patrick.net

doodler,

Clicking around I see quite a few reporting rents increasing. There also isn't enough consistent data to be sure that outliers and mistypes aren't seriously distorting some trend values.

I think the data there is self-reported? That is about the least reliable way to get data about anything.

I forget the actual stat, but something like 80% of people will rank themselves above-average drivers. 75% will report they "got an extremely good price" on a new car purchase. I doubt many people accurately report their rent prices on a site like that. A good rule of thumb is to add 10%-25% to what people report for prices where lower is better, and opposite where higher is better (people overstate what they paid for their wife's engagement ring, for example).

Sylvie,

If we get enough interest in them (any other takers?) I may ask Patrick about setting up a CafePress online storefront for Patrick.net shirts, hats, mugs, etc. If not, I can do it informally on a person by person basis. I won't have much time to do anything until October though, as I'm in the process of moving right now.

I won’t have much time to do anything until October though, as I’m in the process of moving right now.

Did you buy a house? :)

off topic....

What's up with zillow, I was checking out the increase in values of houses in the 94040 area and the prices seem to have doubled (or more) suddenly in Jan 05 - what am I missing?

Zillow's gone wacky. I have very low confidence in any of its estimations. The only useful thing there is the sales history.

speaking of crikey:

"As finance journalist, Michael Pascoe, wrote in crikey.com.au last week, “A Sydney Century 21 real estate agent has broken one of the golden rules of his profession: never admit there's anything wrong with the market as it's always a good time to buy.” The agent had confessed that “there’s absolutely nothing happening out there”.

Such honest comments are not welcome among the real estate crowd.

Suddenly, the painful truth of Sydney’s property market can no longer be denied, covered-up or buried under self-serving industry spin.

All the recent real estate cliché words – such as 'soft landing', 'correction', 'adjustment', 'plateauing', have been swamped, tsunami-style, with one truthful word – CRASH."

PROPERTY'S PAINFUL TRUTH

it could be the year of crikey...

It's almost all too late now, but this one is funny -- not sure if it's been used here before:

It’s what’s often referred to as ‘The Strawberry Box Principle’, in which a box of strawberries keeps being re-sold at ever increasing prices until one of the buyers looks in the box and says, “Hey, these strawberries are rotten.” The answer from the seller is: “Oh, these are not for eating, they're for selling.”

Randy H,

I'll have to agree. Zillow is all over the board. This may not be entirely their fault. Most markets are now very sloppy. Homes widely known to be in a bubble prone areas seem to be appreciating nicely? I have no idea if this platform can be salvaged.

SFWoman Says:
True sociopaths see nothing wrong with their actions, so they don’t give off that odd feeling (smell? tics, too quick a laugh? fleeting eye contact?) that people normal give off when they are lying. Their human-ness is missing.

unfortunately, they are often politicians, salesmen and management... maybe it's part of the human condition after all... :(

hmm, just to prove that i wasn't smoking peyote earlier re US consumer confidence (vs the 'CostCo was crowded today Indicator'):

"Meanwhile, in the main game, the bad news just keeps on building about the US housing industry. On top of massive oversupply, home sales there dropped last month to a two-year low. That is not unrelated to the University of Michigan's consumer confidence index diving to a 14-year low, excluding the September/October hurricane shock.

As Macquarie Bank economist Mark Tierney writes this morning, the dive in the homebuilder survey hints at a significant fall in US personal consumption and the consumer confidence downturn is being complicated by rising inflation expectations. It's become a messy and unattractive picture.

The bottom line is that if the consumer of last resort tightens his or her belt, the world will feel that housing crash."

The housing crash - no wonder Howard's hiding on interest rates

DinOR,

I'd like to say that some hardcore methods could be applied to clean up the data. (That said,) it's much easier said than done. My best guess is that they're using some reasonable techniques, but that they're getting hammered by the small data sets per estimation and large estimation errors.

I'd love to take a crack at trying to apply some nice neural network tech to that data, and see if a NN could be trained to produce nicely smoothed & inferred estimates. I doubt there's a business model which would sustain such an indulgence, though.

-20%...

Patrick.net on my racecar would look good

can't afford a sponsorship tho :( patrick.net is an inverse sponsor...

how about that .gif file of the bubble bath that was going around? that would be cool on a t-shirt...

"He is actually a very hard-headed, calculating sort of bloke - the only reason he trusted me was that he knew me very well. "

Hehe. Are you suggesting that your colleague is just a tinge weasly? (Unfortuately, I do not have your colleague's pleasing ability to flatter - my original statement was supposed to imply that you work at a nice place where people trust each other and I was not implying that you work in a place full of trusting rubes - though I guess working in the latter setting can also have its advantages.)

Bap33,

Yeah, those are pretty funny numbers. Maybe they discovered a layer of asbestos 2 feet below the surface or maybe somebody strip mined the land didn't bother to restore it.

(My best guess is that somebody along the way probably mischaracterized some transactional data.)

Astrid wrote:

> The majority of renters are people who want a
> decent place to live, affordable rent and on time
> repairs.

True

> But there is a small minority who are financial or
> emotionally unable to make good tenants.

It's not a "small" minority since the majority (well over half) of all renters are not "good tenants" and even with good screening I have problems with at least 20% of my tenants...

A 15 minute conversation can reveal much more than any screening.

