[drunkle]

what is the population growth since then? what is the growth of residences?

despite the current slight outflow of people from san diego, since the mid nineties, there must have been a total influx. verses, the absolute amount of land available in la jolla.

if anything, why wouldn’t the north county folks dump their boonietown plaster casts for a spot in the village? traffic is crappy in both locations, might as well have the more “prestigious” zip.

[drunkle]

sdr’s strategy seems quite rational, time tested, effective… and obvious. for the same reason that the auction sold homes at market or higher, for the same reason that car dealers use the same tactics, for the same reason that churches use similar tactics. get the people in the door and you’ll make money.

assuming that some percentage of people are lookie loo’s, some percentage are non-competitive and some people are simply obstinate. the rest is your market. so, the more people you draw in, the greater the percentage of potential buyers. if it turns out that only 1% of your exposure is a buyer, you’re obviously going to be better off with 100 heads than you are with only 10.

now, taking that 1%, you manipulate their psycology. of 10 heads, only one makes an offer, they aren’t going to budge if they know it. if, on the other hand, you have 100 heads, 10 of which are buyers, they’re going to be anxious if they see other potential buyers. they don’t know whether or not those others are serious, they just know they’re there. and an anxious (or panicked, as in the last “houses are going away and never coming back” chicken little scenario) buyer is more likely spend than a calm and in-control buyer.

and of course, the house (car, tv, game console, cabbage patch kid, etc) still has to show better in down times than in up…

as for discount or “honest abe” minimal marketing/effort services:

“you get what you pay for”, meaning anything that goes wrong will be blamed on you resulting in bad word of mouth.

people want everything for nothing, meaning they’ll bargain hunt services, try to milk you for additional work and cut and run if it is opportune.

low price = cheap. people perceive value in dollar signs.

they couldn’t afford it anyway; they’ll just suck your time and energy dry.

lack of long term stability in cut throat markets. when a market is defined only by price, name brand loyalty goes out the window.

just a thought.

[drunkle]

and if you didn’t sell it at all, you’d have a home to live in, paid in full.

accounting for “inflation”, it is… still your home!

[drunkle]

anecdotes:

when i worked in construction during the late 90’s as a soils tech/engineer, some of the things i’ve seen and heard can relate. I’d been on regrading jobs where tracts had sat fallow for upwards of 8 years, the original owners having done all the homework and the grading only to quit and eventually sell the lots off.

san elijo was in high gear at the time with grading work. it was projected to be a 10 year project with new schools, shopping malls, etc. at the time, i thought it was ridiculous that they were preselling the homes at 300k+; san elijo is out there in the boonies.

another comment made by senior engineers was that fly by night builders would slap a home together and get out of town, go belly up, change names, whatever to escape the responsibilities of warranty work and liability. like, poor foundations, insufficient soil work, etc. you cant see that stuff and if it goes bad, it wont be for a year and more.

eastlake, preselling with people camping out in line and such for 250k. another boonie housing tract that suffers massive traffic problems… but values going up 50k in months or even weeks.

carmel valley/del mar… those mcmansions off black mt road across from the synygogue… ~800k/pop. tiny little lots, stupid looking houses and for what?

san marcos. clay sewer lines. terrible commute/freeway interchange at both ends.

temecula/murrieta. come on, 1 hour commute each way? or more, the 15 being jammed tight during rush from escondido to mira mar…

poway… that guy lorenzo llamas lives (lived) out there. woo hoo. big lots, boonies, still a tract house. and for a 1 mil+? people are stupid.

carlsbad and la costa, some 350k. boonies. carlsbad village is nice tho as is the beach…

the builders have made massive profits in the past few. they can easily afford to walk away. lay off a bunch of employees, keep your core together and sit it out. not many unions left in town, construction workers take an extended vacation in mexico (even the white ones), wait for the next upturn.

[drunkle]

married at 19, flipping at 21, divorced and bankrupt at 24. talk about live fast, die young…

years from now, he’ll talk about graduating from the school of hard knocks, another cynical and jaded loser with a spotty past and an uncertain future… but he’s the norm now, even a person of respect and credence. because good decisions and fore thought are worth less than last year’s must-have cellphone.

[drunkle]

but the headline didn’t get you?

“Home prices to fall for first time in 2007
Real estate group sees 0.7% drop in prices this year, the first annual decline in nearly 40 years of tracking.”

lets see… 2007-1991 = something smaller than 40…

[drunkle]

you could probably use the simple relationship, 1$x1R = 2$x2R. meaning, the first loan amount 1$ times the first interest rate 1R is equal to a different loan amount 2$ times a different interest rate 2R. eg., 200k x 6% = 171k x 7%.

people aren’t missing this point, they frequently mention that if interest rates go up, home prices will come down. the converse is obviously true. the problem is that despite the low current interest rate, home prices are still over inflated:

100k @ 10% = 166k @ 6%. and not 500k.

edit: i’m tired of hearing about “inflation adjusted prices”, it’s nonsense. my wages dont get “adjusted for inflation”, it is what it is. if i get a raise, i dont call it “inflation”. justifying increases in home prices due to inflation is senseless since nobody else is calculating their wages in inflation adjusted terms. homes that become out of reach for most americans due to “inflation” aren’t inherent more valueable; they’re worth what people will/can pay for them, inflation or not!

