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This is why I think that upper middle class areas will actually be hit HARDER by the crash.
I also suspect that "prime areas" may get harder than "meat and potato" nabes because status is very seductive, and social climbers may pick an I-O loan over a fixed if it gives them better scenery or bragging rights to their circle of friends.
Whatever surfer-x, I was on this board way before you ever showed up with your profanity laced tirades. I’ m in the same boat as most other people on this board; frustrated with California in general and with BA RE specifically. So save you venom for Marina Prime or some other REAL troll.
Sorry, but you didn't answer the question, for completeness sake, does your outfit sell MBS and how much will you lose when RE tanks.
Well then why are all these $700 plus shitboxes as you call them still selling in the BA??
and just for further clarification
Re: “Am I missing something, because to qualify for a 650K note you need to make in the high 190s or so. HaHa’s bullcrap notwithstanding, how many people are making that much coin? Not many.â€
Well then why are all these shitboxes as you call them still selling in the BA??
So according to you and HaHa, everyone in the BA is making 150+. Sorry, but this plather has gone way beyond annoying
What do you call a poorly built stucco house, one built with one purpose, to flip in two years exactly for profit? Your bullish attitude smacks of someone with something too lose, ie a troll. You seem to think that the amazing increase in BA real estate is somehow bouyed by increasing prices and sales. Simply not true. Furthermore do profanity laced tirades bother you and your imaginary friend?
Again, just for clarification, what portion of your business is derived from selling folks MBS? Oh sorry, that's mortgage backed securities.
Also (more on this later) there really aren't that many two-income "power couples" out there.
Think of all your friends from work. Are they all married to people with an equal or greater income? Most of my friends aren't; their spouses have ordinary jobs, there is only one professional even though both the husband and the wife work.
Moreover, a good many two-income couples become one-income couples when the kids arrive. My wife is a lawyer too, for instance, but she does not work.
Second, not everyone manages to keep earning a high income. One of the spouses might decide to start their own business, or get a government job, and either one of these things generally involves a significant pay cut, at least initially.
Yes, the two-income couples are a force in the market. But I think the impact these people have on prices is easily overstated.
On the subject of erosion/destruction of the middle class --especially in California-- I think it's important to make a distinction between the current credit bubble and longer term demographic shifts, regardless of where your convictions lie:
1. Historically recent (and temporary?) massively pro-credit/debt expansion policies on a national level:
--(since 2001) Fed's extreme easy-money / negative real rates policy.
--(since late 90s) Historically unprecedented levels of GSE and private mortgage risk-underwriting (MBSs/CDOs).
--(since 1997) Tax incentives that reward RE speculation ($half-million 2-year 2nd home capital gains exemption, 1031 exchange liberalisation, etc.).
2. Longer-term demographic/political/economic shifts that have been occurring in CA and border states over the past 2 generations or so:
--Massive influx of uneducated, low-skill, quasi-slave labor immigration mainly from S. & Central America with high birth rate.
--Net out-migration of working and middle-class Americans (being replaced by new poverty class immigrants).
--NIMBYist anti-development politics and mentality, resulting in artificially constrained supply in CA, UBLs, "greenbelts", longer commutes, etc.
Both sets of trends correlate highly with higher housing prices and lower affordability, but the latter are longer-term (and possibly permanent) demographic shifts, while the former may not be.
Just take 2 married immigrant engineers. $250k combined income easily.
Ahhh Robert Campbell and the power of myth. The vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast vast majority of engineering do not, I repeat do not make this kind of coin. Sorry but it is the truth. Just like looking at your car and deciding that because you drive a BMW everyone does. Besides when you roll down the prominade there are plenty of BMW's thus proving your point that most people drive BMWs. The salary surveys simply do not support the propoganda of high engineer salarys. Companies simply cannot afford to pay the average engineer 150K.
Pretty intense thread.
I was in self-doubt till the beginning of this year. I thought there was bubble, but I was about to give up. There was enough theory on this and other boards about why the house prices should correct. But there was no evidence in real life that I could find. Zilch. Nada.
