patrick.net

Joe Schmoe Says:
That DC median income statistic sounds mighty high. Much, much too high. Does anyone have a cite for it?

they all sound high. more troll BS, probably. unless you take an exclusive suburb, or the salaries of congressmen and advisers and lobbyists drag the median up... it doesn't say anything about distribution of salaries either, it's only an averaging measure... however, with labourers only getting $10 an hour, walmart employees on $6.25 an hour, etc, it's suspicious. google will probably tell you. avg salry in the US is supposed to be $30 000 something dollars...

Do 401(k)s invest in the sharemarket in the states?

AMERICANS do not go in for envy. The gap between rich and poor is bigger than in any other advanced country, but most people are unconcerned. Whereas Europeans fret about the way the economic pie is divided, Americans want to join the rich, not soak them. Eight out of ten, more than anywhere else, believe that though you may start poor, if you work hard, you can make pots of money. It is a central part of the American Dream.

http://www.economist.com/world/displaystory.cfm?story_id=7055911

I thought it was funny a previous poster claimed 'in Europe everyone is pushing to the front and devil take the hindmost' etc, when that is precisely the american way, and has been for a long time, and european social democratic states tend to try to equalise things more, reduce poverty, provide more public goods and welfare, etc.

What made you change your mind finally? I raised the reasons why such a crash wasn’t in the cards many times over the last year and a half, but I couldn’t convince you. What made you realize that the crash indeed wasn’t going to happen?

I do not know exactly. But I am not afraid to adjust my positions.

I think fringe areas will fall hard, as price decompression works itself though the process. That said, even in good areas, SFHs may still see a 10%-15% nominal correction.

On the other hand, rent appears to be on the rise. This will help correcting the price/rent imbalance.

It is not too difficult to own. After the corrections, many condos/townhouses will be more affordable. One should not be obsessed with the ownership of an SFH with a big lot anyway.

I see the housing situation as just one aspect of the bipolarization of asset ownership in the US.

I do not think so. It is rather easy to relocate nowadays. One can always move slightly further (or across state lines) to get the "right" kind of housing.

The bipolarization of wealth is a natural process and the middle class is an unnatural occurence. I am not surprised that it is under pressure. However, I am not too worried about the middle class. So long as there is a will to climb upward, the middle class will persist. However, if the middle class does nothing to improve itself, it will fade away.

You were right that innovation is the key.

How much does the average BAer (or the posters on this blog) spend on eating out?

Our food budget is classified information.

Does it make sense to completely stop eating out, taking vacations etc. in order to save for housing?

Ask yourself what makes you happier.

The gap between rich and poor is bigger than in any other advanced country, but most people are unconcerned.

The gap is not that big. Many public bathrooms in "upscale" places are not even attended. If the gap is big, one would expect such finer details.

The gap between super rich and rich is quite big though. Look at all those Gulfstreams and Learjets.

The gap is not that big.

well, how big is 'that big' when it's numerically the greatest in the world? wage multiples in the hundreds when in europe it may only be 10 or so? how big do you want it to be?

Many public bathrooms in “upscale” places are not even attended. If the gap is big, one would expect such finer details.

these days, they save money on wages by NOT hiring such people. more money to the bottom line that way. contributes to private affluence and public squalor...

there's no attendants in any bathroom in oz that i've encountered. people would find that a bit creepy...

heh, never mind that pollies and lobbyists are each filching hundreds of thousands of dollars a year in wages from the public, that there are rich and super-rich classes milking the rest of society like crazy (what would happen if that money was redistributed back down?), extravagant multi-billion defence contracts going to cronies where that sort of level of investment in military capability really isn't necessary, that 'get rich quick or die trying -- and devil take the hindmost' is the new national motto and ethos and conspicuous consumption rules, there's now a new index of social inequality known as the Toilet Attendant Index, which is superior to the normal numerical methods of assessing the distribution of earnings. It has some cross-cultural weaknesses tho, that's it's only major limitation...

these days, they save money on wages by NOT hiring such people. more money to the bottom line that way. contributes to private affluence and public squalor…

But if they are cheap enough, they can add enough value to justified. The point is that lower-level workers are actually quite expensive here. Another measure: percentage of private vehicles that are chauffeur-driven.

DS, I know what you are talking about. However, the more worrisome trend is that the middle-class is completely hypnotized by consumption. If it can pull itself together, it would still be a powerful force.

The Bay Area has the rest of the country beat. I’ll be sad if I have to leave.

