By Peter P
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2006 Jun 30, 4:02am
13,713 views 167 comments
The inconvenient truth about human greed, its consequences, and possible remedies.
Is Global Warming real?
Does the Housing Bubble exist?
Is there a Santa Claus?
The truth will set you free (or not).
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I'd rather be a hedonist. If humanity is indeed doomed in its present incarnation, I might as well put off having kids and enjoy myself in the mean time.
Anyone here thought about the housing bubble as the outgrowth of the tech bust + outsourcing + threat of terrorism? I read Tulipmania a couple years back and I recall that book posits the tulip bubble and most other bubbles are accompanies by a sense of social upheaval and insecurity. Thus, the usual social norms and checks are suspended in favor of getting rich quick and the fear of being left behind.
At least the Dutch have a thriving flower bulb industry to show for their tulip bust. I wonder what positive contribution this housing bubble could have to American society.
RE: The state of the blog here, a couple of observations and opinions I have...
* There are a huge number of new readers now that the housing bubble has gone mainstream. That has increased the normal: spam, trolls, newbie questions, etc.
* Arguing the existence of the housing bubble issue has become a bit of a non-issue, so now even the moderators/authors are find themselves at odds over the next level of detailed debate. Hard versus soft landing, liquidity versus inflation, urban planning versus exburbia, etc.
* Those issues used to be related to supporting theories about whether there was a housing bubble or not, and why one formed. Now they're about how to make a better future...a subject on which people will widely disagree.
* Most topics now quickly digress or go clearly off in the weeds after about 10 posts. That's not a big deal, it was always the case. But now the digressions all go to generally the same place: liberals-v-conservatives, people with issues-v-those they offend, anarchists, trolls, troublemakers, drunks-v-anyone left reading.
* The level of name calling, offensive generalizations, and just down right immature nastiness has exploded. I had been trying to get Dave Barry of the Open MLS initiative to write a guest piece here. He declined recently after reading the site and determining it wasn't worth his time. If a guy trying to break the Realtor(tm) cartel in CA cannot find it worthwhile to use Patrick.net to spread his message and campaign for his initiative, then there is a problem.
* Most of our long-time readers and contributors are either gone or rarely participate anymore.
My personal opinion is that Patrick.net now suffers from the fate of all lightly/unmoderated open forums once they get enough readers. The diversity which once created a lot of value has now degraded into name calling and shouting matches and escalating levels of bigotry. Most people have limited time and will eventually decide it's not worth while to spend it here. Call it the firstname.lastname@example.org fate. That was once a very useful forum...until it went mainstream...it is now a wasteland.
astrid, i think the housing boom reflects a retreat from a shaky sharemarket where people realised they could do all their dough, they couldn't trust the system after enron etc, and that individual shares could lose all their value overnight... the security of bricks and mortar beckoned... and low interest rates... and spruikers pushing their $5 000 get rich quick courses -- and residential real estate is easy to understand, everyone lives in a house...
you're right, just as there are even now tulips in holland, i predict you will still find houses dotted around america in 100 years... ;)
Except that most people don't understand residential housing at all. They don't comprehend the nitty gritties of codes, taxing schemes, home owner association rules, school districts, mortgages, debt collections, etc. Unlike stocks and bonds, there is virtually no oversight over residential housing because it was not considered to be a financial instrument.
Furthermore, one of the major points of the current boom, and one frequently noted by DinOR, is that houses built today are of a terrible and will not last 100 years and are pretty terrible living spaces.
I do disagree with the Democratic party's stand on illegal immigration and tons of other things. However, I disagree with the Republicans on even more things. Furthermore, the Republicans are indeed the ones in control of all three branches of government, if they wanted to act, they had the last 6 years to do so. Instead of doing a good job, the Republican leadership has created demonized "lib" strawmen to distract its followers from their terrible record.
