San Diego Housing Bubble News and Analysis

i read the link. I concur.

From the link:

There is no better and easier way to rob people blind then to make them think you're doing them a favor. Giving them an $8000 credit on a home priced at $250,000, that without that credit would cost them no more than $100,000, will be preferred over the cheaper home. Hey, it's free money. Isn't it?
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This has been my contention all along. The $8,000 tax credit is raising prices by far more than $8,000 because it is "qualifying" a huge number of people who otherwise would not be able to get a mortgage. Add to this the fact that banks have been told to keep homes off the market, and the market is 100% manipulated against the buyers.

IMHO, the only economic reason to buy right now is the fear that all this manipulation will cause our dollar to fall. So far, that's been the case, but I'm beginning to worry that too many people are on the "falling dollar" bandwagon, and have started to lighten up a bit in my short dollar hedge.

We all lose Arraya. We all lose. It is very very sad and I cannot disagree more with the way our government is operating now and has operated before.

I add my concurrence to the list. None of this will change without major political reform. The status quo will produce the same shell game regardless of which party is calling the shots. Because of gerrymandering the parties no longer answer to the people, but rather to their financial patrons.

The purpose of these tax credits and government interventions in the housing market is the same as their manipulations in the health insurance market. Since we no longer employ people in productive work making goods for export, we have to keep them busy pushing paper. By artificially raising the prices of both housing and health insurance, we are able to employ millions of paper-pushing bureaucrats and attorneys to do worthless tasks. Even though they work for ostensibly private companies, they are basically government bureaucrats since without government intervention their jobs would not exist. Any attempt to change this system will incite howls of protest from these "industries" as they fight to protect their jobs.

I think people that are wondering why the government is doing what they are doing need to consider these numbers:

"First American CoreLogic reports that 26% of homeowners with a mortgage had substantial equity, or paper profit, in their properties at the end of June in the Los Angeles-Orange area. More data:

* 35% were underwater, owing more than their homes were worth.
* 39% were within 5% of being underwater."

These numbers are ridiculously bad and likely historically unprecedented. If it is this bad with all the massive intervention, imagine what it would be like without it. We are currently down to 02-03 price levels in most of SD county and probably headed towards 00-01 price levels as it is. Do we really want 95-96 price levels (which were the same as late 80 price levels). That is two lost decades and would be Japan level statistics. I suppose it could happen but I'm pretty sure most people are vastly unprepared for the consequences even if you are sitting on a pile of cash or think you have a stable job.

Herein lies the problem. Home prices should be a reaction to economic activity not the driver of it. Somewhere along the way we got turned around backwards and everybody's thinking is skewed.

The whole "private" banking system is rigged to implode if home prices continue to decline.

Now we are stuck in a losing battle and throwing the farm at keeping home prices elevated while the real economy crashes and burns.

The zeroth bottom line is: We have decided to bankrupt the nation in an attempt to save the banking industry. The sneakiest part of this whole plan is how they try to package it to citizens as keeping home prices high for their benefit, when in actuality the citizens and a consumer based economy benefit from low housing costs.

The die is cast though. We have set a course for complete economic destruction via loss of confidence in the US financial system. Full speed ahead.

What is really sad is that those of us who agree are looked at as marginal. That this thought is somehow politically motivated. I can not speak for anyone else on this post. But for me this has nothing to do with political parties. My discontent is the same as some one who has been vandalized. That is what this scheme amounts to. Being robbed by those in power. It is no different (except on a grander scale)then the crooked cop who enforces the rules and keeps some people happy so his back is being watched. Please do not mistake who I think the cop is....is is not Obama any more then it was Bush. They don't stand a chance against the Bankers.

The only way to make this end is to end the FED.

I agree with you there.

But that would mean that people stop paying interest to the banks.

People have been consuming thanks to equity extraction.

It's unbelievable to me that that so many American families are at the end of the rope. You'd think that after generations, parents had left enough wealth to their offsprings so that the young generations wouldn't be in so much debt.

What ever happened to the argument from the real estate industry that you buy a house with the goal of paying it off by the time you retire? If that were true, then kids and grandkids would have very little needs to incur housing debts of their own.

But it's the other way around. Debts rose in proportion to housing value.

That's exactly right Brian. No wonder the rest of the world thinks we are idiots - we are.

