patrick.net

Home Depot a real stinker this morning w/CEO Bernie saying he doesn't see any catalyst for improvement in 2007. Buckle up!

King_Cobra,

Oh that's right. They're having the big lender's event in NY. The "We have another year of adjustment" line really floored me! With 2,500 more being laid off (MB's) I'd love to see some projections on what NAR's membership will look like after another year of........ adjustment?

Maybe instead of having a link to the "Boomer Death Clock" we could have a "simulated" realt-whore memberships count down?

CB,

Thanks for bringing some clarity to the issue. I remember as a kid Expo ball caps were something of a collectors item. Definitely cool.

Real estate agent caught between the sheets

This is an old story, but it is new to me.

Sorry, the link.

allah,

I'm in no way condoning the realt-whore's behavior but the daughter was 28 years old! I can see pissed off, I can see disgusted but shocked and upset? If she's 28 and still doesn't know where babies come from perhaps it's time she had?

Re the cottage in Chicago ...

I lived in Chicago from 1995-2000 around North & Wells. Much of the area was built post-fire in the 1870s. There was one "fire cottage" left just west of Wells, maybe about 1800 north. It had to be about 500 sq ft all in, on a standard lot of 20-25x100-125.

Whether you'd be allowed to build something that size these days is an open question.

P.S. Zillow shows the Chicago house I sold for $765k in 2000 peaked at about $1.5m a year ago. The zestimate now is under $1.1m. I hear from the neighbors that the fellow I sold to has been in Arizona a lot lately, diligently working to save a development project outside Phoenix. I can't help LMAO.

I’m in no way condoning the realt-whore’s behavior but the daughter was 28 years old! I can see pissed off, I can see disgusted but shocked and upset? If she’s 28 and still doesn’t know where babies come from perhaps it’s time she had?

Well, now she knows. :)

SFWoman,

I believe I was referring to the latter of the two. Whatever would she think if she made that fateful wrong turn through the "fruit loop" In Balboa Park? God we used to love doing that. U.S Navy Shore Patrol van w/searchlight on "high beam". It looked like the scene in "Something about Mary" w/Ben Stiller. Sure. You were just going to the bathroom. Course ya' were.

Punchbowl,

Oh...... you mean North AVENUE! That would be up by the Historical Society? Randy H lived up that way for several years. I'm from Cicero and hung out on the south side but the old man would take me up there on jobs from time to time. Nice area. At least it was then.

Punchbowl,

W Fletcher @ Sheffield here. The first company I started had a nice loft office down Sheffield near Diversy. We were the first "high tech" company in that little park, and drew quite a few puzzled looks from the various lawyers and architects in the building. My wife and I almost bought a rehabbed craftsman west of there, closer to Southport before my wife unexpectedly go the job that brought us out west.

Something on stressed households in Sydney, quoted on my blog:

Suffering in silence: a city on the edge of insolvency
Linda Morris Religious Affairs Writer
November 13, 2006

ONE in three Sydney households is beset by financial worries and almost one in seven is teetering on the edge of insolvency, a church survey has found.

The study commissioned by the Wesley Mission warns financial stress is greatest in the south-west and outer west, but is also pervasive across all parts of the city, including its more affluent suburbs.

Families reported forgoing family activities, borrowing from relatives or friends, failing to pay bills on time or being unable to make minimum credit card payments.

Five per cent said they had had to pawn an item, 4 per cent said they had gone without meals and a similar number could not afford to heat their homes.

The survey of 400 people was carried out in August. Since then last week's interest rate rise - the third this year - has added $40 per month to average mortgage repayments.

@Muggy,

Dude... didn't you see the chart (from last thread)?

My nominal g/f is renovating her kitchen, the plumber charges $88/hr! These guys are like the new aristocracy. An MD friend of mine only gets $40/hr to do locum work, and has to pay her own 401(k) out of it! Six years of medical study and 4 years family practice study, and the plumber streaks ahead at 2:1 from doing a tech school course! And can't speak English, and no-one's life is in the balance...

