patrick.net

if I win, i just want you guys to have an ‘Ode to Marina Prime’ forum

Well, we had a similar thread, titled "One for the Bulls" (July 27th, 2005), but a whole thread devoted to ONE poster (and an attention-hungry one at that) ?

I'll allow it only if MP holds the Bubble BBQ at HIS house. ;-)

No deal. The problem is that I now have sushi on my mind...

Yeah, that’s a great prize for the winner.. have people over at my house, with me providing the food, drinks, and cooking.

Actually I was thinking pot luck, where the guests provide all the food & drink --no effort on your part needed. I admit I'm just a little curious to see what $1.25 mil buys you in the Marina these days.

Anyways... isn't free sushi and the admission Peter & I were wrong payment enough (assuming we lose of course)?

I thought I'd interrupt the party briefly to share something I found while comparing homes on MLS against previous their previous sale price. This was local to Marin, but perhaps it means something in a larger sense.

In a more local sense, how far do you think house prices should drop in Marin to be more in line with the "fundamentals", such as wages, economy, intangibles, etc? Is there a way to reasonably calculate RE value, once we sweep away the effects of the bubble? Certainly time will tell...but in the meantime, I came across something interesting:

Taking current price listings on MLS for Marin (general cross-section of towns/RE segments), I then went to ditech.com and found the price the house sold for last. Then, I selected houses sold prior to the main bubble window (98 and before). Using median pricing stats from the county assessor, I then compared the previous sale price against the median that year, as a percentage of median. Then, I looked at the current price against the '05 median. What I found is that current prices/median are lower than pre-bubble/median. On average, current "values" are 25% lower against median than in pre-bubble years.
Is there a legitimate reason for this? If median prices reflect market fundamentals, then shouldn't current prices be higher? Or, does this suggest current RE is overvalued, throwing the median 'out of whack'?

(ignore the middle paragraph--it was meant for the Marin blog)

Is there a legitimate reason for this? If median prices reflect market fundamentals, then shouldn’t current prices be higher? Or, does this suggest current RE is overvalued, throwing the median ‘out of whack’?

Median prices are not useful information especially over longer term. They are too sensitive to cross-sectional shifts.

Welcome back TWIT!

MP, I am backing out of the bet since there is no sushi.

Median prices are not useful information especially over longer term. They are too sensitive to cross-sectional shifts.

Ok, that makes sense. Still, I find it strange, even when comparing housing in different towns/price points, they average 25% less. At this end, I'm just trying to build a model for reasonable valuation, since everything is out of whack. Any thoughts on that? One method I've taken is looking at pre-bubble home sales, taking those prices, and adding 5% annually (generous, imo). Comparing current prices to those rough estimates, I find current listings at 140-200% (of 5% annual growth). Any better methods/ideas please share--thanks!

I think the next topic should be : "Potluck? When and Where." :lol:

BayQT~

Don’t forget…as I mentioned before, the ditech site sometimes lists the “refinanced” amount, so it may indeed *not* be the last sales price. It may affect the outcome of what you are looking for.

Really? Hmmm...thanks! Well, maybe I can find some inside realtor angle to get accurate stats.

Really? Hmmm…thanks! Well, maybe I can find some inside realtor angle to get accurate stats.

Yes. I explained in a previous post but the jest of it is that I know the history of a couple different properties, including the sales price, and when they were refinanced. For both properties there is inconsistency. For one, it lists $0.00 for last sales price, and the refinance date for last sale date(property was purchased in 1988) For the other, last sale date and amount are correct....BUT, both of these properties were refinanced in 1999.

Note also that ditech has changed the format of that appraisal page....more simplified. Plus they have added a security system of sorts to "prevent unfair use".

BayQT~

Chan

The best way to deal with MP when he is in a 'mood' is to just ignore him. Insults don't bother him, in fact I think he likes the attention the insults bring. But being ignored is like kryptonite, it utterly destroys him.

chan: this is your warning

Regardless of your feelings about MP's (admittedly dubious) claims, please keep any criticism non-personal and civil. He hasn't gotten nasty or personal since the "incident", nor I do not want to see another flame war erupt which forces me to censor you both.

is it possible to short mortgage backed securities?

Yes, for the big guys like hedge funds there are many ways...

I do not know if there is a "retail" way to do it. I want to know myself.

what is the problem? regulation or the amount of capital needed?

