patrick.net

jojo says

I've seen people say its because journalists are homeowners, the media owners like GE have a vested interest , etc. Any ideas?

I've mentioned this before -- GE no longer owns any piece of NBC:

http://patrick.net/?p=1238667&c=1056593#comment-1056593

jojo says

I've seen people say its because journalists are homeowners, the media owners like GE have a vested interest , etc. Any ideas?

The paid media no longer does real investigative journalism. Only the alternative media examines the way things are-and that gets labelled as "conspiracy theorizing"

smaulgld says

The paid media no longer does real investigative journalism.

Agree, there was a point when the media used to analyze things for the truth. Now it's he said/she said, and they report them at face value, even though the reports are full of shit. No critical analysis by these guys whatsoever. Cable news is such a cesspool and has dragged everything else down with it.

corntrollio says

No critical analysis by these guys whatsoever.

name calling, hyperbole, distraction- and now we break for an important story about Justin Beavers' DUI

jojo says

smaulgld says

Call it Crazy says

Won't be First Time Home Buyers....

Was the topic of the very first smualgld.com post in april 2013

http://smaulgld.com/student-loans-and-unemployment-are-holding-back-the-economy-and-real-estate-market/

good headline:

"What’s the difference between a high school graduate and a college graduate? About $50,000 in debt."

College grads make more money. That is good debt.

Strategist says

jojo says

smaulgld says

Call it Crazy says

Won't be First Time Home Buyers....

Was the topic of the very first smualgld.com post in april 2013

http://smaulgld.com/student-loans-and-unemployment-are-holding-back-the-economy-and-real-estate-market/

good headline:

"What’s the difference between a high school graduate and a college graduate? About $50,000 in debt."

College grads make more money. That is good debt.

Well that depends a lot on what major and field you are talking about doesn't it?

If a degree costs $100,000 but the graduate can only hope to earn and extra $5000k/yr is that worth it? Especially when the wages lost during the college years and interest on the loans are factored in?

Or worse what happens when the graduate finds their employment prospects are no better than someone with a high school degree? Lots of debt to pay off and it just grows in deferment.

Call it Crazy says

Strategist says

College grads make more money. That is good debt.

New Renter says

Well that depends a lot on what major and field you are talking about doesn't it?

If a degree costs $100,000 but the graduate can only hope to earn and extra $5000k/yr is that worth it? Especially when the wages lost during the college years and interest on the loans are factored in?

Or worse what happens when the graduate finds their employment prospects are no better than someone with a high school degree? Lots of debt to pay off and it just grows in deferment.

I was going to post that, but that sums it up pretty well....

I agree, in a way, with both of you. If you are gonna take on heavy debt for an education that just pays a little bit more, what use is it?
I have noticed, people with higher education make better financial decisions. It's not always what you make, but how much you keep. That has value too.

You have not heard adjustable rate mortgages (including interest only) are coming back in full force, but this time the banks are saying they are lending carefully. This genious thinking will definitely expand the buyer pool...............

If the state were to seize the means of production on behalf of the workers, purging bourgeois saboteurs and wreckers, while exterminating the kulaks, we could collectivize both agriculture and industry. This would generate the necessary wealth for first-time home buyers to plunge in to the market.

Duh!

jojo says

I'm not sure how it fits with the qualified mortgage standards and all that.

Waste of time trying to figure out how it fits with the qualified mortgage standards..................if you believe in mortgage standards then I have an island to sell you.

Strategist says

jojo says

smaulgld says

Call it Crazy says

Won't be First Time Home Buyers....

Was the topic of the very first smualgld.com post in april 2013

http://smaulgld.com/student-loans-and-unemployment-are-holding-back-the-economy-and-real-estate-market/

good headline:

"What’s the difference between a high school graduate and a college graduate? About $50,000 in debt."

College grads make more money. That is good debt.

Depends- it may be debt you don't need to take on at all. http://smaulgld.com/is-college-worth-it/
While college grads may make more money if they are also more net indebted they are not really ahead.

jojo says

@sbh

I agree with you completely. I am only explaining things and decisions from their point of view. I strongly advocate against this line of though and decisions. I'm merely explain I g what is going on inside the mind of a millennial.

They absolutely should not take the easy way and stay at home because they will never make up for the lost experience. However, they are young and don't know what they don't know.