Nothing personal, I just am a bit sick of the gold paved bay area. There are parts that are nice, LaMorinda for one, but come fucking on, San Jose, Milpitas, fuck the entire south bay can really just go fuck itself. There is just so much fucking bullshit about that area, everyone according to many on this site make 3-4X the median income, and for what I see when there the only thing on most BA residents mind is how to push you out of the way so they can get their $19/lb cheese that much quicker.

Again, glad you like it, you can have it. Kids in the BA are you high?

However, the more worrisome trend is that the middle-class is completely hypnotized by consumption. If it can pull itself together, it would still be a powerful force.

the middle class unfortunately is fatalistic and individualistic, and somewhat brainwashed. the flight of manufacturing has started to hollow out the middle class, also, as many middle middle positions have disappeared, both in middle management and in unionised skilled trades. these days, they are even less of what marx would call 'a class (acting) for itself', rather than a class of itself...

just kidding about the Toilet Attendant Index, altho coupled with the Chauffeur Index, you mighr really be on to something...

while I think of it, does anyone have an online subscription to The Economist? There's another series of articles on housing affordability from 2003 that I'd like to access that requires a subscription.

anyone? anyone? randy? anyone?

Looking on craigslist today, I have seen a Mercedes and a trip to Vegas offered to potential buyers.

GREAT OPPURTUNITY [sic] TO OWN HOME WITH NO MONEY DOWN AND NO CLOSING COST PLUS A FREE WEEKEND GETAWAY.

I love the way realtors like to frequently misspell words just to keep people like me on their toes, trying to catch my eye with their deliberate mistakes. It's not as though they're only half-educated or anything. Couldn't get a crappy job in the public service because of your spelling? Become a realtor instead...

burbed Says:

> Millionaires galore in Bay Area

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/06/21/WEALTH.TMP

> In the Bay Area, nearly 111,600 out of 2.5 million
> households had a net worth of at least $1 million
> or more in 2005, excluding the value of their homes

It looks like they excluded the value of homes AND any investment real estate since the owners of almost every piece of commercial property in the Bay Area are millionaires (not like that is a big deal any more)...

buffpilot,

Couldn't speak directly to the "military issue" but I thought that I'd heard that most states got quite tired of that and forced the DOD to have folks pay their taxes based on their "home of record" meaning where they originally enlisted. In the late 70's/early 80's many guys were claiming Nevada as it was a short hop to set up a P.O box.

FormerAptBroker Says:
June 21st, 2006 at 5:41 am

It looks like they excluded the value of homes AND any investment real estate since the owners of almost every piece of commercial property in the Bay Area are millionaires (not like that is a big deal any more)…

The problem with the "how many millionaires" question is one of determining accurate net worth. I don't care how many assets one has. Trump has billions in assets. I care about their balance sheet.

It is not possible to get public data about individual or private company net worth because their debt is not openly scrutinizable. Therefore, all data like this relies on self-reporting and statistical guesses based upon verifiable data, which itself is often only available in aggregate.

Frify,
I just wanted to step in and say something that I don't think most people from California or NY know or realize. You mentioned that you've worked on both coasts and " visited" the rest of the country. If by visiting, you mean vacationed or drove through another state that isn't on one of the coasts, then you really haven't experienced enough of the country to make an educated assumption about non-coastal states.
The reason I say this is that roughly 90% of the folks I run into who swear that mana from the heavens oozes out of the ground in the BA are more than likely people who have no experience with most of the country, and instead have hop-scotched from one end of the country to another.

NYC and SF do not represent most of the country. NYC is cold, busy, big, and very liberal. SF is Warm, Busy, smaller, and very liberal. Both are filled with people that would rather spend Saturday night watching an experimental movie about nudists or drinking vodka at the all-nite yuppy club.
I always ask these flyover people if they've ever lived in places like Montgomery Alabama, New Orleans, Dallas, Boise, Denver, Scottsadale, or anywhere other than NYC or SF,LA, etc etc. The answer's usually: " Well, I've visited some of those places." That doesn't count.

I grew up in the middle of the country. I've lived on both coasts. The diffrences are indeed physical, but the reason people move to be in an "ideal" area is to be with people they think are going to be like themselves. It isn't neccesarily the place. It's the people that make it nice.

Where I came from was perhaps not as physically dramatic as the BA, even though we did have the Smokey Mountains in our back yard, but the people were in my opinion more beautiful than the people here in SF. My neighbors never-ever say hello to me here. Back home, the neighbors knew when you were heading off to vacation and would feed your cats and set your alarm on the way out. This was normal.
I would never have known this had I simply skipped over the country from one end to another. So as far as your statement about BA having everywhere else beat, perhaps you should just mention that in your mind, it is the best place for you that you have lived in, which sounds like very few.

