patrick.net

Is specuvestor in the glossary?

It's probably been mentioned before, but the real beneficiaries of the boom are not only specuvestors and baby boomers who timed the market, but all the people on % commissions who have seen their gross and net earnings rise and rise - the lenders, the realtors, the mortgage brokers, etc. Do you think they ever want the party to end? Do you think they'd even be prepared to lie to people to keep it going? While everyone else works for a crummy fixed wage indexed to CPI, their 3% keeps ballooning and ballooning without revision or scrutiny... No-one ever revises it down, and bank interest is certainly not adjustable in the world of international credit...

Real estate agents love booms, and they also love foreclosures when the bubble bursts - even more sales and commissions - so do you think they care?

Shameless plug (my apologies), but it does relate to the education and global competitiveness sub-discussions that come up in almost every thread here: Do We Need Another New Math?

Do We Need Another New Math? Indeed we do.

US VENTURE/CRONY CAPITALISM:
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. Sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet provided with the release. The public buys your bull.

Like many of us, I come to this site for sanity. Lately I can't even walk my dog without the neighborhood realt-whore smiling that inane smile and proclaiming" Our neighborhood is BOOMING!!" I come home with a sick feeling in my stomach and log on.
Perhaps it IS because I'm a woman that I want to own a home again so badly. I love to redesign, venetian plaster, add on, landscape, etc. Owning a home IS emotional because, for me, it means I can put down roots. But I am also careful with my Hahas...so I have to wait for this damn bubble to POP.
Waiting for the correction/crash has been very depressing for me. Patience is the name of the game...but in my part of town...things haven't shifted down yet. Houses sit much longer...but eventually some idiot comes along and buys. There is very little inventory...only the ugly,unconsumed leftovers.
When the trolls come to this site, I try not to repond...they only want to incite a reaction. I thank the regulars, especially Randy H., for your honest,intelligent, informative badinage. Sometimes the topics meander and we discuss our families or other investments.
If this bubble really is nationwide or worldwide...then I do question what will happen in the big picture. Things have been difficult for me lately as patience is not my forte'.

A nicely decorated home with Ethan Allen furniture to a woman is a Ferrari to a guy. Just accept the way it is. We as men need our trophy wives, and our trophy wives need their trophy homes. Case closed, next question please.

ALERT: All of us should watch the immigration reform very closely.

It seems that competing bills all have some features to significantly increase employment-based immigration quota.

I do not know whether illegal immigrants will be legalized in the end, it does not matter to the housing bubble anyway. However, an influx of skilled high-tech workers WILL change the picture considerably.

Globalization cannot be stopped. We can only react to it. If the changes become law by 2007, we may just have enough people to cushion the expected massive ARM reset.

Now, no flames please.

Linda,

I can totally understand your frustration. I have been fighting to be patient too. I have kids, and would prefer to have a home before it's time for them to move out. Seems like time is running out for me. Then, there is always the self-doubt about the decision to wait. What if ... ?

I try to then take the cold logical approach. What is the goal here ? Apart from providing a house, I also have the responsibility to save for kids' college education, and my retirement. If I give my hard earned money as downpayment to someone, and then pay huge monthly installments, I have taken care of sellers' retirement, and his/her kids' education. What about mine ? Someone else need to come around 10 - 15 - 20 years from now, willing to pay me enough appreciation to achieve my goals. That's a BIG risk. If I buy, I am essentially hoping that someone would bail me out.

No thanks. I would rather keep saving for my retirement and kids' education. I rent a nice apartment, in probably the best school district in Bay Area - elem and middle. I don't need to move for many many years. What I cannot give to my kids in terms of house, I try to make up for it by vacations etc.

I also calculated one more thing. If I had bought in 2003, what my net worth would be 2 years from now, ASSUMING prices don't increase or decrease at all from what they are today. The only increase in my net worth would have come from gain in the house price. Almost all the income would have been spent in PITI, plus maintenance. Since I did not, it will take me a couple of years more, to get my net worth there. And it won't be on paper, it will be hard cash and some stocks. So the only risk is prices continuing to increase at 10%+ per year, which EVEN the NAR does not expect.

