Sympathy? The buyers of overvalued homes have reduced national wealth, weakened international financial markets, raised everyones’ property taxes, on and on. Might as well feel sad for the drunk driver that sideswipes your car as they crash over the cliff and then mobilize a half million dollars of resuce efforts and then racks up millions in the hospital with no insurance only to go to jail at public expense where millions in public defender appeals tie up the courts for years. Sympathy? Their family should get the bill for the bullet.
I’ve no problem with people “wanting” to buy a house. People have wanted to own a house for centuries or longer. These people are not teenagers being handed the keys to the Ferrari. These are people who are lying and cheating and then stealing joyrides. They are signing documents they know to be false. Bank fraud costs me money. These people are distorting the markets causing overbulding and congestion and municipal expenditures. Those cost me time and money. It is a long list and these are not victimless crimes, never were. In the next few quarters we will see victims. Some complicit at first but more and more the innocent bystanders. Imagine your HOA fees skyrocketing in Thousand Oaks (the safest city in the US) because the board is carrying so many pre-foreclosures on former Countrywide employees and also defending itself from legal attacks as these same people get desperate.
No, $7-$9 trillion in asset valuation is evaporating because of this nonsense. These people deserve no more sympathy breaking into these houses because of their need to own than would a drunk breaking into a liquor store because he needed a drink. Neither could feed their addiction through legal means and they don’t care who they hurt.
35 comments:
Greetings Robert,
I read your comments on various blogs and you and I seem to be of like mind.
My husband and I have been sitting on our money for almost 5 years now because we had lived this phenomenon before (late 80's), luckily, at that time, we had relocation benefits that saved our butts.
We almost bought a house in San Francisco in 2002 but a real estate lawyer friend literally got down on his knees and begged us to get out of the deal. He was born and raised in SF and advised that the party was over, even wanted to call the realtor for us - but we did make the call ourselves and cancelled the contract. Then 6 months later my husband got laid off and we were thanking God and our lawyer friend that we could cut our losses and get out of SF fast.
Anyway, wanted to ask you if you know what happened to that blog "Americas Overvalued Real Estate" - think you had posted comments there. I loved that blog but it seems to have been taken over by "Comnercial Real Estate" notice the spelling.
Thank God you missed having to endure that 56% appreciation bullet. Your lawyer friend may have been profoundly wrong about the real estate market, but he sure pegged your hubbies ability to hold down a yob.
From an intellectually honest perspective, we were already overvalued in 2002.
Noone can predict how big bubbles can be blown.
Anonymous at 12:11 PM doesn't truly understand risk. (although I'm sure he thinks he does)
If you spray paint that in your assigned parking space and post it onto your landlords refrigerator you may one day come to believe it.
The apparent hijacking of several "bubble blogs" has people scratching their heads. I loved thereisnohousingbubble for instance. I'm sorry I don't have an answer.
I loved the thereisnohousingbubble blog too. The last one where the author outsourced the commentary to India was side-splitting. I wish I had archived it.
As for SF, yep, it sure kept going up. I could have gained a bit if I bought when I moved here as well. But, I also wish I picked the winning numbers in the lotto last time around. If I didn't know what happened to Detroit, I would not be scared of the downside for the Bay Area. As it turns out, I saw SoCal crash up close, and read enough about Detroit to be very leery of the Bay Area's home prices. I had no idea how out of touch these people were (beyond politics). I think they really believe that they deserved the dotcom money, and that perpetual growth can continue in a world of finite resources.
Well, I guess there's Google. They sure are producing some fat profits and changing everybody's lives in profound ways with their menagerie of products. Too bad Intel and Sun got caught up in producing tangible products. That should teach them a lesson.
I'm OK with losing out on housing profits. Upside leverage would have helped my bottom line, but betting on energy and a few other segments was still a quite productive a use of my principal.
thank you robert,as a loan broker i am sickened by some of the things i have seen and heard realtors and loan brokers do.lying on stated income loans is absolutely expected by lenders and underwriters,it is literally business as usual...it is also a felony and a federal crime.having done volunteer work in county jails i can assure you that there are few,if any feelings better than walking out of one after a couple of hours(becoming a father is unsurpassed). being straight with people has at times cost me money,and the newspaper reporting on real estate has been one of my big problems...an example would be kelly zito's article in today's chronicle (sfgate.com) where she claims to quote the dq news may report for the bay area,and provides a chart.google dq news and look at their chart.the chronicle reports a median price $52,500 higher than dq! and so on.enough,have fun and enjoy the show,it is going to be one hell of a drama.
btw,overpriced,and several other blogs were deliberately hacked,there was a discussion of it on marin housing bubble a couple of weeks back,Athena of sonoma housing bubble apparently took a look at it in some detail.jeez if these folks can't handle free speech they should move to the usa...or was that china?
Just another form of free speech Jack. Free speech does not mean unlimited or even universal speech.
"Another form of free speech"? Thanks for erasing any doubt, if there ever was any, about your capacity for independent, rational thought.
Hey, JD:
I have my suspicions but who exactly are you addressing?
Things seem to be tracking pretty tight to my scenario. Which wrongs deserve apologies?
Sweet Jesus, Robert, are you really deteriorating that rapidly? Who was I quoting you doddering, slobbering, toothless old colostomy bag?
RC:
I was reading your posts on patrick about global climate change, specifically looking at our calculation wrt fossil fuel/cement contributions. As I read the data, 775 GtC are in the atmosphere already; the number is not an annual flux (which is much lower). The 6.2 GtC per annum flux from fossil fuel is adding to the atmospheric reservoir (although the net amount added is only about 3.8GtC/annum). In fact, from the graphic it appears that fossil fuels are responsible for the increase in C in the atmosphere, something that I did not believe had been proven at all.
The above is somewhat of an aside. I agree that the problem is not understood well enough and is basically political. No one really knows how much of an effect CO2 has on global warming. An increase in CO2 in the oceans could in some cases lead to global cooling (although with a pH change as a consequence).
The real issue is energy, but a comprehensive plan would be longer than the timescale of politics, so neither party wants to address it. They'd rather muddy the water with claims about suspect global warming causes. Hydrogen economy? Too bad hydrogen is hard to make, hard to contain, and is an indirect greenhouse gas to boot.
Anyway, I always enjoy reading your perspectives. Public transportation efficiency posts were enlightening. Keep it up.
Anon 8:44,
Yes, the 0.8% is an annual average plus bias to the likely recent average of carbon in the atmosphere. Easily an order of magnitude below measurement error and another cumulative (additive not multiplier we think) order below natural variability. A 0.8% positive bias impact really honestly and for true just isn't a knowable value. CO2 is infinitely soluable in air so are almost everything GHG except H2O(v) and H2O(w). Those last two are 70% (we think) of all GHGs.
I agree that energy is the issue/problem/focus. Call me an optomist but energy ain't never been a problem before. Think about everything just a tiny bit out of our grasp; superconduction, catalytic H2, polysolar, low temp low pressure fusion, gravitics, inertial dampening, the list is endless. We know how "stupid" it was to chop down tress, why is this any different? We can and will do better but not by stepping backwards.
oh and I appreciate the praise. My style and content tend to attract negative responses and I'm only human. I'll start a thread in a few days on these subjects and revive some old ones about transportation.
I look forward to the new post.
The way I see it, politicians take the position of promoting a specific immature technology (flavor of the month) or concern (global warming causes...) rather than address the underlying issue. If a long-term coherent energy plan were formed, there'd be little need to be distracted by fads or arguing the impact of CO2. (You are right; water is the most prominent GHG even when considering its radiation forcing value. The majority of the vapor does not remain in the atmosphere very long though, so it isn't considered forcing... more of a feedback.)
Meaningful improvements can be made using mature technologies to boost energy efficiency. These can be implemented in nearly every link of the chain: from end products to energy distribution/production. Even better, why not run a conservation campaign? (it's been a few decades.) Hell, smoking was severely limited in the US with what, a 10-20 year program... it turned from being cool to being ostracized?
In my opinion, 'new' technologies and theories often lead to very loose money and almost no accountability. Misguided funding and research, swindled investors, scams, bad policy, and little advancement. Certainly, research should be funded and promoted, but politicians/funding agencies seem to put all their eggs in one basket - risky future research - rather than implement upgrades along the way.
No, I do not believe that we will run out of oil for a long, long time, nor do I think that we will be limited by our ability to produce electricity in the foreseeable future. That said, improving our energy policy would be very beneficial (economically likely first and foremost, but also geopolitically and environmentally). We could spend our money more efficiently than often chasing misconceptions.
Cote is wrong when he predicts rising inventories through this year and next. Checked the housing inventory tracking blog today and lo and behold inventories are falling in major metropolitan areas including Phoenix, OC, Riverside, CA, etc.
Phoenix 6/30: 50,974 7/04: 50,264
Statistically insignificant. Nice try Jack.
I said "statisically insignificant." That is a term of art for mathematicians. The MLS listings are periodically updated, weekends and holidays affect when inventory is listed, the reporting carries a large amount of both noise and error. The number of listings also hetrodynes, feeds back on itself such that sometimes people rush to market and at other times they hold back for strategic selling reasons. Buyers (who also impact inventory) do the same for their own reasons.
There, understand now? I doubt it since it is in your best interests to lower the the quality of these pages with your deliberatly provocative comments. Oh, and just because I see a steep drop this year and slow declines going out several years doesn't mean I'm predicting doom. These things need to happen and I smell opportunity. Let's take the level of exchange up a notch here or move it to where quality is not such a concern to the blogmaster.
Jack, every single location you mention is up significantly month over month. The numbers you cite are 4-8 days all straddling the end of the month and before the next friday and include a long holiday weekend. Listings expire at he end of the month. What you think you see is noise in the reporting method.
Most assuradly listings will eventually decline. In fact that is almost certain to happen roughly Oct as discouraged sellers delist. Not only am I "brave" enough to admit it, I fully expect it to happen. Doesn't take much bravery to admit what I already have mapped out.
We cannot have a soft landing. That chance passed last year. We need to find a market clearing price and when we do that will also drop inventories.
Jack, I've explained the details. You disagree, fine. All we do now and wait two weeks right? The reason for the synchronized "decline" is because in an amazing coincidence the month of June ended at the same time for each and in another coincidence they all had a holiday week and in another coincidence none have seen a first Friday after the start of the month. Wow, coincidences abound.
You cannot use week over week data. No, let me correct that; I cannot use week over week because I know better an for me to try would be dishonest. Clearly you never studied Fourier. Thus in your lack of fineness (that's a math joke) you can and will insist on doing exactly what the warmists and peakinese do; use assymetrical and error prone and variable measurements to define trend well within range. Like I said do that and you can discover anything; global warming, peak oil, falling inventory.
Seven days will be enough to discredit your premise. It will still need to be compared month over month.
You last 5 posts have been unbidden personally hostile. This is my blog. If I want abuse I can pick my own terms. Hint.
What is the point of arguing over one detail and especially staking any pride on it? Does inventory rise or decline absolutely have to be relevant?
Credit goes to you for being polite with Mr. Meoff
It is interesting that there are so many people from both camps angry about the Real Estate Market and people who participate in it one way or another. REALLY ANGRY! The are some real mean bears lurking on Ben's blog. Not a good forum for discourteous bulls. It would be nice to have a blog where entering one's real name to the post was a requirement. With all this ANGER it is kind of scary.
