patrick.net

Goran_K says

Unemployment is too high

I'm not sure what kind of house you are looking for, but unemployment for the well-educated in the BA (ie the ones who would be buying houses) is actually around 4%. The landscapers and construction workers who are driving up the overall unemployment rate aren't the ones who would be buying nowadays.

This idea to 'end mortage and all other debt' is an impossible dream.

Its like the Ron Paul dream - he got 3% of the vote and I'm pretty sure if Patrick was organized enought to get a 'mortgage debt is illegall' initiatitive on a ballot box it would get about 3% support.

Remember this is a democracy you just gotta add up the numbers - the debt slaves and debt slave masters far outnumber the 'debt is wrong' crowd.

FHA loan cieling was 220k in 2001 in high cost areas - now its 729k and the NAR wants it to be 1m or unlimited (currently they are lobbying for this.....no one is lobbying to outlaw debt so which one is more likely?)

Very soon the 729k limit will be raised just as soon as Obama or Romney get in the chair again and there is a slight slow down in sales. Prepare accordingly.

tiny tina says

Goran_K says

Unemployment is too high

I'm not sure what kind of house you are looking for, but unemployment for the well-educated in the BA (ie the ones who would be buying houses) is actually around 4%. The landscapers and construction workers who are driving up the overall unemployment rate aren't the ones who would be buying nowadays.

Do you have any sources for that, or is it anecdotal?

How desirable is homeownership, given the mobility of the typical worker?

Does it really make sense to buy, knowing you will likely move a few years later?

You have been screwed. Everyone else has too.
The tens of thousands of illegals and HB1 visas create more housing demand while driving wages down. Who benefits? Surely not you.
Who loved the housing bubble? Among them, those guys who build/fix up and flip houses, who interestingly employ illegal aliens.
Semi-educated people selling houses/mortgages also liked the situation.
The trend is not going to end while the liberal simps encourage everyone to take what others have.
Would you believe that Pebble Beach Corporation is now going to build "affordable housing" down there in order get a permit to build a couple mansions?
I don't know the answer besides not voting for the traitors and of course, buy AAPL because money gives you the flexibility that complaining doesn't.

tiny tina says

Goran_K says

Unemployment is too high

I'm not sure what kind of house you are looking for, but unemployment for the well-educated in the BA (ie the ones who would be buying houses) is actually around 4%. The landscapers and construction workers who are driving up the overall unemployment rate aren't the ones who would be buying nowadays.

I'm guessing that the unemployment rate of "the ones who would be buying houses" is probably 0% + the small fraction of trust fund babies.

But your 4% number is correct and yet I'm betting if you looked closer you'd find of the well-educated pool there are home owners and renters. The unemployment rate of home owners is going to be less than the renters (or those who have moved back in with the folks).

Continuing to look at demographics we would find that the relative number of buyers who can afford nicer bay area homes is down as a percentage of the overall home buying population -- as compared to 5 or even 10 years ago. This is due not only to the recession and tighter restraints on borrowing, (both very significant obviously) but also the fact that we are in a population lull. In the nicer bay area markets I've been told the average buyer is mid-thirties. The demographic relative to the rest of the population is low.

The next "boom" of buyers is in college or just out: 18 - 23. Forget the fact that the unemployment rate for this demographic is much higher than 4% - the reality is even in a rosy future scenario they are at least a decade from buying a home.

In the end, it really does come down to supply and demand. Currently, in some bay area neighborhoods the demand is greater. This will change, but I don't think the best of those neighborhoods will ever suffer lower home prices. This is good for those who own or buy there. The sad thing is those homes will go up further once they become "gated communities", which they inevitably will.

PockyClipsNow says

Remember this is a democracy you just gotta add up the numbers - the debt slaves and debt slave masters far outnumber the 'debt is wrong' crowd.

Because the debt is wrong crowd is completely wrong. Debt is a tool that, when used correctly, is extremely beneficial to society.

To think otherwise is just silly.

Goran_K says

tiny tina says

Goran_K says

Unemployment is too high

I'm not sure what kind of house you are looking for, but unemployment for the well-educated in the BA (ie the ones who would be buying houses) is actually around 4%. The landscapers and construction workers who are driving up the overall unemployment rate aren't the ones who would be buying nowadays.

Do you have any sources for that, or is it anecdotal?

She may have low-balled. The bay area numbers are better than the national. Here are the national.

http://www.deptofnumbers.com/unemployment/demographics/

Goran_K says

Do you have any sources for that, or is it anecdotal?

