Despite NIMBYist attempts to stall, the condominium project at the Vallco mall in Cupertino has finally been approved.
Why do homeowners hate new housing units? Will Cupertino become Condotino? What is the state of the market?
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"..what is left on the Anger thread.." - ajh
How does one navigate to the Anger thread?
I would like to post things like "Regression analyses on the Keebler-Palmolive model have shown that a 37% decline in RE prices contradict both the Bernanke Flipper hypothesis and the NAR estimate for Q1 of '06," or "The assertion that the NorCal condo market is 43% over-valued is supported by the Bubblicious Dirigible Theorem, a widely alluded to but not so widely understood metric," but alas I don't possess the education in economics.
"Randy H seems like a chronically pessimistic loser. Well, that is typical of liberal faggots.
He is even bothered by ‘The Futurist’, for Chrissake… " --Peter K.
@Peter K, Michael Holliday & Barnum:
Letterman's Top Ten Signs You're A Gay Cowboy
10. "Your saddle is Versace"
9. "Instead of 'Home On The Range', you sing 'It's Raining Men'"
8. "You enjoy ridin', ropin', and redecoratin'"
7. "Sold your livestock to buy tickets to 'Mamma Mia'"
6. "After watching reruns of 'Gunsmoke', you have to take a cold shower"
5. "Native Americans refer to you as 'Dances With Men'"
4. "You've been lassoed more times than most steers"
3. "You're wearing chaps, yet your 'ranch' is in Chelsea"
2. "Instead of a saloon you prefer a salon"
1. "You love riding, but you don't have a horse"
I had another discussion with a friend today who told me that SF can never come down!
Some people live in a bubble. We should not try to disturb them. Let them have a sweet dream for now. Reality will not be too kind in the coming months.
Damn, I missed the troll again. And this one was directed at me, apparently. Being called a liberal for daring to evoke neo-classical macroeconomic theory? (which is quintessentially conservative last I checked) Interesting. Perhaps a little less KSFO and a little more reading would help this poster out a little.
Perhaps a little less KSFO and a little more reading would help this poster out a little.
KSFO the airport or KSFO the radio station?
I know little about neo-classical macroeconomic theory and I am not a liberal, but the trollish comment needed to be deleted because I did not like it.
Also, how could I allow personal attacks against you. ;)
Thank God you’re on a lease and don’t “own”! Now imagine spending every waking moment trying to “improve” your property just so the “realt-whore” (I just love saying that) can help the potential buyer step over bums to show them your lovely home. That’d be greaaat, yeah. I put up with dirtbag neighbors for years, make sure you have a buddy wait by the moving van (just in case).
Yes, otherwise we would be stuck for a long, long time.
However, some will argue that being a homeowner allows one to make improvements to the home. I guess one can line his home with Kevler(tm) just to be safe. :)
I had no idea your neighborhood was THAT bad! I guess most Oregonians come down to visit relatives or on business and natives keep showing us all the glitzy places?
Perhaps I exaggerated a little bit. :)
But I am definitely trying to escape from San Jose.
Everything I know about asset bubbles I learned from my older brother who was fond of chewing gum and rocking out to Smashing Pumpkins. He would work up a wad of Bubblicious Watermelon Wave¹ and the bubble would grow until his face disappeared. Finally it would rupture, leaving a sticky goo on his eyebrows and chin. There you have a perfect model for the Housing Bubble.
¹ Not an endorsement of the Cadbury Adams Bubblicious product line²
² Not an endorsement of Cadbury Schweppes PLC [Symbol CSG]³
³ Before deciding to invest you should carefully consider your investment objectives, level of experience, and favorite flavor of Bubblicious¹
"buyers that have the money for a custom YOU dreamed up and built will, more often than not, buy land and build the custom THEY dream up."
Good point. I used to ride motorcycles (before my risk/return rationality took over) and there is a similar situation with motorcycles. You see you can "bling out" and customize a motorcycle by purchasing and adding many different aftermarket parts (custom pipes, brake lights, fairings, etc.). What's interesting and kind of funny is that this "blinging" process actually DECREASES the resale value of the bike despite the fact that the "blinger" is pouring vast amounts of money into buying aftermarket parts! Anyway, it decreases resale value because it turns out most people don't agree on what makes a bike "bling" and would prefer to have stock machine that they can customize themselves!
"Don’t get overly concerned with the whole risk/reward thing (you usually don’t get far before you have to work on it again)." --DinOR
Yeah, I'll probably get another M/C again someday, but as you know those machines are a big investment in time and money and I've got a lot of stuff going on these days.