So I am far more relaxed now that I was a few months ago. Hope this helps.

Peter P said :

Globalization cannot be stopped. We can only react to it. If the changes become law by 2007, we may just have enough people to cushion the expected massive ARM reset.

I am not sure I understand. Are you saying, the new immigrants would be able to buy at these prices ???? If that's what you mean, it does not seem likely at all. Even hitech workers, in early years, cannot buy homes without fancy mortgage.

Let me say this first, as a minority American, I am not pissed or furious about Shmend or sunnyvale_renter's posts. This sentiment doesn't just exist today, it is a factor that I will need to take into consideration IF we slip into a Great Depression/Great Stagflation in which most Americans will have to a serious step back in terms of quality of life. After all, it is the dire state of Weimar Republic that sent Hitler to his throne.

US is a country of sharpening divide between the haves and have nots. The major difference between America and Latin America is our command of the world's share of resources far exceeds that of our population, so even the have nots can kept on welfare watching cable TV all day. Our situation as a whole will deteriorate, by how much I don't know. Not only the minorities, but everyone who has some asset, money to lose will be subject to the same fear, our peaceful life is based on the civility that is mainly sustained by the wealth of resources we enjoy as a whole. If you take away the resources, you take away the civility. And worse still, it is not just about the absolute supply of resources, it is about *expectation*. We all have a certain expectation of our lifestyle, certain homes, certain cars, etc. People who have been poor all their lives with no exposure to how others lead their lives tend to be much less disgruntled that people who have seen it but cannot have it.

So I know there are other Shmends and Sunnyvale_renters who harbor these thoughts. I don't condemn them for their attitude, they are just reacting to the environment, which is getting more hostile every day for a fringe middle class American, and soon, mainstream middle class American. It is not something one can easily change through education either, because we as human beings all look for culprits for our misfortune, that is just human nature.

For this reason alone, I pray for a sudden, severe crash for America, we don't have the monoculture and homogenous, tightly-knit community as Japan which sustained them through 16 painful years. I am not sure if it will be safe for me to live here if we are heading for a long drawn recession.

New thread: Immigration reform and the housing bubble

SFWoman,

I agree with you. But people do use their house value in their net worth. And just for comparison - how well my money/investment has done - it's a valid criterion. I am just trying to find the answer to the question, "Would I have been better off if I had bought in 2003 ?"

No, it is not about new or old immigrants, it is about the reshuffle of world supply and demand for labor. All labor of similar skills, adjusted for cost of living and certain aritificial barriers like residency eligibility, must come to an equilibrium in terms of price. Unless we Americans as a whole can obtain and demonstrate more superior skillsets across most sectors, our standard of living will converge with those countries we look down upon, as they catch up.

Although I don't think China is on its way to challenge us due to many structural issues, there is one thing about the Chinese, over there, that scares me. The urge to become rich is burning. Most Americans have lost that urge, it is replaced by greed, but not a live-or-die kind of attitude. You go to a bookshop in Shanghai, the place is packed, people squating sitting on the floor trying to gobble down whatever knowledge they can get their hands on. Thank god we have this stupid Chinese government which puts the entire nation behind the Great Firewall, or they will catch up much faster. You go to a public park, there is always an English corner where you see several expats (including myself back then) surrounded by walls and walls of students eager to practice English with you.

They may not be smart by FormerApt's standard, but they are sure hardworking, and extremely driven. They know that their only chance to advance their life is through education, and they are determined to get whatever education to equip themselves. Even if a small percentage of them succeed, that will be a huge absolute number of work force that can make most of us obsolete. I am not talking about the cheap labor on the assembly lines, I am talking about college grads. Another saver for us is, the college programs in China are just a joke, if not, I will be kept awake more at night.

But America needs a good kick in the butt. I will send my kids to China for a summer not to study the language or culture, but to be immersed in the ultra-competitive environment so that they will know their future competitors. They are not to be taken lightly, whether they immigrate here, or they stay there.

astrid,

it should be some kind of antique furniture from Sotheby's auctions, but I never care for furniture so I don't even know which era by which maestro to quote.

