We’re Going Down, Down, Down

The real estate market just dropped a bomb:

Housing sales in July plunged to their lowest level in more than a decade, exceeding even the grimmest forecasts.

The National Association of Realtors said Tuesday that the seasonally adjusted annual sales rate of 3.83 million was 25.5 percent below the level of July a year ago.

The July sales were down 27.2 percent from June.

It was the lowest rate for existing-home sales since 1999. For sales of single-family homes, it was the lowest since 1995.

Analysts expected a decline because July was the first month in which buyers could not take advantage of a tax credit. That helped prop up the market last winter. But most had predicted a decline of only about 13 percent.

Yeehaw.






145 replies
  1. 1
    BR says:

    What’s funny or weird is that Calculated Risk had forecasted that this would happen, and yet none of the “conventional” economists did.

    http://www.calculatedriskblog......us-vs.html

    (There were earlier posts as well.)

  2. 2
    Comrade Mary says:

    Fuck. Fuckitty fucking fuck.

    Guess I’m taking in boarders and raising rabbits and chicken in my back yard. CBC Toronto said this morning that people can no longer expect to get rich off our real estate (DUH!), but seeing the US tank isn’t gonna help us stay on an even keel, either.

    I feel for you guys. You’re right in the middle of this.

  3. 3
    jeffreyw says:

    Glad I’m not selling. Should be great for a buyer, tho.

  4. 4
    beltane says:

    For those of us who are big fans of Calculated Risk, these numbers are hardly a bombshell.

  5. 5
    Redshirt says:

    Super. I’m currently building an expensive mountain retreat – fair to say I shouldn’t expect to get any value out of it for 20, 30 years?

  6. 6
    catclub says:

    I agree with BR, this isn’t exactly news, in the sense of being
    a surprise. More like watching a glacier that is very near the sea. You cannot really see it moving, but one day, it will break
    off into the sea.

    (although if global warming is fast enough, it will melt first!
    Lucky duckies, indeed.)

  7. 7
    beltane says:

    @BR: The conventional economists, especially the ones seen on CNBC are nothing but shills who may or may not believe the nonsense they’re peddling. A majority of Americans still labor under the delusion that home prices will go up 10% per year so it is not only the elites who are drinking up the fine waters of denial.

  8. 8
    General Stuck says:

    Who’d a thunk it. We made a doomsday device. The US economy.

  9. 9
    catclub says:

    @Redshirt:
    “I’m currently building an expensive mountain retreat”

    are you a super villain? Those guys always get their mountain retreats (often called fastness) destroyed by James Bond, watch out.

  10. 10
    Hugin & Munin says:

    Redshirt: Depends of if you have designed it with easily covered approaches, interlocking fields of fire, and a shit moat. These will be important selling points in the “new” economy.

  11. 11
    norbizness says:

    @catclub: Not always.

    Hank: Ingenious, isn’t it, Mr. Bont?
    Bont: Scorpio, you’re totally mad.
    Hank: Heh, I wouldn’t point fingers, you jerk.
    Bont: So, do you expect me to talk?
    Hank: I don’t expect anything from you except to die and be a very cheap funeral. [leaves] You’re gonna die now!

  12. 12
    Glenndacious Greenwaldian (formerly tim) says:

    So…what’s your point, John, in posting this as an apocolyptic disaster type hysteria thread title?

    This is no surprise to anyone who thinks about things. The U.S. housing market has long been a huge disaster waiting to happen, and the tax credit delayed a lot of the inevitable. So big deal…lots of people who couldn’t buy homes before will be able to buy them now when it’s a buyer’s market. A lot of people will rent instead of buying, just like in normal countries. A lot of people will walk away from their ridiculous houses and mortgages and…be free. And life will go on.

    So again, why the bomb throwing?

  13. 13
    Zifnab says:

    This is just one more reason for Americans to tighten their belts by cutting public jobs, cutting private spending, and cutting taxes.

  14. 14
    Comrade Dread says:

    Super. I’m currently building an expensive mountain retreat – fair to say I shouldn’t expect to get any value out of it for 20, 30 years

    I’d say don’t expect any monetary appreciation or value beyond inflationary gains ever.

    Personally, I’m just going to accept the loss on my house and work towards paying off the mortgage as early as possible so I can regain some mobility.

    Alternatively, I suppose I could just always be like the rich, go Galt, and leave the bank to take the hit.

  15. 15
    Violet says:

    If the “market” didn’t know this was going to happen, then it wasn’t paying attention.

  16. 16
    Svensker says:

    The predictive power of 80s funk.

  17. 17
    MattR says:

    As someone who is in the process of selling a condo and buying a house, let me just say “no shit”. The market completely dried up on May 1 when the tax credit expired. Additionally, there was a surge of contracts signed the last week of April as people wanted to beat the deadline. I am currently waiting for someone to make an offer on my place before I continue the house hunt in earnest, but I am keeping an eye on what is out there and I am seeing places stay on the market for weeks/months longer than they were at the beginning of the year

  18. 18
    Anoniminous says:

    There’s an obscure economic IF/THEN statement that, I think, needs wider circulation:

    If people don’t have any money then, eventually, they do not spend the money they do not have.

  19. 19
    Violet says:

    The July sales were down 27.2 percent from June.

    There’s that 27% again!

  20. 20
    wilfred says:

    I hope the people who released this information realize what they’ve done. How many people are going to see this and think there’s no hope of ever achieving the American Dream?

    When we start to hear of people committing suicide from despair whose blood will their shoulders be on, and their hands, too?

  21. 21
    Zandar says:

    The analysts who said 12-13% really, really need to be unemployed for a while, they might actually learn something about how a fracking economy works.

  22. 22
    NonyNony says:

    @Comrade Dread:

    Alternatively, I suppose I could just always be like the rich, go Galt, and leave the bank to take the hit.

    And do what? You gonna buy another house? Rent? The rich can walk away because their credit rating won’t shift if they drop a bad mortgage. Amazing what a few hundred thousand in liquid assets can do for a credit rating.

    Anyone who isn’t rich who walks away had better have a friend or a loved one willing to let them move in for the next 7 years. Because you aren’t going to get a new loan to buy a house, and the landlords who will be willing to rent to you probably won’t be the kinds of landlords you want to rent from.

    Life’s a bitch when you’re a slave to your credit rating.

  23. 23
    El Cid says:

    Early on in the bubble burst analysts I was reading (pretty sure Roubini) were arguing that until housing values reduced to realistic market levels (at one point another 25% drop), the sector would not ‘recover’.

  24. 24
    New Yorker says:

    Boy, my father made out like a bandit selling his house when he did. God knows what the price on that place will be in a year.