So you can vote Democrats (as I do, because I firmly believe it is the much less bad option) or you can vote independent, but I really do believe that anyone who still supports Republican national leadership is not politically teachable. That is, they care more about finding a scapegoat (me) than finding a government that will make their life better.
yeah, agreed to all that. i don't know if they sit down and spreadsheet all the ongoing costs, despite the fact they are treating it like 'a business' or investment. the spruiker at the $5 000 course didn't tell them about any of that. there's no doubt money can be made in holding property, lots of people have done it historically, but the market will saturate before too long, and it's fundamentally exploitative of a pool of renters. some of them will be burnt, some of them may be lucky or chose well. all of them think they are setting themselves up for retirement.
re shoddy construction, although it's really land speculation vs the cost of the actual construction on the land (backed by rents to be gathered), it starts to smack of the stratospheric P/E ratios we've seen elsewhere... that's irrational exuberance for ya....
randy, sorry to find you so maudlin this am ;) i seriously think many of the problems of the site are to do with the liquidity and limitations of the limited (wordpress) blog format -- the threads just go on endlessly, can't be edited, don't require member subscriptions, there are no static areas set aside for the glossary or broad statements concerning the housing boom (such as a dave barry piece), and only patrick's links to provide much evidential substance. the site is barely searchable -- you can only use the limited browser text search feature per page, which crashes as often as not in IE6 due to the length of the page. you have to be physically present when a thread is conducted to make any sense of it, which is more suited to a chat room discussion, even if you edited out the flames and various digressions.
the site needs more powerful software that lets threads be moderated more strongly, for posts to be edited by the poster, and provides fixed areas for research and analysis and significant posts, and probably a chat room for all the ephemeral stuff to be vented. or provides a 'political venting' forum or forums away from the housing discussion, etc. i really think it's half to do with a problem of structure, because people will be people, and it's open slather. i find it very hard to harvest useful links to other sites and blogs because of the above also, you have to sift them from dozens of almost unsearchable historical threads. otherwise, i think it follows the pattern of just about every online community which attracts a bunch of 'regulars', who don't always see eye to eye -- you find similar comments everywhere in the blogosphere. it's an interesting experiment which should perhaps be archived while a new format rises from the ashes like a mighty realtor-crushing, guru-incinerating phoenix... the site i was proposing to do was going to be analysis only, with the option of blogging on the side...
i also find the same 'insights' about the market being repeated over and over afresh in each new thread. these insights could be summarised in one place for reference...
i don't find some of the other blogs which use google blogger to work too well in format either, as they ofnte just post dozens of lines of recent real estate prices for people to gaze at, which is short on analysis and commentary.
before i go to bed, i woiuld like to say i think many of the contributors here are quite brilliant, clearly very talented in a great variety of ways...
while some are left or right (or anarchists), agree or disagree with global warming or urban consolidation theory, they are mostly all put out by the housing boom, and share that one distressing economic factor in common -- it shows both the incredible diversity of views and opinions that can make for an interesting and colourful debate and an interesting and colourful society, but it also shows how the rug can be pulled so equally on the generation Y cohort, regardless of creed or religion. that's certainly something to think about.
p.s. summer temperatures are 30 C (86) in london right now, and 21 C (70) overnight -- global warming's definitely kicked in, and it's time to move back ;)
Well, realism isn't as fun as bitching about how other people blew it. Plus, God Bless America is not a political position, it is an insubstantial slogan. The GOP is supposed to be a viable political party, not an outlet of self express for people who obtain self esteem by degrading people who are different from them.
RE: State of the Blog
Randy H, you have some very good points --and the decisions by Dave Barry to steer clear of us is sadly telling :-( . A similar lack of control and degeneration into childish name-calling and pointless political ranting has ruined the WSJ RE bog. Even so, I am (like DS) not quite so pessimistic about the future of Patrick.net and the scourge of this site's exploding popularity and it's "diversity" of viewpoints.
