patrick.net

Nomograph says

Most parents teach their children the value education, hard work, and personal responsibility.

DocNomo ... are these values your personal top three and are they listed in order?

E-man says

Don’t call people name like that. I sincerely expect you to be better than this.

George Bush hands him $1000 /yr just for sprogging, increasing the national debt by over a million dollars (through the magic of compounding) by the end of the century.

Bap didn't do anything worthwhile to merit that tax credit, yet he took the government handout anyway. What a leech :)

Nomograph says

Ryan says

1) Did Bap ask his child’s school if he could volunteer to watch the playground?
2) Did Bap ask his child’s school if he could volunteer to be a teacher’s assistant in the classroom?
3) Does Bap attempt to do anything else to solve his problem, i.e. become a leader of the PTA or even just attend?

That would cut into Bap’s AM talk radio time.
Don’t forget, Bap33 is on welfare. He didn’t follow his own advice and figure out how to provide for his family before he started “breeding”. Now you and I have to pay to raise his litter, and just look at the thanks we get. It’s a sure bet that Bap33’s mother and/or father were also on welfare. Most likely his children will end up on welfare unless he starts providing for himself, stops blaming other people for his problems, and teaches his children to do the same.

Not to mention he is taking out a FHA loan to recoup the 8K tax credit that conservatives so love.

Troy says

Bap33 says

While I can not prove that I have never taken a hand-out, you can not prove I have.

You forego the $1000 per child tax credit? Thought not, leech.

How about that 8K tax credit you chose to receive.

trying, but as of yet, no success.

Bap33 says

Nomo, you’re a disingenuos fable teller. While I can not prove that I have never taken a hand-out, you can not prove I have. And the reverse is true. As a matter of fact, I can not prove that I am anybody that has done anything, and you can’t either — but you will never stop attacking. In other words, a perfect liberal. kudos to you.

Bap33 says

@ellie,
are you suggesting my spellling and grammar may have issues? lol. Merry Christmas ellie.

Bap, I'm not suggesting that your spelling & grammar may have issues. I'm flat out saying it. You often use language that reverses the meaning of your message to make you sound - gasp! - liberal. lol, I enjoy it, and I'm sure that I'm not the only one to do so. An example:

Bap33 says

…. how my posts ignite you to attack me is really funny. So lib, and so predictable. Cheers.

Ignite: To set on fire; kindle. Chemistry, to heat intensely, roast.
Incite: To stir; encourage, or urge on; stimulate or prompt to action: to incite a crowd to riot.

Your comments after your misuse of the word "ignite," instead of fulfilling your mission of appearing condescending and propping your ego 'cause you're smarter than a doctor, actually gives one the impression that you lack education and/or intelligence.

Joke's on you. Merry Christmas.

ok ... jokes on me .... I meant ignite ... as in "light a fire under ones butt and makes them jump up in a flash". Thanks for your support. lol I know my writing sux. I know, my writing sux. I know my writing, sux.

Bap33 says

ok … jokes on me …. I meant ignite … as in “light a fire under ones butt and makes them jump up in a flash”.

Bap - I don't doubt that your posts invite a response, as evidenced by the responses to your posts. But you might be flattering yourself if you believe that you light a fire under Nomo's butt, or make him jump in a flash.

A response written in a laid-back manner doesn't lend itself to the urgency you're intimating. I don't know Nomo, but believe that he has the ability to decide when something is worth jumping up in a flash. He (and various others) exploit your lack of command of the language as they make fun of you. It's funny, and clever.

So, I thank you and several other posters on this forum for the untold hours of amusement you've given - and look forward to many more. Merry Christmas.

Elliemae

RE: the child credit. I like to think that my government pays me to have sex;O)

Bap33 says

simchaland says

Bap, any answer to my question and my telling of how I was raised? Is that any different from what you are trying to achieve?

your post started out saying your mom was liberal, and then you described an ultra-conservative upbringing. My best guess is you mistook a kind heart for liberalism … or you just made up the whole thing. Either one?
All I am trying to achieve is to give my kids all of the tools I can to give them a good solid foundation for life. And, in my opinion, raising kids is a hard job. Also, in my opinion, subsidizing the expansion of the lowest common denominator of society has resulted in very poor results. Lazy people are crappy parents.

Um nope, I really mean my Mom was and IS a LIBERAL. She's very liberal. And I made nothing up. That was my upbringing. Child rearing according to political ideology is stupid. Most parents of any political orientation will use discipline. My whole point is that you and other conservatives seem to think that only you hold certain ideals dear. And my point is that we have some ideals in common. You neglect to take a look at the true definition of the political word "liberal." Liberals are free thinkers. My parents were free thinkers who voted for whomever they thought would get the job done well. We worked on campaigns. Trust me, we didn't work on conservative campaigns. My upbringing wasn't exactly "conservative" in a political sense. Liberals have traditions and ideals we like to uphold too. And we share many of the same ideals as conservatives claim to hold.

