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Coping with my Schadenfreude


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2006 Apr 12, 10:14am   15,291 views  268 comments

by HARM   ➕follow (0)   💰tip   ignore  

Mr. Housing Bubble

WSJ article reports Flippers are getting a rough ass-pounding from the market.

Despite the current turmoil, some Floridians remain bullish, including Stuart Miller, the chief executive officer of Miami-based Lennar, one of the largest home builders in the U.S. But Mr. Morgan, the broker, says for him the market has slowed considerably. He wrote in an email late last week that "we went three days this week with not a single showing. That's incredible. I have 35 listings. We usually get 2-6 showings a day....I received more desperate calls from sellers than ever. One lady broke down into tears. Her husband bought two investment properties, and they are now going to lose their 'life savings' if they sell the homes in today's market."

I experience strong visceral feelings of pleasure and satisfaction.
(_pinky to corner of mouth, Dr. Evil style_ Woohahahahaha!!!)

Q: Does this make me a bad person?

Discuss, enjoy...
HARM

#housing

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189   edvard   2006 Apr 13, 8:28am  

Ray,
Wow, at least you heard back from that guy. I've written to the Mayor of Alameda, several newspapers, and of course all the senators and the Govna' a few times, and nobody except one of the newspapers got back to me, and the person who emailed me from the paper was doing so because he too was pissed that a newspaper editor can't afford anything in town. I think most local politicians would rather just look the other way and stay out of it, which is probably wise because either stand they take will ultimatly put mud on their hands.

190   astrid   2006 Apr 13, 8:37am  

Ray W,

I gave you my take on affordable housing, what's your take on affordable house?

191   Randy H   2006 Apr 13, 8:38am  

Huh? They are all zero-sum games. :)

Then again, I doubt even the Universe is a purely closed system. Not a zero-sum game. ;)

192   astrid   2006 Apr 13, 8:42am  

If the universe was a close karmic system, that means everytime we do something with good karma, someone else is forced to take on bad karma to balance...

193   Randy H   2006 Apr 13, 8:56am  

I was involved in Belmont politics a few years ago, mostly regarding housing-related issues. I spent a lot of time working with a couple of city council members regarding development issues.

Here's what I came away with from my experience spending too much time interacting with the bowels of city government:

1. If you are reading this blog then you are too smart to be wasting time with your city government, unless you have a rare bunch of people running your town (unlikely), or you live in a city with a history of real politics (that is, the state and even national parties take an interest in getting candidates into office in your city).

2. Absent of the exceptions above, the people who rise to political office are those who are most recognizable. This tends to favor reatlors(tm), a very few local business people, and rarely a long-time activist resident.

3. Most of the people running the city have a good heart, but lack the experience, education, or practical knowledge to interpret the complex issues before them.

4. In this vacuum, policy tends to be (a) poorly considered usually with lots of nasty unintended consequences, (b) populist; whatever tends to quiet down the chronic complainers, which by the way are people who have spent the past 25years bitching about the same stupid personal annoyance, (c) self-serving; see real-estate agents.

In Belmont we had a certain unnamed, infamous realtor(tm) who rose to mayor, only to have approved an illegal McMansion development (in a closed session if I recall correctly), which was land acquired by a business partner, and subsequently sold to developers for a few million (as an option, dependent upon approval) from which she directly profited. She came under pressure, resigned, and is still very popular in town. She got to keep her money too, and the little "zoned for 8 houses" area proudly boasts some 30+ overpriced McMansions. I have no doubt that if she ran for mayor again, she'd win. Everyone recognizes her picture, being it's on signs all over town.

The lesson I came away with: "life is too short to waste time herding cats".

**not political advice

194   Randy H   2006 Apr 13, 9:05am  

Ray W,

Just an excerpt of my cynicism towards city governance:

which has yet to make it past the Planning Department and to the public for a full discussion on the pros and cons. I haven’t yet formulated an opinion, and I won’t, until this matter is before the full City Council, and you have an opportunity to be heard.

