patrick.net

We’ve had trolls in the past who went so far out of their way to derail threads...

This is why we have rail-less threads - impossible to derail. ;)

Owneroccupier Says:
Girgl,
when you experienced the German property bubble, were average German homebuyers heavily leveraged in their own personal finance?

Well, the issue was that rents were exceptionally high the years before the bubble popped, to the point where, in 1990, I was told by a landlord that we cannot afford to rent his so-so 2BR condo in a so-so area of Munich. I had just finished my master's degree and had started my first (decently paid) job. The rent would have been about 60% of my after-tax income. He was probably right, but we didn't have much choice.
After a while, we found something equally expensive where the landlord had no problem with our rent/income ratio.

Rents stayed high, but mortgage interest rates dropped below 7% in the early 90s, and house prices went up accordingly.

In 1994, the buzz about folks having moved up from one to two to three bedrom condos to a house just through the magic of appreciation was becoming louder and louder, and so we looked at buying. As luck would have it, our landlord wanted to sell the condo we were renting, and offered it to us first.
After doing a bit of research, we found that 1) we needed 33% down in order to qualify for a mortgage, 2) our parents and my employer would help us get there and 3) our PITI would only be about 10% more than the rent.
So we bought, right at the top.

Fun fact: the rent I'm charging my tenant today is only about 20% higher than what I paid myself in 1994 for the same condo.

To answer your question:
I don't think anybody was have been leveraged in Germany at all. Banks were and still are very conservative with their money over there. I don't think that zero down was ever an option, and 20% down was considered risky. Probably still is.

I was in Japan in 1990-1991, and based on my expereince, I never saw an average japanese as leveraged as an average American middle class. The Japanese companies were in deep doo doo for property flipping, but property flipping was very rare for an average Japanese family, the younger generation just couldn’t buy a home, Neg-am, No-money-down was unheard of. The most creative Japanese mortgage loan was 100 years in duration, and the 100-year mortgage deserved a lot more sound bytes than its true market share (No statistics, but I believe it to be below 10% of the total loan share). On top of this, Japanese are obsessive savers, they never let their annual savings rate get below 5%.

That’s why I think what we are about to experience in this property market will be quite unprecedented.

America is the land of opportunity.

jeez, let's bowdlerise bap's post some more... selective editing!

I thank some members. I wish to name no names for fear of inciting unhealthy feelings and karma.

D.S.,
That is a huge insult. I do not code for living, although I am a first-rate artist on operating systems, computer architecture, networks, computer vision, computer graphics, computer security. Coding is a blue-collar job. I write code when I feel like it and when I have some great ideas to demo to my directors and when I do not trust others to do it. To me, coding is of experimental nature. It's play. I leave engineering to others, although I have the capability of a first-rate engineer, actually better than the guys who wrote Windows and Linux. I am NOT kidding. You have to believe my words.

Let me repeat. I do not code for living. I am not a programmer. Get it??

I think the New Yorker critic article about Whole Foods is quite a good one, it covers all, or most, of the bases quite fairly. however, rather than being a criticism of organics, it's more a criticism of creeping corporatisation and the PR machine. the 14x wage multiple limit of WF is about equal to the outer extreme of most australian companies tho, which shows a relativity -- the US is alone in regularly having wage multiples in the 100s, the rates are much lower in EU and elsewhere. maybe it's a case of 'all business corrupts, big business corrupts absolutely', although their stuff is still certified organic and they presumably don't dump toxic waste into the river at night. if their stuff is overpriced because of fat executive salaries, you would think that many enterprising small stores would be able to flourish by offering something similar at lower prices in the same street, and possible even commence a cheaper rival chain for purchasing power. interesting points about the 'externalities' of large-scale fertiliser-based agriculture too, i.e. toxic blue-green algae blooms etc... caught between a rock and a hard place. it's a very postmodern view of the situation - 9/10

I can see certain members here make this place look like a prison. Bap33 certainly passes off as an incalcitrate inmate. Bap, this is a compliment.

yeah, alright, GC. you're definitely showing some manic and other signs though. people are attempting to cut you some slack, but you're digging a deeper hole...

D.S., what did I do wrong again?

delete all of them, heh

i could equally well complain about astrid or randy, sqt. the fingerpointing goes round in a circle, and nobody appointed anyone grand arbitrator, although some people think they can just name names and start adjudicating out of the blue, or that their prejudices override the next guy's because they whinged first. there are plenty of of people being complained about, so why not show some courtesy yourself. this is just the nature of an open slather blog. GC doesn't seem to be aware he's making some unusual comments.

Huh? Unusual comments? Which ones?

Wait. Beside Randy H and SQT, who else has editorial power here?

Back to serious topic: Housing.

SeattleDude said earlier today that he saw signs of slowdown here. But I beg to differ. I've been checking out nice neighborehoods in Capitol Hill and Green Lake. There are very few for-sale signs. The supply is very tight. It's possible that the RE market in the Seattle area may have another year or two of excellent growth.

