Saturday, September 30, 2006

Planner Victim? Deserving Idiot? Realtor Fraud?,1375,VCS_167_5032952,00.html

You gotta love these. Buys in a ridgeline near a major freeway interchange about land zoned for major retail for over a dozen years and gets a shock when major retsail is built.

"The view from their hilltop home is much different today than the one they paid extra for in 2002. It went from sweeping views of the countryside to neon signs, concrete walls and lighted parking lots."

"The Realtor told us they didn't know what was going to go down there. If we'd known, we probably would have looked around somewhere else,"

Friday, September 22, 2006

What is Urban? Rural? Exurban?

5) In responding to Astrid, who said "Is .1 acre SFH really better than townhouse with good sound insulation and decently planned parking space?"

I replied: “No question. First 0.1 acre is a whopping 4300 sf. 40x100. Not suburban except in the minds of the planner classes.”

TOLurker expands and asks: My house sits on a lot exactly that size and it is considered a suburban lot around here. It’s not inner city Toronto, where they typically have houses on 15’ wide, 20’ lots. Even 12’ lots. 25’ is a big honking lot in the downtown core. So, if my neighbourhood densified, you could fit two houses on one lot and double my neighbourhood’s density. (which they more or less accomplished with all those stinking 30 storey condos. I would have preferred no high rises and lots of 20’ lots.)

Toronto is a bit of an exception eh? Even for Canada eh? We can try to work the margins and provide both an efficient and desireable environmentwith careful density planning. God is in the details. In the US the extent of careful density planning involves changing 16 DU/ac to 20 DU and approving the development with an exception to the city's General Plan. 10 DU/acre doesn't so like a lot. It is also 19,000 persons per square mile. That's a high school, two middle schools and 6 elementray schools. That's 120 of your 640 acres in that square mile. Roads, fire stations, shopping, commercial? Once the gross popualtion density is considered those 10 du/acre don't look so suburban anymore.

Monday, September 18, 2006

Exurban Energy

4) “What this means is that Kunstler has the entire end of suburbia as we know it exactly wrong. Higher energy prices will spur new energy efficient construction and demand for less congested (more) freeways and erode support for the cenurbs as jobs move to where the people live not vice versa.”

TOLurker expands; "Certainly higher energy prices will force new construction to be more energy efficient. (I’m all for that). But aren’t high energy prices connected with recessions (in the short run) which will kill new construction? If people facing $5 gas demand less congested freeways, will they, hurting in this recession, vote the tax increases for new and additional freeways? Don’t more freeways eventually result in more kilometers driven, more cars and more congestion? What is energy efficient construction anyway—are you referring to the buildings? Or the layout of the cities? Because I think the latter is just as important in reducing energy use as the former."

Building NEW energy efficient is easy and justified. Retrofitting outmoded cenurbs is prohibitive and doesn't pay. The biggest POV energy thief is congestion. I see a new under the radar movement that understands this. A recession reduces congestion; a buffered system to some extent. In truth it just buys us some time to fix the problems.

I think you are incorrect as to urban development patterns on the old fashioned density intensity mixed use modal being energy efficient even with new construction materials and methods. I'd like to hear your thoughts however. Me, I see with one exception the cenurbs and exurbs being similar in gross energy consumption. The exception? NYC which "reports" some 30% lower energy consumption per person than any other US city. That's just too extreme to be anything other than a difference in reporting.

ARM Twisting

3) “When the ARMs start twisting it is the cenurbs that will see the greatest impact not the exurbs. Transit costs typically increase much faster than general inflation and marginal ridership decreases in poor economies.”

TOLurker asks; The cenurbs will have greatest impact because of the ARM time bomb knocking out marginal home owners, or the cenurb TRANSIT SYSTEMS get knocked out by the crap economy? Because I’m sure the exurb marginal ARM home owners will get screwed, too, if not worse.