Yea yea, that's what we heard a bunch of times in Belmont too. Translation: "I've already made up my mind, but will hide behind formality until this issue has become confused and frustrating. Hopefully no earnest, organized grass-roots efforts arise to counter the proposal, which I shall encourage by refusing to comment on the issue. I'll seek legal advice from our incompetent, subcontracted municipal lawyer which will result in our losing the next 3 years city budget in lawsuits even if the Council votes no anyway. So hey, by the time I push this thing through, you and everyone else should be thanking me."

195   LILLL   2006 Apr 13, 9:13am  

Have you guys checked out ..

http://overvalued.blogspot.com/

lately...funny...

196   HARM   2006 Apr 13, 9:14am  

@Ray W & Astrid,

I have removed the private phone numbers & email addresses from Ray's posts. Unfortunately, neither I, Peter P, Randy H, nor SQT can moderate each other's threads, only those of other people.

197   Randy H   2006 Apr 13, 9:14am  

City commissions are different in every city. In Belmont they had little to no power and the Council overruled the recommendations of the commissions whenever they wanted to, often in closed session. They can close session whever things get "rowdy", meaning someone speaks emotionally in open debate.

Your mileage may vary.

One piece of unsolicited advice: don't underestimate the power of formality or sound-bite good intentions. If they hold an "affordable housing workshop" and you don't participate and contribute, then they'll discredit you on the subject thereafter. If they label bad housing as "affordable housing", then you cannot attack it directly, or you'll be labeled as a NIMBY, racist, elitist, etc. It's very Orwellian and depressing.

198   Randy H   2006 Apr 13, 9:16am  

I can't edit comments in a top-level admin's thread (none of us can). So SQT, HARM, Peter P and myself cannot edit each other's threads.

HARM, if you see this, strike the email from the OC.

199   HARM   2006 Apr 13, 9:17am  

Randy H, it's already done --see my above comment.

200   Randy H   2006 Apr 13, 9:21am  

@HARM

I have committed the sin of not scrolling up. My apologies. ;)

201   Randy H   2006 Apr 13, 9:28am  

Ray W,

Agreed. I guess my only caution is that city government uses "time commitment' as a barrier to entry. If you are going to fight this battle and have it be anything but a complete and utter waste of your time, then you have to invest in it heavily. You must get involved, go to every council meeting, join a commission, and show up to every workshop. Take council members to coffee, help allies campaign, carry little signs around on election day. You have to spend an enormous amount of time on other issues in order to get them to champion your issue.

Something about an analogy to how one makes sausage fits in here.

202   StuckInBA   2006 Apr 13, 9:29am  

Ray W and tannebaum,

What's your opinion about the Pleasanton - Dublin - Danville RE market ? I am trying to keep a watch on Morgan Hill and Pleasanton like secondary markets to make a guess about the Cupertino area. (No offense intended by calling these secondary markets. To me, Software job center is Redwood City to San Jose, and is a primary market.)

Thanks.

203   Randy H   2006 Apr 13, 9:30am  

...or you can start your own grass-roots, organized movement. Then you're trading herding cats for herding A.D.D. ferrets.

204   HARM   2006 Apr 13, 9:42am  

Ray,

While I agree that CA desperately needs more housing affordable for working class families, I'm doubt that more "well meaning" government coercion is necessarily the answer. As you said, "cities are not incent[iviz]ed to build owner occupiable worker housing. It doesn’t bring in the revenue like commercial space does or luxury homes do". Let's also not forget the massive credit/speculation-induced bubble we're in right now.

Ignoring the effects of the current credit/asset bubble for this discussion, we can partly thank Prop. 13 for artificially limiting supply long-term. What little housing that does get approved tends to be upscale high-end McMansions that will bring in the most amount of tax revenue per SFT for city/state government. For the most part, local government does not want to "waste" valuable real estate on housing, especially low-tax revenue worker housing --they'd rather approve more high-revenue commercial developments. We can of course also thank ingrained CA NIMBYism for most voters being adamantly opposed to any form of higher density housing (townhomes, condos, etc.), which might increase affordable supply.

