The Times has a piece up which could be a real sign of short term and long term financial problems for the US- a real estate crash:
A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York.
More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers.
Add that to rising oil prices, diminishing domestic car sales, the job displacement from Rita/Katrina, and who knows what else, and we could have problems.
Could.
Mr Furious
Yesss! I’m about to put my house on the market…
That said, owning a house in downtown Ann Arbor for four-plus years has still probably netted me $60-70K.
There was definitely a bit of a lag here this year in how quickly houses sold, and I know several people who didn’t get what they originally asked for houses (as opposed to a few years ago, when buyers were bidding above asking price), but Ann Arbor remains a high-demand market that, while no California, is still way above average in price.
I’m an looking to move for a new job and that currently is between Des Moines and Phoenix, both of which are cheaper than here… but what should I do? this news is making me think about renting for a year, THEN buying again…
I’ve been talking about this with several people as part of thsi whole relocation deal, this market is definitely headed for a “correction.”
Should be interesting.
TarHeelCP
Mr. Furious, if you move to Des Moines, you’d might as well buy now. It doesn’t seem that the housing bubble got quite so large there.
Phoenix is a different story. You may want to consider renting indefinitely there. That is, don’t pick an arbitrary time frame, just wait until the market correction has taken place.
zzyzx
Remember that a market correction isn’t likely to be like the stock market in the late 90s. Houses are still worth something as a place to live after all. Prices will go down some or at least level off, but it’s not likely that you’ll regret buying a house 4-5 years down the line.
MrSnrub
Hi Zed!
zzyzx has it right: there will still be value in the house, and that value will eventually recover. What you need to do is figure out what your long term needs are. If you plan on living in that area for a long time, then your concerns about the market are going to be much lower than if you plan on living there for 3 years and then move.
Another Jeff
It had to happen sooner or later.
Philly certainly isn’t in the same league as NY, Boston, or DC, so people reading this in those areas may not think these numbers are all that big a deal, but one of the really hot markets in Philly in the last few years was in the area around the Art Museum.
Basically, 1000 sq foot rowhouses with no yard were going for $500,000-600,000. It had to top off eventually. There are only so many people willing or able to pay that kind of money just so they can say they live in the ARt Museum area or Rittenhouse Square.
Although, there have been numerous articles both in the NY Times and the Philly Inquirer about people from NY coming down here because they still consider that a bargain.
Another problem that’s gonna come up when this housing bubble bursts in the fact that too many people used home-equity loans as there own personal piggy bank or ATM machine when values were at their peak, and as values go down, you’re gonna have people owing more than their house is worth.
Mr Furious
Thanks for the input, guys. I was really just using my situation as an example, but that’s helpful. Yeah, Phoenix is tough, because I have no idea whether we will like it there or not. It very well may be a two years and out proposition…
I WANT to love it, but I won’t know until my first 116 degree summer day…
bains
The times has done a wonderful job on economic forcasting lately, predicting 5 of the last 1 economic downturns.
Actually, there is economic data that ought to concern us, the housing market but one. Yet with all the negative impact of the hurricane sisters, there will be a rather large, and positive one once the major rebuilding gets underway. Time will tell if it will be enough to offset the outrageous cost of oil and gas.
So the Chicken Little of record suggests yet again that the sky may be falling… It is not surprising that their outlook always seems more negative when a Republican sits in the White House.
Ancient Purple
Mr. Furious,
Phoenix is an excellent choice for a place to live. I am a native and wouldn’t live anywhere else. Yes, your first summer will be awful. But the flip side is that you are enjoying margaritas poolside on Christmas Day.
That being said, the local paper (Arizona Republic) just featured a story about the sudden appearance of lots of “Open House” signs in neighborhoods, something that hasn’t been seen in quite a while. The house bubble is leaking air here and there is now a surplus of homes. Demand is clearly down.
Everyone worries about the heat, but Phoenix is great in making sure you can go from your air conditioned home to air conditioned car to air conditioned business.
Trust me, though: keeping a cold beverage handy in the summer is a lot easier to manage than shoveling snow when the wind chill is 20 below.
ppGaz
Mr. Furious, I live in Phoenix and grew up here. Anything you’d like to know about the town, write and ask. I’ll give you the good, the bad, the ugly, and the beautiful. If you want to come out for a tour, that can be arranged too.
July and August are character-builders, but October – April we have the best weather on earth. No earthquakes, hurricanes, tornadoes, or mudslides. And we are surrounded by a landscape of unparalleled variety … from desert to high, forested mountains complete with ski resorts.
To contact me, take the first three letters of my handle and add “ooding” at fastmail.fm.
AZ Views
pmm
It’s amazing what you learn about commenters when you step outside the politics. Ppgaz obviously works for the Arizona Visitor’s Center. Either that, or he’s in fact a crafty realtor spinning a web to catch the valuable “balloon-juice” demographic…
ppGaz
Neither!
pmm
Then I give up. Regardless, that soliloquy on the charms of Phoenix suggests that you’ve sold folks on your hometown more than once!
Krista
That has a certain charm, but I don’t know…last Christmas, after dinner, my boyfriend and I went for a walk, and it started snowing — those large, fluffy, slowly-falling flakes that just make everything look magical. All of the Christmas lights were on at people’s houses, and the air had that kind of reverent hush that only an evening snowfall can bring.
I’ll complain about snow on many occasions — but I really don’t know if I’d want to live in a place where you never get any snow at all.
Another Jeff
Krista,
I’m inclined to agree with you, but my parents spend January and Febuary in Sedona, AZ, which about, if i remember correctly from last year when i flew into Phoenix, about a three hour drive from Phoenix, to the north. Despite how hot Phoenix is, you don’t have to go very far to find snow.
Darrell
I don’t dispute that a real estate downturn would be very harmful to our economy if such a downturn was occurring, it’s just that there is no credible evidence, despite countless predictions, that such a real estate downturn is taking place
Mr Furious
“…reverent hush that only an evening snowfall can bring.”
