housing bubble?

[an]

[quote=no_such_reality]Au contaire. While I was still a young child at the time, I distinctly remember my parents discussions at the dinner table about money, Dad’s union threatening to strike over the raises and COLA, mom an office worker talking about prices going up.

Working class middle income were very aware of the rising prices in the 70s. They were getting raises, but mostly driven around a cost of living increase which companies at the time were starting to phase out or underestimate and then pinch the real raise because they had 8% COLA increases.

SD, appreciated the post about inventory. The SoCal housing inventory and DOM for home for sale has been distorted to the low end for so long, that a return to historical 90-120 days to sell and 9+ months would be extremely psychologically depressing to most.

I bought during the window of opportunity. It wasn’t easy. In another blog, I referred to as like a comment the guys from Motley Crue made about getting a music contract in the 80s involving swimming through a pool of burning sewage to get to crawl through broken glass.

In the 2008-2010 window, inventory was sh*t, house quality for sale was sh*t, many deals needed vision and $50-$100+k rehab above the 30%+ down and financing to close on a place to remove it from borderline slumlord status. If it wasn’t slumlord ready, they’re were 30 people putting offers in. Yes, 30, as in that is a literal number our agent shared with us on a house on which she was the selling agent. It was common to go to a showing an wait in line to get in a house, and then see the entire kitchen counter covered in realtor cards.[/quote]
I was purely going by The-Shoveler’s statement since I don’t have 1st hand experience. What your parents’ experienced sound more logical. But that didn’t change the main fact that I really care about, which is rent was going up and people continue to pay the rent.

As for 2008-2010 window, I too bought a house during that period. I don’t think inventory was shit. Actually, I thought inventory was fantastic compare to now. I’m of the mind sent of buying a old original house, tear apart all the old up and upgrade 100%. So, back then, I had A LOT of options to choose from. Today, majority of the stuff are lipstick on a pig houses and a price to match. BTW, $100k+ in upgrade would mean not only a HUGE house but you also picked top of the line stuff. I remodeled 100% of my house w/ high end stuff (not top of the line) and it came in well under $100k. My house is a 4/3 2000 sq-ft house as well. But you’re right, even those old run down houses also had a lot of offers.

[livinincali]

[quote=AN]I agree that it could happen. But then again, every country is different and we’ve never experienced a Greece/Spain/Portugal/etc situation before. That doesn’t mean that it can’t happen. It’s just that it hasn’t. We can print more USD while Greece/Spain/Portugal/etc can’t print more Euro to increase inflation.
[/quote]

Of course we have. It was during the great depression. That was the last time we had a really big debt bubble across all sectors of the economy. Government debt was big during world war II but public debt was next to nothing because everything was being rationed and it was people’s patriot duty to conserve rather than consume.

Certainly congress could cause hyper inflation. They could credit everybody’s bank account with $1 billion dollars but that would detonate ever retirement portfolio in the world in a matter of minutes. One person’s debt is another person’s credit. You can’t get rid of the debt without getting rid of the corresponding credit. Although that’s pretty much the game the economists play in their solutions to the problem. Solve one side of the equation and bury the loss on the other side of the equation with complexity.

[no_such_reality]

AN, I think you did a lot of the work yourself correct?

Most things I saw were needing, roof, HVAC, kitchen and all bathrooms were a questionable if delayable. flooring was usually needed. Paint is an assumed, landscape was typically required. Many homes also really needed a few walls knocked out to open it up.

I was looking at one stories in the 2000-2500sf range, so those dead shake roofs were budget bombs.

OC’s cycle was slightly behind SD’s and didn’t go as deep, at least in the neighborhoods I was looking.

[dumbrenter]

[quote=bearishgurl] So many of us Piggs tried to coach these posters and assist them though multiple threads and yet they never managed to be able to seal a deal. Or if they did, they never posted here that they finally bought.
[/quote]

Sounds like those coaching methods need an overhaul if not one of them got your ‘students’ to ‘seal a deal’.

[The-Shoveler]

Well I don’t remember anyone being foreclosed either in the 70’s that I knew.

It was much better than what we just went through I can tell you that.

Also I think The west coast fared much better, I remember being envious of the guy’s doing construction work, they were working overtime.

They built a lot of homes in the 70’s.

someone had to build them, someone had to buy them.

http://www.macrotrends.net/1314/housing-starts-historical-chart

[an]

[quote=no_such_reality]AN, I think you did a lot of the work yourself correct?