A little of both. Remember, the cenurbs had only recently and only statistically marginally demographically improved in the 1990s early 2000s. THe cities are going to have a cash crunch and transit/transportation is a likely victim. Without those continuing investments the reasons people were drifting back will go away. There are a lot of compromises with urban living, not a negative, just a consideration. A general recession will unfortunately change a lot of the components; transportation above but also crime rates and costs of living. An economic contraction will cause people to "age in place." That means the stream of younger people constantly replenishing the people who marry and start families and move to the 'burbs will slow. Then there's the last 90 years of exurban diaspora. This slowed in the 90s-00s but will re-acellerate. And college is on the cusp of major changes; not good for the Bostons of the nation. Non of these are urban fatal but enough small cuts and you can still bleed to death.

Friday, September 15, 2006

T-Shirt Suggestions Requested

HARM at andI need T-Shirt suggestions.
Housing Checklist:
[x] Bucket of Money
[x] Box of Stupid
[x] 6% for Realtor
A House is a Home with a HELOC
Ask Me About My Equity
PITI Me, I Bought in ‘05
Broke is the New Paradigm
My House Has Achieved A
Permanently High Payment
My ARM is Bigger than Yours
… and It’s Still GROWING!

Wednesday, September 13, 2006

Bubble "Goodliness" vice "Truthiness"

“As to the housing bubble; The housing bubble is a good thing. It is a voluntary mechanism to raise municipal revenues and assures more efficient use of existing housing stock thus reducing sprawl and stimulating the economy.”

TOLurker comments: More efficient use of housing stock – because people double-up in a house? More people in fewer houses? I thought that happened in a recession when young’uns move home and you have more housemates, intergenerational families under one roof. Last I checked, the housing bubble was exacerbated by restrictive planning policies demanding low density versus high density, a lot of speculators flipping empty houses (and causing more houses to be built than there is real demand for) which will (has?) result in many never-unoccupied houses in exurbia.

There's a bit of, okay a LOLT of tongue-in-cheek here. The housing market is indeed voluntary even as it is manipulated but those restrictive urban policies IMO exacerbate the bubble by pushing unnaturally high densities not low.

Recessions Hurt Transit

TOLurker asks several involved questions. I will use these spaces to address them.

I said; transit saw its’ highest usage in 40 years at exactly the same time gasoline was at its’ lowest inflation adjusted price ever. Real transit advocates should be pushing for cheap gas but their emotional desire to punish autos in a misguided belief in a zero sum game and will instead continue to shoot themselves in the foot.”

TOLurker asks; Why? Could this be directly a cause of a booming economy and more commuters, rather than low gas prices directly equals an increase in the number of transit users?

Acouple things come to play. People can only afford effective transit in good economic times. A recession is a qquadruple threat to transit. First as you note, fewer users. This means the same fixed costs and reduced incremental revenues. The 11th rider on a bus is nearly free to service, their incremental fare no matter how small is still above the average of the original 10 riders. Second, People don't have either thee time or money to utilize transit unless there is a good economy. Third, for the same reasons taxpayers are less willing to tolerate the extremely high expenses and inequitable provison of transit when they feel a squeeze. Finally, transit is slow and resistant to reducing costs thus a spiral of reduced services hetrodynes into reduced ridership and the cycle reinforces.

Higher -energy- prices are also a variable cost of transit provision. Since transit users pay none of the capital costs and a fraction of the operating costs, 1.4th to 3/5ths generally, a rise in energy costs disproportionally squeezes transit prices. On a cost basis transit and POV are a wash but that isn't the problem here. A 20% incrrease in fuel costs for a POV is something like a 5% increase in out of pocket costs but if passed on a 20% increase in transit energy costs would be a 15% increase in fares if actually passed on as increases. Transit being extremely elastic vice POV the 155 is usually delayed an rather expressed in delayed expenditures, reduced service, etc.

Hopefully this will stimulate the discussion. It is by no means pontification or tablets from the mount just my resonable take on asubject I know a lot about.

Tuesday, September 12, 2006

Not Peak Oil Again.

I've examined the reports of the last 148 years.

Cantrell II has -potentially- more oil than the Peak Oilers said could ever be found.

Jack II has -potentially- more oil than the Peak Oilers said could ever be found.

Recent extraction technologies have added to useable reserves more than were ever considered possible.

Peak Oilers don't get it.


"A virtue is an habitual and firm disposition to do the good. It allows the person not only to perform good acts, but to give the best of himself. The virtuous person tends toward the good with all his sensory and spiritual powers; he pursues the good and chooses it in concrete actions."

