Comments on: Mountains of Debt, Housing Bubble Goes Mainstream http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html Southern California is Experiencing a Real Estate Bubble like never before Fri, 04 Feb 2011 01:16:46 -0700 hourly 1 http://wordpress.org/?v=3.1 By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-767 Anonymous Wed, 06 Sep 2006 23:07:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-767 <I>You can't just sell to the rich, you need the middle class. And when the middle class can't afford a home in the OC who is going to work at HD, Ralphs, and Target?</I><BR/><BR/>Undocumented Immigrants (TM), of course. Living five or more families to a "Mexiflopper Clown House", like is already happening in Santa Ana. (I've been hearing tales of "blockbusting" in that city -- buying a house, then renting (and sub-renting) it to 50 or so day laborers who split the rent. Existing neighbors move out as their street turns into Tijuana, and blockbuster/landlord buys them up and does the same.) You can’t just sell to the rich, you need the middle class. And when the middle class can’t afford a home in the OC who is going to work at HD, Ralphs, and Target?

Undocumented Immigrants (TM), of course. Living five or more families to a “Mexiflopper Clown House”, like is already happening in Santa Ana. (I’ve been hearing tales of “blockbusting” in that city — buying a house, then renting (and sub-renting) it to 50 or so day laborers who split the rent. Existing neighbors move out as their street turns into Tijuana, and blockbuster/landlord buys them up and does the same.)

]]> By: awaiting bubble rubble http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-768 awaiting bubble rubble Sun, 20 Aug 2006 06:07:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-768 Jeez, it cut off the link. The year ago post is at http://tinyurl.com/ps2cg. Jeez, it cut off the link. The year ago post is at http://tinyurl.com/ps2cg.

]]> By: awaiting bubble rubble http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-769 awaiting bubble rubble Sun, 20 Aug 2006 06:05:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-769 A year ago I posted links to several articles on the Business Week blog in response to a Chris Palmieri happy talk piece that said nobody was leaving CA:<BR/><BR/>http://www.businessweek.com/the_thread/hotproperty/archives/2005/07/no_mass_exodus.html<BR/><BR/>I'm the poster called Dave and it was obvious to me that people were leaving areas where the median house price was more than 10 times the median income. In one of the posts I even added numbers to calculate the U-haul ratio for LA to Dallas. It was 2.98 a year ago.<BR/><BR/>Chris obviously didn't read the articles on the mass exodus because just a few days ago in his piece, Movin' Out (http://www.businessweek.com/the_thread/hotproperty/) he states "I was surprised to see cities such as Los Angeles, New York, San Francisco and Boston actually losing hundreds of thousands of residents to other states"<BR/><BR/>Now the U-Haul ratio for LA to Dallas is 3.33 (costs 3.33 times as much from LA to Dallas as the reverse) so whatever it is that caused the exodus that "surprised" Chris has increased. I guess he'll be surprised again soon.<BR/><BR/>BTW, in my zip code the median house price last year was $1.1M and median income was about $81K. And guess what, enrollment at my daughter's elementary school is 20% lower this year. Go figure! A year ago I posted links to several articles on the Business Week blog in response to a Chris Palmieri happy talk piece that said nobody was leaving CA:

http://www.businessweek.com/th.....xodus.html

I’m the poster called Dave and it was obvious to me that people were leaving areas where the median house price was more than 10 times the median income. In one of the posts I even added numbers to calculate the U-haul ratio for LA to Dallas. It was 2.98 a year ago.

Chris obviously didn’t read the articles on the mass exodus because just a few days ago in his piece, Movin’ Out (http://www.businessweek.com/th.....tproperty/) he states “I was surprised to see cities such as Los Angeles, New York, San Francisco and Boston actually losing hundreds of thousands of residents to other states”

Now the U-Haul ratio for LA to Dallas is 3.33 (costs 3.33 times as much from LA to Dallas as the reverse) so whatever it is that caused the exodus that “surprised” Chris has increased. I guess he’ll be surprised again soon.

