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SK in CV
ParticipantQuestion for you, if you know….
What’s the availability of SFH rentals in the area? At times in the past it’s been very low in that area. I don’t know how much investor action there’s been there over the last couple years.
Over the last couple weeks I’ve touched base with about a dozen property managers here in Phoenix, and it’s not looking pretty. I’m sure there’s been a lot more PE money here than in SD (if there’s been any in SD?). But from what I’m hearing is all those great plans for sweet cash flow isn’t quite materializing. Rents have fallen in much of the west valley, and even softened in the higher rent east valley.
One guy I talked with said he thinks the PE guys are struggling to get 50% occupancy. Not horrible if they’ve been here for 90 days, but some have been here for more than a couple years already. Unlikely it’s a lot better for individual investors. And with spring upon us, we’re maybe a month away from turning the A/C on.
Inventory issues could reverse pretty quickly, though in a very different way than 5 years ago. Cash buyers don’t suddenly become distressed sellers. Just anecdotal, but I saw a lot more open house signs this past weekend than I’ve seen in more than a year.
Participant[quote=livinincali]
The Fed Z1 is the source of the chart. Not really sure is we can consider GSE (which are the Freddie, Fannies, etc of the world) as being double counted in household debt or not.[/quote]I’m not really sure either. It’s a bit misleading, since the evolution of mortgage financing has changed things. It used to all show up as bank equity and debt, now its the GSE’s.
I’m also presuming what’s called “financials” includes debt obligations securitized by mortgages, which would also be double counting mortgages. Take those two out and the total debt probably wouldn’t look a lot different than what it looked like 40 years ago. Have to think that one through some more.
Participantlivinincali…we must have been talking about two different bond bubbles. I was talking about valuation of government long-term bonds, which have been in a bull market for 30 years.
You’re apparently talking about the increase in debt over the last 60 years. It’s a concern. Not an emergency. I’m a bit confused by it though, what is the source? Not sure what GSE debt is doing in there. It would essentially be counting the same debt twice.
ParticipantExactly the same thing could have happened in a defined contribution plan, though it’s unlikely that any kind of DC plan would ever have the assets that CalPERS has. This wasn’t a function of the type of plan, if true, it was purely criminal activity.
Participant[quote=livinincali]
Was there a bubble in the stock market based on earnings or valuations in 2007. I remember people saying the market wouldn’t be effected by sub prime because it wasn’t significantly overvalued. Of course we saw what happened. I don’t think the bubble is in stocks per say. It’s probably somewhere in the bond space, but when that bubble pops in the bond space it’s going to have devastating impacts on the stock market just like it has the previous 2 times. This stuff is interconnected, decoupling is a myth.[/quote]PE’s were higher than now in 2007, but not astronomically. Until the bottom fell out of earnings. If I remember correctly from Schiller’s in depth analysis, we’re still at least 10% below cyclical PE when the market began its fall in Sept ’07.
I’ve heard predictions of the bond bubble popping for more than a decade now, maybe even two. It really can’t be called prescient when something is predicted for that long and it doesn’t happen.
Participant[quote=spdrun]SK in CV –
Agreed that we’re not seeing bad inflation now. But they’re trying to re-inflate things that should NOT be re-inflated, namely the housing bubble. Yeppers. Good idea. Let’s put housing in acceptable areas out of reach of the 20 and early 30 somethings once again. Remember when it was NORMAL for people to buy homes in their late 20s, often on one income?[/quote]
No, I don’t remember those days. They were before my time. Particularly in California. And I’m closer to twice your age than I am to your age.
Participant[quote=spdrun]”Most Americans” would be painlessly euthanized in a just world.(*) (Yeah, I live in this country, but the only reason NYC is tolerable is that about half of its residents weren’t born in the good ‘ol US of A.)
Basically, inflation helps the stupid at the expense of the thrifty.
(*)- gullible fucktards who got exactly what they voted for in year 2000. 10 years of war, billions spent, debt run up, tax cuts for the rich with no one having the b@lls to say “no”, cuts to transportation and education, and now a closet tax on middle class savers via inflation. WAY TO FUCKING GO![/quote]
With all due respect, you have no idea what bad inflation feels like.
Participant[quote=livinincali]
Japan has been trying to push their market higher for 20 years. Ben Bernanke didn’t stop the market from dropping more than 50% in 2008. The people that are pushing the market higher are those that now naively believe in a power that Bernanke doesn’t really have. They’ll eventually get slaughtered in the popping of the bubble like they always do. Might need to go a lot higher first, I can’t tell you when it will happen, just that it will. The only sure thing from the fed is that they can always create a bubble somewhere and they never see it until after the fact.[/quote]I have to disagree about there being a bubble in the market right now. If there was, the market would be 20-25% higher than it is. By historic levels, it’s currently valued pretty average based on earnings. That doesn’t mean that we’re not in for a technical correction, but that’s substantially different than a bubble bursting. And even if there is a significant business slowdown, even in hindsight, that wouldn’t be indicative of a bubble. Current earnings are real.
I do have great concerns though, that the economy will falter. The US economy has never survived the levels of spending cuts by both federal and state governments of the last 3 years without a recession. And that’s before the spending cuts that the sequester will bring. We can quantify the dismal failures of austerity in Europe, and fortunately have not yet been dramatically effected by US austerity. It’s very possible we will. And soon.
Participant[quote=paramount]So this is not a case of: Politicians stealing citizens money and handing it over to the banksters?
Also, is this really a deflationary move? They could have instead just printed up more money, right?[/quote]
No, Cyprus doesn’t have its own money to print.
ParticipantUpdate from the WSJ:
The Cypriot parliament is now scheduled to meet Tuesday at 1600 GMT … The government is also in discussion with its creditors to ease the burden on small depositors. … The new proposal will see smaller depositors, those with up to €100,000, taxed at 3%; savers with €100,000 to €500,000 taxed at 10%; and those with over €500,000 taxed at 15%, one official said.
That would be about 2 1/2 hours from the time I’m posting. Russia is not happy with the proposed tax and are threatening to withdraw their previous commitment for aid.
Participant[quote=paramount]
I agree, your observations coincide with mine and I feel the spring is pulled back really tight; I wonder if the bull market was timed with the 2% payroll tax increase?[/quote]
Would that mean that the bull market the first 3 or 4 months of the previous two years were timed to coincide with the 2% payroll tax cut?
If you look hard enough, you can always find some spec of evidence that points to a grand conspiracy. But most, like this one, don’t really stand up to any scrutiny.
Participant[quote=paramount]Are we really seeing weakness in the bond market?
That could be a bad sign, right?[/quote]
Unlikely. The general trend for the last 8 months has been down, off about 6-7% in that time. But it’s been coincident to a 20-30% rise in equity indexes over the same time frame. There was a small short term drop at the beginning of the month, but 1/3 of that has disappeared over the last week.
If bonds, US equities and the dollar all make significant downward moves at the same time, that would be a bad sign.
American big business is booming, for all except those who do the work to make it happen.
Participant[quote=spdrun]Since the seller is moving out of state, he’ll be a non-resident.
And correct me if I’m wrong, but the property manager’s distribution is the gross rent minus their fee. Owner still pays taxes, common charges, and mortgage directly, no? So the withholding would be closer to a percentage of the gross rent than that of the the net income. And unless an exception is granted, Jerry’s Pigs will owe the owner at year’s end, rather than vice-versa.
Personally, if either of my offers in CA go through, I have no intention of using a management crook.[/quote]
If you’re going to pay a management company, let them manage. Including paying the mortgage and property taxes, insurance and all other expenses. That’s what they’re getting paid for. Most people who use management companies for real estate do that. I never understood people who pay significant fees and then do the work themselves. They don’t get their money’s worth. Waivers from withholding are invariably granted except for failure to file CA returns when required.
Participant[quote=spdrun]It’s a farkin’ 1/1 condo. How much “management” is actually needed, other than finding tenants? As far as basic maintenance, either find a tenant who’s somewhat handy, or put a clause in the lease that all repairs < $300 are on the tenant. (i.e. the if-the-toilet-is-plugged-plunge-it-yourself rule). Added benefit is that a management company is required to withhold an excessive amount of taxes in CA, whereas a tenant could just mail checks directly to you out of state. (And yes, you're still expected to pay taxes, but better to PAY than give the pigs in Suckremental a free loan for 12 months.)[/quote] It's not a free loan for 12 months. And it is not excessive. If you object to paying CA income tax, don't buy in California. No withholding is required by property managers for Ca residents, only non-residents. And the withholding is based on the amount distributed to the property owner, not based on the gross rents collected. Waivers from the withholding requirement are easily obtained for non-resident owners who agree to pay CA tax.
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