It was from an article I read a few months ago. In a brief search, I found a national number which is 4.2%. I would think BA would be similar if not lower than the national average.

http://www.bls.gov/news.release/empsit.t04.htm

Every time I pay taxes to support the welfare socialist state for the public sector unions which constantly vote themselves more benefits from my paycheck.

bmwman91 says

And of course, RE in the BA could defy reason yet again and rise further.

Why do you keep on harping on this? Have you traveled much? Do you know how much real estate costs in NYC, Tokyo, London, HK, Buenos Aires, Syndney, Melbourne, Paris, Vancouver, Taipei, Singapore? Do you realize that no US city ranks in the top 10 of most expensive cities in the world?

http://www.huffingtonpost.com/2012/02/16/most-expensive-city_n_1281845.html#s701687&title=Tied_for_3rd

Do you think SF compares more to a Frankfurt or to Oklahoma City? "Reason" would dictate that a more attractive city is more expensive than an unattractive city. Just because you don't find the Bay Area worth the cost doesn't mean the rest of us moving here don't. Perhaps you're the kind of person that's more comforable in Raleigh, NC than San Francisco. Good for you. Just stop with the bitching about other equally smart people wanting to pay a premium for the leaning left politics (try moving your fiancee out to NC and see how some of the locals treat her), the great weather/outdoors, and the high tech opportunities here.

Goran_K says

If you don't want to live in an apartment for 20 years, you're forced to participate in a ponzi scheme and overpay for a home.

Then don't live in an apartment. Search hard and find a home of some good landlord that isn't trying to squeak out every last cent from his rental to pay down his massive mortgage. Many people have no mortgage on their homes and for various reasons have to rent them. They want, more than anything, someone that can take care of the place. If people are really serious about comparing renting to buying then you would put the same energy into finding such a rental as you do to buy. Spending a single Sunday out looking at apartments is not the same time commitment most people put into buying so it is not a fair comparison. Rent a home just as good as you could buy for less and enjoy. I don't feel cheated at all, in fact I feel like I am cheating the system.

I actually am renting a "home" of the SFR variety. I was just trying to make my post more dire. :)

FortWayne says

Every time I pay taxes to support the welfare socialist state for the public sector unions which constantly vote themselves more benefits from my paycheck.

Thank you from this school-teacher family that has so much cash that we don't know what to do with it. We have classrooms filled with upwards of 35 kids and usually not enough paper or pencils, but we really like selling baked goods to pay for classroom necessities.

tiny tina says

Goran_K says

Do you have any sources for that, or is it anecdotal?

It was from an article I read a few months ago. In a brief search, I found a national number which is 4.2%. I would think BA would be similar if not lower than the national average.

http://www.bls.gov/news.release/empsit.t04.htm

That's a good link, but it doesn't track underemployment. So if someone is only working half-time, or working at a job under their normally expected level or salary, it still counts them as employed.

According to this article,
http://www.remappingdebate.org/article/hidden-toll-underemployment

There are over 9,000,000 who are underemployed, and it cuts across all educational levels.

Here's a graph that illustrates it:
http://www.remappingdebate.org/mediapopup?content=node/948

So I'm not sure your claim of anyone who is educated in the Bay Area and wants a house has income and can buy is valid.

Most government employees are basically ALL multi millionaires now.

Its the pensions. In order to throw off 80k a year 'until you die' you need to have about 10m in the bank at 1% interest rates and after tax you get 80k (a typical gov pension if they retire in 2020 or after). Of course cops/firemen/paper pushers get more.

They will say 'they pay into this fund' but its a lie - they are paying into it with salary from taxes not earned income from a non taxpayer funded job. Its like a kid getting an allowance - the parents earned that money really....

At any rate we are all free to become gov workers - so thats fair.

Its the 'French Dream' in thier country to do this. I think we are headed somewhere between France and Cuba politically..... especially once Obama gets in again. House payments will be based on your declared income - sales price doesnt matter the loan terms will be 31% of your combined w2. (the feds already have this structure setup - its called a loan mod via HARP or HAMP I cant remember, at some point it will apply to NEW PURCHASES just watch!)

FortWayne says

Every time I pay taxes to support the welfare socialist state for the public sector unions which constantly vote themselves more benefits from my paycheck.

Incomplete sentence. Let me finish it for you.

"Every time I pay taxes to support the welfare socialist state for the public sector unions which constantly vote themselves more benefits from my paycheck, I poop my pants and need a fresh pair of depends."