I know of what you speak…the late night dogwalk in the middle of a snowfall is truly among the most peaceful experiences one can encounter.
I will severely miss the changing seasons, the leaves are changing here in MI as we speak. Brooklyn is the farthest south I have ever lived. If I end up in Arizona, it will be a departure for sure. Flagstaff looks like a delight, Phoenix, not so sure…
Anybody got a high-paying Art Director gig in a northernish climate?
Krista
I saw a few in B.C. It might be worth checking out, Mr. Furious — beautiful area, mild winters, free healthcare, an escape from Dubya, and prime weed. What else does one need, really?
ppGaz
90 minutes, or so to see the snow fly. Two hours to see it stick for more than a day or so. Flagstaff is 30 degrees colder than Phoenix, year-round. A two hour drive in my car, maybe 2.5 for more light-footed drivers.
Arizona’s desert is bisected by a range mountains bearing the largest Ponderosa pine forest in the world.
There is something calming about living in a world of flat cornfields as far as the eye can see in all directions, but the thing about Arizona is variety, and that’s what always brings me back. Within a 3 hours drive is almost every landscape you can imagine except for seashore. San Diego is 6 hours to the West. Mexico 3 hours to the South.
Arizona is a more-or-less Red state, so nothing is perfect ;-)
jobiuspublius
A cannibal, run!
Davebo
Darrel,
You correctly point out that the sales of existing homes increased in July.
Unfortunately sales of new homes declined to a greater extent.
A mixed bag it seems.
But then we aren’t really dealing with a housing bubble so much as a financing bubble.
Another Jeff
ppGaz,
it was pretty amazing when i visited the folks in Sedona and my dad and I went skiing one day and golfing the next.
It’s kind of hard to ski and golf within 24 hrs of each other back east.
ET
DC/Capitol Hill market is definitely slowing down.
Had a neighbor 2 doors down who put her house up in April for $470K got $521. It sold in something like 3 days.
Had another neighbor one door down just put their house up for $521K no offers but lots of interest. Been up for 2 weeks.
House around the corner equivalent in size (just slightly larger) than the two above for around $645K went in days but only had one, weak offer and I don’t know if they got what they are asking.
These last 2 houses, during the boom, would have gone in days, had multiple offers, and gone past the asking price. Saner than it was but scarry for home sellers used to the last couple of years nuttiness.
Blue Neponset
As an American, I can’t imagine having a monarch as the head of state, symbolic or not. Free health care isn’t worth being a royal subject. One man, one vote. USA!!!
Darrell
A blip on the radar in an otherwise sharply upward trend that I can see. New home sales, even with that monthly drop, are up 6.2% over new home sales from the same time last year.. a level itself which most everyone thought was boom-time last year. Bottom line, prices are still way up and rising, indicating demand for housing overall remains strong. Not saying its going to last forever, but I see zero evidence of a real estate “crash” coming any time soon
John S.
If Darrell doesn’t see any evidence of a ‘crash’, then I think we can safely expect one within the next year.
Mr Furious
Krista-
Going to the Vancouver Sun home page to job search and be greeted by this isn’t encouraging…
It would have to be high-paying indeed.
Darrell
But that’s in Canadian play money dollars. Doesn’t that equate to something like $70,000 US?
Davebo
Darrell,
Now you’re just cherry picking data. You correctly note that for one month existing home sales are up. When I point out that the sale of new homes for the same period are down 10% you shift the goal posts to a yearly comparison.
ppGaz
When you are facing bankruptcy because (what seemed like) a relatively minor medical situation put you $150k in debt in three days’ time …. you might change your thinking.
Being opposed to universal health care is the privilege of those who are lucky and can gaze into the navels of their own foolishness.
You live in a rich prosperous country where people just like you are routinely fucked over and left to fend for themselves for one reason: The rest of the people can get away with it. That is the only reason. All the ideology and political stuff is just bullshit. It’s just a matter of screwing people because you can, pure and simple.
Ancient Purple
Krista wrote:
Ah, but just remember, to have an orthodox (small ‘o’) Christmas, you would have a desert-like setting. Mary and Joseph did not battle snow drifts heading to Bethlehem.
:o)
Darrell
I would be guilty of cherry picking if I was trying to hide a TREND. The trend of both new home sales, existing home sales, and home prices is UP. No goal posts had to be moved to make that point you jackass
Slartibartfast
Orlando is still pretty hot. We’ve been in our place just a bit over 4 years and our property value has doubled, at least.
Mr Furious
Yeah, Darrell, that play money is now worth 86 cents on the dollar. That’s up over twenty cents since Bush took office. Nice economy, Mr President.
$430,000 U.S. is still a lot for a one-story bungalow.
Darrell
Sorry, but I can’t bring myself to respect any currency which goes by the names “loonie” and “toonie”
Kimberly
“Philly certainly isn’t in the same league as NY, Boston, or DC, so people reading this in those areas may not think these numbers are all that big a deal, but one of the really hot markets in Philly in the last few years was in the area around the Art Museum.”
Tell me about it. I got booted out of a place I was renting within spitting distance of the museum. Only 12 feet wide and 700 total square feet, no maintenance done, peeling paint, rotting deck, a tree growing into the side of the unfinished cavelike basement, deeply-gouged wood floors, no yard, etc. It sold for $209K as is, which was triple the price my landlord had bought it for 6 years before.
Ridiculous.
srv
Mr. Furious,
It interesting how a year in the Bay has changed my idea of ‘alot’. May be a small price to pay to escape this insanity.
In just the last two months friends and family in SoCal, DFW, Austin, Houston, Atlanta have been telling me about neighbors buying into questionable valuations in the last year and now trying to sell. I know for Palm Springs and the Bay, 40% of all property purchases in 2004 were interest only loans (speculation).