    Meanwhile, yesterday was my 7th anniversary living in the same apartment with the same low rent and the same good landlord (and handyman upstairs) in the same nice neighborhood. Remind me again why owning a place is supposed to so much better than renting?

  25. 25
    cleek says:

    @Anoniminous:
    relatedly: if people are worried about the stability of their jobs, they will be less likely to buy expensive things.

    i’m working a contract right now, and it’s set to end mid-Sept (and i can’t get anyone to tell me if it’s going to be extended or not – i’ll take that as an implicit ‘not’, for now). and if i’m really out of a job, i know the job market is ultra-shitty right now, so no big purchases in the cleek household for a while.

  26. 26
    Jager says:

    I just spent a week with a client in So Florida, housing prices there are stunningly low. A friend of mine in W Palm Beach recently bought a very nice 1 bedroom, 1600 sq foot condo on the 19th floor of a highrise. The building has 24 hour security, the condo came with two covered parking spots and its on a golf course. He paid $115,000. A few years ago units like his were selling in the mid to high 200,000 range. With a PITI of less than 900 a month my friend could give a rat’s ass about an increase in value, maybe this is the new reality.

  27. 27
    Zifnab says:

    @Glenndacious Greenwaldian (formerly tim):

    So big deal…lots of people who couldn’t buy homes before will be able to buy them now when it’s a buyer’s market. A lot of people will rent instead of buying, just like in normal countries. A lot of people will walk away from their ridiculous houses and mortgages and…be free. And life will go on.

    This isn’t all happening in a vacuum. And the housing market isn’t just combusting on its own. When you’ve got 10% unemployment, that’s one in ten workers who can’t own a house no matter how low the mortgage. People aren’t moving into rentals, either. They’re moving back in with their parents. Or they’re becoming homeless. I don’t consider that “freedom” in any conventional sense.

    No jobs = No recovery. The most generous buyer’s market in the world isn’t going to benefit the guy with no money. That’s the fundamental problem here. The market will not just magically correct itself.

  28. 28
    Rosalita says:

    @Svensker:

    I’ll meet your Gap Band and raise you a Springsteen going down, down, down

  29. 29
    BR says:

    Well, I guess it could be worse. You could be stuck in a traffic jam that lasts 9 days:

    A 100-kilometer-long traffic jam in China’s Heibei Province has left thousands of truck drivers stuck on the interstate heading towards Beijing since August 14. What’s worse, officials are saying that the jam could continue for up to a month!

    http://newsfeed.time.com/2010/.....s-9th-day/

  30. 30
    Steeplejack says:

    @Redshirt:

    Presumably you will get the “value” of using it and enjoying it.

    I think we are entering an era in which (residential) real estate will not be a fast-appreciating asset as well as a roof over your head.

  31. 31
    p.a. says:

    Welcome to the Age of Delusion. The rational, hard-headed economic Masters of the Universe delude themselves into thinking the financialization of the economy will spur growth, the Republican base deludes themselves about, well, everything. The Democrats delude themselves that the Republicans really want to work in cooperation to better the nation. The public deludes themselves that any but a handful of national pols represent their best interests.

    (Yes, many M.o.t.U.’s probably don’t actually believe, but I’m not clairvoyant so they get credit for delusion and not baldfaced hypocrisy.)

  32. 32
    Ryan says:

    @Anoniminous

    I think this is the perfect opportunity for targeted tax credits.

  33. 33
    Punchy says:

    Should be great for a buyer

    You’re not kidding

    A house for $5. Not $5K, not $50K. One Abe Lincoln.

  34. 34

    @Glenndacious Greenwaldian (formerly tim):

    So again, why the bomb throwing?

    Because a real estate bust will affect the whole economy.

    The economy has survived shocks before. But the present economy was already in trouble and then more problems arise. And we may not be able to carry on as usual.

    More unemployment. More retrenching in the companies that make everything that goes into houses. Even less money available for the Great Unwashed [us]. The sanest president we have had in decades won’t be reelected. We will have jerks in office that will start a couple more wars. Any efforts to establish alternate energy sources will grind to a halt and when the world oil supply shrinks to a point where it begins to hurt the whole economy will go into apoplectic shock.

    Any more questions, Grasshopper?

  35. 35
    chopper says:

    @Glenndacious Greenwaldian (formerly tim):

    This is no surprise to anyone who thinks about things.

    tim’s back, with extra ‘smug prick’. great.

  36. 36
    Brachiator says:

    @BR:

    What’s funny or weird is that Calculated Risk had forecasted that this would happen, and yet none of the “conventional” economists did.

    Thanks for the link. CR not only provides good stuff, but they also call out the cowardice and stupidity of conventional economists:

    Well, as best as I can determine A LOT of the economists surveyed for various “consensus” forecasts often don’t really know much about many of the statistics they are asked to project, but are still quite willing to be in such surveys. In the case of home sales, very few track local sales data, but surprising quite a few also don’t look at pending sales either!

    In other words the ranks of conventional economists are filled with McMegans doing their McEstimates, and as usual, getting it wrong.

  37. 37
    Violet says:

    @BR:
    Speaking of China, NPR had a pretty long segment on this morning about the dreary real estate situation in China. Loads of empty houses, sales off 25% from a year ago (or something like that, wasn’t paying full attention), real estate offices laying off workers or closing. Apparently the Chinese electric company has said something about there being enough empty properties to house a very large percentage of the population, or something. The government is denying this, but people are believing the electric company. And the people think it’s going to get a lot worse.

    Bubble, bubble, toil and trouble.

  38. 38
    Comrade Javamanphil says:

    @Hugin & Munin: It’d be cheaper and Redshirt would get a better return if the property were just renamed “Galt’s Gulch.”

  39. 39
    peach flavored shampoo says:

    A 100-kilometer-long traffic jam in China’s Heibei Province has left thousands of truck drivers stuck on the interstate heading towards Beijing since August 14

    Not to go gross, but where does one, uh, ya know, poop in a car for 9 days?

  40. 40
    aimai says:

    @Jager:

    Yes, but how long will the private security and the ameneties and the building itself be maintained if/when the other owners abandon their units because they can’t pay *their* mortgages. Your friend is an absolute fool to put money down on a condo or in a gated community at this point–not only can the value of the thing decrease but its very physical attributes (roof, shared walls, electricity, sewage) can be seriously endangered by the failure of other co-owners to pay their share. The stories coming out of other such arrangements are hellacious, though I can’t find any to link to just now. I’d be very leery of getting into any situation in which I might be liable for condo or co-op costs if others stopped paying.

    aimai

  41. 41
    Mnemosyne says:

    @Punchy:

    I have a friend in Michigan who paid $80K for her house. She’s currently battling her soon-to-be-ex-husband over who gets stuck with it, because it’s now worth $20K and is totally unsellable.

