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Re: On the Housing Market

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  • dsummersminet@comcast.net
    ... From: David Hobby hobbyd@newpaltz.edu Date: Mon, 23 Feb 2009 00:08:53 -0500 To: brin-l@mccmedia.com Subject: Re: On the Housing Market ...
    Message 1 of 16 , Feb 23, 2009
      Original Message:
      -----------------
      From: David Hobby hobbyd@...
      Date: Mon, 23 Feb 2009 00:08:53 -0500
      To: brin-l@...
      Subject: Re: On the Housing Market


      Rceeberger wrote:
      >
      http://www.businessinsider.com/the-housing-chart-thats-worth-1000-words-2009
      -2
      >
      >
      > Housing prices may still have a ways to fall.

      Rob--

      >Wow. That's certainly what the chart shows.

      >Is it really that clear? If it were, you'd
      >think that enough investors would have bet
      >against the housing bubble that it never
      >would have happened.


      The bubble was that clear, particularly where housing prices skyrocketed up
      on the coasts, in NV, etc. There is no way that a doubling in price is
      anything but a bubble. But, the house I sold, I had to put in about $10k of
      upgrades and sold at about 10k over what I bought (in inflation ajdusted
      dollars), so the bubble isn't everywhere. But, we're now starting to drop
      in value as the market dries up.

      Houses are now much bigger than they were in the '50s, GDP per capita is
      much higher, etc. So, a rise in inflation adjusted home prices is not
      inherently inappropriate: one would not expect to pay the same price for a
      3000 sq. ft. house as for a 1500 sq. ft. house, especially if the 3000 sq.
      ft. house is much nicer. The rent vs. own question is still important.
      Right now, we're living in a 1350 sq. ft. apartment that costs more than
      our mortgage payments were on our 3000 sq. ft. house. Working it all out,
      if it wasn't for the value of getting our appreciation while we did and the
      relative ease of leaving an apartment when Teri got called, it would have
      been cheaper to stay in the big house, maintaince costs and all.

      Dan M.

      So, home prices could now be 10% overvalued.

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    • Nick Arnett
      On Mon, Feb 23, 2009 at 6:50 AM, dsummersminet@comcast.net
      Message 2 of 16 , Feb 23, 2009
        On Mon, Feb 23, 2009 at 6:50 AM, dsummersminet@... <dsummersminet@...> wrote:


        The bubble was that clear, particularly where housing prices skyrocketed up
        on the coasts, in NV, etc. There is no way that a doubling in price is
        anything but a bubble. 

        What's your definition of a bubble?  Artificially inflated prices (not related to supply and demand)?  A large price increase that is sure to correct?  It seems like a mushy term.

        I'm asking not to argue, but to get at what this really means.  There is no doubt, is there, that sometimes prices (of some things, at least) shoot up for legitimate reasons.  When we get a sharp rise followed by a sharp correction, we can point backwards and say "Bubble!"  But how do we know that a doubling in price is a bubble unless it is followed by a big correction?

        Wikipedia: An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, or a speculative mania) is "trade in high volumes at prices that are considerably at variance from intrinsic values".

        Has the real estate volume been high in recent years?  Or may that's not the right question - the volume of mortgages certainly has been high, but the price of mortgages hasn't shot up.

        "Intrinsic values" is a problematic term, since economic value is generally defined in terms of how much of one thing we're willing to give up for another.  Apparently people have been willing to give up a lot of money (or do I mean solvency?) for real estate lately.  Banks have been, at least.

        In the stock market, we talk about fundamentals and technical analysis.  It seems like fundamentals have been forgotten in the real estate market... such as the relationship between rents and valuations, which somebody here, as I recall, pointed out was a pretty good indicator that we were in a bubble.

