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Housing Inflation

By Patrick   Follow   Tue, 23 Oct 2012, 10:53am   1,519 views   22 comments
In Menlo Park CA 94025   Watch (0)   Share   Quote   Permalink   Like (5)   Dislike  

Let's all start noting where reporters call housing inflation an "improvement" or "recovery" and making a point to write the reporter and point out that inflation is no improvement for buyers.

I'll start. Damn, this is easy. Just search for "housing recovery" on Google. Ah, it's a bit harder to find one that has the reporter's contact info... OK, got one. Here's the article:

http://www.bloomberg.com/news/2012-10-21/fannie-mae-limiting-loans-helps-jpmorgan-mortgage-profits.html

And here's the email I will send to one of the reporters, Alan Goldstein agoldstein5@bloomberg.net

Hi Alan,
in this article of yours:

http://www.bloomberg.com/news/2012-10-21/fannie-mae-limiting-loans-helps-jpmorgan-mortgage-profits.html

You say: "amid a presidential election and a recovery in housing, including higher prices".

Please don't use the word "recovery" to refer to inflation in house prices. Would you call higher prices for bread or gasoline a "recovery" in those things, or just inflation? They are just inflation, and so are higher house prices.

I hope you'll reply on my housing forum, here:

http://patrick.net/forum/?p=1218020

Patrick Killelea
Menlo Park, CA

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1. errc Follow Befriend (7) 30 threads 1,215 comments 31 male Premium

   1   11:02am Tue 23 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Good luck! You're going to need it Its hilarious to watch these fools cheer on rising prices,,,,why do they hate the economy?

2. upisdown Follow Befriend 632 comments

   2   11:11am Tue 23 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   The local tv stations run half-hour to hour long shows advertising homes for sale on Sunday mornings, and the newspaper is crammed with house listings in the Sunday edition too. They won't bite the hand that is feeding them, and sometimes they will do an expose on a company or industry after a recent drop in their advertising, and that usually inspires the former advertiser to resume their advertising. That's not even mentioning all the bank advertising that's done too. So, of course the housing industry will get some favorable exposure.

3. mell Follow Befriend (5) 57 threads 1,324 comments Premium

   3   11:32am Tue 23 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Great email! Note that stocks are starting to wafer amidst lower earnings and guidances - having increasing house values in such an environment is pure evil. But if deflationary pressure continues to pick up despite the fed throwing the bazooka at it there will be no escape, not even for housing. Look out below! ;)

4. SkyPirate Follow Befriend 4 threads 91 comments Atlanta, GA

   4   1:55pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   CPI is what, 1.9% YTD for 2012? That accounts for house price gains in many locations but not all. Phoenix, for instance, is up 30%. There is more at play here.

5. SkyPirate Follow Befriend 4 threads 91 comments Atlanta, GA

   5   3:38pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   There are increases in house prices scattered around the country but I believe it is driven in large part by low interest rates. People are thinking about payments, not price. Since more people are buying now that payments are within their affordability, it is driving prices up. If interest rates go up, prices will come crashing back down. Bottom line - median US income has remained stagnant for over a decade. It's certainly not CPI that's driving the increases we're seeing in CA - it's the interest rates.

6. Dan8267 Follow Befriend (16) 764 threads 7,710 comments Boca Raton, FL Premium

   6   6:01pm Tue 23 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Patrick says Let's all start noting where reporters call housing inflation an "improvement" or "recovery" and making a point to write the reporter and point out that inflation is no improvement for buyers. Back in 2008 I wrote to a news article writer who wrote in 2006 that housing was a great investment and now was the time to buy. I asked him if he realized how wrong he was. His response was a snide "well, were were you in 2006?" to which I replied that I and many others were warning about the housing bubble and inevitable crash since 2004 on places like patrick.net and thehousingbubble.com. He didn't reply after that.

7. evilmonkeyboy Follow Befriend (1) 2 threads 119 comments San Jose, CA

   7   6:26pm Tue 23 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   If housing only increases at the rate of inflation then that is good for the overall economy. However, if housing booms (recovery) this is simply a generational transfer of wealth. Let's consider the highly unemployed youth, can they afford to substadized their parents and grandparents by purchasing their homes at inflated cost? Artificially low interest rates are inflating housing, but interest rates have limit to how low they can go, which we have quickly approached or have already passed.

8. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

   8   6:50pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Darrell In Phoenix says Now it's time to reconnect to early 1990's wage levels. Credit and strategic default are like stopgaps that prevent any such endgame. The daughter of one of my buddies was home from biz school recently, and based on what she'd learned that summer, was trying to convince the old man how bankruptcy was "genius."

9. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

   9   7:09pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Darrell In Phoenix says And how'd that work out? ;) Not so well. That's not the point. It's still ongoing.

10. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    10   7:21pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   I am sitting, but not tight! I'm too old. I gotta sprawl a little...

11. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    11   7:25pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Nosir...ice cold Ballantine on weeknights.

12. errc Follow Befriend (7) 30 threads 1,215 comments 31 male Premium

    12   7:43pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   JodyChunder says Darrell In Phoenix says Now it's time to reconnect to early 1990's wage levels. Credit and strategic default are like stopgaps that prevent any such endgame. The daughter of one of my buddies was home from biz school recently, and based on what she'd learned that summer, was trying to convince the old man how bankruptcy was "genius." Well, filing for bankruptcy is 'genius' if you are bandrupt. The propaganda machine has bastardized the process so much to scare people away from taking the "easy" out, they make bk'ers out to be lepers. And go figure, its all the bad debt that's got us all backed up. Our system has a built in solutionto keep the pipes unclogged and flowing,,,bankruptcy Everything is relative. Being bankrupt and not filing bk is pretty stupid

13. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    13   7:45pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Darrell In Phoenix says There's always colt 45 You've got some funny ideas...

14. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    14   7:47pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   errc says Everything is relative. Being bankrupt and not filing bk is pretty stupid I was talking more about levering up and then filing for bankruptcy as a strategy for wealth creation -- not as debt relief. It's just another form of larceny.

15. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    15   7:55pm Tue 23 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Darrell In Phoenix says Boon Farm? Mateus? Schlitz? I consider myself ombibulous, but hell...might as well get a friend or a friend's cat to piss in your mouth than drink that garbage. As a successful VLB, I am strictly high-dollar. I don't get out of bed on Saturday morning unless I've had two or three Belvederes via bedside ice luge.

16. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

    16   8:11pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Patrick says Let's all start noting where reporters call housing inflation an "improvement" or "recovery" and making a point to write the reporter and point out that inflation is no improvement for buyers. Tell them to call it what it is: the fed and their cronies arresting a correction with stolen money.

17. taxee Follow Befriend 88 threads 457 comments El Cerrito, CA Premium

    17   8:14pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   And lo and behold, somehow they'll end up with the deeds all clean and quieted. Couldn't see that coming now could we?

18. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    18   8:14pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Mix one half Genesee Ale with one half Woodpecker and you get a Genocide. I preferred Rheingold extra dry when I was in NY in the late sixties. I'm tired of talking about beer...I'm gonna go live it!

19. JodyChunder Follow Befriend (3) 16 threads 1,379 comments Victorville, CA Premium

    19   9:06pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Darrell In Phoenix says Schaeffer. One word is worth a thousand pitchers

20. New Renter Follow Befriend (3) 13 threads 2,219 comments San Jose, CA Premium

    20   9:22pm Tue 23 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   JodyChunder says Darrell In Phoenix says Boon Farm? Mateus? Schlitz? I consider myself ombibulous, but hell...might as well get a friend or a friend's cat to piss in your mouth than drink that garbage. As a successful VLB, I am strictly high-dollar. I don't get out of bed on Saturday morning unless I've had two or three Belvederes via bedside ice luge. Obligatory: I hear you can get high, really really high on cat urine. Probably shouldn't have said that...

21. SkyPirate Follow Befriend 4 threads 91 comments Atlanta, GA

    21   6:51am Wed 24 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   evilmonkeyboy says If housing only increases at the rate of inflation then that is good for the overall economy. However, if housing booms (recovery) this is simply a generational transfer of wealth. Let's consider the highly unemployed youth, can they afford to substadized their parents and grandparents by purchasing their homes at inflated cost? Artificially low interest rates are inflating housing, but interest rates have limit to how low they can go, which we have quickly approached or have already passed. Very good point. The price:income ratio for this generation is much higher than it was for prior generations. http://www.mybudget360.com/the-magical-2-housing-ratio-between-median-nationwide-home-prices-and-household-income/

22. SkyPirate Follow Befriend 4 threads 91 comments Atlanta, GA

    22   7:06am Wed 24 Oct 2012   Share   Quote   Permalink   Like   Dislike   Australia is even worse: