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powayseller
ParticipantWe do NOT have stringent inspectors. The SD County building inspector missed that my roofer did not put in the attic vents; the realty home inspector caught that at time of sale. They replied in a letter that they don’t catch everything…
My friend hired his own crew to build his house, and I was stunned at the low quality of the wood used in framing. The boards were warped, split, and not going all the way down to the floor. Some cuts were uneven, which probably doesn’t matter for structural stability, but it goes to the quality of the work. He used a teen crew to lay marble flooring, and the new marble guy ripped some out and redid it. His house is in Ramona.
I do *not* believe the construction is decent from someone who is only paid $8/hour, and is not trained. I respect the skilled tradesmen too much, to think that someone can just come along and just pick this stuff up. It takes many years to become a real craftsman. I interacted enough with my subs to have respect for them, and to know the difference between some who were just workers and those who were real craftsmen. A professional builder can command a living wage. Those building for $8/hour are most likely amateurs. I would *not* hire them to build my house. Anybody thinking that you can just pick up a crew and have them build while you supervise, I saw the bad outcome in my Ramona friend’s house. You pay cheap, you get low quality.
Check out the Lennar problems in FL. If you’ve followed the Bubble Blogger links, you’ve already read this from globaleconomicanalysis.com. Lennar hired their own inspectors, and the result: hundreds of building code violations and a class action lawsuit in the works. Also read this about Lennar’s shoddy construction.
Lennar probably hired these $8/hour guys, and I bet we will see more lawsuits like this. They cut corners, didn’t train and apprentice these guys as they should have.
ParticipantThe media has kept the beach problems from the front pages. I did a google search on this, and found only one article. San Diego cannot afford to make a big deal of this, because it would hurt tourism, one of our main industries. As a resident, I know of occasional beach closures, and to avoid the beach after rain, but had not heard of the stench. How many potential buyers would know about this?
PD, you live in Coronado. Do you think this problem is affecting your desire to live there? What does the community think about it?
ParticipantBugs, those concrete guys were an exception. I know they were paid well. My experience is working with a small builder, and to my knowledge, only the roofers and drywallers were illegals. They were skilled laborers, so I assume they were paid good wages.
How can you get someone for $8/hr to build a house? What kind of training would that person have? If they were skilled laborers, they could command higher wages, or not? Yikes, I wonder if I want to buy a house built by someone earning $9/hour. It makes me question their qualifications/training/experience.
About the illegals, I think it is a humanitarian abuse to take their SS taxes, and not guarantee them a SS payout at retirement. What will they do at age 65? Our government is knowingly taking advantage of poor people with little prospects, just to keep our inflation down. We take advantage of their cheap labor, hard work, and when they are old and tired, let them be homeless or send them back home? There will be no social security or medicare payouts if they’ve used a wrong SS all along. And we claim to be a country that abhors atroctities? Caring for our elderly population is a necessity of a civilized society. And this is related to housing and the economy, because I see that the quest for keeping inflation low is causing us to take advantage of the poor.
ParticipantIllegal immigrants from Taiwan? How would they get past the customs without the proper documents? Do you think they come here with papers, and then stay past their H-1 visa? Then how can they get work? The office type jobs do required a valid work permit, as far as I know.
ParticipantMy friend at Nokia is here on a temporary work visa, and he is waiting several years for his green card to be completed. His hope is that the green card comes through before he is laid off. He told me that his coworkers are more concerned about their H-1 visa/green card status, than being laid off. If they are laid off, they can find another job, somewhere in the US. But it is hard to get a green card. Apparently, in the white collar jobs, employers check for immigration and work status. So here we have a high tech brilliant foreign worker, educated and coming here by airplane, who must have a green card or H-1 visa to work, whereas an uneducated worker who crawled illegally across the border and broke our immigration laws is allowed to work here forever no questions asked. Is that even fair? No f**cking way!
Instead of getting mad (although I am, for the sake of my friend), I ask myself why Bush is promoting illegal immigration of the underclass.
I think it’s because an underclass, the low cost laborers, people who squeeze 3-4 families into a 2 bedroom apartment in Escondido, benefit the rich by keeping their costs down. Bush wants to create a 2-tier society. Cheap labor for the rich, cheap labor for big business. Use them up, and then when they’re old, send them packing. They can’t get SS. How fair is that???
In the meantime, our housing construction costs are lower, landscaping costs are lower.
