patrick.net

Jack, you can use intangibles to justify practically everything, because they are not tangible. :)

It is quite possible that someone could have justified pets.com by intangibles too. ("I love my pets so much that I bought pets.com even though it is worthless." Of course I did not buy pets.com.)

“250 per cent premium to live here?”

How about the premium of owning versus renting? This should be more stable across the nation, right? Why is there a 250% premium to buy here and only a 100% premium to rent here?

"To summarize: big credit bubble, but bay area survives because wealthier people are replacing those leaving. Rest of america becomes wasteland of economic horror."

I heard that after the Asian Financial Crisis some billionaire real estate tycoon in Thailand had to sell food on the street. The credit bubble is precisely about wealth.

On the other hand, there are perhaps a lot of wealthy people in the Bay Area. But are they going to buy all the 500K homes on the market when the bubble bursts?

Does the “Pets.com” analogy REALLY have anything to do with this conversation Peter?

No, I was just saying that to provoke you.

Peter P, is it totally impossible that there are a lot of people here who are not “wealthy”, but they have some net worth which enables them to buy $500-$1M (but not multi-million dollar) houses with a sane loan? Why do you think that people are either broke or multi-millionaires? Most of the people I know have a net worth of a few hundred thousand dollars, so such people can’t be all that rare…

Face Reality, how many of these semi-wealthy people are going to be net buyers of real estate if the market is expected to stagnate in a "soft landing" scenario?

There were also a lot of semi-wealthy people in Tokyo with significant savings. There were also vultures who circled around Tokyo. Yet they were unable to prevent a large decline in real estate prices there.

Jack, can people rent an apartment or house in the Marin county and enjoy the same intangibles?

West Coaster,

I agree with you (see my post from June 27th). Actually, I noticed that participation was coming from a small number beginning in the last topic and it carried on to this one. I started getting lost with the MACRO, hedging, etc conversation.

Patrick? We DO need a little help here to liven up the blog. A new topic, perhaps, that more of us can participate in? I don't know what the dqnews is, but do we have to wait for that?

Here's an idea....if someone has a topic, question, concerns that they would like to address here, can those be brought forward as suggestions?

BayQT~

And since “most people” is what drives the marketplace, the rental market has almost no bearing on ownership prices in the SF Bay Area.

The rental market always has bearing on ownership prices anywhere in the world except in periods of housing bubbles.

I started getting lost with the MACRO, hedging, etc conversation.

My fault... let me think of a popular topic.

If you are REALLY interested in “what is to be done?”, you will first have to acknowledge some of this stuff without resorting to chipping away at what the premium SHOULD BE to live here….based on your opinion, which usually uses Omaha Nebraska as a baseline for what ” normal “is.

I do not know what the premium should be. But I know what it should NOT be.

Yes….but under what conditions and requirements by the owner?

Choose a premium apartment complex with rules that you can live with.

Yes….but for how long? When does the OWNER decide its time for you to go?

Except when the P/E ratio is temprarily out of whack, apartment complexes usually favor long term residents and one can stay as long as she wants.

Yes….but how long will this period of low rents last?

Rent can be 50% higher and it will still be cheap.

Yes….but how much control over your immediate envrironment do you want?

Most apartment allows wall painting (yes, even salmon and green) so long as you can restore the original color.

Yes….but can you stay if you like the neighborhood, but the home sells?

Discussed above.

Yes….but wouldn’t it be nice to have a bigger window in the living room?

Move to an apartment complex with a bigger window in the living room.

:)

(Just for the sake of argument...)

"Your answers are too contrived, even solely for the sake of argument…"

Fake P (or anyone), can you please give suggestions for the next thread?

West Coaster Says:

July 4th, 2005 at 12:25 pm
At this point there are about 5-7 posters on this blog who contribute. The threads need to be opened up to attract more input. This is turning into a private chat room.

As far as "contributing" goes, I'm pretty sure that anyone can post his/her opinions here. There's nothing stopping you that I know of, aside from those occasional annoying "you comment is awaiting moderation" messages (happens when your post includes a full URL).

On the other hand, starting a NEW thread/topic seems to be a bit more difficult. Supposedly anyone who registers can do so (see links to right of the main threads page). However, after I registered, I didn't notice that any new links magically appeared allowing me to do so. At the risk of revealing my own ignorance, I have no idea how to do it, aside from emailing Patrick directly.

Peter P, you seem to be the only one other than Patrick who has started a new thread. Can you lend us morons a hand? Thanks.

C F, thanks for the suggestion. I have created a new thread about the causes of the bubble. The discussion will be interesting, I hope.

:)

BTW, any registered user of this site can request permission to post from Patrick.

HARM, after you register, Patrick will grant you permission to post. Then, you can use the Site Admin link to write a blog entry. Hope this helps.

(To avoid "you comment is awaiting moderation", use tinyurl.com)

Thanks, Peter, but I can't find the "Site Admin" link. Is it on the main threads page?

It should be on the main threads page under "Meta" after you are logged in. If you do not see it, you do not have the permission to post yet. Please send an e-mail to Patrick to request the permission.

Many thanks! I wonder how many others were wondering about that, but too embarrassed to ask?

fyi: For those who feel this one's gotten stale, Peter started a fresh thread, "Why", on the underlying causes of the Bubble.

IDEA, what happen to you?

One thing I like about this blog is the mutual respect among its participants. Anger solves nothing. Violence brings more problem. Curses will have no effect on the matter.

Jack, of course I understood your need to use that language. My previous post was directed mostly at Surfer-X. I am worried about him too. I hope that he made up the story about that two guys. It would be pretty bad otherwise.