Mostly capital and relationship with derivative/financial firms. You will to borrow MBS in order to short them... you need to find a lender. Also, you are responsible for the cashflow (interest payments) if you short a debt instrument.

Moreover, you need to carefully hedge away interest rate risks. otherwise, you bet against MBS will turn into a bet against interest rates. If you can do all this, and is well capitalized... aren't you a hedge fund already? ;)

(Not investment advice)

when were the hedge fund regulations introduced?

I thought hedge funds are mostly unregulated investment partnerships. I believe they are trying to regulate them a bit now.

is there already a hedge fund that shorts MBSs?

Hedge funds are private. They do not need to disclose their holdings/positions.

Bears/Bulls,

I think we have gotten stuck. Stuck, not being able to stay on topic....and stuck, giving attention to an individual who clearly (as SactoQT said) likes the attention...revels in it.

Suggestion: If this topic has gotten stale already, let's admit that and move on to another one. Harm's last post in the Lurker's Turn thread (see, Harm, I told you I was going back to read it. :-) ) recommended that we discuss "Appraisal Fraud". It's a good topic, and one that affects a lot of people in various situations, different communities, etc, and no one to protect them or look out for their interests. Ironically, the ones they trust are the very people who are sticking the knife in and turning it. It is rampant and many stories have turned up in the media.

So now that some of the deer have been caught in the headlights, how do you think that this will be corrected moving forward? The FBI is involved in many of these cases right now. Do you think that the government set down any new rules....perhaps the realty industry will initiate something to save face?

What do you think?

BayQT~

Jack,

Of course, I know that we get off topic and yes, the trolls will follow. But it would be a fresh start. That's all I was saying.

Has anyone actually LEARNED anything ?

I don't think I deserved that. I have been a positive contributor to the blog, and was just trying to help.

BayQT~

"I just find it funny that the redundancy and predictability doesn't have everyone fed up by now."

*DING*

It's going to be an amazing five days, watching housing prices in the bay area decline by 10% per day...

@peter re: golf, it goes. Some up, lots of down. re: party, sure. patrick knows my email. I'll bring the scotch. Scapa 14, if no one objects.

@sqt: Slammed. More posting later. Kinda bored of the bubble topic to be honest, and one reaches ones smugness quotient fairly quickly when reading threads here now. Hope things are good in sac.

Chewbacca,
prat

Chan/Jack/BayQt,

I think we still manage to pack in quite a bit of information here, despite you-know-who's comments. Ironically, arguing back and forth with MP & Peter over the definition of "inverted yield curve" forced me to really think about it, and prompted some useful input from other posters, like HEPfinance. Interesting how an opponent --whether your opponent's arguments are good or not-- has the effect of sharpening your own arguments.

Like Shmend Rick says, at his best MP provides a foil and occasionally some comic relief. When he just brags and makes no sense (often), then we can just chuckle and move on to other things. As long as he (and everyone else) behaves and doesn't get nasty & personal, I see no grounds for booting him off. And like SactoQt and others often point out, if you don't want to see more MP posts, just don't address or provoke him.

I hope we can finally put this topic to rest...?

Ha Ha

I don't know much about mortgage products, but I've heard that it is possible to opt for a permanent neg amortization loan that continues to balloon pretty much as long as you hold on to the property. The logic I guess is that you can sell or refi before the payment exceeds the value of the home or you can just let the balance grow if you plan on never moving. (how stupid would that be)

But I'm guessing the article you posted was being ironic, at least I certainly hope so.

Re:troll

Ignore ignore ignore. If no one ever talked to him he would dissappear. Granted, I've talked to him in his more civil moods but I'm beginning to think it's a waste of time. For the most part he just drags down the blog and it seems like too many interesting people are opting not to post anymore. Is it worth offending quality people to keep one marginal personality around? I don't think so.

BayQt - working on that new thread (Appraisal Fraud).

Like Shmend Rick says, at his best MP provides a foil and occasionally some comic relief. When he just brags and makes no sense (often), then we can just chuckle and move on to other things. As long as he (and everyone else) behaves and doesn’t get nasty & personal, I see no grounds for booting him off. And like SactoQt and others often point out, if you don’t want to see more MP posts, just don’t address or provoke him.

*sigh*

Thanks, Harm....only if you think it's time. If not, I (and I'm sure the others) can wait.

BayQT~

Sometimes I have very little tact.

In print, my “tone” can look angry when what I thought I was expressing was incredulousness! I am sorry. If you recall I was second to welcome you back!

