patrick.net

egads101 says

yeah, maybe. But much more likely they just keep making money, and you keep being yoU!

Is this because investment bulls always make money, and investments always increase in value?

Looking around my area, plenty to be had, condo's are still cheap too. Not sure why inventory seems to be building, still a few foreclosures around yet.

egads101 says

veruca says

I'm confused. Why are they laying off so many employees if posters here are saying the housing market is strong and prices are going to keep going up due to strong demand. Serious question to those guys

Well, maybe posters here are more knowledgeable than you? for the past years 65% of all loans have been REFINANCE LOANS.

as rates rise, refinance loans tank; Purchase loans have been relatively stable when compared to last year.

Serious answer to you. the oracle is never wrong; housing is going to lull into the spring, but prices will be higher next year.

I know others are more knowledgeable. That's why I asked the question. Why are you so nasty?? I see why you have such a low rating as a teacher at your college. Unbelievable, how you treat people. Thank you to everyone who answered politely and unbarbaric.

Beep, beep, beep...........................this is a public service announcement to the fellow board members (aka nitwits): There are outlets and professional services available to deal with anger management issues. I can assure you Patrick.net will not be your source of healing. Let me know if you need any assistance locating such services in your local area.

sbh says

JH says

Low interest rates and withheld inventory have propped up home values.

Yes, I agree. Now, substitute "middle class wealth" for the words "home value". Now, how might you rectify your statement;

sbh says

If you view home values as a measure of wealth you won't assail home values. But if you view home cost as a consumer cost you'll assail home values as a detriment to middle-class capital formation.

Yes, I see homes as a cost to the middle class for 30 years (from, say, age 35-65). Then after 30 years (at, say, age 65), the home becomes a measure of wealth. As long as it is on my monthly balance sheet, it is a cost to me. That is, if I am middle class, my wages are stagnant, I make the median for my neighborhood which is $70k where I live. If that is my income and I drop $400k for a median home in my neighborhood, where am I going to get any money to make other investments? OK, sure I could move, get a better paying job, etc, etc. But we are talking about middle class, so we are staying at the medians.

Now this projection for age 65 makes three huge assumptions:
1. the borrower did not take out a single HELOC (that he didn't pay off)
2. the borrower did not refinance in a way that makes the house like an ATM; ie, didn't extend the 30 year loan
3. the borrower was able to use his savings or natural increases in income to make upgrades to the home in order for it to maintain value.
4. we agree that, historically, middle class homes gain value with inflation IF and only IF the home is maintained using #3 above.

sbh says

if you view home cost as a consumer cost you'll assail home values as a detriment to middle-class capital formation

If we are talking about "median" (ie, middle class), I think they (we) have a very difficult time with capital formation. And once an investment (say, a home) increases in value, the middle class starts using that value to pay for things...thus eroding at its value over time. That is the difficulty with areas that make the middle class house poor and why I am on the side of "homes are an expense" rather than an asset. It will be interesting to see boomers retire, and then eventually Gen X and Y, and see how many retire with house payment bills still coming to their mailboxes...

Diplomacy today with Russia, and the United States deciding the fate of Syria.

We'll see,

Tim Aurora says

I predict a quiet Winter. Price increase holds but barely as booth sellers and buyer go back to trenches. Come spring , we may see another spurt and house prices increase another 10% nationwide.

Of course Fed is an X factor

It may not be quite quiet and sanguine. The Fed and free money has a lot to do with the surging prices. Incomes have not gone up - but prices are almost back to what was considered an unprecedented bubble. I think deflation and correction is probably more likely than another spurt.

http://www.mercurynews.com/business/ci_24089191/bay-area-housing-market-cooling

sbh says

The difference between paying and owning is largely a function of time and its relationship to the transaction.

So from my standpoint it's difficult to hear policy makers talk about how we need to "restore" home values to their peak levels (or some fraction thereof to keep banks and owners above water). Being on the paying side of the time function, this is difficult to hear and reconcile with my budget. If I were on the owning side, it would be music to my ears. "Restoring" value to these assets helps a certain portion of the middle class and shits on the younger generation (just my opinion there...;-))

sbh says

even with small rates of return, the formation is relentless.

