patrick.net

zzyzzx says

donjumpsuit says

4. In 5 to 10 years, house prices will remain at this exact pricing, yet incomes will double based on how the financial system is acting.

I'm pretty sure that incomes in the US aren't going to double in the next 5-10 years.

I would bet significant money they won't......................Anyone want to take the other side of the bet?

Call it Crazy says

Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA.”

Let's underscore the word MAY there.

Next year I MAY put off buying a new car, or I might not.

If 1/3rd of firms cut people or hours it will show in employment figures.

Vicente says

Let's underscore the word MAY there.

Call it Crazy says

The impact on the real economy is astonishing. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA.

Yea, I was curious how the impact "IS" astonishing when people "MAY" hire fewer people. Anyone care to explain how that works?

CaptainShuddup says

OK Who had Cluster Fuck?! Anyone have "Cluster Fuck" for the "I bet Obamacare turns into..." Pool?

Ben and Jerry's used to have an awesome ice cream called Clusterfluff. The the censors spoke up and they changed it to the less offensive "what a cluster".

Obamacare= what a cluster

The point is a whole generation has systematically been priced out unless they are gamblers or part of the 1%. My dad had hardships, he is a boomer. He bought his house while still in his master's program and taking care of his small son who is blind and has autism. He also had to refinance his house to survive after IBM gave him "early retirement" and he was going through a divorce. No one is dismissing the previous generation's individual hardships. I would argue though that the generation before the boomers are the ones who are truly entitled to make an argument about hardships as a whole; as a generation. The point is that the last generation, like the generation before that, and the generation before that, bought for less than twice the median income. This current generation has never had that luxury. My dad was the first to admit that he would have never considered buying a home that was even four times his income, he considered that for fools and gamblers. He admits this new generation should not buy, and he feels it's a shame that a whole generation of young families have to struggle every month to make the rent or mortgage. He also thinks that it seems to him that every family needs both parents working just to survive. He only knew a couple of families that needed both parents to work in his day. My dad thinks that this whole set up is asking more of the current generation than the boomers would have felt was okay for them. That's the issue. He wants a better life for his kids and grandchildren and the new system gives him very few options to help. Like most boomers his wealth is tied up in a house that doesn't make sense to sell. He can't help his children out of this mess, like a lot of loving boomer parents. At least my dad cares what is happening to young families, its not all about him. He would trade homes going back to twice the median income (even his own home that is now worth two million something) to give young families a real chance. He only wants the same chances for this generation that he had, that is all, nothing more.

Good discussion. I have never considered buying so far, although it isn't a money issue. While rents are high as well, you can get decent deals outside of downtown for yourself and family, and you always have the possibility to move. I have put in a bid back in the earlier days (when the bubble was building up) once or twice, but when the agent told me not to offend the seller with what I think the place was worth, I severed ties with the housing cabal and haven't looked back since ;) This country would be better off without realtors (6% for what?) , without the NAR, and without section 8 housing.

mell says

This country would be better off without realtors (6% for what?)

This is a valid question that I have asked before. At this point with the online tools available we can buy and sell just as we do with automobiles.
I have to laugh when people will hire agents to sell their homes in places like the bay area where housing is typically hot. Why would you dish out 6% on a 1 million + home sale when the place will basically sell itself due to the market?

Heraclitusstudent says

You're missing the key point which is that housing prices have risen faster than wages for several decades. As it happened, most people who bought a house during that time saw their equity increase and therefore were able to upgrade to more expensive homes. That's especially true for boomers.

That makes no sense. If house prices go up, then the price of more expensive houses goes up too. Prices going up does not help "move up" buyers at all. In fact, it discourages move up buyers, at least in CA. When they sell, they will lose their low Prop 13 limited tax assessment.

Can you all spell MISpricing?
What do you all call this?
http://www.showrealhist.com/yTRIAL.html

Intellectual honesty is lacking. I think that the dominant use of the term is here: "What is intellectual honesty's cash flow?"

Do you know folks who had kids to have somebody to sell bubble-high to?

Her Royal Highness,

Think you have it bad? Think the young new-comers from the heartland America, or even just inland California, or from overseas . . . all having no old man, from whom the lucky ones like you can inherit a house in coastal California.

High real estate price is fundamentally a transfer of wealth from new-comers to those who are already there. Your family, having the older generation already bought the house decades ago, is the beneficiary.

IMHO, except for the few notable coastal metro markets that people are obsessed with, much of the country's real estate price has corrected.

The low ownership rate among the younger generation is not mostly due to house sale price per se (outside the nutty coastal metro markets, they are justifiable by rents), but probably due to:

1. career mobility; people switch jobs more frequently nowadays. Paying 6% every time gets expensive and gets old fast.

