San Diego Housing Market News and Analysis

Why are bums and idiots keeping their homes a good thing? And kudos to the governor of my state of birth (NJ) for VETOING anti-foreclosure legislation today. I generally hate the fat prick, but he did the right thing this time round.

The stupid should be punished. No dual-tracking means no threat to force deadbeats into a short-sale or modification, so they can just keep being deadbeats without consequence. And if banks can't enforce the terms of their loans, how can they GIVE loans in future?

I was being sarcastic.

Next legislation: The evil banks can't foreclose on people with income less than X

Think of it this way: from a purely economic view, houses that are unused, just like factories that are idle, are a huge economic waste.

If you believe in economic efficiency, you would want all houses to be used to provide shelter for people and for the benefit of society.

I'm all for putting houses to use rather than let them sit empty, idle, wasting away simply because of a bottleneck in the financial system.

Folks, do you realize that this picture represents a historic moment?

It's the first time a tea party member has a sign with all the words actually spelled correctly!

Unfortunately, grammatically it's still incorrect. But hey, give a few more iterations, they'll be able to achieve 5th grade grammar in about another year or two.

:)

The good thing is that the laws come into effect on Jan. 1. Meaning that there may be a rush to give a lot of bums the bum's rush over the next few months. One can only hope!

If the banks were to foreclose in a timely fashion and then put the damn homes on the market they way they're supposed to -- and the way they always have in the past -- there would be no empty homes (not for any significant amount of time). We have empty homes because the banks aren't foreclosing and selling the homes in a timely manner.

These deadbeat losers aren't doing us any favors. These are the idiots who were over-bidding against rational buyers during the bubble. These were the idiots who forced responsible people to rent and spend years of their lives waiting for prices to correct so they could buy homes at prices they could afford without gimmicky loans. Let these dirtbag deadbeats suffer for their irresponsible actions. They deserve no sympathy.

If we keep deadbeat borrowers in their homes, they we need to have laws that protect renters equally. Are you in favor of laws that prevent the eviction of tenants if they endure tough economic times, too? If we protect one group, we have to protect the other; otherwise, we are discriminating against renters who are more often poor and/or members of minority groups.

Hopefully CA Renter, you aren't being sarcastic.
Josh

CA renter, in hindsight we know that banks were not prepared for the crash in home prices. However you want to look at it, the banks did not have the infrastructure needed to process all the foreclosures on a timely manner. It was a systemic problem.

Banks should crash due to irresponsible lending. Municipalities should be propped up forever despite fiscal élan

No, they quickly remedied that problem. The one they still struggle with it solvency. If they actually foreclosed and had to realize the real value of their properties instead of paper value, they'd be BK.

CAR is right, this keeps fools in houses they never could afford and keeps the same houses at price levels that are actually above sustainability and keeps the tax payers funding irresponsible banks and home debtors.

You should know me better than that! ;)

(Of course, I was being sarcastic.)

I've always said that they should let it ALL crash -- municipalities, pension funds, wealthy "investors," etc. That's because the purchasing power for workers would remain fairly stable if prices were allowed to go down with wages. IMHO, prices would have crashed faster and further than wages because prices were more artificially inflated than wages, and this would have helped reverse the trend in wealth/income disparities of the past 10-30 years.

As it stands, they've realy screwed us over by propping up asset prices without any concurrent increase in wages.

CA renter, its not about propping up banks and prices. It's about keeping economic activity from falling off. By economic activity I mean the number of cars sold, the number of meals served at restaurants, etc...

CA renter, its not about propping up banks and prices. It's about keeping economic activity from falling off. By economic activity I mean the number of cars sold, the number of meals served at restaurants, etc...

What's wrong with lower prices and less activity? Why should the average American family need to work two 45+ hr/week shifts just to make ends meet? Things slowing down would actually be a GOOD thing -- let prices drop to the point that an average family can survive on 1 to 1.5 incomes, so parents would actually have vacation time/time with kids and be able to SAVE some money.

This is actually my goal before I get married. Have enough passive income to guarantee an annual cash flow that pays for housing, insurance, and some needs regardless of employment status, so we can basically live on a single income if we so desire. Or just travel a f**k of a lot and work the other 9 months. And have fun doing so.

I guess having low expectations of material things also helps. My car is 30 years old, my laptop is 4, and I keep my mobile devices basically till they fall apart and die. Do like good clothes, good food, and good music though.