SQT, Thanks.

delete those too. and the previous 11 posts back to girgl. except GC's serious topic one and the WF review, it took a while to write. or as you like... :mrgreen:

anyone notice problems with the lack of a pvt messaging facility?

Randy H,

I suspected much of what I shared regarding re-negotiating fees would be review for you. Still, they merit repeating. We could all use a "pep talk" from time to time. Since all institutional clients tend to view all money managers as from the "same cut of cloth" they gloss over your track record and accomplishments and frame the debate as one over THE FEES! Since they figure long term we're all about the same anyway the way they make their money is by getting you to agree to come down on your fees. Frequently it is necessary to ask for a "bump" even though you're pretty sure you won't get it as a defensive measure to let them know that you won't be open to re-negotiating your fees downward any time soon.

Yes, I have spent countless hours "kissing the WRONG a$$! Just b/c the guy is part of the "executive group" doesn't mean he can push your proposal through. What's even worse is that even though you've swayed 5 of the 6 members one "no vote" can put you back to square one or even out of the running. Now, with the fullness of time I spend a lot less time smooching the WRONG hiney (thank God). Cordially thank them for their time then ask them if they will kindly steer you toward someone that CAN make a decision! I hate the way I love it, and I love the way I hate it. Not unlike yourself, it's "the evil that I know".

Garth Farkley,

From where I sit I can survey Blue Heron "fishing" in our creek, an assortment of Ducks, raccoons, chipmunks and more deer than you can shake a stick at! I can't say though that a Bald Eagle is a regular sighting. Cool "eagle cam"!

DinOR,

It reminds me of a line from Field of Dreams:

"Is this Heaven?"

Garth,

Earlier this week I was driving back from yet another futile, unproductive and embarrassing sales appointment and there's this young hawk. We get a lot of them scouring the farm fields between Mt. Angel and Silverton. He's swooping and circling and then out of the blue he goes from doing about 70 mph to a dead stall in mid air and then with wings outstretched he decends at a rate that exceeds gravity, picks up a young garter snake! Why can't I be more like that?

SQT,

Can you remove my racist comment. I checked the backlogs and I didn't see a specifically racist comment from Bap33. I may have mentally confused him with Sunnyvale Renter.

Bap33,

I apologize. You're not shown to be a racist, you're just shown to hate everything to the left of you.

DinOR,

Your description of big corporations sound remarkably like the Chinese Communist Party. Some Westerners assume they can directly deal with the manager, but they really needed the approval of the local CCP head. I guess pinheads flock together, like Canadian Geese, or something.

Grateful Coffin Says:

"I thank some members. I wish to name no names for fear of inciting unhealthy feelings and karma."

"Let me repeat. I do not code for living. I am not a programmer. Get it??"

Well, yes. But it took me a while.

At dawn I went outside and sat naked on a rock eating a bowl of Grape Nuts cereal while contemplating your words.

As the birds sang and crickets chirped, and the first lambent rays of the glowing morning sun reached skyward, I got that "Aha!" experience.

You don't write code, but you are a master coder. You are also a spiritual master of whole wheat toast, stone ground corn for Tostitos, and alfalfa based macrobiotic spirituality. A true child of the spheres working on astral planes of Windows and Linux-caliber computer geekdom...

Yawn...

You've got to get up earlier than that if you think you're going bullsh-t the people on this site.

Just noticed a few trends locally here in OR.

I don't want to go so far as to say they are "alarming" or "disturbing" more..... telling I'd say. On WED our local paper comes out and the Coldwell Banker RE insert consisted almost exclusively of NEW homes. Now, to be fair, this little publication has been dominated by "new construction" listings for some time. But it always had plenty of older inventory to thumb through as well. Now? Out of 8 pages you could count the older homes (the ones you recognize from last 9 months) on one hand! Additionally they have completely dropped the language of "2 years new!" "Built in 2004". "Just completed in 2005". "Still time to pick your colors". Gone. No more. I guess if it looks new, it IS new! What's up?

Here's my guess.

Given that most all of the listings that have actually sold here in the last 9 months or so have been "new" the builders now have the leverage to to tell the RE firms how to run their business! Over the last year we have written out checks to you totaling over 500K (or whatever) and we want the lion's share of the "ad space"! We want you to dedicate your agents time to moving OUR inventory, not mom and pop homedebtor's!

And the firms are listening. They reason; "Why throw all of those dollars at fickle "homedebtors" with little or no "wiggle room" to come down to a price where we might actually be able to sell it?" Why deal with FB's that have unrealistic expectations? Why pull your hair out explaining away the shortcomings and obvious flaws of an "older" home on a busy street? Why have fickle income streams b/c homedebtors still think this is a seller's market refusing to do even the most necessary repairs. Why deal with the liability of a heating system on it's last legs or a water heater gone kaput? Who needs Ma and Pa Homedebtor PERIOD?

These RE firms need to look out for themselves and what ultimately will ensure their own survival. They've seen the future, and Ma and Pa ain't it.

astrid,

I am so flattered that you would be left with the impression that I call on Fortune 500 companies! (I wish). Oregon has but a handful of noteworthy players and their retirement plans get solicited from major players back east (not a "work at home" independent). It might have been nice to leave the "regulars" here with that impression but I'm always careful not to misrepresent myself. The truth is that my sweet spot is employers w/ 10-50 plan participants. So I mainly do battle against third party administrators and other independents. Woohoo!