  42. 42
    roshan says:

    I hope, Cole’s weekend parties survive this downturn.

  43. 43
    JMC_in_the_ATL says:

    @Glenndacious Greenwaldian (formerly tim): And a lot of people have run through all of their savings, maxed out their credit cards, are *already* living with friends and have been for months, and get five or six interviews per month that never go anywhere because HR managers like to look busy without actually hiring anyone.

    Hurray for being 39 and functionally destitute with a Masters degree and a professional license that I can’t afford to do the CPE requirements for!

  44. 44

    @Mnemosyne:

    So divorcing couples are still battling over who gets the house, just now with a little twist. Funny.

    The more things change . . . . .

  45. 45
    JR says:

    Well, it’s a good thing that I like my house. If I could only nail down a job here for after graduation, I’d be happier than a pig in plop. But instead, I’m a prisoner of the housing market and a victim of the labor market.

    Yay!

  46. 46
    PTirebiter says:

    @Hugin & Munin: Too funny.

  47. 47
    Violet says:

    @New Yorker:

    Remind me again why owning a place is supposed to so much better than renting?

    As someone who rented for a very long time, I’m happy to toss in my two cents.

    Renting is better because you don’t have to worry about upkeep and maintenance and you can move quickly if you need to and aren’t tied to a mortgage.

    Renting is worse because you can be kicked out with little notice if you have moved from a longer term lease to month-to-month. Happened to me twice. Both times were really stressful. The landlord is not always willing to sign a long term lease year after year, so you may have little choice except to move if you want the longer lease security. Also, rents can go up with little notice on a month-to-month lease.

    Not all landlords are great at taking care of places. Things need to be done, but they don’t get done, or they’re done poorly. So you can decide to sink your own money into something, for little return except your own comfort, or you can live with it.

    Finally, it’s not yours and you can’t do everything you want to it. And if you are allowed to do everything you want, you may spend a lot of money for zero return.

    There’s good and bad in everything. The freedom to do what you want to your own house (within deed restrictions and zoning laws, of course) is a big bonus to owning. But it comes with a downside that the market may turn or you may lose your job and you are stuck with a house you can’t pay for.

  48. 48
    Punchy says:

    @Mnemosyne: That’s some funny shit. Now the loser in the divorce gets the house.

    Christ on a strippers pole, reality is worse than the funniest Onion article.

  49. 49
    CaseyL says:

    Remind me again why owning a place is supposed to so much better than renting?

    Well, it’s funny you ask, because the traditional advantage(s) of owning still apply, though not the advantages people thought they had in the boom times.

    The traditional advantages are that your mortgage payment doesn’t go up, whereas rent often does; that you get to change the house via remodeling, painting, or whatever and you usually can’t do that in a rental; that no one will sell the house out from under you, which also can happen in a rental; and, above all, that at some point you pay off the mortgage (remember mortgage-burning parties?) and no longer have to pay a huge monthly sum toward housing, which is never the case with a rental.

    Using one’s house as a piggy bank canceled out some of these advantages – notably, the never-changing mortgage payment and the possibility of owning the house outright at the end of the mortgage term – but if you never do that, owning a house is still a good idea.

    I do have a HELOC, and it did come in handy during my long unemployment. But I have never considered my house an “investment”; it’s my home.

  50. 50
    Glenndacious Greenwaldian (formerly tim) says:

    @chopper:

    Let me make sure I understand: you and the rest of the BJ regulars can be as snide, smug, insulting and prickish as you please to whomever digresses from your orthodoxy, but let ME make a snide comment and you’re all offended?

    get a life. It’s only a blog.

  51. 51
  52. 52
    Nom de Plume says:

    @Brachiator: In other words the ranks of conventional economists are filled with McMegans doing their McEstimates, and as usual, getting it wrong.

    It ain’t by accident that every economic report you see (and I mean every blessed one) includes the word “unexpected”.

  53. 53
    Corner Stone says:

    @BR:

    Well, I guess it could be worse. You could be stuck in a traffic jam that lasts 9 days

    You’re looking at this wrong way round. I say some enterprising family gets a couple bicycles with baskets and they start selling food and water up and down the line. Or maybe they use backpacks and hike it in.
    Other members of the family could rent themselves out as security guards and protect the abandoned cars & property the owner couldn’t carry out.
    Lots of opportunity here.

  54. 54
    mr. whipple says:

    We’re doooooooomed!

  55. 55
    Jager says:

    @aimai:

    His building is over 90% owner occupied. He investigated the ownership and condo structure with his attorney before he bought it, he is in good shape and if he isn’t, he is still living for less than comparable rent in WPB.

  56. 56
    Xenos says:

    @Jager:

    His building is over 90% owner occupied.

    Says who? I hope he verified that claim himself… because there won’t be much recourse if he is wrong, and suddenly becomes one of 20 people who have to come up with a few hundred thousand for unexpected repairs.

  57. 57
    wobbly says:

    Reminds of that Springsteen song “Downbound Train”.

    Weird thing is, do trains ever actually go up or down?

    Most of the railroads I’ve ridden are laid out flat on the landscape, the landscape having been blasted and flattened out in front of them by Chinks and Harps and cheap labor from
    all over the world.

    (This includes the NYC subway.)

  58. 58
    lacp says:

    So the stimulus we’re gonna need to counteract this and all the other shit going down will be in the trillions, and numbers that high are radioactive to any Congress that even a socialist/fantasist like me could imagine in my fever dreams.

    Christ. Go Galt? Try Road Warrior. Or Eloi/Morlock. This doesn’t look good at all.

  59. 59
    New Yorker says:

    @Violet: @CaseyL:

    I guess I’ve just been lucky with the landlord I’ve had, who does make sure stuff gets fixed on time, who does upgrades from time to time, and who doesn’t raise my rent. Given those advantages, there’s a lot more for me personally to like about renting vs. owning.

    I’m well aware that my situation is better than the vast majority of renters. I’ve often commented to myself about how my terrible luck with employment has been balanced out somewhat with great luck in housing.

  60. 60
    John PM says:

    @aimai: #40

    The stories coming out of other such arrangements are hellacious, though I can’t find any to link to just now. I’d be very leery of getting into any situation in which I might be liable for condo or co-op costs if others stopped paying.

    I just saw an e-mail from an attorney the other day whose potential client is in a bad situation. They bought the first condo in a 25 unit building. One year later, only 5 of 25 units have been sold and the developer is nowhere to be found. There is no condo board and thus no entity collecting the assessments to pay for common expenses. No to mention the fact that there are 20 vacant condos which present numerous security problems.

