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This is why our bleeding heart, wanna do good, victim mentality nation is going down the tubes:
Activists want foreclosure moratorium
Housing activists say families that have mortgages with questionable terms should be given six months to work out deals.
http://money.cnn.com/2007/04/04/news/economy/foreclosures/index.htm?postversion=2007040413
These a$$holes want to "save" these idiot FBs who got themselves into this mess? Screw them.
The house itself depreciates. It is the land that appreciates enough to beat inflation.
The replacement cost of the structure also tracks inflation.
It is the land that appreciates enough to beat inflation.
I guess they really AREN'T making any land anymore, then!
"What we don’t know is whether it will be a steep and sudden crash, or whether it will be a decade long correction. "
The keepers and publishers of that data (NAR) have a huge vested interest and will spin the numbers in all sorts of ways. I dare say
they may even distort the results (like Enron hidding/covering up the losses). Fact is there is no laws or regulations that bind them into any ethical practice like the SEC or other oversight goverment body. They are anwserable to no one. And no third party reviews their public press releases. Since they believe the bubble is no more than 'media hype' they most likely see them self as Guardians. ( Sort of like Nixon on his last days) and any distortion of the facts is all for the greater good. So the potential fraud is vast.
We could be in a deep decline today or in future period and never really know it.
“What we don’t know is whether it will be a steep and sudden crash, or whether it will be a decade long correction. â€
I think between the number of houses going into foreclosure and the imaginary zillow values (that many people are heavilly fixated on) dropping (due to the relling of those properties), sprinkle in some tighter lending standards and I see prices dropping hard, unlike anyone has ever seen at any other time in history.
Just my prediction.
"It is the land that appreciates enough to beat inflation"
You are repeating at statement many would say is true.
But can you justify that reasoning behind that. I think the reason
is lost from our agrarian roots and may not hold true any longer.
In Silicon Valley we had commercial rents and some residental rents which sky rocketed due to a tech bubble. Since 2000 they declined from $3/sq ft to $1/ft and have stayed flat now for 4-5 years. Yes inflation gone forward year over year. But rents have been flat due to no or low demand.
Currently the market demand for vacant land (future R&D or Mfg.) is practically dead. There just is no need for it.
The flip side for non-vacant R&D office space is there is in many cases a provision to increase rents due to CPI, but lets face it thats more Admin charges covering salary increases for land lord staffs. All the CAM is all pass through which do decline as they declined form my company in 2006 and projected to decline in 2007 regardless of CPI. I worked with this stuff before.
Had we not had a "Computer Revolution" back in the 1980s in SV I doubt we would even be talking about this. We would still be sitting in a orchard field which is a low margin business and seen land prices been flat since 1950s. There would be no demand for land here ... there was no reason...
Currently the market demand for vacant land (future R&D or Mfg.) is practically dead. There just is no need for it.
A free market would have converted those land into residential use. But NIMBYism is a powerful force nowadays.
Had we not had a “Computer Revolution†back in the 1980s in SV I doubt we would even be talking about this.
We have to thank Bill Gates for that.
"We have to thank Bill Gates for that."
Oh Lord..... you do know who Gary Kindall was? Actually gary had
a bigger impact in Computers than Gates did.
You do realize Gates was a small player in the early days...
There were others...
But even so, Gates was never in SV. He did but a lot of SV companies
out of business.
But even so, Gates was never in SV. He did but a lot of SV companies
out of business.
See, creative destruction. :)
Bill Gates is just one of my heroes. But Windows really changed the world.
"A free market would have converted those land into residential use"
Actually the free market did ... destroyed all the farms and coverted to
business parks and residentials. We are already seeing that in SF with the new towers near the ball park... I see they are also expanding and building more.
Actually the free market did … destroyed all the farms and coverted to
business parks and residentials.
But residents moved in and voted free market out of business.
allah,
Although we've kidded about picking up everything from Harley's to jet skis on ebay I don't believe this will lessen the demand for "new goods" much at all. These are "tainted goods". Bought with "free money" and neglected almost as much as the shoddy homes that originally "facilitated" their purchase.