2. other bills to pay: student loans, cell phone bills, cable bills, etc.

3. parents have spare bedrooms, and are willing to provide housing for free or collecting rent from kids. The stigma of becoming dependent is going away in the society

4. of course, if one is a dependent of the state, collecting Supplemental Income etc. from government aid, then owning a house is out of the question.

Car ownership rate among the young is also way down.

Reality says

Her Royal Highness,

Ah, so that's what hrh stands for? And people say you cannot learn a thing on patnet!

Call it Crazy says

Reality says

IMHO, except for the few notable coastal metro markets that people are obsessed with, much of the country's real estate price has corrected.

What's your definition of "corrected"??

Having reverted to mean. Of course, sometimes over-corrections can take place, and it did for some/many parts of the country. Do we get another chance at buying at over-corrected prices before the next bubble phase? We shall wait and see.

Of course this doesn't apply to the select coastal metro market that never really corrected.

Call it Crazy says

WARPED, DISTORTED, MANIPULATED, FLIPPED HOUSING MARKET

Not that we need anymore evidence that you’re screwed if you bought a house in the last 14 years.

Reality says

Her Royal Highness,

Think you have it bad? Think the young new-comers from the heartland America, or even just inland California, or from overseas . . . all having no old man, from whom the lucky ones like you can inherit a house in coastal California.

High real estate price is fundamentally a transfer of wealth from new-comers to those who are already there. Your family, having the older generation already bought the house decades ago, is the beneficiary.

I don't think I have it bad, I think a whole generation of young families have it bad. I think the system is a mess and the inflated housing market is a mess. A lot of my generation live with their parents, but not because they are dependent, but because they have no choice. Both parents work at decent paying jobs in most cases and can not afford the insane rent around here or a mortgage.

Reality says

IMHO, except for the few notable coastal metro markets that people are obsessed with, much of the country's real estate price has corrected.

It is not corrected until it is less or about twice the median income.

The low ownership rate among the younger generation is not mostly due to house sale price per se (outside the nutty coastal metro markets, they are justifiable by rents), but probably due to:

1. career mobility; people switch jobs more frequently nowadays. Paying 6% every time gets expensive and gets old fast.

Career mobility is not always about the luxury of changing to a new job. This generation is rarely offered a pension or any incentive to stay in a job. Most of my friend's career mobility is based on downsizing within the company and not their choice.

2. other bills to pay: student loans, cell phone bills, cable bills, etc.

Except for the student loans, these wouldn't even make a noticeable dent. I went to school on scholarship and choose not to have a cell phone or cable. I know a lot of other people from my generation in the same situation.

3. parents have spare bedrooms, and are willing to provide housing for free or collecting rent from kids. The stigma of becoming dependent is going away in the society

.
Because people realize that it's insane to buy a home ten times your income. If living with family keeps a young couple working two good jobs out of the homeless shelter I have no cause to judge them, or label them dependent.

4. of course, if one is a dependent of the state, collecting Supplemental Income etc. from government aid, then owning a house is out of the question.

People living with their parents are far from welfare leeches. They are often professionals, teachers or other skilled workers.

5.Car ownership rate among the young is also way down.

So what? I have a lot of friends who bike to work? That's a bad thing? I know a lot of couples who have one car between them, seems terribly inconvenient to me, but they are trying to save, so more power to them. We save by not buying much and not having cable or a cell phone, they save by not having a car; when the cost of living is tight, and the housing market is inflated and rents are insane, then it's save or be left out in the cold, literally.

The same people who can't make a webpage can run a bank???

ttsmyf says

Can you all spell MISpricing?

What do you all call this?

http://www.showrealhist.com/yTRIAL.html

Intellectual honesty is lacking. I think that the dominant use of the term is here: "What is intellectual honesty's cash flow?"

Do you know folks who had kids to have somebody to sell bubble-high to?

Overpricing of homes and stocks has evidently supported a LOT of overconsuming, see here:
http://patrick.net/?p=1230886
The people have been drunk. Now they have sobered up a bit. The 'establishment' speaks little truth, but does seek to pass the people more bottles. Wise up!

hrhjuliet says

2. Even when they can theoretically save for downpayment, they choose to spend money on entertainment/going out and as a result don't save.

Some do, but the majority don't. The biggest spenders I know, especially on frivolous entertainment and eating out are over 55.