Do you guys ever get tired of the constant gloom and doom talk? I don't come here as much as I used to because it's so depressing. Maybe ignorance is bliss but you guys really go overboard. Enjoy life!

WTB, for some people, that is enjoying life.

why is reality so often mistaken for doom and gloom? what is inherently depressing about trying to see things as they are?

Right now it does look to me like housing has been turned into a big scheme to separate working people from the fruits of their labor via interest payments, oh yeah and tax payer bailouts... and institutionalizing high prices. Not saying many people don't throw themselves willfully and excessively into the scheme. Apparently the skimmer class got a little carried away on that desire to collect interest and it backfired.

delete

We should reward the gubment with a nice big third party.

And what a better world it would be.

The US's two biggest yearly expenses are servicing debt and war. It shows our priorities.

People pointing out and agreeing with theft is not doom and gloom. Doom and gloom is believing Nostradamus' predictions are right or that the Mayan calendar says that this all ends in 2012 or whatever.
Or doom and gloom could be any prediction not based with any evidence.
We have been robbed. If you choose to ignore it I would call that "pollyanna" in the face of reality.
When reality sucks - that is not doom and gloom. It just means if you accept reality....you get to choose to do something or sit on your ass and do nothing. Your choice.

Human nature is Too Funny!

Maybe the thread "Waiting for Bottom in Escrow" http://piggington.com/waiting_for_bottom... can tell us why posts negative to RE would be percieved as doom and gloom to someone "waiting for bottom"?

News flash; most actual news of the RE market is going to be doom and gllom for some time to come (except for NAR pumping). So you may need to find a "Knife Catchers" forum if you are looking for comforting threads on why your recent purchase will not result in a huge loss.

"Kinfe Catchers Still Out There - Rancho Dorado
User Forum Topic
Submitted by waiting for bottom on March 3, 2009 - 12:55pm
http://www.sdlookup.com/MLS-080043783-21...

This is a very nice house - just not at 15% above 2003 prices and when there are 4 other houses on the same street selling for 150-200K less.

What are some people thinking?????" http://piggington.com/kinfe_catchers_sti...

Now maybe some are wondering what you were thinking and the shoe finds itself on the other foot?

Pooh-poohing good read articles like Arraya posted is not going to make the bad news go away.

This is an article everyone interested in RE values should read. It certainly falls into the doom and gloom catagory, but its hard to fight the reasoning IMO.

http://europe.theoildrum.com/node/5917

Lot's of charts drive the points home, we are in an historically difficult situation.

Without real jobs I can't see the US pullling up from this plunge without the pain discribed. Where will the jobs come from? The fake FIRE jobs are disappearing at break-neck speed and the American people have no sense of job protection/support anymore.

RE has a lot farther to fall. If you don't know that then you are just like the folks during the great depression who fell for the sucker rallies. Yet probably even more blind, as we all now have easy access to the facts and figures underlining the deterioration of the still over-priced RE foundation.

Or, are you one of the folks that believe the greatest bubble in history will not follow the path of every other bubble?

Blaming anyone's more bullish attitudes on buying a house doesn't work all the time and may or may not apply to WFB.How do you know? Why can't they have an opinion on doom and gloom the same as you can? Many of us have owned houses continuously since joining this forum years ago. I owned a house continuously and predicted a 45-50% loss in mostly nominal terms and I predicted that much of it would happen fast. If it doesn't get quite to 50% should we blame it on the fact that I own a house? Now I think the previous lows generally speaking are the bottom. O.K. it's because I own a house, soon to be two. Try to argue better like you expect other people to.

I was making light of an extreem flip-flop in attitude due to purchasing a house. And the plea to stop with the bad news, now that they have bought a house.

And how.... now that they are on the other side of the fence the people still on their previous side of the fence, are going overboard.

I still think you are making a lot of assumptions. Use the track feature and I think you will find scant participation by WFB on the doom and gloom threads during his or her two years here. Looks like one of those who stick to real estate for the most part. Also, there have always been people who didn't buy into the doom and gloom and especially "end of the world as we know it" attitudes. I don't think the long timers here are prone to being impulsive about their outlooks on things in housing and the economy.

I do agree with those who say some of this stuff is actually grim fact, having gone beyond theory and into reality. I see big components of the actual bad news as more likely to result in holding up nominal RE prices not less.

This is a very important article. Highly recommended to everybody.