The world as seem by my students

[mydogsarelazy]

I teach at a Community College, and whenever I have the chance I talk to my students about their plans and sometimes they open up and tell me about things going on in their lives. This semester, the sense of despair felt by many of my students is just profound.

The impact of the housing boom on them is that they just can imagine how they would ever get started in life — economically speaking — and they have a tremendous sense of going nowhere. I often advise my brightest students to think of ways they could get started elsewhere, by teaching English overseas or something of that sort.

When I tell them that housing will soon be crashing, that isn’t much of a consolation, as we all realize that it will happen at the same time as a major recession or even depression.

This is not a good time to be young in California.

Your thoughts?

JS

[bob2007]

This brings up a point I think some people on this list are missing. If the housing market drops 50% from todays values, they seem to think they can then buy a house and life will be good. The problem is that if housing and automotive go down at the same time, they and the people the care about may be in for a very rough ride. Unemployment can become a problem, and it would be ironic if tighter lending standards present a problem for some people here to get a loan. People should be careful what they wish for, everything is interconnected. This isn’t “winning the superbowl” as I saw someone post. This is only half-time. The final score may not turn out the way you expect.

[Mark Holmes]

Yes, I agree. As someone who has wanted this insanity to stop years ago (have wanted to stop renting and buy starting in 2003) it’s very frustrating. Now that prices were allowed to reach these levels due to complete abandonment of regulation of the lending industry, there is now no good outcome. Even when (not if) prices reach normal levels here in San Diego, I’m afraid the job situation could be very ugly. What can you do….

[surveyor]

looking ahead

i don’t know what majors your students are pursuing, but to me there is a pretty good future ahead of them. there are many people who are going to be retiring and there is virtually no one who is able to replace them, recession or not. In practically any skilled industry, there are shortages of skilled labor and the ones who are already there are ready to retire.

besides, i remember what it was like when i was their age – i thought i was going to be making $70k to $90k right out of college (not!). Anything less than that was considered a failure. Tell them to plan ahead, look towards what is going to happen, and educate themselves to take advantages of the numerous opportunities that are going to present themselves. Learn as many skills as possible, sign up for every difficult task imaginable, and for god’s sake, do not show up to a job interview with tattoos and piercings.

My profession itself needs an influx of about 50 land surveyors a year to replace those who are retiring and leaving (just a week ago, I attended the retiring of SIX land surveyors in San Diego alone). My industry is only putting out about 20. My wife is an electrical engineer. Her own profession is a difficult one, but she sees so many openings for electrical engineers, software designers, programmers, technicians. She and I are often the youngest workers in our field, with no one who can replace us.

[cr]

Mainstream media only ever considers the homeowner and how they are affected by the collapse of the bubble.

No one ever considers the renters and upcoming generation of soon-to-be home buyers. Occasionally they allude to them as waiting on the sidelines to jump into the market before prices start to skyrocket again, but these people don’t have over inflated homes to leverage into bigger homes they couldn’t afford otherwise. They are simply priced out.

No doubt a 50% correction will be a rough ride, and an unwelcome wakeup call to those basking in success from the over inflation, but it is an absolutely necessary correction.

The idea of a government bail out makes me sick. It will only worsen things as people are priced out for an even longer period of time. Not to mention waning demand as baby boomers retire, downsize and, well, move on…

No one has considered these people, and I only hope that ignorance speeds up the correction in housing, and stabilizing of the economy. All they can do is find a way to make enough to survive and wait it out…the correction is coming.

[kewp]

You should try giving them some perspective. Our country experienced a golden age coming out of the depression, for example.

We are returning, slowly, as a nation to a place where education, diligence, integrity, hard work and thrift are respected values.

If they pick a profession, work hard at it and have realistic (and modest) expectations, they will do well.

So the days of free money are over. Good riddance. So it will be painful while this all shakes out, tell them to persevere, stay in school and study and work hard. Be frugal. They will be rewarded in the long run.

I don’t think its the current students that are going to be hit the hardest. I think its the Gen’X’ers who have drifted from bubble to bubble, living high on the hog that are going to get slammed the worst when the credit faucet is shut off. Those that have never known hard times.

