Divorce 2008 Style

Guy talks to his coworker in 2008 about his recent divorce:

"Man, I just finalized."

"Tough times. I know, I've been there. How'd it turn out?"

"It was vicious right to the end. She got nothing and I got the house."

"Sh!t! You got screwed. You needed a better lawyer."

"I know. Trouble is hers was a former Realtor®."

[Nodding] "You never had a chance."

A Difference of Opinion

I was wondering if the Arizona Republic would be interested in running a story in the Real Estate Section over this little difference of opinion.

“Local Realtor® reiiterates claim that anyone who dares believe Phoenix houses are overpriced is a Brownshirt Nazi. Greg Swann, ABR, CBR, CRS, E-Pro, GRI, Realtor® and Designated Broker for BloodhoundRealty.com again repeated his description of internet bloggers that are asserting that there is a housing bubble in the Greater Phoenix are were “Brown Shirts or flying monkeys.” Attempts to contact Mr. Swann at his brokerage went unanswered but representatives of the JDl were quick to…”

Mr. Swann you’ve clearly violated both the ethical guidelines of your profession and the bounds of decent human behavior. It really is time to let Phonecians in general know just what your views are. An article would give you a chance to defend your repeated character assinations. A letter writing campaign to the Op-Ed pages would also work as the editors upon recieving hundreds of submissions from all over the country would certainly result in a requst for you to comment. Worst would be the insulted parties being forced to buy advertising space where you would be afforded no voice. Of course there’s always peer review where the local board of fellow Real Estate professionals can be calleed upon to rule on your ethical behavior and how it reflects on them. Then there’s the alternative, use this as a learning experience and apologize for calling me and the many others out there Brownshirts.

Quote-O-Note

"There never was a bubble, and there isn't a bubble now. We don't see a bubble in the future."- Larry Murphy, president of SalesTraq, which monitors real estate trends in Las Vegas.

WWTFFD?

Someone observed: "The Founding Fathers wouldn't recognize the place."
Another anon someone retorted: "Yes they would; as the place they rebeled against."

To this I add; Time for an event long overdue and wholly endorsed by the Founding Fathers; a Constitutional Convention.

The "rules" were deliberately left vague. I suggest the following:

No delegate shall have ever held Statewide or Federal Office. Indeed, aspiration to such shall be cause for suspicion.
Any delegate shall not be currently under due process procedure or conviction of any felony.
Delegates shall be of legal age as alcohol will not only be served but in some instances be mandatory.
Wives, mistresses, boytoys, etc. are not Convention expenses nor deductible.
The new 0th Amendment shall address the right to privacy explictly limiting any government(s) going forward.
Federal taxes are for raising necessary revenues. Nothing else.
The penalty for utterance of the word "fair" in the upper house shall carry the sentence of death at a minimum. No other sentencing guidelines are permited.
Other than that, no air conditioning or heating or security. Go boys (and girls).

Auger In?

I used to think a nice cleansing price decline would be enough. Now I’m entertaining the necessity of a “fall down, go boom” type of event to just set the stage for a merely painful protracted contraction following. I am honestly worried that papering over the “Event” (my new term) will only make things worse. I thought we could avoid The Event; steady increases in interest rates, gradual tightening in loan requirements, natural end to the business up cycle, public awareness. Now I’m not so sure.

sunsetbeachguy says it even better:

Hey Robert, I think all bears are struggling with what you mention.

Even housing bears that disagree with each other share that concern.

I think we may be in for a harder ass-whupping than we anticipated.

But that is OK, because my beating will be much more tolerable than an Fb’s.
------

For the record I am not a bear. I'll be out in front on the upside. I just don't see an upside anywhere in the near future and don't see any reason to see an upturn in a timeframe measured in years. The next 6 months are a time where we discover how bad things are. That will enable me to predict how bad things could get.

Bailey Acres

Aesthetics is the last resort of intellectually superior
urbanists who lack the FActs with which to advance density.

