patrick.net

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.

Arg! I just noticed this quote in the "Rising rates slow but don't stop ARMs race" article:

"In this town, where home prices are so high, people are looking for a low monthly payment that allows them to own a house."

Of course, I see skibum's post on the state-of-our-schools. *brain explodes* Argg!

I happen to like high ceilings, but I'm also one of those people who don't make use of heat or air conditioning. (Grew up in a stone house w/ hardwood floors and no heating to speak of.) There's something about building on a large scale that makes people fell... well, not oppressed, the way smaller cramped places do. Of course, the overall quality of a McMansion helps undo any such beneficial effects.

astrid Says:

For sheer absurdity of architecture, my vote would be for the Chinese Zhejiang countryside...a discordant overall imagery of Disneyland on acid.

PLEASE provide links to photos - this I've got to see!

newsfreak,

Provided the story of the 250K over asking price (in DC of all places) is true please contact the Overvalued Blogspot for inclusion into America's Overvalued RE! If the buyer was properly exploited there is even an option to nominate the selling realtor for their "Hall of Shame".

newsfreak,

And thank you in return. I may still be quite young, but I've learnt that a big name alma mater is no guarantee of brain activity. In fact, some of the smartest people I've met have gone to land grant schools (esp. for undergrad) and a few of the dumbest/inanimate ones come with big name university Ph.Ds.

Dinor,

some of the pictures on this page come close, but I've seen much more absurd examples - including one with a glass tile wall section running 4 floors tall.

http://www.skyscrapercity.com/showthread.php?t=332782&page=2&pp=20

Requiem,

Yeah, by March in Oregon it's pretty easy to become overwhelmed with cabin fever and a vaulted room to escape to can help when it's 37 degrees out and raining for the sixth consecutive week. Like I say, we "walled it off" during the winter and only bothered to heat a few hours during the weekends. Not that I'm some kind of conservationist (just cheap).

re: the bimbo reporter, is that Melissa Francis (is she on MSNBC or CNBC)? Man, she is CUTE.

DinOR,

How does that compare to your experience in the Philippines? I had a friend who was half Philippino and she said she packs her bags there with Spam. Unfortunately, that's about all I know about the Phillippines.

Anon,

Thanks for the clarification. I haven't seen the show so I maybe I shouldn't jump to judge her. But her credentials alone means very little to me. I find it's the person and what they're able to create that really matters.

Yeah, by March in Oregon it’s pretty easy to become overwhelmed with cabin fever and a vaulted room to escape to can help when it’s 37 degrees out and raining for the sixth consecutive week.

And the Bay Area has been raining for how many consecutive weeks now? Didn't we make a March record?

I do not mind rain and I like overcast. However, it was pouring on 101 yesterday.

"And the Bay Area has been raining for how many consecutive weeks now? Didn’t we make a March record?"

Did I mention that D.C. has been enjoying a beautiful March and April? March was so dry the Washington Post was giving advice about droughtproofing the garden.

Dinor....
If it rains one more week... I am going to go NUTS! Seriously, it has rained for almost 60 days in a row. If the so called PDO cycle is ligitimate as NASA claims, then mother nature alone may body slam those prices in the Bay Area quicker than anything, because if it is going to rain 6 months out of the year for the next 10 years, then that defeats most of the reason people choose to live here.

astrid,

That stuff was da bomb! I thought I had seen over the top in the P.I but that it just plain insane. My wife's cousin worked for years in Ohio for an auto parts supplier. She worked hard and saved her money and built what I like to call a "P.I Peso Palace". Good for her, she earned it. But it looks ridiculous. There are bamboo huts, fishing boats and swaying palm trees and then there's her cousin's monstrosity in the middle of all this tranquility. Oh, and she has a "mini dish" bolted to the side so she won't miss TV for the two weeks every other year she visits. When sge was "fishing" for a compliment from my wife, Mrs. DinOR asked her why she didn't build a hospital instead. That kind of took the wind out her sails.

DinOR Says:

When sge was “fishing” for a compliment from my wife, Mrs. DinOR asked her why she didn’t build a hospital instead. That kind of took the wind out her sails.

That is f-ing hilarious! Sounds like a line from a Filipino version of Pride and Prejudice, or something.

The other pictures on the thread are also very nice, some of them illustrate what Chinese countryside used to look like. Decrepit, but quite picturesque.

"Mrs. DinOR asked her why she didn’t build a hospital instead"

Mrs. DinOR rocks!

NAR's desperate spin: Check.

http://tinyurl.com/fb9af

Some highlights:

But based on those projections for 2006, both the new home and existing home sectors would see their third-best year, following the booming markets of 2005 and 2004, the trade group said.

Wow. "Third best". Is that the NAR's way of saying "sequential decline"? :-)

"Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect," David Lereah, NAR's chief economist, said.

Oh shit. Damn the rising interest rate poking on the bubble. Poking -- it sounds just so violent. Sometimes I wish it were more like a souffle. Delicious.

But don't worry. Although your ARM will adjust from 4% to 7%, you can still handle the $900 increase in your monthly mortgage payment. After all, with commodity cost increases and the flatline salary and stock market, we'll get over it just fine.

Houses in the Bay Area will go up another 10% this year! (25% if not for the soft-landing).

nomadtoons2,

Going nuts? Oh, I'm there man! An old friend just moved to LV (with no intention of buying anytime soon) and he gives me a daily update on their weather. Bastard. I had no idea though that NASA had confirmed the possibility of the PDO! I'll have to check NOAA's ? website. As far as I knew it was the weather guessers at "U Dub" (Univ. of WA) that had made the observation. Years back I had a client that was a hydrologist? and he said that in effect LA had been turned from a desert into an oasis b/c of Mullholland and this may have changed weather patterns there.

newsfreak, (re: 2-story living rooms)

I know! you could put platforms at different levels, with stairs going up and down, like those 3D Star Trek chess sets.

(Would be intersting to see, though it'd be of more use for parties than for anything else.)

"Economic growth...are providing a favorable backdrop for the housing market"

BrightC, good point. What does direct economic growth even have to do with the housing market? I understand if economic growth can be linked to higher household income, but otherwise, there's no reason why economic growth would lead to higher property value. And you're absolutely right, what higher economic growth does directly contribute to is a rising commodities market.

DinOR,

How did you even close off your two floor living room? At least for McMansions, the 2 floor foyers and 2 floor living rooms are arranged in a manner that make it impossible to isolate from the rest of the house.

Thanks all!

I think Mrs. DinOR rocks too! It's just that we have seen so many of the "ex-patriots" return with an ugly display of wealth when what is really needed is at the very least a clinic. Many of their relatives are all hunky dory (healthwise) and then they just keel over b/c they have NEVER been seen by a medical professional of any sort in their lives. It's only after they are "critical" that these long term issues surface. If there was some sort of way to tell these people that they had diabetes or high blood pressure (or whatever) then at least the family could make some home health care preparations rather than pumping money into what SFWoman describes as the 1/3 of health care dollars being spent in the last 30 days of life. You know, basic preventative stuff.