  61. 61
    Napoleon says:

    @Corner Stone:

    On the radio this morn they said people were selling bowls of noodles to those trapped at 4 times the ussual price.

  62. 62
    DBrown says:

    @Redshirt: After peak oil in a few to ten years, that retreat, if it doesn’t included farm land, will be worth little.

  63. 63
    NobodySpecial says:

    I work a blue collar retail job that guarantees me 50 hours a week (and has for five years and counting), and live in a postage sized apartment where I pay no utilities.

    And now I’m evidently living the good life?

    THAT’S depressing.

  64. 64
    Frank says:

    @CaseyL:

    You will always have property taxes to deal with. Mine are close to $4,000 a year ($333/month), which is slowly starting to approach the rent payments I used to have when I rented.

    In addition, my city had a street construction project. Any house located in this area were stuck with paying the bill. So that ended up being another $5,000 per household.

    I think for people who have a hard time saving, a house may be a good idea financially as the monthly payment each month is kind of a forced savings. If you don’t have a hard time saving, I think renting is a better way.

    The big advantage of having a house to me is it more quiet. I can’t hear the neighbors talk or fight, whereas in my previous apartment I could.

  65. 65
    New Yorker says:

    On another note, I can’t help but be strangely optimistic about this housing report. It’s like we’re finally going to hit the real bottom of the real estate market, and not the one kept propped up, “Weekend at Bernie’s”-style by tax credits and government stimulus. I feel like we need to hit the real bottom before any sort of real economic recovery is possible.

  66. 66
    Taylor says:

    @CaseyL:

    no longer have to pay a huge monthly sum toward housing,

    Unless you live in Northern NJ and pay five-figure property taxes…..and Chris Christie isn’t going to do shit about it……

  67. 67
    BenA says:

    And yet all I see around me is builders still building houses. You’d think these assholes would wise up and stop paving farmland… who the hell is loaning these jokers money? I mean I’m happy someone is employeeing people but it just doesn’t make sense.

  68. 68
    Brachiator says:

    @Nom de Plume:

    It ain’t by accident that every economic report you see (and I mean every blessed one) includes the word “unexpected”.

    There is a Southern California based economist, Christopher Thornberg, who has been consistently right about economic trends, especially in the housing industry. He had the housing bubble nailed.

    He has been interviewed in the LA Times and regularly appears on some Southern California based public radio programs. And yet, for some reason, he is never interviewed by national or Beltway based media.

    But as you suggest, the conventional wisdom is designed to be “surprised” by the steepness of economic downturns.

    I think part of this is because the economists who still are the go to guys as far as the media are concerned (including the Grand Oracle Krugman) deal with theories and models, and are weak at collecting and reading basic economic data.

  69. 69
    GOPhuckYourself says:

    I personally thought the title was an oblique reference to Danny Elfman and the rest of the Mystic Knights of the Oingo Boingo:
    http://www.youtube.com/watch?v=gOhncfDJum8

  70. 70
    Max says:

    @Napoleon: “Selling bowls of noodles” reminds me of Kung Fu Panda.

    I love that movie.

  71. 71
    DBrown says:

    @JR: Pigs are very clean animals that never have liked the dirty conditions that sick humans (ie corp farmers) make them endure – change your word pig with republican, and then it makes great sense and doesn’t put a fine animal like a pig, down.

  72. 72
    GregB says:

    Does anyone have any good Soylent Green recipes?

  73. 73
    DMD says:

    Make me glad the Republicans have reformed and turned out crazies in anticipation of returning to power in November on the back of a bad economy.

    oh…

  74. 74
    Violet says:

    @New Yorker:

    I guess I’ve just been lucky with the landlord I’ve had, who does make sure stuff gets fixed on time, who does upgrades from time to time, and who doesn’t raise my rent.

    I had that too. Until I didn’t. Fabulous landlord, fixed everything, never raised the rent for years. Then all of a sudden, 60 days to get out, no exceptions, no extensions, no flexibility. Landlord went through a divorce combined with a job problem and needed to move into the much smaller house that I was occupying.

    That was the second time something like that had happened to me (sudden notice given, not my fault at all), and it soured me on renting, except with a specific lease. Renting can be great, but it does leave you more vulnerable.

  75. 75
    Trinity says:

    @Punchy: omg…I grew up in Lansing. I knew things were bad back home in Michigan but…$5 for a house?!

  76. 76
    danimal says:

    It seems like we’ll never recover until the housing market bottoms out, and that won’t happen until everyone that can’t afford (or won’t pay) their mortgages shakes out of their homes.

    It’s looking like we’ll see even more foreclosures and bank owned property in the near term. Which means prices will continue to depress further. Eventually the market will hit an equilibrium, but God only knows how far prices will fall before that happens. When this crisis hit, I was hoping that we could avoid massive deflation of housing prices, but obviously that’s what’s happening.

    Since homes will never be free, this won’t last forever. At some point, things will pick up. Hopefully we won’t be in a stone age economy when they do.

  77. 77
    cleek says:

    @GOPhuckYourself:

    and i heard the last lines of The Doors’ “Moonlight Drive”:

    Come on, baby, gonna take a little ride
    Down, down by the ocean side
    Gonna get real close
    Get real tight
    Baby gonna drown tonight
    Goin’ down, down, down

  78. 78
    jinxtigr says:

    I feel badly for a lot of people, but I’m not doomed.

    My house is a fixed rate mortgage that I can afford, it’s a Rural Development mortgage which had Section 8 homeownership program assistance and the land’s part of a land trust. It was ridiculously impossible to get ANY house cleared through two government programs and a private land trust- but the resulting house is solid, man.

    I like Vermont. I like my neighbors pretty much without exception, though there’s low-income housing apartments nearby and those folks sometimes get dicey. I’m gonna have to keep working on maintaining the house and all- it’s been sketchy enough with the downturn that I’ve been constantly obsessed with work and things like paint and the yard have declined- but I have no interest in treating it as an investment.

    Reminds me of the John McPhee articles about New Jersey ‘pineys’ who live in decrepit whitewashed shacks because they correctly believe that if they fixed ’em up and painted ’em the tax assessed would be higher. I don’t want structural decline of any sort, but I’m not interested in a McMansion Lite.

  79. 79
    roshan says:

    Is anyone else getting a feeling of Deja Vu?
    Hey Cole, don’t fuck with us, I know you put up a similar thread some time back.

    Hey Brachiator (today), stop doing this (from 2008) man, it’s fucking up my head.

  80. 80
    stuckinred says:

    @Violet: We own the house next door and I am the model landlord, I fix stuff immediately, barely cover the mortgage and allow critters. We had a manic-depressive yoga teacher that we put up with fir 5 years until I finally pulled the plug. Now we go with a “specific” lease. Landlords are no worse than renters.