Very true. Actually, one eye contact is telling enough.

It’s not a “small” minority since the majority (well over half) of all renters are not “good tenants” and even with good screening I have problems with at least 20% of my tenants…

hmm, all the more reason more affordable housing should be available for ownership, rather than exploiting people for rent, possibly for their whole lives... maybe if they had a chance at owning their own place they would look after it better...

poor landlords, always losing money :cry:

SQT,

LOL! I couldn't believe they didn't pull that one almost immediately! Very funny. Had the post been toned down in the least it could have passed for a "legitimate" post.

I'm sure we've all seen the pathetic "mercy posts" that pop up from time to time in virtually every market C/L covers. The only thing I would have added is that the vacation should have been some place wreckless (like Vegas) or exotic (like Fiji). We need to get that one across the board on C/L!

Mr. Harm

Thanks for info October would work. Would make good christmas gifts don't ya think? Keep me posted..

i understand option ARMs better now. people in oz take out 'ARMs' as a matter of course, but not with neg am or deferred interest payments -- it's just not common to fix, and you can only fix for 3-5 years before the banks review it anyhow, never for 30 years...

He said that the company that his brother works for has just put in place some tough rules for accepting sellers - basically the seller must be prepared to ‘work with them’, i.e. not be unrealistic in price expectation - or else they don’t list the property.

About time. :)

Refinancings. Anyone who can is getting out of ARMs/IOs/Options

firebolt,

Somone over at Ben's Blog did a great job sharing that exact same sentiment by following Andrew LePage. He now writes for the "Sac Bee" but wrote for the LA Times during the last down turn. I'm sure for journalists the reason they got into that field in the first place is to cover "ground breaking" stories! (For Andrew this had to feel like being told to "re-copy your homework").

Especially funny to note all of the cheerleaders comments were a mirror image of what's being fed to us today. Hang in there Andrew.

Check out www.foxnews.com for some real abuse! Click on the video links in the lower left hand of the home page under "Brutal Beating".

Someone over at Ben's brought it up and it is a glimpse into what a bursting RE bubble will look like. (Not for younger members of patrick's viewing audience).

"Historically, consumption led expansions do not have staying power"*

Steve Lehman, Federated Funds*

Gosh, do you think we could consider at least the last 5 years a "consumption led expansion"? Thanks for sharing that Steve.

"Spending your way out" of a recession has been tried before with dismal results.

In retrospect FB's should be grateful! They were shown their way into neighborhoods they otherwise may not even have driven through. Permitted to vacation at spots they'd seen on Robin Leach's Lifestyles of the Rich and Famous and drove some really neat cars/SUV's (for awhile).

“Spending your way out” of a recession has been tried before with dismal results.

So the only tried-and-true way is a world war?

Wars and World Wars have a pretty dismal record of stemming recession and overpopulation. WWII was a truly exceptional outcome that required exceptional leadership by Allied leaders. I can't think of any current politicians, of any nationality, who is capable of pulling off a similar accomplishment.

Robert Coté Says:

I notice this in even my modest neighborhood. People seem reluctant to form relationships with those suspected of swimming naked.

Oops. I guess I'll have to start wearing clothes.

SFWoman Says:

Why would someone put that in instead of wood or bamboo?

It's cheaper and easier to clean. It's the American way. Actually, the American way is to get wall-to-wall carpeting and just replace the whole thing every few years.

I just thought Steve Lehman's comment was funny b/c we've evidently beat on the "consumer driven" expansion like a "rented mule". I mean, when life has put you in the position of having to rent a mule do you really care what condition you return it in? How would it be possible for us as nation to get one last iota out of this "growth vehicle"?

Someone made the comment that granite countertops will become the lime green formica of the future! (At least w/formica you could cover over it quite inexpensively). Perhaps in the near future we will be able to reuse the repo'd granite counter tops for FB tombstones? Hell! There's enough to make a whole tomb!

"Does anybody actually use that Pergo stuff?"

Oh come on! (You can sh@t in front of us!)

My luxury rented condo has it and it is worthless! Even the slightest scuff becomes permanent and it "spots" terribly. As long as you never have company or wear shoes it should do just fine.

Unlike real wood floors (or classic guitars) the wear and tear look more like parking lot door dingers than a contribution to character. Worthless I tell you.

Pergo is not too bad per se. It's an easy and cheap alternative to wood flooring. It's much better than most carpeting and more aesthetically pleasing than linoleum. The problem is that it's so easy to install that lots of people DIY it and then goof it up.

“Spending your way out” of a recession has been tried before with dismal results.

Consumption led recoveries have been quite common 1950-present. G = C + S + I - T. All the terms are related. There cannot be a recovery without C.

Randy H,

Well, agreed but you can't have a meaningful recovery with just C?

Well, agreed but you can’t have a meaningful recovery with just C?

A smaller T would help.

Since its so slow today, here's an interesting link to read:

The High Cost of Free Parking
http://www.thisplaceis.com/archives/26#respond

Peter P,

True! LOL!

The High Cost of Free Parking

Robert, this is your area.

Pergo is the stuff they sell at Costco right?

http://www.costco.com/Browse/Product.aspx?Prodid=11122539&whse=&topnav=&browse=&s=1

Being a person used to carpets (I love noise dampening) - how does one do hardwood floors normally?