Oh btw, absolutely agree on taking the pains to look almost exclusively at homes that need a little "updating"! Not having the remodeling energy we once had I believe we would probably now pay to have professional contractors with impeccable references do the actual work. We see a lot of mid-60's homes all over the Portland area that really do not need all that much work but sit and sit (even though they're much more reasonably priced) in favor of chitbox McMansions that are usually at least a 100K more for the same sq. ft! You would need to be a major BOZO to burn through 100K in rennovations! And no one says you have to do it in "flipper time". In our area taxes would also be much cheaper, and that's one of the things we really look at. Taxes (unlike mortgage payments) never go away.

Randy H,

Um, I think the original ref. to the report citing all of the wealth in the BA was prepared by Merrill Lynch. I've always considered those reports to serve two basic purposes. Firstly they are intended to be flattering to the area for which they are targeting and secondly they are used as a "recruitment tool" for rookie brokers to dangle candy in front of their faces. BNY used to pump out the same basic stuff for various markets. I'm not saying there is NO basis for their claims but consider the source.

buffpilot,

The era I was speaking of was in the late 70's and if you had a postal recpt. for a P.O box you could go to the disbursing clerk and after a payday of two you were a NV (or wherever resident). In the end though we were making so little money it wasn't that big a deal. Besides most of my "career" was spent overseas where I was considered the "un-official mayor of Olongapo City". The amount of "stuff" we got away with when compared to a stateside duty station was beyond all reason. By the time I got back to Sandog (San Diego) I was "short" and had little patience for officers and chiefs angling for a seat on the city council. Sorry.

Buffpilot,
How do people survive of of 50k a year here? Well... I make 50k, and the way you do it is live very cheaply. I drive a 11 year old truck, carpool, only buy used appliances and furniture off Craigslist- most of the time the stuff is free-, rent a house with another housemate( $500 a month) and eat out once, twice a week, buy clothes at the Goodwill. In that way, I save about half of my salary a year. Not much, but enough to hopefully buy something outright in TX in a few years since I'm almost there now.
On the other hand, I get calls all the time from agencies in other states offering me 45-55k for the same job. 50k in TN of TX gets you at least double what it would get you here. Those calls are sometimes very tempting.

Willywhopper2 Says:

"...I always ask these flyover people if they’ve ever lived in places like Montgomery Alabama, New Orleans, Dallas, Boise, Denver, Scottsdale, or anywhere other than NYC or SF,LA, etc etc. The answer’s usually: ' Well, I’ve visited some of those places.' That doesn’t count."
_____

Yes, I think living in other places, if you're from the Bay Area, helps to give you a focus on what's good and bad about CA and the other areas you've lived.

Here's my bio (as if anyone actually cares):

1967-'79: San Jose, California (some Golden days)
1979-'80: Arlington, Texas (nice suburb in-between Dallas and Ft. Worth)
very much enjoyed my time there, minibike riding, fishing, Texas Rangers balls games, etc. Big, brick house for modest price. Dad moved for IBM.
1980-'86: San Jose, California (Golden Age)
1986-'89: Ft. Bragg, North Carolina (US Army): did get to see a bunch of Southeast coast states & lived in Florida for 10 weeks while working with the Airforce at Ft. Walton Beach, FL. Big pimpin beach action.
1989-late '98: San Jose, California (bailed to Phoenix as Nasdaq began steep climb.) Helped mom and siblings get adjusted to life in AZ after divorce. HOT AS F-CK but I liked many aspects of it and stayed, besides being priced out of CA.
1998-2001: Phoenix, Arizona
2001-2002: Flagstaff, Arizona: Lived in Flag going to Northern Arizona University to pursue one-year MBA program. Got degree & hauled ass back to Phoenix (called Valley of the Sun).
2002-2006: Phoenix
2006-?: Sick of corporate BS in AZ and living in a "right to work" state with NO worker rights. May head back to BA to become law enforcement officer in a South Bay city. Would be priced out of owning anything but the most ghetto condo for now, but pay not bad with overtime, and pimp pension (getting rarer). May get real estate license to do a few legit deals on the side and watch the shake out of fly by nighters.

Who gives a F-ck about any of this? Hopefully no one.

What's YOUR geographical pedigree?

