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“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.

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I’m in the mid 20’s-30’s crowd and most everyone I know is a renter.

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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.

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I’m a ward of the state, Josh!

I lose my job and it means the state government is bankrupt. I’ll gladly leave California if that is ever the case.

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Yeah, it will be terrible. All of us that spent our time getting educated and building stable careers will be able to buy cheap housing from bankrupt flippers and other equity chasers. Maybe if they clean up the house nice and give it a fresh coat of paint I’ll let them mow my lawn for minimum wage.

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“I just sense that folks are a bit too anxious to reap some sort of reward for recognizing the bubble which reminds me of the folks who were too anxious to reap some reward not recognizing the bubble. Human psychology is fascinating.”

Well, I’ve tried to take a moderate outlook on this thing as much as possible.

I can’t find fault with the celebrations though, after listening to years of “real estate only goes up”, “they aren’t making any more land” and “buy now or be priced out!”; I’ll say its somewhat deserved.

Remember, as the market corrects itself and returns to fundamentals, the only folks buying homes will be those with good credit, cash and stable employment that hasn’t been fueled by the equity liquidity of the past few years. A large portion of the folks that would ‘move up’ have HELOC’ed themselves into a corner and won’t be able to.

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Just promise not to buy until the market bottoms and we will call it even.

There still seems to be a large population of greater fools that are causing sticktion on the way down.

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I’m not even going to consider getting into SoCal real estate until at least 2008. And by that, I mean actually doing the math, looking at whats available, etc. In the mean time I’m just going to enjoy the fireworks.

The main indicator I’m watching is foreclosures. Once that stabilizes I feel we will have gotten close enough to the bottom to consider buying. If the foreclosures are holding and the median is still dropping, I’ll turn to watching that.

Once the indicators have stabilized, assuming I’m cash flow positive and still have a job, I’ll work with a realtor to find me maybe a dozen properties that meet my criteria. I’ll then put out a low-ball offer (maybe 10% under) on all of them and see if I get any bites.

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SD Realtor,

No offense taken; I appreciate your contributions here greatly!

I think at times we are guilty of just as a myopic viewpoint as the perma-bulls. As with most things, the reality of any situation is somewhere between the extremes of the prevailing viewpoints.

I think the ‘devils advocate’ approach is that the are poor folks in the subprime market that are not living extravagant lifestyles, that are still at risk of foreclosure. Their toxic sub-prime loans are the best they could do. I have a feeling we will see people like this held up to the spotlight in the MTM by the REI in order to pressure a full bail-out.

That said, my personal opinion is that they should get dinged, just like everyone else. Nobody ‘has’ to buy; they made a decision to purchase something that ultimately they can’t afford. Not a sob story by any means.

But really, who is ultimately to blame here. The fool with the credit, or the greater fools providing it to him? In my opinion, they all need to be punished in the end.

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Yeah, a barometer I use for any meme is it hitting the front page of cnn.com, which the housing bust did yesterday. The great market psychology shift begins.

I’m not patting myself on the back about it though, as I felt it was inevitable. Kind of like speculating that the sun will set, the only question in my mind being the details of the process.

I’ve always felt arguing with the perma-bulls as counter-productive, as I’m *sure* some portion of them realized this was a bubble and were just blowing hot air before cashing out. Kind of like the pump&dump stock scams.

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“Federal aid “would come at a cost,” said Douglas Duncan, chief economist at the Mortgage Bankers Association. “It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?””

Thats a great quote. I wonder how all the renters that are scrimping and saving will feel about this. Are the FB’s going have to give back all their toy’s that they bought with HELOC’s, assuming there is a bailout?

The ‘only’ form of bailout that I would support would be if the Fed created their own subprime lending body that would buy up subprime loans and re-finance the FB’s into something they can afford. So if Joe FB is going to default on his 800K ARM, he gets refi’ed into something much lower.

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“Yes, taxes, very efficient mechanism. So you’re the guy who votes for these kinds of things…”

Jokes on you, I don’t vote!

Regarding desalination, its already a reality in parts of the world, so I merely presented it as an option. Its admittedly a not very good one, as its costly and produces lots of waste (hypersalinated brine).

As for the farming, I’m all for phasing out 100% of farm subsidies over time. Food is too cheap and our citizens are too fat anyway.

To those that oppose environmental regulations, I’ll suggest visiting TJ. Its about as close to a free market economy as you can get around here.

Just don’t drink the water.

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How about a 100% water tax? Use the revenue to fund desalination initiatives.

Might encourage more folks to install low-flow shower heads and toilets.

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Hey cooprider,

(nice name btw)

Could you give me some predictions for stocks you think are good buys?

I’ll short ’em and make a killing.

(sorry for the cheap shot, couldn’t help it)

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“So what income is needed to support this? $240K ($20K/month) at the minimum? Basically, give 50% of your income to support this house. Two very good professional jobs will actually achieve that in San Diego, so maybe not everyone is doomed. What do you all think?”

What % of San Diego households gross over $240k per annum? And are not dependent on bubble-related business?

And have done the sensible thing and re-fi’ed to lock in a low rate, rather than use their house as an ATM to furnish a more lavish lifestyle?

I’ll suspect not enough to finance a soft landing.

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