  81. 81
    mclaren says:

    If you run the numbers you can calculate the fair value for homes based on median income in that region. To take one example, Southern California has a median two-person income of $38,159. The standard mortgage loan for many years required that no loan payments exceed 30% of a couples’ take-home income. That means a monthly mortgage payment could not go above $1059 per month.

    So now you figure in a 5% rate for a 30 year fixed rate mortgage with 10% downpayment and you can do the math. What is the maximum value of a home on which you could lend to a typical 2-income couple in Southern California?

    The answer I get is $195,000. That’s the absolute most home a couple with the median income in California could get a loan for today — if they had a perfect credit score and if they had rock solid jobs and if all the stars lined up and the bank were willing to give ’em a loan.

    At last call, the median home price in San Diego was $480,800. This suggests that homes in San Diego will have to fall to 100*(195,000/480,800)% = 40.55% of their current value.

    In other words, homes in San Diego will have to lose another 59.45% of their value before their value would become reasonable for the current circumstances. That’s roughly a 60% decline from current levels.

    However, in recessions, prices typically overshoot on the low side just as the overshot going up. This suggests that home prices are likely to drop a guesstimated 75% to 80% more from current levels before they finally stabilize.

    That’s a loooooooooooong way down.

  82. 82
    some other guy says:

    @CaseyL:

    and, above all, that at some point you pay off the mortgage (remember mortgage-burning parties?) and no longer have to pay a huge monthly sum toward housing, which is never the case with a rental.

    If you take out a traditional 30-year mortgage then almost all of your payments for the first half of the loan go straight to interest rather than principal. After 15-years you’ll only have 25% equity, and how many people these days actually stay in the same house for even that long? Isn’t the average length of home ownership only 7-8 years? That’s less than 10% equity! And this is all assuming your home doesn’t depreciate in value during this time, making your equity worthless.

  83. 83
    Rosalita says:

    @BenA:

    you and me both…some new developments are completely stalled yet they keep starting new ones

  84. 84
    Xenos says:

    @Rosalita: Fish gotta swim, birds gotta fly, builders gotta build. I think they are afraid that if they ever stop they will never start again. They might be right.

  85. 85
    Elie says:

    One of the other related concerns that I have is that many local governments such as mine (Whatcom County Wa), are still in thrall to the developers and construction industry. The developers are still going to want to build unnecessary homes and buildings because that is what they do. This will result in more empty lots and drain the coffers further to support needless infrastructure development with our taxes to build what shouldnt be built. This is what the local republican/libertarian fools are supporting — yeah — Tea Party, Tea Party for the developers to continue to exploit taxpayers. Cut those taxes for the rich — same thing.

    Our county just expanded the rights of some of our local towns to expand beyond their current boundaries. Its ridiculous! Expensive, wasteful and ridiculous. We do not need more building of anything — even though the construction jobs will be affected, we can’t fund those jobs to build empty buildings and destroy more of the green space — for nothing. We have tens of hundreds of homes sitting there for sale with no buyers. Lets add more to the pile…

  86. 86
    Violet says:

    @stuckinred:

    We own the house next door and I am the model landlord, I fix stuff immediately, barely cover the mortgage and allow critters. We had a manic-depressive yoga teacher that we put up with fir 5 years until I finally pulled the plug. Now we go with a “specific” lease. Landlords are no worse than renters.

    Oh, yeah, there’s definitely good and bad on both sides. I actually feel really lucky with my previous rental situations. The two I’m referring to were absolutely great. Until they weren’t. And both of those were due to the landlords experiencing some life changes. The first one was very unexpected, the second one a bit more predictable because it was a divorce, but I wasn’t told until the very end.

    It definitely cuts both ways. Landlords can be screwed by bad tenants, and honestly, that probably happens more because it’s easy for the tenant to just pick up and leave the landlord having to fix the mess.

  87. 87
    stuckinred says:

    @Violet: Yea and there are certainly trade-offs to having the house next door. They’d have trouble sneaking out but then I have trouble avoiding fixing stuff!

  88. 88
    debit says:

    Part of the reason why no is buying is that no one is lending. I don’t know about other markets, but in MN I’m hearing from people who want to buy but can’t get a mortgage no matter how many hoops they jump through. Granted, we’re talking people with okay, but not perfect credit scores. But here’s a newsflash, banks: no is going to have a perfect credit score pretty soon. It’s ugly out here.

  89. 89
    Punchy says:

    Selling bowls of noodles” reminds me of Kung Fu Panda

    His fat no-clutch-hitting ass is killing my fantasy baseball team this year.

  90. 90
    BenA says:

    @Xenos:

    @Rosalita: Fish gotta swim, birds gotta fly, builders gotta build. I think they are afraid that if they ever stop they will never start again. They might be right.

    I suppose you’re probably right, and the housing market where I live hasn’t collapsed completely (yet.)

    Still either someone is loaning a crap load of money based on nothing or these guys are still burning through reserves they made during the boom.

  91. 91
    The Moar You Know says:

    On another note, I can’t help but be strangely optimistic about this housing report. It’s like we’re finally going to hit the real bottom of the real estate market, and not the one kept propped up, “Weekend at Bernie’s”-style by tax credits and government stimulus. I feel like we need to hit the real bottom before any sort of real economic recovery is possible.

    @New Yorker: Timeframe on that is between 2011 and 2014, depends on where you live. Which leads to this:

    At last call, the median home price in San Diego was $480,800. This suggets that homes in San Diego will have to fall to 100*(195,000/480,800)% = 40.55% of their current value. In other words, homes in San Diego will have to lose another 59.45% of their value before their value would become reasonable for the current circumstances. That’s roughly a 60% decline from current levels.

    @mclaren: I now own not one but two homes in San Diego; I hope you’re wrong. I know, from past experience, that you likely aren’t.

  92. 92
    Ol'Froth says:

    I have never considered my house an “investment”; it’s my home.

    Bingo.

  93. 93
    Violet says:

    @mclaren:
    Jeez, that’s depressing. I have a distant relative who is in the real estate business in the San Diego area. I wonder how they’re doing….

    Of course San Diego’s real estate isn’t everywhere. Some cities, and even some areas within cities, are probably not going to experience the same level of slump.

  94. 94

    @JMC_in_the_ATL:

    Hurray for being 39 and functionally destitute with a Masters degree and a professional license that I can’t afford to do the CPE requirements for!

    Overeducated and underemployed? Been there and done that. Bummer [to use an old word].

    But what is the alternative? A less educated life? Ignorance really, really impoverishes the mind and I suspect the heart as well.