Let's see... from roughly ZERO as recently as 1999 to $715 Billion (almost 3/4 of a TRILLION dollars) today.

So it's the "Goldilocks economy" and "ownership society" that have been driving job creation and consumer spending for the last several years? Got it. Where's that NAR bong? I think I need a hit right now...

HARM,

Make that negative-ownership society.

@DS,

We had a lively debate a couple threads back on whether or not MDs were underpaid for the schooling, lawsuit risk & debt load required vs. other professions. Put me down firmly in the "underpaid" camp.

We had a lively debate a couple threads back on whether or not MDs were underpaid for the schooling, lawsuit risk & debt load required vs. other professions. Put me down firmly in the “underpaid” camp.

Yeah, that was the debate where DS agreed with the side that MD's are overpaid and only care about making money. :)

I don't think that USNewswire/demos article is necessarily right in attributing borrowing from home equity to 'pay for basic needs due to declining salaries', that sounds a bit pious and pursuing an agenda to me. I think a lot of it has been discretionary spending on home renovations, new cars, etc. There is no question a lot of borrowing has been going on, as per the graph, but to imply that it's all to meet living expenses is drawing the long bow and being a bit ultra-left. Did they ask everyone in the country who has drawn against equity for their reasons? And the lender's ads haven't influenced anyone to go out and splurge on luxuries to look good to the neighbours? And those who draw down from home equity are often in their later years of salary earning with a home almost or entirely paid off, I doubt whether they were in financial distress prior to drawing down...then there's the question of reverse mortgages. Cost of living hasn't risen that much, and salaries haven't fallen that much.

that sounds a bit pious and pursuing an agenda to me.... to imply that it’s all to meet living expenses is drawing the long bow and being a bit ultra-left

Ok, this is getting weird now. First, DS implies MDs are underpaid, then he accuses a news article of having a leftist slant? Has someone hijacked Different Sean's screen name??

HARM,

Thanks for the chart.

Do youk, or anyone else, have a chart showing net MEW. That is, in spite of the proliferation of IO loans, I presume that most Americans continue to pay some principal down each year.

It would be interesting to subtract the amount of principal paid down from the MEW numbers to find out how much net equity Americans built, exclusive of market appreciation--I am wondering if this might actually be a negative number? That is, are Americans withdrawing more equity, in the aggregate, than they are accumulating through payments of principal?

Yeah, that was the debate where DS agreed with the side that MD’s are overpaid and only care about making money.

heh. To the best of my knowledge, Oz and UK doctors are paid, I dunno, maybe half of a US doctor's rate doing the equivalent specia1isation. I believe there is a certain amount of money and status chasing in becoming a doctor, although the reality on graduation may be different. I remember talking to the 'doctor's union (AMA) representative' on campus a while ago, who was breezily talking about making 'half a mill, or a mill' (so much for the role of unions), altho she will get a rude shock on graduation, unless willing to spend many years further specia1ising to make $150K-$200K at best. I think she was quoting US rates and doubling them in her febrile imagination... A recent report pointed out that increasing numbers of medicine graduates are chasing specia1isations for the money, and abandoning the idea of community general practice.

Have to get after those plumbers though, heh, I heard someone saying tradesmen are all making over $100K these days -- and they get quite a bit of interesting variety and challenge in their work without really being responsible for too much... certainly no-one's lives... and the plumber completely misread the plans for my nominal g/f's kitchen and botched it...

@Glen, no, but it shouldn't be too difficult to plot as long as you have relatively comprehensive mortgage data (which I don't at the moment). The "exclusive of market appreciation" part might be a bit tricky. A ton of people refinanced (I think we concluded a while back that virtually EVERYONE with an outstanding mortgage has refi-d within the last 5 years), and their "equity" at the time was based upon current appraisals. If that appraised value has fallen since refi time, "net equity" would be hard to precisely calculate.