– They’re saying there will be more bankruptcy filings in Sept/Oct. than all of 2004.
– Heating oil prices skyrocket
– Ford/GM cooling off
Something is coming, and I don’t think it’s going to be roses.
The Energy side of BC is going to boom. How much logging will go down, not sure, as I think they will still export alot to Asia. Krista might be right.
Blue Neponset
Universal and free health care are not the same thing. I can afford to pay for health insurance and I do. That doesnt’ make me priviledged it makes me average. My fellow Americans and I can do much much better in regard to health care in our country, but that doesn’t mean socialized medicine is the way to go.
Also, F*ck the Queen! 26 + 6 = 1! Many men died so I wouldn’t have to look at Queen Elizabeth on my money and I don’t take that lightly.
Jcricket
John, the important thing to read in the data is that while homes may not be selling quite as quickly, new homes not built as fast and prices not rising as rapidly, that’s not evidence the market is headed towards a crash. Simply that people investing in real estate hoping for a quick buck are in for a rude surprise.
Remember, people still need a place to live and restrictive zoning laws (and the natural limits of how far people are willing to commute) create a unbalanced demand and supply situation in most major metro areas. This means prices will at least remain stable, if not increase (who knows by how much).
Two, even when homes don’t sell as fast, people simply pull their house off the market, rather than sell for a loss. Again, owing to that whole “needing a place to live” thingie.
Periodically you get a big drop/B> in housing prices, but due almost universally due to an external event (i.e. the oil and gas crisis caused lots of lost jobs in the Texas area, causing a big sell off in homes and no one wanting to move to the area from 80-82. Corpus Christi never really recovered). And even less frequently an area simply becomes an undesirable place to live (e.g. Syracuse) and prices decline long term. Those are both isolated type incidents, and not structural market weaknesses.
I think anyone who lives in a major metro area whose waiting for prices to actually drop (rather than just level off) is going to be waiting a looooong time.
To be clear, this doesn’t say anything about the percentage of investment dollars in real estate, which could really be hurt by even a levelling off in the housing market. That’s a different issue, which could still lead to a recession, but might not hit consumers directly in their wallets in the short term.
Jcricket
oops, sorry about the extra bold text there.
TarHeelCP
I wonder why Darrell seems to get little respect here.
ppGaz
You have no idea what the hell you are talking about.
Tens of millions of working people in the US have no health insurance and would be wiped out by a relatively minor medical crisis.
“Can do much better?” We’ll see how you charcterize that on the day when you are one of the unlucky millions who get screwed.
“Socialized medicine” is just a marketing slogan for the status quo. It is inaccurate, dishonest and manipulative. If there is justice, you’ll one day find yourself screwed by the status quo and you will eat those dishonest words. I wouldn’t ordinarily wish such a thing on anyone, but in this case, exceptions must be made. The sweet taste of arrogant foolishness will turn to the vinegar of reality in your mouth, if there is a Dog.
Bob
I sold a house in 2002 for 400k, and I swear the San Andreas Fault actually runs right through the front yard. All the houses on the lower half of the street were condemned and demolished because they were sliding into the Pacific.
Three years later the guy who bought the house sold it for 800k.
Blue Neponset
I deserve to suffer for my views eh? Which one of my children are you hoping will get sick so I learn my lesson you fucking asshole?
John S.
Who gives a rat’s ass what it is called? You have to respect a currency that is gaining on the dollar like a greyhound on a rabbit.
Because he says a lot of stupid things.
ppGaz
Yes. There are consequences for being wrong, and it is only just that those fall upon the wrongheaded people. Why should they fall upon those who know better?
But take heart. The world is not fair. People who know better will get screwed, and you will probably get off without a mark on your bank account.
ppGaz
Why should your children suffer for the sins of their father?
It is you who should find yourself on the wrong end of a medical lottery, staring at huge bills you can’t pay.
Then come back and tell us more about “socialized medicine,” you fucking asshole.
Mr Furious
Yikes, ppGaz. Maybe I should pick Des Moines—I’m not sure Arizona can handle any more righteous anger…
If I do make it down there, I’m buying you a driink.
Blue Neponset
ppGaz,
You are basically hoping I get sick or someone in my family gets sick because we disagree as to how the US should pay for universal health care. Do you see anything wrong with that?
ppGaz
That’s a step down from the dismissive “socialzed medicine” crap you were posting earlier, isn’t it?
I’d love to see you with a $150k invoice in your hand, and talking about “socialized medicine.” The only thing between you and that piece of paper is luck. That’s true for every person in this country, thanks to stupid political ideas that ignore reality in favor of ideology.
Blue Neponset
No it isn’t. I made a distinction between free health care ala Canada and universal health coverage. I think you are reading your own meanings into my comments.
The best revenge is a great life ppGazz. Maybe you should step away from the computer for a couple of hours.
jg
I grew up in New England. Loved cold weather, loved seasons. I use to have hockey practices at 5 Am in a rink with no walls. Thats cold.
After two years here I don’t miss cold at all. Haven’t worn a coat in at least 5 years. Golf all year round, skiing just hours away (including Utah and Colorado), Vegas within driving distance and Rocky Point Mexico for the weekends.
I bougt a house for $125000 (3bdr/2bth, 1500 sq ft 2 car garage) in 3/00. I could now sell for close to $300000. Sounds nice but that of course means if mine is this far over valued then the one I want to buy will be too. Plus I’d be bidding against folfs with interest only loans who are driving up the price.
John S.
Blue Neponset-
As I read your exchanges back and forth, I haver to ask if you are the sort of person that:
A) Is genuinely concerned about the plight those less fortunate may have, and couldn’t imagine having to deal with their set of circumstances
or
B) Could generally care less about the plight of those less fortunate, because you got yours and are going to keep it that way, so why worry about different circumstances
Or, perhaps you’re a little of both. It seems like ppGaz has you pegged as B) while you apparently think of yourself more as A). But I would rather ask how you see yourself rather than make my own assumptions.
ppGaz
You called it socialized medicine.