Now I see evidence of the beginning of the crash all around me. I see the change of psychology. I see change of tone in RE agents speak. Not only I see high inventory, I see price reductions, and house not selling even AFTER the price reductions.
This is exactly playing according to the script. What else do people expect ?
I am sick of hearing guests on CNBC claim that we're in a buyer's market. It makes me want to spit.
They've just spent two years jacking up prices. If that's not a seller's market, I don't know what is.
I'll know a buyer's market when I see one.
This is exactly playing according to the script. What else do people expect ?
It is happening. I just do not want everyone to be too excited over the coming correction. It will come. We should be smiling. But we will save the laugh for later.
Just for clarification, when people on this blog speak of engineers and their high salarys they mean:
1) Mechanical Engineers
2) Civil Engineers
3) Chemical Engineers
4) Electrical Engineers
5) Materials Engineers
7) Petro Engineers
8) Aerospace Engineering
9) Biomedical & General Engineering
10) Environmental Engineering
11) Computer Science & Software Engineering
12) Industrial & Manufacturing Engineering
Give up? Ok the answer is 11) Computer Science & Software Engineering, if working the current "hot" area and are willing to work 60+hrs/wk, and 4) Electrical Engineers if working the current "hot" area and are willing to work 60+hrs/wk
Red Whine Says:
The choice is obvious. Spend and enjoy. When you buy a memory by going to a show, taking a weekend trip, etc., you have “banked†something that cannot be deflated into non-existence. It was — and hence cannot be un-done.
True, but what if the government invents a memory-wiping device? They could then sell us a device for recording/restoring our memories (to protect us from the government's own memory-wiping device), which of course would be enormously expensive --requiring a negatively amortizing adjustable-rate 50-year loan. Of course, finance capital would be no problem --China, Japan, Korea, et al will gladly loan us the money by purchasing MBS (Memory Backup Securities). :twisted: :lol:
At least Intel is honest, "how many hours do you expect", reply "plan on 50, sometimes it's less and sometimes more".
This at least I can respect. Other sweatshops forget it. Not working 60+ then you'll get the crappy projects and your work will get taken away and given to those willing to "pull their weight". Whoops, what's that? A revolving layoff, not to worry, they only get the "dead wood". Nice. Enjoy our cool aid are we? Wake up fools, your lifestyle sucks, do you even know what lifestyle means? No fool it isn't driving your leased 5 series to your cube farm and participating in weekly blame sessions.
But we will save the laugh for later
Yes: at least one satisfying cackle reserved for that once steely-eyed flipper, who's now chasing a cigarette blown down the street. :twisted:
They’ve just spent two years jacking up prices. If that’s not a seller’s market, I don’t know what is.
I’ll know a buyer’s market when I see one.
Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.
Red Whine, kindly recommend a nice red in the 2-300 price range, aged, with a long tail and subtle tannins.
You like clarets.com?
>>Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.
Well, I'll agree that all those conditions are met, and that the sellers may indeed be miserable because they've taken a second mortgage and spent it on the good life.
But just because the seller is miserable doesn't mean a buyer would be happy.
While it is big fun thinking of the boomer hoard when the lights get flicked on and they realize that the 24 yo trophy wife has turned into a 50yo hag, the simple fact of the matter is they are likely to be too coke'd up to even care.
Peter P Says
It is happening. I just do not want everyone to be too excited over the coming correction. It will come. We should be smiling. But we will save the laugh for later.
Can't argue with that !
Here's your Google orb of influence:
http://money.cnn.com/2006/06/20/technology/google_bear/index.htm
skibum WHAT? Google is complety re-contexulizing the ebusiness environment. Whoops, sorry, that was Razorfish. What does google do again?
Sir Surfer-X, Lord of Profanity Says:
While it is big fun thinking of the boomer hoard when the lights get flicked on and they realize that the 24 yo trophy wife has turned into a 50yo hag, the simple fact of the matter is they are likely to be too coke’d up to even care.
Dude, I just about peed in my pants from laughing so hard when I read this.
If anyone debates that $80 is too much for an engineer; I know for fact that that agencies charge over $80/h for ENTRY LEVEL people.
Ptiemann,
I think we've already been over this before ad nauseum. The vast majority of Bay Aryan households --much less all Californicators-- do not make $200k or even $150k (1 haha). I work for an IT department in a large company and our entry-level QA staff don't make anywhere near $80/hr. They exist of course, but you are talking about a very small, select group of high-skill people.
http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty.htm
Kobrick said that Google clearly has a great product, but that alone isn't enough to make it a good stock
Funny I cannot recall for the life of me buying any of Google's "products".
Last year, around same time. Everyone believed RE could only go up. Crash ? Huh. Hard landing ? Are you nuts ? The worst case was not soft landing, but a permanently elevated plateau.
Fast forward 12 months. Where are we ? Exploding inventory. Prices are not going up, no matter what the median indicates. Houses go "below" asking. Who thought that could happen ? In BA ? What happened to all the rich people ?
Just 12 months. Very short time. Very very short time. And interest rates are STILL historically low. This was a mania. It is ending on its own. All the other things HARM mentions can only add to the downward trend.
No bear market ends in a short time span. The trend continues till everyone is convinced that this is how it will be forever. We have just begun the bear market.
How long will it go ? How will it end ? Who knows. But I plan on being in an economic downturn for a long time.
If anyone debates that $80 is too much for an engineer; I know for fact that that agencies charge over $80/h for ENTRY LEVEL people.
I do not know any agency that charges $80/h and pays $80/h. What kind of charity is that?
If I charge $80/h I will only pay $40/h or I rather close my doors.
Here’s your Google orb of influence
Should we say Google in Retrograde?
Not to sound mean here.. but as someone making 50k and now hearing from people that seem to be making 200k or more here, on other sites, and in the papers now bitching that they can't afford, and what an outrage it is, well.... welcome to the club! I've been in it for a hell of a lot longer than some who make 2,3, and 4 times as much as I do. Actually, hearing so many people here that make a shitload of money concerns me. That means as soon as the prices start coming down... KABOOM! tons of people who are doing very well, who've saved up, and are in a better position than I am, even though I've been saving my ass off for years. A person making 200k can save more than me in 6 months than it took me 5 years to save. depressing.
ptiemann Says
Someone wrote:
Re: “Am I missing something, because to qualify for a 650K note you need to make in the high 190s or so. HaHa’s bullcrap notwithstanding, how many people are making that much coin? Not many.â€
Just take 2 married immigrant engineers. $250k combined income easily.
The are not making any more "immigrant engineer couples" ! Those who existed before, have already bought. The newer ones are very happy earning fabulous salaries in India and being "nouveau rich" there.
A person making 200k can save more than me in 6 months than it took me 5 years to save. depressing.
True, if you are thinking of a person just like you but making 4X the loot. But let me assure you most if not all BA jackasses making 200K plus are tapped to the max. Know what goes good with your new 5 series? Well thats a 5K mt bike that you never ride. What goes good with your uncomfortable but stylish danish modern sofa? Well a 50" flat screen, nevermind that there is nothing to watch.
@WW2,
Ignore the "everyone here makes $___,000,000.00 a year" nonsense. Census numbers (plus personal observation and common sense) should have disabused any non-troll of that foolishness long ago. I put that myth right up there with the "wage inflation will bail us out" crowd.
>>A person making 200k can save more than me in 6 months than it took me 5 years to save. depressing.
They can, but do they?
Ignore the “everyone here makes $___,000,000.00 a year†nonsense. Census numbers (plus personal observation and common sense) should have disabused any non-troll of that foolishness long ago. I put that myth right up there with the “wage inflation will bail us out†crowd.
Perhaps you would be happier back in Russia you Amerika hating fiend.
To BA Or Not To BA Says:
I was in self-doubt till the beginning of this year. I thought there was bubble, but I was about to give up. There was enough theory on this and other boards about why the house prices should correct. But there was no evidence in real life that I could find. Zilch. Nada.
Now I see evidence of the beginning of the crash all around me. I see the change of psychology. I see change of tone in RE agents speak. Not only I see high inventory, I see price reductions, and house not selling even AFTER the price reductions.
This is exactly playing according to the script.
What else do people expect ?
_____
Very good, positive post. It makes me happy to see that you are observing the unfolding of a housing crash like the unfurling petals of the Golden Lotus Flower.
What else do people expect? Hmm...good question!
Well, what I'd like to see...what I expect to see is a growing anger...a smoldering rage that finally expresses itself in explosive, medieval vigilante sort of ways as you see mobs of angry folk, carrying lighted torches, hoes, brooms, and shovels, chasing their naked realtors down the street, screaming, "kill the lying, little rat! Kill that motha..."
Greg,
Just remember that my opinions are worth what you paid for them. I think 1-2% deflation falls within the "zone of error", and is not sufficient to constitute real price deflation to be worried about, so long as it's not protracted for too long.
Michael Holliday Says:
Well, what I’d like to see…what I expect to see is a growing anger…a smoldering rage that finally expresses itself in explosive, medieval vigilante sort of ways as you see mobs of angry folk, carrying lighted torches, hoes, brooms, and shovels, chasing their naked realtors down the street, screaming, “kill the lying, little rat! Kill that motha…â€
That's just more of the same, though - people refusing to blame themselves for bad decisions and finding a scapegoat. This is already happening in the media/NAR publicity machine, with all those claims that either the Fed raising interest rates are the main culprit in the slowing market, or that all the bubble stories are just a "self-fulfilling prophecy." What a joke.
Micheal Holiday,
As mentioned yesterday, the boycott housing site is evidence of a vein of people that all feel the same.. which is PISSED. The visitors seem to be people that have had some pent-up rage for some time now, as evidenced by some of the messages in the visitor's section. Mob mentality for sure.
I think that this is one life-altering event that doesn't get discussed much amoungst those that feel helpless about it. If more sites like patrick, boycott housing, and Craigslist can eventually harness this mindset, then the battle is already partially won. Then again, I assume the amount of people actually pissed enough to look for sites that discuss it is fairly small, so who knows?
Where I live in Sunnyvale and Mt. view areas there still is not that much inventory available. YES, it’s higher than what it was but not materially so to get sellers to panick and lower prices materially.
These places are within the orb of influence though.
Blogs are a very powerful media, and we should take comfort that our form of information and debate is growing in influence and importance.
However...
We should not delude ourselves about the relative size of "us" versus the "sheeple". We are still a very small majority compared to the population of those who buy and sell homes. I assure you many many times more people are influenced by those stupid "nasty wife" ads than by all these blogs combined. This is why, if we want to have the biggest impact possible, we need to remain credible, self-challenge our own community's most objectionable and outrageous claims, and cooperate when the "mainstreamers" pick up on our torrents.
It seems unfair that some jackass talking head gets to have his/her staff dip their big toe into a world we've all worked hard for years to create, and then present it to the masses as if they are the fount of knowledge. But life ain' fair, it just is.
I've been pondering ways we (all the legit bubble bloggers and their blogs represented here) can get more exposure to big media.
Any ideas?
$95k is only about the median income in Santa Clara. So… a lot of people are making a lot more.
If $95K is the median, then half are making more by definition; the amount by which they exceed median is not revealed by this number.
Fyi for burbed, hellboy, etc.
When quoting a previous post, it's helpful to offset it using italics tags:
<i> Quoted text here. </i>
Diplays as: Quoted text here.
This makes your responses much easier to distinguish from the quoted text.
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Randy H Says:
June 18th, 2006 at 10:46 pm e
Similar posts from Ben Jones' blog:
Comment by Brandon
2006-06-16 15:07:53
Comment by groundhogday
2006-06-16 15:46:47
Have CA specuvestors fled their own (now depreciating) RE market to ply their evil trade in "fly-over country"? Will they do for the Midwest and South what they did for their own state (f@ck over working families and drive prices to absurd heights)? Is there still enough time to warn people in those regions, so they can organize lynch mobs and destroy the flippers before they wreak too much damage on their (still) affordable communities?
Discuss, enjoy...
HARM
#housing