[Bugs]

You couldn’t have found a less inflammatory of encouraging her to stay? That’s not going to be helpful in de-escalating this.

[Bugs]

It takes two to tango. You surely read the first couple responses to the other thread and you could not have missed SDRs followup post which did indeed stick to the issues (for which I am personally grateful). I admire your enthusiasm and I agree with many of the conclusions you draw, but seriously, you’d do a little better on a forum that uses aliases if you’d develop a little thicker skin. Sometimes it does comes down to letting the other person get the last word in. If we are to go from here, someone has to let the last dig slide.

And yes, you’re welcome to refer to me as “Grandma”.

[Bugs]

Nice report SDR, lots of information to absorb. I’d like to echo zk’s question about whether they addressed the effects of financing, interest rate rests and ARMs. I’d also be interested in hearing if they addressed the rising rate of loan defaults and foreclosures.

The overall message I got out of all this was that they have no historical precendents for a decline that has occurred without a recession, and lacking such a precedent their analysis is that there won’t be a serious decline because there is no recession to cause it. That’s why they’re commenting on the effect of a declining real estate trend on the economy as a whole. An overly large decline in real estate could create it’s own weather if the percentage of mortgage servicing incomes does include a disproportionate share of real estate-dependent jobs.

Now I’m wondering if the lack of precedence for a real estate spike that accelerated during a period of recession (as we just experienced) has any correlation to a decline occurring in spite of a lack of recession. Perhaps the Fed’s syncopation of the mortgage rates from the rest of the economy will have a corresponing rebound effect. I dunno, I’m just musing out loud here.

Given the current disconnect between incomes and prices, they must be pretty bullish on employment and wages, ’cause it seems like there’s a long ways to go before those two trendlines merge. Net decreases of population would appear to be working against the price plateau scenario, too, even though some of those move outs are have-nots.

So now if regional employment and wages for the upper end jobs are due to increase significantly, it seems to me that the industries where those mortgage-servicing incomes are increasing should be good bets for investments. That would be a silver lining for folks to rejoice in regardless of what their current status is.

[Bugs]

I was always under the impression that the Professor would more likely serve up some absinthe or some other potent elixer to stimulate the conversation.

[Bugs]

I’m sure if you were gracious enough to post a summary of your associates’ take on the material that would be sufficient to start a good discussion. Everyone who has something constructive to add can express their viewpoints from there. I see no advantage for either side of the discussion to assume the role of the visting team.

Who knows, maybe if we all play our cards right we might even be able to avoid another publicly embarrassing exchange here between the two of you.

[Bugs]

I met one of the upper management staff for Ameriquest’s corporate office a couple weeks ago. Nice guy, I hope he makes it. He was recently hired to clean up some of their mess. The closing of the branch offices is consistent with what he was recommending they do to stave off their regulatory problems with some of the states. Ameriquest was reportedly about 1″ away from getting kicked out of a couple states anyway. I think this move has more to do with reining in their branches, many of which have been out of control for a while now, than it does with declining volumes.

On the other hand, I personally know of a couple mortgage brokerages in town that are already in some real pain because of declining volumes here. I also know of a couple of the realty agents here in town who have hit a wall – no sales since the beginning of the year. I’ll wager the Hummer dealers will have a glut of used H2s pretty quick.

[Bugs]

I would wager there are several people here who have access to the MLS and other sources of data. For example, I spend almost $800/month on various sources of real estate data for my business.

—————
As for some of the exchanges we’ve been seeing I think it has indeed become quite personal. We’re now rebuking each other over grammar, spelling and punctuation. What is productive about that?

I think it’s ironic that the parties generally don’t seem to hold viewpoints that are entirely opposing. There is much common ground between them and instead of using their macro agreement they are feuding over the micro details. I think some of us have lost sight of the fact that virtually no group of people other than a cult will ever be in 95% agreement on any subject. Elections are won and we are governed by the opinions of a simple majority. Anything above 55% is considered a landslide. We should be very content with attaining 70% concurrence here because that supermajority will dominate the discourse.

These online forums highlight an interesting evolution in our communication. Back when written correspondence was the only way to conduct a non-verbal discussion people were very careful to adopt and maintain a high degree of formality. That formality and “distance” served as a buffer between people and helped them avoid some misunderstandings that can occur as a result of reading between the lines.