All I need is a bed and a desk, everything else is sort of beyond my comperhension.

Excuse me for getting in the middle of your chat, but isn't Club Med for singles? I thought Club Med=dating club on the road, am I wrong?

Owneroc,

That resonates with me ! I think there is one advantage - if any - to be in an over-populated country. You have to be extremely competitive in order to succeed. It starts from kindergarten.

SFWoman,

No, I don't have graphs. BUT ... I know what prices my friends paid. Almost everyone I know, bought in or after 2003.

And now there is Zillow ! It gives you graphs, and zestimates. Use it with a grain of salt. The more important information it gives is sales records !

I have been using ZipReality and Zillow a lot, for a house I like. These houses sold around 600K in 2003, and now the asking price is 850K - 900K.

Thank Al Gore for internet, what would I have done otherwise ?

SFWoman
The rooms are basic because they want you out and about! This time we went to Punta Cana.
FABULOUS>
When I was 11, my parents took me to Club Med in Tahiti...changed my life. Discovered boys, vanilla yoghurt,water skiing, and all things tropical!
BA
Don't look back! If I hadn't sold in Aug. and waited till Feb. I probably could've made 1 whole Haha more! But I can't think that way!! Gotta look forward to the big fall and the variety of choices we'll have then!
I think part of my problem is that one of my hobbies is fixing up the house..you know...adding value. Can't do that with a rental! Especially if I want to buy it in a few years! The first house I ever bought , I had been a long term renter...I'ts actually a good way to get a house. I said...Come on! It's my home! As soon as we closed escrow I turned around and sold it for $50K profit. Boy were my previous landlords pissed!

On Clubmed.com they have the kinds of clubs listed and, yes, some are for singles.

SFWoman,

thanks for the explanation. Ah, I will never let my wife know :-)

Furniture again is a woman thing, I bet most guys are just like me, we can look at a piece of heavily ornated furniture and pretend that we are taken away by its beauty, but in secret cannot think of better things to do except for using it as firewood.

You know what???
I think I AM a JBR>
I wasn't J or B before...but I think I am now.
shit.

athena wrote:

> Women who can afford to buy and happen to be unmarried
> do it for the same reasons anyone buys… because they
> can and they have bought into the emotional bs about
> owning a house. Then again, some of us save and spend
> our haha’s more wisely. criminy, don’t make such general
> statements about women. Choosing not to be married
> doesn’t equate with being alone, and they don’t all have cats.

I was just responding to the post that single women have been a big part of the real estate boom buy pointing out that.

There are a lot more educated single women with good jobs today then 20 years ago.

Most (but not all) of these women planned to marry a nice guy (with a nice house) and have kids.

Most (but not all) women at around 40 start to realize that Prince Charming with the nice home in Pacific Heights (or Ross or Tiburon) is not going to come along and start a family with them.

Most (but not all) single women over 40 that don’t have kids want a cat (or cats) so they are forced to buy because most rentals don’t allow pets…

SFWoman Says:

"In Pac Heights the women slather over overpaying for 18th century French or English or Irish Georgian. All of them are beautiful styles (not all examples are nice though), but can be had for soooo much less than the women pay for it. There seems to be a perverse pride in overpaying for it among some of my friends."

My Uncle was in the Antiques/Estate Furniture/Used Furniture business my entire life and I appreciate quality furniture but I've met women in SF (who are members of the Young Collectors and involved with the Fall Antiques Show) that seem to be just trying to impress people with their furniture (how rare it is, how much it cost etc.) just like they try and impress people with shoes and handbags (how rare they are, and how much they cost etc.)…

There was a saying that a thought goes along the lines of this: a recession is when your friend loses his job and a depression is when you lose your job.

Surfing on the website foreclosure.com in my zip code I saw two friends pop up on the delinquent list. I guess that means, at least for the time being, recession. Weird thing, these folks have lived in their homes for a long time, at least 10 years.

