patrick.net

Pop! Says:
REAL ESTATE’S CRASH LANDING

that article's pretty well spot on, especially about exhausting the pool of available purchasing power -- can you imagine how pissed off recent young purchasers will be, when the house they bought for X, and which they're paying interest on, is now available down the road for 0.8 X or 0.6 X -- it's like buying something at a store at full price the day before the unadvertised sale begins...

not counting the anxiety of losing tens or hundreds of thousands in ghostly equity in the event of resale, and their huge interest bill, of course...

"With a state election just over six months away, the Premier, Morris Iemma, must also be worried about the potential fallout from the property woes on Sydney's fringes.

Just blocks from the Iemma residence, an imposing four-bedroom, two-bathroom brick home at Beverly Hills sold this year for $510,000, just over the $507,000 lent by the bank. It had sold during the boom time for $580,000. The new price reflected a 12 per cent fall."

see how the bank so cleverly covered its ass? they recovered all their money, leaving a whole 3K for the buyer who is wearing a 70K loss... not forgetting to subtract RE advertising costs, etc, of course

poor banks, always losing money... :cry:

Hmmm, dude at work gave me the number of a broker that has been in the biz for quite a while here in the $anta Barbara area. dude at work said that it took him 6 months to find a house 5 years ago and his broker friend helped him look. Anyhoo, I called Holmes up and he called back today and apologized that he hadn't returned my call sooner and said that he is also a property manager and the rent market is insane. He said that he hasn't seen anything like this in his 15 years in $B. Evidently Holmes posts an ad and has 200 applicants immediately. Hmmm, now why would this be? I commented, "It certainly isn't because of the economy", he didn't address the comment.

Now here's where it gets interesting, soon to be Mrs. X had the following to say, "the FB's that need to get out are bailing in a hurry and need somewhere to live", followed up by "the other FB's that aren't smart enough to get out are vainly attempting to raise rent to match their mortgage". Certainly there isn't a huge upswing jobs here as Senor Cote' can attest. What can it be? Why the huge pressure all of a sudden?

Moreover, at what point does my boomer landlord, who owns the house free and clear say fuck it and jack the rent? (note, this will correspond with Surfer-X purchasing a 24" chainsaw and 3-6 bags of redi-mix, and no I'm not a lumberjack or a paver).

Dang.

0.8 X or 0.6 X

Still a lot of X ;)

I missed most of the tax discussions. Damn. All I can say is that, after reading through all the fine arguments, I still see nothing that isn't remedied by eliminating all income, capital gains, payroll and arbitrary transfer taxation and replacing it with a uniform national consumption/use tax. Now "rich" people can't hide behind cap gains as income. Now everyone pays the same rate for the same things, regardless. And for those things which burden the poor; we just don't tax them, or tax them at a very low rate -- the lowest common denominator rate. So less tax on milk than caviar. If a poor person wants to eat caviar and a rich person wants to drink milk, then so be it. If there is going to be income redistribution then at least make people responsible for redistributing their own incomes by their behaviors.

Hey SactoSassyPants, how to close out old threads?

Randal H Esq. Blog party?

FormerAptBroker Says:
The only brokers that make 5% (five points) are the hard money guys who get money for people with bad credit.

hmmm, fair enough, she's sub-prime. doesn't seem to be hurting her revenues, does it?

what happens if the market tanks by 50%, including exhausting re-fis? (admittedly not many people will be refinancing as interest rates go up...) she'll only be making $125K a year, except she will have set up her new office with permanent loan officers by then to take their 40% en masse... seems to be no shortage of hard-luck borrowers with bad credit out there... there will always be property sales -- as interest rates go up, prices will go down -- but sales will continue...

besides her perks of buying tons of cheap property just before the boom, buying ex-VA places for $10K, buying places owned by blacks 5 minutes before white gentrification in DC, etc...

but our armenian friend may have been projecting his future hypothetical earnings or his bosses earnings or some overheard earnings in claiming to be making 250K...

that's a good article, that should go into the Flippers Museum archives -- it's looking increasingly ridiculous. funnily enough, there is a suburb here called Tempe, altho it's a post-industrial inner-city hell-hole...

Riding the Boom - May 30, 2005

"Tahmassebian? What the hell kind of a name is Tahmassebian?"
"It's Tahmassebian's name, sir"

hmm, that's it for today, didn't mean to be so verbose...

Moreover, at what point does my boomer landlord, who owns the house free and clear say fuck it and jack the rent? (note, this will correspond with Surfer-X purchasing a 24″chainsaw and 3-6 bags of redi-mix, and no I’m not a lumberjack or a paver).

heh. the interesting thing is that people who owned free and clear years ago have no reason to jack rents except for pure greed (and perhaps allowing for wage inflation...) however, the flow-on effect for recent FB 'investors' is that they are hurting and the seminar conman told them they will have to jack rents every year as part of their inevitable path to RE glory... this will eventually lead to global wage and CPI inflation effects as the whole sorry saga plays out... unless a major bust or oil apocalypse occurs first...