BTW, in my zip code the median house price last year was $1.1M and median income was about $81K. And guess what, enrollment at my daughter’s elementary school is 20% lower this year. Go figure!

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-770 Anonymous Sun, 20 Aug 2006 04:49:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-770 LA Times real estate listings has a number of listings labeled as REOs today. I don't remember seeing this in recent weeks. The first wave of foreclosures is already here, even before the huge reset tidal wave of 2008. The comps are going to take a dive and appraisals will be hard to get. I predict that a good half of what goes into escrow in LA in 2007 will fall out within 30 days. LA Times real estate listings has a number of listings labeled as REOs today. I don’t remember seeing this in recent weeks. The first wave of foreclosures is already here, even before the huge reset tidal wave of 2008. The comps are going to take a dive and appraisals will be hard to get. I predict that a good half of what goes into escrow in LA in 2007 will fall out within 30 days.

]]> By: B. Durbin http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-771 B. Durbin Mon, 14 Aug 2006 05:00:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-771 You know, I think I know what the trouble is with the emotional appeal to home buyers. "Buy now or you'll be forever priced out!" The truth of the matter is that most people are fundamentally incapable of facing the fact that they may never get a home... so they entered the game and raised the stakes for everyone.<BR/><BR/>So what it takes to prevent a bubble is a little fortitude. "Buy now or you'll be priced out forever!" "Well, I guess I'll never own a house, <I>since I can't afford one now.</I>"<BR/><BR/>It's a hard choice to make, especially as it is based on a false premize (that you'll be priced out forever.) But if you've got the guts to say, Oh well, if that's the way it has to be, then you'll do fine. You know, I think I know what the trouble is with the emotional appeal to home buyers. “Buy now or you’ll be forever priced out!” The truth of the matter is that most people are fundamentally incapable of facing the fact that they may never get a home… so they entered the game and raised the stakes for everyone.

So what it takes to prevent a bubble is a little fortitude. “Buy now or you’ll be priced out forever!” “Well, I guess I’ll never own a house, since I can’t afford one now.“

It’s a hard choice to make, especially as it is based on a false premize (that you’ll be priced out forever.) But if you’ve got the guts to say, Oh well, if that’s the way it has to be, then you’ll do fine.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-772 Anonymous Mon, 14 Aug 2006 04:17:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-772 the funny thing isn't to read gary watts and his insights now, it will be what people like that have to say in a few years after the market has cratered. then watch them take the skilling-lay defense that "it was the media's fault." not to mention the fail-safe proposition that "yeah prices have dropped -- but that makes it a great time to buy!"<BR/><BR/>actually, what i remember most from when the dot-com bubble burst was the absolute silence from the brokers who had been touting those stocks just a few months before. in fact, the only words many of them ever said publicy after that was "not guilty, your honor." <BR/><BR/>real estate agents and lenders should be regulated like securities brokers. it should be illegal for them to put someone into a home they know is way beyond their means and is a disaster waiting to happen. the funny thing isn’t to read gary watts and his insights now, it will be what people like that have to say in a few years after the market has cratered. then watch them take the skilling-lay defense that “it was the media’s fault.” not to mention the fail-safe proposition that “yeah prices have dropped — but that makes it a great time to buy!”

actually, what i remember most from when the dot-com bubble burst was the absolute silence from the brokers who had been touting those stocks just a few months before. in fact, the only words many of them ever said publicy after that was “not guilty, your honor.”