I appreciate your post, Jack.

BayQT~

Btw, did anyone read Primetroll's latest masterpiece?

For the most part he just drags down the blog and it seems like too many interesting people are opting not to post anymore. Is it worth offending quality people to keep one marginal personality around? I don’t think so.

Ok, I guess we're NOT quite done with this subject, so...

Here's the problem with the "ban the troll" approach: the last time I threatened to boot MP, we had a vote and it ended up about 60% in favor of keeping him. When Peter P actually DID ban him, there was a sizeable outcry in favor of restoring him, so clearly this sentiment is not 100% shared by everyone here.

However....

If a majority of bloggers here feel that he is causing irrepairable harm (no pun intended) and his presence is directly responsible for keeping you from participating, then let me know now and I'll take care of it.

I want ANOTHER show of hands: Can you live with MP or is his presence here so offensive that you want to leave and/or stop posting?

Btw, if a majority votes to ban, there will be no going back this time. I will ask Patrick to filter all of his comments and I will not ask him to reverse that decision if any of you regret that decision later on.

I guess we need a vote deadline: how does midnight tomorrow sound?

New thread: Appraisal Fraud

Don't forget to vote before you bail on this thread.

Having MP turn it down a peg or two would probably be asking too much. Sometimes he adds a little flavor, sometimes he is downright annoying. However, when the conversation begins to revolve around him, I may make a comment but for the most part I elect to stay in the background. My observation is that some of the regular contributors are doing the same since I don't see their posts as often as before. But then again, they may just be taking a break, or just waiting for the next topic.

BayQT~

Possibly useful content:

http://tinyurl.com/762du

I can feel interest rekindling. This is bad.

Chewbacca,
prat

BayQT, so is it thumbs up or down for you?

It's amazing how weak we are. So easily baited into argument-like-discussions trying to counter largely nonsensical statements with points that will be ignored.

I don't actually want to persuade MP or anyone else to agree with my opinions, but it's impossible to learn anything from the discussions MP half-engages in. As it's been said, always on transmit, never on receive.

I don't think it's feasible to ignore him. It only takes one hasty response to start an avalanche... Even if today's voting population could manage to hold back, newcomers wouldn't, and the cycle would repeat.

At the end of the day, anything that encourages people like Zephyr and Veritas and Prat to contribute (all missing lately), and discourages arrogant verbal masturbation...is good for the community.

I hate the appearance that I'm voting to squelch someone with a contrary opinion (and I wouldn't have done so last time around), but I think it would be best.

I hope, truthfully, that MP will reregister with a new name and contribute in a less antisocial way.

Lacking other options, I vote to ban.

I think the blog in general has seen a major loss of quality and whenever a flame war erupts it generally involves the same person. I have actually seen him post the same post 3x's trying to get a response, so I know it's all about attention.

The only reason I would vote to keep him is to see if he actually keeps his bet and shows up for sushi. Then we'd actually know if he's the real deal. If he wiggles out of the bet or the pay off phase, then we know it's all a sham. But the thought of having to put up with a bunch of BS in the meantime... I'm not sure I'd stick around if the threads keep deteriorating. Lately I show up to make a few lame jokes and that's about it. I'm wondering if the topic is getting stale or I'm just tired of wading through a bunch of meaningless babble. I don't know....

I wasn't in on the last vote (probably during my break), but I'll go with a thumbs up. I'll just ignore him. Let's see how the others vote.

BayQT~

@SactoQT: I agree. If the threads were half the length, but we didn't spend any time discussing MP, it would be a huge improvement.

Let's get this over with as quickly as possible, so we don't waste even more time on the subject, okay? I want a thumbs up or down on MP from EVERYONE --not just regulars.

Prat, SactoQt, Peter P, Jack (need I ask?), TWIT, Gabby, Shmend Rick, Zephyr, Mr. Right, astrid (again, need I ask?), Yuan, Kurt S, Veritas, News, AntiTroll, primetroll, chan, SIM, hymie, pbass, ptiemann, SoldAtThePeak, Dipanjan, laverty, SiliconValleyRenter, NervousinOakland, Van Kouver, Jamie, Karrie, matt_walsh, Surfer-X, Cattle, Economist...

Still waiting... what'll it be ??

I think quesera's right, ignoring hasn't worked because there is always someone who'll answer. Maybe better to ban because intelligent people are leaving in disgust.