patrick.net

It is considered “immature” to be renting too long.

I know... it is difficult to be mature without losing everything at least once. Many recent homebuyers will get the chance to be "mature" though. :)

recent homebuyers will get the chance to be “mature” though.

PeterP, LOL...glad to see you and your wit are back!

It is considered “immature” to be renting too long. Especially by fiancees and wives. --DrChaos

I think you're on to something there Doc. I'm tempted to use that as an excuse for why I have not yet found a (good) fiance or wife! Anyway, I tend to think the prevailing dogmatic school of thought concerning housing will change quite a bit once the current debacle unwinds itself. The masses will likely reassess the maturity level of the renters who chose not to bankrupt themselves by taking on an onerous debt burden to acquire a wildly overvalued asset!

I know… it is difficult to be mature

Peter Pan, is that you? :-)

>

Men are just as susceptible to this kind of thinking as women. In fact in my household I am the one who would be happy without the outer trappings of success, while my husband feels like if he's earning the cash, he should have the outer proof of it.

"The “earn the high income, sock away that money, and get ahead” strategy does not go over very well with them. Firstly having a house in an expensive area is “proof” that the man is making money, and many consider having a home the primary reason to earn the high income. "

Darn it I made my quote disappear again. The above quote is what I was replying to with my last post...

Men are just as susceptible to this kind of thinking as women. In fact in my household I am the one who would be happy without the outer trappings of success, while my husband feels like if he’s earning the cash, he should have the outer proof of it.

I have a suggestion/request for a future discussion topic:

What housing stocks, indices, REITs, or whatever do my fellow bubble watchers feel is one of the better candidates to short sell or buy put options on? This of course would be purely hypothetical as options trading in general and short selling in particular are extremely risky speculative bearish bets....

Oh and of course it would most interesting to know WHY people have selected their candidate...

Peter Pan, is that you?

Peter Pan? I cannot fly.

P staPeter Pan, is that you? :-)The P in "Peter P" stands for "Peter P"

Am I a "Big Government Libertarian"? I do not know, but I do think that justice ought to be swift and severe...

http://tinyurl.com/8ryzv

An Australian was hanged in Singapore for smuggling 26000 doses of heroin. I may be insensitive, but I do consider justice pervailed.

Unlike the US, which spends millions in taxpayer money to put convicts on death rows for many years, Singapore took less than 3 years from arrest to execution. (They are not as "efficient" as China though :) )

I think what we should learn from Singapore is its efficiency in delivering death sentences, not necessarily its position on drugs.

Why should we clog our prisons with inmates? When putting them in the chamber is more efficient.

Putting convicts on death row for over a decade with countless appeals is even worse.

In the rest of the world, justice prevails - in the US, oops I mean “Eww ess”, justice “pervails”.

All right, I am a bad speller...

Most of the time, Fannie and Freddie break even or lose money on the resale of repossessed homes. Only rarely do they make money, and then only when there is considerable equity in the home. But if it were not for them, would there be any repossessed homes on the market that were clean, repaired and fully functional? I don’t see how.

There will always be an investor who will buy a fixer and turn it over for a profit (well maybe not right now!). It will sell for whatever the market will bare. The GSE's make themselves out to be the good guys, but I can see through their very thin disguise!

I wonder if anyone has ever thought about what the real estate market would be like without this service.

The only ones who benefit from the GSE's are those who work in the RE industry....so maybe for you they are a blessing!

They have provided liquidity in the mortgage market by buying loans from banks thus allowing them to take on much riskier loans....this is what drives up prices! If it wasn't for them, houses would be much cheaper. You don't make housing cheaper by putting more money into peoples hands!

They claim that they make it cheaper for minorites to buy houses, yet only 10% of their business is to minorities. They also claim to pass on savings to the borrowers, but what are they passing on? 7 lousy basis points! That's .07%! .......Fannie you can keep the pennies!

To top it all off, when this market crashes (and it most definetly will!), Fannie will fall on her ass and us taxpayers will have to take the hit! ....and YOU ask what it would be like without them!

Shine A Hard Light On Fannie Mae

Take a look at our favorite housing stocks.

@ScottC

I want to discuss the GSEs, namely Fannie and Freddie. Yes, these are privately owned corporations backed by government guarantees. They also provide an invaluable service–rennovating repossessed homes for resale at fair market value, which provides many people with access to reasonably priced older homes.

Scott,

Regardless of the original lofty intentions of the bureaucrats who created these high-risk behemoths, the GSEs aren't doing crap to help the "little guy". The only thing they're good for is taking much of the risk off the banks'/lenders' hands by purchasing their paper then re-selling them to institutional investors. This enables lenders to make no-doc I/O loans to dead people as often as they want. Even Alan Greenspan admitted they've (at best) shaved about .07% off mortgage interest rates --big deal.

I wonder if anyone has ever thought about what the real estate market would be like without this service.

Hmmm.... let me think... Affordably priced?

ScottC,

Most Libertarians I know --and on this blog-- are calling for the end to the GSEs' exclusive government charters (and taxpayer guarantees). If they can still survive as private companies, more power to 'em.

