patrick.net

Actually, I forgot that creditors can't go after minors in most states. So I guess anytime before 18 is fine, if you get a creditor stupid enough not to demand a co-signer.

astrid,

Well that's ONE way to go about it! My point more simply is that if your home isn't really appreciating what sense does it make to pour money into it when you should be funding your retirement, etc?

There was a time when folks actually considered diversifying their investments but as the HB gained momentum there were RE investments and then there were "bad" investments. "Bad" meaning anything that isn't on track to double in 3 years.

If I were to purchase at this point (yes even if one of my or Randy H's lowball offer were to be accepted) I would still be "over paying". Every dime that goes into this over payment means a dime NOT going into my retirement! How do we determine how much we're over paying? Hard to say. I get the sense we'll know more come Spring of 2007. So as it stands we have George's Summer of IT, The Fall of...... What? The Winter of Huh? and The Silent Spring Part II (The Reset Reckoning).

Ever notice how titles to sequels need to "ramp up" the fear factor?

The best one I've ever seen was Scary Movie 4 (Last of the Trilogy)

astrid,

One of the most ridiculous "minors with money" article I'd ever seen was in a mag. called "Wired"?

The title was something like:

Should your minor child be allowed to daytrade his UGMA Account?

Uh, excuse me? Can you say "flagrant violation"? Pffft. Whatever. This article was actually in their March 2000 issue and should have served as the ultimate contrarian indicator!

*UGMA (Uniform Gift to Minors Act)

Skibum - thanks for the link. My favorite Cleoisms "Ya that's the daddy" and "Is he incarcerated?"

SGVPatience-

Hello from Alhambra!

Obviously, I've noticed it too. But I do think the second generation immigrants will all assimiliate. My wife's famiy (Hispanic) has not really assimiliated, my mother-in-law does not speak English and her dad (a US citizen who grew up in Mexico) became fluent in English after serving in the Army but still watches TV exclusively in Spanish, reads the Spanish-language newspaper, etc.

But immigrants' kids all speak English and all assimilate.

Assimilation happens slowly. The first generation often never assimilates, not really, especially if there is a large immigrant community nearby. The only immigrants who really assimilate are those who don't have a support system, i.e. if you grew up in Sweeden and moved to LA you pretty much have assimilate becuase there is no large Sweedish community here.

The second generation assimilates a lot more. But even this takes a little time. People who grow up in an all-Chinese or all-Hispanic neighborhood they feel a little uncomfortable after suddenly being thrust into a more diverse world and tend to hang around with other people with similar backgrounds in college, etc. But as the years go by, people become more comfortable in a more diverse setting and get used to it.

By the third generation, most people have only a pro forma relationship with the old country. You can already see this happening in SoCal's Japanese community. Japanese-Americans are all driving monster trucks in the Inland Empire these days, no one speaks Japanese or has any real ties to Japanese culture any more. My wife grew up in a town (Monterey Park) that used to have a large Japanese-American presence, and we went to the Cherry Blossom Festival a couple of months ago. It was so lame, there was nothing but bad tereayki and funnel cakes, it was no different from any county fair or Oktoberfest, you certainly didn't feel as if you had been transported to Tokyo.

The Asian residents of SoCal will all assimilate eventually, as will the Hispanics.

Funny, I thought we had a "wait til' 300 posts" rule for threads these days. Not only did Peter P kill my C.A.R. thread at 98, but he closed his own "condo" thread at 58.

Funny, I thought we had a “wait til’ 300 posts” rule for threads these days. Not only did Peter P kill my C.A.R. thread at 98, but he closed his own “condo” thread at 58.

Threads are too quiet nowadays to wait for 300 comments. By the time we have 300 comments, the bubble will be long gone and hell will be cool. :)

I used to think Buchanan was a nut, now, with his criticisms of the neocon foreign policy and his criticisms of the Bush administration’s CAFTA ‘open borders’ plans and amnesty programs the guy is sounding rational.

A closed border policy is not necessarily good because it costs too much (to implement, to enforce, to endure). The problem is in the welfare system.

Psychic -

"I'm sensing a lot of negative equity, err, I meant energy"

San Francisco: Prices will slide slightly or hold steady. This is basically because it is a concentration of really rich folks who have no real need to sell.

Actually, many rich people do not like to buy when they think the prices are too high. Remember, they do not NEED to buy. Also, they do not NEED to hold on.

Moreover, much of the housing stock in San Francisco will not appeal to rich folks. And they have better time to do than specuvesting in real estate.

I don't know exactly how "quiet" things have been lately?

We've had some great cameo appearances by some incredibly stupid and determined trolls that remind me of Japanese soldiers still hiding out in the Philippines awaiting the Emperor's Orders (until the 1970's)!

In all fairness to these guys they'd lost radio contact with their superiors probably prior to the re-taking of Manila so with no contact to the outside world we can not only excuse their ignorance but also applaud their dedication (however twisted).

RE perma bulls on the other hand can not lean on this defense. At this point their has been more written, said and broadcast regarding the bubble than the holocaust. So with all of this overwhelming evidence confronting them they are either in deep denial (as in there never really was a holocaust) or just plain stupid. At this point, does it really matter?

We’ve had some great cameo appearances by some incredibly stupid and determined trolls that remind me of Japanese soldiers still hiding out in the Philippines awaiting the Emperor’s Orders (until the 1970’s)!

Were there at least good sushi in Philippines back then?

The Asian residents of SoCal will all assimilate eventually, as will the Hispanics.

The precise ethnic/genetic makeup of greater Los Angeles doesn't particularly concern me. What does concern me is the following:

1. Immigration (mostly illegal) causing rapid population growth (conservatively est. @2%/yr.) which will double the current population (36 million) in 35 years, mostly among the low-paid, low-skilled. Population density/growth is already too high in most parts of SoCal, and is resulting in vast swaths of urban perma-ghettos, significant environmental degradation, as well as accelerating the bifurcation of our economy and gradual erosion of the middle class.

The current situation is not exactly an environment conducive to high quality of life for middle-class wage earners, such as myself. Sorry if this sounds "racist" to some, but I do not regard this as a positive development. If I really wanted to live in Shanghai/Mexico City, I'd already be living there.

2. Free-ridership. Never before have so many gamed the system so completely, while riding on the backs of so few (the remaining taxpaying middle-class citizens who inconveniently happen to be in the way of "Reconquista"). I guess this really wouldn't bother me so much if some bureaucrat would offer ME some free money and food (AFDC), free healthcare, free housing (Section-8), heavily subsidized college education, etc., etc. Sadly, I don't get any of that, but I do get the BILL for it every April 15th.

3. This "assimilation" you speak of is not happening as rapidly or as completely as it has in prior decades, largely due the rise of radical Mexican political movements, such as the Reconquista, MECHa, etc., which seek the repatriation of California and other SW border states to Mexico, which they regard a stolen province known as "Aztlan". Whether or not this will actually occur is debatable, but the movement is very real and very popular among recent immigrants. You see it in efforts to ignore/subvert federal immigration laws, displace English as the default language in our public schools and on the ballots, P.C. revisionist histories, etc.

The fact that the southern border states once really were part of Mexico and this is where the bulk of unassimilated immigrants are coming from --with no great ocean to cross-- makes the current situation considerably different from immigrants who arrived in great numbers in the past. It's not uncommon for these new arrivals to never relinquish Mexican citizenship and fully adopt the U.S. as their home country. Many migrant workers do just that --migrate back and forth over the border, never having to choose to which country they will be loyal.

I recommend reading Victor Davis Hansen's excellent exploration of this very topic, "Mexifornia".

Actually, many rich people do not like to buy when they think the prices are too high. Remember, they do not NEED to buy. Also, they do not NEED to hold on.

Certainly rich people don't like to waste their money; if they did few but the richest would remain rich for long.

However, it's easy to underestimate the financial position of many of these folks. I maintain that in a serious downturn most of them won't sell unless they have overriding qualitative reasons, like moving to another coast/country, etc. However, those who do sell will do so at a significant discount to today's prices.

I would expect to see very low transaction volume, but a healthy drop in prices in rich neighborhoods. But this "healthy drop" will reach resistance because of constrained supply; probably only slightly less of a factor than the healthy decline in rich buyers. So S & D both shift down, probably D a little more than S. In middle to starter neighborhoods I'd expect D to shift down but S to shift up, causing very sharp declines.

**all this assuming a hard landing, of course. I'm still not convinced of such, but it is a distinct possibility.

Seriously.

Troll claims exhibit all the soundness of the "Cargo Cult".

Waiting for the "Great 250/500K tax free cap gains Bird" to reappear!

No longer hunting or gathering, fishing or farming they wait at the islands highest point and spend their days combing the skies for a sign of his much awaited return!

So if the perma bulls are going to recreate a "shrine" to the "Great Bird" what would it look like?

1. Immigration (mostly illegal) causing rapid population growth (conservatively est. @2%/yr.) which will double the current population (36 million) in 35 years, mostly among the low-paid, low-skilled.

HARM, on the bright side, we will be able to aford two maids per household and perhaps most public bathrooms will have attendents. :)

Free-ridership

Again, the problem is in the welfare system.

Whether or not this will actually occur is debatable, but the movement is very real and very popular among recent immigrants.

Repatriation of California? :lol:

You see it in efforts to ignore/subvert federal immigration laws, displace English as the default language in our public schools and on the ballots, P.C. revisionist histories, etc.

The threat is real though.

Peter P,

Now, I can't speak to the availability of good sushi in the P.I post WWII but I will say that it is testament to how bountiful the islands once were. I understand many of these guys survived for years off of fruit and turtle meat (which I hear ain't half bad). Damn, 30+ years surviving in that sweltering jungle. I hope they got their "back pay"!

I just bring this up as an extreme example of the caliber of trolls we've seen of late. True hold-outs, die hards if you will. Armed with only a smattering of anecdotal evidence to face an onslaught of hard numbers. I guess it's not as easy being a perma bull as it once was. Eat up boys!

However, it’s easy to underestimate the financial position of many of these folks.

Perhaps 25M+ properties will not see much activities.

It is also easy to overestimate ...

http://www.socketsite.com/archives/2006/08/1200_indiana_the_final_chapter.html#comments

I see this trend continuing:

San Mateo (all price ranges):
6/8/06 1363
6/12/06 1428
6/19/06 1452
6/26/06 1467
7/10/06 1488
8/21/06 1511

San Jose (all price ranges):
6/8/06 3669
6/12/06 3709
6/19/06 3793
6/26/06 3915
7/10/06 3915
8/21/06 4115

source: mlslistings.com

Kevin Says:

Peninsula: Prices will slide 5-15%. Rich folk and existing long-time owners still dominate the area.

SF and Peninsula prices are already either flat or even slightly (-)ive YoY in many parts. So are you predicting that SF prices will basically remain flat (negative in real terms), or appreciate with inflation from now on?

newsfreak,
Agreed. Just trying to figure out what Kevin is predicting exactly.

>So as workers’ wages in the middle class go down and they put pressure on goods to be cheaper, as do elderly people on fixed incomes

That's overly simplistic. If oil/natural resource prices continue to go up, prices will go up. If China/India continues to be more propserous, prices will go up.

People don't have an entitlement to afford things.

SFWoman,

Thanks for bringing that observation to light. As a planner myself it just doesn't carry the same weight as someone like yourself. What people on the west coast seem to almost always completely overlook is how east coast old money works. Typically the portfolio spins off dividends and interest that are redeployed to purchase HUGE life insurance policies that ensure the next generations place in society! (And so it grows and grows). The trusts the TB's live off of are relatively small when compared to the overall net worth of the family. Trying to explain to most folks on the west coast that wealth means more than a new bimmer (wealth means several generations to come will have new bimmers) is like peeing up a rope. In so many instances here out west if their income dried up (so would their lifestyle). Just an observation.

Kevin,

I can agree in principle but not necessarily in practice. The important distinction being (as SFWoman points out) is that the dream can go on as long as the "appreciation" is there to draw on. Again, if the "income" is there the facade can continue.

It's surprising, but some places are actually hiking their offering prices here in the Pennin:

http://www.burbed.com/2006/08/21/east-palo-alto-price-hike-2239-poplar-ave-now-at-504000/

It’s surprising, but some places are actually hiking their offering prices here in the Pennin

Can't sell it? Hike that price! Sounds reasonable (as a coping mechanism) to me.

Within the condo building I live in (I rent from a condo owner), I’m seeing prices holding pretty steady, and at the same time I’m seeing a lot of gentrification of the area.

Gentrification? Sounds scary to me.

Harm:
precisely why I got fed up with So Cal. If unaffordable housing wasn't bad enough.. I had to pay taxes for people working largely in a underground economy created in large by small business and the greed culture. I think it is all slave labor but,even so they are willing to keep coming because it's better than where they come from.

To many self serving business people in So Cal. If you looked at all the housing bulit in the last five years primarily by illegals. Just about all business has these folks off the books (paid cash) no benefits or insurance. Companies save millions we middle class earners have to take up the slack.

We basically created our own monster. And they keep coming....

I had to pay taxes for people working largely in a underground economy created in large by small business and the greed culture.

The guest worker program should fix this. The labor is necessary. It just needs a way to regulate and tax them properly.