HARM Says:
Ok, this is getting weird now. First, DS implies MDs are underpaid, then he accuses a news article of having a leftist slant? Has someone hijacked Different Sean’s screen name??

heh, no, maybe I'm in a right wing mood this morning. No, nothing's changed, I'm a realist in the centre left, and try to be evidence based, rather than conjecturing about whatever. Being a realist in the centre left in the US probably puts you somewhere on the lunatic left fringe tho, relatively... have to make the US phase-shift adjustment on every comment...

Glen,

Interesting wrinkle. I have pondered how to calculate that but I'll be honest. It would be primarily just to prove how paltry that sum is. I've read mortgage studies that show even w/ a 30 yr. FRM it isn't until year 23 the home debtor reaches the 50/50 level in the amoritization of the loan.

Given that affordability is defined as refinancing at every turn once it's time to pay the piper......?

HARM, I'm getting really tired of your crap. This whole hate thing has really got to go. I'm sick of hearing you degrade the fine institutions of realtwhoring and loan sharking, of course you can borrow you're way to prosperity. Why the hate HARM, why the hate? ;)

-you're
+your
shit

@Muggy :lol:

When you get done with your Photoshop "art project", please post the results here.

@Surfer-X

I may be a REIC "hater", but (to borrow spelling from my favorite FB) I'm no "looser". :mrgreen:

@DS,

Your assessment is correct. Many in university/college who want to go into medicine are in for a rude awakening. In the US, you can decide to practice in a state with high demand and low malpractice, like many states in the South and make lots of money in a subspecialty, but anyone who wants to live in a major urban center will be compensated much less. The desire to go into subspecialties is also about "controllable" lifestyle and better hours, too.

Hehe,

Casey's trolling his own website with a troop of "looser" identities.

Oh wait, I think someone provided this link before, which sort of answers my question:

http://www.financialsense.com/editorials/benson/2006/1109.html

So, in 2000 American homes were worth $11.4T and were encumbered by $4.8T in mortgages. In 2006, American homes were worth $20.3T and were encumbered by $9.3T in mortgages.

Let's be generous and assume that the natural rate of growth for aggregate home prices should be around 5% (to account for inflation and new construction). That means that if the prices in 2000 were reasonable, then a reasonable price today for America's total housing stock would be around $15T.

Now consider that 1/3 of homeowners have no mortgage. So they probably account for around $4T of equity (even assuming their houses are worth less than the average home). Thus, you have $11T in equity, encumbered by $9.3T in mortgage debt. At that point, I suspect that at least 1/3 of homeowners would be underwater. Massive liquidation time.

Glen,

Thanks for an excellent question. I see the difficulty in arriving at a net equity figure, but it would help us to estimate a sense of scale when discussing equity extraction. I have no intuitive idea if $715 billion is significant unless I know whether it represents 9% or 90% of current equity.

HARM? Got a rough estimate?

SFWoman,

It's kind of a personal ambition of mine that if I raise a son, he would be a plumber/slacker/rockclimber in summer/skibum in winter in his teens and early twenties. (before he is discovered as a financial genius at 30 and buys his mum a genuine midcentury modern house.)

Glen/HARM...

...aha! See what happens when I take too long away from the thread? Can't mix this with playing chef de cuisine, I see.

@Bruce,

This is not an exact figure, but $11 Trillion is a number that has been getting thrown around lately.

So, $715 Billion would represent 6.5% of "equity". Problem is, how much of that equity is really peak-of-the-bubble-valuations vapor-equity? If prices continue to decline by significant margins, much of this vapor equity will disappear, and that percentage will balloon even if no additional equity is "liberated".

Another thing to consider: Homeowner equity expressed as a percentage of market value has dropped to its lowest level (55%) since they bagan tracking it, despite one of the biggest run-ups in house prices in history.

In other words, owner equity would be even lower if not for the sky-high bubble valuations.

Let me try posting the chart:

Muggy,

Sadly, no one except higher-level moderators can post images in the thread comments, though any author can post images in their own thread topic. Plus, the procedure is complicated pain in the a$$.

I think this image is fine here. It's a bit large for the header though.

So, HARM, what you show is vast numbers of people having removed a reserve of assets which might otherwise have been tapped in hard times.

Income had better be pretty solid, by the look of it.