patrick.net

"Very well said. I think the demand is there because:
1. People in general desire to own their home.
2. People would like to live within a reasonable commute to work." -- SFResident

None of that means shit when people can NO LONGER AFFORD THE HOME.

"Also, I did not see a lot of open house signs in San Francisco as several people in this blog claimed happened in other areas." --SFResident

That's strange, out in the Inner Richmond by GG Park where I'm at there are many places up for a sale. There's a house on the corner of 15th and Cabrillo that's been sitting on the market for over 2 months with an open house every weekend.

Anyway, if you're so sure that "the demand is there" then get off your ass and go buy a second house here in San Francisco. Put your money where your mouth is as I and most of the others on this blog have already done.

"People in general desire to own their home." --SFResident

Oh, how fucking helpfull and informative! What a delightfully delicious tidbit of information we have here! This of course surely means that housing prices shall rise in perpetuity! Ya know, people in general ALSO desire to be pro sports players and bang supermodels on a regular basis, but this does not exponentially increase the population of pro ballers and cheap supermodel sluts now does it?

I for one am positive the demand is there; so much so that I'm currently taking an ITT tech correspondence RE agent course, and will hopefully soon get my license. The world will be my oyster. MMMM oysters.

@SFRenter, good work, embrace the dark lord, I can taste your anger, you are doing well my son. Have you also tried incorporating profanity into your daily life? I for one have found it very helpful when dealing with customer service representatives. Not finding them too helpful, tired of getting crapped on, speak up with profanity.

Come to think of it. If SF were so bad, why people bother to come to SF and cause traffic jam ?

Do you seriously think they come to SF to have settle down, have a family, and send their kids to the prestigious SF public schools, like those in the Bay View district? I don't think so. Usually, I stop by SF to take a piss before gettin' back to the road to visit Sausalito and/or Sonoma.

If you park your car in San Francisco, within minutes someone will strip it of all valuables and burn the rest.

I guess that's why, for safety reasons, you've got to pay $18 to park one hour in a garage, and spend another half an hour finding an entrance in the traffic flow to exit from there. Or you can just be brave and push your BMW forward the coming car, hopefully scaring him to yield you a passage, thus reducing your waiting time and become a personal hero to your passenger, all at the same time.

And you must be very, very thankful (after crossing your fingers and other various parts of your body) to have a deed to your own opencompact parking spot assigned to your condo, should you want to purchase one, to settle FOREVER in the wonderful city of SF.

SQT, welcome aboard :) feel the anger, embrace the outrage, vent.

SQT, think about it, Yoda is what 1-2ft high, green with pointy ears, of course he embraces the dark side, it's the yang to his ying.

I have found anger/profanity works wonders when dealing with customer service operators who pick up the phone after you have been on hold for 45 minutes.

I tried that years ago and it did not work.

Now I am extra nice to them and occasionally I get goodies. :)

Peter P, in all honesty I first go poodle then doberman, or if you prefer, the carrot and the stick. Very nice, then over the top. Works great.

Actually, "poodle" or "doberman", it is all about exploring human weakness.

In this housing bubble, the weakness of potential buyers has been fully exploited. In particular, the greed of gains and the fear of being left behind have driven prices to the peak.

Fortunately, sellers may have more to lose and they should be more susceptible to psychological manipulation.

Peter P, focus your chi :)

Peter P,

Good to see you again. Ever decide to pursue that behavioral finance education?

"Peter P, in all honesty I first go poodle then doberman, or if you prefer, the carrot and the stick." --Surfer X

Agreed, I always start out with the "polite, professional, and firm" approach and only descend into livid appoplexia when absolutely necessary.

Exploiting real estate agents is very entertaining. When one came to my door asking for business, I asked her how the price reductions were going. Watching her squirm and swallow, tickled my fancy down to the dark force at the center of my being.

surfer-x rocks.

Good to see you again. Ever decide to pursue that behavioral finance education?

Maybe later... but I am studying for CFA Level 1 and CMT Level 1. Any tip?

Good to see you again too!

Agreed, I always start out with the “polite, professional, and firm” approach and only descend into livid appoplexia when absolutely necessary.

If being nice doesn't work, I usually just let go. The karma credit can become handy. ;)

Let me get this straight,

Surfer X is taking courses and being sized up for a "blue blazer"!

Jeffolie HATES Amerika?

SFRenter is knockin' down 3 pointers and.......

SQT is using profanity and embracing the dark side?

What next?

DinOR gets pressured to make ridiculous I/O offer on $hitbox for 999K?

I say RE Bulls made their bed, now I'm hearing that SQT's husband's esteemed firm is of the opinion that the FED will actually be forced to LOWER rates to provide "damage control" for the HB? SQT, tell me it ain't so! Like I say, these guys have been hitting from the "ladies tees" since the 2nd of JAN 2001. Reaped what, $61 billion in commissions, managed to allow everyone that makes a mortgage payment to think they are an investor, tap every imaginable resource ($$$) recieve untold amounts of free publicity, been given "tax exempt" status and now THEY NEED someone to give them a break?! Give ME a break already! Jeffolie, I apologize for being short earlier but I could use some help here. Anybody!?

@jeffollie, so the RE agent swallowed? bbbbhhhhahahahahahah :)

Is it bad that I want people like that to suffer?

I think this is very normal.

Is it unethical? I think it is bad only if

1) by wishing you can actually cause them to suffer, and
2) you consciously know that (1) is true

If your wish conincides with their suffering when the bubble bursts, you will still be fine because the cause and effect cannot be ascertained.

btw,

That should read; $61 billion in commissions in 2005 ALONE!

DinOR

I love America. I proudly served in the military. Hate on occassion motivated me to persist against powerful people and authorities. Hate took its price and gave it rewards.

So let's disintermediate the crooked Realtor(tm) cartel by getting the Open MLS Act passed. Close your eyes and imagine all the cheap Lexus and Mercedes that will be available on consignment lots throughout the state.

"Maybe later… but I am studying for CFA Level 1 and CMT Level 1. Any tip?" -- Peter P

I'm studying for CFA Level 1 right now tool. I'm half-way through the lovely subject of "Financial Statement Analysis." A tip is to not slack on this subject because it's 35% of the test. But man it gets mind-numbing. I'm currently memorizing all the damn ratios as well as DuPont analysis components. Aaaaargh...

I’m studying for CFA Level 1 right now tool. I’m half-way through the lovely subject of “Financial Statement Analysis.” A tip is to not slack on this subject because it’s 35% of the test. But man it gets mind-numbing. I’m currently memorizing all the damn ratios as well as DuPont analysis components. Aaaaargh…

Are you taking the June Exam in SF?

Jeffolie,

I know you don't hate America and I do place a value on your opinion. Me personally, I couldn't stand the military, that's why I joined the Navy. Proud? I was in charge of the "retention prevention" squad. If anyone even THOUGHT about re-enlisting I was sent down to talk them out of it.

SQT, not that it's your husband's place to atone for something an analyst in NY said but I would be curious. Since when has a Wall St. firm felt sorry for anyone? It's as if the FED suspects something is wrong and they know full well it needs to be corrected but they lack the political will to see it through. Conventional wisdom seems to trend toward, "The longer we put this RE correction off, the worse it's going to be"! Why put the "kid gloves" on now?

Peter, SFRenter WHY? CFP designation not enough of a pain?

Peter, SFRenter WHY? CFP designation not enough of a pain?

CFP? Maybe later.

For whom will we do financial planning though? Gen-Xers? Not enough of them. Boomers? Nothing can be done at this time.

Perhaps we should start a CBA designation: Certified Bubble Anlayst. :)

I can't offer any CFA advice, not being one myself. I'm just a cptr sci/eng guy who later got an MBA focussed on finance and economics. I can tell you that accounting profits are enigma and how to determine "excess cash".

I can’t offer any CFA advice, not being one myself. I’m just a cptr sci/eng guy who later got an MBA focussed on finance and economics. I can tell you that accounting profits are enigma and how to determine “excess cash”.

Randy, I am also a Computer Science/Engineering guy. Is getting an MBA a good way for me to steer into a career in finance?

I am sure it is a good degree but I also want to look into self-study education that costs much less.

Peter P,

The pain doesn't end when you pass the exam! That's where the CFP nightmare begins, there's the continuing ed. a whole new level of scrutiny and then you get volunteered to speak at every meeting known to man and lastly clean up after the seminar! I study the material regularly and keep it handy for ref. but soooo many people have told me it's a hassle! And yes, I would love to be a charter member of CBA! Organizational Chart as follows:

Surfer X: Chairman/CEO and HMFIC

And yes, I would love to be a charter member of CBA! Organizational Chart as follows:

Surfer X: Chairman/CEO and HMFIC

35% of the exam will be about the legacy of surfer-X.