So, why is it that you think that only conservatives have ideals?

Something tells me that you are fighting a "straw man" liberal that exists only in your imagination. We liberals love our children and want the best for them. And we even believe in discipline. However, we don't all hold the same ideals because we are free thinkers. We can be liberal and pick and chose from many traditions. We liberals aren't "boxed in" like it seems conservatives are.

So, again answer the question that I really asked, why is it that you think that only conservatives have ideals?

Just wanted to ask if anyone else is having trouble viewing the forums with Google Chrome?

What kind of trouble? Could you send me a screenshot?

Please email me about problems with the forum: p@patrick.net

Hey Patrick, When do u think the interest rates will raise to 10+ percent so prices on homes will be very cheap?

Also do u own many properties? and how did u start

I think interest rates will rise to 10+ percent when either the Federal Reserve Board all goes to prison, or when the Federal Reserve Board succeeds in destroying the dollar. Whichever comes first.

I don't own any property, but now that I track the rental rates vs price, I'm tempted to buy rental property in some bad neighborhoods. There are good deals there.

I think we'll see 2% mortgage rates before 10%.

10% would utterly destroy everything, including the wealth basis of people buying the bonds.

A real mexican standoff.

I think you're right that interest rates will probably be kept low to protect wealthy bond holders, esp. US Treasury Bond holders. Bond prices fall as interest rates rise.

But I disagree that high interest rates would destroy everything. I think low interest rates are already destroying everything by artificially inflating assets and preventing rational investment.

L.10 Assets and Liabilities of the Personal Sector (1)

Total financial assets
2004: $34.7T
1Q09: $37.1T

(+7%)

Total liabilities
2004: $14.7T
1Q09: $19.8T

(+34%)

The market has rallied since 1Q09 so assets are up ~20%

Bernanke needs inflation, but so did Japan.

We're finding, like them, that there's no clean way to back out years of massive and systemic misinvestment in land valuation and unneeded construction.

It's hard marking that $5.1T gain in liability to $0.

Japan's M1 was ~$1.5T when I was FOB there in 1993. Now it's $4.8T and wages and prices there are lower now than then.

We're not Japan in the specifics but the liquidity trap is the same AFAICT.

Patrick -

First of all I would like to start for thanking you for putting up this site...I have been following it since 2007 and it is awesome!! You seem to be very focused on Bay Area or CA in general because that is where you are....I am also orginally from the Bay but moved to VA in 2005. Can you please add some information on Loudoun County in VA. Where do you see the future of this county?

I don't know anything about Loudoun County. But I always say just look at the rent/price ratios.

If yearly rent is under 5% of purchase price, then prices are too high. Rents are determined by jobs. You can't borrow to pay rent. So rents are usually at market price.

That means the house price compared to rent tells you whether to walk away -- or whether to run away!

I had once read that the market is always right. Unlike you Pat, I was a licensed Real Estate Agent from 1981 to 1997. Mostly in the bare land sector some business opportunities and multi. unit. It was futile to argue value with sellers as neighbor's prices skyrocketed. The new logic was BUY at any price because it will be worth 20 % more next year ! Yippie Kia Yae !
If we become educated as to WHY real estate prices became detached from reality we would understand where the values will return to. This IS what happened !!! One day In 1973 each american family was given double the credit for the purpose of buying a home. The reason was never discussed because its chauvinistic. ( Women were not considered credit worthy prior to 1972 !!! ssshhhh!!! ). Home prices exploded till 1981 when real property prices fell nationwide by 17%. I know this well as a regular comment around the office was that real estate sales were profitable till I got in the business. In the meantime Woz and Jobs were introducing a gadget that created more profit than ANY other invention Since and even BEFORE the alleged big bang. Virtually everyone in the free world bought some for the house and some more for the business And they replaced each and paid about $1,500 for each one every other year from 1982 until Around 2002 when Charles Schwab was asked why they have not replaced their work stations this year. The response was they do not need to. Hardware sales hit a brick wall. Do a little math. The amount of money generated by hardware is only a portion of that era's cash flow. Consider peripherals, software, ink sales, remember the "DOT COM BUBBLE".
That orgasm of cash flow caused over exuberance when shopping for Real Property and actually caused multiple buyers to offer MORE than asking prices. They did not have google earth nor did their Selling agents (for some reason) disclose the fact that their is still plenty of land to go around.
Humans phenomenally pay a multiple of 2.5 times their annual income for a home. When they hit the lotto, bets are off. The Bay area's prices actually passed 8 times median income.
No one argues that 17% of the people who live in the Bay Area can afford to buy in the Bay Area. I am willing to wager that approximately 17% of the Bay Areas wage earning population is/was in the high paying Technology field.

Thank You Pat, Promote freedom of education.

I echo the first post about your 3% rental figure EVEN in the Bay Area. The calculation does not work out at all. I like most of what you say, but that is simply not an accurate calculation of the rental market. For example, I am renting in the Claremont Hills in Berkeley, CA. It is fair to say the home value is 550K to even 600K because of a likely bidding war due to desirable area, front yard, back yard, three car ports, and great view. There is no way I could rent this home for less than 2,000 which your formula concludes. $2,300 to $2,500 is the rental range of this home.

I've been collecting a TON of rent/buy data lately, and more than 40% of rentals in the Bay Area are returning less than 4% of their valuation (from Zillow, tax records, etc).

So maybe you rental is closer to break-even for the landlord, but very many are not, especially in more expensive neighborhoods.

select count(*) from caps where metro_area='sfbay' and cap_rate < 0.04;

20925

select count(*) from caps where metro_area='sfbay';

48322

This is from my Bargain Finder service: http://patrick.net/?cat=3

Hi Patrick,

One variable you have not addressed is the national debt and the probabilty the dollar will devalue an additional 90% within the next year. It has already devalued by some 40% in the past year. If a home was purchased today for $400,000 then conceivably it could be worth $4,000,000 in a year if the dollar drops as predicted.

Hello Patrick,

I was falling for the whole "housing market hit bottom" line from my realtor, and the different institutions that try to profit from real estate. I live in the Florida Miami-Dade County/ Broward County area. I was hoping to buy my first home in the Broward area. From what I understand... these areas are the worst in the list for overvalued homes, and where foreclosures are at their worst. The market value is set to fall here the most. I recently found a 2 bedroom / 2 bath 1047sq foot home built in 1976 in the Broward county area for $95,000 as a short sale. It has many renovations and a new roof from 2006. I have put in an offer but this process can take months. After reading so much information on statistics from your site I'm thinking about forgetting the whole home buying thing for now anyway.

I was hoping to get some insight into this. I rent now for $800 in a duplex in a decent area in Dade County. I split utilities with the homeowner and I always spend around $900-$1000 a month for everything.

If I purchased that home in Broward County for $95,000, I estimated my closing costs to be around $10,000. And because the taxes on that property have a homestead exemption, taxes would be around $1900 a year. Plus hazard insurance, flood insurance, along with my principle/ interest/ and PMI at around the 5.25% interest rate... my payments should be around $870 all together. Of course this is not counting utilities. I would be paying $70 more a month to have my own property as opposed to renting, which at one point seemed to be more of a security than it is now.
Should I back out now for the next couple of years and continue renting?

lillybee62002 says

If I purchased that home in Broward County for $95,000, I estimated my closing costs to be around $10,000. And because the taxes on that property have a homestead exemption, taxes would be around $1900 a year. Plus hazard insurance, flood insurance, along with my principle/ interest/ and PMI at around the 5.25% interest rate… my payments should be around $870 all together. Of course this is not counting utilities. I would be paying $70 more a month to have my own property as opposed to renting, which at one point seemed to be more of a security than it is now.
Should I back out now for the next couple of years and continue renting?

Personally I am of the opinion not to buy unless you plan to be there for at least 10 years. I work in the default services industry and have a glimpse of what is in the pipeline and it's pretty ugly. I bought this year (at about rental parity) but I plan to be where I bought for well over 10 years.

At that low of a cost of a property you probably won't get a tax savings as you would only pay about 5K in interest. You would be putting money to principal though. Assuming your there for 10 years you would still owe 77K on the property (30yr/5.25).

Will your rent still be around $800 in 2020?
Will your place be worth $77K in 2020?
Do you want to be there in 2020?

I wish I had answers to your questions. I'm not sure about them. What is your guess to what values might be like around that time in the area I was planning to buy in? I wish I had some kind of reliable information that can give a good indication of the condition of the market in 2, 5, 10 years.

That house that I’m thinking about purchasing… what do you think the values might be like in 3-5 years based on the information you see everyday?

lillybee62002 says

I wish I had answers to your questions. I’m not sure about them. What is your guess to what values might be like around that time in the area I was planning to buy in? I wish I had some kind of reliable information that can give a good indication of the condition of the market in 2, 5, 10 years.
That house that I’m thinking about purchasing… what do you think the values might be like in 3-5 years based on the information you see everyday?

I wish I had the answers too. Short term is pretty bleak.