By the way I grew up in Ventura County. It cracks me up when you dismiss Oxnard.I lived there during high school.
Anon, I thought my two weeks for data offer was fair. In part it is fair because any rise in inventory one week from now would only be a boomerang effect of this last week of exceptional conditions. You are correct that individual rises and declines at this level are small compared to the trend. Indeed inventory need not change one iota for the trend to continue if sales fall. There's going to variation in that as well.
Jack "me off" was essentially kicked off Ben's Blog not for his positions but his disrespect. I know some of these discussions can appear to get heated but it may also be a function of the medium. I "go off" on Prop 13 and transit and as you note Oxnard but I don't hate them. BTW, use the search box on OXnard specific to this blog, I've written a lot. I also know the entire council by first name and know what they like to drink. I've got all the inside dirt.
Sacramento, Seattle, San Diego, Phoenix, Riverside, Orange County and Los Angeles ALL show drops in inventory in the latest counts.
Not so fast, Jack.
Sacramento:
6/30: 16,505
7/03: 16,341
7/07: 16,509
Orange Co:
6/30: 16,692
7/04: 16,629
7/07: 16,723
LA:
6/30: 42,317
7/04: 41,984
7/07: 42,588
http://bubbletracking.blogspot.com/
Better luck next time.
Hey Fuzzy, thanks. I just now got the data. And what day is today? Robert says; A FRIDAY. And what else? The 1st friday after the end of the month? And waht else? Higher, Robert sees higher. And who has been caught with his pants down around....
No. I stick to my original and unbroken position. This weeks data is still inside the noise. Jack should wait before bowing to his masters.
Jack, just keep your head buried in the sand. There is now way housing justified the gains it experienced over the last 3-4 years. I've been at this gig for over 25 years and regardless of the stats in one MSA, the overall data points to a correction. How mild or hard it will be is debatable.
RM
...so Jack - you believe in the US dollar? That we still "attract the best and brightest"? Global warming is the confabulation of crazed environmentalists, bent on destroying what, exactly?...
GW, the devil? Nah - nowhere near interesting enuf....Merely adequate as a cover for Darth Cheney's machinations... The same Darth who's heavily invested in European bonds, strong believer in the dollar that he should be...
Personally, I'm rapt, observing this trainwreck in slo-mo. Having accumulated a staggering list of housing-related stats over the past year, and convinced massive equity evaporation is guaranteed, p*ssing matches like the previous amuse me no end....Thx
So, I get four of seven right on the money and am confronted by a hostile housing bear sneaking over from Ben's blog. What else should I expect?
Just the facts, man. You're down to two out of seven. Trend?
Riverside County:
6/30: 24,490
7/04: 24,213
7/08: 24,517
San Diego County:
6/30: 22,588
7/04: 22,410
7/08: 22,755
http://bubbletracking.blogspot.com/
Better facts next time.
Beat me to it Fuzzy. It's worse than trend, every update that meets my criteria of first fridy, first full week, post holidy, etc. has been uniformly up erasing the glitch in reporting. I'm a lot of things but I am not innumerate.
One thing I am is intolerant of incompetence when mixed with braggadacio. Jack will apologize for wasting time and bandwidth or I will help him with the latter.
In the next week or two the peak will be obvious even to you.
I thought you only needed 'til this Thursday? Now you want another week or two? Hmmm, Sherman set the Mayback Machine:
Seven days, Cote. That's all we need.
Someone is learning real time data collection and analysis the hard way.
Robert,
I thought you might be interested in knowing... I finally got out.
Sitting Pretty in Palm Springs
lol Phoenix back over 51,000. Oops!
One day later, Phoenix inventory 51,500 (7/15)
Good time to point out that moderately falling inventory is the norm over the summer. We aren't bothering to do seasonal adjustments here. Not necessary. When "Jack" talks about a slowing or plateau it is in context of a market that should be showing a steady decline into the fall.
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