Regarding fear....I wonder if any of our sellers realize that if they made 100% appreciate on a 500K house, it only takes a 50% drop in nominal prices to bring them back to square 1. Thus being said, a 10% softening in prices doesn't sound like much but the absolute value is pretty significant.

On an unrelated matter, I've been watching the Tahoe market for months, there is an insane amount of inventory right now, and prices are being lopped by 50 to 100 k in many instances. Found one listing of a fairly nice house for $750k but in the body of the text it claimed "all this for only $850k!" Looks like our realtor friends are getting sloppy with hiding the price depreciation out there.

DS,

Oh come on! You made a broadly misleading and unqualified statement about mortgage broker's take. Just admit for once that someone (FAB, who has hands on experience in getting American mortgages) corrected you, rather than let your original statement stand.

I'm just a bit sick of you referring to you mortgage brokering "mate" all the time. You already have a girlfriend, you've evidently never travelled to America (where she could give you a free tour on her dime) and you're constantly decrying this "mate" of yours as ignorant and corrupt.

So what's attraction?

sorry?

she's sub-prime, but she's told me she can legally take up to 7%. i've not questioned it, because i assume she knows what she's talking about...

she's attracted to me, mostly...

what's your problem?

i think i detect some angst about the lost opportinuty of becoming a sub-prime mortgage broker here... as i said, if you can't beat 'em, join 'em... america, the land of opportunity...

a friend of hers is a 28 year old laywer in DC who makes 500K PA with bonuses and has a house and yacht -- why don't you query that one as well...

"what’s your problem?"

Huh, that you infer waaaaay too much about Americans from way too small of a sample set, and without bothering to qualify your statements given the problematic nature of that sample set.

My problem was that you made yet another misleading (arguably erroneous) generalization about Americans, was corrected by someone who knew better, and then you refused to acknowledge the problems in the at best problematically worded original statement.

It's also that you're bragging about leading on an ignorant woman for whom you've shown considerable disdain in your comments here. I just find that pretty distasteful, especially after your 10th or 20th reiteration of those facts.

Huh, that you infer waaaaay too much about Americans from way too small of a sample set, and without bothering to qualify your statements given the problematic nature of that sample set.

Huh?

My problem was that you made yet another misleading (arguably erroneous) generalization about Americans, was corrected by someone who knew better, and then you refused to acknowledge the problems in the at best problematically worded original statement.

you are disputing that sub-prime mortgage brokers can make $250K? you should go and sort out my friends tax returns then, she must be paying way too much tax....

why don't you arguably argue with someone else about nothing...

i fully accept that 'prime' brokers might only make 1%, but they might be better off in sub-prime at that rate...

It’s also that you’re bragging about leading on an ignorant woman for whom you’ve shown considerable disdain in your comments here. I just find that pretty distasteful, especially after your 10th or 20th reiteration of those facts.

you said, how does someone make 250K, and i pointed out it's quite possible in the mortgage business, and in finance generally, without too much 'formal' education or a college degree. you've used a lot of inflammatory words there that i haven't said, such as disdain, etc. why don't you apply your highly refined extrapolating and inferring abilities somewhere else where they might possibly be useful to someone.

DS,

You stated in your last comment: "you said, how does someone make 250K, and i pointed out it’s quite possible in the mortgage business, and in finance generally, without too much ‘formal’ education or a college degree."

Let me remind you that I originally said: "Wow, a job that pays a 22 year old high school graduate with no training $250K a year. Where was this job all my life?" and followed up with "Well, damn me for knowing better… I’m still quite impressed. $250K is quite a lot of commission for a 22 yr old broker (presumably one who does not have an assistant and must pay a large portion of his commission to his office)."

Both of which clarified that I'm merely surprised about the existence of a particular subset of (1) high school graduates (2) with few years of work experience (3) making $250K a year. I also explained why I thought the scenario was unlikely, because a 22 year old is likely to work by himself and share commissions with a head broker, which requires him to do a lot of work, gross.

You replied after my two comments with: "how many times have i said this before? my broker mate in DC pays herself $250K out of the business, works from home, employs loan officers and takes 40% of their commissions as well.

she didn’t bother completing her arts degree in college…

brokers in Oz only make 0.7% on a transaction, whereas in US it’s flexible, but around 5% (!). That’s about 7x the pay for doing the same work, i.e. filling out a few forms. "

You said "but around 5%" with no specification of prime or non-prime. Indeed, your use of the word "around" creates the impression that 5% is the norm, when in reality the majority of the mortgage business does not receive that level of compensation. With your unqualified statement on the matter, you held yourself out to be an expert. Expect to get called for confusing and misleading statements like that.

There's also the fact that your comment failed to explain my original query because your example was different from that of the 22 year old mortgage broker. I never said that mortgage brokers or undertrained mortgage brokers can make $250K, you just extrapolated that all by yourself.

As for how I chose to waste my time. (eye roll). It's my time, not yours! Though I've usually found time spent debating with you to be quite futile for reasons I've already explained numbers of times, I commented on your comments because they were in response to my query. If you don't like my responses to you, don't respond to me.