patrick.net

Okay now, what is Jake Gyllenhaal cream sauce? Is it similar to truffle cream sauce?

Owneroccupier Says:
I know this Margaret Hwang woman, before she got married. Haven’t been in touch for years.
Let me put it this way, she is not the brightest bulb in our circle of friends, but definitely a climber. Used to intern for some big name senator or something, tried politics, didn’t work, wanted to do ibank, didn’t work. Kinda surprised to find her in academia. One should check who sponsored that study, I bet it is some realtor/builder-related interest that is doing so.

bubble, bubble, toil and trouble,
fire burn and housing double...

reminds me of a fairly useless 1946 paper written by one milton friedman on the cost of housing in chicago etc at a time of similar concern. he actually submitted that you could control all property prices rather than just rents, but kind of dismissed that as a possibility, one memorable line was 'but what of the man who wants to rent?'

http://mason.gmu.edu/~kbrancat/Papers/roofs_or_ceilings.pdf

oh, Capuchin Economics - the behaviour of Capuchine monkeys - behavioural economics - i'm all for that stuff - i thought the name was like 'latte economics' for a moment...

i like these sorts of quotes:
"In other words, home buyers do not operate in a world of rational expectations. They are easily swayed by low interest payments, low down payments, tax code changes and perhaps most importantly by the emotional tug of being left behind or not getting their fair share of wealth that others are receiving. This last factor is the founding basis for behavioral finance and Capuchinomics. We then fully understand that such behavior is emotionally normal, but financially destructive."

a recent study found some 8-10% of sheep (rams) were gay...

Inside the Mind of the Gay Sheep
http://www.theregister.co.uk/2004/03/08/inside_the_mind/
(quite a funny site, too)

a guy called milton diamond (no relation to jared?) postulated 4 stages of pre-natal sexual differentiation through the action of hormones - the derangement of any of the stages would lead to different manifestations of cross-gendered behaviour...

Different Sean wrote:

>reminds me of a fairly useless 1946 paper written
>by one Milton Friedman
http://mason.gmu.edu/~kbrancat/Papers/roofs_or_ceilings.pdf

Friedman's writings usually make a lot of sense and I did not find anything in the link above that I didn't agree with.

Bingo. The international carry-trade via ultra-cheap $USD was a huge factor in spawning RE bubbles all over the globe.

hmm, when wall st sneezes, the whole world catches a cold... (not that it was wall st exactly this time, tho greenspan lowered interest rates to save the share market...) interest rates definitely went down in many countries following 9/11 and all the rest.

tho wendell cox at demographia.com insists it is urban consolidation housing policies alone that drive up prices, when you consider parts of america are still very cheap (the smith article calls these "screaming bargains") - i am somewhat surprised in fact that people haven't swooped on every part of america and tried to milk the ROI on investment property - if you get good cash flows on cheap property in nebraska or wherever, why haven't all those places gone through the roof as well - interstate investors buying up all the places?

wee

sorry about the post above. For some reason my last post wasn't posted.
Anyhow, About the baby boomers selling off their houses in 10 years.. I was reading an article the other day and the scary thing it mentioned was that the next big baby boom is pretty much happening right now. Get this- The majority of those having kids are: you guessed it- Baby Boomers! Yay! another entirely new generation of boomers to start all over again! The good thing is that by the time lil' Jr gets old enough to buy anything, we'll hopefully be out of this mess and be in homes of our own( if you aren't already.)

SFwoman,
When I lived in Berkeley, I knew a lot of people who claimed to have their home residences at their friend's houses just so their kids could go to Berkeley High School. Amazing. I think they have since cracked down on that because Berkeley had a huge amount of students for a few years.

It sort of scares me at the level of hostility being exhibited in those posts. Someday, I might be one of those guys with california tags driving around there. I hope they don't associate all californians simply as "assholes". I can understand the fear of people coming in and jacking up their prices, but I'm sure many of the people who moved there are in my same boat and needed the ability to attain upward mobility, not just cash out and gorge on cheaper real estate.