Well, maybe in the SFBA but what I'm seeing in Texas is if the young get a spare dime - they spend it and spend it FAST. Eating out, because preparing dinner at home has become a lost art. Got to go see the latest movie, because ... well, I'm bored and just because I can. Buying DVD's, because ... well, because I like to watch the same movie 50 times (boy, that one I never figured out). Spending it on iTunes. A newer car, even though the one you've got is fine and fixing it would cost 1/20th (or less) of what a new car costs. Going to concerts, sports games, clubbing, you-name-it, all of which cost from $50 and go up, but we're bored and ... we just want to. Lots of shills out there crying, singing, competing for your money - and young people fall for it. PT Barnum, said there is one born every minute; I think the new reality is there are several dozen born every second.

Heraclitusstudent says

If you own a house and profited these past few years, the question for you is: why do you hate young people?

The way this system works is very immoral.

Nonsense!!!! The way this system works is called LIFE. The system doesn't owe you ANYTHING. I got my teeth kicked in, more than once. And I did what I had to do to pick myself up off the ground and face life and take it on again. I lost a good paying job (due to recession), had to sell my house (twice). Had to move 2500 miles, had to moving in with relatives while I got back to getting an upper hand on life. I've had to live on less than $100 for two weeks for food AND gas. I've had to decide to not go to a doctor and not take meds because the choice was that or rent.

My life still is far from ideal, but it's also far from those conditions. I picked up a house that was at the bottom of its assessed value cycle; and it has since appreciated to 50% more. BUT, I'm also driving two (paid off) vehicles which are 14 and 12 years old and have over 200K miles on them.

We make choices. If you're choice is to stay in the SFBA area for WHATEVER the reason, then good for you, but don't say the playing field isn't level. Circumstances change, the world changes, we DON'T owe you (or anyone else) ANYTHING just because you take up space.

Sounds fair - how could he have known that they weren't robbing him? unfortunately, he'll be found guilty of the lesser charges and get as much jail time. Unless they can find a reason to get the charges tossed out.

hrhjuliet says

Also, all this speculation on why homes are not moving off the market even though inventory is low? How about a simple answer? The prices are still too high and too risky.

Bingo!!!

I rent a condo in San Jose for 2k a month. The same condo is selling for 500K, plus you have a $350/month HOH. Why buy? Even with 20% down it is way cheaper to rent per month and you dont have to worry about losing your down payment or ending up upside down in the house.

Dude, I'm not going to watch a video rant.

Summary?

It's a good thing we have these no-knock SWAT raids to prevent someone flushing a marijuana plant down the toilet right?

Gah, what idiot judges approve these warrants? Oh right.... Texas.

Vicente says

Gah, what idiot judges approve these warrants? Oh right.... Texas.

Not just Texas or even close. Police departments all over are going to a policy of using a swat team for all felony arrests, even things like check kiting, fencing, credit card fraud, etc.. Good way for even more cops to get killed. http://www.offthegridnews.com/2014/02/08/swat-team-invades-innocent-familys-home-for-credit-card-arrest/

hrhjuliet says

I don't think I have it bad, I think a whole generation of young families have it bad. I think the system is a mess and the inflated housing market is a mess. A lot of my generation live with their parents, but not because they are dependent, but because they have no choice. Both parents work at decent paying jobs in most cases and can not afford the insane rent around here or a mortgage.

Then move. The median home sale price in this country is only $192k according to the latest stats (December). The median household income is $50k; the median income in the upper half, i.e. potential home buyers as the ownership rate is 65% and many of those are owned by retirees, i.e. the 75th percentile is making $90-95k. That makes the median house price barely over 2x the median income of the potential home buyers. At less than 5% interest rate, it is not bad at all.

Both parents having "decent" paying jobs yet unable to make rent or mortgage? Why don't they move to some place cheaper? Why did they make a baby and make the baby suffer too?

hrhjuliet says

It is not corrected until it is less or about twice the median income.

That's not likely to happen. The median income is $50k, but the median income in the upper half is $90-95k. There's your 2x right there. Why the upper half? Because home ownership rate has historically been around 60-70%, and many homeowners are retirees making less than median income. So the typical home buyer is someone in the upper half in terms of income. It's highly unlike for median home prices to drop to close to 1x the median income of typical home buyers.

hrhjuliet says

Career mobility is not always about the luxury of changing to a new job. This generation is rarely offered a pension or any incentive to stay in a job. Most of my friend's career mobility is based on downsizing within the company and not their choice.

Pension is a scam cooked up by the unions and the employer pretending to pay the workers. Most of them are pyramid schemes that presupposes that a major corporation would keep taking more and more market share. Well, there's a mathematical limit to market share . . . not to mention the monopolistic/oligopolistic profits can not be maintained over most people's life time for most people (running out of victims).

hrhjuliet says

Except for the student loans, these wouldn't even make a noticeable dent. I went to school on scholarship and choose not to have a cell phone or cable. I know a lot of other people from my generation in the same situation.