I think if we rolled back the RE development laws/regulations to pre-1970s (when housing was still broadly affordable here), dropped the NIMBY mentality and let the free market work its magic, there would soon be no "affordable housing" crisis (again this is ignoring the effects of the current credit/asset bubble on prices).

Sometimes LESS (government) is MORE.

205   StuckInBA   2006 Apr 13, 9:55am  

My Sanskrit is really rustic. The word "karma" has many meanings, all related.

The simplest meaning is "actions" - as in someting you do. It refers to the cause and not consequences.

The most famous hymn from Geeta literally says - "You have the right to choose your karma (actions), but not their consequences".

206   Peter P   2006 Apr 13, 10:07am  

Then again, I doubt even the Universe is a purely closed system. Not a zero-sum game.

What if the universe is an infinite but closed system?

Is the Infinite Hotel a zero-sum game? :)

207   astrid   2006 Apr 13, 10:10am  

Peter P,

Entropy will get us all in the end.

208   astrid   2006 Apr 13, 10:16am  

Re: discussion of government control

I know most of you think Dailykos and similar left leaning organizations are full of wack jobs. (and my behavior on this board may have left the impression that such organizations are filled with wack job nymphos) But I think Kos has created a great model for putting responsible and caring people into local offices. They've gathered some knee jerkers, but a lot of the people there are willing to follow a good argument and even change their minds on occasion. They're also good ways to reach campaign donors and workers.

209   astrid   2006 Apr 13, 10:22am  

Ray W,

I agree with you. Most of these attempts to build affordable housing is putting a bandaid on a gushing wound. Furthermore, the few affordable houses are basically lottery winnings for people savvy or lucky enough to win.

I still think allowing more apartments and townhouses is the way to do it. Even the tiniest house in Pleasanton is now over $600,000, no way can that be affordable. With more small, market rate rental housing, poor teachers and city workers can at least live close to where they work.

210   astrid   2006 Apr 13, 10:25am  

Ray W,

Though you really can't blame the city government per se. Most cities prefer to have lots of tax revenue and low crime.

Also, Pleasanton does have a motorcycle, drag race problem. Those jerks race at 1 in the morning on streets lined with street facing apartments.

211   astrid   2006 Apr 13, 10:32am  

Randy H,

As for your story on Belmont, I think your former mayor belongs in prison or at least should be forced to pay the city every cent she made on the deal.

212   asik   2006 Apr 13, 10:32am  

Regarding government:

"For what are states but large bandit bands, and what are bandit bands but small states?"
-St. Augustine of Hippo

Taxation is theft. Fannie Mae helped create the housing bubble that will ruin many sheep. Franklin Raines, ex-CEO of Fannie, cooked the books, and left a future bankruptcy.

213   astrid   2006 Apr 13, 10:35am  

"Taxation is theft."

Huh. Oh yeah, let's go burn down city hall and create our pure anarchist paradise now!

Not!

214   LILLL   2006 Apr 13, 10:46am  

'intaxication'
a new word for our glossary
The new tax assessment that the FBs didn't forsee!

215   DinOR   2006 Apr 13, 10:50am  

SQT,

I have this list. It's a list of total a$$holes. Some are in politics, sports, some are in commerce but most of those on "the list" are either former co-workers, neighbors or rude people you see everyday (commute, grocery store etc.) Mind you, I don't add to this list indiscriminately and seldom is one offense sufficient to land yourself on "the list". That said, once you've made my list, there are only two ways out. Total exposure for the AH fraud that you are and....... death. I seldom hold a grudge against people once they are already quite dead. Again though, I've made some exceptions over the years. From time to time a crooked politician or greedy businessman will die from a heart attack while being "restrained" in a sleazy hotel with "Mistress Helga" and if the police have to bring the wife down to identify the AH corpse this is sufficient humiliation to be taken off the list, albeit posthumously. They are then downgraded to J.O.

