patrick.net

wthrfrk80 says

Want nice weather? Move to North Carolina or Virginia. For $500,000 you can have a mansion. Yeah, summers are humid but that's why there's air conditioning. And

As someone who endured 35 years of humid summers, I feel compelled to comment, lest someone unwittingly move to the subtropical southeast for the weather. I'm sure it varies greatly depending on the individual, but I don't believe anyone escapes the horrendous reality of a 90 degree day with 80%+ relative humidity. Sure, air conditioning helps (it's pretty much a requirement), but it doesn't prevent developing a sweat-soaked shirt walking from your car to to the entrance of the mall. Some will certainly think I'm exaggerating, but anyone who has lived in the region will be nodding their head knowingly. The degree to which the weather affects you will depend on your lifestyle. If you spend most of your time indoors, I guess it wouldn't be terrible. (though living indoors in itself would be)

I have said many times that if I were to return to the region, I would have to make a summer home elsewhere. It's that bad. September trough November is great, though.

Edit: Wow, I just noticed your handle. Weather freak? Indeed.

tatupu70 says

Well, that's certainly one opinion. You could be correct, but sales volume is rising. Regardless, supply and demand rules are pretty simple--as supply decreases (with constant demand), prices will rise.

Here is another take on the same data. Incredible how the same data can say so many different things. Notice how the author doesn't add his own color or emotion. All of that is added by quoting other people. That is good reporting to me. Keep it just facts. Let the reader decide.

http://money.cnn.com/2012/02/28/real_estate/home_prices/index.htm?iid=Lead

RentingForHalfTheCost says

Here is another take on the same data

Did you post the wrong article? I read it and it doesn't mention housing volume data at all. It really doesn't take any position. "We might be on the verge of a recovery, and we might not." Wow-now that's some serious insight.

Here's the latest data I saw today:

http://news.yahoo.com/sales-contracts-us-homes-2-pct-january-150313677.html

tatupu70 says

RentingForHalfTheCost says

Here is another take on the same data

Did you post the wrong article? I read it and it doesn't mention housing volume data at all. It really doesn't take any position. "We might be on the verge of a recovery, and we might not." Wow-now that's some serious insight.

Here's the latest data I saw today:

http://news.yahoo.com/sales-contracts-us-homes-2-pct-january-150313677.html

No, that was the correct article. Recovery seems to mean two different things to people. To me it has only to do with price. If I am selling I am interested in the price rising, if I am buying then dropping. How many people are out shopping obviously influence the price, but if you say recover then I think price. The original article did not say there was a sales recovery, it was using the sales to infer a recover that had yet to happen. The article I posted is using the same year of data and inferring the there is very little to infer, except price data that keeps going down.

tatupu70 says

Here's the latest data I saw today:

http://news.yahoo.com/sales-contracts-us-homes-2-pct-january-150313677.html

It is yet to be seen if the 2% increase in contracts is because prices are getting softer or there were more aggressive buyers. I think it will show the first. Sellers are getting aggressive and dropping their prices. We will know next month when we see the price data.

swebb says

The degree to which the weather affects you will depend on your lifestyle. If you spend most of your time indoors, I guess it wouldn't be terrible. (though living indoors in itself would be)

The human body adapts to weather... I've lived in So Cal for 10 years now.. So I'm much more thin-skinned and a breezy 60 degree evening requires a sweatshirt or jacket... I grew up on the east coast and remember that being shorts and short sleeve weather! :)

But i agree... once you've lived in a dry, low humidity climate.. It's very uncomfortable going back to high humidity areas.

tatupu70 says

OK--you're free to disagree, but don't complain that nobody is showing you any data.

I'm frustrated seeing that you didn't address the points made about the words used to write the article. It matters when someone writes"This week, there was a lot of housing data, all of it good" but doesn't admit that they are not writing about "all of housing data." In fact, that suggestion is not reasonable. How could a writer address all of the housing data for a week? Isn't that the suggestion based on the words the writer used?

This kind of writing suggests either a limited vocabulary or a limited understanding. Either make it really difficult to connect with observations. Observations are the goal of some data, like I want to observe all of the house prices for the last year. Of course, unfortunately, some data becomes disconnected from what it represents, such as during cases of voter fraud and house prices that represent listing prices rather than selling prices, but there are people out there working very hard to keep them connected.

RentingForHalfTheCost says

No, that was the correct article. Recovery seems to mean two different things to people. To me it has only to do with price. If I am selling I am interested in the price rising, if I am buying then dropping. How many people are out shopping obviously influence the price, but if you say recover then I think price. The original article did not say there was a sales recovery, it was using the sales to infer a recover that had yet to happen. The article I posted is using the same year of data and inferring the there is very little to infer, except price data that keeps going down.