Supposed areas with the most sprawl:

1. Riverside-San Bernardino, Calif.
2. Greensboro-Winston-Salem- High Point, N.C.
3. Raleigh-Durham, N.C.
4. Atlanta
5. Greenville-Spartanburg, S.C.
6. West Palm Beach-Boca Raton-
Delray Beach, Fla.
7. Bridgeport-Stamford-Norwalk Danbury, Conn.
8. Knoxville, Tenn.
9. Oxnard-Ventura, Calif. <------ ME!!! That's ME!!!!
10. Fort Worth-Arlington, Texas

Cities with the least sprawl at least according to the SmUGLERs:

1. New York
2. Jersey City, N.J.
3. Providence
4. San Francisco
5. Honolulu
6. Omaha, Neb.
7. Boston
8. Portland, Ore.
9. Miami
10. New Orleans

Source: Smart Growth America

More silly science available at:

http://www.smartgrowthamerica.com/sprawlindex/sprawlindex.html

Smart Growth is by definition the "smart" thing. "Good" planning likewise. Only the most close-minded transit advocate would allow the discussion to devolve to the point where people who disagree should become demonized.

Only SmUGLERS (smart urban growth lovers) and planners are unhappy with the current process. Everyone else is content to let evolutionary land use policies develop. SmUGLERs like all malcontents claim the -need- to change the status quo. Planners are merely pursuing their life goals of shaping the developed environment to their will. Recent trends in land use regulation, notably Napa and Ventura Counties in California represent the greatest threats to the NewUrb/NeoTrad/SmUG fad du jour of the "professional" planning community. Surely Napa and Ventura counties are effectively promoting the -claimed- goals of those planner driven marketing progroms but their failing is in their inability to promote the agenda planners assumed would follow from such programs. It should be noted that every single planner at the city and county level publicly opposed the passage of Ventura Counties' SOAR initiative and one of the most visible skeptics, Bill Fulton, is now on a city council.

The supposed benefits have been promoted to no end and the technical literature are filled with the measured failings. It is hubris in the extreme to think there is any substantial body of pro SmUG evidence or that there is not a large body of measurable SmUG refutation already extant.

SmUGLERs are generally anti-POV for reasons of either religion or demonization in order to advance a competing agenda. It is also important to expose what misguided Nurbists refer to as "evidence" of unwieldy conspiracies and roads cabals and evil capitalist plans . The failure resides in not addressing the many legitimate social and economic forces that were responsible for reshaping society over the same timeframe. These forces are actually easy to tease out of the fabric of 1920-1960 if one is diligent. Transit usage was falling, mobility was rising, transit costs were rising at many times an already high cost of living rate, POV costs were falling in both real and relative terms, etc., etc. The pervasive success of the POV to address unmet societal needs is the effect and not the cause of social pressures for a different urban model.

Recall that classic bit of Americana; "It's a Wonderful Life." It describes exactly how miserable the "company town" old style density could be. This is the reality of presuburbanamerica. Only planners and SmUGLERS pine for the days of pre- WW-II urban patterns. An excellent example BTW of the urban legend syndrome among the planning class.

The politics of SmUG are all about mixed use and close proximity. SmUGLers are instead griping about the -results- of government meddling in the development process for reasons other than their responsibility to community (safety, compatibility, etc.).

SmUGLERs neither speak with a single voice nor even with a consistent voice. Even SmUG is nothing more than the latest incarnation of previously discredited Nurb and NeoTrad and whatever came before that. It is a "given" in any discussion of planning meta-principles that urban advocates will attempt to continually redefine the discussion and their public personas as the previous claims are refuted, disfavored and exposed for what they are. Recent outrages such as Monster housing are only targets because they aren't on the agenda not because they are bad. On the contrary, newly constructed super homes are nearly unique in one, all important, municipal characteristic; They pay for themselves from the beginning. Requiring
neither subsidy nor tax breaks and also needing fewer infrastructure investments and fewer social service burdens, McMansions are the moneymakers of the zoning for dollars racket. More taxes and fewer burdens, this is the formula for running a city like a business. We needn't get into the moral implications just by acknowledging the situation. To harken back to another buzzword it turns out that from a community perspective McMansions are "sustainable" by all the enumerable criteria usually associated with that concept.