Patrick's link about "How to Lose 260K in RE" linked today explains the situation more effectively than I could ever describe.
SF is a self-proclaimed liberal city. Can someone tell me why it is so adverse to changes (e.g. redevelopment, demolition, etc)? I thought liberals are supposed to be open-minded. :)
"Bill Gates is just one of my heroes. But Windows really changed the world. "
BAHAHAHAHAH!
Before Winblow$ we had Mac OS and Geoworks... Far far better!
You have alot to learn about tech my boy! Actually it was Gary Kindall
that changed everything with CPM my boy. Gates was still growing pimples and selling Basic and Fortram and had no idea on creating and OS
which they had eventually buy (clone of CPM).
"Can someone tell me why it is so adverse to changes (e.g. redevelopment, demolition, etc)? I thought liberals are supposed to be open-minded. "
OH Lord.. have you even been there??? There is more development there than any time before. Take a long look next to the ball park... you will more homes being built.
Before Winblow$ we had Mac OS and Geoworks… Far far better!
How so? Windows enjoyed a huge market share. Its phenomenal market penetration allowed the rapid development of the silly valley.
"See, creative destruction."
Actually see Toshiba Samsung ( Asian Tigers) due to highly educated and cheap labor froce back in 1985-90. Bills Gates had nothing to do with it.
Bill Gates runs the biggest Monoply in the world.
theotherside
You can keep repeating that half-math over and over all you wish. I still await your systematic, quantitative disproof or criticism of my publicly published model. You promised that over 6 months ago now. Thus my "vitriol". At this point you're just Trolling. I've taken the time to disprove your calculations in past threads, in excruciating detail. In the end you were shown to be relying upon hidden, unrealistic assumptions about continued perpetual out-of-band housing price growth.
By your own assumptions 23 threads ago, housing will constitute 99.9% of all world GDP by 2050. Wow.
Here's the gauntlet. I'll take you seriously as soon as you:
a) Reveal your identity or at least enough to establish credibility. You know who I am. Even anonymous people like FAB and DinOR have revealed enough to establish credible identity. Short of that you could be some investment banker's desperate adolescent teenage daughter going through some attention spasm for all I know.
b) Give & take. When I respond to your detailed calculations with similarly detailed responses don't just repeat yourself again half a dozen threads later. You know, we had another Troll who kept showing the same Marina property which sold for like $250K over asking for nearly a year as evidence there was no bubble.
c) When you agree to take up a challenge, do it. What's wrong with my model? Half a year ago you chuffed it aside as obviously flawed, and easily debunked. Forgive my incredulity, but *show me or STFU*.
"How so? Windows enjoyed a huge market share. Its phenomenal market penetration allowed the rapid development of the silly valley."
If you dont know about these things Im not going to rewite the history of MSFT monoplitic practice over the past decades. Do you expect that! LOL Silly Boy! You must be really young!!!
"Err… perhaps because not enough people moved in to oppose new projects yet?"
OK you wasted enough of my time... I see your an idiot!!!!
Randy H,
TIME OUT! TIME OUT!
O.K, let's settle this once and for all! "theotherside" can be become "The Minister of Finance" over at Second Life and live happily ever after! (in fantasyland). :)
If you dont know about these things Im not going to rewite the history of MSFT monoplitic practice over the past decades. Do you expect that!
Still. It is hard to image what would have happened without DOS and Windows. Technically superior products are useless if they do not sell.
You must be really young!!!
I wish.
Peter P-
skibum is correct, my confusion lies in the long term expectation for inflation beating performance in RE. It takes skilled intervention to manage any asset portfolio to outperform inflation, an area I fully admit my own woeful incompetence. But RE seems to exist outside this realm, at least in many otherwise well educated minds. As I see it that's the only rational basis for a huge chunk of the mortgage industry and the "climbing the RE ladder" mentality.
As I see it that’s the only rational basis for a huge chunk of the mortgage industry and the “climbing the RE ladder†mentality.