When I have looked at the Demographia papers they always seem vaguely like Heritage Foundation papers, the outcome is known before the data/study is put together. Suburbs=good,...

yeah, i don't agree with his single-cause theory, it has to be interactive at the very least. i initially took offence at his 'anti-urban planning posture', because it seemed like a near-trivial input to inflation. however, he is adamant it's the main driver. i suggested to him it is a correlation at best, like eating ice-cream doesn't cause you to put on sunscreen, altho both behaviours are present on a hot day.

further, with the current fuel crisis, peak oil, etc i completely disagree with his 'flight to suburbia' - i argue for better train links, higher densities, and so on - but then he has arguments saying it is costlier to run trains. other reasons not to sprawl are that it cuts into arable farmland and costs much more to implement infrastructure over large areas - therefore all environmentally wasteful activities...

he has a good grasp of demographic data tho... and points out that housing is affordable in houston area, altho it takes in millions of people... and the US experience has been that the coasts have become particularly unaffordable, other areas not so bad...

the Schiller house bubble hedge

how will it work?

nomadtoons2 Says:

About the baby boomers selling off their houses in 10 years.. I was reading an article the other day and the scary thing it mentioned was that the next big baby boom is pretty much happening right now. Get this- The majority of those having kids are: you guessed it- Baby Boomers!

I don't know if the article you refer to is talking about the same thing, but there's a well-described phenomenon of the "echo boom", ie, boomers' kids are in another generation that has a larger population than its predecessors and successors. I'm gen-X (yes, that term fell out of vogue long ago it seems), so we're stuck being in a minority demographic and subject to mass effect from the boomer generation. They're certainly not all evil, but there sure are a lot of them.

maybe the californians will be mistaken for terrorists, targeting the wal-mart...

Friedman’s writings usually make a lot of sense and I did not find anything in the link above that I didn’t agree with.

it makes some sort of sense in some sort of status quo way, but so what? he really is working inside the box, working in a model he has been given - no useful suggestions for ameliorating a problem. hence, i wouldn't go to him for any kind of useful social policy advice... maybe there's a reason he struggled as an academic for a long time, until market fundamentalism and laissez-faireism and economic rationalism became the order of the day in a new era... and homo economicus was born...

SFwoman,
I was in one of those moods yesterday, as you could see. You're right. People lump others into groups generically. After living in all these places, people act the same everywhere. But.. there are some cultural diffrences from region to region. Small things, like the way people greet each other, talk, and hold conversations. I can imagine that someone coming from say LA and going to a tiny place like Asheville might feel a bit of a shock from the shifting of gears. I know that it took me about a year to get used to San Francisco. Now it feels like all the other places I've lived except the weather ( is usually) pretty good. I can recall living back home and knowing only what people told me about California, which was that they were all rich and eccentric. People from New York were simply known as stupid Yankees, and people in Alabama.. well they were considered toothless hicks.
Seeing all these people from California must strike fear in the minds of North Carolinians who have only heard about what people " are like" from California. I'm sure some of those Californians had perceptions of what North Carolina would be like as well. Hopefully they'll both get along just fine.

nomad, SFWoman,

While we're on the subject of population demographics, IMO, the CA invasion phenomenon is inevitable, even without the housing bubble being concentrated in coastal regions (although the bubble has accentuated this phenomenon). The coasts have always been the main entry points for immigration, the primary population and economic centers of the country, and therefore the source of substantial intra-country out-migration in addition to the in-migration due to job seekers and the like. As the cost of living goes up and the quality of life goes down, the out-migration surpasses the in-migration. That's led in part to all the stories from Seattle and Portland 10 yrs ago hating newbies from CA, then more recently the same stories from Boise, Santa Fe, Reno, SLC. Similarly, the same thing seems to be happening on the East Coast (NY/CT/MA/NJ moving to VT, NH, ME, PA).

SFWoman Says:

the perception of Californians will become one of wealthy nasty people (with small weiners) instead of wealthy laid back people.

The wealthy laid back ones usually stay. Why would they leave?

goober Says:

More boometts = more social security tax revenues for X’ers…..

Economists predicted 9 out of the last 3 recessions....

would we be any worse off if we let economists predict the weather and meteorologists predict the economy?