In the past (as a firm employee) I have called on major employers and my experience is that it is every bit as bungling as you describe the CCP. Sorry, but it's true. In my position, we can still go into the backroom, puff on stogies and "cut a deal". I kind of like it that way.

DinOR,

I can certainly see that. Your deal cuttings sounds a lot better than endless calls to an endless series of pinheads.

astrid,

Thanks but there are still plenty of calls and plenty of pinheads. I was curious though, was there a "system" problem? There were no posts for about an hour, or are my posts really that boring?

Anyway, not to "bump" my own post but has anyone else seen evidence that your local RE firms seem to be abandoning Ma & Pa Homedebtor in favor of the promise of higher volume (lower margin) builder inventory? George or anyone else care to weigh in? In the future I promise to insert references to gladiators and domination in an effort to "spice things up a bit"!

Hmmm,

Anyways, I realized that my last comment may have just offended all the money people out there (AKA the ones who may one day hire me), so I need to emphasize that not all corporate accountants, tax lawyers, etc., are pinheads. Only pinheads are pinheads.

Okay, now I've permanently offended and alienated the pinhead (don't confuse us for coneheads!) population.

DinOR,

Builders certainly seem willing to offer the agents more. I've heard quite a few 4% and bonus offers to buyer's agents. Ma and Pa home flippers are too cheap to offer those sorts of incentives. So it's no surprise that the realtor dollars are going towards selling what'll get them the most money.

So anyway I was on my way to the next futile, unproductive and embarrassing sales appointment and while I was rumaging through my jazz and blues cd's what do I come across? A "Best of Adult Entertainment" audio CD? Well, suffice it to say when I arrived at the office I was eager to check out the new "talent" at the receptionist desk and let's just say I was not disapointed! When "Sue" mentioned that my meeting had been cancelled and that there was no one else there for me to talk to but her........

Is that better?

:) I'm holding out for the milk delivery man and Jake Gyllenhaal.

Uh, thanks for the input.

There wouldn't be anyway I could get that last post deleted, would there?

Just kidding! It's hard to compete with the ahem, preferences of ancient Greece and "chef quality" ginsu knives when you're "just a sales guy" with a lower middle class upbringing. I'll go back to being just plain old DinOR if no one minds.

Uh, so how bout those White Sox heh?

George,

Some here have speculated that it's not so much that gold has risen but that the dollar has slipped? Any comment on the alleged realtor "abandonment" of Mr. and Mrs. FB in favor of "commercial production"?

DinOR,

If my choice of desert island companions were you, Jakey, or the milkman, I'll take you. We can plot out a pyramid scheme or a reality show while waiting to be rescue.

SQT,

True enough. Actually, I too find Jackman to be much more attractive and a better actor than Jake Gyllenhaal, but somehow I got myself stuck on that Gyllenhaal conceit.

I probably don’t need to mention this, but gold hit a new 25-year high of $727 this morning.

Go Go Go!

I am not happy. It is going up too quickly. I am not able to accumulate fast enough. :(

Must keep buying. $725 is cheap.

NOT INVESTMENT ADVICE

SP,

I was just making it up. There was about an hour between posts (which usually only occurs between 3:00am to 4:00am PST) so I just threw that in there for a goof. I've made commitment to all here that my dry, almost reserved commentary will resume as before and I think it was well rec'd.

astrid,

Me and you kid, me and you. It's funny that you mention that b/c "Lost" is the only non-financial show I'll watch! I would have to admit though that I would be the castaway that everyone gave up on. Running a "still" and selecting just the right coconuts is demanding business! Mysteries? The meaning of life? I've already found it and it will be ready in about a week. Mrs. DinOR HATES the show though.

I've got 2oz of gold Eagles and 60oz of silver eagles in my '90s Honda. Apparently they're worth more than my car. Anybody want to make an offer before I take them to the coin shop?

Can one of you super savvy financial guys riddle me this, why when the FED rate was 1% or so mortgages were 5% or so, a 4% spread. Now that the FED rate is 5.25%, why are mortgages only 6.6%, a 1.35% spread. Who is taking the hit?

Surfer X,

You have struck a nerve sir! I was wondering the same thing at about 5:00am this morning! I have NO logical explanation and there aren't any straight shooter type mort. brokers that I know of so let me make a few calls. I'd been wondering the same thing myself. I mean wtf?

The spread on ARMs has stayed the same (i.e. ARM prices have increased with the FED rate):

http://library.hsh.com/?row_id=93

But 30-yr fixed have not moved up:

http://library.hsh.com/?row_id=92

Basically, this is the bond market saying they expect a recession and a future drop in rates. That or else it's just foreign banks buying MBS without realizing / factoring in principle risk.

milk delivery man and Jake Gyllenhaal

MMMMM cowboy love, Astrid do you have chaps?