Most things I saw were needing, roof, HVAC, kitchen and all bathrooms were a questionable if delayable. flooring was usually needed. Paint is an assumed, landscape was typically required. Many homes also really needed a few walls knocked out to open it up.

I was looking at one stories in the 2000-2500sf range, so those dead shake roofs were budget bombs.

OC’s cycle was slightly behind SD’s and didn’t go as deep, at least in the neighborhoods I was looking.[/quote]Nope, the only thing I did myself was moulding and painting. Everything else, I hired someone to do it. I was just the “GC”.

I replaced my HVAC, kitchen, and all bathrooms. The only thing I didn’t replaced was roof, since it already have tile roof. You can replace the roof of a 1300 sq-ft single story house w/ mexican tile roof for about $15k, so, for my house, it’s probably around $15-20k. That still put it well under $100k mark. Now, for a 2000-2500 sq-ft single story you’re talking about, that probably will cost you around $25-30k. That would still put it under $100k, but would definitely take a huge hit on your budget for sure. Knocking walls is easy and cheap, assuming it’s not load bearing.

[an]

[quote=livinincali]Of course we have. It was during the great depression. That was the last time we had a really big debt bubble across all sectors of the economy. Government debt was big during world war II but public debt was next to nothing because everything was being rationed and it was people’s patriot duty to conserve rather than consume.

Certainly congress could cause hyper inflation. They could credit everybody’s bank account with $1 billion dollars but that would detonate ever retirement portfolio in the world in a matter of minutes. One person’s debt is another person’s credit. You can’t get rid of the debt without getting rid of the corresponding credit. Although that’s pretty much the game the economists play in their solutions to the problem. Solve one side of the equation and bury the loss on the other side of the equation with complexity.[/quote]What was the interest during the great depression? Were we the currency reserved? We we the super power then as we are today? Also, if you’re counting a great depression as a possibility, then shouldn’t you also count in a hyper inflation as a possibility where you have to cart around a wheel barrel to buy a loaf of bread?

[The-Shoveler]

My guess as to what will happen,
Remember this is what I think is most likely to happen IMO, not what I think should happen but what I think is most likely to occur.

The Gov will first raise minimum wage to around 9 or 10 dollars then tie it to CPI.
Wage inflation will then reach about 5 to 6% and may even get to 7% by 2018.
Anyway that’s what I think is most likely to occur but we will see.

There were way too many differences in Fed Gold deposit requirements which kept the fed from printing money during the great depression, so there are no comparisons to what is occurring now and what happened then. Even Minimum wage did not start until 1938.

The wheel barrows of money to buy a loaf of bread thing is not likely in any event.

[spdrun]

(1) Good luck getting the bickerers in DC to agree to raise min. wage
(2) If CPI is cooked (doesn’t include food, fuel, or house sale prices), how do you expect wages to rise by 7% p/a?

[The-Shoveler]

It’s just a guess, but the very act of tying minimum wage to CPI will start the process I think same as using assets prices in the CPI used to.

[spdrun]

See (1)

[FlyerInHi]

Flu said something about the rich getting richer. That’s the natural order with monetary stimulus where money is dumped onto the top echelon. Pretty much trickle down economics.

Fiscal stimulus has not happened and now the sequester is having a negative effect on jobs.

I don’t see any minimum pay raise on the horizon until perhaps after the next presidentials.

[Coronita]

[quote=AN]

So, I’m still betting that our country is different than others and we’re more likely to repeat our past than repeat other country’s past/current. Only time will tell and my crystal ball is broken, so I’ll just have to wait.[/quote]

You win AN. I broke the code of silence first….Lunch on me next time…. But sdrealtor’s got you beat 🙂

Now back to NSA-ish lurker mode….

[an]

[quote=flu]You win AN. I broke the code of silence first….Lunch on me next time…. But sdrealtor’s got you beat 🙂

Now back to NSA-ish lurker mode….[/quote]I didn’t know it was a game :-). I just felt like it’s the right time to come out of the shadow. Pigg has gotten quiet, so I decided to liven it up (as much as I can). I just have to make sure to only touch RE related topics :-D.

[carlsbadworker]

[quote=flu]Now back to NSA-ish lurker mode….[/quote]

No, wait! We need you guys here.

[Author]

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