Absolutely. My argument regarding RE, however, is that if I plan to purchase and eventually own one parcel of RE that I live in, then there is no immediate, liquid return on that investment. (Except a HELOC, but we know how that often ends up...) If I plan to be a landlord, then I can HELOC or turn the investment income into a cascade of assets. As I said before, if homes are 100-200k, I could do this in the middle class. But if homes are 500k-1M, then it's more difficult.

sbh says

I don't perceive the ability to get on the right side of time as being withheld from the American middle class by virtue of any absolute level of "median" income. I think the middle class simply ends up spending rather than owning due to a whole collection of persistent habits that put it on the wrong side of time.

So my personal viewpoint is that we have to consider the collective...or the natural tendencies of people. To say that the "median" home value is not affordable for the "median" income I think is a fair statement in some communities. In OC where I am, it's fair. This is the crux of my argument. Not what should the middle class do, but what does the middle class do. Fair to the upper class? Probably not...haha.

We have tried lowering interest rates and offering teaser loans, but that was an epic fail. While we tried making homes more affordable for the middle class, prices simply rose (and one might argue they rose in concert with monthly payments...that monthly payment philosophy on RE). To me that says something. I don't know enough about economic theory to know what that means...but it's as if there is a floor to RE prices. Anytime we try making it more affordable on a monthly basis, it just gets more expensive in terms of absolute purchase price.

sbh says

As exceptional as Americans think they are, they aren't very good at doing the hard part.

Despite all my arguments, this is absolutely the problem. It is the root cause, and it is the reason that the American middle class will not grow. People have to sack up, work for a living, pay their bills, etc. And until they do, we will have a shrinking middle class that we blame the 1% for. Hell, I'll probably continue to blame them...and I think that is partially justified by their policies. But in reality if the middle won't do their part, then the middle will continue to get destroyed by bear markets, crashes, etc...

Lol were something like 35% of the way through the cycle. We'd be fully done by now, but ya know...printing money and buying bonds by the fed...that whole thing.

Last time an executive branch and fed did this crap it resulted in unmitigated disaster. High unemployment, gas shortages, and a worldwide disrespect for the US resulting in foreign affairs nightmares. Wow does that sound familiar.

I know who the economic autistic are on the site, and its not me.

RentingForHalfTheCost says

This is a long game, being extended by many manipulators. The final score is what really matters, and I am still in the bear camp.

You remind of the monthy python flick where the knight fights another knight and gets one limb after another cut off while screaming "come on! we're not done yet" - snap! here goes leg 2...in the end he lays on the floor, without arms or legs and still screams "I am gonna get you, its not over yet"

You have been wrong as of now. Wrong is Wrong. Such a lame game. Prices could go up for 10 years and you would still say...yes, but crash is coming...at what point do you realize that you misjudged everything and simply don't have a clue what is gonna happened next.

The Professor says

SubOink says

you misjudged everything and simply don't have a clue what is gonna happened next.

Does anyone have a clue what will happen next?

My guess is as good as yours. We can only look back and see who made the right decisions in hindsight.

What if you're bullish on yams, belt-fed weapons, and property with a large kill-zone perimeter?

RentingForHalfTheCost says

Your comment about prices going up for 10 years has no base.

I wasn't saying that prices would go up for 10 years. I was making a point about you and others not willing to admit that they have been wrong. IF (hypothetically) prices were to go up for 10 years I doubt that you would admit that you were wrong. You would have all sorts of excuses why it did and that its BS and that its manipulated and not normal...blabla...just like you do now.

egads101 says

other than that, the ENTIRE POPULATION of bears on here have been 100% wrong on everything.

What's 100% wrong is this premise that the bears have been wrong. Just because the bulls refuse to see reality, doesn't make the bears wrong. The bears have been 100% correct during the recession, and then again correct during the 1st double-dip, and they are still correct now. In fact, it is the bulls who are clinging on to the last vestige of hope that this dead-cat bounce is, in fact, real. The bulls are the ones who have no arms or legs to fight this battle. Last month we saw 17% MoM drop in new home sales, after a shocking 27% drop in July. Inventory is going up in all cities and prices are starting to fall again, the bulls are totally blind to these facts. They are still out there, partying like it's 1999. But, when the music stops playing, we will all see who's been swimming naked.

dunnross says

In fact, it is the bulls who are clinging on to the last vestige of hope that this dead-cat bounce is, in fact, real. The bulls are the ones who have no arms or legs to fight this battle. Last month we saw 17% MoM drop in new home sales, after a shocking 27% drop in July. Inventory is going up in all cities and prices are starting to fall again, the bulls are totally blind to these facts.