You do not need to work 45+ hrs/week just to make ends meet. If you do, your "ends" is way too high and you need to reevaluate your expenditure. I know a family of 6 living on a single income and that income is just an electronic technician income as well. So you can't get any more average than that. They bought their own home and they're still able to save. So, no, you do not NEED to have 2 parents working 45+ hrs/week to make ends meet. You NEED to have 2 parents working 45+ hrs/ week to live a well above average life.

Electronic technician? Depending on what exactly he's troubleshooting, he could be making $50-100/hr. Perhaps more than an engineer -- skilled tradesmen aren't easy to come by.

Trust me, he's far from that. My guess is, $50-75k/year. You'll understand why I would guess that by just watching how they save/spend.

BTW, I'd like to see some data to back up the claim that an electronic technician with an AA degree make $100/hr in San Diego. I'm extremely skeptical to say the least. $100/hr is equivalent to over $200k/year. Even engineering directors don't make that much. Maybe once you get to the VP level. Unless you're talking about contractors making $100/hr with any benefits. But even then, that's still hard to believe.

Poverty all around. Less jobs. Lower tax revenue. Less innovation. Less influence in the world.

Corporations develop their products and services for the largest market. Then they sell their products around the world. America enjoys the newest products because we are the largest market that nobody can ignore. If we lose that leadership, we will be buying second best.

Your plan might work for an individual or a family but not for the economy as a whole.

You're from NY and you want the best for yourself, no? You want to travel and experience the best hotels and the best restaurants? Wait until your new bride and kids wants all the best also....

Are you sure anybody wants to marry you if you drive a 30yo car?

Letting it correct is what restarts the economic activity.

Everyone is forced to move on. Instead we have everyone, from business people to home owners just 'hanging on' waiting for it to return to what it was and it won't.

We could have bottomed out 2 years ago. Home construction would have restarted, rehabbing the foreclosures would have been a two year boom, lots of people working, prices would be way down (probably another 20% from peak, maybe more).

Wages, probably would have gone up.

Rents would go down.

But instead, we have a stall that they keep pumping trying to keep in th stratosphere.

Are you sure anybody wants to marry you if you drive a 30yo car?

In a place where only about 50% of people own a car, nobody asks what I drive.

As far as buying second best, that's personally fine with me. There should be more to a country than the "best products." Adequate leisure time. Time with family. Time to enjoy life. People are more than consumer-droids, required to buy the "first best."

Slow down, jump off the rat wagon, and spook the horse so the wagon crashes into a ditch and kills the (slave)driver.

Full employment shouldn't be a goal. ENOUGH employment so that anyone who genuinely wants to work can, should be that goal. Fortunately, as labor force participation declines, we're actually headed that way. And lastly, the economy worked fine when there were a lot of families with one working parent.

Unless you're talking about contractors making $100/hr with any benefits. But even then, that's still hard to believe.

I said $50-100/hr, and yes, I could see a contractor making near $100/hr. At $150-200k/yr, benefits become sort of irrelevant, especially considering that mortgage and self employed health insurance are tax deductible.

Lastly, how do you know HOW he bought the house? He may have had money from other sources.

Rapid growth from a very bottom is actually worse than slower growth from a higher point. Remember that a hard crash throws millions of people into poverty.

Krugman was right once again.
http://www.washingtonpost.com/blogs/ezra...

As you look at those charts of Europe, remember that in America, two years ago, we were back to pre crisis GDP and growing, thanks to government and central bank intervention.

And I disagree. We're up to a pre-crisis GDP only if you don't adjust for inflation. What we've had is INFLATION in other things, combined with low housing prices.

In other words, a lot of Americans lost their shirts due to housing crashing. Now to add insult to injury, they're paying 25% more for food, about the same for gas, more for energy, than before the crash.

Keep them on the treadmill, make sure they can't save anything but are pressured by society into owning the latest and greatest.

spdrun, NY is one of the most money concerned places I know.

A robust economy is good for everyone. People have the choice of participating only part-time. A robust economy provides more mobility and more job flexibility.

IMO, unless you have money from other sources to buy a house/coondo/coop in NY and otherwise enjoy the City, you won't be able to meet a desirable partner. Not sure if your a man; but if you're a man it will be even harder.

I'll provide a example from SD to make it more relevant to other readers. If you drive a 1980 impala and live in Skyline, your marriage prospects are much more limited than if you drive a new Prius and live at UTC.

Proof please. It's extremely unlikely for a technician to make $100/hr. around here, even as a contractor. Btw, he's not a contractor.