No one was interested in the deadly sins or spiritual (heavenly) virtues so this is just to close out the subject. From the Catholic Catethism above it is self explanatory especially for my regular readers who display extraordinary accumen.

The question remains: Is it enough to say?; "I think it is time for me to sell." or is it necessary to say "All the signs I see indicate this is a terrible time to own real estate."

Is there a moral obligation to let people fail?

Sunday, September 10, 2006

The Seven Hevenly Virtues

Things won't always be this bad. thee bloodhoundblog won't be around much loonger with his 21 reasons why Phoenix is special. The Bhuddist Realtor of Sacramento (delicious irony that) is already prursing other exciting prospects. The ethical Realtorslike Jim the Realtor of NorSD County are dutifuly reporting the truth. So, with the Seven Deadly Sins in full force but crumbling what are our options? There are two. roughly secular and spiritual. First the spiritual:

Ethical Action on the part of participants. From:
Truth - Truth is a comprehensive term that in all of its nuances implies honesty, accuracy, sincerity, integrity, and reality.

Respect for the life investment people are making. From:
Love - A deep, tender, ineffable feeling of affection, devotion, and/or compassion toward a person.

Courage to tell the truth when all around are lying.
Courage - The state or quality of mind or spirit that enables one to face danger, fear, or change with self-possession, confidence, and resolution; bravery.

Expertise and the skills to efficiently employ the best practices available. From:
Wisdom - Knowledge, and the capacity to use the best means for attaining the best ends; good judgment.

Creativity because a shifting moral and economic ground requires it. From:
Creativity - The ability to produce through artistic or imaginative effort, characterized by originality and expressiveness.

Compomise to achieve best outcomes for all.
Tolerance - The practice of recognizing and respecting the beliefs or practices of others.

Independence, beholden to none. From:
Freedom - The power to act, speak, or think without externally imposed restraints.

The Seven Deadly Aspects of the Housing Bubble

1. Confusing housing with lifestyle consumption. Lust (Latin, luxuria)
2. Aquiring more than is healthy. Gluttony (Latin, gula)
3. Conflating living costs with investment. Greed/Avarice (Latin, avaritia)
4. Money for nothing. Sloth (Latin, acedia)
5. TBD as the blame game has barely started. Wrath (Latin, ira)
6. Keeping up with the neighbors. Envy (Latin, invidia)
7. Mistaking ownership for personal validation. Pride (Latin, superbia)

Up next the Seven Heavanly Virtues and the Seven Cardinal Virtues of The Housing Restoration. Yes, The Housing Restoration. You heard it here first.

Wednesday, September 06, 2006

All around the equity ladder
The FB chased the HELOC

The broker thought ’twas all in fun.
Pop! goes the loan rate!

A penney for a pergraniteel top,
A penney for a bidet.
That’s the way the money goes.
Pop! see equity fly away.

Up and down the City Road,
In and out of the marketplace,
That’s the way the money goes.
Pop! goes the tax base.

Half a pound of tuppenney Pergo,
Half a pound of Pella,
Mix it up and make the flip go,
Pop! goes the FB fella.

What's truly amazing is that the 16th century original warned of the dangers of pawning ones' assets for prolifigate spending habits.

Saturday, September 02, 2006

See Whaat Happens?

The local rag of plausible deniability has this article:

As housing prices in Ventura County are going up, enrollment in local schools is going down, and that means less money for education.
That's because most school funding is based on enrollment, so if schools have fewer students, they get less money from the state.
"As we're in this slow decline, it's difficult to balance the budget," said Charles Weis, Ventura County superintendent of schools. "It's difficult to keep teachers and programs in place."

Countywide, enrollment dropped by 1,500 students last year, Weis said.

Full Story:

Of course there's a whole lot more than just housing prices but it is a piece of the picture.

Friday, September 01, 2006

Holy Freakin' Fresno

I'm in Fresno helping a friend execute an estate. Among the things necessary is vacating the current house and finding a rental after convincing him not to buy. We drove through just two small neighborhoods in the NW (Chance/Perrin) and there were 5 within 5 minutes. 3/2/gar $1200, $1450 w/gardener & water. That tells us the reversion to 120x rent is a 40% haircut. Nice Timeseries: