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Blog Party Tales


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2005 Dec 18, 1:06pm   24,369 views  195 comments

by HARM   ➕follow (0)   💰tip   ignore  

Please regale those of us who are "geographically challenged" (or is it "space-time differently abled"?) with your personal stories of the first Blog Party at Mijita's this Saturday.

How did it go? Who attended and how many total showed up? How long did it last? Were there any surprises? Did the people you met fit your mental images of each person or not? Anyone have any photos they don't mind posting and providing a link to (provided the subjects don't mind being viewed publicly)? Any plans for future gatherings?

Please be generous with your descriptions for the less fortunate bloggers among us. After all, it's the Christmas season --er, "the Holidays". :mrgreen:

Thanks,
HARM

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1   praetorian   2005 Dec 18, 2:27pm  

So sorry I missed it kids!

In other news, a property I mocked mercilessly as hopelessly overpriced in Sacramento is now sale pending:

http://tinyurl.com/7g5lo

For those keeping score...

Housing Bubble: 379
Praetorian: 0

Cheers,
prat

2   San Francisco RENTER   2005 Dec 18, 2:45pm  

That looks like a nice house! But I'd rather hang myself than hang a $900 Grand mortgage around my neck for the rest of my life. Especially in Sacramento...ewwwww. Did you know that you can buy twice the house for about $65 Grand in upstate New York or the midwest? Something seems strange about this...

3   Peter P   2005 Dec 18, 3:26pm  

It was a dark and stormy day...

...but the party went very well, it exceeded my expectations.

We had a lot of meaningful discussions. :)

4   praetorian   2005 Dec 19, 12:19am  

That looks like a nice house!

See, that's the thing. I thought it was absolute ranch-house garbage. The neighborhood it is in isn't particularly nice, the upgrades look out of place and are guaranteed to wear poorly, the entry way is a home depot special with about as much visual impact as a discarded fast food bag. And so on.

In short, this house is my white whale. The notion that someone making 300K a year is willing to live in it astounds and depresses me.

And a merry Christmas, one and all!

Cheerio,
prat

5   San Francisco RENTER   2005 Dec 19, 12:40am  

From the article: http://tinyurl.com/9q4h5

"The slowdown is ironic in one respect: Prices have risen so sharply, fewer Sacramentans are able to buy. Just one in five Sacramentans can afford a median-priced home, says the California Association of Realtors."

That's not irony, that's called Econ 101! The reason the slowdown was inevitable and is occurring now is BECAUSE of the fact that prices have risen so sharply and priced out the majority of buyers, thus decreasing demand. Wow, supply and demand, isn't that just a little bit ironic dontcha think?

6   DinOR   2005 Dec 19, 12:45am  

I hope all in attendance had a wonderful time! I on the other hand, wound up at a neighbor's party where the topic was the dominated by RE bulls. Several realtorsTM and a boastful lawyer that no sooner had he introduced himself started telling me how he "made" an obscene windfall fortune. You could readily tell the guy was as full of it as he was full of himself. The usual blather about how he's "made" more in the RE market than he ever did in the stock market yada, yada. My wife always (and I do mean always) accuses me of being judgemental in social situations. When someone tells me they now only "cherry pick" law suits/clients and have this unreal stream of income because of all of their positive cash flow and RE "deals" but doesn't have the slightest idea as to what the Alternative Minimum Tax is I tend to get skeptical. If most of your income is now "passive" and very little in the form of earned income one of two things must be true. Either this guy is full of it and is able to pocket some coin by "serial refinancing" and leaching equity out or (2) he hasn't filed in years. There may be other possibilities but I'll leave that to your imagination. Needless to say I really dread the social function aspect of the holidays. Let's all have a great week watching what Andrew LaPage at the SAC Bee cites as a dissapointing January as more sellers decide "06" is their threshold of pain! Here's to the holidays and more desperate sellers!

7   KurtS   2005 Dec 19, 2:30am  

Oh and lest we forget the life of the party… THE LURKER! The self-proclaimed “lurker” from Oakland, a very nice guy indeed, brought enough charts and graphs and printouts that even YOU, HARM, would have been envious of!

Indeed...he was very informative, and to my surprise corroborated my own concerns about the future scene for ARM/IO holders. Little do I know, but to hear it from a pro (and one who struck me as forthright and honest to his clients)--that was enlightening.

