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Jazzman
Participant[quote=flu]Oh please… stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.
Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.
Just another case of envyfluenza when some foreign buyer has more money than some domestic light skinned color person. Sheesh.[/quote]
What blame game? Nobody is blaming anyone. What is interesting is why is happening, not that it is happening. So read the “fvcking” article before you blame the blamers.
ParticipantI am no expert, but isn’t buying into any bond fund now expensive and more likely than not, regardless of what it is, to drop in value as rates go up. If you are buying any bonds, I would have thought that buying short maturity individual bonds at par, (or new issues) and laddering them to take advantage of rates as they rise is the only safe way. You just need to accept the very low yield. BBN only has an average return and risk rating and three stars from Morningstar.
Participant[quote=scaredyclassic]The people are sheep.[/quote]
Is that being a little unkind to our little wooly friends.ParticipantHistorical Persepctive:
Russia and Turkey have been at it for centuries: Crimean War, The Russian-Turkish War, WWI, control over the Bosphorus (more latterly Crimea), the Kurd factor, current split of alliance (Assad vs Arab states).
http://www.independent.co.uk/voices/a-long-history-of-tension-underlies-turkeys-downing-of-russian-jet-a6747516.htmlPersonality Cults:
Two nutters (Putin and Erdojan) in the middle of a complex regional conflict is a recipe for disaster. How is it that people like this so easily find their way into power able to do what they want while f**king it up for the rest of us.
http://www.theguardian.com/world/2015/nov/26/russia-turkey-jet-mark-galeottiParticipant[quote=The-Shoveler]The Crazy part was if you wanted to buy 10 homes with nothing down and no collateral other than the house you were buying, there was not much to stop you.
Not seeing anything like that now.
Something like that only happens once.[/quote]
You don’t have the crazy lending, at least not quite on the same scale. You do have plenty of government sponsored schemes that took up the reins, and the net result is the same; over-valued RE. Some would say, yes, but the risk is different this time. Let’s wait and see. They may also say prices are not at the same levels. Do they need to be? Is less than crazy not crazy by virtue of being less?ParticipantThe “crazy” loans were in part crazy because of the low rates. The laxness of lending didn’t help either, but we need to be clear about what we are referring to: high house prices, credit crunch, or economic downturn. What is significant is that we’ve had a fairly brisk pace of home price appreciation from 2012-14 tighter lending standards notwithstanding. That begs the questions of what is the overriding driver of home prices. It might be that it depends on when we talking about. Currently, we have a significant shortage of supply which has been shown to track price increases.
Participant^^^That misses the point that CAR is making, but it was more than just interest rates and lax lending. The chronology might go something like this:
Recession and loss of manufacturing
Deregulation of financial markets
Creation of complex financial products
Dot.com bubble
Monetary easing
Collateralizing risk and risk transfer
Lax lending due to risk transfer
Lax regulatory scrutiny (due in part to misplaced loyalties)
Denial followed by collapseBanks used to lend your money to borrowers. That risk was transferred to investors. Consumer driven economies enjoyed huge increases in lending and the apparent guarantees offered by risk transfer. What was not to like about it? Well, we are puny humans and give in easily to our irrational side.
Participant[quote=scaredyclassic]I feel sick of it all.
I feel no solidarity with any nation or group or ethos.
Just a vague sympathy with Abrahams G-ds impulse to wipe us all off the face of the earth. Our ceaseless desire to hurt and dominate. Our absurd certain types in our correctness. The mess we make at every turn.
And test I think it’s women’s fault as much as men[/quote]
That makes you normal.Participant[quote=FlyerInHi]Jazzman, what do you think will happen to France if Marine Le Pen becomes president?[/quote]
About as likely as Trump becoming President in the US. Equally horrific to contemplate but both have their roles to play in the democratic process.Participant[quote=scaredyclassic]Many viewed foreclosure crisis vultures as in similarly poor taste.[/quote]
Apples to pears.Participant[quote=FlyerInHi]Yes this feels different. But still not on the level of fhe London bombing.