Hey, I just had a light go on in my head. Do you suppose we need the cheap illegal labor to reduce the inflation? Just as we have cheap goods because of low wages in China, we have cheap American services due to low wages provided by blue collar illegals. This is one way the government has successfully kept down inflation.
If we had no illegals, maybe inflation would be 1-2% higher. But the willing low wage workers kept wages from going up. Thus, flat wages in the blue collar jobs…
ParticipantI wrote an employment piece a week or so ago. Did anyone read it? I put the employment figures back to pre-MEW times, so the year 2001.
Spending will drop in the categories mentioned in that story I wrote: retail, construction, restaurant. People will cut back at least 75% (a guess) on remodeling, shopping at Home Depot/Ethan Allen, buying new cars, jewelry, boats, ATVs, iPods, clothes, take fewer trips/meals out, and so on.
You listed consumer staples, but those things will not go away. Those are cheap things that everyone needs.And read the CR thread from above.
ParticipantI’ve written about the benefit of cheap labor in construction, as I experienced it first hand. I know the roofers and concrete crew were illegals. The concrete guys were paid $20/hr (I paid the boss $25/hr for each guy), and they were true professionals. But it was still a low wage, and the boss didn’t have to pay 33% of wages for worker’s comp and all the other stuff. I’m sure that some bosses pay their workers even less. The labor cost and workers’ comp savings are huge. Whenever you hire a licensed contractor who does everything by the book, you are paying 33% more on labor to cover CA’s ridiculous workers’ comp taxes.
As far as the effect of them losing jobs: this has been covered before also. I wrote that 10% of labor in CA is not counted in the payroll report, because it is illegal and independent contractor labor. This is over 1 million people, 1.2 million I believe, and is the largest stealth employment labor force in the country. This figure includes contractors, realtors, and lenders who are self employed. Many of these jobs will be lost.
But there are millions of contractors who are legitimately on the payrolls. Only roofers and drywallers and concrete crew were illegals on my construction site; the others were US-born, mostly white guys.
There will be a huge fallout to this group, the group who owns homes.
ParticipantSo the stench is in IB, but not Coronado?
Has this affected IB property prices? Or would you say it’s still a largely unknown problem. Someone shopping for a home in IB might not even know about this, until they take their first beach outing.
ParticipantYes, the laid off people will surely leave San Diego.
I just spoke with another friend in biotech, and asked her how she sees the SD biotech industry. “Poorly”, she said. Most of the companies here are very small, and her jobs exists only at the big companies. She said the best biotech cities are San Francisco, Boston, and some places in North Carolina. SD comes in 3rd or 4th place.
All this makes me wonder if SD is really such an up and coming city in wireless or biotech. It appears we are scraping by and getting smaller in these areas.
Participantbubba99- you are so right! Even flat home values will cause a recession, since 70% of GDP is consumer spending, which comes from MEW.
I hope everyone else here gets this point. 70% of GDP is dependent on this one fact: rising home values and borrowers’ ability to borrow it freely to spend.
Flat prices or high interest rates will break the cycle.
What could help: rising wages. This would be possible if we erected trade barriers with low-wage Asian exporters. That strategy would also cause massive inflation, as the low-cost goods they provide has caused deflation in goods.
The key for everyone in this country is to realize that even flat home prices will cause a recession, about 9 months – 18 months after the prices stop rising. It takes consumers 9 months to spend the equity loan, and 9 months for reduced spending to show up in less capital spending and lower stock prices.
By the end of 2007, the full-blown recession will be here.
Can another asset bubble save it? Globally, central banks are tightening and withdrawing liquidity. Even Japan, whichh had 0% interest for decades (I think) is raising interest rates. Even China is raising interest rates and bank reserve requirements to reduce inflation.
The gig is up. Prepare yourselves for a period of saving, possible job loss. Be frugal for the next few years. Then you can handle this recession with less pain.
ParticipantSan Diego Home Prices fell $15K from April. See this thread.
ParticipantI spoke with a Nokia engineer this week, and he told me the decision about CDMA will be made on August 2. Then, they will either drop CDMA and close down the SD division in increments until final shut-down on April 1, or go forward with the other (non-CDMA, I forgot the name) technology and lay off half the people (needing only half the staff to work on the other system). So they will lay off at least half the staff, perhaps all.
ParticipantAdd the possible Nokia layoffs.
ParticipantI’m wondering about any effect of the Tijuana sewage flowing into the SD water/beaches, and the trash on the beaches. Is this causing a problem in Coronado and our other southern beaches, and home prices? I know this hasn’t been in the media, so I only know about it from word of mouth.
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