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As a fan of modern and contempory architecture, I was pleased with what I saw.
I love pre-fab. I have to repeat, it is not a mobile home.
I am a big, big fan of high density, wisely and beautifully designed urban infill. Bring it on!
Same here. But I am also a fan or rural, self-sufficient houses.
I've got an Idea...
1500 sq. ft house on 5000 square ft. of land = $1,000,000 in Bay Area.
Cool.
But let's try some new world math:
Let's divide that by ten and see what we can cook up for affordability:
1500/10 house = 150 sq. ft. dog house
5000/10 land = 500 sq. ft plot
1,000,000/10 price tag = $100,000 affordable price
Sweet!
What I'm going to do is start selling 150 sq ft. dog houses on 500 sq. ft of land for $100,000 in the Bay Area.
Trust me, it'll be worth it to live like a dog because:
1. It's the Bay Area and the best weather, restaurants, schools in the
world.
2. Real estate ALWAYS goes up. So in a few years you could actually
sell the dog house and move to Austin Texas and buy a mansion.
This metro-puppy lifestyle sounds like a viable option. I think I'll sell the rights to "Dog House Flipper" the TV show, on how I got rich flippin' burgers by day and flippin' dog houses by night.
I thank the Baby Boomers for creating the economic conditions that lead to my success.
Like the old Chinese proverb says: "Wei Chi." Where there is danger, there is also opportunity...
Ha, ha! I'm gonna be rich!
Soon I'll be pimin' it!
Wah Wah said:
"I hate to repeat:
I earn 160K in Bay Area and have NO HOPE of owning a home …. "
The ellipsis suggests that you want us to complete the sentence so here goes:
"... that is worthy of someone of my status and allows me to look down upon the minions of the land."
Just spoke w/ a friend (mort. bkr.) and by his estimates 50-60% of all homes in the U.S have zero equity. At this point it doesn't much matter if that was the result of "Zero Down", 125% financing, bought at the market peak or whatever. There is NO ROOM for a realt-whore in this picture! His sentiment was that over half of the home debtors are extremely vulnerable as the yield curve works itself out. Not cool.
John F,
"that is worthy of someone of my status"
Why did it take so long for someone to say that?
Thank you, although I’m starting to wonder why this bird flu seems to be evolving to a mammal transmisible virus at this point…
Shit happens.
Which is why we infectious disease types ALWAYS wash our hands.
I know.
Half the things you’ll catch out there are fecal-oral.
I used to be very careful. But then germs are everywhere anyway. I do not care as much anymore. The single most important factor in life is fate anyway.
SF Dean,
"overall economy tanking as a result?"
Will there be pain? Sure, but I tend to take the view that it will most directly impact those that are reliant on RE for their livlihood. Mort. brkrs. are already feeling the pain. The "re-fi" craze evaporated last Labor Day and with the on going fight to open up the MLS (banzai) there is bound to be pressure on realtors comp. as well. A true abberation was our own Monaco Coach right here in Coburg, OR. After 9/11 people thought twice about flying and "high end" RV's sold well. Their best years ever! That's going to dry up also. Most of the down payments were done w/ cash out re-fi's.
You can live in your vehicle but you cannot drive your house!
http://www.autoblog.com/2006/01/05/gmc-pad-wins-california-design-challenge/
All prices have to do is level off for things to get REALLY ugly.
Exactly. Also, once the expectation changes, high price-rent ratio can no longer be justified.
DinoOR (and others),
A newbie question. What is the real problem of having zero equity in one's home IF (a big IF) the home owner is not forced to sell or refinance ? Actually, the questions I have is - If I buy a house of 1M with 200K down, and the value drops to 700K in 2 years, the loan amount of 800K exceeds the value of the house. Can the bank demand more equity to be given to them in such a scenario ?
My particular example may be wrong. But I am trying to understand the "equity cushion" term. Is it only a risk that becomes real when I am forced to sell, or is it a risk because the loan is "callable" by bank ?
Ewwwwwwwwwwww. Excuse me while I go wash my hands………..
Don't worry. Germs are everywhere. What doesn't kill you makes you stronger.
But alas, there is also chance.
Fate has more influence than chance. Sometimes, it is just not possible to collect that $200. ;)
My cats will be angry when they have to stay inside if/when bird flu gets here.
Mine are always inside. It is too dangerous to let them out.
Bird flu will get here. But there have not been major human outbreaks anywhere.
It could certainly cause problems when the time comes to refinance though, and the bank is no longer willing to advance you the amount you still owe. You are responsible for the difference!
Yes, and consider that an estimated 82% of CA mortgages last year were IO or neg-ams with a national average of 2% down payment, plus the fact that most CA homedebtors are already stretched to their limits even BEFORE they've reached the end of the fixed/teaser interest rate period. Most of these buyers simply will NOT be able to cover their monthly payments when they adjust to ARMs, much less when they convert to fully amortizing mortgages.