Your post
ppGaz
Maybe you should just own up to being an arrogant boob who thinks health care is all about how all the unlucky “other people” get screwed while you make jokes about in blogs.
Blue Neponset
Either choice isn’t very flattering. But if I have to choose I would choose B because it seems to piss off ppGazz more.
I can say with some certainty, however, that I wouldn’t wish an illness on a person or his family just because of a political disagreement.
John S.
I think A) was rather flattering, unless you consider putting yourself in the shoes of someone less fortunate a negative trait.
It’s a shame that you do see yourself more as B) because that sort of “Fuck you, I got mine” attitude seems to be prevailing more in this country, and it makes me sick.
It’s nice that you wouldn’t wish illness on anyone, and I sincerely hope that you don’t find yourself on hard times at the receiving end of millions of people who look at your hardship and say, “Fuck you, I got mine”.
John S.
As the late Pope John Paul II said:
Source
Blue Neponset
John S., I was being facetious. I think everyone in a country as rich as ours should have health insurance and shouldn’t have to endure bankruptcy or worse because of medical bills. I just don’t believe we have to do that by offering free health care to everyone.
I am sorry I gave you a snarky answer.
ppGaz
What a waste of time. Meanwhile, you walk around cracking jokes about “socialized medicine” while people are being screwed as we speak.
Called on this, you want to pretend that somehow you have been injured.
Asshole.
John S.
Thanks for the clarification. I have no problem with ‘snark’, so long as it is fairly obvious. Regarding your statement:
How do you think we could go about providing everyone in this country affordable healthcare? Particularly when you seem to look upon ‘socialized’ medicine with so much scorn.
Krista
And as a Canadian, I can’t imagine having an ignorant monkey as head of state, but hey…to each their own. :)
Yeah, Vancouver IS pretty darned pricey. There are also quite a few art director positions in the greather Toronto area, which is still pricey, but not quite as bad. It’s always worth exploring, anyway. I’m biased, though…the east and west coasts here are so gorgeous.
And in regards to the health care, our system is far from perfect (waiting lists are a major problem here). However, I am really happy to know that if someone here needs emergency surgery, their ability to pay is not a factor. Some people still have major financial difficulties due to medical expenses…mostly for pharmaceutical costs incurred by chronic conditions.
And about the whole loonie/toonie thing, I don’t care what it’s called…most people here just find it a pain in the ass to have extra coins to carry around. It makes the wallet rather bulky after one breaks a $20 bill. And the different colours of our bills might be strange to a lot of you, but at least it makes it a lot harder to accidentally tip the bartender a $20 instead of a $2, after having had a few too many.
Blue Neponset
There are a lot of solutions between government only provided health care and market provided health care. One thing I would like to hear more politicians talk about is the Gov’t underwriting some type of ‘stop loss’ health insurance in order to prevent people from being financially devastated by medical bills and to lessen the cost of existing health insurance. It would be a health care safety net for people without insurance and would kick in once a certain percentage of a person’s/family’s net assets were used to pay medical bills. It would also kick in for those with health insurance once their total lifetime medical expenses reached a certain dollar figure.
That wouldn’t fix all the problems we have but I think it would be a good place to start.
Ancient Purple
Since a large chunk of people live paycheck to paycheck, I am wondering what percentage of their assets should be spent. Do we ask people who have very little to sacrifice more? Does it boil down to “give us your sofa and you can have your chemotherapy?”
I am not advocating “socialized medicine” but I am wary of asking the “have nots” to have even less in return for medicine.
Kirk Spencer
Darrell,
The original claim was that a bubble was on the verge of bursting. You claim it’s not because the annual trend is upward. You see the decline in new and used house sales, the increased inventory, and the slowed growth rate of sales prices for the past couple of months as a “blip” – there have been blips before after all. Others are seeing these as the beginning of the pop.
Now there are a lot of legitimate arguments to it being a blip. But using the argument that it’s not because they’ve been growing in the past (the basic description of a trend line) is fallacious at best. If you’re going to argue it’s not bursting, use a better argument please.
For me, I think the primary flaw is that it’s mis-described. I think it better described as a credit bubble. 24% of new house sales in the past year were second home and investment purchases, of which a significant minority were financed by so-called ‘high-risk’ loans, and another significant minority were financed by using high-risk equity conversions of other properties. I’m defining high-risk as: interest-only; short-term ARM; no-down (100% or 80/20 dual loans) and their equivalents. These purchases are made on the very low interest rates presently available, and assume that the market will remain hot, that prices will continue to rise, and that interest rates won’t push upward.
I think this unlikely given the current credit market and future estimates. The Fed appears likely to raise interest rates at least two more times due to inflation concerns – note that, please, inflation concerns. Minimum payments on credit cards go to 4% this month, and the new bankruptcy rules go into effect mid-month.
To restate it, then, what it seems to me is that we’ve been on a credit binge and house prices/sales have been part of the purchases on that credit binge. As the recognition of overextension and subsequent reconsolidation go into effect, housing will take a beating. What I expect to see is a lot of those investments/second houses go into foreclosure (in parallel to a number of bankruptcies), which will have depressive effects on the market. The “housing bubble” portion will be a general decline in prices and rather strong increase in time on the market. With the exception of certain ‘hot markets’, I expect housing will be mostly flat priced instead of decreasing, balanced by times in the months on the market. In the hot markets prices will decline – 10 to 25 percent, I think.