Good for you. However, most 20-something living at parents' homes have been the generation that lined up at new iPhone releases, and pay $130+ cable bills every month. Between a $120 phone bill and a $130 cable bill, that's $250 per month, enough cash flow to otherwise sustain payment on a $50k capitalization, or more than 1/4 the cost a median home in this country right now!

hrhjuliet says

Because people realize that it's insane to buy a home ten times your income. If living with family keeps a young couple working two good jobs out of the homeless shelter I have no cause to judge them, or label them dependent.

Consider less expensive areas to buy, and consider renting. Adult living at parents' home is dependent on the parents, regardless labeling or no labeling. Married adults still living at their parents' home? Unless we are talking about something like family farms where the young adults' contribution is indispensable to the parents' living, something went wrong in how the parents raised the young adults.

hrhjuliet says

4. of course, if one is a dependent of the state, collecting Supplemental Income etc. from government aid, then owning a house is out of the question.

People living with their parents are far from welfare leeches. They are often professionals, teachers or other skilled workers.

I was talking about a different crowd, who are actually dependent on the government aid programs, then they are out of the buying pool as well. It's quite astonishing how many people in their 20's and 30's, prime working age, are now on government subsidies.

hrhjuliet says

5.Car ownership rate among the young is also way down.

So what? I have a lot of friends who bike to work? That's a bad thing? I know a lot of couples who have one car between them, seems terribly inconvenient to me, but they are trying to save, so more power to them. We save by not buying much and not having cable or a cell phone, they save by not having a car; when the cost of living is tight, and the housing market is inflated and rents are insane, then it's save or be left out in the cold, literally.

There are plenty cheaper places to rent. Being dependent on walking and biking makes one captive to local high price retailers as well as making many employment opportunities unavailable. The housing market overall across the country is not inflated after the massive corrections that we had. Nor is rent. If you choose to live in a local bubble market, that's your choice. You have that choice because your parents bought their house decades earlier. That makes you dependent on your parents. Fairly simple concepts.

Homeownership? I think they meant to say loanownership.

You don't own a house (oops I mean "home"...sorry NAR) until it's paid for.

APOCALYPSEFUCKisShostikovitch says

America needs ObamaHouse if the Boomers are going to all be able to cash out to Caligulan lifestyles they know they deserve...

This really resonates for me: insurance companies deserve money because they're good people, and so do boomers. And subsidizing the health care of elderly Bob Dylan worshippers - who need help thanks to the extreme pharmaceutical abuse they inflicted on themselves during the '60s (Far out, man!) - does not go far enough. The young should also subsidize their real estate investments.

The boomers are so much better than everyone else, because they all were at Woodstock that weekend, and they all took lots of drugs. The rest of us just wouldn't understand what the Summer of Love really meant.

The only problem is finding enough criminally-insane priapic psychopaths to drill out the rectums of Millenials and Xers who refuse to pay what is owed to the boomers. Prison rape works fine now, but how does it scale to deal with a much larger number of felons? And can we scale up wedding-dress production?

The boomers worked hard, crawling around on all fours at Stones concerts, ingesting whatever came in pill, pipe, or syringe, and diligently worshipping whatever band told them drugs were coolest. Can't we step up and pay these boomers what they deserve? They worked so hard. They patriotically dodged the draft in Vietnam, and then called opponents of Bush's wars "Friends of Saddam". Can't we show our appreciation for them?

Reality says

here are plenty cheaper places to rent. Being dependent on walking and biking makes one captive to local high price retailers as well as making many employment opportunities unavailable. The housing market overall across the country is not inflated after the massive corrections that we had. Nor is rent. If you choose to live in a local bubble market, that's your choice. You have that choice because your parents bought their house decades earlier. That makes you dependent on your parents. Fairly simple concepts.