You argue that threads should be more tightly moderated. I would agree, but of course this will pretty much require FT (compensated?) blog moderators, not the casual PT "volunteer army" we have today.
DS argues that the site requires better organization, format and technology --and recommends a full redesign. I concur. This site could definitely benefit from some static content (similar to Piggington) written by moderators, which outlines the basic arguments, terminology and research, which form the Patrick.net "world view". This could serve as a content "anchor" and introduce newbies to the the basic HB/RE concepts, so we are not constantly forced to repeat the same reseach, terms & arguments ad naseum.
I would also recommend requiring registration (currently optional/only required for thread authoring), which would significantly cut down on the amount of auto-spamming & casual trolling, plus give moderators a more powerful "stick" to deal with the more determined trolls. Not sure about requiring a subscription, though. This might drive away most regulars (as the lack of enthusiasm for the links "subscription" service has revealed).
Perhaps we should summarize our recommendations and submit them to Patrick.
Btw, I'm checking out for the rest of the day. Happy pre-July 4th to everyone!
@newtroll, aka mybelief
Thank you, it is much more clear to me now, I will go put down say 20% or 170K on a house "worth" 850K, my payment will then be $4,991.26 (mortgage) + $850 for prop tax, plus ~400 for maintenance = $6241. But thats ok because property in Santa barbara is only dropping at ~9% or so. It should only take me about two years to lose all my money. Oh but according you and the trollarmy (realtwhore?) it only goes up. Not the case anymore chump. If you are a realtwhore you really should tell the truth as you make money either way. What was the point of your post again? Oh thats right trolls just like attention. Now that you have gotten yours kindly go back to craigslist.
Randy H, sorry for the degradation into name calling but I cannot stomach trolls. I think troll postings should be deleted on site.
SQT I'm with you on the charging but I also feel that patrick has expences for this site and he is only asking for a very small sum, $10. not a big deal. It's worth it to me to get the links as I like to watch the FB's get it in almost real time.
Ok that's all for now, I'm off to put down almost 200K in Vegas, I was going to do the SFH investment in $anta barbara but I would most surely lose all my money, thought might as well get free drinks while I am doing so.
I am not offend-able. I appreciate everyone expressing themselves in whatever manner they see fit. Even if they do sound like an ass.
Knowing almost everything I need to know about everything. I look for insight into which direction we are heading. This affects my decision making. Should I stay or should I go. Will things get better here, or should I move to New Zealand or Australia for a better life. The scraps of truth are derived, not stated. So it is with great care, I sift through the reams of rhetoric to find a modicum of truth. I have an uncanny ability to separate fact from fiction, right from wrong, good from evil. For this I am proud. Not the money or the net worth, but the knowledge of the true value of the asset, tangible or intangible, these are answers that I seek. And you have provided me with that knowledge. For that I am grateful.
No one can accurately predict the future, But some of us can come pretty darn close, even on timing.
OT-One thing I have noticed recently; The Immobilization of a once mobile society; due to falling home prices. Do some people feel like they are prisoners in their own castle? What is causing this, and what does this mean for those who are stuck? I kind of know the answer, but I would like to here how others would express it.
I am a bit pessimistic about the future of this forum, mainly because of the technical & logistical reasons DS and HARM point out. The problem is that Patrick.net has become a destination. A "brand" if you will, and like craigslist.org, we have about 0% chance of succeeding in any attempt to move this discussion elsewhere. We need the patrick.net domain or this blog will not survive as a destination.
I am not a fan of self-administered blog software, even open-source. This isn't because the software doesn't work, but because it's vanilla unless actively modified and maintained by volunteers. Only Patrick has this access to WordPress on this server. Even if he opened access to others, who wants to spend their time modifying PERL or Python code for a blog? Especially when as little as $200 per year buys a high-volume, professional blog site on Typepad; less for Blogger. You'll notice that pretty much every other blog linked/referred to from here is Blogger or Typepad. These other blog platforms offer the functionality DS points out as necessary to maintain any control over the communication forum.