I think the disconnect is that the articles were looking at different sets of data. Looking at last years data, it was undoubtedly a bad year. But looking at forward indicating data--Jan sales volume, Jan. inventories, Jan. pending contracts, it appears that 2012 will be better.

RentingForHalfTheCost says

Red hot

I suppose a declining RE(which he calls it flat) is RED HOT.

E-man says

we know that they will do whatever it takes to achieve their GDP growth objective.

Considering the things that they allow into the definition of "GDP", I think that they will achieve precisely the numbers that they are targeting while the American middle class continues to be ceaselessly gutted.

bmwman91 says

Considering the things that they allow into the definition of "GDP",

The Fed is serious about the output gap.

Output gap is the difference between actual GDP and potential GDP, where potential GDP is a long-term trendline growth.

They want to close this output gap, with whatever it takes.
Doesn't matter if its nominal or real :)

E-man says

Don't fight the Fed.

In the United States, aren't the people "the Fed?" So will there be a point where the people get it or will we return fully to rule by the aristocracy?

SFace, I would actually be A-OK with something in the $600-700k range. As of now, the only stuff in that price range in the South Bay is either directly in SJC's primary take-off path, within 50ft of a highway or major throughfare or a unit with serious structural issues. Houses, even if they are still kind of shitty, that are not on a major street or next to a highway are looking to carry an $800k minimum. Honest to god, the only houses that have appealing features and location to us are listed in the $1M to 1.2M range today. Too bad we didn't make a move a year ago when inventories were waaaay higher. Now we get to battle it out with all the other DINKs for the scraps.

We have a couple of relatives that are RE agents. Hopefully they can help us find something that hasn't hit the market yet. I'd be fine with targeting underwater owners in areas that we like to see if they would be interested in a short sale and negotiating that out. Our rental lease lasts until August, although we could just bail early if we found something decent.

And Texas? No thanks. Washington and Colorado are the two places we were looking at. Why? Life in the SFBA is hectic and full of douche bags with nothing better to do than make money and try to flaunt it. Over-the-top liberalism is also not on my list of favorite things, and CA in general looks like a sinking ship. Everything in life is a compromise, and at this point I think that the "people" here are more of a pain in the ass than the harsher winters in Longmont, CO. My wife has already said that she would be 100% fine moving to the Seattle area. Colorado...would be a harder sell lol.

Sorry about my bitching and moaning. It's annoying as hell to watch the already broken housing market become deliberately broken further, and ultimately at my expense.

Oh and SFace, you are probably right about me ending up in a $1MM house in the next 5 years lol. Given that we could put 20% down on one now, and I have a friend that can get me a below-market APR on a 30 year, it might just happen. Find me something on an 8000SF+ lot, 2 car garage (preferably detached), mature trees and a pool in Sunnyvale, Campbell or Mountain View and I'm sold. My friend in the lending industry keeps advising me to wait until after 02/2013 though...need to see how the fiscal cliff, QE4Eva and some other structural lending changes pan out or something. Gotta go visit him & have a beer to find out more lol.

bmwman91 says

Life in the SFBA is hectic and full of douche bags with nothing better to do than make money and try to flaunt it. Over-the-top liberalism is also not on my list of favorite things, and CA in general looks like a sinking ship. Everything in life is a compromise, and at this point I think that the "people" here are more of a pain in the ass than the harsher winters in Longmont, CO. My wife has already said that she would be 100% fine moving to the Seattle area

Yep. A Region of Fools. Welcome to Silicon Valley.

B.A.C.A.H. says

Yep. A Region of Fools. Welcome to Silicon Valley.

It is also called Silly Valley for a reason.

heh. be careful bmwman- I think you might have some of SFace's ass pennies in your pocket (or are you using the Black AmEx these days?)

https://www.youtube.com/watch?v=DO1Q7F23DxM

Haha. Ass pennies, classic.

bmwman91 says

Oh and SFace, you are probably right about me ending up in a $1MM house in the next 5 years lol. Given that we could put 20% down on one now, and I have a friend that can get me a below-market APR on a 30 year, it might just happen. Find me something on an 8000SF+ lot, 2 car garage (preferably detached), mature trees and a pool in Sunnyvale, Campbell or Mountain View and I'm sold. My friend in the lending industry keeps advising me to wait until after 02/2013 though...need to see how the fiscal cliff, QE4Eva and some other structural lending changes pan out or something. Gotta go visit him & have a beer to find out more lol.

I agree. WAIT. I empathize with you. You've worked hard, saved, but because of banksters and assholes who bought more than they should have and were entitled to nothing in the first place, your money is getting you much less than it should by all reasonable and historically projected accounts.