This is ideal for young first-time homebuyers. There is no way these people could afford to buy a home in disprepair and fix it up, even if they wanted to. If it were not for Fannie and Freddie, these people would have very little access into the housing market.

Wrong, Scott.

If it were not for the housing bubble (of which the GSEs are a major contributing factor), young first-time homebuyers could easily afford homes, because they would be priced based on sane valuations, not Fed/GSE-generated monopoly money.

When most people are shopping for a home, they want one they can move into and live in. They don’t want to buy a dump and repair it. They want a clean, fully functional home.

Again, if not for the housing bubble, ALL homes --turn key new ones and fixer-uppers alike-- would be much cheaper. Fixing up repossessed homes is great, but this is not the GSEs core business (providing mortgage market "liquidity"). HUD and Habitat for Humanity, by contrast, do this as their main mission. There are plenty of private entrepeneurs/contractors who also do this as their core business. This argument is a red herring.

Most of the time, Fannie and Freddie break even or lose money on the resale of repossessed homes. Only rarely do they make money, and then only when there is considerable equity in the home. But if it were not for them, would there be any repossessed homes on the market that were clean, repaired and fully functional? I don’t see how.

Again, there are tons of private and government organizations out there whose main mission in life is to renovate repossessed homes and help out first-time buyers. This is not the GSEs main mission, nor has it ever been. Btw, last time I checked, the GSEs were making plenty of money for themselves and their investors. They are hardly in the charity business.

and why on earth do people care so much if someone does drugs?

Geez, let me guess, because illegal drugs have side-effects, leading to lethal overdoses, and induce addiction, forcing drug users willing to do anything, including killing and stealing, to get their fix? Okay, if drugs were all legalized, and the cost were nominal, so to speak, wouldn't the price eventually go up because of huge demands? What about criminals using drugs to get kids hooked up and do bad things, like robbing you? If you had kids (I doubt you don't), would you be thrilled seeing your kids smoking pots and injecting heroin in the third grade? All those, and I have not accounted the brain damage and the loss of productivity caused by illegal drugs.

I'm surprised to see the Australian media blow the whole thing out of proportion about that execution in Singapore. Just like the U.S. media, the Austrialian is chasing cheap sentimental stories. The guy deserved the death penalty, period. He was a career criminal, and so is his twin brother. I would've felt sorry for that guy if he had shown remorse before death, but he did not. The last request from the guy was to be allowed to chew gum on his way to the hanging. I'm glad the Singaporeans turned that "last request" down.

Don't take poverty to be your excuse. Low-income people in Australia receive government assistance every month (and significant, too), and the homeless in the SF get $400/month. There are jobs around, too. A decent person should rather stay poor than dealing and trafficking drugs.

I'm with the conservative government on this one. Liberal or libertarian are too soft on morals, which everyone nowadays seems to severely lack of.

Since everyone's chipping in on the drug topic, here's my 2 centavos....

My feeling is, if you want to take drugs, imbibe alcohol, gamble, see a prostitute, whatever AND you are not endangering anyone else by doing so (as in neglecting your children, driving under the influence, etc.) then why should it be any of the government's business?

Is the government my parent? My minister? Should it be?
I don't think so.

Now, are there some drugs that are so toxic/addictive, they should never be legalized (heroin)? Well, possibly, but like A1337 said, just imagine how much safer our streets would be if it weren't for the massive amounts of crime related to drugs. Just imagine what we could do with the $billions we're spending on our futile "war on drugs".

We can't engineer a perfect, happy, drug-free society simply by removing individual choice. If that were true, then totalitarian regimes would be the ideal form of government.

In free societies, people have the right to do stupid, dangerous things to themselves (but not others), even when you or I disagree with them. That's part of what true freedom is all about.

SQT,

I agree that all drugs --including "socially acceptable" drugs (alcohol and tobacco)-- when abused have always had a negative effect on communites. It is a huge leap of logic --and one not supported by the facts-- to say this is more so in societies where they are plentiful and legal.

Quite the contrary, in those few places where drug laws are more lenient, I've found the opposite to be true. I've spent some time in Amsterdam, and let me tell you, I felt a whole lot safer walking there at night than in most neighborhoods here in L.A.

look at this! I am shocked to see this news.. I thought we are out of recession

Why are you shocked? This is one of the things we all were predicting! Out of recession? The party hasn't even started yet!

@brightc,

Just for the record, I don't have a lot of sympathy for the heroin dealer --he knew the risks he was taking and knew what the penalty was. Too bad for him. What interests me more is whether or not criminalizing certain behaviors (drugs, etc.) makes society better or worse. I think you were on to something with this:

...illegal drugs have side-effects, leading to lethal overdoses, and induce addiction, forcing drug users willing to do anything, including killing and stealing, to get their fix? Okay, if drugs were all legalized, and the cost were nominal, so to speak, wouldn’t the price eventually go up because of huge demands?