That formality has long been dropped from common usage in our society, partly as a result of the technology that has allowed us to conduct live conversations. To be sure, it’s a lot more intimate to be able to use a casual mode of conversation. Now that these online systems allow us to expand our conversations to include more people and to encompass an indefinite time frame we have strangley reverted back to the written modes of communication. Most of us are not good at this because, unlike our grandparents’ generations, we never had to be.

Having come full circle, we are only now seeing the need for a little more formality, reserve and restraint in our conversations and exchanges. The problem is that in the written word it is difficult for most people to accurately convey their tone. The anonymity of the Internet allows us to avoid the decorum we normally maintain when talking with strangers.

It’s like comparing how people drive in the big cities vs. how they drive in a small town. The more anonymity there is the more people assume they won’t have to answer for their uncivil conduct out in public. Conversely, we’re a little more reluctant to tailgate or cut someone off when we know there’s a real good chance we’re going to run into them at the hardware store later today and run into their cousin over at the diner on Saturday.

The bottom line here is that this is a community. How productive our community is going to be will be a function of how well we observe and maintain a minimum standard of conduct. The credibility of the arguments that emanate from this forum will be a function of how level and fair everyone perceives the environment to be. We don’t want our discourses to devolve to the point where Rich has to post rules of conduct or start banning people for acting outside of those rules. Better for us to develop our own internal restraints than to have to rely on external controls. Then when someone crosses the line it is the group, not some moderator, who applies the pressure to conform.

I don’t consider the need for decorum to be some sort of hand holding or I’m-okay-you’re-okay doubletalk. This is all about finding a practical way to attract and analyze the maximum amount of information that pertains to our common interests – which are to observe and forecast (to the extent possible) the direction and depth of the next leg of this economic cycle.

[Bugs]

I like to have an idea of where a person is coming from so I can assess their opinions within that context. A vague idea is sufficient for that. Beyond that, I don’t think it’s productive to play point-counterpoint with each other on a personal level. These exchanges can never result in any meaningful information or analyses because what any individual does is meaningless in the wider context.

Whether PS deserved her profits (I think she did) has no bearing on whether her buyers were underinformed or were gambling when they made their purchase. Whether SDR is having a great year or a poor one doesn’t address and is irrelevant to the question of whether the volumes are dropping enough to affect pricing. Arguing about Rima’s writing style doesn’t address the message that writing is attempting to convey.

If you don’t mind my saying so, arguing about the colors of the leaves on your trees won’t help you to see the forest any better. There must be 100 better ways to spend your time other than to attempt to justify your lives to complete strangers.

As a community we need to observe and maintain a certain amount of self-restraint in our comments to the other members of our community. I strongly doubt that some of the comments and exhanges that have been made here would have been made if this were a doctor’s waiting room or a coffee shop. Surely we can coexist more civilly than this.

[Bugs]

I think it depends on how you are applying the data. The applicability of the data is not limited to the real estate markets only, and you could say they’re only indirect indicators. As a component of the national economy there are a lot of areas that do not qualify as being part of a bubble, per se.

In terms of our local economy, I think we’re still in a period of transition. If there’s going to be a freefall (and I think there is), that freefall hasn’t started yet and may not start for a while. It would be only natural during a transition period to have conflicting and inconclusive data and indicators. By the time everything is going in the one direction that momentum will have already reached its terminal velocity.

[Bugs]

Nobody ever describes themself as a speculator.

[Bugs]

What’s the difference between getting into a 50-year mortgage that you don’t intend to be in long enough to pay off and being in an I/O or ARM? I would say that most buyers right now have no intention of staying in one home until it’s paid off.

It depends on how a person percieves the trends, too. If they think that during their holding period – whether that period is 1-year or 15-years – the overall value will go up then the trade off is between having cash to use now vs. having a little more cash in the future after they sell. It’s a shortsighted and imprudent way to look at things but you can’t be big pimpin’ without spending every available dollar that comes within your grasp.