But again that’s an opinion based on how by most credit evaluations of even five years ago we’re terribly overextended, and it’s all based on the good times continuing. It’s an evaluation based on what happened a couple of decades ago. And the “now” is based on the fact that for the past couple of months the trendline’s been sagging – what you’d see if you’re reaching the top of the curve. It might just be catching its breath for another run. And it might be getting ready to turn around. I’ve got my opinion, and that’s how I’ve braced my finances. If I’m wrong, I don’t make as much. OK.
ppGaz
Uh no. The costs of healthcare are high because moneyed and power interests want it that way. They want a setup where the costs and profits are high, and they don’t give a damn about the ability of anyone to pay as long as they themselves have no worries.
Those interests lobby the government to maintain and leverage the status quo. They spend tons of money to make sure that the ill-informed think that the alternative is “socialized” medicine, and poorer care.
The thing will fall apart one of these days, because it is going to come close to bankrupting the country. Meanwhile we have dumbass-snark in blogs from people who don’t have a frigging clue.
Blue Neponset
In the Blue Neponset plan if you are living paycheck to paycheck you won’t have to sell your sofa to get chemotherapy, but if you have a vacation home on Nantucket you may have to sell that before the Gov’t kicks in for your health care. It is just too expensive for the Gov’t to bear all of the risk. Those who can afford to pay something toward their healthcare costs should do so and those who can not should not. There has to be some incentive for an average person to have health insurance or the price of this plan wouldn’t be worth the benefit, IMO.
I don’t have specific numbers for you but I think this is a workable starting point to begin to fix our health care system.
David Rossie
Whoa! Ppgaz, calm down.
Haven’t you stopped to think that many people oppose nationalized health care because it wouldn’t work? Some of us are interested in economics, which by studying we often learn that state-planned systems tend to fail?
And it’s a huge leap to suggest that just because someone doesn’t want their taxes to be used to support others, they instantly become selfish. I don’t want to pay a single dime in taxes to support anyone, anywhere. I think most wealth-transfers are travesties of justice. But am I selfish? Nothing I said about my economic and political understandings should suggest an answer to you. Making politics personal is stupid, unless you’re defending yourself against politics. No-one has a right to attach moral judements to their complaint that they aren’t having enough transfers directed their way.
ppGaz
Your argument is basically “waaah! I don’t like your argument.”
The status quo is not sustainable. Period. Unless you have a solution, you are part of the problem.
John S.
Shorter David Rossie: I want to keep every damn penny I make, heaven forbid it should end up in the hands of a degenerate. Does that make me a selfish person?
No, David. It just makes you an advocate of a low quality civilization.
ppGaz
That’s horseshit. A working American holding a $150k invoice in his hand and facing bankruptcy has had a moral judgement made for him by people who want no interest in his situation, but will work assiduously to see that others like him are screwed.
People have lied and connived to get this situation. They have called a responsible effort to remediate this situation by dishonest names like “wealth transfer” and “socialism.” Is it “wealth transfer” for you to pay taxes so that poor people can have roads to drive on?
How far into deceit and evil are you willing to go with your word games? A rich country that leaves its working citizens to fend for themselves in the face of basic needs is not protecting wealth, it is abusing wealth.
Another Jeff
I’m not sure how a post about real estate prices got to this point, but whatever.
The problem with the debate about national health care is quite simple. If you ask people “should every American have quality, affordable healthcare”, the answer is overwhelmingly “yes”.
However, when you ask those same people “would you be willing to part with your existing coverage for a national healthplan”, many of those same people who say yes to the question of “should every American have health care” say no to the question of would they part with their current coverage.
Part of that is obviously due to the fact that politicians and the HMO lobby have successfully demagogued the issue. but part of it also is that, for all the horror stories you hear about healthcare in America, there are a hell of a lot of people who are happy with their current coverage and don’t want to risk their and their families coverage in favor of a national plan.
Now, does that whole mentality play into the “i got mine, fuck everyone else” attitude that John S is talking about? Probably, and as i said up above, part of the reason people with coverage would never wanna part with that coverage in favor of a national plan is because of how Phil Gramm and others demagogued it back in ”93 or ’94 or whenever, but just as i don’t wanna speak for someone without coverage, I also don’t wanna judge a hardworking guy with a family who worries how his family would be affected by a national plan.
Darrell
New home sales and used home sales are up considerably from what they were a year ago. Some months up, others down, but overall significantly up. Existing home sales are at near record levels. New home sales are up over 6% from a year ago. New and existing homes sales are booming
Where is the evidence that overall home sales prices have slowed in growth rate over the past couple of months?
There was a bigger drop in home sales last November, but sales bounced back as you can never read too much into a 1 or 2 month drop, which is exactly what you are trying to do. I don’t disagree there is risk in the financing, but my problem is that we have been told we are in a ‘housing bubble’ with over extended credit for YEARS now, but the housing market keeps booming. Those who keep repeating their sky-is-falling predictions about real estate never admit how wrong they were in making their predictions years ago.
Mike
“Another Jeff Says:
It’s kind of hard to ski and golf within 24 hrs of each other back east.”
Two Words:
North Carolina.
David Rossie
ppgaz, what on earth are you talking about.
Bankruptcies and 150l invoices are purely matters of choice and contracts. Morals have nothing to do with it. If you want to talk sustainability, you have got to take the morality out of the economics. If you want to ignore economics, fine… and stop commenting about policy.
Kirk Spencer
sigh – sorry for the post pertaining to what was prior to the hijack. Got it written, lagged in getting it posted.
Another Jeff, I think I’ll challenge you a bit. “Would you be willing to part with your existing coverage for a national health plan” is terrible phrasing – it implies “you get nothing till the national is in effect”. Further, given the large numbers of people for whom the existing coverage is “nothing”, I have to wonder if your statement is based on a real poll or your expectations of such a question would be answered.
I’ve seen a proposal I liked but which never seems to get off the table – largely because it was created by Dems in an election year while the Reps were in charge. Basically it’s two parts, both useful, synergistically brilliant.
Part one: The government is responsible for catastrophic coverage. Part two: The government encourages (rewards) prevention and maintenance.