Mathematics brought rigor to Economics. Unfortunately, it also brought mortis...

hee hee

Sort of going off topic here, and perhaps about to make an obvious statement that's probably been discussed here... but.. It seems to me that all of this mess started in 1978 with the passing of Prop 13. It's what got Reagen in the office, and if you look at what occured afterwards, there has been a fluctuation of housing booms and bursts in California ever since. There is no money for schools and public works because Prop 13 strangled the amount of money the state gets. It also is the main reason housing is unaffordable to younger less affluent people. Prop 13 has outlived it's usefulness and caused an unforeseen problem that's just as bad as the problem it served to fix. So why not advocate tax reform that is somewhat flexible? of course this means some pain for homeowners, but then again, non-homeowners have been dealing with the pain for years, so why not spread the love around. I'm all about repealing Prop 13, and jack the taxes on property until it makes it at least 30-40% less profitable. It will solve so many problems for the state and the approximatly 50% of the residents priced out, and ultimatly, even the homeowners.

Economics is not to be confused with Econometrics.

Phil,

Sorry if last night's transcript wasn't to your taste. To make it slightly more on topic, I'm retroactively naming the women line of discussion "how to avoid marrying a Century 21 harpy."

Also, please free to contribute more and steer the conversation to matters more to your liking.

A shame to see a newswoman on MSNBC today bragging that a house sold for $250,000 over asking price in her DC neighborhood. As if she was bragging she lived in Shangri La or something something.

The HSBC research shows DC as by far the worst bubble in the US by almost every approach they simulate. Compared to DC, the Bay Area looks only a little bit loony. DC will implode, in my opinion.

The biggest problem with "californication" is not what they do to house prices across the country, that's a short term effect that will be reversed by the bubble burst. My problem is with the sort of houses the Californians are buying. They often have a taste for tacky and oversized McMansion. Those houses are just kind of worthless because of the layout (cooling 20 ft ceilings in Atlanta? 200 sq. ft. bathroom?) and the shoddy construction.

astrid,

I'm not sure the McMansion taste is a California-only phenomenon. Having visited many parts of the country in recent years, I've seen each region's version of the McMansion: California prefers the stucco, often Spanish-style McMansion, Texas and the South prefer the light-colored brick colonial, and the Northeast seems to prefer the red-brick or faux-wood siding colonial look.

Either way, the useless 20ft ceilings and the shoddy construction are things I can't stand either. Have you noticed in those airplane on-board catalogs (Frontgate and similar crap), those ladders and duster/light bulb changing extension tools these people sell for McMansion owners so they can change recessed lighting for these 20ft ceilings? Ridiculous. There must be a light bulb joke in there somewhere involving FB's...

skibum,

I don't think McMansion taste is California only. However, I do think that a lot more Californians and New Yorkers are able to afford such white elephants.

Skibum,

As a long time Portland resident I don't despise ANYONE from CA! Yes, there are the "Helenites" but I'm not among them. Many of the tech firms and start-ups in the PNW eminate from CA. Without their contribution we would still be trading beaver pelts! Are there trade offs? Sure, but net, net overall it's been a plus.

Much apologies regarding the delay in the "negotiating 101" thread! We went to the OR coast for Mrs. DinOR's birthday and were completely immersed in a prelude to retirement. God it's good to be back!

astrid Says:

I don’t think McMansion taste is California only. However, I do think that a lot more Californians and New Yorkers are able to afford such white elephants.

That's true - hence the cultural and financial "imperialism" from California to its neighbors (and beyond). And they're stupid enough to want to buy/build these pieces of crap.

DinOR,

Do you think you are in the minority regarding the "Californians are okay by me" sentiment up there? It seems at the very least the popular media likes to tell the Calinvasion story over and over again. Then again, why should I believe the popular media?

Skibum,

I think the battle lines are pretty clearly drawn on this one. The avg. W-2 wage earnin' employee sees only additional traffic, escalating RE prices and more crowded schools so in his/her book Californians are just plain bad. Folks in retail and financial services, etc. well frankly we don't care where they're from! The truth is that had it not been for our proximity to CA our RE prices would be about as bubbly as Wyoming. Now that we are in our 7th CONSECUTIVE MONTH of rain I can't imagine why anyone would want to live here full time. As much as it pains me to say it I believe this is the LAST winter I spend in OR without some kind of reprieve!

DinOR,

If I'm not mistaken, parts of Wyoming are very overpriced because of rich outsiders.