[Bugs]

I can address the view thing. “Water influence” has an effect on values almost no matter where you go. How much effect it has is usually a function of supply, and views are usually a function of topography. In the LA/Orange county areas, the supply of properties with view amenities is exceeding limited because of the topography. There is a range of hills that run all up and down the coast in those areas, and except for just a couple areas there are no ocean views of any type farther than about 1 mile away from the beaches, and lots of areas where its measured in blocks, not miles.

Here in SD County the topography is a lot more hilly and includes a lot more mesas and canyons. There are properties that are 20 miles or more from the ocean that can have a blue water view on a clear day and there are lots of those during the year. Because there are so many more view properties here, the effect of those views are generally less than if that same view were available up in the O.C. People up there go nuts for just a glimpse of blue.

Personally, there are very few views I would pay extra for unless I had money to burn, and no views that are worth to me what other people are willing to pay for them. Then again, I’m not emotional about my home and I would never spend hours sitting on a balcony staring off into the cosmos. But there are a lot of people who can get that wound up in a view amenity even though they’re seldom around to enjoy it. Different strokes, I guess.

[Bugs]

The first thing I would recommend everyone keep in mind is that the way our system works now, the role of a realty agent is to act as an advocate for the real estate industry as a whole, brokerage as an occupation, the merits of the deal at hand, and finally the interests of the buyers and sellers; basically in that order. It is not reasonable to expect an objective and unbiased analysis of a deal from someone whose compensation is commensurate with the closing of that deal and the amount at which it closes. It’s not their role to be dispassionate or to act as an outside observer to what they’re doing, and it’s not reasonable to expect them do act outside of their role.

With respect to this article, you gotta give the author credit for being enthusiastic if not accurate. She’s repeating the party line and trying to get the message out, and that’s what NAR wants their foot soldiers to do. This is like a political campaign and the soundbites are what sell.

While we’re on the subject, I don’t think that it’s fair to give kudos to one agent with minimal experience just because they write what we want to hear, and then hassle another agent with minimal experience just because they write something we don’t want to hear.

To go even farther off point, I think the primary reason some of our exchanges get overheated is because we’re having a hard time addressing the message rather than the author. We can disagree on the issues and still be friends, but it’s almost impossible to call each other names and maintain a reasonable level of decorum. Stick to the point and skip the personality – that’ll keep it from getting too personal.

The more intolerance there is for diverse points of view the more narrow the focus of discussion and the less information actually gets exchanged. That’s how forums fade away.

[Bugs]

Putting aside the wisdom of buying residential land for development at this time, there are a couple things that come to mind. The seller for both parcels is the same entity, and the sale price for the Atherton land is said to have been negotiated at some point prior to 2004. It’s possible that the saleprices for the two transactions involve some reallocation between the two parcels for some reason.

It’s also possible that they sold with different levels of entitlements – one may have already had a recorded map and the other may have owed some fees and bonds and such.

When looking at these transactions from the outside it’s hard to know exactly what’s going on without interviewing one of the principals to the sale, and both sales were apparently handled in house without the use of outside brokers. So basically, good luck in finding out anything at all.

To make matters just a little more confusing, the parcel that sold in 10/2005 has another sale listed on it from 11/17/2005 for $21,000,000, and I found yet another transcation attributed to this site on 10/05/2005 for $36,000,000. Offhand, I’d say the 161 acres has been split into at least 2 and possibly 3 smaller parcels and it’s possible your numbers on the 10/2005 sale are off. Richmond might be using part of the 12/2005 sale land in with their portion of the 10/2005 sale land to build the larger project.

Or you could possibly have it reversed and they may be building the Luminara project on the $31,000,000 parcel and the Atherton project on the $23,680,000 parcel.

Truth is, I don’t know what the answer is – I’m just throwing a couple random thoughts out.

[Bugs]

I’ve found that it’s impossible to tell someone who either has made a big profit (on paper or otherwise), or who knows someone else whose made big profits that we’re not poised for another 10 years of increases. The smart money already knows that there are no short term increases in our immeditate future. The dumb money isn’t aware enough of exactly where they are to accurately gauge how little time they have left to get out in one piece.

If they ask my opinion I usually offer them the toned-down version that the market is already slowing up and in some areas declining a bit. There’s no upside in trying to foretell the depth of the decline, especially when there are so many variables in play. Unless I’m exactly right I’m an idiot, and there’s essentially no way to be exactly right.

[Author]

Posts