The former’s pretty obvious. Set some arbitrary level of dollar amount after which all costs are borne by the government – pretty much what catastrophic health insurance is today. The detail is where that takes effect, and whether it’s tied to income or it’s a fixed level, but even if it’s fixed at $250,000 (for example) it’s going to have an effect. And the major effect is that insurance companies can charge lower rates because they have a cap on expenses. One million dollar payout requires thousands of others to pay just a little more – and a little more and a little more.
The latter is trickier. It’s pretty much a given that if insurance companies can run plans that encourage people to be healthier – coming in more frequently, geting breaks if they have positive changes in their numbers, and more. But the reality is that it doesn’t pay – most of the time the effects show up far enough in the future that it’s ANOTHER company that reaps the benefits. Since there’s no certainty the favor would be returned, why do the extra effort which costs more. There are two basic ways to make most if not all the companies do it – benefitting them all. There’s the stick – do it OR ELSE. I prefer the carrot – if you do it then the government will reward in some fashion. It may be tax break, it may be reimbursement – there are lots of specific means. The result, however, is reduced pay-outs in the long run – less for the government if it’s running catastrophic, less for the companies if not.
Everything between may still be a mess, but it would probably be a more affordable mess.
ppGaz
All those who are inclined to make real estate decisions based on the blatherings of Darrell … please raise their hands ….
Darrell seems unaware that housing prices have traditionally ridden these sine-wave roller coasters over long periods of time, and that certain aspects of the waves are predictable. For example, you can look for the time between listing and sale, which is an indication of inventory. You can look at the number of Open Houses being held in the area …. another indication of inventory. A rising bubble depletes inventory as the pop approaches, shortens listing-to-sale times, eliminates the need for open houses and other long-term sales strategies. For example, I saw a house last year sell on the same day that a small hand-lettered sign was tacked onto a tree in the front yard. A month later, the sign long gone and an offer accepted, people were still coming to the door of that house wanting to buy it. No listing, no advertising, just feverish interest. Today in that same neighborhood, homes are staying on the market and being shown for 8-12 weeks. That’s a huge swing in just a few months.
Darrell wants “evidence?” Tell him to get off his dumb ass and go out and look around and talk to people buying and selling houses right now. Also tell him that the cycles are not nationally synchronized. Some areas will lead the trends, some will follow. The lag time can months, even years, from area to area. Local conditions always trump national trends anyway. An annualized trend line may mask a current, short term, opposite trend.
Most importantly, the people who track these things for a living are generally doing so because they have big money at stake. They are not usually wrong. And their job is not to educate some blog-reading potatohead who has a track record of not getting rather basic things. Darrell.
No real estate bubble in history has gone on indefinitely. But Darrell’s thickheadedness is forever.
John S.
Yes, by all means extarct morality out of economics. Otherwise, how would CEOs be able to sleep at night knowing that their decision to increase shareholder profits resulted in 50,000 people losing their livelihoods?
John S.
Two more words: No thanks.
ppGaz
I am talking about an average citizen going along and singing a song … when a minor mishap or medical situation puts a $150k invoice in his mailbox, which he can not possibly pay, because he wasn’t lucky enough to have health insurance.
Something that happens many times every day, as we speak.
The $150k figure is arbitrary. But nowadays, it does not take much to rack up $150-200k in hospital and medical charges. Blink of an eye.
If you don’t have coverage, you are in profound danger of having a six-figure bolt of lightning strike you without warning at any time. If you work for a living and get along like most people do, you are screwed at that point. You can lose your house, your car, your assets. If you are really unlucky, you can lose your job too.
That’s not a moral choice made by these people. That’s a moral choice made by other people and forced upon these people.
Darrell
If the time between listing and sale fluctuate from month to month and quarter to quarter, how do you “predict” them? Of course, no one ever accused ppgaz of being too smart.
And unlike the geniuses who claim they can predict markets, I am not saying or implying the real estate market can be accurately predicted, I’m only pointing out facts such as year over year sales numbers and price changes. We were told years ago we were in a real estate bubble, yet housing continued to boom. What happens in the future? I’ll leave those predictions to the ‘experts’ like ppgaz
Another Jeff
Kirk,
I’m basing it on a poll i saw five or six years ago. I’m not claiming the phrasing is exactly right. My point is simply that everyone pretty much believes in a country as rich as ours, that everyone should have healthcare.
But, there’s a certain unknown for people that makes them really nervous about a change. Yeah, for people without coverage any change would be good. But there are others out there, and i’m not willing to say all of them are of the “fuck you, i got mine” mode, who would be nervous about going from their private plan to a national plan.
No, i’m not saying it’s an all or nothing thing. We’re not gonna solve the healthcare problems in this country in the comments section of a blog.
I really wanna get the hell out of the office right now, but i will say that there ARE private insurers that encourage prevention. The plan that i use for myself and my four employees, I get a hell of a reduction for the fact that they have gym memberships and go at least 12 days a month.
the problem with that is that the only way to prove they went is by them getting a log for when they’ve signed in and out, and there’s no way to prove that once they sign in, they don’t leave, go have a couple pints of Guiness and an order of wings at Moriarity’s, and then come back and punch out.
Regardless, i think you missed my point but i don’t have the time to go into all of it.
ppGaz
In the fullness of time, some people learn, and some don’t, Darrell.
The beauty part is, you can choose which group you want to belong to.
ppGaz
Also no way to know whether their genes would give them disease even if they ran 24 hours a day and ate nothing but salads with fat-free dressing.
No guarantees, except that death and disease will strike 100% of people not killed by accidents.
Darrell
Plan on changing your screen name to Nostradamus, ppgaz?
ppGaz
If you change yours to Imadumbass. sure.
John S.
I’m waiting for Paul Mooney to bust in here and reprise his role as Negrodamus.