Everyone -can- live in a pleasant exurban community. We just cannot all live in the -same- community. We know what happens when we allow infill at the city level; San Fernando Valley. Infill, of course, being a central tenet of SmUG. We'd have none of the problems if the "cities" (urban nodes) in the SFV had remained discreet. When they all grew together into a vast continuous urbanscape the inevitable congestion and inability to provide new, adequate infrastructure became obvious.

I propose the following bumperstickers for the campaign to change the hearts and minds of the people before "we" change their lifestyles:

"Density; Even rats get it" "Smart Growth; Simple Solution" "Club of Rome
Lives!" "Save resources; help China" "LEMs = Apartheid" "Transit is
addictive" "Freedom = Mobility" "Invest in Nature; Sprawl" "Congestion
first, transit later" "Light Rail, watch the first step"

SmUGLers (Smart Urban Growth Lovers) don't really care about transit mode. They advocate density and transit. They place their relative value of natural open spaces over the well being of people. They place their emotional hatred of autos above the rational provision of transportation resources.

Sustainability has replaced Smart Growth. Same fish different wrapper.

The problem is that when the sides are aligned along "Change vs. No Change" the compromise always involves "Change." The advocates for change can always start with an extreme position and negotiate down to merely radical positions. No Change is stuck with principles and no way to negotiate without losing. Perhaps the answer is in the zoning that you dislike. Make requests for rezoning , exactly that. A potential developer risks losing the zoning intensity they already have when they request a rezone.

At least the NUTS (NewUrbanistTransitSupporters) are left to clean up the mess left by the last round of social agendaists rather than impose their mandates on those of us fortunate enough to escape the borders of their inhuman experiments on unwilling subjects.

Redlining

Redlining or Location Discriminatory Mortgages are paid for through higher general interest rates and thus have the effect of reducing housing affordability.

Man walks into a bank. Fills out a mortgage application. Banker says, "Oooh, too bad. If only the house were the one next door we could give you a better rate or more money. As it is you don't qualify." "What?! That's redlining! That's illegal!" "Nope, that's transit math. You see, banks are not private companies, we are required to follow some rules that are contrary to our best financial practices. Not to worry, we are still allowed to make a profit so our mandatory exposure is covered by raising other costs. In fact, if it weren't for our being forced to be overexposed for the house next to yours we could probably afford to loan a fair amount to both houses. You see son, this is a push-pull business. Prices respond to the differences in affordability."

Location Discriminatory Mortgages decrease affordability. Not only that, but LDMs are the tail wagging the dog. There is nothing in any enabling legislation at any level of government that covers preferential treatment for the purpose of assumed transit effectiveness.

LDMs and their cousin, Subsidized Unaffordable Housing (SUH), are attempts by government to do to the American housing environment what they did to American transit. Not too worry, housing is only the next target and it may not be too late to avoid the bullet. Government is currently preoccupied with doing to the education system what was done to transit and housing still has some time before more tentacles come to strangle home ownership.

This is a campaign of resistance to being socially engineered versus the forces of social engineering and is not really one of a contest of equal competing interests.

LEM qualifying locations are generally riskier choices based on historical data. LEMs are in effect rewarding poor choices. Now clearly this is a generalization and some LEM locations are going to prove good investments but if there are such indications then an LEM wouldn't be necessary since the property and purchaser(s) would qualify under the regular rules.

"Location efficient mortgage" is like "smart growth." Who would want a location inefficient mortgage or who would support dumb growth. Meaningless catch phrases, nothing more. Location discriminatory mortgages are the exactly descriptive phrase.