Not that I feel sorry for them.

[bob2007]

Hi Mark,

Definitely frustrating. Being smart with our money should provide a much bigger advantage.

[kev374]

and we should realize that the Bush administration is to blame for selling out the future of this country.

[Bugs]

Are you saying that you hold Pres. Bush more responsible for the current bubble and its aftermath than the borrowers who overextended themsleves? Did he send his jackbooted thugs to force all these unfortunates to buy when they had no business buying or to refi every year with no thought of repayment?

You can blame him for the things he has done but you can’t blame him for the decisions each of these individuals made of their own accord. He’s powerful but he’s not that powerful.

[blahblahblah]

We are returning, slowly, as a nation to a place where education, diligence, integrity, hard work and thrift are respected values.

That must explain why “American Idol” and “America’s Next Top Model” are so popular.

I think its the Gen’X’ers who have drifted from bubble to bubble, living high on the hog that are going to get slammed the worst when the credit faucet is shut off. Those that have never known hard times.

Oh, what a rich vein we have to mine here. This is just patently ridiculous. Xers saw their parents suffer through gas rationing, stagflation, the great market crash of 1987 and the housing bust of the early 90s; we graduated college just in time for the horrible employment market of the early 90s, saw our 401ks evaporate during the tech bubble crash and now many of us are priced out of homes due to this ridiculous housing bubble. Yeah, we’re to blame for “living high on the hog”.

[kev374]

Bugs, I am referring to the future of our students. The enrollment in our Engineering schools is dwindling and for good reason. Our jobs are moving offshore and we are invaded with low wave H1bs (many of who will not hesitate to live 4 in a 1bdroom apt.). What do our students have to look forward to? Why would they spend a ton of money on the ever increasing cost of education if they know that they will graduate with heavy debt and bleak job prospects? I am in IT and I know that virtually entry level jobs have all been offshored or will be shortly so how are these students supposed to make a start?

Bush has supported cuts in Educational funding, increase of the H1b cap to satisfy his corporate cronies and provide them with an endless supply of cheap 3rd world labor, mindlessly emptied our coffers on this idiotic war and printed money to create this whole bubble fiasco!

Shame on the Bush administration!!!!! They have FAILED all of us.

[kewp]

“That must explain why “American Idol” and “America’s Next Top Model” are so popular.”

http://en.wikipedia.org/wiki/Roaring_20%27s

“Xers saw their parents suffer through gas rationing, stagflation, the great market crash of 1987 and the housing bust of the early 90s; we graduated college just in time for the horrible employment market of the early 90s, saw our 401ks evaporate during the tech bubble crash and now many of us are priced out of homes due to this ridiculous housing bubble.”

I’m a Gen-X’er, so I can’t really argue with that. Matches my life pretty well.

I do know, however, a fair amount of folks in my age group that have indeed been riding the equity train from one bubble to the next and are in for a rude awakening when it runs out of steam.

[sdcellar]

It’s really the Millenials that have been a spoiled bunch. They’ll learn.

[blahblahblah]

Oh I don’t disagree with you, but I see people of all ages consuming too much, purchasing too much, and taking on too much debt. I don’t think you can pin it on one group in particular. Gen Xers used to try to blame all of their troubles on the boomers, which I always thought was stupid. We’re all to blame at some level. I’ll confess — I bought an overpriced home in San Diego and sold it when it was even MORE overpriced. So I did my part to run the bubble up…

[Anonymous]

“…People should be careful what they wish for, everything is interconnected. This isn’t “winning the superbowl” as I saw someone post. This is only half-time. The final score may not turn out the way you expect.”

I realize that everything is interconnected. This is why the bursting of the housing bubble is necessary in order to “shake out” the economy and bring things back in line. It will be painful, for sure. That is why you need to put your finances in order. But in the long run, we will be better off as a society. I think the longer it goes the worse the fallout will be. The college kids need to keep hope. I feel they will be able to afford houses one day, based on “normal” lending criteria.
BTW, It is not just renters that want to see the housing bubble burst. I’m a homeowner and I paid off my house last year. I’d rather see my kids be able to buy a house than have my house value ridiculously too high.
Bring on the burst!!

[Author]

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