[rankandfile]

I am growing into a bitter old man…and I am only in my early 30s. It’s stuff like this that is molding me into more and more of a conspiracy theorist. I am trying not to become one, I really am. You have to believe me. But there is just too much crap like this that flies by my desk everyday to make me think otherwise.

I have often thought partisan politics was detrimental to the forward movement of our nation. In some cases I guess it is. But it’s articles like this that make me think that having an opposition party, political enemies as it were, helps to keep those who are in power in check. Then again, all it takes is a handshake or a wink and a nod, peppered with some nice kickbacks, and those sharp party lines become blurred. I think that Rich should respond to this post because he probably knows more about it than any of us…and he is the exact opposite of me when it comes to conspiracy theories. But I don’t know if he is allowed to under his new position.

[rankandfile]

If I had a better grasp on economics and government, I’d be better able to answer exactly how the government could intervene and slow the bursting of the bubble. One tool that I can think of at the federal level would be to slow or stop the rising Fed interest rates. Although the Federal Reserve is technically a separate entity, I am sure that they are vulnerable to political pressures similar to those seen at other levels of government.

I’d be curious to see if any politicians mention housing prices as a part of their platform coming up in mid-term elections. I haven’t heard any buzz up to this point, but then again I haven’t really been looking for it. I would think that IF the government were to intervene in any way, it should be sooner rather than later given the slow pace at which they move. But in reality it will probably be more of a reactionary or emergency-type of response. Isn’t that how Prop 13 came about? Did any policy makers see that coming beforehand? And did they try to do anything about it before things got too crazy?

[rankandfile]

I don’t think that we are fence sitters anymore. I’d be willing to bet that many of the fence sitters have come down from fences, walked back to their rental properties, and have decided to hunker down for the foreseeable future.

In comments concerning government intervention, I am a big proponent of market forces. I only feel that the government should intervene in very few circumstances, most notably if there is an emergency or if the public safety is at risk. Other than that the market should be left to the laws of supply and demand. One thing that sets the housing market aside from others is that it is not a true market. Too much of the sales process is controlled and not open to true market forces and increased competition.

[rankandfile]

I feel sorry for those “bigger fools” who bought into the market towards the end…most likely on their own false assumptions/calculations and advise from overly optimistic realtors and mortgage brokers. I am sure that many are middle-class people with families and are finding it tough to sell their home to the next bigger fool.

[rankandfile]

It seems that the author(s) of the San Diego Regional report were doing a bit of double-talking. In one sentence they mentioned that there will be a soft landing in the housing bubble due to steady employment, increased incomes, and spending growth; while in the next sentence they express serious concerns over high gas, utility, and housing prices, as well as the resetting ARMs. My question to the author(s) would be where is all the money going to come from to support the 9% annual increases in consumer spending if it is going to cover increasing mortgage payments and rising costs of living?

[rankandfile]

Hell hath no fury like a Powayseller scorned.

[rankandfile]

I think that what you said about the blanket statements is valid and it sort of goes without saying on this forum. Many of us are aware that some really smart people may have employed these financing vehicles because they calculated that they would work well for their current and future situations.

Sduuuuuuude, surely you must know that my analogy was purely for effect and not a true apples-apples comparison to exotic loans? Bmarum understood it for what it was. Perhaps you have some better analogies?

[rankandfile]

You make good points, SD Realtor. I realize you are in a tough predicament being a realtor and having to read about ones that don’t play by the rules. I am sure there are honest realtors who do operate by their code of ethics. I’ll bet they’re the ones that actually earn more money as well.

I agree that buyers need to empower themselves. I think this would be much easier to do if (1) the process was more open and (2) it was simplified a bit.

[rankandfile]

Whatever happened to the strict code of ethics that all realtors are proclaimed to operate under? Sounds to me like if you raise the commission, Realtors are going to push these units like there is no tomorrow. Like selling a ketchup popsicle to a woman wearing white gloves. I don’t care if it’s a good deal for the buyer or seller, I’ll tell them whatever they want to hear. Just give me my 7-8%!

I know that the higher commissions provide a greater incentive, and that not all realtors are out for the quick buck. But something about this is just unsettling to me, especially considering that the real estate industry is a relatively closed system from top to bottom…they control the entire sales process.

[rankandfile]

“my friends who have taken such loans are on professional career paths that have pretty steep guaranteed salary increases.

Bmarum, sounds like you have some very fortunate friends to be in such a cush job. I’d be curious as to what type of profession/industry they are in that “guarantees” steep salary increases. My guess is that there are not too many industries like theirs. These jobs you speak of sound almost too good to be true.

“All of this is to say that not EVERYONE who took out an exotic loan, or an ARM, is going to end up being financially ruined.”

Not everyone who drives while intoxicated will get into a car accident. Whould you still advise them to drink and drive? I’m just using your own logic.

[rankandfile]

Bugs, did you read the article that was linked? The one that stated:

“Many traditional real estate brokerage firms, and their organizations, function as a cartel that tries to set prices and restrict service options,” said Stephen Brobeck, CFA’s executive director at a press conference in Washington D.C.”

and…

“The CFA charges that consumers are harmed in three main ways:

* Traditional brokers charge high, uniform prices regardless of the quality of the broker involved. Even a newly licensed, inexperienced agent receives the same commission no matter what the level of service offered.

* Traditional brokers who work with both seller and buyer in a home sale almost always function as facilitators. Brokers try to make sure a sale is completed (and they get paid), rather than as fiduciary agents acting in the best interests of their clients, as the brokers claim to do.

* Brokers “double-dip,” promoting their own listings or the listings of their firm over properties better suited for their clients.”

I am assuming that you must be commenting on a different article, or you are doing your best Howard Berg impersonation.

[rankandfile]

It is assumed (at least in a market system) that producers produce enough product to be purchased within a reasonable amount of time. The costs to carry excess inventory, in most cases, outweighs the benefits. Or so this is the thinking. In other words, producers produce just enough goods that will be purchased by willing buyers, hence they are scarce and will go to the highest bidder. Then again, I am not an economist.

[rankandfile]

All the economic indicators spell out a doom-and-gloom future for the housing industry and the economy in general. The more I think about it, the more I feel that there will be some sort of government intervention to slow the bursting of the bubble. The government at all levels (federal, county, municipal) has way too much interest in keeping homes priced at this level and keeping them from falling too far, too fast. There’s just too much money to be lost if the housing bubble plays out under market forces.

[rankandfile]

Therein lies the underlying problem: taking out a loan to pay on a loan. Homes in SoCal, or even La Costa, will never see the levels of appreciation that we’ve witnessed over the last 5-10 years, IMHO…at least not in our lifetime. Same goes for the price of money (interest rates). Moreover, technician-level wages typically remain flat. They certainly don’t rise to the level that we’ve seen homes rise over the past few years. Increasing wages = company relocation. I feel sorry for this person. Hey, at least he got to hob-nob for a while and brag about his $1.1 million mans.

[rankandfile]

I have to defend Powayseller here. I’ve also noticed a change in her tone from earlier posts. I guess you can bang your head against the wall only so many times before you start to get a little honery.

Sometimes we have to remember that we are human and show some emotion…especially when things don’t change from trying to be civil, or politically correct. I personally don’t think we should apologize for showing some emotion once in a while. It’s not as though PS was coming across like Michael Savage or Howard Stern. Making a reference to a 6th grader was clearly done to stir the pot, to shake things up a bit. And I don’t blame her for doing it.

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