Goran_K says

So I'm not sure your claim of anyone who is educated in the Bay Area and wants a house has income and can buy is valid.

Where did I ever say that?

All I said was unemployment for the educated is 4%. The data supports that point. Saying that unemployment is too high is not a valid point when talking about better parts of the BA.

PockyClipsNow says

Its the pensions. In order to throw off 80k a year 'until you die' you need to have about 10m in the bank at 1% interest rates and after tax you get 80k

80K annual pension converts to about 1.2M @ 5% return or 1.8M with 1% return. Of course this depends on retirement age to be eligible for pension. but still, nowhere worth 10M.

PockyClipsNow says

They will say 'they pay into this fund' but its a lie - they are paying into it with salary from taxes not earned income from a non taxpayer funded job. Its like a kid getting an allowance - the parents earned that money really....

They forgot to consult you for your invaluable expertise, you must be so oppressed . . . .

tiny tina says

All I said was unemployment for the educated is 4%. The data supports that point. Saying that unemployment is too high is not a valid point when talking about better parts of the BA.

What? Even your own stats show that unemployment is high.

Also if you simply wanted to bring up educated BA resident unemployment was low (you didn't even post any stats for the BA), why did you bring up the point "ie the ones who would be buying houses" ? That statement would imply that you believe educated BA residents would create demand for housing, unless you just mentioned that without purpose or reason.

My point was that unemployment and under employment would slow down home buying.

Also not to be a stickler, but you never actually posted data for "better parts" of the BA, and no stats about under employment which was my entire point, so until you do, your counterpoint is anecdotal and not based on anything but opinion.

Goran_K says

Then why did you bring up point "ie the ones who would be buying houses" ?

Because the ones who are buying houses are not high school dropouts working construction jobs. It doesn't matter if 50% of those making minimum wage are unemployed. They aren't buying $800k houses (anymore).

I haven't been able to find the article that is specific to the BA. If you want to think the BA is above the national average that is your choice. I'm not sure why you want to believe something that you know or should know is not true.

1sfrenter says

Thank you from this school-teacher family that has so much cash that we don't know what to do with it. We have classrooms filled with upwards of 35 kids and usually not enough paper or pencils, but we really like selling baked goods to pay for classroom necessities.

You can thank the socialist state for that mess where all personal responsibility is replaced by socializing problems onto the society. You don't have to have 35 kids per classroom, but unions demand that we teach all the kids of illegal immigrants further using up the limited resources we have.

When municipalities are cash strapped and in dire need to cut budgets at least for the bell curve the unions are out banging drums, throwing temper tantrums like spoiled children. That's why we can never get any decent pension reform, or decent education reform.

And you really should not complain about your pay, you guys are well compensated. In a private sector folks are stretched out to pay for healthcare costs, while we have to cover 100% Cadillac healthcare benefits for the public sector even after their early retirement at 55.

I agree with Ft Wayne.

If you dont have a pension or a gigantic net worth you might be eating out of garbage cans when retired. Or if you are lucky you might be a butler for a governemnt retired pensioner with thier millionaire pensions. Hey now i sound like Mish complaining about unions! Anyway we can always self euthanize, no reason to live in the street poor and sick.

FortWayne says

In a private sector folks are stretched out to pay for healthcare costs

Uh, sorry, no.

I pay $700 month for health insurance, which increases yearly.

Another $600 month goes straight out of my paycheck into the State Teacher's Retirement System.

In CA, teachers do not pay into nor do we receive Social Security.

We spend more of our tax dollars PER PRISONER than we do PER STUDENT and the United States currently incarcerates a higher percentage of its population than any other civilization in history (including during Stalin's reign in the Soviet Union).

robertoaribas says

I have three more homes under contract now, which will bring m total to 12

12 !!!! Are you using property management companies or dealing with the pesky tenants yourself?

PockyClipsNow says

If you dont have a pension or a gigantic net worth you might be eating out of garbage cans when retired.

It's the unions who fought hard for pensions (and the weekend and minimum wage and the 8-hour work day and safe working conditions).

Getting rid of unions (now only 12% of the US workforce is unionized) will not insure anyone's quality of life. The idea that unions are the problem is a smokescreen and the powers that be are helping us all race to the bottom and won't be satisfied until we are all working in 3rd world conditions.

Hey--I'm the first to argue that there are some reforms needed in public sector pension plans. And if you want to complain about salaries and waste, you should be pointing the finger at administrators, not the rank and file teachers.