[drunkle]

i think fretting over nuclear “proliferation” is political and intellectual laziness. that nuclear containment is a futile policy of status quo and inequality that ignores the certainty of nuclear acquisition.

i don’t think obama’s comment on iran can immediately be interpreted as “lets go kick iranian ass”. he’s being political and pragmatic; on the one hand, he’s not showing any “weakness” or “fear” by declaring force is off limits. on the other hand, he’s keeping all doors open as an honest admission that diplomacy may not work. it’s the same position that any politician would take in matters of unknown threats. any specific objections that obama had on iraq were actually stated specifically; lack of projection, lack of reliable information, etc.

is it even necessary to take any stand against iran? that’s the underlying question, why is iran being portrayed as a threat.

[drunkle]

my parents bought a new 4/3 tract house in the santa clarita valley (castaic, specifically) around ’90. market bust almost as soon as we moved in. but it really didn’t bother us much; they were always compaining about “the economy” for as long as i can remember, my mother regretted, fretted and whined alot, but that’s mostly it. we survived. they still own the house.

funny thing, i discussed this current boom/bust with them at a family get together and they said “houses always go up”. they completely forgot about the 90’s.

thing is, even at the height of that boom, the house was still affordable. overpriced, maybe, but affordable to middle-middle class self employed small business owning single wage 2 kids + dog. you can’t say the same thing today.

[drunkle]

i’m a black belt 5th degree in google-fu. i’m also a level 15 nerd.

yeah, the insanity is irritating. it kept me from buying in early 2k; how could prices possibly go up any higher? not to mention, everyone in the media was talking about a “housing shortage” rather than retarded interest rates and cracker jack loans. i was too busy drinking at the time to bother with doing any of my own research. and hey, if NPR says it’s a shortage, it surely is, right? (fcking gloria penner and her round table of UT hacks.)

rents are going down so your reasonable price may also go down. not to mention, as prices go down, the standard of measure goes up. ie., for 120k, why not hold out for a 2 bd? or even, a house out in the boonies? and a condo in fashion valley doesn’t look that great when carmel valley is coming into range…

[drunkle]

“$130K in 2002”

that’s funny yet sick. in 2002, RE values were still inflated from the bubble.com.

http://www.businessweek.com/magazine/content/02_32/c3795028.htm

[drunkle]

In my opinion, the fundamental difference between bulls and bears is that bulls are focused on making money, while bears are more interested in not losing it.

Ergo, bears perpetually harp about fundamentals, whilst bulls see nothing but sunshine and rainbows.

Yes, this is bear board. Yes, the real world is a bull market except when we are in a recession. This is not news to anyone.

what is the history of the labels bull and bear? i only recently got why steven colbert hates bears…

historically, the real world is a bitch. every empire past is past because… well, because they’re no longer present.

bulls produce bears; feeding frenzies lead to starvation and collapse. not to mention “inflation”, an arbitrary, even obtuse term used to hide the effects of population growth.

look at a stock market chart in linear, not log scale. explosive growth in the stock market coincides about with the invention of the 401k… doesn’t seem to be much question about why there’s a bull market in stocks under that light; 401k’s make stock market investment easy peasy. the depression generation were mostly gone and fear of the stock market eased. with stagnant middle class incomes, negative savings rates, the current housing equity crisis, national debt, increasing taxes, decreasing workforce… and the retiring of the baby boomers (and the subsequent draw downs of their 401k’s), the (american) stock market looks more like it’s been in the midst of a 30 year bubble run. the past 7 years have been relatively flat and stagnant in terms of stock values, is it a plateau? a peak?

401k invented around late 70’s. average age of boomer at that time, 30’s? as the boomers hit their career strides as well as greater marketing/acceptance of the 401, you see mid 1980, the point in which the dow makes it’s run for the sky. 2007, boomers are in their 60’s, some retiring earlier than others, but retiring all the same…

[drunkle]

“Gabriellee Cunningham had fallen behind on the mortgage on her modest suburban Miami home and was mired in debt when she was approached in June by a door-to-door “mortgage lender” who promised to help her. ”

the first paragraph says it all. she was already in trouble to begin with, an offer of assistance probably went over real well with her.

[drunkle]

i hope the administration of this bail out is as stupid as the bail out itself. that is, bonds are sold and money disbursed directly to the “homeowners”. guess where the money goes from there? that’s right, in a continuation of this fraud/fiasco, these “homeowners” pocket the money and split.

even better, i hope there’s provisions for the “homeowners” who have already been foreclosed upon. so that they too can have a slice. and if there isn’t, they should sue.

come 6 months to a year, decent ohioans get medieval on these idiot politicians, dust off the tar and feathers and run them out of town.

[drunkle]

lancaster… home of the killer attack tumbleweeds…

you may want to check out the santa clarita valley south of palmcaster. some 40 min commute, but nicer and much more developed. unless they’ve also seen a similar boom.

property values in this neighborhoood are probably stable:
http://www.corr.ca.gov/visitors/fac_prison_lac.html

[Author]

Posts