The problem is this. The bulls are not wrong until 3-6 months after they are wrong.

Whether the fundamentals have shifted or not, the bulls have been right for the past few years. Kudos. I will give you the lead in this game.

Unfortunately, if suddenly there is a shift in the economy and we get bear markets in RE, stocks, commodities, etc, those charging bulls will be left with their pants down. The great thing about being a bear is that we can let the bulls think they are winning 20 to 1. If all the bulls pulled out early, the crash would be less spectacular. =) It's much more fun to watch if the bulls push the line aggressively!!

egads101 says

Had he bought a home the day he started this website, he would be several hundred thousand dollars to the positive.

not possible.. he would have been competing with people who hit gold with the recent IPO tech stock mania bubble back in the late 90s. No crazy IPO stock bubble no house buying. That is why many were priced out of the market very very early on. Of course those who paid top dollar for the stock so the stock seller could pay inflated prices also were taken to the cleaner and lost 90% of their net worth.

Call it Crazy says

That's exactly what the bulls WON'T address. The normal economic fundamentals that support a housing recovery aren't there now.

It's been an "artificial" recovery supported by FED actions and investors trying to chase better yields, NOT supported by increased wages, great GDP growth, true lower unemployment, first time home buyers, etc.

This fake recovery can't continue without the basic fundamentals changing....

Below is the true picture of the bulls:

the vested interest (realtors) are very much interested in keeping the party going.

hint : cut their balls off!

Tim Aurora says

If you compare SFBA with other high profile cities like Manhatten, downtown London, Mumbai, Tokyo, Paris, Shanghai, SFBA is still much cheaper.

Notice how he said "Downtown London". So he is now comparing SFBA to downtown London, not even Kensington or Chelsea. Hmm, let's see what we are talking about over here:

Typical Spread in Downtown London:

And a typical one in SFBA which is purportedly much cheaper:

kashif313 says

If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage,

why pay $500K if you can buy cheaper $250-300K and bank the savings.

egads101 says

condos in Phoenix for $30k that rent for $800 a month aren't supported by "normal economic fundamentals" in your moron world. In the real world, them and houses in the bay area rented for twice the mortgage couldn't possibly be more supported by fundamentals!

oh yes they are... lots of Silicon Valley companies have moved operations into AZ, Texas, and other lower cost states..

Call it Crazy says

corporations less selfish

WTF?

John Bailo says

thomaswong.1986 says

u can buy cheaper $250-300K and bank the savings.

Yeah, all you have to do is wait until a year from now.

few homes in the USA are worth $500K. Of course many like to throw out
$500K as being some kind of "normal" price... when its not.

sbh says

In your case, just living in OC puts you behind a big eight-ball right out of the chute. If you wish to have kids, well, maybe you cannot under those two conditions expect to form capital until the last ten years before retirement.

Yes, and my argument that locations like the OC are not sustainable is exactly this. It would surprise me if a metro area of 20 million could possibly become so stratified that it's a city of renters with kids and owners without. But...

sbh says

If I lived in high-cost California I'd try to rent and invest instead of going the home ownership route.

Yes, I agree this would be a good move. However, since I already have kids I would like to have them not grow up in a shack so I'll probably be dumping 100k into just a downpayment. That means I'll have a very nice nest egg in my house when I retire, but it also means I'll be spending a lot to get it.

sbh says

but I haven't run the numbers since the early 90s, and it was never the Cali market that I considered.

Well, if we assume that houses now appreciate without end, the numbers would be different today. But if we assume that homes still increase in value with inflation (long-term, on average), then the numbers are still the same as the 90s. I agree that common stock is a better investment for 1 and only 1 reason: stocks don't have plumbing to fix!! The numbers when I have looked at them are about equal, although others debate this 10-20% either direction. However, the hassle and cost of maintaining a home IF it only increases in value with inflation makes it a no-go for me. But if you play the market right, it could be ok. However, when RE does well, stocks often do also...

egads101 says

kashif313 says

If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage, 3.5% interest rate vs. 4.5% interest rate, the payment is $1,796.18 vs $2,026.74 or a difference of $230.56 per month. Yet you say mortgage rate increases are not relevant?