Athena
I pretty much agree with you. I bought my first house while still in my 20s. My boyfriend could not afford a house...and I didn't even let him live with me! In fact, when we eventually got married, I had the prenup written until HE figured his finances out!! Three houses later, he did. Now we share money...but for many years I was the principle bread winner. We still share household chores etc in a non biased way.
I have a clear memory of me,very pregnant, building a fence and laying the concrete for the posts. I could see into the kitchen window and there was my big, manly husband doing the dishes with (an unlit) cigar hanging out of his mouth smiling away. It was a perfectly natural scene for us. We lived in a French Norman house in the Hollywood Hills and could look into Madonnas(then) house from our balcony!

hmm, I'm not sure that people from mainland China are all that competitive - it seems to be more people from Hong Kong, Japan, S. Korea, Singapore, etc. The mainland Chinese I've met in Australia are pretty laid back and normal as a culture, and they tell me they don't work too hard in China. Under Communism, sometimes there isn't anything to do for days in a job... However, go into any suburban library, and you will find the kids of the 'westernised' Asian countries completely filling the library, without a single Caucasian present, right up 'til closing...

SFWoman Says:
March 29th, 2006 at 6:39 pm
Is it more of that American ‘I’ll be rich in the future too’ type of thinking?

ooh, i got howled down for suggesting that recently... apparently everyone in america is going to get rich....

“and they still make .75 on the dollar compared to men’s wages.”

the rise of women in the workforce since WWII has had a really interesting effect - you now have 2 incomes bidding for housing, thus disadvantaging single income households, whether singles or couples. housing prices have risen to the price of the highest bidder, so you find affluent working couples winning out every time, and feeding into a separate inflationary effect in housing.

so i sometimes get tired of the 'equal pay' arguments taken in isolation when people don't factor in total household income - i.e. the modern couple as a working unit - let's face it, statistically most people are paired up, and relatively few are alone, although it is not an insignificant number. hence, single people and single-income families will always get beaten out by the dual incomes, on average, even when it comes to 1 bedroom apartments, always priced 'in the market' for a dual income... not enough thought is given to providing for families as a unit, and trying to match the needs of each distinctive household with a fair housing outcome, and the market is clearly a manifest failure at achieving this by itself...

In my search for a home for my parents, I’ve called on a number of “Owner Financing” type signs and offers…almost exclusively, it was an investor who wanted to get someone into the house with a lease (or rent-to-own) payment that was about 30-40% above comparable rents and 1-2 years in length.

These vendor finance options are 'wrap' deals, etc aren't they? They are illegal in some places. Some are almost calculated to make sure the purchaser defaults and forfeits their payments so you can do it all over again to the next guy...

you learn how to do them on some guru courses...

http://www.jenman.com.au/NewsNews1.php?id=220

Athena wrote:

> Why is it assusmed that most women plan to marry?

I was clear to write that just most (but not all) woman want to get married. Most (but not all) men want to get married, hell even most (but not all) GAY men want to get married (I had a friend from college fly up here with his boyfriend after Newsom made gay marriage legal)...

Don't even get started on the $0.75 on the dollar thing that is due to most (but not all) woman trying to work as little as possible. Smart women tend to meet smart guys and if the guys do well the women don't work at all (or very little). My sister never practiced medicine and has not worked (for pay) since she had her first kid just after med school (I know raising kids is work) and many of my female b school classmates spend their days playing tennis or at the Circus Club pool while every single guy is still putting in 60+ hour work weeks. I have another friend married to a Hastings grad who made a couple grand last year doing TIC contracts in between play dates for their little crumb crunchers...

George,

Thank you for shedding some light on a complex topic. You continue to bring up tangents I hadn't considered. I can't speak for PS but rejection is part of life so that doesn't really confront me if the rewards are there. I suspect that over the next several months a glut of "investor" properties will come on the market (yes, no matter where you live) as we are seeing this already in heavily speculated markets. It's just interesting enough that like PS I'll continue to track this possibility as it develops. This much I do know; we've all had friends or associates that have leased a building and the "owner" turned out to be a real flake. No question there. When the "owner" proves to be unreliable the lender quickly becomes more interested in the tenant that has remained current, done improvements and proven themselves reliable. The current occupant naturally becomes the primary focus b/c they have shown that they can make the property viable. Just b/c you are paying YOUR rent on time doesn't mean that your landlord is honoring his debt obligations. Sometimes all you have to do is ask around a little.