    The trick is to live an interesting life regardless of the material environment you find yourself in. No, I haven’t mastered that yet but I am working on it.

    Good luck. :-)

  95. 95
    Mister Colorful Analogy says:

    @Hugin & Munin:

    Redshirt: Depends of if you have designed it with easily covered approaches, interlocking fields of fire, and a shit moat. These will be important selling points in the “new” economy.

    Folks, we have a winner. S,N! AA reference FTW!

  96. 96
    some other guy says:

    @Ol’Froth:

    As many people are learning the hard way these days, it’s not your home. It’s the bank’s home until you pay them off.

    How many people actually own their home free and clear nowadays? It seems like everyone in my generation either refinances or moves every decade or so, wiping out their equity and starting over. And if they find themselves suddenly unemployed… well, we’re seeing the result of that play out now.

  97. 97
    Jager says:

    @Xenos:

    He did, if the whole thing goes to shit he is still living for less than rent. The upside here is that he could afford a much more expensive place to live and chose not to.

  98. 98
    Jager says:

    In reference to the traffic jam in China; do they build Freeways without exits? WTF

  99. 99
    Brachiator says:

    @roshan:
    That’s funny!

  100. 100
    wes g says:

    did you just reference Fall Out Boy – Sugar?
    i’m kinda hoping you were referencing Autotune the news #12 :P

  101. 101
    Suffern Ace says:

    @Jager: I thought that, too. This is China, where they had passengers get out of a jet and tow the jet to the gate. While the cars are stuck, they could be building exits and an entire city for them to live in less time than it would take to spend a month getting to Beijing.

  102. 102
    quaint irene says:

    Well, I guess it could be worse. You could be stuck in a traffic jam that lasts 9 days:

    Crap, forget that. Howz about being in a copper mine for 3-4 months?

  103. 103
    Suffern Ace says:

    Regarding the crisis, I can only say that I hope that THIS time, the rich guys were properly hedged against this decline in housing, since it has been apparent for quite some time that government support is required to keep the housing market from falling. I can only imagine what would happen if the big banks came back and asked to be rescued again. I believe that any congressman voting for such an option would be unable to attend any public event in his or her home district, and rightfully so…

  104. 104
    catclub says:

    @Jager:
    “the condo came with two covered parking spots and its on a golf course.”

    Amazingly, some people consider this an asset.

  105. 105
    Brachiator says:

    Is anyone else getting a feeling of Deja Vu?

    By the way, the predictions of a couple of economists, back in 2008, from the old thread noted by roshan:

    Here is [economist] Thornberg just on the prospects of the Southern California housing market:
    __
    “Southern California prices will fall 25% from their peak and won’t find their bottom until the end of 2009,” Thornberg said.
    __
    [Economist Edward] Leamer also sees a drop-off at the high end of the range—20% to 25%—and sees the downturn lasting into 2010.
    __
    Now, imagine this on a national scale.

    And these predictions may now appear to be too optimistic, even though they are still more accurate than the conventional wisdom.

  106. 106
    Anoniminous says:

    @cleek:

    Yes.

    And it goes deeper than that.

    Everybody has been running around shouting Americans need to save more and lower their debt; which are accurate statements. The flip-side is to do that people will have to shift money they from consumer purchases. Which means a slow down in the production & etc. of consumer goods. Which means a slowing economy. Which, ultimately, means increasing unemployment from, among other reasons, younger people entering the workforce. These decrease consumer ‘Good Vibes’ about the economy lessening consumer spending as money shifts to saving for a cushion for hard(er) times.

    shrug

    We’re in a downward spiral and until the positive feedback loop in a downward direction is halted and then reversed things are only going to get worse.

    @Ryan

    Targeted tax credits would help. A Lot.

    If I may go all “S” word …

    They need to be accompanied by a “New-er Deal” that invests money in existing infrastructure as well as for the future: High Speed Rail, wind power, “smart” electric grid, education, research, & all the rest.

    IMNSHO, we’re in a hole and both the GOP and Dems are choosing to keep digging. (To find oil? Gold?) Until we start doing Something Else we are not going to get out of the mire.

  107. 107

    But what is the alternative? A less educated life? Ignorance really, really impoverishes the mind and I suspect the heart as well.

    But judging by Palin’s book and speaking fees, I’d say it pays pretty well.

  108. 108
    Martin says:

    @mclaren: Uh, no, your math is totally fucked. For a median income of $38K (and that’s personal, not household – you need to use household, so that number is automatically higher), the bottom half of that market *at least* will be renting and not even in the housing market. You need to find the median income of the home owning population to correlate to median home prices. In SD, that’s going to be around $80K (in my city in OC, the median household income is $105K, which puts homeowner median in the $140K range) which would yield a median home price in the $400K range (my city is around $600K but was $990K at the top of the bubble), which sounds about right.

    And there’s a big inflection point at $417K + 10% where homeowners typically jump from standard to jumbo mortgages, as the rates on the latter have been rather high since 2008. What we’ve seen is that once home prices settle down to where homeowners can get in with a standard conforming mortgage (~450K-500K) that home prices stabilize.

    Honestly, in our area we haven’t seen the housing market appreciably slower in the last month. If anything, it appears that banks have offloaded a lot more of their properties on flippers, and those homes are just now hitting the market. I’d say about 50% of the homes on the market here sold last month, and about 80% of the bank owned properties were purchased by investors. Now, some of those houses coming off the market seem to have gone up for lease. A coworker of mine who recently moved leased her home in 24 hours at the price she wanted, so for those homeowners that can afford to lease the market appears pretty good right now. So I don’t think it’s quite so gloomy as this report makes out. It’s not good but I don’t think it’s horrible, at least in SoCal. That should be taken with a little grain of salt that our unemployment rate is a bit lower than average at 9.3%. It’s improving and it’s a lot better than some places here in Cali (Imperial county is 30% – that’s jaw dropping) so the housing market here should be at least slightly better than some other areas, but 9.3% isn’t exactly something to brag about nationally.

  109. 109
    Martin says:

    @Comrade Dread: Yeah, but how nice are JMCs tits, and can he/she wink with conviction?

  110. 110
    Mnemosyne says:

    @some other guy:

    How many people actually own their home free and clear nowadays? It seems like everyone in my generation either refinances or moves every decade or so, wiping out their equity and starting over.

    It used to be that people would buy a house and live there pretty much until they were too old to keep the house up anymore and they had to move into an apartment or nursing home. My mother-in-law and her sister live in the house they grew up in that they inherited after their father died.

    But now houses are a temporary place to roost while you pull out all of the equity and then try to sell it for more than you paid. People got really caught up in the flipping game, trying to stay one step ahead of the mortgage before selling at a profit.