        Nick
      • John Williams
        http://www.calculatedriskblog.com/2009/02/house-prices-real-prices-price-to-rent.html _______________________________________________
        Message 3 of 16 , Feb 24, 2009
        • Rceeberger
          ... Thanks John! Those were pretty much the kinds of arguments I was seeing in 2006-2007 that made me anticipate the bubble bursting. Do you see the correction
          Message 4 of 16 , Feb 24, 2009
            On 2/24/2009 1:05:34 PM, John Williams (jwilliams4200@...) wrote:
            > http://www.calculatedriskblog.com/2009/02/house-prices-real-prices-price-
            > to-rent.html
            >

            Thanks John!
            Those were pretty much the kinds of arguments I was seeing in 2006-2007 that
            made me anticipate the bubble bursting.
            Do you see the correction lasting 12 - 18 months or perhaps longer?


            xponent
            A Question Of Balance Maru
            rob


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          • Dan M
            ... I won t argue with the basic premise, because I saw it too...especially for the coasts, NV, etc, but I have found that it is more expensive to live in a
            Message 5 of 16 , Feb 24, 2009
              > Thanks John!
              > Those were pretty much the kinds of arguments I was seeing in 2006-2007
              > that
              > made me anticipate the bubble bursting.
              > Do you see the correction lasting 12 - 18 months or perhaps longer?


              I won't argue with the basic premise, because I saw it too...especially for
              the coasts, NV, etc, but I have found that it is more expensive to live in a
              1350 sq. foot apartment that's not as nice as my house than it would be if I
              bought my old 2950 sq. foot house at the price I sold it, paid 20% down, and
              lost the interest on the down payment money. This figures in all the costs
              of maintenance, the but not the 400 sq. foot of storage for furniture and
              books and stuff that we are storing until we move to wherever Teri gets a
              call.

              On the whole, up on the north side of Houston, it's cheaper per sq. ft. per
              year to own than to rent. I think that's very unusual for the US, so I
              think Houston is just below the live because of expensive downtown
              rentals....if we weren't hoping to leave soon, it wouldn't make sense to
              rent.

              Dan M.



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            • John Williams
              On Tue, Feb 24, 2009 at 9:22 PM, Dan M ... Dallas seems to have had little, if any, real estate bubble. It has the lowest peak to current price decline (9%) of
              Message 6 of 16 , Feb 25, 2009
                On Tue, Feb 24, 2009 at 9:22 PM, Dan M

                > On the whole, up on the north side of Houston, it's cheaper per sq. ft. per
                > year to own than to rent.

                Dallas seems to have had little, if any, real estate bubble. It has
                the lowest peak to current price decline (9%) of any of the 20 cities
                tracked by the Case-Shiller index:

                http://www.calculatedriskblog.com/2009/02/case-shiller-house-prices-decline.html

                If Houston is similar to Dallas, then it probably does not make sense
                to talk about a bubble in Houston. Nevertheless, it would have been
                more interesting to make your price to rent comparison a few years
                ago. As you can see in the link I posted previously, the price to rent
                ratios in the country as a whole have come down a lot recently, making
                the buy or rent decision closer. The ratios appear to still be
                somewhat elevated, but only by perhaps 10 or 20% above a long-run
                trend.

                I took a look at realtor.com for Houston (although I am not familiar
                with the area) and it looks like a typical single family home, about
                2000 sq ft, rents for about $1000 per month. A similar home costs
                about $120K, so a 30 yr 6% mortgage with 20% down would be around
                $600/mo. So anyone looking to live in the area I was browsing, for
                more than a year or two, would probably want to buy. Especially
                considering the government's ill-conceived tax credit for first-time
                buyers this year (heads up to anyone interested: it ends Dec 1, 2009
                not December 31).

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              • Rceeberger
                ... Sure, those areas were what tipped me off that something was up, though to be honest, I anticipated the bubble bursting only in the highly priced areas
                Message 7 of 16 , Feb 25, 2009
                  On 2/24/2009 11:22:40 PM, Dan M (dsummersminet@...) wrote:
                  > > Thanks John!
                  > > Those were pretty much the kinds of arguments I was seeing in 2006-2007
                  > > that
                  > > made me anticipate the bubble bursting.
                  > > Do you see the correction lasting 12 - 18 months or perhaps longer?
                  >
                  >
                  > I
                  > won't argue with the basic premise, because I saw it too...especially for
                  > the coasts, NV, etc,

                  Sure, those areas were what tipped me off that something was up, though to
                  be honest, I anticipated the bubble bursting only in the highly priced areas
                  with the rest of the country riding it out mostly unmolested. I saw the loan
                  problems as being a parallel situation and never expected such a dramatic
                  implosion.