real estate agents and lenders should be regulated like securities brokers. it should be illegal for them to put someone into a home they know is way beyond their means and is a disaster waiting to happen.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-773 Anonymous Mon, 14 Aug 2006 01:59:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-773 Gary Watts document makes a lot of points with no supportive facts. Some things to note...<BR/><BR/>1) Not all home buyers are millionaires the other 9 out of 10 are working class. You can't just sell to the rich, you need the middle class. And when the middle class can't afford a home in the OC who is going to work at HD, Ralphs, and Target? <BR/><BR/>2) Asking realtors not to put up "Price Reduced" signs. If everyting was so great Gary they wouldn't be putting up the signs.<BR/><BR/>3) Sure we have new immigrants in CA; good luck selling them a 1M home. Many are lucky to be able to afford rent. They came here for a better life, they may not find it in CA. They used to come here because it was affordable and they had a familiar community. (Monterey Park, Alhambra, etc.) But when you can't afford the area they are not tied to CA and they will be the first to leave.<BR/><BR/>4) Gary's focus is on High Income. But all of his new buyers are 22-35-45. Well if they don't have a home already how are they going to afford 1M homes? Even if the average family in the OC has a household income of 100K give or take 10K, after taxes a 1M home is really expensive month after month.<BR/><BR/>This guy lives in another reality. Sure there are a lot of rich people in SoCal, but if you rely on the upper 10% for all of your sales you are going to run out quick. <BR/><BR/>Does anyone have the facts on who buys these new homes? Household imcome? Are they selling a home in SoCal to buy another? <BR/><BR/>It was easy to buy JDSU at $300 share when you just sold the CMGI at $290 that you bought for $10. But if you are late to the party, the price seems VERY expensive. Gary Watts document makes a lot of points with no supportive facts. Some things to note…

1) Not all home buyers are millionaires the other 9 out of 10 are working class. You can’t just sell to the rich, you need the middle class. And when the middle class can’t afford a home in the OC who is going to work at HD, Ralphs, and Target?

2) Asking realtors not to put up “Price Reduced” signs. If everyting was so great Gary they wouldn’t be putting up the signs.

3) Sure we have new immigrants in CA; good luck selling them a 1M home. Many are lucky to be able to afford rent. They came here for a better life, they may not find it in CA. They used to come here because it was affordable and they had a familiar community. (Monterey Park, Alhambra, etc.) But when you can’t afford the area they are not tied to CA and they will be the first to leave.

4) Gary’s focus is on High Income. But all of his new buyers are 22-35-45. Well if they don’t have a home already how are they going to afford 1M homes? Even if the average family in the OC has a household income of 100K give or take 10K, after taxes a 1M home is really expensive month after month.

This guy lives in another reality. Sure there are a lot of rich people in SoCal, but if you rely on the upper 10% for all of your sales you are going to run out quick.

Does anyone have the facts on who buys these new homes? Household imcome? Are they selling a home in SoCal to buy another?

It was easy to buy JDSU at $300 share when you just sold the CMGI at $290 that you bought for $10. But if you are late to the party, the price seems VERY expensive.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-774 Anonymous Sun, 13 Aug 2006 17:17:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-774 50 yr mortgages still won't make them affordable. Besides, the trend has started, it's based on psychology. Soon, even those who can afford to buy a home, won't. In a few years, no one will want to buy a home. 50 yr mortgages still won’t make them affordable. Besides, the trend has started, it’s based on psychology. Soon, even those who can afford to buy a home, won’t. In a few years, no one will want to buy a home.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-775 Anonymous Sun, 13 Aug 2006 17:01:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-775 Have you guys considered that home prices will stay put and to make them affordable 50 yr mortgages may become the norm? That is just scary! But given the stupidity of so many people they may just sign up for those 50yr deals so that they can get into a home. Have you guys considered that home prices will stay put and to make them affordable 50 yr mortgages may become the norm? That is just scary! But given the stupidity of so many people they may just sign up for those 50yr deals so that they can get into a home.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-776 Anonymous Sun, 13 Aug 2006 05:06:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-776 The huge crash is coming most definitely, it's only a matter of when not IF. The unfortunate thing is that it is going to bring along with it some really painful times for the economy at large, I predict huge job losses. It is wise to save up your money and prepare for very tough times ahead ;-) The huge crash is coming most definitely, it’s only a matter of when not IF. The unfortunate thing is that it is going to bring along with it some really painful times for the economy at large, I predict huge job losses. It is wise to save up your money and prepare for very tough times ahead ;-)

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-777 Anonymous Sat, 12 Aug 2006 23:16:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-777 This was a great read. This was a great read.