There is no real GDP growth; taxes on everyone are going up and most people here are already over-leveraged to the gills. Most people are going to be in a world of hurt come 2013.

robertoaribas says

RentingForHalfTheCost says

What I am disputing is that they are trying to say a bottom is happening. Now, when someone says a bottom, I am thinking in pricing. As a potential home buyer I just need to buy one home for a good price. How many homes are being sold (sales) is nothing to do with a bottom to me.

Feb 2012...wow you got that all backasswords last year, renting with half a brain!!!!

I was analyzing the report. Not making a prediction myself. I don't see how that is 'getting things backasswards'. Everyone is allowed to debate the facts. They were calling a bottom just because of inventory numbers.

In terms of pricing, there is still a lot of weakness to be found. I really don't know what to think anymore, except that fundamentally there is another shoe to fall soon. Even the Fed has limits and we are fast approaching the bluff game. Next year should be exciting. I'm ready...

bmwman91 says

the bust portion of the cycle starting around 2016.

That's an interesting stance. What will be the causes of this potential bust?

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that? And we are all
still very screwed. Except Concord and Phoenix people I guess, cause everything
is so hunky dory according to the real estate bulls. Hope the Fed stays your
friend long enough for you to lock in some of them magnificent gains you crow
about non-stop.

Problem with all you shadow inventory types, is you would focus, way too much on the amount and never the disposition.

Every month with you guys it was some sort of apoplectic fit of hysterics "OMG!!!! - LOOK the shadow inventory is HUGE!!!!", with an assumption that it was all going to be puked up, all at once, en masse, in a "woooosh" type event, driving prices back to the stone age.

As far as I was concerned it matterd not if it was 3 months or three decades of shadow inventory, so long as it was metered, out, slowly, drip, drip, drip, style as it had been since early 2008. So long as that continued, it was only a matter of time before price declines decelerated, flatlined, and then rose, albeit slightly less than they would have if the shadow inventory had not existed. Still amazes me how you guys could not see that.

Other problem with you bears is you were focused on problems which matter not now, but 10 or 20 or even 50+ years from now. Make no mistake, when looking at demographics, national debt, etc, etc, etc, there is no doubt this country is indeed screwed. However, since It likely we will all be long since dead and buried before those headwinds get severe enough to worry about, many of the bulls will just simply continue to buy homes and live their lives, all to the frustration of the bears, many of whom will sit sidelined about macroeconomic worries til the day they die.

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that?

nominated.

This one really makes me laugh. There can be no debate on this issue--the verdict is in. You were wrong. Own it.

What sort of appreciation are you projecting over the next 5-10 years for housing?

Do you see a "bursting point" over the next 10 years or so? Bursting point being when there is a strong pull back in home prices, think shades of 2010/2011.

As a non-home owner I'm hoping/banking on the stock market to also grow over this ramp up period as I'll be sidelined from the housing market.

Thanks, and this is a great thread.

Goran_K says

bmwman91 says

the bust portion of the cycle starting around 2016.

That's an interesting stance. What will be the causes of this potential bust?

I don't want to put words into their mouths any more than I have, so I'll give my take on it. Basically, it looks like all of the various measures taken to bolster housing prices are working, and will continue to do so. Eventually, many owners will have enough positive equity that they will want to sell, and inventories will rise at this higher price point. Even with rates as low as they are now, there just are not all that many people that are qualified to mortgage a house at that price, given RESPONSIBLE lending standards (20% DP, 46% DTI or less). At that point, I see 2 possibilities:

1) House prices stagnate and drop. While it is plausible that owners will just de-list and send us back to nonexistent inventories, I think that there is a mass psychology factor there and lots of on-the-fence sellers will panic because the strong seller's market that started last year will suddenly look like a buyer's market, and they will want to cash out "while they still can."

2) Lending standards loosen up again and that propels the bubble to new levels. ARMs blow up in people's faces and we get another delightful melt-down.

I would bank more on option 1 than option 2 though. Maybe I put too much faith into Wall Street, but I don't see them repeating last decade's mistakes again so soon.

robertoaribas says

RentingForHalfTheCost says

Supply was at 9yrs in Cali at the time. Are you debating that?

Yes, I care to debate that!

The 9yr figure factors in the shadow inventory, which as we all know is still being heavily manipulated. Will that end? Doesn't look like anytime soon. Thank the Fed and what will be 2 or 3 decades of lost progress for this country. We are almost through 1 decade already. I don't think anything has improved, just shits and starts.

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

RentingForHalfTheCost says

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

Regardless of how much there is, as long as shadow inventory remains in the shadows, it hardly matters. Is your theory that the manipulators who have managed to keep all this inventory on the market suddenly going to stop manipulating?

RentingForHalfTheCost says

tatupu70 says

RentingForHalfTheCost says

The 9yr figure factors in the shadow inventory

The 9 year figure was complete BS as many on here told you. You have to be careful when you see estimates for shadow inventory that include all underwater homeowners--the vast majority of them aren't going to walk away.

I still disagree with anyone on this issue. The shadow inventory is very real. Highly manipulated, but real.

Assuming arguendo, it is real why did you always focus on the number, and not the way it was going to be disposed of? You would certainly agree that 9 years of shadow inventory listed, en masse, in 18 months time, would have a large difference vs say 9 years of shadow inventory, metered out slowly over 18 years.

So given that MTM was relaxed in 2009, and the general disposition of the fed (circa 2009 & beyond) why did you continue to believe it was all going to be puked up in some "woosh" type event, driving prices down into the stone age?

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

CDon says

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed. I guess you can't underestimate how far our leaders will go. Everyone on here seems so happy that we have rapped future generations of the prosperity we had. I am not. You and others can keep gloating like you had a crystal ball, but in the end there is a huge problem still brewing that wouldn't take much to push us into another fiscal crisis. I'm definitely ready and I hope others are as well. Nothing has really changed except stealing from our future. I was negative about the next decade back in 2007, but now I am just overall negative about this country. Sad...

RentingForHalfTheCost says

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed.

Well said - the kids thank you.

E-man says

A picture is worth a thousand words. The green line shows we go through this event in every recession, and we WILL approach the red line again. That's the Fed's ultimate goal.

WORTH REPEATING.

RentingForHalfTheCost says

but in the end there is a huge problem still brewing that wouldn't take much to
push us into another fiscal crisis.

Hey--we can agree about this. The problem is wealth disparity and until we can find a solution, it won't take much to push us into another recession/depression.

RentingForHalfTheCost says

CDon says

At what point did you wake up, and realize, gee, maybe that whole "dont fight the fed" thing had some merit to it?

At the point where I realized our grandchildren, and then their children, will be bearing the punishment for our greed. I guess you can't underestimate how far our leaders will go. Everyone on here seems so happy that we have rapped future generations of the prosperity we had. I am not. You and others can keep gloating like you had a crystal ball, but in the end there is a huge problem still brewing that wouldn't take much to push us into another fiscal crisis. I'm definitely ready and I hope others are as well. Nothing has really changed except stealing from our future. I was negative about the next decade back in 2007, but now I am just overall negative about this country. Sad...

If you look at my posting history, I have noted several times the predicament that our country is in the the very long term. Still, not once did my emotions about what "should be" affect my recognition about what "is".

Imagine how much better your calls would have been too had they not been clouded with the emotion of your feelings of what should be.

CDon says

Imagine how much better your calls would have been too had they not been clouded with the emotion of your feelings of what should be.

I have more than fine on my calls. Even though I stayed away from housing (aside from owning in areas outside of the SFBA), I loaded up on the market in 2009-2011 and have been rewarded handsomely. So, sure, housing hasn't done what I would expect or hope, but the reasons for that are fine with me, because my wealth verses housing costs just keep improving each year. Only 6 months through this year and most major stock indexes are up 20% or more. I still wouldn't add to my housing position, and probably won't until there is the inevitable shift. Interesting that already there is talk in the Feds meetings about easing up on the QE forever. It will come, there is no endless pit of money to play with. Although, there is war to distract everyone from our dilemma. Which I have predicted numerous times on here. Instead of admitting to our financial disaster, we will undoubtedly declare war and put fear back into everyone's minds. Give it a couple more years. The last thing you will think about is your house equity.

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

zesta says

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

I don't think it's wise to ever disrespect cash. Equities and RE are simply vehicles to transform a pile of cash into a bigger pile of cash in the end. That in itself makes cash king and deserving of a place on the top of the asset vehicles hierarchy.

zesta says

RentingForHalfTheCost says

Only 6 months through this year and most major stock indexes are up 20% or more

If housing didn't bounce back, do you believe the stock market would still be up 20%?

Whether it be QE or the manipulation of shadow inventory, a lot of people have profited from it, including those who didn't even purchase RE.

The biggest losers were the doom and gloomers who decided that they should keep holding cash because Cash was King.

Very true. QE is really at the root of any of the moves in real estate or equities. I admit that I underestimated the extend that this gov't/fed would extend itself to protect asset prices. Cash hasn't been a good place to be the last few years. My only regret is not at all about housing, it is that I should have just been buying and rolling over option calls on equities rather than owning the underlying stock. If anyone really had a crystal ball, like many believe they do, then why don't I here about people who did just that? No riskier than buying housing in this market IMHO.

I'm still kicking myself for not putting a hundy on the 6-9 exacta at preakness.