The abundance of one's life does not consist of what one possesses. Revisit any place where you have experienced joy and you'll realize it was 95% the people you were with. Renting will not ruin a childhood if the surroundings are reasonably safe.

Is getting an MBA a good way for me to steer into a career in finance?

It depends. If you're too old, and have a long employment track record in industry, then getting into high-finance is nearly impossible. I knew many of my cohort, and lots of others from Stanford and Wharton who thought they'd become investment bankers/private equity principals after getting their MBA only to find that they were too old or too experienced.

But, your chances of getting into corporate finance are pretty good, especially given the people you'll meet and network with. It's really all about the network, which is why it is worth it to try to get into a top-tier school. Luckily, there are at least five BA options:
- Wharton West
- Stanford GSB/Sloan
- UC Berkeley, Haas Full-Time Program
- UC Berkeley, Haas Evening/Weekend
- UC Berekely, Haas and Columbia Business School Joint Program

I can't recommend doing a "lesser tier" MBA, unless you already work for a corporation which will foot the bill and promote you for getting the degree. Generally, the cost of the program only pays back in salary surveys for the top-tier.

(your mileage may vary; there are plenty of examples of losers from Stanford and winners from Saint Mary's; i'm just stating the odds)

It depends. If you’re too old, and have a long employment track record in industry, then getting into high-finance is nearly impossible. I knew many of my cohort, and lots of others from Stanford and Wharton who thought they’d become investment bankers/private equity principals after getting their MBA only to find that they were too old or too experienced.

Thanks for your advice. I will keep that in mind. I am turning 30 last next year, so I guess time is soon running out and I must act soon or I will be left behind. :(

The hard landing will be world wide and the Fed will not control it:

"As the delinquencies and losses on mortgages flow through to subordinated mortgage- and asset-backed securities, who will be affected? Who buys these securities? The interesting part about these private label subordinate pieces is that for the most part, they’ve ended up in CDOs [collateralized debt obligations] and have been sold outside the U.S. Subordinated pieces are trading at their most expensive levels ever primarily because of the demand from structured deals—CDOs are underwriting the risk in the mortgage market. The lender (buyer of the CDO) is the person in line to lose money. While CDOs often have higher yields for a given rating level, they also usually have higher risk for a given rating level. Because the investors are CDOs, the bonds are outside the banking system, and the regulatory agencies cannot police the market. That has been a frustration for the regulators—they can’t do as much about the situation as they had hoped."

"Are you taking the June Exam in SF?" -- Peter P.

Yes indeed, I am registered.

Yes indeed, I am registered.

I will be there too. ;)

"So, everyone, go into RE and finance! Those are the jobs of the future!"

Well it could be worse: I could be a Realtor (TM).

There will be no hard landing, you doom and gloomers have been predicting one for the last three years and there is still no evidence of it.

The economy will keep bumbling along, with average real wages continuing their long slow downward trajectory in the US, and jumping up in the rapidly industrializing nations. Globalization is pretty much unstoppable at this point and wages will tend to equalize over the world until the average Chinese citizen makes more or less the same as the average American. We have been speeding the process along with our unwillingness to save, but it is inevitable in any case.

I think the only thing that can stop this is World War III and no one is interested in that.

Real estate will stumble though, already has in fact. A nice two little two unit around the corner from me has been sitting on the market for six weeks at $1.2M. Last spring it would have been snapped up in the first week. This is not going to bring down the world economy all by itself though, you guys are seriously delusional if you think that a slowdown in California real estate is going to collapse the whole world economy. Most of the US hasn't even experienced any real housing bubble.

California and the East Coast might get hit pretty hard though, we shall see.

To Jimbo's point, real-price inflation in many areas of the Plains, Midwest and Southeast have been around 5% for the past 10 years. There is no national RE bubble; there are instead a number of regional bubbles--mainly on the coasts or in some inland urban metra areas.

It is for this reason that there will not be a widespread MBS/CDO collapse. Even if the regional bubbles crash hard, and the aggregate default rate ticks way up, it will be far from the threshold to cause the kind of "dogs and cats sleeping together" scenario some have predicted. This is true even if you remove liquidity from derivatives based on these instruments. The simple fact is that there will not be 100% defaults; not even 50%; not even 20%. The number will be much much much lower, in the worst case (barring some type of truly exogeneous catastrophe like WWIII). The resultant slack will be absorbed by inflation.

It won't be pretty; but it won't be armageddon.