But, regardless, unions are NOT the problem. I wish we had stronger unions fighting for the average Joe. Like Buffet said--there is class warfare, and the 1% is winning. By a LOT.

1sfrenter says

PockyClipsNow says

If you dont have a pension or a gigantic net worth you might be eating out of garbage cans when retired.

It's the unions who fought hard for pensions (and the weekend and minimum wage and the 8-hour work day and safe working conditions).

Getting rid of unions (now only 12% of the US workforce is unionized) will not insure anyone's quality of life. The idea that unions are the problem is a smokescreen and the powers that be are helping us all race to the bottom and won't be satisfied until we are all working in 3rd world conditions.

My brother is very conservative - not quite tea party or libertarian conservative, but close. He is 57 and retired last year with 2 pensions from larger CA cities. One city he worked for about 20 years and took an early buyout so he could head the dept (civil engineering) in the other city. He makes more money now than he ever did and has gone back to work part -time(w/o) benefits to city #1. BTW, he is not in a union.

If he lives as long as our father did, he will collect >$200k for the next 38years (with cost of living increases) And although he understands how this may be perceived as not fair you'd never get him to give up a penny of it.

So for all those conservatives here who want to point to government pensions as a big problem our country faces, you are right. But don't try to demonize the folks who are getting these because many of them are just like you. Hypocrite comes to mind, but human is more accurate.

DukeLaw says

Why do you keep on harping on this? Have you traveled much? Do you know how much real estate costs in NYC, Tokyo, London, HK, Buenos Aires, Syndney, Melbourne, Paris, Vancouver, Taipei, Singapore? Do you realize that no US city ranks in the top 10 of most expensive cities in the world?

http://www.huffingtonpost.com/2012/02/16/most-expensive-city_n_1281845.html#s701687&title=Tied_for_3rd

Do you think SF compares more to a Frankfurt or to Oklahoma City? "Reason" would dictate that a more attractive city is more expensive than an unattractive city. Just because you don't find the Bay Area worth the cost doesn't mean the rest of us moving here don't. Perhaps you're the kind of person that's more comforable in Raleigh, NC than San Francisco. Good for you. Just stop with the bitching about other equally smart people wanting to pay a premium for the leaning left politics (try moving your fiancee out to NC and see how some of the locals treat her), the great weather/outdoors, and the high tech opportunities here.

Of course there are way more expensive places to live. I have been to many of them. It makes sense why they are expensive...the population densities are immense there, many of those places already built UP and there really isn't anywhere left to go. They are also fun places and damn near anything you need is within walking distance. If a busy area isn't something that bothers someone, then it is a great place for them and the exorbitant cost can be justifiable.

In contrast, the BA is mostly a dull splattering of concrete & strip malls, and outside of SF proper, you basically need a car. My interests happen to be in the outdoors, so there are obvious reasons why the lack of weather here makes the BA appealing. I have spent enough summers & winters in the northeast, and summers in the south, to know that they aren't on top of my list of places to go!

It isn't all bad here, by any means, and most things about the region are quite good. My beef isn't even with the high prices here, but with WHY prices are what they are here. It is perverse to knowingly buy into a system that is blatantly rigged to take you for most of what you are worth. I grew up here and have 80% of my family in the area, and would like to stick around them (and the really awesome hills/mountains). The prices on houses here are still stupid for what you get IMO. I don't mind renting at all, but the recent hikes are also upsetting what was a happy balance for us. Yeah, I know that reality dictates, "put up or shut up" but this thread happened to start out as a complaint-fest anyway (so I guess that you complaining about me complaining is OK after all).

Hey i dont blame the pensioners for being smart enuf to get in on the looting.

I'm the only one in my family not to get a check from the govt - brother, sister, both parents all get either gov salary or pension+ss. 'govt employees are rich people' is fooked up IMO, complaining doesnt help.

tiny tina says

I'm not sure why you want to believe something that you know or should know is not true.

Because "tiny tina" is not an authoritative source for me, and didn't even cover underemployment which can be just as big a drag as unemployment. There is a high amount of both. But if you can find a source (BLS or otherwise) that shows the BA has low unemployment for people with degrees, and they are fully employed, then maybe you have a point, and housing in the BA just has lots of demand from local educated buyers flush with cash. So far that point hasn't been proven to be the case, just some here say and opinion.

tiny tina says

Because the ones who are buying houses are not high school dropouts working construction jobs. It doesn't matter if 50% of those making minimum wage are unemployed. They aren't buying $800k houses (anymore).

