributes that people stick to other areas or the area that they live in. " The people are smarter here"- or- " People are more outgoing there." or perhaps loads of bible thumpers live in one area, and loads of self-righteous hippies live in another. That basically translates to the fact that no matter who you are, you want to live where people think-act-talk-walk-and eat like you do, and more than likely you'll pay a huge price if you have to just to have the privelage.
I view the housing bubble as one based in this stigmatism. "people will ALWAYS want to pay a lot of money to live here." - apply statement to your pick: NYC, SF, LA, Boston, Austin, ect ect.
This is to the most part true. Jack the rents, jack the RE prices, jack the gasoline because we'll pay WHATEVER it takes to stay... until we're run to the snapping point, at which I think we are. The reason is that as I mention every day, I hear and see people moving out of here to states like NC and TX. I can gaurantee that if you asked many of these same people if they would've considered NC 5 years ago, they would've thought you were insane. " Of course not- everyone there is racsist, the weather stinks, and they're too republican" would've been the reply. But now that the prices have left people with little choice, some of these places look downright rosy in comparison. So there they go in swarms, leaving california's shores leaving behind a sea of overextended mortage debters insanely rich fat cats, young folks ok with renting forever, and boomers with little to no retirement.
Perhaps in 10-15 years, the stigma attached to California will be vastly diffrent.

SP,
I had the same kind of idea. I thought about putting a realty-looking sign in my yard, printing some fake RE company on the front with a weasly-fuck looking picture of myself holding my cat, then put on the front: FOR SALE! then in small letters below so they would have to get out of their car and looks would be: " housing bubbles" I even thought about perhaps putting a bubble blowing machine next to it for an even greater dramatic effect. My landlord would probably NOT be happy.