Also, until recently, homes are long-term assets. People were able to visualize the absolute appreciation of their homes. They can see huge gains in home equity with apparently no work.
Although we’ve kidded about picking up everything from Harley’s to jet skis on ebay I don’t believe this will lessen the demand for “new goods†much at all. These are “tainted goodsâ€. Bought with “free money†and neglected almost as much as the shoddy homes that originally “facilitated†their purchase.
The people (real financial heros) that have been buying up consumer goods with the "free money" are the people who mostly make up the people buying the "new goods"; Thus driving the economy. Now that the "free money" is no longer there and many of these people are going to try to resell those "Equity Distressed Assets" (EDA's as I call them) to help them through their financial bind. Just the fact that they are no longer buying new stuff because of their situation is already lessening demand for the "new goods"; In addition to that, many people who are not in financial distress (aka. renters), may want to get some of those EDA's for half of what they would cost brand new (Depending on like you say, what shape they are in); Further reducing the demand for "new goods".
Speaking of Harley's, according to Roubini, many hogs have been purchased with subprime loans that are also going bad, I would imagine the same would be true for jetski's and such; You don't have to be a homedebtor to be a FB.
Refering to Patricks link, I wouldn't buy the piano. :lol:
Who was it that once described a home as "a high maint. long term depreciating asset off-set only by it's utility function"? :)
But… Peter P will be dabbling in owning a chain of sushi bars and astrid will manage an interplanetary seed exchange.
I like that future! :)
allah,
Spot on! In addition to the normal depreciation inflicted by the simple act of driving it off the showroom floor we need to calculate FB's burn rate to foreclosure, decline in median for your ZIP, absorbing "the glut" in the market for Harleys and then factor in neglect on top of normal wear and tear!
Meaning I can (generously) "give" you a two months reprieve on your mortgage OR 5K (whichever is the lesser). :)
Space_Acer,
We love ya' like a brother but in truth... we just don't get that emotional about software here. Well, I don't intend to speak for others so if you like getting emotional about it? Don't let ME stop you.
Space_Acer Says:
Had we not had a “Computer Revolution†back in the 1980s in SV (Silicon Valley) I doubt we would even be talking about this. We would still be sitting in a orchard field which is a low margin business and seen land prices been flat since 1950s. There would be no demand for land here … there was no reason…
_____
How about the weather? Good weather would have boosted prices a bit.
How about the Great Pumpking patches off Santa Teresa Blvd., where the Great Pumpkin would appear to Charlie Brown every year?
What about all the great punkin pie you could 'uv made? & the Porkypines and Hamsters roaming around the foothills & stuff & junk & what not?
It is fine to be emotional about software. It is also fine to call me an idiot. I am not emotional about it. :)
:)
Just frustrates me, because folks like tOs drop late into every 3rd thread and spit out the same crap over and over. But it's well formed enough so that, if taken in isolation, it sure sounds credible to any new readers.
Maybe we need one of those "click on the name and see all their previous comments" functions here. Want to see tOs' cut & paste calculations, then looky here!
Ah well. Send 'er off to cartoon real estate land. I hear there's a huge bubble in progress there.
There are bigger fish to fry.
Can we grill the fish instead? I heard it is more heart-healthy.
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http://www.time.com/time/printout/0,8816,915445,00.html
Sound familiar? Yet another story from 2005? Nope... the publication date of this article was September 12, 1977 - nearly 30 years ago.
Let's look at some other snippets from this time capsule:
Does anyone know what happened to the housing market in California after 1977? Or was the impact of Prop 13 too influential in the resulting statistics?
And finally, the social impact:
So... this was in 9/1977. Now, it's hard enough predicting what 9/2007 will be like - but what do you think September 12, 2037 will be like?
Already, both parents are working, realtors are spinning the Bay Area as a place so great that you don't need to take vacations - what's next? Will child labor make a come back? ("Monta Vista High School and Fireworks Factory #88"?) How much more special can it get here?
(Bonus points for including Peak Oil in your prediction...)
#housing