I totally agree on static links and the creation of a mandatory-reading FAQ. We could then prominently link that and when someone new pops in and asks the same old question we just point to the link on the left.
As to the digressions and off-topic conversations, I don't mind this at all and didn't mean to diminish their importance. The problem is that this blog is basically purely serial communication. We hardly ever have even two active threads, let alone 4 or 5. Again, other blogs with better management tools have many active threads going at once. My own has 7 active threads right now. Because of the serial nature of this blog, once a thread goes off topic or down a rat hole it's usually lost. This is what probably drove Barry away: he'd be wasting his time since his discussion would get hijacked after about 25 posts, which would represent about 1 hour.
I still have an issue with trolls and gratuitous offensiveness. I agree with X that all trolls should be deleted on sight, and I'd go further and say all responses to the trolls should go to. They just should disappear so as to not encourage more trolls. Name calling is my own moderation peeve. I usually allow most name calling even in my threads unless it becomes over the line offensive or personal. Sadly, both of these types of flames have become much more common in the past few weeks. I come down hard on my view towards such behavior because I believe it drives away new readers who've just found this forum, leaving us with an ever self-selected group of shouters. When we were small, this didn't matter so much. But I think we've crossed that threshold where it's starting to matter a lot more.
HARM, I'd be very interested in collating these ideas and sending to Patrick. I will admit that I've been authoring less here and I am increasingly less interested in doing so.
Peter P, kindly put down the ohasi and delete the trolls.
MyBelief (The newest REALTOR) to Troll the BLOG Says:
> Surfer-X - Your degrading remarks just show your
> lack of class.
Iâ€™ll try to respond without any name callingâ€¦
> At any rate, the govt subsidizes wealthy homeowners,
> whereas Renters get the maximum pain every month.
We all know that the government allows us to write off home interest payments, but explain how my sisters friends that live down the street from her in San Mateo and pay ~$110K in mortgage payments + ~$20K in property taxes + $5K in insurance and maint. ($135K total) are coming out ahead of my sister who is paying $24K total in rent every year after this big â€œgovt. subsidyâ€â€¦.
> Renters think they are â€˜makeâ€™ money by saving money.
Not spending money and having it available to invest is a sure way to â€œmake moneyâ€â€¦
> Hello? You only make money when you make more money.
> Thatâ€™s why you will always be behind financially.
> You donâ€™t understand.
It sounds like you are new to the business and didnâ€™t learn that real estate can go up in value as well as go down in value.
If a renter invested $100K in US treasuries 6 months ago and needed the cash in a few weeks they would have $102K.
If someone bought a $1mm home in San Franciscoâ€™s Richmond District 6 months ago making a $100K down payment and they needed to cash out in a few weeks they would have NOTHING. With prices down over 10% in the past 6 months they would have lost all their equity and if they â€œNEEDEDâ€ to sell they would probably have to write a check for another $100K.
Real Estate is great when prices are going up by 20% a year but things are and will continue to get uglyâ€¦
FAB, you Sir have earned ~7 patron silver margaritas at my pathetic rental any time you are in $anta Barbara.
Geez, you are all so gloomy about this blog.
From my persective, the demise of this blog would be a good thing. Why? Because it would mean that there is no housing bubble to talk about anymore.
Wouldn't that be a really, really good thing?
That said, the demise should (and in my opinion will) be for the right reason, and not because Patrick decided to charge 5 bucks
correction: when i said member subscription, of course i meant registration. paid subscriptions or 'make a donation' buttons should be entirely optional. i think you'll find that the only people who bother registering are those with a burning desire to say something, rather than casual trolls. casual trolls may still go to the trouble of registering, but i think the impulse factor will be gone.