These people will either HAVE to refinance or sell the house. Which, of course, they won't be able to do, beacause they will be NEOs (negative equity owners).
Many people refinance just to pay their mortgages. These people will be screwed.
NEOs will want to think that the reality is all fake. :)
RANDY, what is your email address? I have some questions for you. Thanks.
You can also reach me from randolfe.typepad.com
ToBA or not toBA,
tsusiat stole my thunder BUT there are other repercussions that may be more "indirect". While you may be current on your obligations (that doesn't mean that your NEO neighbors are)! Everyone has their threshold of pain. For many Americans it is zero. Particularly if the whole idea was to make a huge killing in a short time.
Many people refinance just to pay their mortgages. These people will be screwed.
I know a guy like this. He's a pretty good friend actually. It's very sad. He was in very good shape at one point, but a career bump and nasty divorce later, now he's sitting on a McMansion which he should have sold to finance the divorce. He's a real finance quant too, so he should know better; no excuse. He's probably solvent up to a 20-25% correction in prices, but after that he's upside down bad. Even with flat prices, he's still digging a hole. Just goes to show it requires more than intelligence. You have to have some common sense too.
Peter P,
GM's "PAD" looked pretty cool! Now all it needs is graffiti proof paint. Back in the 70's my brother worked with a guy in NW Portland that lived in his RV during the week just parking it on the street. On the weekend he took it to his cabin towards Mt. Hood. Then again he was single. It certainly didn't have the appointments of the "PAD".
Floor traders go extinct, Realtors(TM) go extinct, mortgage brokers are pared back. .. I guess we will always need undertakers.
There are still bond floor traders even though much of the trading is now done on eCBOT. S&P floor is still alive after the E-mini practically took over.
SF Woman,
The "Big Board" was forced to update technology or go extinct. They were losing volume every year.
My bet is it jumps from birds to pigs, becomes transmissible between pigs and then to people in a crowded Asian city where the three live in very close proximity.
A very plausible scenario.
Unfortunately that person will probably then get directly onto a flight to SFO about 5 hours before the symptoms start.
There is no defense. Even if we close the airport bird will still get us eventually.
I think us humans have been too arrogant in thinking that we can cheat Nature.
GM’s “PAD†looked pretty cool! Now all it needs is graffiti proof paint.
Just see graffiti as THE new paint. ;)
First time posting--have been reading all of your posts for days now and am intrigued by the amount of info. and knowledge.
Perhaps we should just see a pandemic as Nature's way to liquidate "malinvesments".
We think that every human being is special, unique, and invaluable.
But Nature thinks that evey one of us is expendable.
You can't imagine the relief I've felt finally coming into contact with sane people like yourselves. I have tried many times with many different people of varying income levels and and 99 out of 100 look at me like I have 2 heads when I tell them that I think buying a home in this market is a bad investment.
Is anyone making $$$ trading the mini’s?
Don't know. It has decent liquidity and it is a 1256 contract for tax purpose (60/40 long/short term treatment), so I think it is no worse than stocks.
ps I wonder why my last post on prefab homes was moderated?
Does it contain links? Some links trigger moderation.
It's coming boys and girls, we'll show those pesky Persians a thing or two, how dare they price their oil in Euros, whoops I meant, lets keep the world safe from Nukler devices.
Funny how the rhetoric is increasing as the Bourse is just about to open.
It’s coming boys and girls, we’ll show those pesky Persians a thing or two, how dare they price their oil in Euros, whoops I meant, lets keep the world safe from Nukler devices.
tinyurl.com/h8573
tinyurl.com/qw3te
Funny how the rhetoric is increasing as the Bourse is just about to open.
Davis,
No I haven't, thanks for the info, I'll check it out.
Believe it or not Seattle's RE is nearly as rediculous as CA. I rent a 300sq ft house on 75 ft of lake Sammamish waterfront with a boat lift for my ski boat and a huge yard for my child, in the best school district in the area, 2 miles from the Microsoft campus. $1.5 being offered to the owner to then be torn down and build a castle in it's place. I pay $2700/month
Believe it or not Seattle’s RE is nearly as rediculous as CA. I rent a 300sq ft house on 75 ft of lake Sammamish waterfront with a boat lift for my ski boat and a huge yard for my child, in the best school district in the area, 2 miles from the Microsoft campus. $1.5 being offered to the owner to then be torn down and build a castle in it’s place. I pay $2700/month
300sf or 3000sf?
I was a stock broker from '98-'02 i've seen this before and i learned my lesson.
I showed this blog to a few friends of mine and of coarse they said, "that's CA, it doesn't apply here.
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Long bond rate is climing and it appears that the yield curve is steepening. What does it mean?
At the very least, fixed-mortgage rate is going up. In the Bay Area, this may not be very relevant because most mortgages are adjustable. However, will there be even more bubble media coverage because of the perceived correlation between long rate and the housing market?
#housing