If you don't buy a home, and rents increase by 10% for the same type of home over the next say 3 years, a not unlikely scenario, well there goes your $200 a month issue with the mortgage.

Also, the $230 is tax deductible, so in effect it is much less than that. And if rates go back down, you can refinance.

Call it Crazy says

Call it Crazy says

thomaswong.1986 says

few homes in the USA are worth $500K. Of course many like to throw out

$500K as being some kind of "normal" price... when its not.

The median sale price today in the US is around 250K, so if they want to spend 500K as "normal", feel free.......

Actually, I just read, per NAR, the the median price as of July was 213K.....

It just depends what your "normal" is......

The US is a very large country...

44% of Americans oppose raising the debt ceiling
Why does this surprise anyone?
Only 44% of Americans work today.

What is causing our debt crisis? Pristinely focused self-interest among our leaders. There are a bunch of psychopaths running Wall Street, Washington, and everyone else is just following their lead. We've put the wolves to guard the sheep, and then are surprised when they trade the pasture for a desert and pick the sheep off for mutton! The real problem with government, business, religion, and society in general is that people neither understand nor appreciate that people are not all basically good. 4% of the people have no conscience and are out there actively causing harm to the other 96%. When they get in positions of power (which the smarter ones are highly prone to do), they can cause mass devastation across wide swaths of society, and then retire wealthy.

I read an article on HuffPost yesterday about an awful obituary some adult children wrote for their aged mother who died. It accused her of systematic abuse and stated that they and the world were better off with her not around anymore. The perhaps surprising thing was the plethora of comments where people admitted to having awful abusive parents and said they fully sympathize with the obit writers. It wasn't surprising to me. Psychopaths can be mothers as well, and they invariably make their children's lives a living hell.

Human civilization seems to "naturally select" psychopaths for positions of power.

Sorry! Someone is STILL wrong on the Internet!!

Why are you posting photoshopped image?

gsr says

Why are you posting photoshopped image?

I believe he's making fun of those 2 brainless tea-party cunts.

Obama didn't avoid the War Putin did, that my friend is where in the Irony lays.

Putin is one up on Obama for doing a Kennedyesque gesture in his term as a leader. Obama won a Nobel Peace prize for best Kennedy impersonator, but let's face it, he's been any thing but Great.

Are you guys sure Obama isn't a Patnet member? He sure is as clueless as the rest of you.

President Obama dismisses the notion that he mishandled his response to the crisis in Syria, saying during an interview that Washington is more concerned with style than substance, ignoring suggestions that Russian President Vladimir Putin is gaining the upper hand

http://www.youtube.com/embed/8g3tQaqizh0

You gotta love how when Obama says he's going to take military action, the right-tards are suddenly anti war. But now, when it looks like military action might be avoided, they're pissed about that too.

I don't think it matters what Obama does; you are against it simply because he did it.

That is a misrepresentation of the tea party. They have always been anti-war, promoting military isolationism. Could be accurate though for some Republicans.

Homeboy says

You gotta love how when Obama says he's going to take military action, the right-tards are suddenly anti war. But now, when it looks like military action might be avoided, they're pissed about that too.

I don't think it matters what Obama does; you are against it simply because he did it.

The interests of The Republican Party supersede those of the United States.

But they are not traitors.

thomaswong.1986 says

few homes in the USA are worth $500K

Define "worth"

Time to lay off the steady diet of Rush Limbaugh...

Cic,

The people who have the power to screw you aren't middle and upper-middle class folks with waterfront property.

Fegads101 says

If Obama went on tv and said, " I want everyone to join the republican party, and only vote for republicans from now on" the GOP would come out against it before the speech was over.

For you, on the other hand, the opposite is true. If Obama wants it, it must be a good war. If Republicans want it, it must be a bad war.

If you like the war, why don't you go and fight, and join the cannibal gang who eats out heart and liver of enemy soldiers?