patrick.net

"Her, and possibly 500 other realtors."

LOL! At least.

I’d love to know which book discussed the issues you mentioned, Mr. Right. It sounds very interesting.

Jamie, read both! "Blink" and "The Tipping Point" are both worthy books.

Okay, they're in my amazon cart now. :-)

I thought the discussion of legalized abortion resulting in a lower crime rate was in Freakonomics, by Livett & Dubner.

If you legalize something, of course fewer actions will be classified as crime. The only way to eliminate crime completely is to abolish laws. :twisted:

“Blink” by Malcolm Gladwell. Surprising amount of evidence to support causation. “The Tipping Point” was very thin, to be kind, on support for it’s premise.

The author expects you to "thin-slice" after reading "Blink". As a result, "The Tipping Point" needs only "thin" support. ;)

The author must also expect us to be fortune tellers since Tipping preceeded Blink.

I knew you are going to say that. :)

Heh. I guess Kauai beaches are the place for economics books. I was there end of July and read Shiller’s book Irrational Exuberance.

Reading economics in Hawai'i..are you some sort of masochist? ;)

The beaches are just so nice they make you want to just lie there and read something, and that book was next in my queue.

I hear ya--I always take a 'down day' to read. Last time, just for irony's sake, I read Krakauer's Into Thin Air

Phone Scam

If you get a phone call from someone saying they are from the phone company doing a test on the line and want you to press 90#, don't do it. 90# gives the caller full access to your phone line, and they can bill long distance calls to you. Thought I'd pass that on.

Also, thanks for the vacation reading tips. I like Vince Flynn too. ;)

@SactoQT: don't worry -- that 90# thing doesn't apply to normal phone lines.

It only applies to a certain types of office PBXes, for which 90# is the equivalent of "transfer to outside line, dial the operator, and drop off the call". The caller then tells the operator they want to call Nairobi. Hijinx ensue.

@SoldAtThePeak: I never noticed the bulls/bears coincidence/connection before either! I just convinced a coworker that the financial terms came from the Chicago teams though. So if the meme every crosses your path from that direction, you know it was indirectly your fault. He has an MBA and is a huge sports fan, so I don't feel the least bit guilty for his gullibility. :-)

...dispelling scary myths and then creating silly new ones... It's a closed circuit. The second law of thermodynamics remains unchallenged. My work is done for the day.

Have you been to Modesto?

Quesera

Supposedly the phone scam has been confirmed by the major phone co.'s as working on regular phone lines. Don't know for sure, but it's good to be aware.

This crash will be different in that the worst effected will be the affluent. ie. your hedgies, derivative players and wickedly bright young MBA’s.
So, where do these folk’s live?
Places like the Marina and Marin.
Prediction:
Marin’s $850K Novato Eichler special will be available for $475K.

So, does that mean the affluent areas could be hit too? Interesting thought, because that suggests instability in places like Sausalito, Tiburon, and Mill Valley.

Of course, and in all seriousness it has been very, very good to me.

That's good to hear. So do you think Modesto will hold it's value as well as Tim suggests?

I don't know Modesto all that well, I used to drive through on business now and then, thought the area's I saw were fairly unattractive. It may have improved but I don't see Modesto being some kind of island in the middle of a crashing market. The wealthier folks are not going to be as affected by a falling market as the middle class because it's the middle class that have been using the NAAVLP's to stretch their income in order to buy a home. I'm afaid that a lot of people who bought out of fear that they would be priced out if they didn't buy are the one's who are going to be hit the hardest.

@SactoQT: I promise on my life and my profession that the phone scam cannot work on regular residential phone lines, nor on most business PBXes. It is only possible on a couple of PBXes, and even then, only if left in a default insecure configuration.

I don't know much about many things, but this I know a whole lot about. I wouldn't belabor the point, but we all have our peeves. One of my biggest is unnecessary fears of technology. Some fears are legit. This one definitely, absolutely, swear-to-god, is not. There are ways to take control of remote phone lines, but they are far more sophisticated than this, they do not require the victim's cooperation (or awareness), and they are exceedingly rare because there are easier ways of accomplishing the same goal (unchargeable or untraceable calls).

With that said, if anyone ever calls you and asks you to dial something, give them personal information, hang up and call xxx, et cetera... just hang up. No legitimate caller will ever do such a thing. But there's no reason to be afraid of them -- they can't do anything special or scary to you or your telephone from the other end of the line.

Obligatory, vaguely on-topic... @Jack: You're right, no Eichlers in Novato. And the ones in Sunnyvale aren't exactly at the top of their local market (because they haven't been maintained well, and their hoods are less-than-stellar). In SoCal, you can definitely find desireable Eichlers..

quesera

I give, I give. I completely take your word for it. Btw, I'm not afraid of technolongy, I'm wary of people trying to take my money. My husband and I have had to cancel our check cards because someone got hold of our numbers and started making charges on them. Same thing happened to my Dad. I've had people call on the phone and try to get personal and credit info, tell me I've won something and I only "have to pay a small transaction fee." Stuff like that. So when someone tells me that there's a new scam out there, I pass it on. Nothing more to it than that.

Jack

I don't have anything against Modesto, I just don't think it's special in any way. Tim probably just used it as an example, but I agree that the lower end is not going to fare better for the reasons Tim stated. Right now it's all up in the air what the high end and the lower end are going to do, but like you said, not all the big homes are owned by bankers, mortgage lenders or RE agents..... or are they??? Just kidding.

Jack

I don't think it's you. ;)
Sorry, but I got to run. Time to take my daughter to school. I'll check in later.

"...wealthy people in more affluent areas made those areas more immune to corrections. The less dependent on job income a person is, the less likely they are to get into a situation where they are forced to sell thier house...."

Just a thought: while "more affluent areas" have a higher percentage of "money is no object" people, there's also a group of less-wealthy people who desire to "move up" into such a neighborhood for status reasons. They're willing to incur more financial risk simply for the location, "social status", intangibles, yada yada. Perhaps this explains a higher incidence of foreclosure/bankruptcies I've seen in places like Palo Alto, Los Gatos, Los Altos, Sausalito, Mill Valley vs. San Rafael, Novato, Sunnyvale, etc. I'm pretty certain there's newcomers to these "prime" areas leveraged up to their eyeballs.

I don't think that it is that unreasonable that modest homes near jobs would do better than places like, say Novato or Blackhawk. Modesto is perhaps not the best example of this kind of place, though.

The commute is just going to keep getting worse, gasoline will never be under $2/gallon in our lifetime and jobs don't really seem to be moving out of the urban cores. So the relative desirability of a place like Daly City or Fremont will probably continue to go up.

I already suggested once a few weeks ago, that places like the Marina would probably be hit the hardest during the downturn. This was mostly to pull you know whos chain, but to no avail. I *do* think that we will see softness on the top end first, just like in 2001, and that home prices will come down from there.

Why? Well, no one really *needs* to move from their 4 bedroom, 3 bath house in Menlo Park to a 6 bedroom 4 bath house on 1/2 acre in Los Gatos. Especially if you are pretty sure that 6/4 is going to be going down in price in a few months. Though I suppose no one really *needs* anything, other than a place to rent.

Also, it seems like the top has gone up the fastest and therefore has further to fall. Does anyone have any empirical evidence one way or another? Like perhaps by what percentage have large homes gone up, compared to smaller ones? Or perhaps home increases sorted by zip code?

I've heard that the higher end and condo's are the first to fall in a downturn. I live in an area that is considered more upscale (though I rent) and a friend of mine told me that an appraiser who looked at her house said homes in this area have gone down in value about $100,000 in the last year. But if you look at home sales in this area the home values seem flat instead of down, though the appraisals may very well be lower than they were. I'm not super knowledgeable on this but it seems reasonable that higher end homes will lose value just like the rest, the only question is if the owners of the homes actually hold more wealth and can avoid bankruptcy and foreclosures better than the middle and lower end.

Surfer X, you should be a writer. You have a truly unique voice. And great comic timing.

@SactoQT: I give, I give.
Haha. Sorry. I've been awake for about 36 hours straight, and I'm way too old to be doing stuff like that to myself. Tip for the kids: There's something magic about turning 30. Immediately thereafter, your body stops being as cooperative with your whims, and you get punchy after 24 hours of awakeness.

We're packing, moving cross country in 42 more hours. I hope a few of them will be spent asleep. :-)

At least you cite some EVIDENCE to back up Jim’s point. How long have you noticed this trend?

Jack--I must've missed this post. What I've done for the past month is count the number of foreclosure/bankruptcies and divide that against the city's population. What I found was that town that had a higher affluence/perception of status typically had quite a higher incidence of insolvency. The point I made from the data is speculative, but it's suggested by anedotal evidence.