RandyH, burbed, FAB,

RE: the question of how many millionaires there are in the BA, again, as it relates to the housing bubble, this question is not very relevant. First, persons with that much net wealth are generally not participating in exotic mortgages in order to afford a home (they may be doing it for the original intent, to allow increased cash flow for other investment strategies). Second, the frenzy of the masses involves price points, income levels, and parts of the BA that they have nothing to do with, other than passing these people and towns on their way to the corner office at Google.

Michael,
Impressive list! Well.. Ihaven't lived in as many places, but I'm not quite old enough to have had the ability yet, being that I was born in 1976. Let's see..

Knoxville, TN: 1976-1997

Harriman, TN: 1998: This was an absolute NOTHING town. Lots of hicks that drove chevelles 100 MPH down main street at 3AM. That said, it was a beautiful little town with big victorian houses. I considered getting one before I left because they pratically gave them away

Asheville, NC: 1999: Quaint Mountain city. Lots of hippies and old grumbly tobbaco farmers thrown in. Some of the "new" money was coming in from New York and Cali- some of the tech was starting up there.

Boston, MA: 2000: Cold as hell. I was dirt-poor because rent there was asanine. People wern't particulalrly nice either. The spring and fall were very nice, but summers got way over 100 degrees, and winters almost killed you, especially if you had bad heat.

Berkeley, CA: 2000-2003: Crowded, almost cult-ish city with lots of bitchy baby-boomers angry that the 60's were over. When the Iraq war started up, they were as giddy as school children. Yay! the 60's... part 2!

Alameda: current: Love it here. Small town reminds me of home and you can actually walk to town and not get run over or panhandled by crack fiends. Very nice.

Future?: Again, that's the big question most of us are probably trying to figure out.

Cruiser,
That's freakin hilarious! Actually, being a southern guy, I'm hoping the sentiments I hear from most people remain. Again- the 2 big fears and "awful" things that people not familiar with the region always mention is:
" it gets humid in the summer there... and Mr Evil Evangelical christian man is gonna knock on my door and DEMAND they convert.. or ELSE!
Actually, I've thought about encouraging this kind of mentality. Yes- it's terrible there! Trust me, I'm from the region, and I would NEVER go back, heaven forbid!

skibum,

You mean there aren't swarms of well moneyed clients for Merrill Lynch rookies to cold call? Uh huh, thought not! Besides the report goes on to say that part of the appeal of the BA is "unparelleled access to wealth managers"?

Huh?

Most affluent people avoid "wealth managers" like the plague! Seriously. Guys of my "ilk" are viewed as a necessary evil at best. Besides, even nickel dime "players" think they rate a Wall Street firm.

"panhandled by crack fiends"

LOL! Really? Panhandled?

In Portland it's more like extortion. Give me 5$ or I'll get on the MAX and sit right next to you!

One time my buddy and I were getting lunch at SW 5th and Yamhill (panhandler central) and there was this kid that had a cardboard sign that read:

I'm ugly, nobody likes me and I need a beer!

Frankie gave the guy a dollar and the kid pipes up and says "A dollar won't buy me a beer"! Frankie says, "Well I know but I appreciate your honesty"!

But I do see the psychology of many here is rather short-term. It seems like the psychology you all seem to criticize so loudly in the real estate markets, but take toward commodities. Best to think again.

actually, i've been meaning to ask about that...

I can't stand panhandlers, especially healthy looking kids that are doing it just to be cool. I recall one time seeing these kids sitting in Berkeley. They seriously dressed better than I did. One of them asks me for some money. I told him I thought I'd better start panhandling myself if it gets you nice clothes like he had on.
The crazy ones just freak me out. People that panhandle around here assume that everyone that isn't begging is simply loaded and OWES them something.
The worst instance was when I drove to Vegas by myself. I got to a gas station and this woman walks up, asks me for a quarter. I seriously didn't have a quarter so I told her, sorry, but I didn't have anything one me. She asks again. Being 3AM and I very tired, I told her that perhaps she hadn't heard me: I DID NOT HAVE ANY CHANGE. She starts cursing like I've never seen a woman curse- then tells me what a dirty mexican I am. WTF?! Mexican? I'm a little tan because I'm part native Am, but Mexican? that was a new one.

willywhopper2 Says:

> I suggest a quick tour of ‘The Vault’ website for
> salaries at consulting/finance/Law firms. I get
> from there that MBA’s from top schools only
> make $50-60 starting in NYC and considerably
> less if not cream of the crop.

