patrick.net

Well, the hard part is not just the $3M price tag, but the perpetual carrying cost about $50K + after tax money for property tax and home insurance alone.

Nowadays, gardeners, lawn service and pool services start to charge based on zip codes. If you live in San Jose, your quote will be a quarter of those living in foothill Saratoga. Plumbers and contractors? Oh sure, Mr. $3M, you can afford a minimum charge of $250 for coming out to your house, right?

Welcome to the high-flying lifestyle of "mass effluent", yeah, certainly substantial cash flow effluence.

Back on topic. Admittedly, this is not new, but often seen.

Homes, when priced competitively, are selling within 45-90 days. If priced 5% below market value...they sell with a few weeks!

Market value of a painting I have, is 100K, but if you want to buy it now, I will give you 60% discount over this "market value".

There are quite a few choice quotes at
http://realtytimes.com/rtmcrloc/California~Tracy

Kim: "I want to be effluent, Mum. Effluent!"

Kath: "You are effluent, Kimmie. Look at all you have - a Hyundai, a half-share in a home unit, a DVD, a mobile ..."

Kim: "I want to be effluent, Mum. Effluent!"

Kath: "You are effluent, Kimmie. Look at all you have - a Hyundai, a half-share in a home unit, a DVD, a mobile ..."

HARM, EBGuy,

BACK OFF!

(I saw Kathleen first!) :)

Agreed, more than drive a dagger through the heart of the misguided notion of even entertaining a bail-out she really does strike at the core of the bubble!

How about this? Let's have potential bail-out recipients write an essay as to why they should be eligible for more free money and allowed to stay in "their" homes! Winners.... (and they're ALL "winners" here) gets instead an autographed "Guide to Financial Responsibility" signed by no less than Kathleen herself!

Brand Says:

You know, I think most people on this forum are envious of the young investment bankers making $200K/year to start. And what about the MBAs who got their degree at the University of Phoenix? $400K/year minimum.
_____

No. U of P is $600K per year min. to start. Stanford, Colombia, etc. $5M+ per year.

As for doctors, sure they only start out at $400-$999K per year but 10-15 years out they're making 15-20X that amount plus 50 free houses thrown in.

Please, enough of this sh-t already.

DS - I love Kath and Kim. Truly cringworthy comedy, like Alan Partridge used to be.

Wait a sec, worst drop in home sales in 18 years? Can't be, can it?

http://money.cnn.com/2007/04/24/news/economy/home_sales/index.htm?postversion=2007042410

Weren't realtors just in the past few weeks talking about "hitting bottom" and that this year will be a year of "sure but steady" sales? Where are all the a$$ effluents to bail us out?

Speaking of the NAR's EHS numbers, can anybody tell me how the for-sale inventory managed to fall between February and March.

ozajh Says:

> Speaking of the NAR’s EHS numbers, can anybody
> tell me how the for-sale inventory managed to fall
> between February and March.

When homes are selling fast developers put EVERY home for sale in to the MLS (even before they get a CofO). Now with home sales slow they just list a few as "for sale" (even if they have 100 unsold sitting vacant on the street or in the condo tower)...

And a quick look over at CR indicates I'm not the only one having trouble swallowing the fall in inventory...

FAB,

I posted while you made your comment.

Yes, that makes a lot of sense.

"(even before the get a CofO)"

Oh, how very convenient? They can leave the shower head off or leave the dishwasher in the garage or simply sit on the ppw and magically there's less inventory. Jeez, where do the shenanigans end?

"They just took the student loans and stuck it into vehicles returning double the rate."

Then "they" are a$$holes. That money was design to help people afford college. It is not investment seed money for rich folks or those with corporate tuition assistance.

I hope no one sees this as "shrewd" investment strategy.

Brand,

I can't say for sure and someone else may have brought this up previously but FWIW I suspect that the giggly sidekick, "Hi-There" is CR/FR/BB's alter-ego as well. Innocently showing up at the most opportune times to "support" Fake Brutha's point? Hi-there seems to function as a "wing man" putting out some of the "smaller fires" leaving FOS to at least feel he's on a par with FAB, Randy and some of the other heavies.

We'll have to get a 'forensic blogger' to go back through the archives but I hardly think it's necessary.

PA Homeowner Says:

> To get back to the point of this thread, which is Big
> Brother saying that professionals who have worked
> 10-15 years “can” afford $2.5 million dollar houses.

