Monday, April 10, 2006

Say Hi

It's quiet and one reason I saw was a statistic that enabling those silly "type in 8 distorted letters" to post boxes discouraged legitimate comments by 60%. So, they are turned off and let's see.

Say hi, ask a question or as I suspect; let rip.

Extra points for admiring my photography which I plan on using as visual headers henceforth.


Osman said...

Are you going to use your photos as the blog header or to illustrate each post?

p.s. take it easy on the shrooms Coté

Rob Dawg said...

I've got so many artsy phots I was going to illustrate each post. I'm a visual person anyway so tracking will be easier.

The mushroom pic was a multiple entendre. Interpreted one way I was expressing about posting tasty morsels in the dark. Another as you note, halucinogens. Then there's the my posts are full of it perspective.

incessant_din said...

I guess can't leave you hanging, since your posts are helping me keep my sanity in this bubble mess. So here's my contribution to chumming the waters...

In my neck of the woods (East Bay, CA), I have been astounded by the double-peak of our housing boom. Despite drastic declines in income and employment, prices have continued their ascent through the stratosphere. Rent-to-mortgage, mortgage-to-income, price-to-replacement cost... none of these metrics justify the run-up. It is possible that they could be flawed metrics, somewhat like using oil supply and demand to predict prices at the pump lately.

So, of course, my solution is to propose an unproveable theory. I think the Bay Area is setting itself up for the coupe de grace. I think this (2006) might be the zenith, the moment that Rochester, Buffalo, and Detroit must have each had. The moment when the economic Gods colluded with the NIMBYs and once-in-a-lifetime myopia to create a conflagration that consumes the aspirations of the young workers and entrepreneurs, leaving a barren, charred landscape in its wake. If the Silicon Valley engineers need to move to Los Banos to live in some sort of semblance of the American dream, what are the chances that they will be willing to pay even 20% less than current prices for a 1960s tract home in the Silicon Valley after it ages another 10 years?

I think the loss of momentum is permanent. Boise, Texahoma, or some other undiscovered gem will have to rise up and take the mantle as the next "it" area. Maybe Mexicali.

Of course it will be of no consolation to be right. I would not want to have been the guy who saw Detroit's fate coming.

Anonymous said...

Mushrooms are kept in the dark and fed shit, right?

The inability to reconsider underlying assumptions is a common trait of those who are dead wrong year after year after year, and it's fascinating to watch how the sheer magnitude of their errors only serves to reinforce and convince them of the correctness of their position.

Rob Dawg said...

incessant_din, thanks for speaking up and the kind words. The one factor that probably kept the bubble inflating was the monthly cost to own. Low interest rates and low risk premiums and low tax rates and exotic financial instruments conspired to make it very cheap to buy in. Me? I'm happy to be sitting 30yr fix less than 5% because of all the nonsense. Now the perfect storm is aligned. All of those are going away and inflation is returning as well.

anon 10:17, your comment is appropriate given sufficent time to cover natural variations. People shouting fire in 2002, 2003, 2004, 2005 are strange because anything they saw then wasn't changing and neither were the results yet they persisted. Contrast them with the people like me who waited for -changes- before speaking up. It's one thing to say things aren't fair and cannot persist. That's just Gen X bitching. It is another to lay out the factors and show that when those change there is a likelyhood of dramatic reversals in trend. You have to go to to see the mirror image of what you are talking about. They are blaming boomers, they are assuming their educations and salaries entitle them to at least as much as some dumb janitor has achieved. They didn't buy in 2002 because their inate intelligence told them it was a bad idea.

As to the next boomburgs? No idea. I'm a paradigmer on this issue. Everything I see in physics and chemistry and technology points to a massive urban diaspora.

Anonymous said...

Couldn't let your hi go unanswered. So hello back and thanks for writing this blog. I want to second the opinion that the dearth of commenting may be because of your sane point of view and dense subject matter (in other words, it's a good thing - things will warm up eventually). Now, regarding those who didn't buy in 2002: could anyone knowledgeable/clued in enough to understand that prices were crazy then, have guessed how much more insane they would get, without being an insider? As to the folks over at patrick's and their entitlement feelings: are you saying a well educated American is asking too much when he/she imagines that a home with income at multiples of the national average *ought* to be able to afford a home?

haus said...

Thanks for the blog. I have been following Ben's site for about a year now and have found your post there to be very interesting.

I have been coming here for about a few weeks and have found the content to be thought provoking. Traditionally I am more of a lurker than a poster in the RE bubble arena. I have lived in the greater DC area for eight years now, shortly after arriving here I landed a job working as phone support for a small software company, the pay was low, but it gave me a path to a better career (form my former life as a Marine). Over the years I have progressed from support, to system administration, to network security, and enjoyed significant pay increases along the way. But given the lack of reality as to RE prices in this area, I am no closer to being able to afford a reasonable home or condo then I was when I first arrived.

In 2002/2003 I made a point of ranting to my friends and colleagues that something was simply wrong with the market, and have been beating that drum since. I completely failed to predict how long it would take for the winds to begin to change. Early 2005 was a bleak time for me as I began to wonder how I ended up in this bizarro world and finding blog’s like Ben became a comforting sanity check for me.

I look forward the insight that you bring to the subject in what I suspect will be a difficult time for the nation, and especially those areas of the country that have been on the leading edge of the bubble over the last few years.

surfer-x said...

Yes we’re a bunch of whiny little self entitled twerps over at Patrick’s, but why shouldn’t we be? We are the smartest humans to ever walk the planet and should in no way have to live in the same 1,800 sf $hitboxes as our bloated bong huffing boomer parents who put us through college on their salaries as plumbers and secretaries.

Yes we could afford a house, just not the one’s we want, and are completely deserving of. It’s not our fault that by the time we graduated with our Master of the Universe IT and CS degrees that millions of Indians and Paki’s were doing our jobs for 56 cents an hour. We still deserve 80k to start and 200k after 2 years, not geeksploitation at the cube farm as low paid code monkeys like we are now.

As a 40 year old renter with a wife, cats, and student loans to pay I feel personally insulted that people far less ingenious than I have been allowed to profit from the risk they took when they bought homes while those of us far smarter sitting in the cheap seats have been pounded in the mud flaps, bouncing from one rental to another.

Rob Dawg said...

Thanks for the kind words. Seems like most visiting are most interested in the bubble. I'll try to stay entertaining or at least tangential when I talk transportation or land use. The three are entwined in my opinion which is one of the goals of this blog; to get people to understand the realtionships.

Tough times are indeed ahead. It's going to take some real careful piloting and still there's going to be a lot of blood.

My biggest fear is the the levels of goverment are going to misread the problem and try to raise taxes and make the problem much worse before understanding their revenue problems are part of a bigger problem.

Rob Dawg said...

Yes we could afford a house, just not the one’s we want,

Aye, there's the rub. The recent past has distorted the present. 40 years old with kids in high school was a common life point to be buying a house... prior to WW-II. That's the problem, it increasingly seems likely that the middle class was a temporary phenomena.