Great sharing a meal and friendly banter with you all! :)

8   surfer-x   2005 Dec 19, 3:20am  

Sticky on the way down

Due to bodily fluids on the sign out front?

Pismo update, house around the corner has "price reduced" sign on it, now thats not too funny but the "again" sign is.

In short, this house is my white whale. The notion that someone making 300K a year is willing to live in it astounds and depresses me.

Thats just it, you have to bust your fucking ass to just get by here, what's the point of doing so if the reward is an over-priced piece of crap?

9   San Francisco RENTER   2005 Dec 19, 3:36am  

"Thats just it, you have to bust your fucking ass to just get by here, what’s the point of doing so if the reward is an over-priced piece of crap?"

The reward is that you/we are smart enough not to waste our money on over-priced crap and screw ourselves permanently like so many other poor sheep have already done. Could it be that asset bubbles are a form of wealth transfer from the ignorant to the informed? Perhaps this is why Easy Al has repeatedly stated that it is not the FED's role to do anything about asset bubbles. He knows that the old money and the smart money will not get hurt by the bursting of a bubble; on the contrary, the old/smart money is always the first in and the first out so those folks made a killing on the upside of this bubble just like they did in the stock market bubble leading up to 2001.

10   surfer-x   2005 Dec 19, 3:53am  

What gives me the most joy is that the bulls take on the whole RE bubble, perfectly ok to defy 100+ years of data when going up, but not ok to defy data when going down, hence the whole "sticky going down" crap. Bullshit, lets call it by it's real name, a crash.

11   Peter P   2005 Dec 19, 3:57am  

What gives me the most joy is that the bulls take on the whole RE bubble, perfectly ok to defy 100+ years of data when going up, but not ok to defy data when going down, hence the whole “sticky going down” crap. Bullshit, lets call it by it’s real name, a crash.

Well, it is New Economy and they get to define it. So more sticky rice I guess.

12   HARM   2005 Dec 19, 4:16am  

Oh and lest we forget the life of the party… THE LURKER! The self-proclaimed “lurker” from Oakland, a very nice guy indeed, brought enough charts and graphs and printouts that even YOU, HARM, would have been envious of!

Jack, Kurt S, I'm intrigued. You said he was a "pro". I'm guessing this means in an RE-related profession. Was there anything that might be useful to post? Is he willing to "de-lurk"?

13   Peter P   2005 Dec 19, 4:37am  

Was there anything that might be useful to post?

Some charts regarding income trend and price trend. Jack was talking about intangibles.

Is he willing to “de-lurk”?

Probably... as BillyGoat

15   surfer-x   2005 Dec 19, 6:39am  

I really really don't know what to make of this
http://tinyurl.com/bh9ae
Yes I understand that he's biased by his profession, and likely is huffing the bong (Santa Cash resident) but come fucking on now.

16   San Francisco RENTER   2005 Dec 19, 6:51am  

"The media has been talking about housing bubbles for four years." -- http://tinyurl.com/bh9ae

In reality, the media only started talking about the housing bubble in early 2005, and at that time the vast majority of the press went to refuting its existence and a discussion of how ridiculous the notion was. It has been very interesting to see the deluge of media attention that has increased over the summer and fall and the increasingly pessimistic tone. Now it is very rare to find "no bubble" holdouts except of course for Realtors (TM).

17   San Francisco RENTER   2005 Dec 19, 7:13am  

Speaking of media attention, Siegel just weighed in today too:

http://finance.yahoo.com/columnist/article/futureinvest/1827

18   surfer-x   2005 Dec 19, 7:49am  

Wouldn't be so tragic but I know people in $anta Cruz, contractors, who are convinced that they are well on the way to riches, one of which bought a $hitbox on the Westside for 750K, neg am of course. WTF? Don't these people remember what happens when RE dries up? They job go poof.

19   San Francisco RENTER   2005 Dec 19, 7:49am  

"Siegel is very wishy washy - he apparently doesn’t want to piss off either side… "

Yeah, he certainly doesn't take a stand in that article, but on the other hand he's definitely NOT bullish. I'd guess it's because he's a Phd Economist and so he wants to make sure no one can dig up that column in a few years and say "Siegel was WRONG!"