Athena wrote:

> FAB… I dont’ know that I would agree with the
> statement that women work as little as possible…

That sounded a little harsh, but after years of hearing that "men and women are the same" from the PC crowd I've noticed that if you have 100 men and 100 women with $50 million dollars that could do anything they wanted most (but not all) the men would work full time and most (but not all) the women would stay home with their kids. Over the years I have I have met very very few women who work more than they need to while I know hundreds of men who don't "need" to work and work because they want to...

Athena
I SOOO agree with you in most respects. I find most of the women I can't even pretend to tolerate are the unemployed"kept" women. Their lives seem to get real small and their values real petty. I have always been proud of the fact that I have earned my own money, I am very capable without a man, and can generally figure things out for myself...though I have been married for a long time(17yrs).
You are the woman I'd seek out and talk to at a party.Strength of character,opinionated, smart...gotta love those qualities! :)

FormerAptBroker,

Smart women tend to meet smart guys and if the guys do well the women don’t work at all (or very little).

I'm not sure if I qualify as smart or as a reasonable "catch" for my "smart and wanted to have it all wife", but I ensure you she works every bit as hard as I. Although your generalizations about women may hold true much of the time (something I'm unconvinced of), what makes life worth living happens in the margins, where generalizations and stereotypes don't apply.

Please just remember that making broad generalizations -- even about what you anecdotally consider to be "most but not all" -- has an amplified effect on the "not all" portion you refer to. Being that my wife is a specific counter example of your position, and that I have been there to support her as she has fought many professional and personal battles because of the type of loose thinking you are demonstrating, I am a bit sensitive to the subject.

Your arguments also imply that I must somehow be an inadequate spouse for my wife, for if I were successful enough, then she wouldn't even want to work. Or, perhaps the problem is I prefer a woman my own age?

To make this working vs. stay-at-home mom discussion relevant to the BA, did any of you remember this article from the Aug '05 issue of SF Mag???

**********
The Woodside Four
Got baby? With the Peninsula's smart set, four's the magic number.
By Leslie Gordon

They spend their time packing junk food-free lunch boxes instead of Vuitton briefcases. They've traded courtroom skirmishes for PTA dustups. And only once in a while do they think about whether their Ivy League degrees prepared them for their current job as minivan chauffeur.

Welcome to the lush, lavish suburbs of the Peninsula, where a baby boom among well-to-do women is giving rise to the moniker Woodside Four—named after women who love motherhood so much they have not two, not three, but four kids. Having escaped cramped, child-unfriendly San Francisco, where schools are shuttering and backyards are as teeny as a $500,000 condo, these women traded up with bigger homes, husbands with bigger paychecks, and, of course, bigger families. And before you hurl a barrage of Stepford comments their way, consider this: while many wealthy city women prefer to indulge in the three Cs—clothing, careers, and cosmetic surgery—Woodside, Los Altos, and Atherton moms are only OD'ing on children.

"My standing joke is that if it was the 1950s, I'd have eight kids," says Woodside PTA president Liz Dressel, a mother of four girls ages three to ten. A former real estate attorney, Dressel has long focused her energies on playing Blue's Clues, making trips to Roberts  Market to load up on Pirate's Booty, and washing out ziplock bags (she's an environmentalist). She says she prefers the commotion of kids to the law, and her three best friends in Woodside, all former professionals as well, are also moms of four. And we're not talking about fertility "accidents" here. Throughout the upscale suburbs of the Peninsula, families of five and six are as common as ear infections.

What gives? In the Third World, international aid workers educate women in order to lower the birthrate. But many Woodside Four moms claim they're just influenced by having grown up in large families. Only thing is, their moms came of age in the fifties and sixties, before women entered the workforce in droves. Today, having a family of four, even with a platoon of nannies and housekeepers in tow, essentially ensures that any careers these women might have had once upon a time are deader than Sesame Street's beloved Mr. Hooper.