]]> By: John Doe http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-778 John Doe Sat, 12 Aug 2006 22:11:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-778 Anon:<BR/><BR/>I'm working on one right now. It will be out in a couple of days. It normally takes me several days or so to write up an article and I often have 3 or 4 in progress at a time.<BR/><BR/>John. Anon:

I’m working on one right now. It will be out in a couple of days. It normally takes me several days or so to write up an article and I often have 3 or 4 in progress at a time.

John.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-779 Anonymous Sat, 12 Aug 2006 21:09:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-779 John:<BR/><BR/>Time for a new Gary Watts post!<BR/><BR/>See his revised outlook.<BR/><BR/>http://www.homesforsalehuntingtonbeach.com/Mid-YearOutlookJuly2006.doc<BR/><BR/>Looks like some recommended actions taht violate anti-trust laws to me.<BR/><BR/>here is a suggested title for the post:<BR/><BR/>Gary Watts and his demon spawn will burn in HELL for eternity. John:

Time for a new Gary Watts post!

See his revised outlook.

http://www.homesforsalehunting.....ly2006.doc

Looks like some recommended actions taht violate anti-trust laws to me.

here is a suggested title for the post:

Gary Watts and his demon spawn will burn in HELL for eternity.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-780 Anonymous Sat, 12 Aug 2006 04:34:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-780 True, the bubble has become so obvious that even the mainstream media is starting to take a column inch away from Paris HIlton and such to mention it. The herd will soon be stampeding and you bloggers helped open the gates. A necessary but painful cleansing has begun. Let's hope those who are unable to learn from the past don't seize power again after the dust settles. True, the bubble has become so obvious that even the mainstream media is starting to take a column inch away from Paris HIlton and such to mention it. The herd will soon be stampeding and you bloggers helped open the gates. A necessary but painful cleansing has begun. Let’s hope those who are unable to learn from the past don’t seize power again after the dust settles.

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-781 Anonymous Sat, 12 Aug 2006 03:47:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-781 Folks are just waiting for their JDSU and CMGI stock to hit $300 again, then they can buy any house they want. It IS different this time, dammit! ;) Folks are just waiting for their JDSU and CMGI stock to hit $300 again, then they can buy any house they want. It IS different this time, dammit! ;)

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-782 Anonymous Sat, 12 Aug 2006 02:48:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-782 But don't you know that it's different now...;-) But don’t you know that it’s different now…;-)

]]> By: Anonymous http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html/comment-page-1#comment-783 Anonymous Sat, 12 Aug 2006 00:41:00 +0000 http://www.socalbubble.com/2006/08/mountains-of-debt-housing-bubble-goes.html#comment-783 When people making $45K a year can't afford a $200K home in Ohio, how can the average family in SoCal making $55K afford a $650K home? (That is if you can find one for $650K that will fit a family of four.) <BR/><BR/>Interest only loans, 40 year payment plans, and other schemes can't last forever. <BR/><BR/>I guess I should be getting a huge raise this year? According to the bubble my salary should be 3 times what it was in 1996. I need to ask for a huge raise. When people making $45K a year can’t afford a $200K home in Ohio, how can the average family in SoCal making $55K afford a $650K home? (That is if you can find one for $650K that will fit a family of four.)

Interest only loans, 40 year payment plans, and other schemes can’t last forever.

I guess I should be getting a huge raise this year? According to the bubble my salary should be 3 times what it was in 1996. I need to ask for a huge raise.

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