20   San Francisco RENTER   2005 Dec 19, 8:29am  

"Whats going on? Comments?"

First they were profiting from the distress of the buyers as the market marched ever upward, now they are attempting to profit from the distress of the sellers as the market slows. I bet it's some kind of seminar for buying and selling strategies. Either they'll charge an entrance fee or the Realtor(TM) vultures will just be sinking their talons into every poor sot who walks in the door. Either way it'll just be some sort of glorified marketing event for the Real Estate industry.

21   surfer-x   2005 Dec 19, 9:25am  

For Jill and Bob McDebtor it doesn't have to crash for them to feel the pain. All it has to do is quit going up, and it has. Time to sit back and enjoy.

22   San Francisco RENTER   2005 Dec 19, 2:31pm  

Well looky what I found:

http://www.financialsense.com/fsu/editorials/kirby/2005/1219.html

The ideas presented in that article give a possible explanation for how the FED could keep deflation in RE from happening and also a possible explanation for why they've decided to stop reporting M3 statistics.

Bernanke has already stated on numerous occassions that deflation is his main enemy, and this makes sense given the amount of debt that is currently propping up the US economy. But if he starts printing money willy-nilly and devalues the bonds that are mostly held by foreigners, he pisses off the rest of the word. Helicopter Ben has a Catch-22: he either screws the American citizens or he screws the holders of our Government debt who can easily screw us by dumping it and causing the yields to spike.

It's good to not have a jumbo mortgage and also not be the new FED chairman!

24   Jamie   2005 Dec 19, 4:05pm  

Look at you people being all chatty tonight. Many who didn't even BOTHER to show up to the blog party. Ahem. Er, um, anyway, I think I had some kind of point here. Oh, right, I draw the line at pink toilets. That's just WRONG.

So, to say something about HARM's questions about the party, it was interesting to me how much everyone's personalities in person were exactly like they are on the blog.

25   Jamie   2005 Dec 19, 4:13pm  

As America becomes more homogenized, I suspect the most overpriced areas will lose some of their cachet, regardless of how great they are. Twenty years ago certain parts of the US were very un-diverse, very limited in their cultural offerings...and that is far less true of many places today. It's easier to find hip, diverse, enlightened cultural pockets in the South and Midwest than it used to be.

So someday maybe all Cali will have going for it is the weather and some pretty scenery, and since too-nice weather has a way of making people complacent anyway, maybe the next cultural renaissance will emerge from someplace unexpected like, um, I dunno, Milwaukee.

I believe Jack is right that places like Marin will always be the most desirable places to the majority, but without a price correction, the smart young people will continue to decide that sunshine isn't worth THAT big a premium...

26   HARM   2005 Dec 19, 5:10pm  

So someday maybe all Cali will have going for it is the weather and some pretty scenery

Try "right now" on for size. Anyone who still thinks the California lifestyle is so much better than anywhere else has either spent too much time behind the gates in their McMansion planned communities (and/or exclusive hippie enclaves) or hasn't experienced the "urban splendor" of huge swaths of ghetto in just about any major city in this state.

Yeah, we've got the beaches --big f@#%ing deal! For me (L.A. dweller) to get to the nearest beach requires sitting in gridlock traffic for at least an hour sucking down polluted air, so I can then start the always-thrilling Quest for Parking. This is followed by a lovely romp to a trash-filled beach with polluted grey surf, all the while surrounded by the local chapter of Crips/Bloods/(insert your gang here).

As America becomes more homogenized, I suspect the most overpriced areas will lose some of their cachet, regardless of how great they are.

Indeed, we can see this transformation happening right before our very eyes, as the bubble is accelerating the process of driving my generation out of California. I wish the landed Boomers good luck in selling those 1.5 million-dollar McMansions to a nice young FTB couple a few years from now, when they all start retiring and need to downsize.

Sorry, Jack --"Intangibles" my ass! California lost most of its intangibles vs. other regions a long time ago. The only thing it's still got is the good weather, and even that's mainly confined to the pricey coasts. In the broad interior regions where most mere mortals live (Inland Empire, high deserts, Central Valley, etc.), it often gets hot enough to fry an egg on the sidewalk in the summer, complemented with horrible air quality.