  111. 111
    catclub says:

    @mclaren:
    Given reports of $5 homes ( not $5k, an Abe Lincoln)
    I may be too optimistic, but:

    Isn’t this calculation assuming that everyone will buy a home?

    If we already know that homeownership is well below 70% of the population, it might be more useful to estimate that home(buyers/owners) are more representative of the upper 80% of the population ( not upper 70% because some wealthy still rent and some poor own homes – think elderly for starters.)

    I do not know the median of the upper 80%, but whatever it is would give a higher median house price estimate.

    Also, remember that San Diego home prices may not really be the same market as the Inland Empire. Haven’t those home prices already fallen about 60%?

  112. 112
    Hal (GT) says:

    @BR: That’s not so weird. They others are prefer ignorance and are so badly leveraged that they have to continue the lie.

  113. 113
    ChrisS says:

    I may be missing something, but didn’t the housing credit end in June? Who didn’t see a drop coming?

  114. 114
    ChrisS says:

    @catclub:
    His numbers would also be more accurate if San Diego is considered average in terms of desirability and people weren’t willing to pay a premium on homes just to live there.

    Personally, given the snow in syracuse and the 363 days of shorts weather in San Diego, I’d be willing to outlay a greater portion of my income for housing costs if I were to magically get a similar position there at a similar salary.

  115. 115
    Pug says:

    Well…I guess can you can say this really is good news for John McCain.

    And John Boner. And Sarah Palin. And Newt Gingrich. And Mitch McConnell.

  116. 116
    Elie says:

    @Linda Featheringill:

    I can dig.

    My husband just accepted a job cross country after years of underemployment here.

    We are living in bizarre times that no one could have fully envisioned — despite the fact that we were warned…who could actually see what it would be like?

    The value of our home has fallen tremendously and there are dozens of home up for sale in our immediate neighborhood. We have a very desirable location — near the water, etc., but even that is falling…

    As I said on a comment yesterday, things are spinning down. The only thing to hope for is that the rate of fall stays slow enough that we don’t get into the sorts of social and political upheaval that will make things 4000 times worse. The people who will exploit this for political gain are being very very stupid — this is very very dangerous.

  117. 117
    Redshirt says:

    @Hugin & Munin: You’ve got the right idea. Given that I’ve designed it to succeed in our post-Galt world, I’m feeling better about the long term value. It’s easily defendable if nothing else!

  118. 118
    Comrade Sock Puppet of the Great Satan says:

    ” She’s currently battling her soon-to-be-ex-husband over who gets stuck with it, because it’s now worth $20K and is totally unsellable.”

    Christ. If they go much lower, Best Buy will be bundling houses in Michigan with Big-Screen TVs.

  119. 119
    Brachiator says:

    @Ryan:

    I think this is the perfect opportunity for targeted tax credits.

    We’ve already had a slew of targeted tax credits: First Time Home Buyer’s Credit, Residential Energy Credits, Fuel Efficient Vehicle Credits, child tax credits, New Vehicle Deduction, etc.

    The weakness of this approach is that while you might shore up old, known sectors of the economy, you neglect innovation into new areas.

    I think that the education credits enhanced by Obama are risky but good investments in human capital.

  120. 120
    Anoniminous says:

    @Brachiator:

    Something I didn’t mention above:

    Tax credits work only for those people who have the discretionary income to afford to purchase in the first place.

    And it may very well be credits will ‘push’ marginal (potential) consumers from No-Buy to Buy – I don’t know the research on that – credits won’t do nothing for people who aren’t buying because they can’t buy.

  121. 121
    Joshua says:

    GF and I bought a condo in June. We aren’t counting on anything more than inflationary gains, though we bought a place in a smart growth area with good public transportation, good schools, and a walkable urban core (which we are right in the middle of), so I would say there is upside.

    The idea that you could get 10% annual appreciation by plopping a poorly constructed McMansion on top of some pavement in the vast Arizona desert is nuts. I don’t know why people believed it. Hell I don’t know why people still believe it.

  122. 122
    Sanka says:

    The real estate market just dropped a bomb:

    Clearly, the greedy bankers are to blame.

    What we need is Democratic majorities in congress and a Democratic president to reverse the trend of federal policies that help the rich, and use some stimulus money to help the middle class, because clearly, that is what Democrats stand for.

    Some good Federal program to stem the tide of foreclosures, which increases the supply of housing, should do the trick as well.

    Oh wait…

  123. 123
    HyperIon says:

    @aimai wrote:

    Yes, but how long will the private security and the ameneties and the building itself be maintained if/when the other owners abandon their units because they can’t pay their mortgages.

    I thought the same thing but read a bit further and see that you are on it. IMO condos are the worst thing now. They are like adjustable rate mortgages but 10 times worse. At least you can refi the mortgage (in theory). But the association dues cannot be avoided and only go UP! I note that the original poster said nothing about dues.

    That part of Fla experienced a VERY crazy run up. I don’t think the property values there have yet hit bottom.

  124. 124
    Brachiator says:

    @Anoniminous:

    Tax credits work only for those people who have the discretionary income to afford to purchase in the first place.

    Not entirely true. Although it may be dumb to do, someone might take out a loan or make a credit card purchase for an item that is eligible for a tax credit. And business credits also might be used by people who take out loans to buy income-producing equipment.

  125. 125
    Tax Analyst says:

    Rosalita: (to Svensker)

    I’ll meet your Gap Band and raise you a Springsteen going down, down, down

    I was thinking more along the lines of Freddie King.

    edit: Hmmm…somehow I screwed up the blockquotes here. Oh, well.

  126. 126
    Anoniminous says:

    @Brachiator:

    Ack.

  127. 127
    Martin says:

    @HyperIon: Condos are *always* a disaster. In a buyers market, nobody wants them and their price plummets because people can get detached for the price the condos went for before. In a sellers market, they do okay, but anyone buying in at that time has a high likelihood of getting killed when they sell, unless they sell during another strong market.

    Condos only work in markets where single-family is prohibitive – dense urban areas, dense beachfront, etc. Anywhere else it’s a coinflip at best that you’ll get your money back out unless the condo is VERY cheap when you buy (<100K).

  128. 128
    Martin says:

    @Anoniminous: No, his reasoning is sound, particularly for the business. Borrowing money for appreciating assets (or those that generate income) is perfectly appropriate. If a tax credit helps make that happen, all the better.

  129. 129
    Corner Stone says:

    @Napoleon:

    On the radio this morn they said people were selling bowls of noodles to those trapped at 4 times the ussual price.

    Like I said, Free Market Opportunity.
    Where is ED Kain when he’s needed?