I only know everything point to the pice dropping over the next couple years. One of our larger clients has a HUGE back-log of loans that are already delinquent that they need to figure out what to do with. The "Shadow Inventory" is real. In 2008, we were seeing 4000+ loans per week of just HELOC's that were >90 days late from one bank.

FWIW one company is taking the a current BPO value and cutting it by 20-45% (depending on state/zip) adding in closing, foreclosure costs, holding and reo costs when deciding what to do. For FL your looking in the 40% range and it taking 330 days or so to handle the whole process.

I would say if your looking to live there for only 5 years, rent.

Good advice. But to clarify... the house I was looking at is a short sale. I noticed on the tax roll that the assessed value last year dropped to $129,000. They are asking in the short sale for $94,000. Do you think the banks are already taking into account the drop in value that is coming?

Is the 40% drop in value the worst of what will happen? Or that is just this year alone and we will be seeing more drops in value in coming years?

And I was thinking 5 years, but I would not mind being in that area I found for longer... I thought I could always rent it out too in case I need to move. Not sure if renting it out will be worth it at that time.

Wow - patrick, a side of you we never knew!

edited response: I wrote this in response to a spam ad for sex-related material. But since he removed it, I retract my observation.... :) sorry!

Not a side of me. Sex spam deleted. Those guys are like cockroaches.

Socialism is not freedom.

andrew.lieberman says

Socialism is not freedom.

And pertinence is everything.

Socialism is not freedom.

Au contraire, mon frère.

Socialism provides liberty of action by leveling the playing field between the haves and have nots. Without socialism, "all the freedom you can afford, but not one drop more" obtains.

It can go overboard, but when done right (eg Canada, the Eurosocialists, Australia, NZ, Singapore, Japan to some extent) the real-world results speak for themselves.

Any unregulated economy is just a money pump that sucks wealth from the weak to the strong in a self-reinforcing closed feedback loop.

In such an economy there's generally opportunity at the margin to escape the rat-race through entrepreneurial effort, but overall the great bulk of jobs are uncreative and soul-killing. Socialism just recognizes that in a modern economy somebody's got to pick up the trash, drive the buses, clean the toilets, front the storeshelves, and do the millions of other shit jobs that need to be done. These shit jobs have low skill levels and so are fungible and the people stuck in them lack bargaining power, but socialism obviates this dire state of affairs by attempting to provide subsidized social services -- health, education, transportation, recreation -- that the toiling masses would normally lose access to as they become increasingly peonized by predatory capitalism.

Few jobs outside the rat-race are really wealth-creating. Most are just naked rentierism, parasitical intermediary activities like real estate agents, mortgage brokers, landlording, resource extraction. A good example of socialism that kills two birds with one stone in this area might be Norway, with their oil-funded Pension Fund, but I haven't been there so I don't really know. But I do think they've got their act together better than the US.

National Socialist Party... that's socialism.

Bernanke is caught in a trap. He CANNOT raise interest rates as it would destroy the only certain money-maker the big banks have right now. Borrowing at nearly zero and using it to buy Treasuries or similar lame "money-printing" schemes is what is keeping their leaky boats afloat. All jawboning about raising rates, is just whistling past the graveyard. I would expect this "we might raise rates next cycle" to repeat for at least 3 more years, possibly as much as 5.

Heck, he can't lower them either! So the Fed is completely impotent, except for the possibility of helicopter drops of cash.

This next crash in the stock and housing markets will be interesting, because there's nowhere for interest rates to go. Looks like the stock market is crashing at this very moment, down >2% today.

Patrick,

I think it would be a very good idea to see where the NAR and CAR are putting their political money. Who is getting their lobby money for this next Nov. Can you get that info? Do you think it would be important for voters, specificly PatNet voters, to know? I know it would matter in my vote.

I've heard that the NAR and CAR contribute to everyone to make sure everyone owes them something. But it would definitely be interesting to see exactly where the money goes. There are laws about recording contributions, but I think they're pretty weak.

Anyone know how to get data on which politicians have been bribed the most by realtors?

I think you're right Patrick, it seems about 50/50 bribing to both parties:

http://www.opensecrets.org/industries/indus.php?ind=F10++&goButt2.x=7&goButt2.y=8

Click on the "Recipients" tab from that site to see who is receiving the most RE bribes.

It is slightly higher in recent years to Dems. They probably bribe the party in charge a bit more, but they definitely spread the obligation around.

andrewl570 says

National Socialist Party… that’s socialism.

No, that's fascism. It's an entirely different political philosophy. Why don't you look it up in the dictionary or in a history book? You may also want to look up another word, "propaganda." Then you might understand why that particular fascist party wanted to try to come across as "socialist" when in point of fact, they were fascists.