More than any objection to the actual policy I'm distinctly surprised at the willingness of people whose entire premise is supposedly fairness to run to unequal treatment as a first step when they agree with the intentions. I'm also wondering about the unintended consequences shoe that hasn't dropped. We in PAD know that government with good intentions ALWAYS results in unanticipated problems. Speculation; people will buy near transit, use more transit, pay less taxes to local government and eventually get cars. Result, normal traffic in a deliberately under-road served area with higher transit subsidies and lower taxable base.

Funny how the old VA loan policies that inadvertently used to favor new suburban housing were struck down as unfair by the very same people advocating this new version of redlining. (Red Line as in Los Angeles and Boston, etc.)

In case it isn't obvious, I know and I am willing to say out loud that LEMs are evil discriminatory mechanisms.

Easy Terms

Whatinthehell are these people thinking? They've got and ARM that will reset to levels they cannot afford. Don't blame Greenspan. His comments about the benefits of Adjustable Rate Mortgages were misinterpreted as an endorsement going forward when in fact all he said was they were really helpful in the past. Anyway, say you are the bank and you've got the fish on the line with an ARM and a nice margin that protects you from swings in the economy. These fish can barely afford what they've got now and they come looking for a way out. Well the only way out is a fixed at an even higher rate! They caannot afford that either. Indeed many will need to cough up some income documentation under the newer rules. Now they really don't qualify. They are going to walk out of the bank with the same loan they walked in with. Who in the world wants to give 30 yr fixeds to subprimes and no equity who can't cover their current lower payments? Sell and rent? Who'll give them a loan to close with? And renting? Rents are going way up with inflation and all the other things I've bloviated on about ad nauseum.

I hereby cristen these unfortunate house prisoners: The Immobil Class.

Private/Mass/Public Transport/Transit

I love mass transit. Mass transit makes a lot of sense. Mass transport even more so. It is public transit that I've pretty much given up on and then only in US type situations. For a counterinstance, as near as I can decode the transit math; Sweden public transit seems not only energy efficient and timely but beneficial to the urban landscape and environment.

I love airplanes private and mass transport. I love shipping both private and mass transport excepting ferry services that are just waterborne public transit. public and private transport via pipelines are also wonderful. Coal slurry, NatGas, water; doesn't matter to me, all generaly good ideas. I don't even mind public transit. I object to running an operation so sloppy that even bribes are not enough to change behavior, we have to resort to punishing alternative behavior as well.

Attention FBs

Heeeello US Homedebtors. Dr. Evil here. This is my son Scott, Number 2, various henchment, yadda yadda… I’m interupting your tedious blogging act-tiv-ities to explain my latest Evil® plot. It seems you people have foolishly played into my hands. Those papers you signed? Those loans are {air finger quotes} a-just-able. OooohOoooohOoooh, heeeeheee… cough, cough, hem. Excuse me. Now; These “a-just-able” loans are not the innocent shortcuts to no effort prosperity you were led to believe. Noooo, these a-just-ables are an Evil® international conspiracy designed to enslave you! If you are hearing my voice it is already too late! ALL YOUR Bases... er EQUITY ARE BELLONGING TO ME! Now for the good part, I am holding your mortgages hostage and you will pay me MORE. Yes, every month I will extort dozens of extra dollars. OooohOoooohOoooh, heeeeheee… cough, cough, hem. And who are we? This Evil® international conspiracy? {air finger quotes} “We” are your parents, your neighbors, your government. “We” be using your money to make sure you never get ahead ever again.

_pinky to corner of mouth, fade to black. We now return you to your regularly unfettered blogging.

Civic Update

Just bought a Civic. Paid cash. Stupid? Maybe. Let's do da math:

Price $20,000 In a 1 yr CD that would earn 5%: $85/month.

Old car; 17mpg. Civic 38 mpg.
$3.25/gallon 1100 miles per month. Old, $210. New, $94.
Difference $116/month.

There's more to owning a car including depreciation but 4 year old Honda Civics are selling used at 90%+ of retail new. I fully expect the price of a Civic to soar and used prices follow new prices up and down.

