patrick.net

Given the volume of foreclosures, the foreclosure will just be a blemish on an otherwise good credit report, or it will just be another spot on an already stained credit report.

Another prediction I've jokingly made with people is that there will somehow be legislation that prohibits future creditors from penalizing 'victims' who lose thier houses now. Basically they won't be able to move someone into a lower borrowing tier solely for credit blemishes directly caused from their housing problems.

Eburd that's nuts, but it is also true. My observation: The bigger the loser someone is, the easier it is to get them to buy something. All you have to do is make them feel like somehow they qualify for the right to buy it. It is just like an addiction, for that moment they feel like a winner.

I am not sure if bragging about long hours has anything to do with being masochist.

People like to prove themselves better than the group they are in - to earn respect. People often equal more work with more accomplishment. Hence they try to prove that they have achieved far more by saying how long they have been working.

Bay Area is one Amazing (Rat)Race. It's all about who did what project, and who made a killing by working for a startup and who made how much on their house. No one brags about their knowledge of movies, music, literature or such mundane stuff. They like to brag about how they don't have time for it.

Once you realize that you win by not participating in it, it becomes a great amusement to watch.

>> Once you realize that you win by not participating in it, it becomes a great amusement to watch.

One great way of non particpation is not to buy a house in bay area ..... once a realtor tried to pursue me by opening the list of home owner to me. Here is the email text:

======
Sorry to burst your bubble, and there wont be a bubble bursting in the RE market here. I tell you what if we see a 25 -30 percent drop in valuse in SV then I will be more than happy to buy a house for you. That's how confident I am about our market. So you can be like the millions of people who bought and building equity and becoming wealthy or continue to rent and stay with the poor people.

It's a Good Life!!

Patrick Adair

Here is a short list of the Indian clients that are becoming wealthy, maybe you know 1 or 2 of them and can ask about my services, especially my knowledge of Vastu.

Manish & Kavita Agarwal
Madhu & Laxmi Alur
Saurabh & Vishakha Atre
Muni & Sailaja Bandlamoori
Sunil Kumar and Sadhna Chaudhary
Rajesh & Jeanne Desai
Praveen and Ami Dua
Ganesh Subramaniam & Ayishwarya Ganesan
Gopal Sundaram & Lakshmi Gopal
Selva and Bharathi Govindarajan
Prakash & Suda Iyer
Vinay & Anjli Jagtap
Mr. & Mrs. Vipin & Charu Jain
Veeraiyan & Radhamani Kandasamy
Harish and Jhaanaki Krishnamurthy
Prabhu & Chitra Krishnamurthy
Lakshminarasimhan Venkatavardan and Vasanthi Lakshminarashim
Ravi Shankar & Priya Mahurkar
Anil Madan & Shalini Malhotra
Mani and Tina Manicham
Ravi & Preeti Mayuram
Rajeev Ranjan and Renu Mehra
Mr. & Mrs. Milind & Snehal Mohile
Satish Maruvada and Surekha Nidamarty
Logo & Bharani Palanisamy
Abhay & Rashmi Pendse
Poulo Kuriakose & Smitha Poulo
Srini & Preetha Rengasamy
Mani and Kalpana Revanuru
Nitin Khanna & Urna Roy
Khalid Beg and Nikhat Saleha
Sandeep Sakawalker and Sampanna Shambbhag
Kapil Sheth
Mr. & Mrs. Rohit & Poornima Sood
Sridhar Rao & Sasireka Sridhar
Prasad Purushothaman & Sripriya Srinivasan
Srini Raman & Shobha Srinivasan
Srini Satyavarpu & Sri Sriramdas
Gopal and Lakshmi Sundaram
Murthy Atmakuri & Vasantha Tammana
Gopal and Rupa Tendolkar
Ramesh & Brinda Thyagarajan
Rahul & Bhagyashree Vadodkar
======

I forgot about the 'dont 1099 me bro' law.

Randy H should remind his flop lord w/family money neighbor of this law (If were him I would write the text of the law on a huge sign on my car and drive around Marin all day honking horn and pointing at people accusingly at red lights.....hehe...gotta help GW by getting tha message out)

Builders should behave more “rationally” when setting prices than sticky, mental-accounting, owner occupiers. But builders have been much slower than I had predicted, though they are now coming around.