27   Peter P   2005 Dec 19, 5:30pm  

He forecloses on the $670k house and just reduced his payment a little. Since he’s on an ARM, his loan’s interest will be high anyway.

It will probably work in the early stage of the crash. Once lenders have reacted to the new market reality, lending standards will be further tightened, and this will no longer work.

28   SJ_jim   2005 Dec 19, 6:11pm  

"Twilight of the West theory"
-->Go east young man?

"And I LIKE pink and turquoise tile"
You are a sick man.

Vice
A two-jawed clamp used to hold tools or work in place. Hand vices typically hold smaller tools . Bench vices are used to hold stakes for forming.

IMPRESSIVE! (Or dictionary.com?)

“Whats Happenin’”, “Whats Happenin’ NOW!”, “Alf”, and “Small Wonder”.
Give the people what they really want: Mork & Mindy.

So someday maybe all Cali will have going for it is the weather and some pretty scenery, and since too-nice weather has a way of making people complacent anyway
My sister, raised in CA, moved to Philadelphia (actually Wayne burrough(sp)) four years ago. Loves it...loves the seasons, the muted silence of a blanket of snow, and the t-storms. It certainly can happen. (then again, she didn't like the snow nor the beach for that matter).

Hey, NY transit workers on strike...no bus, no sub. Bloomberg says he's gonna walk across the bridge to work. Urges NYers to join him.
Is this the big event?

I love this blog.

Oh, regarding RE: s.san jose inventory recently took a 15% hit over a two day period. They didn't sell.
Spring '06.

29   SJ_jim   2005 Dec 19, 6:15pm  

OH hell just realized "flak" is not a sick man...but rather a sick woman...err, actually maybe not so sick...chicks can like pink & teal, huh?
Regardless; sorry flak!

30   SJ_jim   2005 Dec 19, 6:36pm  

Oh, this guy has some interesting commentary, if anyone hasn't seen it:
davidyu.com

Conspiracy theories aside, the correlation of the Fed Daily Repo with the November market rally is rather uncanny (scroll to bottom of page). Foiled again PeterP.

31   SJ_jim   2005 Dec 19, 6:46pm  

Relating to the NY transit workers vacati...err...strike:

Jose Padilla, 34, said he and fellow Coca-Cola employees are meeting at 4 a.m. to come up with a plan to put more workers in trucks to ensure their product gets delivered in the case of a strike.

"We have to get the Coke to the people," Padilla said. "Just because there is a strike, people don't stop drinking coke." .

Ah jeeze that's too much.

32   SJ_jim   2005 Dec 19, 7:52pm  

"Oh man and Coke is REALLY BAD for you, read the book Fatland etc if you don’t believe it. "
But it's much better for you with bacardi.

I think they also wanted 1/2 pension at age 50, and 8% annual raises for X number of years. How can a job with a binary performance scale be given 2-3x inflation raises?
The flip side is their jobs are important to support producers...not always easy to valuate such (relatively) low skill but necessary jobs.
I think the employees complained to the unions that they couldn't afford housing. Same reasoning applies to the on-the-sly raise given to the garbage haulers here in SJ by our mayor.

Maybe they'll opt for a CA-style freeway system. Eminent domain and new deal projects...yeah! boost that economy!...taxpayers pockets: because they run deep & they run wide...and because you can.

33   DinOR   2005 Dec 19, 11:09pm  

Peter P,

"It will probably work in the early stage of the crash"

I've really wrestled with this one, the co-worker described here that is upside down can rationalize his actions by saying, "I just did what anyone in my situation would have". Or, "I just did what was prudent at the time".

I'd really like to get on board with that but the truth is the "prudent" thing would have been to keep it in your pants (rent) but nooooo! The buyer was motivated by the greater fool theory and now he's upside down and he doesn't give a rip who eats the negative equity.

What usually happens when we have negative eq? Yep, nearly every time we trade in a car. They just tack it on to the new loan! This what should happen. Will it? I hope so, what we should want to see executed is a "No Personal Soft Landing Clause". The market around me is crashing but with some slick moves I can evade the pain and "walk away" unscathed.