'patrick.net' is a rather quirky eponymous name for a domain, it's not so valuable a franchise as all that. note that patrick's site is pretty rough, perhaps intentionally so, but it's about as basic and structureless a format as you could get -- could use some 'zhoozhing' in itself. i begged him to add a '#links' placeholder to his media links just so the URL could be sent to various people so they could jump straight to the reports as a resource. it's still really just 1 HTML page. of course, you could offer to buy his domain name for $100 million or so, in the true spirit of internet commodity valuation.
i don't think a blog format or blog software should be the pivotal or opening part of the site, i would maybe work it in as an option. not every type of site should be force-fitted into blogging format, it's just that setting up a blog is a no-brainer that they're so ubiquitous.
there's a whole slew of free open source apps out there for chatrooms, blogs, forums, etc.
when i mentioned my surprise at the rather unwieldy setup at present, various people said they liked the 'campfire' feel of the site, which is great if you're all on at once in the same timezone. but do you want the site to be a worthwhile commentary on the nature of housing booms in the West, or just a parochial, individualised navel gaze of one little town's struggle in the big harsh world? the housing boom is an international phenomenon with politicial ramifications, and i think it's a mistake to internalise all the hurt individually and not try to agitate in the political sphere, and elsewhere.
while it's been fun to post a few opinions on the forum, and it's (very) interesting to see the spectrum of thinking in the US on a range of issues, there's a time cost in doing so, and it's taking away from more serious pursuits, including creating an equivalent local site. further, i'm actually making inroads with local politicians in an election year, and i have to keep the pressure on. the very existence of these blogs and forums in itself is a handy bargaining tool, tho, if politicians get a feeling there is a mounting public backlash against their indifference and inactivity, and that people are wising up to what's going on. i would also think about that in the CA context, although your mileage may vary, depending on the corruption factor and the classic habit of fatalism and individualism in the US (post following on this). california actually has a reasonably progressive set of housing affordability programs compared with here, having said that.
so i will probably wind back posting since it's become a strumming guitars around the campfire pursuit, unless it ramps up into a more diverse kind of site in a technical sense.
so i will probably wind back posting since itâ€™s become a strumming guitars around the campfire pursuit, unless it ramps up into a more diverse kind of site in a technical sense.
Would you like to write a thread? I really appreciate your writing.
The bubble is now ao apparent that I am not longer bothered by dissident views. Why should you let them bother you?
"The bubble is now ao apparent that I am not longer bothered by dissident views."
I'm with you, Peter. I like hearing from trolls. Mostly, they're just cheerleaders with nothing substantive to say, but I like to hear from the dissenters. The idea of silencing dissenters never sat well with me.
Would you like to write a thread? I really appreciate your writing.
that's very kind, especially coming from the zen master of blogging ;) maybe there's one last strum left in me -- altho don't i have to download STUFF and install it for thread management. then think of something to post, hmm...
Dissenter: One with a viewpoint, perspective, opinion or theory which is either opposed to or incompatible with those of the majority.
Troll: An anarchist who seeks to light flame wars for merely for the pleasure of watching them burn.
When someone enters a blog on pet kittens and argues that declawing is indeed a good and justifiable thing to do, they are a dissenter.
When someone enters a blog on pet kittens and proposes that only losers have kittens and winners have puppies, they are a Troll.
@donâ€™t i have to download STUFF and install it for thread management. then think of something to post, hmmâ€¦
You're only half right --no downloads. Wordpress is 100% web-managed, no downloads or installs required. Once you're registerd & ready, let myself, Randy H, SQT or Peter P know and any of us can promote you to author.
this was a conference held last year on affordable housing:
One guest speaker was:
CEO, Bridge Housing Corporation, California
Lessons from the USA for Australia.
Bridge Housing's experience as a not for profit developer and manager of affordable housing â€“ what it takes and what we've learnt.
here's a link to one of Carol Galante's presentations (Powerpoint presentation, 6 Mb unfortunately):
can anyone confirm if the structures used in her presentation are actual affordable housing developments in CA? they look pretty swanky and posh, more like upmarket developments...