@RandyH,

In addition to the "marketing vs. finance" internal struggle with homebuilders, I think another factor in their price stickiness is from legal. Namely, they are probably scared current owners will cry foul when they see prices for homes in their neighborhood getting slashed, especially those who bought more recently. There have already been a trickle of stories on this. I can't imagine how those arguments would have any merit at all, but my guess is that it's a serious concern for the HBs.

RandyH's RE-Tycoon-neighbore:
“not going to give this house away!"

Hey, looks like he is willing to just give his money away instead.

Isn't that what he is doing now?

eburbed: It’s like people in tech companies who brag about how many hours they work.

That seems to have changed already. My sample may be skewed but I am seeing more and more people bragging about cutting back on hours or quitting altogether to stay home and take care of the brats. If I had a nickel for every woman who says she will look for "something in a non-profit" after the toddler starts school... well, I would have a few nickels.

In fact, 70-80 hours at a startup is seen as a dead-end of sorts, unless you are one of the piggies with his snout close to the trough.

In fact, 70-80 hours at a startup is seen as a dead-end of sorts, unless you are one of the piggies with his snout close to the trough.

Maybe Silly Con valley's population is aging and the supply of fresh grads is not enough to replenish the need for code monkeys ? The older one gets, the priorities change. And the ability, and the drive. How many failed startups does it take for an engineer to realize that may be it ain't worth it ?

If the aging of the population is a significant factor, then it doesn't bode well for BA housing - which is a pyramid scheme - in the long run. Older population is more susceptible to reach salary limits and extended periods of employment.

Arrghh.

... and extended periods of employment.

Should be and extended periods of unemployment./i>

Re-listing a home in phoenix does not reset the cummulative days, it sets a different field, agent days to zero. Interestingly enough, the local MLS has decided to remove the cummulative days on market (DOM) from all the normal sheets, though it is still available if a realtor clicks the history button. Resetting cummulative days would require screwing up the address so that the computer didn't recognize it. When I see that, I typically use the "report violation" feature, and send both MLS numbers to the MLS system monitors for review. The listings seem to disappear after I do that, then come back with the correct DOM number. My understanding is that the fine for gaming the system is a few hundred dollars...

By the way, the graph above shows it isn't happening all that much, after all the DOM average seems to be climbing almost 1 for 1.

Yes, that's been the big thing in my life, and I was a toddler in the 60s, to realize that it's not the friggin' 60s.

There's no tech race, we've conceded defeat. There's no space race, there's no company willing to hire an enthusiastic tech and make 'em an engineer.

In the BA you're lucky to make $10 an hour and in flyover country you can find plenty of work for that or more - with 1/3 the cost of living and no hours in the car daily.

OK - so I went into town today, to swap the guitar I'm not playing for an air rifle I'll definately shoot and get a lot of grins out of..... it's amazing how much my life it turning into some kind of weird retro-teenagerhood. I have the motorcycle, the pellet gun, practice my trumpet every day, and am even proud of the snappy come-back I made to this chick at the coffee shop, it went like this:

She: "Oh, I don't like motorcycles."
Me: Why don't you like motorcyles?
She: Because they're "murdercycles" people get hurt
Me: Oh come on, I've crashed tons of times and not gotten hurt - much.

Maybe I should get a job selling GRIT, is that newspaper still around?

But I should get to the real subject, which is how things change when the economy's tanking, even over a couple of months. The hock shop where I traded my bitchin' guitar for an even more bitchin' air rifle has become quite popular with RealtWhores, selling off their bling, or trying to. The pawnshops are kind of inundated with stuff lately, so they've gotten rather selective, this guy is really only taking coins, gold, the really good stuff. The "antique" stores around here all have silver coins prominently displayed now, and there are a few more empty store fronts. A street banjo player told me he calls for jobs but it's very hard to actually land one, meanwhile, I guess his pickin' pays OK even if he sings the Beverly Hillbillies theme song with the emPHASis on the wrong sylLABles.

Foreign buyers are buying sell, so the "antique" shops with a lot of interesting old "western" type knick-knacks are doing well. The Germans and Euros in general just eat this stuff up. In general though things are really slowing down, with Murphy's advertising $2 appetizers and $2 drinks during weekday happy hours, which is saying something since they're about the highest class joint in town.

