On 13 Jun 2011
in
Heard today from a broker: Lots of Houseowners are worried about a precipitous price drop coming.,
balance said:
Well, population of NY City is over 10x the population of SF. Of course there is more of everything in NY!
Bay Area population is about 70% of NY City's, and its cultural richness is more appropriate to compare. Still, not quite up there with NY, I agree.
Real NY City's competition is Los Angeles Metro, with population about 70% larger than NY City's and plenty of "theater, music, museums, shopping, and galleries".
dunnross says
iwog says
San Francisco is probably the most respected and desired international location in the entire United States. It’s certainly in competition for the title with New York.
This is total BS. San Francisco is very provincial in comparison to NY. It’s theater, music, museums, shopping, galleries cannot even come close to anything which NY has to offer. If I had to compare San Francisco to any city in the US, I would, most likely compare it to Cleveland than NY.
On 12 Jun 2011
in
Heard today from a broker: Lots of Houseowners are worried about a precipitous price drop coming.,
balance said:
Based on this thread and mainstream media consensus, one can only conclude that the public sentiment today is that home prices are going to further decline. Which, to me, indicates that they may start growing again rather soon. Hard to tell when exactly, yet I suspect it will be a time far shorter than a decade - maybe even in a year or two.
For the record, I've been a renter for the past 14 years, as during that time it was cheaper to rent than to own in specific places where we wanted to live (Mountain View, Los Altos, Palo Alto, in walking distance to schools of our choice). Also, I could see the real estate con game rather clearly and never believed in uninterrupted long-term appreciation.
I believe that the real estate con game has its final objective. Which is de-facto nationalization/corporatization of housing (the US government being considered as just one of major global corporations).
From this perspective, many current real estate market "mysteries" cease to be such. For instance, banks are keeping the shadow inventory and are lenient toward non-paying squatters because it is a necessary step in the game - acquiring massive number of properties without letting too many smaller foreign and private investors compete for them.
To play the game properly, previous owners need to be separated from their property by first compelling them to over-leverage (already done), then gently pushing the prices down by means of engineered deflation (happening now and probably mostly done), and finally, blocking them from re-purchasing the property by means of hyperinflation (perhaps already starting).
The game is played on a massive scale approximately once every 40 years, so that the previous generation of losers - remembering how they were had - dies out and a new crop of whatever-owners grows up.
In the 1970-ies the game was played around corporations. Prior to that "decade of consolidation", the US used to be a nation of small business owners, with significant number of products and services being supplied by a loose network of family-owned enterprises. By the end of the transition, huge corporations emerged, driving most of the smaller players out of business. The mechanics was exactly the same: compel to over-leverage => deflationary squeeze => hyperinflation.
In the 1930-ies, the game was targeted toward farm land. Prior to the Great Depression, the US fertile land was mostly in the hands of family farmers. It was successfully transferred with the invaluable help of banks from these farmers to the newly emerged large agricultural conglomerates. The familiar sequence was played: compel to over-leverage => squeeze by restricting the credit => hyper-inflate.
After the property transfer was mostly completed, the laws and regulations would be invariably adjusted to benefit the new owners. For instance, instead of the mass of individual farmers whose blood was drained by ever-increasing taxes and predatory interest rates, fertile land moved to large-scale agribusinesses, who were given ridiculously low-interest loans and outright taxpayer subsidies. Or consider effective tax rates and loan rates that big global corporations pay versus small entrepreneurs.
At each phase of each game, corporations-controlled mainstream media played a major role in influencing the public sentiment. It seems to me that today the media is given the instructions to scare the homeowners out of their possessions, just like in the previous phase of the game it was lauding the joys of homeownership, thus compelling the population to over-leverage.
So, Iwog approach may be smarter than it seems to most, as he (or she?) urges us to seek out and analyze verifiable facts rather than blindly follow the popular consensus.