Millennials have been told incessantly that going to college was their ticket to the future. Then they graduate without jobs or a part time job or a job that doesn't require their decree. They live at home because they can't afford to buy a home or rent. There are two main reasons for their inaction:
Cultural- it's no longer odd for a 24 year old to be living with his parent so there is no real peer pressure and given their economic circumstances staying at home is a rational move
Economic- as stated above it makes sense to stay at home but also the economic opportunities are not there today in the traditional ways for college grads.

Starting one's owns business is not how they think. They think job. The number of people working for themselves in the United States I read is at an all time low; I think low single digits. As sbh notes they need to break the mold and shake off their lethargy but with cultural forces telling them it's ok it's not their fault they are unemployed, it's the economy, the media telling them for five year things are improving (recovery!) and the availability of food stamps, they wait for the job market to improve.

Analyzer says

You have not heard adjustable rate mortgages (including interest only) are coming back in full force, but this time the banks are saying they are lending carefully. This genious thinking will definitely expand the buyer pool...............

Clearly that is what is coming to try and boost the housing market. With rising interest rate banks will want to lend money more than when rates were low.

jojo says

But I dont think it will go very far. Govt is already moving to get rid of Fannie and Freddie. And it banks can't get rid of the garbage they won't make the loans in size. They are only interested in subprime if its someone else's risk. If it stays on their balance sheet they won't do it.

"I'll take the risk if you'll take the blame"

jojo says

sbh says

Apropos a larger issue: how should we consider them as the future of this fucked up country? Joshia Bartlet said: the future belongs to those who show up. Too many of these appear to have checked out already.

We will have to wait and see.

My prediction is nothing will change absent a major event, a collapse or calamity. After that the young people will be the ones who set about to rearrange things for the better. They are capable, just not motivated

Typical housing recovery article

Reports that home sales down slightly from prior month but fails to mentions lowest homes sales in 19 months

http://www.nasdaq.com/article/us-existinghome-sales-fall-slightly-in-february-20140320-00649

Who will buy?

Gay Trillionaire Chinidians who shit gold and eat caviar off the asshole of their gay lover.

Higher interest rates will prompt banks to lend again perhaps creating some demand. They will make adjustable rate mortgages popular again

Call it Crazy says

A lot of that was drummed into their heads by their parents. A big piece of the blame rests on the parents. Many of these kids got degrees in useless majors, and now are wondering why they can't find work.

It worked for them and there were loan guarantees and everyone was doing it

Hard for parents to admit they made a mistake so they "live with them"!

Call it Crazy says

After that the young people will be the ones who set about to rearrange things for the better.

It will be in their hands.... (that's a scary thought)

I think millennials are no better or worse than any other generation. They just haven't been tested. I know that many congressional medal of honor winners were never considered leaders or heroes before they won their medal. They rose to the occasion in a crisis.

Call it Crazy says

smaulgld says

I think millennials are no better or worse than any other generation.

I don't know about that... I have 3 millennial kids and I've met a whole bunch of their friends. Over all, they seem to be generally smart and an intelligent bunch. But, as a whole, they lack any drive, ambition, have no goals, no plans, no dreams, lack personal responsibility, can't handle change, etc.

They are just happy "existing".... If we are betting the future of this country on them stepping up and taking control.... we're screwed...

Don't disagree but that is a product of their circumstances. If things change, a crisis or collapse they will have to rise to the ocassion

jojo says

Debt does not equal wealth. That is where people went wrong. Debt is a tool for building wealth, not a guarantee of wealth.

Debt for business or investment CAN be a product of building wealth.
Debt for consumption is never a tool for building wealth

Foreigners bought 58% of their properties in 4 states- Florida, Arizona, Texas and California.

Blackstone bought 88% of theirs in Arizona, California and Florida

http://www.bloomberg.com/infographics/2013-12-20/blackstones-big-bet-on-rental-homes.html

Call it Crazy says

I know my kids will, I don't have a lot of faith in the rest of that generation..

You kids and select others will lead, the rest will follow- no different than any other generation- their time hasn't come yet

Call it Crazy says

Ha ha... very true.... many times I think the ones who didn't have kids were the "smart" ones...

Certainly is cheaper not to have kids!

Call it Crazy says

smaulgld says

Call it Crazy says

Ha ha... very true.... many times I think the ones who didn't have kids were the "smart" ones...

Certainly is cheaper not to have kids!

Don't even go there.....

Kids used to be a financial asset- another set of hands to work the family farm. Today you have to invest in your kids with time, love, energy, teaching and tuition!

Here's one that blames low inventory not low demand as a reason why the housing "recovery" may not continue http://www.foxbusiness.com/personal-finance/2014/01/23/housing-biggest-obstacle-inventory/

jojo says

Debt is a tool for building wealth

Lol

Call it Crazy says

That "low inventory" chant is such a load of crap!!!

jojo says

Does that mean higher prices?