Hearing about the RealtWhores discovering that hard-times establishment, the pawn shop, made my day!

I meant, "buying well".

But still, the Bay Area is the preeminent place for high tech people. The good time and old spirit will come back, I'm pretty sure, although I've never been affected by the BA culture, despite having spent a summer working -- I mean dozing off in my cubicle -- at SGI.

The world is full of losers (dreamers) and suckers (risk takers) and they need the bay area, the sunshine, the waves, the million-dollar bungalows to fight for, and the average-looking, aging chicks to compete for. Bangalore just doesn't cut it.

These losers won't be happy elsewhere. Trust me. They either get beaten up or depressed. That's why they chose to come to the meca in the first place.

My first wife was a commercial real estate broker but she sold high end residential as well( Beverly Hills, malibu, etc.) She said that if a piece of property was on the market for more than 30 days with no offers then the asking price was simply too high.

Ex sunny, where you at man? I've been thinking of leaving. You sound like you are living my dream bro. How is it? Any suggestions for someone thinking of quitting the program.

Amazingly enough, Grit is still around.

http://www.grit.com/grit-history.html

'One thing that continuously surprises and delights all who work here is the number of people who hear where we work and say, “Grit? I used to sell Grit when I was a kid!” '

IIRC when my parents sold houses in the south bay in the 1960s and 1970s, houses typically were about 60 days on the market.

In April 2006 when I listed my Cambrian Park home, the listing went up on a Monday and the winning offer was in hand that same Friday.

A friend's mother died last spring, and they put her three Fremont properties on the market in June. They have already gone through 2 ninety day listings with two agents, and have decided to rent them out and wait.

Hey, looks like he is willing to just give his money away instead.

Isn’t that what he is doing now?

Yes. But to the owner it's counterintuitive. It goes against their instincts. It goes against their "common sense'. Although it annoys me to no end, I can understand the position of all these sticky owners.

They are simply un/undereducated in economics and finance. In order to operate in modern capitalistic society our children require a basic minimum of financial and economic literacy. But then again, we seem to be having enough trouble teaching them to read, write and add.

Financial & economic illiteracy will be the downfall of free market capitalism. It matters not how wrong the masses are, and how responsible they are for their own fates. It matters only that there are lots of them; more and more every day.

skibum,

Agreed. Had it not been for the threat of lawsuits (builders would have started their "improved pricing" model the following day) In FL and AZ we've seen stories of disgruntled recent buyers.

I guess the question for the builders becomes "At what point is the "possibility" of class-action less of a threat than "certain" insolvency if we can't move inventory and generate immediate cash flow to service our debts"?

This must be where the gloves come off, and I think we're there.

>> The world is full of losers (dreamers) and suckers (risk takers) and they need the bay area, the sunshine, the waves, the million-dollar bungalows to fight for, and the average-looking, aging chicks to compete for. Bangalore just doesn’t cut it.

I have been both a loser and sucker. I have worked for two failed startup. In the first startup I wasted three years of my life. In the second I exited within five months. Unless you are very close to CEO, ultimately you will be layed off unless startup is making big.

This means people who work for startups are basically unemployed -- they just do not know this fact.

Startup destroys your life by consuming the basic ingedients:

1. SPACE: Cramp working condition for 70 hours a week

2. TIME: You work six days a week. Remaining one day you do shopping.

3. SOUL: Startup destroys your connections. You do not smell roses, your wife divorces you, you do not know how your kids are growing up.

After all this many people get layed off -- still startups are able to hire. That means there is steady supply of LOSERS and SUCKERS just like me.

Back in the 80's, there were a few lawsuits filed by people, or groups of people, who bought at the peak and then tried to sue the builder for the price difference when the builder slashed prices to move inventory. The outcome was that the judge said that no one had their arm twisted to sign the note, therefore, they were told to stop whining and pay their bills.

Richmond,

Right, unless they can build the case that tennis courts, pools and other amenities promised were not delivered it will be up hill for them.

I think the other factor is that builders are possibly decimating their creditor's inventory. This is where the builders and lenders will find themselves at odds. During the Boom they were in perfect alignment. Now with each new foundation poured, another comp crusher!