There is a big difference between “can” buy and “will” buy…

Most of my friends “can” buy a Ferrari F430, but not many “will” buy one…

When $2.5mm homes go up in value year after year most who “can” buy “will” buy…

When $2.5mm homes drop in value and smart people predict that values will continue to drop very few that “can” buy “will” buy and an increasing number “will” sell to cash in before values drop even more…

Speaking of the NAR’s EHS numbers, can anybody tell me how the for-sale inventory managed to fall between February and March.

ozajh,

This is from the realtor.org press release:

"Total housing inventory levels fell 1.6 percent at the end of March to 3.75 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace, up from a 6.8-month supply in February. "

What FAB says makes sense. However, these are existing (read used) homes, not developer (read new) homes. I think the news of a housing bust is finally hitting your typical potential seller, many of whom are waiting to see if the market improves. Tracking Boston, which I still think is ahead of the Bay Area in its housing cycle, this Spring has had noticeably lower inventory levels compared to last Spring. Sales are stable compared to last year. I think they are seeing a "dead cat bounce" as the very last capitulators (sp?) are pulled into the market.

Also, it's interesting how the drop in inventory still is not enough to prevent a rise in "months supply," as the drop in sales was so substantial.

On other economic news, consumer confidence down, inflation expectations rise. The Fed must be stressed out right now. Can they continue to hold the course, holding rates steady while giving lip service to inflation? I think this puts a serious damper on those who think the Fed will cut rates any time soon.

From my e-mail this morning :

NationPoint offers loan programs that many lenders don’t.
Looking for a mortgage with a high loan-to-value (LTV) ratio? We have 100% LTV products that are available with credit scores as low as 620.1
And lower LTV products are available to borrowers with credits scores as low as 540.1 Extended amortization programs are also available to keep your payment as low as possible.

"California has great twisty roads though, nothing I’ve seen on the East Coast compares. "

Astrid, if you get the chance try driving Route 58 or Route 60 through the Blue Ridge mountains. These roads are within a few hours drive from DC.

If you like "twist" and incredible natural views, you'll like these.

"Then “they” are a$$holes. That money was design to help people afford college. It is not investment seed money for rich folks or those with corporate tuition assistance."

Big deal. That's about the least of our worries. Anyhow, a simple way around it is to have a networth cap. The much bigger story in this area is how SallieMae and other non-government lenders have made out like bandits on our tax dollars.

Headset,

Thanks for the tip. My boyfriend and I have driven skyline drive and been a little underwhelmed (the vistas are nice, but the mountains just aren't tall enough or interesting enough. We might take a drive there this weekend.

http://www.dailykos.com/story/2007/4/24/81711/7932

Hehe, Dailykos ties honeybee disappearance to subprime mortgage (sort of)

Then “they” are a$$holes. That money was design to help people afford college. It is not investment seed money for rich folks or those with corporate tuition assistance.

I disagree.

I believe college education should be widely available. However, student loan should not be seen as a form of welfare. There are already too many forms of welfare.

Unproductive people had been gaming the welfare system for decades. What is wrong with these people taking advantage of some universal benefits now?

If anything is wrong, the system is wrong.

And don't forget that student loans are not free money. It is a collateralize debt. The collateral is you. Not even BK can wipe it out.

"This listing is special John; you guys can do this."

GC said:

I hope no one sees this as “shrewd” investment strategy.

Finally, some manly words. I emphatically agree.

Firstly, I made no claims about the ethics or morality of the arbitrage student-loans situation.

Secondly, it isn't so clear that this is *always* unethical, regardless of how macho GC attempts to fantasize of himself.

While I'll agree that taking a loan in addition to taking tuition reimbursement, if one commits fraud by declaring the loan's use for tuition, is not only unethical, it is illegal fraud.

But, these loans need not only be designated for tuition. You can also stipulate you intend to use the proceeds for living expenses, travel, or supplies. You can take the loans in lieu of working (thus the term full-time student).

So the ethical dilemma is this: say you get $25K in Stafford loans. You also have $25K in the bank. You'd saved the $25K in your savings account to pay for school. But now the government comes in and offers you a student loan of $25K for 2.0%. What's the difference between taking that money and leaving your $25K in your bank account -- because you're conservative and don't wish to be with a $0 bank balance -- and taking your $25K out of your bank to pay tuition, then putting the loan's $25K back into your bank?

I'll answer from my perspective, there is no difference. It's all semantics.

Anyways, what machoman GC misunderstands is these are unsubsidized Stafford loans. Subsidized Stafford loans only go to people meeting a "poorness" needs test. So GC can rest easily on his big blog cajones.