That's not the point. If someone who graduated from Harvard has to take a $50,000 job because the $250,000 jobs simply don't exist anymore, are they going to buy an $800,000 home either? You are trying to make it out like the only people who can't afford homes in nice areas are gardeners and janitors. Tell that to someone who works at Apple and wants to buy in Cupertino on a $120,000 salary.

Goran_K says

It is perverse to knowingly buy into a system that is blatantly rigged to take you for most of what you are worth

I was fortunate enough to be in a living situation where I had very negligible housing expenses for about 3 years after college. Then I rented with my fiance and later wife for about 5 years. Last year, we purchased a place. We are paying ahead towards principle and the goal is to be done with mortgage in the 2019-2025 range. I am very motivated to get as close as possible to having financial housing costs that resemble those first 3 years. Of course, there will be property tax and HOA, but that is negligible compared to renting or mortgage in this area. It's like chasing that first high lol.

Goran_K says

Tell that to someone who works at Apple and wants to buy in Cupertino on a $120,000 salary.

I have a friend who has worked at apple since college - about 12 years. Not sure how much she makes - a lot is commission - but not a ton. And yet she bought a very expensive home last year. Thank you stock options.

My point is Apple may not be your best example.

Friends that went to Apple, all with 3-5 years of EE experience, are pulling a base salary of around $125k, and stocks and bonuses bring the annual gross compensation to more around $160k. Google is a similar story. Given FHA loan limits of $726k on 3.5% down, you bet that a number of people CAN finance an expensive house. I do not know how many actually DO, but they certainly CAN. Get a professional DINK couple pulling salaries like that and a few years of saving, and they CAN pull a jumbo loan (again, not sure how many DO).

Goran_K says

Because "tiny tina" is not an authoritative source for me, and didn't even cover underemployment which can be just as big a drag as unemployment. There is a high amount of both. But if you can find a source (BLS or otherwise) that shows the BA has low unemployment for people with degrees, and they are fully employed, then maybe you have a point, and housing in the BA just has lots of demand from local educated buyers flush with cash. So far that point hasn't been proven to be the case, just some here say and opinion.

You received 2 sets of data that said nationwide unemployment for the college educated is ~4%. That is not my opinion. The fact that I read an article that said the same thing several months ago specific to the BA also is not my opinion. Again, if you don't want to believe me, that's fine. I would think someone would put 2 and 2 together though that the 4% unemployment is real for the educated in the BA, not just some made up number.

As for the underemployment stuff, I doubt there's a breakdown of that. Kind of like the specifics of the "shadow inventory." Maybe it's a factor, maybe it's not.
Goran_K says

That's not the point. If someone who graduated from Harvard has to take a $50,000 job because the $250,000 jobs simply don't exist anymore, are they going to buy an $800,000 home either? You are trying to make it out like the only people who can't afford homes in nice areas are gardeners and janitors. Tell that to someone who works at Apple and wants to buy in Cupertino on a $120,000 salary.

You seem to be misunderstanding my point. I never said prices were perfectly affordable in all parts of the BA for anyone who has a job. You tried to say I said that. Again, the point is that unemployment for the college educated is around 4% in the BA, maybe slightly higher if you throw in underemployment. Saying high unemployment is a reason why housing is in trouble is simply not true.

All I ask is for you to go to an open house in Cupertino this weekend. Let me know how many people you see there. Then tell me the supposed "high unemployment" is keeping housing down.

clambo says

buy AAPL because money gives you the flexibility that complaining doesn't.

Second that. Anyone who have rented and invested the would-be downpayment (say, $20,000) since 1997, can now pay cash for a SFH with remaining AAPL worth similar.

Hi Goran,

My advice to you is to stay positive, be grateful for all you have and play the cards you've been dealt. That's basically what all of us have to do. Every generation faces unfairness, best just to deal with it and not dwell on it. Trust me - you have little to gain by allowing yourself to 'feel cheated' and much to lose as you will not be grateful for all that you have. I have no doubt that if you stay positive and play your hand to the best of your abilities you will accomplish your goals. Good luck!

hanera says

Anyone who have rented and invested the would-be downpayment (say, $20,000) since 1997, can now pay cash for a SFH with remaining AAPL worth similar.

But anyone who put it into Netscape or 100 other hot companies would have lost it all.

Just sayin it's not so easy to pick the AAPLs.

tiny tina says

All I ask is for you to go to an open house in Cupertino this weekend. Let me know how many people you see there.

That confirms lots unemployed people :)

Back in 1999, you don't see a lot people, because they have jobs and are busy to flip stock.