Update July 11th 2006

6 weeks and 3600 miles. We've been driving more than we thought and we've tried to put the miles on the Civic as well. So, repeating the calcualtion:

Price $20,000 In a 1 yr CD that would earn 5.4%: $92/month. (up from 5%)

Old car; 17mpg. Civic 37 mpg. (down from 38mpg)
$3.25/gallon 2400 miles per month. Old, $459. New, $210. (steady gas prices.)
Difference $248/month.

Looks like a worthwhile deal.

The Blame Game

You cannot talk a bubble down, it is an irrational exuberance. You cannot do something to deliberately pop a bubble. If bubbles were subject to rational forces they wouldn't become bubble. Therefor whatever popped the bubble was accidental/incidental and emotionally based. Therefor it was the Democrats who in their disgust with the state of current politics have tried to inflame the passions of Americans by trash talking the entire nation until some people here and abroad actually started believing their rhetoric. Yup, it was the Dems and their lapdog mainstream media buddies.

Alright you didn't like that one. How about:
The markets are busy finding the best use of capital. The stranglehold the Republicans have on the Federal govt has allowed the normal checks and balances to go unattended. The Reps caused the bubble so in effect the Reps are responsible for the bubble popping.

Personally, its all those damn Libertarians on their blogs. Speaking in calm clear rational terms, they have managed to dislodge the emotional content from housing with the enevitable result that people have woken up and are pricing rationally now.

Nope, it was big oil. Think about it. Who is raking in the big bucks? Who was getting $15 and now gets $75 for the same damn thing? Who isn't being blamed for the whole mess? Yep, big oil.

Nina Flipped that House. Palm Springs Sells!

Nina and her partners have closed escrow. She has a.... ummm.... "general" accounting of her profits. Unfortunately she's turned off by some criticism she's received in the past so she has turned on blog approval. If you have comments then this is the place. Personally I'm offended by the unwilliness to admit to the loss. Sure as heck come next April 15th she's going to list this little misadventure as a loss to the IRS, why not now? Anyway I'd like to hear your unmoderated comments on the saga and the responses we've seen. Her post: http://sittingprettyfinancially.blogspot.com/

Here is the final installment. We sold it and I’m pleased to report that we closed escrow last Friday. Here is the final tally:

$613,000 Sales Price – July 2006
$475,000 Original Purchase Price – August 2005
$138,000 Subtotal

Minus Costs:
$75,000 Improvements
$31,000 Agent commissions
$32,000 Total Proceeds

The monthly carrying costs (mortgage, taxes, insurance, utilities) are not included in these numbers. If you factor in these then you can call it a “break-even” venture. But we used the house & pool on the weekends so we maximized our dollars and enjoyed the time in Palm Springs.

Shine Mister?

Joseph Kennedy, the SEC’s first chairman and father of President John F. Kennedy, reputedly told colleagues that he sold most of his stock prior to the 1929 Crash after his shoe-shine boy started giving him stock tips. He reasoned that if his shoe-shine boy knew something he didn’t, something had gone seriously awry with the markets.

Read more from a SEC transcript: http://www.sec.gov/news/speech/spch120105et.htm

To ARMs, the NURBs are Attacking!

http://money.cnn.com/2006/07/07/technology/newvillages.biz2/index.htm

Or as SunsetBeachGuy says:

Oh man, don’t get Robert Cote started on that one. We have already beaten the pedestrian friendly development pattern vs. the car friendly development pattern. I prefer people to cars. Click on Robert Cote’s name and go discuss over there. Just one little poke at Robert, I thought that the market had thoroughly repudiated this development pattern?
----

The Politics of AGW

"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." - Anon from the previous thread drift

CO2 is the flavor of the month because it most easily fits the warmist agenda. It is easy to measure, corellated with economic production and simplistic for the masses. As soon as you realize why China is exempt and what they are doing with that exemption you know everything you need to know about why CO2 is the stalking horse of socialism.

There, did I offend everyone? If not, give me another chance in the comments.