"Big Deal"

Big Deal?

I don't mean to get on a soapbox but I just spent 3 hours of the nicest* day we've had in a long time, sitting in a cubicle being subjected to the NASD "Continuing Education" brainwashing. They covered a LOT of ethical issues (and frankly several I'd never even stopped to consider)

1. You're the branch mgr. for a regional firm. The firm has authorized you to have a complete landscaping makeover. Do you go with A) the lowest bid, B) the higher bid BUT (with the under the table agreement of having your personal residence done at a substantial discount!)?

How refreshing to hear this even being discussed!

Pffft. Screw it. Not MY money? Afterall I've been the mgr. here for years and I'm not making the money I "should" be making? So this is like one of the "perks" that comes with the job, right?

They had another great case study where one of the sr. brokers is pressuring HR to hire his largest client's (challenged) nephew for the intern position! True, they don't exactly get top notch actors but the situations are real, and happen everyday.

If Headset thinks they're @$$holes "I" think they're @$$holes.

Want something real? Lots of good quotes on this page.

"the buyers think they're being slick and sticking to their $430k thinking the seller will cave. i think they're just gonna lose the house to another buyer again."

"i'm starting to agree with Susan, i think they're scared."

Does she know suzanne too?

In the pay-as-you-go system, which is how I afforded college, working stints of full- or part-time while chipping away at your degree, means you will never qualify for the subsidized loan (or any grant). And that interest clock starts ticking as soon as the check is cut. Ouch!

I don't personally know anyone who used college loans to make a buck, or buy stereos and such. I've heard those tales. Just never met anyone who actually did it.

Allah,

Hysterical posts as always! I guess the sellers NEED the 435k just so they can walk (net of comm. of course). Is an "extra" 5k going to make you or break you? That's a serious question? This is what we've lowered ourselves to? C'mon, bum me a cigarette man!

Never is appraised value mentioned nor the fact that the "extra" 5k will cost you 20k over the life of the loan. Those buyers, they're such pussies aren't they?

My favorite part was her saying she'd never lower her commission as she'd 'earned' it. It would almost be worth registering on that board just to point out that as of right now, she's earned jack.

My favorite part was her saying she’d never lower her commission as she’d ‘earned’ it. It would almost be worth registering on that board just to point out that as of right now, she’s earned jack.

Words like deserve, earn, entitle, etc are just fluff.

The point is to make more than we deserve. That is what profit means. But we are not victims simply because we do not get what we have earned.

I'd say that 25 homes is pretty low. I've looked at over 100 by now. She sounds like a spoiled brat realtor who's been working in the field since, oh, 2002, and doesn't know what rough times are like. Entitled sellers and entitled realtors are running headlong into the newest beast... entitled buyers. It's gonna be ugly for awhile. :D

It’s gonna be ugly for awhile.

Ugliness = Beauty

This is hope. :)

I know a guy who used student loan money to speculate on tech stocks in the late '90s. Back then, student loan rates were at around 8%. He lived very modestly (even more than the typical student), then used the student loan money that he didn't need for living expenses to invest. I don't think it worked out very well for him, but he did eventually pay back the student loans.

I am pretty sure it is illegal, though. If it isn't illegal, it should be. Even though student loans can't be discharged in BK, taxpayers are on the hook if a student defaults (due to death, disability, etc.). Accordingly, the taxpayers are subsidizing student loan arbitrage. I would guess that a lot of people took advantage when SL rates were at 2 or 3 percent (even though MM accounts were only paying about 1% at the time).

SFBB,

Excellent points. What a typical realtor. She is bringing NOTHING to the table but fully expects to be paid for carting people around.

Since this is BOregon we can basically "look" at everything and go from the process of elimination perspective. Hell, we've looked at homes that have indoor pools! Does that mean it's a deal killer if the home doesn't? No. Maybe realtors should get paid the same as shopping assistants or dog walkers (since it's about the same thing).

SP,

O.K, you got us there but you've got to admit there's nothing quite as appealing as a woman that is totally and completely fed up and willing to do something about it! I've never seen (let alone met) Kathleen but I LOVE the way she talks! :)

"Ability to purchase and affordability are two different things"

Yes, yes LILLL they are.

SP, Brand, DinOR and whoever else is pining after Ms. Pender,

She has written a follow-up piece for that anit-subprime bailout article of hers:

http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2007/04/24/BUGC8PE0FC1.DTL&type=business

It's nice to see that there are plenty of sane people out there after all.