You cannot fight greed. Humanity is by nature disgusting.

The funny thing was, Ron Insana chimed in that he called the peak of the housing market and the existance of a bubble last fall.

So everyone starts to jump on the bandwagon and claim they saw this coming.

This approach works so well for our history-revisionist media pundits, I wonder if it would work also for the Lottery? I could claim that I "called" last week's winning numbers months ago, and so am entitled to the winnings. Must try this sometime.

I think there needs to be tougher measures against identity theft. Capital punishment should be extended to these economically damaging crimes. Seriously.

I don’t think Reconquista and MECHa are that popular in the Mexican community. They are fringe organizations that draw little support.

MECHa is a fairly mainstream organization. Some of their members have said some radical things, but then again so have some members of the Republican party, the church, the military and just about any other social organization with more than a dozen members. Just because there are radicals within an institution does not mean that the institution itself is radical.

To the extent that there are radical separatist latino groups (I'm not familiar with 'Reconquista' so I can't comment), they do not reflect the views of the larger community. Just as neo-nazi skinheads and the aryan brotherhood do not reflect the views of the larger white community. There is a lot of fear-mongering on talk radio, aimed at a mostly white male audience, which is intended to make the listener feel that Latinos want to "take over." The reality is that the vast majority just want to take care of their families and try to get ahead--just like everybody else.

According to Robertson the FBs and loose lending will cause the utter collapse of civilisation as we know it.

Not impossible. Psychology will be the primary driving force.

That’s exactly what Schiller said…he really narrowed it all down to psychology.

Don't worry. He does not need to appear bearish anymore. The market will go where it needs to be. Fear has been, and will be the most powerful emotion.

LILLL,

I watched Suzy Assad interview RS on Friday and he was positively glowing! As the implosion becomes more obvious and tougher to deny the less he has to say. He's in an awkward postion right now b/c (as we've noted here) his housing futures are not exactly blowing anyone's doors off. However with all of the data pouring in he KNOWS he's in the catbird seat having a new financial product that can't help but be a lightning rod!

I'd heard that Toll Bros. up and walked away from several land options deals and will have some more bad news for shareholders! At some point they'll have to hedge these positions and he has just the vehicle to do it.

For Robert to tout his position at this point would be an awful lot like a bankruptcy attorney's advertisement saying;

"We help all types of freaking LOSERS"! So get your lame broke dick a$$ down to my office for a tongue lashing you won't soon forget! Our staff will treat with the respect you deserve. NONE! Swing by for your free belittlement (I mean consultation) today!

For Robert to tout his position at this point would be an awful lot like a bankruptcy attorney’s advertisement saying;

“We help all types of freaking LOSERS”! So get your lame broke dick a$$ down to my office for a tongue lashing you won’t soon forget! Our staff will treat with the respect you deserve. NONE! Swing by for your free belittlement (I mean consultation) today!

This is precisely what he SHOULD say. Bob Shiller is far too polite. We Bubbleheads have long been insulted, baited and belittled by gloating arrogant bull a$$hats. In my Book 'o Cosmic Karma, that's called "just payback". And it's a bitch (and so is Suzanne).

eburbed Says:

It’s surprising, but some places are actually hiking their offering prices here in the Pennin:

http://www.burbed.com/2006/08/21/east-palo-alto-price-hike-2239-poplar-ave-now-at-504000/

Checked out your linked EPA house in question. I can totally understand why they would jack up to asking price - it's SO worth it!! Especially being in "up and coming" EPA!

LILLL and DinOR,

I'll bet Shiller has to keep his commentary on the DL now, given his housing futures thing. He can't appear to be trying to push prices one way or another, or else there will be accusations of trying to gain the system.

On the Fox News interviews, if bubble predicting has reached Fox, it has really become mainstream!

I saw a listing in Mountain View that has also had it's asking price raised......I wonder if the new plan is - raise the prices, so you can lower them whenthe house still hasn't sold, and...

hey, presto - it seems like a bargain to an unsuspecting buyer? But it's what you originally wanted for the moneypit.......

HARM,

No argument here! I would find it very hard not to plop my feet up on Suzy's desk with a cigar in one hand and scratching myself with the other. RS has a few considerations to think of though. He did say that he can NOT personally make investments in the CME Futures. This tends to imply that he would be considered an "insider" and as such he has certain fiduciary responsibilities.

He knows where the data is leading him, and just what it means for the future. He'll get more mileage appealing to institutions, not bludegoning FB's. He was absolutely glowing. How many times in life do we get to do that?