  130. 130
    Corner Stone says:

    How much can we charge those Chilean miners for glucose drips?
    I’m smelling victory all over the place around here.

  131. 131
    Alex S. says:

    The housing economy won’t be coming back. We’ve been saying this on this blog for some time now.

  132. 132
    liberal says:

    @Brachiator:

    There is a Southern California based economist, Christopher Thornberg, who has been consistently right about economic trends, especially in the housing industry. He had the housing bubble nailed.

    Did he call the bubble as early as Dean Baker did? Baker called both the tech and housing bubbles, and had valid arguments (i.e., ones based on fundamentals).

    I’m not sure anyone except maybe Shiller was as early as Baker on housing (AFAIK).

  133. 133
    chopper says:

    @Glenndacious Greenwaldian (formerly tim):

    i’m not offended. i’m just sad that i’m going to have to read your posts again.

  134. 134
    Tsulagi says:

    @Punchy:

    That’s some funny shit. Now the loser in the divorce gets the house.

    That is funny. Guess divorce lawyers will now try to find ways to stick the other spouse with the house and mortgage. “My client says you’re responsible for picking the McMansion, so you live with it!”

    @Violet:

    Oh, yeah, there’s definitely good and bad on both sides.

    Definitely true. I’ve owned two rental houses now for almost seven years. Would like to think I’m a decent landlord. With the exception of one idiot who thought he was a creative genius, a true renaissance man compelled to transform the house and outside to his vision, I’ve had pretty good tenants. Been lucky.

    Have noticed some trends during the past seven years as the economy has been tanking. All of my renters have been in their 20s and 30s. Up until about three years ago, renters would leave because they were then buying their own house, or they got a better job farther away. I’ve priced the homes about 5-10% under market. When I’d hold an open house for a couple of hours for prospective new tenants, would usually get 40-50 people show up with most filling out applications. A few even offered to pay a little more to get the house.

    Not now. A year ago one of the two houses became vacant because the guy lost his job, and his wife was still in school trying to finish her doctorate. They moved in with his mom. That time holding an open house very few showed up. Only two filled out apps and asked to rent: A web designer and her stay at home husband taking care of their daughter; and three gay bodybuilding UPS guys who wanted to share. I felt for the couple who were there first, but given the economy figured the UPS guys have more reliable income. Who knew UPS was so strong with the gay? They’ve turned the garage into a weight room.

    A couple (M/F) rented the other house two years ago, but she’s lost her job. Her brother is now sharing the house with them to help pay the rent. Before them it was three women sharing. More and more it seems people are sharing rent filling up the bedrooms in a house. My very first renter was a single woman who sat in her car with her dog in front of the house for two hours before the scheduled open house so she could be first. She could afford the rent alone. Times have changed.

  135. 135
    Turbulence says:

    @NonyNony: the landlords who will be willing to rent to you probably won’t be the kinds of landlords you want to rent from.

    I’m currently renting from a landlord in a nice part of a rather nice American city. No credit check needed. Just first month’s rent plus maybe security deposit. My sense is that many landlords in this part of the country don’t care about credit worthiness per se; what they care about is whether you have a job because if you’ve got that, you’ll probably keep making rent checks. That and deleading — if their property hasn’t been deleaded, they completely freak out if you have kids or look like you might have kids soon.

    Now obviously things might be totally different in other parts of the country, but I’d guess that if you’re in a city meeting landlords via craigslist, it is less of an issue. A lot of landlords who are cutting out the middleman using craigslist lack the time, interest, or skill needed to get credit checks done. And because of the real estate crash, there are a lot more people who own property that they’re trying to rent.

  136. 136
    Redshirt says:

    And also, I am planning on actually Going Galt. Not for the reasons the wingtards usually give, but Galt all the same. Can’t wait!

  137. 137
    Church Lady says:

    I live in a solidly middle-class neighborhood in Shelby County, TN. We never had the “boom” here that so many other areas had, so we really haven’t suffered to much of a degree from the bust. We bought our house in May of 1989 for 95K. According the the Assessor’s office, our house is currently valued at 130K, which is probably a little lower than what we could actually get for it in a sale, if recent sales data for the area is any indication. I’m not sure, but it has probably kept pace with inflation, but that’s about it. When we bought, we thought we’d be here for 5 to 7 years. It’s now been over 20. We like the house, our neighbors and the location. We could easily afford a much nicer, and bigger, home but we don’t see the point. We’re comfortable here and the house will be paid off in less than 10 years, around the time we start thinking about retirement. At that point, we’ll probably sell and move to the farm in Arkansas. Maybe more people should be happy with what they have, stop looking for something “bigger and better” all the time, and treat their homes as a place to live, not an ATM.

  138. 138
    Brachiator says:

    @liberal:
    RE: There is a Southern California based economist, Christopher Thornberg, who has been consistently right about economic trends, especially in the housing industry. He had the housing bubble nailed.

    Did he call the bubble as early as Dean Baker did? Baker called both the tech and housing bubbles, and had valid arguments (i.e., ones based on fundamentals).

    There were any number of economists who were warning about the housing bubble. But their voices were drowned out by the “home values are going up forever” enthusiasts.

    The weird thing is that the economists who got it wrong still have TV and radio shows, are still the ones quoted by reporters, and are still the ones who write popular columns and newspaper articles.

  139. 139
    catclub says:

    @Redshirt:
    So it IS a mountain fastness.

  140. 140
    Redshirt says:

    @catclub: Indeed. I feel a bit too nerdy trying to tag it “Gondolin”, but there you have it. Ulmo told me to build it, in a dream. ;)

  141. 141
    morzer says:

    @Redshirt:

    I assume you are intending to refuse admission to the Children of Men this time around?

    I imagine that if the local GOP hear you’ve named the place Gone Doling you’ll be denounced as a Soshulist Muslim, or some such.

  142. 142
    morzer says:

    @Redshirt:

    I assume you are intending to refuse admission to the Children of Men this time around?

    I imagine that if the local GOP hear you’ve named the place Gone Doling you’ll be denounced as a Soshulist Muslim, or some such.

  143. 143
    Redshirt says:

    Darn tootin’! Nothing but trouble, those pesky mortals.

  144. 144
    Waynski says:

    I like the Slim Pickens photo from Dr. Strangelove. Appropriate to the topic.

  145. 145
    Jager says:

    @catclub:
    Okay, how about no parking and the building is in the middle of a fucking parking lot rather than a golf course, feel better…now that’s a goddamned asset. Jesus, my friend BOUGHT a condo that would rent for 12-13 hundred a month and his mortgage is 900…what don’t you get about that picture? What are some of you, the cardboard box elite?

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