Krista
The hijacking of the thread over to health care can be attributed pretty equally to Blue Neponset and myself. Sorry ’bout that. Getting back to the original topic, the real estate bubble is definitely happening here as well, as Mr. Furious saw when looking at housing prices in Vancouver. It’s ridiculous — in Halifax there is such a huge housing boom that sellers can pretty much ask what they want. When my sister bought her house, the guy from whom she bought it had only listed it the day before, and there was a full-scale bidding war on it.
Blue Neponset
Yeah, sorry about that. I just wanted to make fun of Queen Elizabeth, and all of the sudden we are talking about health insurance. Who knew?
Rome Again
No worries Mr. Furious, it’s a DRY HEAT, I’d take dry Arizona heat over humid Florida heat any day of the week. I lived in Vegas for nine years, I saw it go to 123 once, didn’t phase me as much as I thought it would, dry heat is actually not too uncomfortable. Don’t let it scare ya.
Rome Again
That used to be me. My husband and I were offered healthcare through his employer, but it was going to cost us about $600 a month for healthcare alone, not including dental and vision or any extras. I am now covered under my current employer for less than $150 a month (including vision/dental/AD&D/Life for both my spouse and myself). When my husband and I couldn’t afford his healthcare, I had recently moved on from a job that paid 100% of over $700 a month for healthcare for myself only. What I wonder is how my current employer can afford to give me such a great package for such a small amount when I’ve seen the prices of packages offered by other employers.
ppGaz
The way I explain it to newcomers is ….
We have two summers here. May-June-early July, where the humidities are in the teens and twenty percents andt he dew points are in the 30’s. Very comfortable, even when the temps are high … although you might not want to go out and play tennis at 2:00 pm on the Fourth of July. Unless you want to commit suicide.
Then there is late July – August – early September. Damp, dew points in the 50’s and 60’s, humidity levels higher. Temps go down but misery goes up. It feels hot all night. Hot at 7 in the morning. This part of summer is pretty much like Dallas, maybe not quite so humid but just as uncomfortable. This is our “monsoon” season when the prevailing winds shift to the southeast and moisture comes up from eastern Mexico. Thunderstorms are frequent. Some places down toward Tucson and southward will get rain every day for several weeks in July or August. Sometimes even in late June.
Every summer is a little different here. This year we had a very hot July and a very moderate August. You never know.
DougJ
It’s times like these when I’m happy that all of my money is in the gold bars that I keep near the fire arms in the basement.
Rome Again
ppGaz: I have been to Phoenix several times and I’ve always considered the weather to be very similar to Vegas. I can tell you that it is a LOT different than Florida. I once (many years ago) took a flight from Vegas to Florida to attend a funeral. When I got on the plane, I was breathing dry air; when I got off the plane, I felt as if I was breathing a sea of water. It was very uncomfortable. I couldn’t breathe the whole time I was here (about a week).
Since I’ve come back to Florida I had to make that adjustment again, but at least I drove across the country that time and was able to temper my physical reaction.
Rome Again
How exactly do you purchase groceries?
DougJ
Still working my way through the supply of canned foods and bottled water I amassed a few months before Y2K.
Rome Again
You had five years of stock? Is canned food that old still any good? Somehow I think the tastiness factor would have faded.
DougJ
Faded? It was never there to begin with.
David Rossie
CEO’s appeasing shareholders and cutting jobs and $150,000 health-care bills are fine abstractions, but they don’t say much about any given problem.
I frankly don’t believe the high figure for health-care costs. If you’re trying to tell me that the average American is in immeadiate danger of health-care costs more than triple of what they make in a year, I don’t believe it.
I for one don’t believe everyone should have health insurance. The most important reason is that, of course, not everyone wants it. Health insurance isn’t even “insurance” anymore. It’s health “coverage” that encourages consumption of many non-essential services that would not be be purchased if consumers had to face costs themselves. Health insurance as we have it today is a large reason for why a doctor’s visit is so expensive in the first place! I don’t have H.I., and the only reason I regret it is because artificially-high demand drives up prices for when I go to the doctor for important checkups.
Being a marginal thinker, I would suggest that the friends of property-rights make a compromise with the entitlement crowd: offer health vouchers to the poor, the young, and the elderly with only one string attached: it must be used for a health insurance plan, in the mold of car insurance. It could not be used for drugs, routine checkups, or aesthetic treatments. Only health emergencies, which can reasonably be defined.
h0mi
What “relatively minor” medical problem can result in a $150k bill in 3 days?
dlnevins
One serious car accident can generate that level of medical bills. Anyone who can afford to purchase catastrophic medical coverage and goes without it is quite literally playing Russian roulette with their financial future.
Krista
What many people don’t realize, or don’t want to accept, is that there are people in the U.S. right now who are dying because they cannot afford to be treated. There are people who have cancer, who can no longer afford treatment, either because they didn’t have health insurance in the first place, or because their private insurer dropped them like a hot potato as soon as they started become a financial liability, as opposed to an asset. Private insurance definitely has its place, and many people here in Canada have it, to cover the things that our public plan doesn’t. But at least that basic public plan is there for all citizens, to cover the lifesaving and/or emergency treatments. I was hospitalized a couple of years ago, because I had a kidney stone. I had no private insurance, only my provincial health plan. The only thing for which I had to pay was my Dilaudid prescription afterwards. I wonder: how much would that visit to the ER, with the x-rays, ultrasound, and morphine have cost me in the U.S?
Mr Furious
How about a relatively minor softball injury (broken bone in hand)? That’s what happened to me this summer. Required no surgery, just x-rays, casts and four doctor’s visits. Without insurance, it would have cost several thousand bucks. Money I DO NOT have laying around, even in a bullshit “health savings account.”
Kirk Spencer
David Rossie,
Last year, I was mowing the lawn when I opened a ground wasp nest. In (attempting to) fleeing the cloud I tripped and banged up my elbow and arm. A subsequent trip to the emergency room, a shot, an X-ray (not broken), and an observation period, and I was out. My insurance paid $4,000 for that trip, and I paid $500 on top of that. One day, minimal damage.
