patrick.net

eburbed,

Hey, don't go after me, I spend a lot of money on fully licensed software, music and DVDs...and then swear a lot when my computer crashes, yet again.

the trick is to come up with your own desirable designer label. those guys must think it's hilarious to be able to make a t-shirt for $5 wholesale, including freight and customs duty, and sell it for $75... over and over again, to the label fetish crowd...

I just read an article where the ex-wife and co-founder of Billabong surfwear now lives alone in a sustainable tin shed, while her ex-husband is putting the finishing touches on a 5 storey waterside mansion with helipad or whatever...

Well, stakeholder doesn't translate well into either Communism or Feudalism, though I think the Chinese are becoming quite aware of the phenomena. The force retired employees of state owned enterprises may not have a name for their predicament, but they know the uncomfortable place they're in.

It'll take a bit longer become the idea fully sink in. Meanwhile, the Mainland Chinese are a selfish, self centered, egotistical, cunning, yet incredibly naive populace. If I wasn't one of them, I could never have any affection for the Chinese.

the word 'stakeholder' is a bit redundant if you don't have a govt which is at least nominally a participative democracy, or equally well where you have a minimalist govt which offers very little by way of social goods, as there is no need for the word or concept...

wasn't the main driver for the chinese communist revolution the very fact that it was a 'nation devouring itself' due to the general self-centredness and ultra-mercantilism? increasingly a marker of high capitalism as well...

Frugality and wealth are different things although somewhat related. If you make enough money, you can engage in a lot of conspicuous consumption and still be fine. If you don't make a lot of money, being frugal can allow you to buy things (such as a house) that less frugal consumers would not be able to afford.

I think Asian wealth and frugality impacts the housing market at different points. A person with a low income and who does not otherwise have other assets or rich parents is unlikely to ever save enough before your kids grow up to buy in a wealthy community such as San Marino. If you are buying in San Marino, you are not competing against the frugal Asian. You are competing against the rich Asian. At lower price points, I think a large population of first generation Asian immigrants with high savings rates and who view home ownership as a safety net creates a pool of buyers that help support the market.

I guarantee that not everyone who buys a house in San Marion is a wealthy expat from HK, Taiwan, or the PRC. Nor are they all double income professional couples who have squirrled away a $400,000 down payment by living in a cramped studio apartment in Rosemead ever since graduating from medical school.

I am quite certain that many recent buyers in San Marino are leveraged well beyond the breaking point, and have used neg-am mortgages, I/O ARM's, and every other trick in the book. Some just want to live there, others are speculating and hoping for appreciation.

I am sure the same is true of Cupertino.

Joe Schmoe:

No one is saying that there are no recent buyers in San Marino (or any other immigrant-favored area) who are not leveraged beyond the breaking point. Some probably are. No one is also saying that such areas will be immune from general market declines. But the existence of a pool of potential buyers who are less sensitive to the mortgage insanity of recent times and who are willing to pay a premium for good schools can help support the market in those areas.

OO,

Well, part of the irony is that the first generation's frugality also fuels the second generation's consumption. The first generation often makes huge sacrifices to expensively educate their kids and pay off their tuition, making it possible for the second generation to acquire the habits and means to spend very freely.

SFWoman,

Are LV bags cheaper in France than in the US or made in different production centers? Otherwise, why don't the tour groups come to the US and buy to their hearts' desire.

Sandibe,

Well, part of the problem I have is that you say "...willing to pay a premium for good schools" as if that is something unique to Asians.

Everyone values good schools! It's what the whole phenomenon of "white flight" is ultimately based on. Single people aren't afraid to live in the city, but no one with children wants to send their kids to school there. So people buy expensive houses, and endure awful commutes, so their kids can grow up in a safer, more nurturing setting.

Now it is true that Asians tend to place a greater value on good schools than other ethnic groups. I can see them being willing to make greater financial sacrifices than other groups in order to ensure that their kids go to good schools. Although I think this distinction no longer holds true among well-educated people; two Ph.D engineers of any ethnic group are likely to value education every bit as much as two Asian Ph.D engineers. And these are the very people who buy in places like Cupertino and San Marino.

Finally, I just don't buy the "wealthy expat" and "super-frugal people will support the market" arguments. The big waves of immigration from Taiwan and HK ended at least 15 years ago. There are no more wealthy expats, certainly not in any significant numbers. And for the reasons stated above, I am reluctant to accept the idea that Asians are all driving 15 year-old Corollas.

I certainly agree that San Marino and Cupertino are nice neighborhoods and will always command a steep price premium. But I do not believe that the fact that these communities are popular with Asian people will make them less susceptible to a downturn.

SP - Thanks for the photo link - wow, just wow. If you find the other one, please post it. I would love to see it.

Perhaps the anti-brand movement is the way to go. Think of all the resources wasted on brands: advertizing, markups etc. Pay for a good meal, or pay for the marketing and finance and more strip mall development.

the bags and BMW keyrings are just 'positional markers of social status' or an attempt to meet their esteem needs. once sensible people realise that, they go off the idea, and have taken another step towards enlightenment...

As someone who's been to the south bay for a long time, I tend to be very specific about a particular area.

Palo Alto is nice, except for the part east of Oregon Expressway and the part bordering Mtn View dotted with apartments, it is not very safe either. Los Altos is nice, except for the part along N San Antonio bordering El Camino in Mtn View, which is very Mtn Viewish, lots of condos and bland shopping strips. Saratoga is nice, except for the entire part east of 85 sandwiched between Prospect and Saratoga, which looks rather dumpy. Of course I covet the part of Saratoga south of 9, which is a further step up from the so-called Golden Triangle. IMHO, Los Gatos has the best downtown, but part LG along Blossom Hill looks just very boring San Jose.

Cupertino is generally no different from San Jose, with a defunct Vallco which never seems to work, but the Monta Vista area west of 85 is the only exception which looks more Los Alto-ish. Almaden is slightly better than San Jose, but rather bland, except for the part bordering directly Los Gatos along Hicks road, which is rather cute. Also, the McKean road area of Almaden is quickly becoming another Los Altos Hills in the making as more and more estate-size homes mushroom on multi-acre properties.

this is not relevant to the housing bubble, handbags or keyrings:

U.S. Lags In Family-Friendly Workplaces

(AP) The United States lags far behind virtually all wealthy countries with regard to family-oriented workplace policies such as maternity leave, paid sick days and support for breast-feeding, a new study by Harvard and McGill University researchers says.

The new data comes as politicians and lobbyists wrangle over whether to scale back the existing federal law providing unpaid family leaves or to push new legislation allowing paid leaves.

The study, officially being issued Thursday, says workplace policies for families in the United States are weaker than those of all high-income countries and many middle- and low-income countries. Notably, it says the U.S. is one of only five countries out of 173 in the survey that does not guarantee some form of paid maternity leave; the others are Lesotho, Liberia, Swaziland and Papua New Guinea.

Face Reality,

in fact Saratoga east of 85 is cheaper than Monta Vista Cupertino. There is a big spread in price within the same town depending on the school district and location. Part of Los Gatos in Moreland district is significantly less expensive than the LG part in the LG-Saratoga Union, with Monte Sereno as the creme de la creme. There's also a part of Cupertino that borders Los Altos Hills (at the foothill of Rancho San Antonio) that is selling at par with Los Altos, I looked at them a few years back when it just got developed, very big lots.

It really boils down to which particular neighborhood you are talking about.

SFWoman,

I'm just speculating here, but maybe all those Chinese buying at the LV store are doing so because it doesn't occur to them that the LV items in the department stores are genuine.

StuckinBA,

I take your point about the waiting lists for the private schools at the existing rates, but I can tell you right now that my immediate family could no more afford $1200 a month for any of their kids' schooling than fly to the moon.

And within our wider family (who are mostly in the UK) WE are considered to be the wealthy relatives, because mum can afford to travel to the UK from here in Oz every couple of years to meet up with them.

My 'cousin' (technically my mother's cousin's daughter) and her husband are coming to Australia for a month's holiday this year, and will spend a week or so in our town. For them, this is literally a once-in-a-lifetime trip. They've been planning it since 2004.

(And in passing I know from talking to them last year in England that they are very worried about the housing prospects for their early-20s twin daughters. The UK bubble is every bit as bad as the US, and while the daughters and partners could get a loan the repayments as a percentage of household income would be ridiculous.)

SQT,

To pick up on Muggy's DJ theme, how about a thread (or another thread, if it's already been done) on housing bubble lyrics for popular songs? Stuff for the regulars to Karaoke at the next party, maybe. :)

I have a couple of ideas myself, but they're reworks of 60s/70s songs which I suppose dates me as boomerscum. :(

CB Says:

> (Los Gatos is) too snobbish for my taste,
> I don’t need to see 50 people in their bicycle
> outfits sipping lattes

You have to admit that it is fun to laugh at the out of shape tech. dorks who put on matching outfits and ride ½ mile on a $6,600 full suspension mountain bike for a cup of coffee…

Different Sean Says:

> The United States lags far behind virtually all
> wealthy countries with regard to family-oriented
> workplace policies such as maternity leave,
> paid sick days and support for breast-feeding

Another study founds that the United States well is ahead of virtually all wealthy countries in actual “work”…

The more time people are on 8 week vacations, maternity leave, paid sick days or breast feeding the less time they are actually “working”…

Face Reality said: Renting may work if you can find a good rental house that fits your needs and you can stay there as long as you wish. Unfortunately, that’s not how rentals typically work. It becomes hard to move your family every year or two, and to keep finding new places.

This is not my experience. Not at all. I have always selected my rentals (usually SFH's) carefully, and so far I have always been able to stay as long as I wanted--usually 4 years at a time. Typically I move to get a shorter commute and other conveniences and intangibles. Typically I do not see a rent increase over the 4ish years I live in a place--I am a good renter, pay on time, and rent for individuals rather than agencies. Typically when I move I do not see a big increase, either--I do not move when the rental market is hot.

Renting is not bad. In fact, I rather like being able to move when the job moves, or when we want a new town.

Face Reality Says:

> Renting may work if you can find a good rental
> house that fits your needs and you can stay
> there as long as you wish. Unfortunately, that’s
> not how rentals typically work. It becomes hard to
> move your family every year or two, and to keep
> finding new places.

Then Eliza Says:

> This is not my experience. Not at all. I have always
> selected my rentals (usually SFH’s) carefully, and
> so far I have always been able to stay as long as I
> wanted–usually 4 years at a time.

Anyone that “has to move every year or two” is either the unluckiest guy in the world or is not asking the right questions when they rent. You want to rent from someone that has been a landlord for a long time “and” who plans to continue being a landlord for a long time.

My parents have owned all their rental homes on the Peninsula for over 30 years and have never asked anyone to move and like most landlords keep the rent below market for good tenants in the hope that they won’t move.

FormerAptBroker Says:
Another study founds that the United States well is ahead of virtually all wealthy countries in actual “work”…
The more time people are on 8 week vacations, maternity leave, paid sick days or breast feeding the less time they are actually “working”…

Does that define quality of life then? Those things are all legitimate work entitlements. Anyway, you're in good company with Lesotho, Liberia, Swaziland and Papua New Guinea. ;)

Is there a link to the youtube 'Mortgage gangsters' clip that works? It is marked as private...

My parents have owned all their rental homes on the Peninsula for over 30 years and have never asked anyone to move and like most landlords keep the rent below market for good tenants in the hope that they won’t move.

I've only rented in complexes from corporations. Is it better to rent houses instead?

Also, 1st generation immigrants act very differently from 2nd gen. What’s ironic is, 2nd gen are usually disgusted by their parent’s thrifty behavior and go entirely insane once they become financially independent. 1st gens are mostly thrifty, there are exceptions of course, but very few spend like a typical American.

That's why we need to clamp down on immigration. These 1st gens are making things worse for everyone by insisting on working hard and saving. :(

I have a cheap knock off Christian Dior bag. It's a very handy size and shape for me. Plus, I don't think many people recognize the brand. It's almost as if I was carry a brand X bag. The meta implication of this bag amuses me whenever I carry it.

I always wondered why BMW has such nice key chains, I guess it's all an extension of what I will now call the "handbag theory of consumerism."

I always wondered why BMW has such nice key chains, I guess it’s all an extension of what I will now call the “handbag theory of consumerism.”

Competition too - the lexus and infiniti are pretty slick.

spike66,

That place needs to rent for approx. $7,000 just to cover their costs.

re: auto discussions

I bought my first car a couple years ago (used 2000 VW) just as we were discussing selling the house. I have no interest in a car other than it's ability to get me from A to B and carry stuff. Before the purchase it was all walking, bicycles, public transit, taxis and rental cars. Those modes of transit work perfectly fine in Chicago. I guess with the inflated value of the house I was feeling a little flush so we bought a car. It's nice to have but along with less exercise comes the weight gain, ouch.

Face Reality Says:
By the way, one of the reasons for my confidence that Cupertino prices will not tank is that they haven’t actually gone up that much over the last six years. The median SFH price went up from $871,400 in 2000 to $1,103,000 in 2006. This is an appreciation of only 4% per year. There seems to be a misconception that prices there went up a lot more than they actually did.

That's not an entirely accurate way of putting things in a perspective. The bubble started in BA around 1998. That's when I first heard of bidding wars. Then after dot com bust prices actually dropped. 2003 was a net -ve year for BA. For a while it seemed to me that prices will be back to fundamentals. But thanks to the credit bubble, the bubble resumed in earnest.

For a detailed discussion on this and contribution of immigrants to this bubble, check out
http://www.safehaven.com/article-6795.htm

Paul,

I commend you! I believe the temperature in Chicago this weekend is hovering around 0 F.

spike66,

I sometimes wonder if Ms Cochran isn't a Sulzberger cousin. Oh, and I especially loved 'lenient policies'.

I loved the couples - two cases of he's (relatively) rich and she's (relatively) hot. I'm eagerly awaiting the bitter recriminations when they divorce and have to divvy up the responsibilities for their soon to-be-underwater cunning property.

burrrrrrrrr

GO BEARS!

http://128.121.214.229/

Eburbed said: "like most landlords keep the rent below market for good tenants"

Sounds like my son's landlord. I guess it's more common than I realized. He always pays on time, takes IMMACULATE care of the place, and very rarely complains.....and then only if it's a major deal. If there's something along the lines of normal M & R, he'll do the work, document, and forward so the landlord has what he needs to know what was done and it was done correctly.

In return, should something require the landlord's attention, they have somebody take care of it before the sun goes down. My son is happy with his stable rent and the landlord is delighted with his tenant and wants him to stay for as long as possible.

It seems like SF has "professional" renters.....something rare or unheardof in other parts of the country. I had a rental years ago and could not dump it fast enough. People are no damn good and will steal the paint off the wall if they could.....that, after not paying the rent.

Every time I read about all the dipshit REI's talking about their spreadsheets, I laugh my butt off. They have NO idea what they are in for. I'd love to hear their tune after a year or two.

Do you think a rotting piece of chicken would work?

I recommend squid myself. Comes in convenient rings and easily suspended from the float shaft.