I think is feels different because France was against the Iraq war. So people are asking why France?[/quote]
Well France was right about the Iraq war, but it didn’t escape the backlash because it is deeply secular (banned burka), has the largest Muslim population in Europe (colonial past), high youth unemployment (disproportionately along ethnic lines), has been militarily very active on a number of fronts fighting jihadists. and its freedom of speech (Charlie Hebdo) hardly warms it to western hating muslims.Participant[quote=Hatfield][quote=scaredyclassic]How to profit from blood running in the streets[/quote]
I’m sorry, but fuck this thread. What the hell is wrong with you?[/quote]
I think sc is just being sardonic. I hope…ParticipantThere’s two issues here; demographics and new housing supply, and available inventory of existing homes. There is probably a big overlap but when you hear that the availability of affordable homes is low it is about home prices. Likewise when you here about months supply. When you look at demographics and the the rate at which the supply of new homes is keeping up, that poses a different kind of question. The overlap is when supply of existing homes is so low, it puts pressure on new builds to keep up with the extra pace. That is where I believe we are at the moment. The solution probably lies somewhere between the two; increase in new builds, but encouraging existing home inventory for sale. I believe the stranglehold for both has been the very distorted housing market in recent years that acts as a disincentive to many sellers, which impacts the move up market, and timing issues for developers who plan around long time frames not wishing to get caught out by boom bust cycles. There are very likely many other issues that impact this supply issue. For example, low interest rates inter alia have been stimulating demand. Had that not been the case you might find supply and demand more in equilibrium.
November 4, 2015 at 11:28 AM in reply to: San Francisco 2.0 – HBO housing bubble documentary #790996Participant[quote=AN][quote=flu]
I don’t think there’s a disagreement on there being a correction in the future. I’m doubting the magnitude of it that some apparently are convinced will happen, just as much as I doubted the magnitude of the correction we experienced here in SD in the areas where demand is generally stronger than other places.And that cousin doesn’t *need* to live in a 1.8million+ place in Cupertino, he can live just fine in Santa Clara. It’s a tradeoff, that people make more so there than down here.
Regardless, when this new tech bubble does pop, guess who’s going to end up eating shit the most? Yup, retail stock “investors” who either bought these company stocks directly, or are indirectly holding onto them with a mutual fund, like the famous Fidelity Contrafund or OTC fund, that is in just about everyone’s 401k plan.. It won’t be all the employees and insiders of these companies that were given these shares as part of their employment package. Just like how was back in 2000/2001.[/quote]
I won’t predict the depth of the crash because it’s foolish to even try. However, according to the video, Cupertino saw a 70+% rise in 1 year? If that’s true, I think there’s a possibility of a big decline, but who knows. Even at the peak of the bubble, I don’t think places like La Jolla and Del Mar were seeing 70% increase in a year. So, this is uncharted territory. Maybe this is the new normal for bay area and it’s going to be forever expensive like other major cities around the world. Only time will tell. But regardless, if you’re not making millions from the IPO lottery, I don’t see a reason to stay. If you own a home, this is a perfect opportunity to sell your million dollar shack and move to less expensive places like SD, LA, OC and retire.Then the next question is, at what point do companies will start saying, why are we paying Sr. Engineers $250k in the bay (just so they can afford an average life style) while we can pay 1/3 of that in SD, OC, LA, etc. I don’t know where that tipping point is, but I would assume there has to be a tipping point.
As for your cousin, I find it crazy that you would have to make that kind of tradeoff when you have that big of a windfall. That’s one of the reason why I think it’s unsustainable. It goes back to, if you’re not young (in your 20s) with no kids trying to chase the IPO lottery, this is a perfect opportunity to cash out.
As for who will eat shit the most, I think it’s the young engineers who feel rich with their paper $ who got in a little too late and got greedy and does not cash out. Remember all the .com companies? You can be millionaire one minute and a few months later, you’re back to where you started. Only the lucky few who are founders who sell their company who would make it out big, but they’re the minority, even in the bay. I don’t think the bay area tech crash would bring down the entire economy like the housing crash, since bay area tech is isolated, unlike housing.[/quote]
I agree with everything you say, except the interconnectedness between local markets. For example, high prices in CA have pushed buyers into other markets, pushing up prices there. Suburbs in particular benefit from increasing prices as more and more buyers are forced to look further afield. Let’s also remember that the current frothy market is not confined to SF or even the US. Other markets may have different causes for a bubble that are not connected to tech companies. For example, a favorable tax environment or anonymity. A danger of course is if mayors of other cities see the effect on housing and revenues that is happening in SF and seek to emulate it. The other important point to remember is that lending is not local, so what effects credit in one place can effect it in other places as happened in the last bubble. Some states scarcely saw a blip on the bubble radar, yet the effects of crashing markets in more frothy states especially cities were felt everywhere it terms of credit availability, unemployment, and the effects of a deep recession generally.While I agree that making precise predictions is a fools past time, I see ample justification for that happy middle ground of hoping for the best yet expecting the worst.
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