"What do you say of this article:
ETF’s Are Not A Real Asset!
I didn't even read the article, but I read the excerpt and that should be enough. It is true that ETF's are not real assets, but whether or not you invest in actual gold & silver or whatever depends on just how much of a doomer & gloomer you really are.
The idea behind buying commodity ETF's or funds is that you can profit from spikes in these assets and hedge your equity and fixed income investments which are probably taking a hit if gold/silver/palladium/whatever is spiking (because the economy is likely going to shit too). But of course if you're holding shares in physical asset funds or ETF's in a portfolio of some sort, ALL of your money in there is in USD fiat currency.
So the only reason in my mind to buy physical gold or silver or whatever is if you actually think we are going to have hyperinflation, total annihilation of the US Dollar, the US Government is going to collapse, therefore causing the Economic system of the world to collapse, and everyone is screwed anyway. At that point people will come to kill you and take your physical gold unless you've already bought a vault and lots of guns. And of course at this point you are spending money to service your "investments" rather than holding something that pays you interest/dividends.
So obviously in my mind I think it is pretty ridiculous to buy actual physical commodity investments like gold or silver or whatever, but I'm not a hard-core "doomer." I think we're going to have a recession by the end of '06, early '07 at the latest. Maybe even a slight depression. I don't think this translates into the end of the world as we know it. Even if you want to factor in Peak Oil, and I know about all the possible doomsday eventualities people throw around regarding that. Recessions and depressions are a normal thing that have happened countless times throughout human history. A lot of people are going to get screwed, maybe me too, ya never know really. All you can is prepare as best as possible. For me that means being debt-free, living well below my means, investing somewhat conservatively, whatever. For others it may mean buying gold bars and sleeping with him, and if that makes them feel secure then more power to them!
Disclaimer: I don't even own a gold ETF.
"At that point people will come to kill you and take your physical gold unless you’ve already bought a vault and lots of guns." - SF Renter
That's why it makes sense to skip the commodities and just buy guns and ammo. The gun will be the Visa Card in the new society - the tool to get everthing you need by force. Show their heads just once and everything they've got is mine.
"... another form of terrorism: Ability to get NINA loans ..." -ha ha
Plumbing my deep well of ignorance, I should be disinclined to opine, but it seems to me a landslide of financial problems in the U.S.A. started with banking deregulation. Once the strict rules for consumer lending were circumvented by our highly esteemed legislators, the debt snowball got rolling and never stopped. The Fed's low interest rates only fed a fire that started years before. I don't care to speak with contempt for sheople -> sheeple -> sheepholes because the rank and file are, to some extent, victims of lender predation because the laws (eg. usury) that once protected them are toast. Mmmm toast with melted butter...
In case you are selling your Bay Area digs and moving to my delightful central valley community, here is a breakdown of me and my homies who are chomping at the bit to welcome you...The city motto of Stockton is "Melting Pot without a Recipe."
· Mexican - 27%
· Black or African American - 11%
· Filipino - 8%
· German - 8%
· Irish - 5%
· English - 5%
· Cambodian - 4%
· Other Hispanic or Latino - 4%
· Italian - 4%
· Vietnamese - 2%
· Hmong - 2%
· Chinese, except Taiwanese - 2%
· French (except Basque) - 2%
· American Indian tribes, specified - 1%
· Laotian - 1%
· Portuguese - 1%
· Asian Indian - 1%
· Dutch - 1%
· Japanese - 1%
· Scottish - 1%
· Swedish - 1%
· Norwegian - 1%
· Scotch-Irish - 1%
· Subsaharan African - 1%
· African - 1%
· Spanish - 1%
· European - 1%
· Arab - 1%
What do you think of this:
A bullion-dollar bank account
Troubled times make gold an even more precious metal. Here's one way it can protect your treasure.
By Paul Sloan
February 4, 2006: 7:59 AM EST
SAN FRANCISCO (Business 2.0) - High oil prices. Inflation fears. Ballooning deficits. Guerrilla war. Bad news? Not for gold. The asset that shines in bad times has been on a tear recently, surpassing $500 an ounce, a level not seen in decades. In 2005, gold outperformed the fishtailing Dow Jones industrial average by about 19 percent.
But how to cash in? The last time gold prices were this high--in the 1980s--it wasn't easy for small investors to capitalize. Gold-mining stocks are notoriously volatile, and owning actual gold involved insurance and storage expenses. New tools, however, open the current gold rush to all comers. One of the cheapest and easiest ways to play is through GoldMoney.com, a thoroughly Internet-age company created by James Turk, a longtime goldbug and former banker with Chase.
Turk opened GoldMoney.com in 2001 on the English Channel island of Jersey. The company has gotten ink for its novel effort to create a gold-backed currency that companies can use for transactions, but so far GoldMoney's most successful venture is a retail arm that gives investors a new way to buy gold. The number of GoldMoney retail customers almost doubled last year to 17,000, with the total value of their gold reaching about $50 million.
GoldMoney is similar to online banking, except accounts are denominated in "goldgrams" and mils instead of dollars and cents (1,000 mils equals 1 gram). A typical gold bar weighs 400 ounces, which at current prices would fetch roughly $210,000. But GoldMoney lets customers buy any fraction of a bar. The gold is stored in a vault in London and insured by Lloyd's, and since accounts are linked to the U.S. automated clearinghouse, GoldMoney can easily be converted to dollars and wired to any bank. Thanks to efficiencies of the Internet, GoldMoney's exchange rate is just 2 percent over the spot price of gold--far below the markup on, say, gold coins bought through a broker. "Our goal is to bring gold down to the individual," says Turk, 58.
Turk and his customers argue that other ways to invest in gold--such as exchange-traded funds (ETFs) and brokerages--are too risky or too costly. In the case of an ETF, for instance, investors hold paper whose value depends on the smooth, honest operations of traditional exchanges. Says Mark Kohr, who recently sold his house in Venice, Calif., and began pouring his profit into GoldMoney, "I don't want to sound like a fruitcake, but the appeal of GoldMoney is that it's outside of the system."
For centuries, of course, gold was the system, the standard underlying much of global commerce. But in more modern times, it lost luster, particularly after President Franklin D. Roosevelt signed legislation making it illegal for individual Americans to own gold coins, bullion, and certificates. That law was rescinded in 1974. Gold prices soared in the inflation-ridden late 1970s but then slumped and stagnated. The metal traded around $250 an ounce in 1999 and has for decades been a lousy long-term investment.
Nevertheless, Turk maintains that gold is like insurance, shielding wealth from global economic calamity. In fact, he and other goldbugs see the recent run-up in gold's price as almost beside the point. In the long term, they say, governments are too quick to print money, which spurs inflation and destroys buying power. "There are too many political factors that can wreck a currency," Turk says. "You have to do what lets you sleep at night." If you think the country is about to collapse, you might as well profit from it.
Patrick.net is fascinating and addictive.
But I'll call BS on a frequent angry theme here. I mean the recurring hostility toward "Mr. Homedebtor McBoomer.”
McB is a greedy, consumerist pig, crashing around with his new Hummer and Rolex. Somehow he’s also a deranged dupe, spending half of every paycheck on the biggest investment of his life.
McB’s investment may a bad one. I bet he eats a lot of Top Ramen for dinner and believes in delayed gratification.
But McB is just pursuing his own economic self-interest as he sees it. As is “Mr. Renter McMarket-Timer.”
The free market will reward one man and punish the other. Don’t pretend it’s a moral issue.
"The free market will reward one man and punish the other. Don’t pretend it’s a moral issue." --Garth
Well, you make a good point. However, a lot of people are pulling money out of their home via HELOC's and spending on consumer goods (i.e NOT delayed gratification), and I think that is where most of the rants are directed. So I agree, not ALL Boomers are evil, after all you can't generalize and stereotype a whole Generation. Still, a lot of Boomers really do suck. :)
The way the E-Gold, GoldCash, CyberGold, CyberCash kind of schemes work is no bargain. I consulted for one of these operations (no longer in business).
The account holder purchases title to an amount of gold at spot, for USD. The asset is now valued at gold spot. The account holder can transact in gold, buying from many places which accept the gold-denominated currency. The part most people don't get is the vendor has only agreed to accept the gold currency because the "exchange" has provided them with an API similar to a PayPal API, which allows them to express the price in gold denominated terms, but set at a spot exchange rate which allows the vendor to get the same amount of USD (plus transaction fee buried in the price).
Of course, if gold goes up, the account holder comes out ahead. (Note, this ignores tax implications, but presently no one reports or claims gains based on some pretty flimsy arguments about the gold not being gold but a currency). However, the account holder *takes all the risk* of holding gold, always valued at spot. The exchange, on the other hand, is running a treasury bank. They use financial engineering to determine demand requirements, reserve requirements, and they then hedge forward to smooth gold volatility and make extra gains on your account deposits.