I know because he's family.

briansd1 --

Already did - bought an apartment in 2009 :) Though buying isn't necessarily the best thing in NY since rental cap tends to be 3-6% -- i.e. you may be better off buying a rental in NJ and using it to pay your rent in NY. There's no stigma in renting nor a huge push to become a homeowner.

NY is money-concerned, but in a very different way than San Diego. And at this point, I'm only interested in one person, so meeting someone isn't an issue.

My point is that inflation doesn't make a robust economy. It makes for slavery plain and simple. What's been created over the past ~3 years is a false "rally" due to inflation, not a real recovery.

You're correct. Not participating 100% is a choice, and one I have. I DON'T think it's a choice for the majority of Americans, unfortunately. It's either "get a job" and accept the 2 wks of vacation on bended knees, or not have an income.

Ha! NYC is the most real estate obsessed place in the country. More so than California.

It's so expensive to buy in NYC that people are resigned to renting. So it's an adaptive instinct more than anything.

It's easy for you to say because you already own. You have built a nestegg so you want a slower pace. But that's not what's best for everyone else.

It's like old people who already own their houses in San Diego and "want our SD of 30 years ago back".

Like food, restaurants, cafes, fashion, and culture.... these are past-times that require constant cash flow and keeping up.

In San Diego, you can go hiking and enjoy the outdoors and those things do not cost any money.

That's a personal choice...

But for people in general, getting married requires a job and money.

spdrun, the GDP numbers are real GDP, not nominal.

As far as "get a job" and accept the 2 wks of vacation on bended knees, or not have an income, , that's more true when the economy is stagnant.

When the economy is robust, people can quit their jobs and goof-off and easily get back into the job market.

My cousin who's a software engineer in high demand has quit his job several times -- to go on 6-month trip, to live on a farm outside of SF, etc... He's planning to quit his job again to do music promoting. It helps that his bride to be is loaded and bought him a house, cash.

Funny how opportunities open up suddenly when you have money.

My point is that we need real GDP growth to provide opportunities to everyone.

My other point is that a hard collapse in economic output throws millions of people into poverty. We are better off to engineer a soft-landing, even if the trade-off is slower percentage growth; the argument being that YOY growth is not as important as the overall size of the economic pie.

First, there are plenty of free/cheap things to do in NYC and just outside. You tend to find out about them if you live here for a while.

Second, are you really arguing that high prices in necessities (i.e. housing) are a good thing? I'd argue that genuine innovation and effort should be rewarded. 10% annual gain just for sitting on a house? Not so much. The bubble was an anomaly, and people who are asking to re-inflate the bubble don't know what they're asking for. Yeah, I'm looking to invest, but I'm looking for steady income properties, not flips. Flipping takes effort. Leasing provides a steady, predictable income to supplement the highs and lows of running a small business.

Lastly, define "real GDP" please. You're assuming that the inflation numbers coming out of DC aren't cooked. My point is that we have the worst of both worlds now. Remember the term "stagflation" in the 70s?

Speaking of cooking ...

spdrun, I don't see government intervention as reinflatiing but as keeping economic output from fall off a cliff.

After a bubble there are only two ways of adjusting 1) inflation or 2) internal deflation.

As Krugman argued, inflation is a lot easier. Each person's situation is different but we are talking in general here.

Sorry if the libertarian, anti central banker in you can't see the logic.

BTW, If you do cheap things in NYC then you are not living the NY lifestyle.
In SD you can be a surfer bum and living the So Cal lifestyle. If you payoff your house in SD, you're set.

Sorry if the credulous Kool-Aid(tm) drinker in you can't see the logic. :D You also have to realize that most of the people who bought during the Bubble aren't owners at all. They're renters who are renting from the bank, or maybe paid a few % key money. They had no equity, so nothing to destroy by letting prices go pre-Bubble or a bit below. This would allow the younger generation to buy at a reasonable price, and have home ownership being a saving, not a form of slavery.

BTW - I don't see "libertarian" as an insult. I'm very libertarian on some issues, almost socialist on others. (read health care) The closest you can describe me is "anti-authoritarian", whether that authority comes from government, banksters, employers, or corporations.

BTW, If you do cheap things in NYC then you are not living the NY lifestyle.

So, for example, plenty of small/indy bands aren't worth seeing unless they charge at least $50 per concert? News to me.

I like the SoCal lifestyle. Note that I'm looking to pick up investment property in SD. Perfect mix of decent cap rate on some condos + a good chance that prices will at least stay stable.

But it would get old after a month or so, and I'd be back in NYC. Or a certain Eastern European city that's also dear to me.