Even if they can buy lots for 20k and deliver @ $95 a sq. ft. what good is it if their lenders simply cut them off?

DinOR,
Good points. The issues you mention weren't the case back then.
This time around it's a totally different animal.

The world is full of losers (dreamers) and suckers (risk takers)

Luckily there are many who do dream and take risks, otherwise you wouldn't be bitching about how stupid it is to dream and take risks on a blog right now.

--A loser sucker.

Oh wait, I didn't see this anti-startup rant was originally started by GC, infamous blog troll.

I'll choose not to take entrepreneurial career advice from a Microserf worker bee with some confusion about his cultural heritage and a propensity to write about children in an inappropriate sexual context on real estate blogs.

You have to wonder though, how many of those financial relationships are already strained, if not outright blown up?

As the builders slide down the food chain and begin working with lesser tier lenders... well why would they give a rip?

"Sure, we used to secure our project financing through CitiGroup but they just became... inflexible, unwilling to adjust to the new realities of the market place. Besides, they have problems of their own".

Btw the latest round of financing for Merrill and Citi are just... embarrassing! I don't even work there and I'm embarrassed. Singapore, Kuwait and Korea. Sounds like they both made the same rounds. 9% pfd. to convert to common in 2 years? "Special" class of stock w/ no voting rights or control? Whahappens in 2 years? Is this whole thing supposed to have blown over by then?

I live in deep Republican flyover country now (hint: it's home to the "world's oldest rodeo") and so far it's pretty cool.

As for being a start-up or a dreamer, it would be much, much easier for me to do a start up tech company out here. No problem having the space to have a proper antenna test range. No problem with workshop space.

I have to get this BK thing taken care of then decide if I might want to start making useful tech stuff and see how that goes. No way I'd be able to do that in the BA.

ex-sunnyvale-renter, Prescott is quite nice right? It is so close to Sedona, my favorite place in the world! :)

Oh wait, I didn’t see this anti-startup rant was originally started by GC, infamous blog troll.

Well, since there are so many start-up losers and suckers, perhaps we can do a start-up on start-up services?

Peter P,
Yeah, I'd like to start up my own venture capital firm using someone else's money.

Yeah, I’d like to start up my own venture capital firm using someone else’s money.

I thought most VC firms use OPM (other people's money).

BTW, does Boise have streams and cascades? Or are they mostly near Cascade?

Peter P:

I can't afford a home in Sedona so I bought a pair of these instead:
http://www.ariat.com/products_detail.aspx?cid=2&scid=20&pid=41 They really fit my feet well.

Nice boots!

Sedona is too pricey, but it is considered to be one of the prettiest places in the world.

SF is quite pretty too, but only if you get the bridge-to-bridge view. Now that is really going to cost the moon.

PeterPee - Yeah Sedona's near but I've never been there, allergic to hippies and woo-woo types, I guess. I do need to visit it though just to see it. Jerome's nearby, Flag's not all that far away, etc.

$1000 or more a month for a tiny closet of a place in the BA as opposed to, well, free rent just a few chores here right now. It's a huge difference! And the people all reflect so much light and are so nice!!!!!

Peter P,

Pull out your physical map of the western US. Boise city is at the foot of the Rockies: downtown elevation is 2700' but a few miles north Bogus Basin ski resort is at around 7500' - and currently buried in about 8' of snow. Everything to the north of Boise city is a riot of forested mountains and rivers, all the way into Canada. Everything south of Boise city is desert and canyonlands all the way into Mexico. A major tributary of the Snake river, the Boise river, comes down from the Rockies and goes through downtown Boise city. Boise State U. fronts the river for a mile or so and students stand on campus and fish for trout. There's also a small rapids adjacent to the campus so the PE department at BSU gives kayak lessons ON CAMPUS. It may be the only college in the US that can do so.

PeterPee - Yeah Sedona’s near but I’ve never been there, allergic to hippies and woo-woo types, I guess.

I am allergic to hippies myself, but I am a woo-woo type. It is not as bad as you think. (I cannot stand Berkeley though.)

Dennis, if we want to visit Coeur D'Alene, Boise, Flathead County (Montana) in a week, can we do that by Amtrak?

What the heck is a "woo-woo" type? A tree-hugger?