. You are very out of touch with the current situation, and with the reality young families are facing. I am not living with my parents, that is an assumption you made by the conversation. I have many reasons for living in this area, all of which make it hard to move without causing harm to my immediate family and my extended family. Your picture of reality you have painted for yourself may be comforting, but it is far from the truth. Housing prices have been historically about the same; there have been small ups and downs, but all within about twice the median income. It has been that way for generations. People can throw out all of the emotional arguments they want about how this generation deserves to live hand to mouth with two professional jobs, let them suffer, and all their blah, blah, blah, but it doesn't dispute history or the numbers. The numbers for the last decade have seen the average home falling somewhere around ten times the average income. The boomer generation, if they were honest with themselves, like my father, would admit that they would have felt it an injustice to have to pay for a home ten times their income, and at the very least found it risky, or even stupid. They would admit that in most cases they would have felt it was a horrible situation to have both parents work. This generation has just as many selfish citizens with a sense of entitlement as the last, and just as many hard working savers as the last generation, the difference is this generation is being asked to pay ten times the amount for a home, with a more unstable job market, less jobs left in the States in general, less benefits, and to survive a family has few choices beyond having both parents work. As my dad would say, "no one is minding the store" and it is not a wonder why kids have so many issues today. The truth is that the current generation can not have the quality of life their patents had unless they are in the top 10%. Fairly simple concept.

hrhjuliet says

You are very out of touch with the current situation, and with the reality young families are facing. I am not living with my parents, that is an assumption you made by the conversation. I have many reasons for living in this area, all of which make it hard to move without causing harm to my immediate family and my extended family.

So does almost everyone else living in the area. There is a reason why Fillet Mignon is more expensive than ground chuck: supply and demand. I'd have a hard time believing your living an hour away would cause actual harm to your extended family; heck, it's hard to believe all your extended family live within 1hr drive away from each other. An hour drive is the distance from San Francisco where an apartment cost over a million, to Tracy, where a couple years ago half a million could buy a dozen acres.

hrhjuliet says

Housing prices have been historically about the same. There have been small ups and downs, but all within about twice the median income. It has been that way for generations.

That has not been the case ever since the beginning of the fiat money regime. Here are some hard numbers:

http://www.census.gov/hhes/www/housing/census/historic/values.html

Median home value not adjusted for inflation:

2000: 119,600; 1990: 79,100; 1980: 47,200; 1970: 17,000

http://www.davemanuel.com/median-household-income.php
Median household income not adjusted for inflation:

2000: 41,262; 1990: 28,506; 1980: 16,542; 1970: 7,651

So the ratios are:

2000: 2.89; 1990: 2.77; 1980: 2.85; 1970: 2.22

As you can see, the ratio has jumped from somewhere around 2 to somewhere around 3 since the 1970's.

hrhjuliet says

The numbers for the last decade have seen the average home has been falling somewhere around ten times the average income.

It's never been close to 10x Average income for the country as a whole. It is currently standing at less than 4x Median income, which is lower than Average income.

The ratio goes up when interest rates go down. The fiat money artificially low interest rate causes the asset prices to be bid up.

hrhjuliet says

As my dad would say, "no one is minding the store"

The real reason is actually that there are too many minders. All the minders have to be paid, at the expense of normal productive workers.

Let's not fight boys, I think you two have more beliefs in common than you both believe. The truth is with both your arguments. We have a government that makes decisions based on short term numbers to keep the two parties reelected. Common sense and the future stability of our republic are never a consideration, and this sick behavior is displayed by both political parties in power. The Republicans and Democrats are really so similar that it's frightening. The Republicans bailout and give welfare to corporations and the 1%, and the Democrats bailout and give welfare to the poor and addicted. How about not bailing anyone out? Both parties are thoroughly corrupted, and when anyone like Ron Paul runs for office the two parties band together and run him down. They fight on camera, but the two parties are clearly bedroom buddies. There are few good Democrats and a few good Republicans, but the majority in both parties need to be overthrown. I also think the media needs a lot more voices. There is no such thing as the liberal media or the conservative media, only the corporate 1% sponsored media (Fox being the worst) that feeds the public garbage and keeps the populace in ignorance while they blindly support a political party like it's a sports team. Never vote by party, but by person and policy.

My brother is blind and I am his conservator. He needs to stay where he is at. He is independent, to a degree, because he knows his way around by memory. It would be traumatizing to move him at 56 years old and never having lived anywhere else. He would become a complete dependent if I moved him. Not to mention my mom dying of early frontal dementia. Yes, my family all lives within thirty minutes max. You assume a lot and your numbers are fuzzy at best. The reality is simple; when homes are back to twice the median income we will have healthy market. I will feel like this country is on the mend when I see jobs return to the States, people buying less useless crap, parents able to make the choice to have a parent stay home with their children, less bailouts of every kind, homes twice the median income and people out volunteering more. Those are the signs of a healthy future.

Reality says

The ratio goes up when interest rates go down. The fiat money artificially low interest rate causes the asset prices to be bid up.

This I agree with.

I also 100% agree!

E-man says

Sad.

Indeed.

I think you both have so many intelligent and thought provoking threads and comments. Why must you two fight? It's boring.