You won't find reprieve in California. But perhaps you should invest in a sunlight machine. :)

Back to Mcmansions, think about what it must be like for a life-long inhabitant of NY, CA, or MA moving to a state like GA. They've been molded and shaped to believe that houses are always expensive, the house you might someday get will be smallish, older, and perhaps not in the most ideal neighborhood. Imagine that you're a school teacher, librarian, plumber, or engineer and suddenly, houses in your new adopted state are 4 times cheaper and 4 times bigger than the houses from where you grew up. Perhaps many of these people never had the opportunity to buy, or maybe they had a small crappy house and sold it for a cool half mil. Suddenly, their purchasing power in their new state is IMMENSE. So naturally, gluttony will occur if you take a person out of one extreme and put them in another. I'm not surprised that californians and New Yorkers salivate over these MASSIVE houses. I'm sure they think they're going to finally live the life, and their ship has arrived. I think the kind of people who are buying these houses aren't neccesarily in the california mindset. They're just people who value posessions heavily and the physical percentage they can now buy in these parts of the country is so severe, nothing short of massive houses and plenty of them can be expected.

Skibum,

There has always been a prevailing attitude that 3rd, 4th or 5th generation Oregonians are just plain better than "everyone else" here. I see it in business everyday, and it's sad. I worked at a financial firm in Portland where there was a definite difference in expectations for "Native Oregonians" and the rest of us. Many that had not even been there a year were telling the sales manager that their family ALWAYS goes for the first day of Elk Season so don't even ask me to be around. They start talking about it 4 months in advance and have no reservations whatsoever about dumping work on non-native, non-sportsman. It was a terrible work environment, but I'm afraid it's still pretty much the norm. I could see if a guy like myself were able to say "But we always fly home for the first Bears game" and being able to go but that would be utterly laughed out of the office. It's just not a very level playing field here for "non-natives".

astrid,

I'm sure there are expensive areas, yes, even in WY! How sad. One of the articles on Ben's Blog talked about the "Rolling Boom" as investment $'s scour the country for the last cheap frontier. Just as an aside, my wife even noticed the California "kitsch" in her native Philippines! Many of the "up scale" subdivisions are all stucco with huge vaulted ceilings and verandas that no one ever seems to use. We have a very simple beach house and now that the roof needs some work we are going to add a second story so that others might actually be able to live there. Imagine that.

Can any one with an engineering background please help us calculate the wasted square or perhaps cubic footage in the avg. McChateaux so we can extrapolate the figure nationally? Our old home had ONE room with a huge vault but we closed it off during the winter weekdays and only heated if and when being used on the weekends. Even at that it was inefficient.

DinOR,

For sheer absurdity of architecture, my vote would be for the Chinese Zhejiang countryside (about 2 hours from Shanghai by train or car). They built these 4 or 5 story houses (very narrow) in the middle of the rice paddies, tiled them in pastel color tiles, and giving a discordant overall imagery of Disneyland on acid. For the top of floor of the building, they would put in this glass-in sun room like structure (I can only assume for solar drying) and cap the whole thing off with a 2-4 meter tall antenna like thing.

anon,

And? Because we know Harvard is only filled with smart people? Huh? Huh?

As far as vaulted ceilings, or high ceilings, they make no sense to have in California unless you live in a hot region. The original reason for high ceilings was that the house stayed cooler. My Aunt lives in Memphis. Her house was built in 1918, long before modern AC. To say the least, Memphis gets hotter than hell in the summer. Add the humidity, and it can be downright uncomfortable. But her house stays cool. All the heat rises to the ceiling. Cool air from the basement is blown up through floor vents via a simple fan system in the floor. The result is that she saves perhaps hundreds, maybe even over $1000 on electricity. Her ceilings are all 12 feet high. Nobody in California really needs such high ceilings, especially in the bay area. That's why all the old houses are built short and squat.

DinOR,

The Oregon coast is so pretty, especially the stretch just north of California's lost coast.

nomadtoons2,

I guess in the end this has all been about what you can afford, not what's needed. Maybe that should read "what you can borrow".

nomadtoons2,

The problem is that the principle only works if you have 12 feet ceilings on a one floor house. Modern McMansions have all or most of their bedrooms on the second floor.

astrid,

Pretty? Yes quite so. Pretty boring? Oh, most assuredly! They've tried to turn the entire place into some sort of "adult disneyland" with the tribal casinos and coffee shops and outlet malls. The ONLY jobs are service and tourism related. Uh, for about 200 years the Oregon Coast was about fishing and logging. Neither of which we tolerate any longer.