I have an uncle recently diagnosed with cancer of the bladder. The treatments on top of his heart condition have racked up a bill in excess of $250,000 over the past three months. Fortunately the insurance will be paying the host of that.
I have an acquaintance who broke her hip. After the operation she got an infection – one of those delightful resistant strains – that left her in the hospital with followon surgeries and such for a month. The bill as of now (and there is a lot more to do even including the pleasure of rehab) has broken past $300,000.
I am sorry you “do not believe.” As it does not take much effort to find cases of such costs, I suspect your unwillingness to believe has led to an active refusal to look. I truly doubt I or anyone else will manage to open your eyes. And it’s too bad, because in your blindness you’ll probably get a lot of people hurt.
John S.
Kirk-
I know your tales of woe sound like specific (and real) incidents, but David doesn’t deal in ‘abstractions’.
And besides, you shouldn’t complain so much…you may be one of those people that just doesn’t need insurance – says David:
Mr Furious
David says:
Well, I say David will sooner or later learn the folly of his arguments. One misstep on the subway steps is all it takes to rack up the bills. He doesn’t even need to undergo intensive care or long-term treatment of an unforeseen illness.
So let’s get it straight. David doesn’t have health insurance, so one can presume he considers himself healthy and takes care of himself. Good for him. I do (did) too. In retrospect, all of the money I spent through my twenties while self-employed, or was spent on my behalf while employed traditionally, was wasted money. I never got sick, never visited a hospital, and rarely “used my coverage.” Assume David is the same. He figures, “I’m healthy and I can get away without it.”
Car accident? Car insurance willl pay those medical bills (theoretically). Trip on the sidewalk? Sue the city or homeowner. Hmm, the bootstraps conservative tough-guy stance starts to unravel… Was I “flirting with disaster” and making a concious choice when I put on a glove and played softball? I suppose. But I prefer to think of it as living a healthy and happy life. How does one keep in shape anyway David? Better not hurt yourself at the gym or even fall off your goddamn bike, because there won’t be another insurance source to cover those costs, nor will you have a lawsuit target to recoup.
So it seems David relies on the same safety net he begrudges all the “deadbeats” in our society. Just like alll the other tough-guy, self-made, bootstrap, fucking assholes in this country. Yeah, you got yours. Doesn’t mean you deserve or earned it. And it certainly doesn’t mean anyone else should be denied for it.
Mr Furious
By the way, why did this housing bubble thread that I successfully hijacked into where I should move and will I like it, turn into a national health care debate anyway?…
Jcricket
David Rossie – I think the car accident example is good. The author of a blog I read was hit (i.e. not his fault) by a large truck, and he drove an small sports car. The driver of the truck was uninsured and he still had to fight tooth and nail to get his insurer to pay the $27,000 tab. Took him all of about 2 seconds to go from fiscal solvency to near bankruptcy. If you end up having to stay in the hospital for days (which thankfully, he didn’t), the bill can easily be triple that. If you followed the recent bankruptcy bill debate you would know that one of the top causes of personal bankruptcy these days is unexpected health care bills (not irresponsible spending, as the credit card industry would have you believe).
Even with a good plan, like my work-provided one (which has a stop-loss limit of around $2,000) has the potential to bankrupt someone earning $20,000 or less. People simply don’t have the cushion that you think they do.
Health-care may not be like auto insurance, but that’s because people aren’t like cars. Auto insurance doesn’t pay for preventative maintenence. But I’d like to see evidence of a health-care system anywhere in the world where preventative health-care maintenance costs as little as an oil change and tire rotation. Secondly, auto insurance is relatively cheap, even for full coverage ($75-150/month), health insurance is triple that, at least. Moroever, if you car is totalled, you’re out of the price of a new car, say $15k-$25k. As with all the health care examples you claim not to see, you can quickly be out $10k, $50k, $150k or even $1million (it’s not unheard of for people who need cancer treatment multiple times to exceed their plans maximum benefit amount – I know, I work with cancer patients and their bills).
The economics of health care are such that people need someone (employer, government) to cover the majority of the cost of a health-care plan, and pragmatically, to reduce long-term health care costs, one that covers routine and preventative maintenance. One thing that’s going unsaid in this thread is that the US spends more than double the amounts (as a percentage of GDP) that other industrialized nations (Canada, Britian, France, Germany, Japan, etc.) spend on healthcare, and we still have 42,000,000 uninsured people (and rising). The insured end up paying a lot of costs (either in health care costs or higher taxes) for the uninsured. It would cost less for everyone and cover everyone if we followed the lead of places like Germany and Japan and nationalized health care (at least parts of it).
The real “villians” in the current health-care scenario are the insurance companies. They jack up the price of malpractice insurance, despite declining payouts and increasing doctor competency, then sell the public a phony line about “capping malpractice awards”. They reduce coverage and increase premiums because of “higher costs”, and yet doctors make less and the insurance companies’ profits are skyrocketing. And they continue to deny coverage as much as possible, only giving in while forced.
PS. No true housing bubble, except for those investing as speculation in the hottest markets.
Rome Again
Around these parts (the US), if you had private insurance, your “provincial healthcare” would go unexercised. Maybe I’m wrong, but it seems from what you’re saying, in Canada, if you have “provincial healthcare” and private insurance, both would go towards paying the cost?
Krista
Rome Again – yep, that’s how it works. Any medical costs have to go through your public (provincial) health care plan first. Whatever is not covered can then be submitted to your private health plan. Some private health plans will let you assign benefits, which means that you don’t have to pay up front, except for any leftover that your private plan didn’t pay. Most private health plans, however, will make you pay up front, and you then get reimbursed your 100%, or 80%, or 50%, or what have you. But your public plan always gets tapped first.