Those definitions look great on paper, but it seems like ANY housing bull that posts here or on Ben's board gets ends up wearing the "troll" hat.
In fact, I even like the ones that post tiresome posts like "all of you JBRs are just afraid to jump in -- you just have to buy what you can afford and never look back" -- I think these types of posters allow us to keep our fingers on the pulse of the masses.
I see properties still selling and I'm so puzzled as to who could POSSIBLY be buying at the tail end of the mother of all RE bull runs/speculative manias, and I love to hear from these people.
Sure, X scares them off pretty quickly, but's nice hearing from them.
I see properties still selling and Iâ€™m so puzzled as to who could POSSIBLY be buying at the tail end of the mother of all RE bull runs/speculative manias
Mostly clueless bag-holders: http://post.polls.yahoo.com/quiz/financeresults.php?qm=1&poll_id=5486&user_choice=4&Submit=Submit
Once youâ€™re registered & ready, let myself, Randy H, SQT or Peter P know and any of us can promote you to author.
oops, I thought I'd registered aeons ago. hoo hoo, those screens don't look familiar, better late than never...
could've changed my nick, it's only to differentiate from another earlier sean who hasn't appeared for a while...
different... but sexy as hell because of it...
yeah, it's a bit dicey... [sigh] some of us have greatness thrust upon us...
shouldn't i swear some pledge to uphold the honour of the court of sir patrick and go forth and vanquish evil in the form of trolls, realtors, hook-nosed witches (sorry, i already said realtors), etc
not saying i'm actually gonna post anything, mind...
77%. Yikes. Watching public sentiment on housing turn is like watching an ocean liner doing a u-turn. People are getting antsy and nasty. Here we are with stalled sales and rising inventories and the MSM news sites have only shifted their focus from "Real Estate - The New Gospel" to "Where to Invest in Real Estate in a Slowing Market". The only sources saying "Run for the Exits" are the same ones that have been shouting this for four years now. At some point, the MSM will stop referring specuvestores to Boise and Dallas, and start hinting at the fact that other asset classes still exist.
i won't faff it up, i promise... hmm, what's that button do???
July 3rd, 2006 at 9:41 am
Interesting link - the lagging indicator that is the MSM are starting to change their tune, for sure.
OT, but I have one major complaint about on line news articles. Why do they always write in one-sentence paragraphs? Isn't that bad grammar? Do these "journalists" all learn from the same "internet journalism 101" textbook?
hey, economists predicted 9 of the last 3 recessions! that's not a bad strike rate...
on the creation of jobs question, etc, how about this? (i always felt the Treasurer was gloating about 'soaring economic growth' based solely on the aggregated GDP which was really due to empty internal housing inflation in the economy -- when the boom turned, the GDP figures nosedived, so he had nothing more to brag about and went a bit quiet. altho he knew all along what was causing it, just pretended it meant productivity increases or something for the gullible press)
After the House Price Boom: Is this the end of the Australian dream?
The house price bubble has finally burst. Average house prices more than doubled between 1996 and 2004, but according to one source, Sydney prices fell back by 15% during 2004, with Melbourne 11% down.
While it lasted, the boom added substantially to the wealth of existing home owners, but it has made home ownership more expensive for aspiring new buyers. In its aftermath, three questions arise. First, who financed the capital gains that home owners have enjoyed? Second, has home ownership become unaffordable for the younger generation? And third, what, if anything, should the government be doing to help young families get onto the home ownership ladder?
SQT, one other trick for embedding URLs are the
a href = "URL address" text /a
tags, where you can substitute the original title of the story, and/or source name, or some abbreviation of it, in normal English, and embed the URL between the double quotes. I've left out the > Housing Market Slides on Coast - and Greater Bay Area - The Half Moon Bay Review
hope that worked...
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