Most of these operations don't allow you to exhange your gold back to dollars directly, because if they did then there would be no argument about capital gains tax reporting requirements.
The worst aspect is a consumer psychological phenomena called "decoupling". It's essentially the poker chip effect. People cannot readily value a real good in gold, only in dollars. Therefore, they don't know if they're getting a fair price when they use their gold denominated cash to buy something...that is unless they translate using the gold/USD exchange rate, which is again nothing more than commodity speculation with the transaction fees pooled and hidden (but lower, in fairness).
On the other point of physically holding gold, I agree with Fewlesh. Firstly, if you want to pretend to run Fort Knox, go ahead. People will kill to steal a car, let alone a pile of gold. And it won't be a secret you have it. If it were a secret, then you might as well not have it--when you try to spend/use it people will figure out you have a cache of glittery treasure.
Secondly, who do you think will accept your gold as payment? If the USD becomes worthless, then your gold won't spend either. This is simply because there won't be enough of it in circulation (or potential to circulate) to make it effectively valuable. It will only be valuable later, after a new USD part 2 is established. And, to be sure, your USD-2/gold won't exchange favorably, drawing to question whether it was worth all the risk and sleepness nights for something that isn't going to happen anyway.
Sometimes on this blog I wonder how a housing bubble deflating digresses into doomsday.
I understand the classic gold-in-extreme times as currency proposition. I also have relatives for which this was true, but that was then. I more think we have long since crossed a critical threshold so that if things ever get that bad, it won't matter whether you have gold or lead; at least in most of the Western world.
I am so certain that the US is *not* headed towards oblivion of this sort in my lifetime that I would be quite willing to personally act as the USD treasury for all the doomsayers' gold purchases. And, if I'm wrong, it will be of the form where all my dollars and all your gold are simultaneously vaporized by the most likely catastrophe.
Sometimes on this blog I wonder how a housing bubble deflating digresses into doomsday. - Randy H
That really is funny, now that you point it out. By the way Randy H, I always enjoy reading your insightful, information packed posts.
The Housing Bubble has a lot of people on edge because it is a symptom of an approaching cataclymic shift. Most of the 5 billion members of humanity want a slice of the pie. We are facing a major redistribution of wealth and resources on a global scale. Americans and Europeans alike realize that their standard of living has become destabilized and will soon degrade rapidly.
We are facing a major redistribution of wealth and resources on a global scale. Americans and Europeans alike realize that their standard of living has become destabilized and will soon degrade rapidly.
I don't deny that this is a possibility, but it is far from a certainty--at least in the near term. Empires tend to decay slowly, not abruptly halt overnight.
The macroeconomic growth in standard of living (as defined by GDP per capita) in China, India and much of the developing world does not necessarily indicate a reducting in the standard of living the North America & Europe. People often mistakenly think of the world economy as a zero-sum game. It is not. The Solow long-run growth model (and related models) all account for real economic growth which roughly equates to growth in productivity, which itself reduces to technology (as broadly defined: technology can be technique, scientific progress, automation, etc.).
If China grows so rapidly that they begin consuming resources faster than aggregate worldwide productivity growth, and this persists for many many years, then the proposition that they are taking away our standard of living would have merit. We are far from that reality today.
You understate the effects of the modern real estate collapses around the world. In Japan it took a mere 2 years with deflation going on 15 years. The Asian Tigers collapse took a mere 12 months:
December 1996: The IMF praises the Thai Government’s ‘consistent record for sound macro-economic management policies’.
July-1997: Thai property companies get into difficulties after a real-estate bubble bursts, wiping a third of the value off the stock market and leading to the collapse of the banks which backed them. Foreign investors lose confidence and start pulling out. The Thai currency’s peg to the dollar wobbles. Currency speculators move in for a killing. The Thai baht is floated and the currencies of the Philippines, Malaysia, Indonesia and South Korea also suffer. A wave of devaluations follow, triggering a massive haemorrhage of funds as panicky foreign investors sell up their stocks and bonds. The economies of Thailand, Indonesia, South Korea and the Philippines go into free fall.
December 1997: By now millions are without work and decades of social and economic progress have been thrown into reverse. Of 282 firms on the Indonesian stock market only 22 are technically solvent.
You can’t possibly be offering to sell gold for a straight spot price swap of USD; there would be a long, long line of arbitrageurs coming to that window!
I was implying that I'd be happy to be the E-Gold gold-denominated-currency treasury for the goldbugs. Then it would be me arbitraging them, as they'd be taking spot risk while I'd be engineering hedged liquidity forward. I'm not interested in taking any commodity spot or derivative risk, having spent enough time with my sleepless friends who work for on the CME.
I just had a great idea. Let's set up a E-Gold style "currency" that's based on crude. We'll let people store their value in litres of crude, while taking all the spot volatility risk. Meanwhile we'll rake in transaction fees and hedge profits on the treasury. All we'd need is about USD 6M to prime the pump (and a nice offshore registry).
ajhThank you for the Anger thread link.
Here are some numbers on home sales published in today's Stockton Record, pg H-6 (source cited is Central Valley Assn of Realtors):
Year to Date Home Sales 2005: 419
Year to Date Home Sales 2006: 40
Year to Date Home Sales 2005: 170
Year to Date Home Sales 2006: 14
Thanks for linking the new OFHEO stats.
PMI Mortgage uses the OFHEO index (vesrus average incomes) to compute its Regional House Price Risk Assessment.
As I understand the PMI Index a regional number over 500 means that PMI expects prices to fall.
I followed the OFHEO links one day and came up with this: The OFHEO tracks the average increase (or decrease) in the sale price for a given home. That is, each time a house sells they record the price and then the next time that same exact parcel sells they track the change. They average all the changes to derive their Home Price CPI. I think the OFHEO numbers are confined to conventional, conforming loans. I know someone will correct me if I’m reading this wrong.
I’m no statistician, but I assume the OFHEO numbers avoid some of the obvious problems involved in tracking the market via either median or average sale prices.
Perhaps it's apparent by now that I'm agnostic, but what do the real Patrick-ans think of the PMI Co numbers?
Should be "versus" versus "vesrus."
Can someone start a new thread so we can leave the racist, bigot etc. stuff behind?
Leave it to a RENTER FORUM to come up with LOW CLASS and DEROGATORY comments about various ethnic groups.
This board is pathetic. No wonder you guys WHINE AND COMPLAIN b/c you’re so uneducated and helpless.
You guys deserve to throw money away in rent EVERY SINGLE MONTH.
I am so offended by this board.
As a quite well educate, self sufficient, former homeowning, non-racist, non-bigot, I am quite happy you are offended--too bad it had to be of such a baser form of discourse. I am equivalently offended by your self righteous generalizations as I am by their pubescent banter.
"Leave it to a RENTER FORUM to come up with LOW CLASS and DEROGATORY comments about various ethnic groups.
This board is pathetic. No wonder you guys WHINE AND COMPLAIN b/c you’re so uneducated and helpless.
You guys deserve to throw money away in rent EVERY SINGLE MONTH. I am so offended by this board."
Sounds like this person has some issues of their own, doesn't it?!
"Ewww, renters are un-clean and low class. If people on this board are talking about housing actually dropping in price, they must all be filthly renting Proletariat. They must be uneducated and helpless too, because all of my "upper class" friends and I all KNOW that housing only goes up. Dirty, dirty renters, I am SO offended! I'm going to have to go wash my own mouth out with soap now because even the act of reading this discussion board has defiled my sensibilities!"
Ha hah hah hah hah!
"Statistics are already showing a steep rise in foreclosures. Clearly it’s not the time to jump in. I’m thinking 2008 might be a good time to get a foreclosure deal."
Yep, don't get caught on the dead cat bounce! 2008 at the earliest. Lot of ARMS adjusting in 2007 according to the SoCal Mortgage Guy, that should accelerate the decline next year. We shall see.
I found something good that the Doomer/Gold Bug/Peak Oilers around here will love (although most of you probably found it already). James Howard Kunstler's blog, check out the January 2, 2006 entry:
He equates Peak Oil to the Housing Bubble in that entry and makes some (I think) valid points about high energy prices negatively impacting suburban home prices. I don't agree with all of his conclusions, but he's a smart guy and a good writer and makes some very good points.
More to the topic, I’ve noticed much more real estate bubble talk in the mainstream media lately. It hasn’t stopped the infomercials that are still pushing the get rich quick real estate programs.
This is the very signal that RE has peaked in this cycle. "When the paperboy is offering stock tips it's time to sell".
About the time you see the "get rich quick on foreclosures" infomercials, it's time to buy a new home and pick up some income rentals and perhaps a new vacation home to boot.
In a feeble attempt to twist threads: It is this reasoning behind why I don't buy gold. I'm quite confident that people who deal in commodities for a living are way ahead of whatever curve I think I see. And, they'd be more than happy to separate a fool from his money.
It's time for a new thread, btw. At 225 responses, the tail is no longer fat.
DinOR, does your e-mail address work?
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