History has proven that the price of ANYTHING once it is legalized, goes way down. Take a look at alcohol prohibition in this country, or prostitution in places where that's legal. If illicit drugs were as cheap as a pack of cigarettes or a bottle of beer, drug-related crime would plummet, as well as the drug cartels & Mafia's power.

What about criminals using drugs to get kids hooked up and do bad things, like robbing you? If you had kids (I doubt you don’t), would you be thrilled seeing your kids smoking pots and injecting heroin in the third grade? All those, and I have not accounted the brain damage and the loss of productivity caused by illegal drugs.

I don't condone drug use for children of any kind. They are incapable of making rational informed adult decisions. Once you're an adult, you must make your own choices and accept the consequences of those choices --good or bad. If, as a reasonably informed adult, you suffer brain damage or lose your job because you took drugs that you knew to be dangerous, then too bad for you.

I’m actually from Germany and my grandparents vividly described how all rules and limits got abandoned during the Roaring Twenties, and how this helped Hitler come to power (though there were more factors, surely). He created the authoritarian regime so many craved after so many unstable Weimar governments and virtues and values spit upon by so many.

Joe,

With all due respect for your grandparents, I don't think that rampant drug use enabled Hitler to come to power. My history's a bit hazy, but I believe it had more to do with the humiliation and poverty Germany suffered at the hands of the Allies following their defeat in WWI (and the ensuing hyperinflation, as the Weimar Republic attempted to print their way out of debt).

Learn more about Government Sponsored Enron. The GSE's business is just legalized crime;they rip everyone off and when they get caught, they retire the execs that got caught and give them a huge bonus package (more than some of us will earn in our life).

a crack house was burned to the ground a few months back in my town. Wonder how the property values are doing on that street?!

Maybe it was a marketing strategy to kick start price increases in your town.

Hmmmm maybe you’r right …. after all supply was reduced by 1 unit thank to the fire

So if 90% of a neighborhood is burnt down by a riot the remaining 10% will see prices skyrocket, right? ;)

Ain't that sweet....Husband is a mortgage banker, wife is a realtor. I wonder what their next occupations will be. :lol:

Ain’t that sweet….Husband is a mortgage banker, wife is a realtor. I wonder what their next occupations will be.

I personally know two such couples. :)

"...humiliation and poverty Germany suffered at the hands of the Allies following their defeat in WWI"

Not to mention that possibly a few key German manufacturers were interested in profiting by another romp through Europe.

Sounds like perfect Real Estate Bull logic if you ask me!

Yes, they will contend that after an earthquake housing prices should go up.

I wonder what happened in SF after 1989?

@SQT,

I don't want to belabor the drug issue (it looks like the other bloggers want to get back on topic), so I'll keep this short:

--I don't think children should be allowed to buy or use drugs --period.
--There are some drugs that probably should never be legalized because there is no such thing as a safe dose (heroin, PCP, etc.).
--If we stopped spending $ billions on criminalizing and incarcerating adults and taxed drugs instead, we would have TONS of money for public health education, rehab and other programs.
--I'd rather spend money here on curing heroin addicts than spraying poppy fields in Afghanistan.
--Legalizing the "soft" drugs would no doubt make the price of them plummet dramatically, and reduce street crime as well as the influence of organized crime. I still think these would be net positives for society.

I too, have a brother who is a long-time recovering cocaine addict, who has had many run-ins with the law. Somehow, the fact that drugs here are illegal has not stopped him from obtaining drugs ;-) . The fact is, there will always be a small segment of society that will gravitate towards reckless, self-destructive behavior. Criminalizing everything under the sun won't ever change this. The best we can do is offer these people a helping hand and opportunities to make better choices.

Sorry for the digression. Now, back on topic :-)

The Loma Prieta quake of 1989 did not help San Francisco, nor did the LA riots of 1992 - if anything these 2 events only added fuel to each city’s early to mid 90s real estate stagnations.

Also, the 1995 Kobe earthquake did not help Japan's RE market.

HARM--

The drug discussion was off-topic, so I'll stop.

Too bad, because I was hoping to hear Bull$hiter's perspectives on that one :-) Where is he/she lately?

I say anyone buying real estate right now has to be on drugs!

Sorry if I highjacked the thread.

I thought I did. :)

I propose we produce a film about the evils of overborrowing during a housing bubble. We could call it "Refi Madness". lol

Friends don't let friends flip condos!

I propose we produce a film about the evils of overborrowing during a housing bubble. We could call it “Refi Madness”. lol

How about a new XBox role-playing game "Flip that condo". Players can assume roles such as builder, mortgage broker, realtor, flipper, and renter. Internet game-play will be supported.

Peter P, that sounds good enough to be true. Might want to patent it.

New article Real estate investors bailing out?

[snip]
A researcher at Arizona State University told the paper that in the hot market of Phoenix, as many as 30 percent of the properties for sale on the market right now are owned by investors, while Sandra Geary, a real estate broker in Sonoma County in California said that her sales to investors have dipped by over 75 percent.

"Now that the market is slowing down, it's scaring investors away," Geary told the Journal.