I get accused of being vindictive w/regularity so it's likely true. I do hope that lenders become alert to this tactic early on and not look the other way while these "victims" put the new house in their wife's maiden name or their folks or whatever fancy footwork they're contemplating. This would create more stress than GSE's could survive. My guess would be that the skater would contend that he/she is making a genuine effort to sell their former home and that there is nothing they can do about this darn slow market! Understand, they're not turning their backs on their obligations (I am buying another house). After all they can't be expected to make 2 mort. payments forever. "I had to move for job related reasons!" Yeah, but you're at the same job and the new home is a longer commute!? Tap dance, hem and haw. Let's all make a firm commitment to not allow this to happen!

34   Allah   2005 Dec 19, 11:38pm  

Just did a search on the craiglist site using keyword "motivated" in my area (NY-LI) and it just reached 100.

35   praetorian   2005 Dec 20, 1:36am  

While it’s kind of amusing to be seen as the Great Defender of Bad Taste - sort of John Waters-like - I think I’ll clarify: I like the 40s-50s pink OR turquoise tiles - the ones usually bordered with black. Laminate floors, on the other hand, will never recover from the taint of the crash once it comes.

Gah. So much material, so little time. Insert hand-wavey, poorly thought out, and possibly fascist argument for classical aesthetics _here_.

@SQT: thanks for the link. Look at that house in the background. I would commit seppuku before I would live in that thing.

Cheers,
prat

36   KurtS   2005 Dec 20, 2:17am  

And places like Marin and other way-too-nice areas in the Bay Area ARE truly unique because they have not only one or two nice things about them that draw people to live there, but there is hardly a single intangible that they DONT have!...some of the Bay Areas nicest towns have the WHOLE F***ING LIST! How many places are there on EARTH like that, let alone America?

I've read some good arguments here for the "intangibles" angle. And from my perspective, I'd generally agree: the coastal pacific mountains are my favorite place to live. But, I'd venture to say that's because I was born and raised on the coast

As a balance, I got a different take on "intangibles" from talking to friends/family who have lived in other parts of the US. When they visit California, they're actually not very taken. The ocean and mountains mean little to them. Instead, they care more about cost-of-living, convenience, infrastructure, and community. By those standards, I think they win. After they finish commenting on local culture, they go on to complain about the weather! Too cold (cold summers), foggy, windy, etc. Simply, it doesn't feel like home. (From my perspective, the Bay Area is too hot for my tastes--but I manage.)

When we like our home, it's easy to extend that desireability to include everyone. However, I think everyone has slightly different criteria. And, I would venture to say many Bay Area professionals did not move here for the weather: they moved here for career reasons. I've met too many people who are consumed 24/7 with their jobs to ever appreciate the local environment, other than giving the scenery a casual nod. Such people learn to love a location for the income/spending it provides. I think this is a stark contrast to people like me who love the location first, and work here to stick around.

37   KurtS   2005 Dec 20, 2:25am  

It’s easier to find hip, diverse, enlightened cultural pockets in the South and Midwest than it used to be.

Jamie-
Great observation. Anywhere has the potential to remake itself--and possibly "out-hip" the SF Bay. Lower costs of living/overhead often provide the biggest opportunities for growth, innovation, and creativity. If the Bay Area outprices itself, it could easily become another rust belt.

38   KurtS   2005 Dec 20, 3:26am  

Tannenbaum--great find!

I found this particular exerpt rather interesting:
"The median loss was $23,500 on a house sold for $203,000, originally purchased for $226,500."

And, if I'm not mistaken, the actual loss is quite higher, due to transaction costs, mortgage interest (why doesn't anyone count that?), taxes, etc.

For example, I know someone who bought a home in '00 for $529K, now listing for $770K, which by a rough calculation of real costs...they'll just break even.
That is, if they sell for listing price.

39   KurtS   2005 Dec 20, 3:54am  

Then you will need to add back the rent equivalent.

Sure, I suppose the gist of my comment was...even with appreciation, housing can be an expense, just like renting.

40   KurtS   2005 Dec 20, 5:19am  

So can you elaborate what you meant with “a rough calculation of real costs”?

PTiemann-
Thanks for fleshing out those numbers, so perhaps my math was off.

My rough calculations took into account mortgage interest paid out (30yr), realtor commisions on both ends, taxes (but not deduction), and in this case, their kitchen remodel. I'll need to crunch those numbers again, and if I slipped up, I'll own up :)

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