Ahem, trash talking, know nothing screw everybody mortgage brokers are on the list.

216   LILLL   2006 Apr 13, 10:50am  

Or
the euphoria of watching the FBs get their new, reassessed tax bills!

217   LILLL   2006 Apr 13, 10:53am  

Be careful...if you spend too much on the house you might get intaxicated!

218   DinOR   2006 Apr 13, 10:55am  

One of the main criteria to landing on "the list" (and trust me this list is written in stone b/c they ALL eventually meet their end) is to go about business with the attitude that as long as you are willing to exploit others that you can always make a good living.

219   LILLL   2006 Apr 13, 10:59am  

Din OR
Has anybody ever redeemed themselves and been taken off the list?

220   DinOR   2006 Apr 13, 11:04am  

Linda in LLL,

Uh let me check, no.

Regrettably this falls under "fool me twice". Like the phone scam artists that take seniors money and then after a few months go back to the very same people and ask for money so they can go after the "guys" that screwed them in the first scam.

221   DinOR   2006 Apr 13, 11:11am  

Linda in LLL,

I actually heard a mortgage broker's commercial today in the car that went something like this, it's so contorted I'll just have to do my best.

"That's right Sue! We went to XYZ Mortgage a year ago and they got us a really good deal. They put us in the "perfect" mortgage for us. Now that we're ready to refinance we'll definitely use XYZ Mortgage again!"

Come on! Now that we're ready to refinance? I thought this was the "perfect" mortgage? Run, RUN!

222   astrid   2006 Apr 13, 11:12am  

There is not just one housing bubble, but two bubbles stacked on top of each other.

Jason, have you considered participation on this site in any form other than links to the futurist?

223   astrid   2006 Apr 13, 11:22am  

"Astrid,

That is a perfectly ON-topic post. "

That's a start. But even better would be for you to let people know where the link is going to ahead of time. Even better than that would be to give your own thoughts about the article in addition to the link.

In any case, given your posting record, I personally think you're stealth trolling.

224   astrid   2006 Apr 13, 11:36am  

Ray W,

I'll agree that perhaps Pleasanton shouldn't take itself so seriously, and particularly in such an inept manner. However, anything making a lot of low frequency noise is capable of being a bother to other people nearby. Given that we're not using these machines in the middle of nowhere, other people may have a legitimate complaint about them.

However, the situation you're talking about sounds more like one of perceived class, and these latte sippers were selectively offended by the presence of a redneck vehicle. I say perceived because Harleys are damn expensive.

225   DinOR   2006 Apr 13, 11:36am  

astrid,

There is an organization I believe called the American Society for Peace and Quite or something like that and they do a wonderful job describing all of the ruckus we have grown to accept. True, bikes with "loud pipes" in of it self is not that big a deal. However when coupled with leaf blowers, sub woofers etc. etc. it becomes substantial. All summer long we have a steady flow of "boomers on bikes" roll through town and each and every one of them manages to "get on it" as they pass through like a dog marking his territory. It's only quite until about 9:00am, then no sooner one group passes then another comes along. Frankly I could live without it.

226   astrid   2006 Apr 13, 11:41am  

DinOR,

I think we can count noise pollution as a sort of bad karma.

227   astrid   2006 Apr 13, 11:45am  

hate to rent,

The other problem is that the stocks are still priced pretty high by historic standards. This is the unfortunate consequence of a credit bubble.

It sounds like the finance types like commodities for hedging. However, these things sound entirely too complicated for my mind.

Also, none of the above is investment advice.

228   Randy H   2006 Apr 13, 11:45am  

Can you post some pix of these supposed Kos Wacko Nymphos while you're at it?

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