They love higher prices but bemoan low inventory. They think if there was more inventory it would create demand and prices would rise!

We'd be better off with lower home prices- they are trying to bailout the 40% underwater homeowners by pushing prices back to the prior fed induced bubble peak-and call that "back to normal"

jojo says

smaulgld says

They love higher prices but bemoan low inventory. They think if there was more inventory it would create demand and prices would rise!

So they are saying more supply will lead to higher prices? Whoever wrote this must not have taken Econ 101.

That is the way I interpret their reasoning. They believe that housing went down so it has to go up. And they believe that this "recovery" is just starting.
I've been tracking the non housing recovery for nearly a year.
Here is a summary up till last November
http://smaulgld.com/the-false-housing-recovery-of-2013-and-how-it-unraveled/

jojo says

smaulgld says

They think if there was more inventory it would create demand and prices would rise!

If that were true then home builders alone could build the way out of this recession! Why stop there, just keep building and the economy will experience infinite growth!

But they are NOT building-starts are down three months in a row and new home construction is at lows not seen since the 60's & 70's when there were far fewer people in the US

sbh says

"supply creates its own demand".

as seen in a movie- If you build them they will come and overpay

sbh says

And their concept of debt baffles me. The great danger inherent in debt is that it turns time against you. The most fundamentally sensible way for normal people to accumulate wealth is to put time on your side such that when you get up in the morning or take a nap at noon your money is actually working while you are doing something else.

And I don't buy the "they can't afford rent" excuse. They can't afford the rent for the place they think they deserve. And then the rent they save by staying in the basement goes toward anything but their debt.

For once we have something to agree on.

jojo says

smaulgld says

They think if there was more inventory it would create demand and prices would rise!

If that were true then home builders alone could build the way out of this recession! Why stop there, just keep building and the economy will experience infinite growth!

That's more or less the essence of the global economic bubble. There are literally ghost cities in some other countries that embraced bureaucratic GDP counting.

Demand is naturally created from excess savings from production
Its artificially created by debt and public financing

Actually, when it comes to housing, the act of building a house instantly creates ten people out of thin air. It also provides those people with enough cash to pay double the asking price. I think Tesla came up with this and was incessantly mocked.

jojo says

smaulgld says

Demand is naturally created from excess savings from production

Its artificially created by debt and public financing

I don't think this is entirely accurate but I see what you are getting at. Personal debt is borrowing from your future self. So it can help or hurt you depending on what you use it for.

Thanks was talking generally on a macro level
The unhampered market economy vs the centrally planned one

jojo says

exfatguy says

the act of building a house instantly creates ten people out of thin air

That's an interesting trick. I heard about this on FOX news.

Moving creates three people two cats and a dog

Have any of these buyers stepped up?

Who Will Buy the Homes to Keep the Housing (Price) Recovery Going?

Millennials & First Time Home Buyers?

Millennials, as we have pointed out since the beginning of Smaulgld.com, are in no position to buy homes because of their high unemployment/underemployment rates and crushing student loan debt. Household formation among millennials is low and prevailing economic circumstances are shutting them out of the housing market. For many millennials, staying at home may reflect a cultural and generational shift. Higher mortgage interest rates and higher home prices will put homeownership further out of reach.

Baby Boomers?

Aging baby boomers are not looking to buy new and larger higher priced homes. Many boomers will be selling their homes and searching for smaller accommodations. They may move in with relatives or move to retirement homes but most won’t be buying new and larger homes.

Move up Buyers?

For the up to 40% of home owners with mortgages underwater, moving out and moving up is not a possibility. For those homeowners not underwater, stagnant wages or spells of unemployment, financing their children’s education or servicing their student loan debts will sap the financial resources required to purchase move up houses.

Foreigners?

Foreigners have made up significant portions of the higher end home sales in upscale markets like San Francisco and New York and a decent amount of the lower end sales in Florida. Foreigners however, constituted only 6.3% of all home purchases in the United States in 2013. I addition fifty-eight percent of foreign home purchases were concentrated in four states- California, Texas, Florida and home purchases by foreigners in the United States is declining.

As investors and foreigners leave the housing market there will be even fewer buyers capable of buying at the current higher “recovery” housing prices and the housing inventory shortage will become a glut unless prices come down.

Recovery, Recovery, Recovery, Recovery

https://smaulgld.com/will-buy-homes-support-housing-recovery/