Others attribute the preference for four as inflation creeping into mothering—for well-off women, at least. "Three is the new two," says Eileen Aicardi, a San Francisco pediatrician whose practice is filled with upper-income patients. "So when mothers who can afford it feel like they've been there and done that, they go for four or more kids."

Eliza Foxcreek, a mother of three in San Francisco, has several friends who are Woodside Four moms and believes that a culture of hyperachievement is a factor. "When former career women become parents, there's this ‘How do I superachieve, how do I get my ya-yas in another realm?'" says Foxcreek, a Stanford MBA. "They put it all into having kids." And with seemingly everyone around you popping out one baby after another, having four children seems perfectly normal, if not a subtle marker of status. As Foxcreek explains, "There's something impressive about being fecund, about starting a clan."

*********

Besides being a major fluff piece, it is interesting in light of this discussion re: the line, "Having escaped cramped, child-unfriendly San Francisco, where schools are shuttering and backyards are as teeny as a $500,000 condo, these women traded up with bigger homes, husbands with bigger paychecks, and, of course, bigger families." A little harsh, but is there truth to the sentiment??

astrid Says:

> I don’t mind professional women taking a couple
> years off for child rearing and take up volunteer
> work. But if that’s their plan all along, why don’t
> they just get their MRS in college/HS and start baby
> making immediately? A lot of people would love to
> take their spots in grad school and continue working.

I saw a study a while back that looked at the percentage of male and female Harvard Law School and Harvard Business School grads that were still working full time in their 40's. It was almost all the men and about half the women. A friend of mine (that is a Harvard Law school grad) commented that the main reason the number of men still working was not closer to 100% was due to guys dying young. This same friend made a comment when Sandra Day O'Conner retired that every guy he knows would have to be carried out of the Supreme Court on their backs...

SQT,

I stayed home for the first couple of years when our child was born. If that means I gave up my "man card", then I was happy to do it. I have a relationship with my son now because of that time caring for him that many men would do well to experience. Even though we both now work, I am still the "flex parent", who is available on-demand for child-related things. It is a utilitarian decision for us. My wife is a Controller, so she has little flexibility. I'm a ... hmmm, what am I? Anyway, I am mega-flexible, so I should be the one to take the point with our son.

Then again, I find stigmas generally annoying. If anyone insists there is a "normal way" of things I'll be sure to go out of my way to do something else altogether.

SQT,

If by rarity you mean oddity, sure I admit it!

BA,

Thanks for keying us in! Just another trick up the sleeve to give the appearance of normality. It wasn't long ago that those bothersome details would have been covered during the ensuing "bidding war" so now (and I believe you are right on this one) recent buyers probably SHOULD be challenging their tax bills.

We're in the mom work vs. no work situation as well, directly impacted by BA real estate prices. By normal US standards, we make a good combined salary (2+HaHa's between the two of us). However, in the BA, with a baby, the wife will be going back to work at the end of the summer in large part b/c otherwise we won't be able to afford more than some stucco box in the Peninsula when we eventually buy (at the nadir of the market!!) It turns out, she has a lot more earning potential (attorney) than I do (MD), so if anything, I should quit and stay at home...

skibum,

It turns out, she has a lot more earning potential (attorney) than I do (MD), so if anything, I should quit and stay at home…

I'm biased, but if you do decide to stay home, at least a while, you won't ever regret it. Myself, I found no real resistance blending in with other neighborhood at home moms. We all took the kids to the park together, and they actually seemed to appreciate having a guy around in the group.

PS,

Understood! Just for the record though most guys don't take rejection all that well. I got to the same point you did, someone would actually say YES and I would just keep selling until I realized I'd better shut up and take their business. Funny world, ain't it? I have to agree, the very thing that attracted me to the lease option arena was the fact that most of the faint of heart would simply say it's not worth the trouble. "I'll just go ahead and buy the damn thing!" Perhaps that is what should have been said, this is not for the faint of heart.