It sounds like "The Vault" has not been updated in 20+ years since I have not heard of someone with a MBA from a top school getting paid under $60K since the mid 80's. Today in NY & SF bigger firms pay low level admin. people more than $60K...

WW2,

LOL! Know the feeling. So many of my Portland native friends act embarassed when I get equally rude with panhandlers. With me it's not so much the 50 cents or the dollar or even the damn principal of it. It's my TIME! This means I have to stop, juggle what ever it is in my hands, play "pocket pool" then haggle over how you think it's not enough and all of this on the way to seeing a client that doesn't even care about me (or my now mentally agitated state) let alone some punk that does it for kicks. And your right, it seems to be some kind of "right of passage" for Portland teens which means there is always a fresh batch to deal with. Portlanders are such wimps.

newsfreak,

It has gotten so bad at times in Portland that restaruants "soak down" the sidewalks outside their establishment before the dinner rush to keep panhandlers from "roosting" outside. Most of the "pros" work the I-5 Corridor (depending on the weather) and Portland built a reputation as being "bum friendly". Great.........

On "dumpster diving"

Given how much identity theft has taken place I have to wonder if they are looking for half eaten twinkies or SS#'s though?

cruiser,

Interesting post - a few good points sprinkled among a lot of sarcasm and a good dose of trollish baiting. I'll bite, though.

There's no need to "convince" people here to not move to the midwest. In terms of cities with future prospects there, probably the Twin Cities (horrible weather, though), and Chicago are about it. All other things being equal, why would anyone in their right mind want to move to a place with poor job opportunities, a depressed economy, deathly cold winters, etc etc? It's no coincidence that yesterday's homebuilder sentiment report had the most dismal regional showing in, you guessed it, the midwest. I can understand moving for family reasons, maybe job transfer (if it ever happens in that direction anymore), but not by choice. The vast majority on this board are talking about TX, the Southeast, or the Rockies as possible alternatives, all places with lots of positives to merit consideration.

People around here actuallly believe in a Christian God and teach their kids to do so as well. Terrible! Primitive!

Why is that necessarily such a good thing?

As far as Randy’s trashing of commodities bulls, well, I don’t really care, as he’s nothing greater than an amateur econonmist. My portfolio says otherwise.

Typical troll-speak, with the "my balls are bigger than yours" attititude. You'd fit in on Craigslist pretty well.

I will say, though, that I agree with you 100% about the short-sightedness of many on this board. Yes, commodities, like every other asset class, should probably be taken as a long-term investment strategy, yes, the crash of the housing bubble will play out over years, not months, and yes, it can get boring to watch in slo-mo.

For any region to thrive it has to be inclusive. That is what used to be great about the US, everyone for better or worst did roughly the same thing. Yes there were always the rich, who took vacations by the lake and went out on their 70ft yacht. But the middle class went to the lake also and went out on their motorboat.

the BA is anything but inclusive, it is exclusive and it turns my stomach.

Religion seems to be a popular topic on the forum this week. Let's say for a minute that suddenly, Porky Pig was a god. There were hordes of people who thought Porky was the best thing out there, and wanted to tell everyone about how terrific he is.
If Porky fanatics came to your home and told you that they were hoping you'd convert to Porkyism, would it distress you or make you change your mind?
I imagine that most people are fairly intelligent, and I see religious issues as somewhat of an annoyance rather than a hinderance to daily living. We believe in what we believe, and that's about it.

I imagine that most people are fairly intelligent, and I see religious issues as somewhat of an annoyance rather than a hinderance to daily living. We believe in what we believe, and that’s about it.

True, except the most people are fairly intelligent part.

Fine to believe in what we believe, but spare the proselytizing, and spare the holier-than-thou crap. (not referring to you, ww2)

newsfreak Says:

After a certain size, I get the picture.

Heck, why not walk around with a life-sized cross slung to your back. Might get the point across better. But if it's gold plated, you might need a HELOC to buy it.

newsfreak, you have made much progress, I feel your anger, I'm your Father, let the dark side flow.

Why do you hate Amerika? Perhaps you and pinko HARM should get together and charter a plane back to Russia.

Surfer X,

You know you bring up a good point. I'm not sure where we reached that fork in the road but I don't believe there is any turning back. Obviously it's not just the "lake" but where we dine, live, clubs, golf you name it. Once in a while I'll suggest we golf at (God forbid) a public course and all I get is the stink eye! Well wait just a damn minute here! When did we all become golf snobs? Let's face it, I suck at golf and I bring my own beer anyway!