                  >but I have found that it is more expensive to live in a
                  > 1350 sq. foot apartment that's
                  > not as nice as my house than it would be if I
                  > bought my old 2950 sq. foot house at the price I sold it, paid 20% down,
                  > and
                  > lost the interest on the down payment money. This figures in all the
                  > costs
                  > of maintenance, the but not the 400 sq. foot of storage for furniture
                  > and
                  > books and stuff that we are storing until we move to wherever Teri gets a
                  > call.

                  Down on the far south side of town, also on the pricey side of real estate,
                  1000 sq ft runs $800 - $1000 depending on how nice the appointments are. Of
                  course there is a price level above and one below, depending on ones income
                  bracket.


                  >
                  > On the whole, up on the north side of Houston,
                  > it's cheaper per sq. ft. per
                  > year to own than to rent. I think that's
                  > very unusual for the US, so I
                  > think Houston is just below the live because of expensive downtown
                  > rentals....if we weren't hoping to leave soon, it wouldn't make sense to
                  > rent.
                  >
                  Right now houses in Clear Lake are quite inexpensive. Prices are way down
                  from 2005 levels. 10 - 20 percent in many cases. When I was first
                  recognizing the bubble, I noticed a lot of billboards advertizing homes in
                  the 400-500K range and I wondered who in the hell were buying these homes. I
                  still have no idea.

                  For John, one of the better real estate sites I visit is HAR.com


                  xponent
                  Da Moneez Maru
                  rob


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                • David Brin
                  I m testing by replying once with Re: in the subject line and once without. If only the Re: comes to me, then we have a PARTIAL version of the old method,
                  Message 8 of 16 , Feb 25, 2009
                    I'm testing by replying once with "Re: in the subject line and once without.

                    If only the "Re:" comes to me, then we have a PARTIAL version of the old method, and I'll ask that folks remove "Re:" unless they seriously want my attention.  (The old "Re: Brin:" was better)

                    If I get both, then another solution is needed.

                    thrive all!

                    d


                    From: Rceeberger <rceeberger@...>
                    To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                    Sent: Wednesday, February 25, 2009 6:25:30 PM
                    Subject: RE: On the Housing Market


                    On 2/24/2009 11:22:40 PM, Dan M (dsummersminet@...) wrote:
                    > > Thanks John!
                    > > Those were pretty much the kinds of arguments I was seeing in 2006-2007
                    > > that
                    > > made me anticipate the bubble bursting.
                    > > Do you see the correction lasting 12 - 18 months or perhaps longer?
                    >
                    >
                    > I
                    > won't argue with the basic premise, because I saw it too...especially for
                    > the coasts, NV, etc,

                    Sure, those areas were what tipped me off that something was up, though to be honest, I anticipated the bubble bursting only in the highly priced areas with the rest of the country riding it out mostly unmolested. I saw the loan problems as being a parallel situation and never expected such a dramatic implosion.


                    > but I have found that it is more expensive to live in a
                    > 1350 sq. foot apartment that's
                    > not as nice as my house than it would be if I
                    > bought my old 2950 sq. foot house at the price I sold it, paid 20% down,
                    > and
                    > lost the interest on the down payment money.  This figures in all the
                    > costs
                    > of maintenance, the but not the 400 sq. foot of storage for furniture
                    > and
                    > books and stuff that we are storing until we move to wherever Teri gets a
                    > call.

                    Down on the far south side of town, also on the pricey side of real estate, 1000 sq ft runs $800 - $1000 depending on how nice the appointments are.  Of course there is a price level above and one below, depending on ones income bracket.


                    >
                    > On the whole, up on the north side of Houston,
                    > it's cheaper per sq. ft. per
                    > year to own than to rent.  I think that's
                    > very unusual for the US, so I
                    > think Houston is just below the live because of expensive downtown
                    > rentals....if we weren't hoping to leave soon, it wouldn't make sense to
                    > rent.
                    >
                    Right now houses in Clear Lake are quite inexpensive. Prices are way down from 2005 levels. 10 - 20 percent in many cases. When I was first recognizing the bubble, I noticed a lot of billboards advertizing homes in the 400-500K range and I wondered who in the hell were buying these homes. I still have no idea.

                    For John, one of the better real estate sites I visit is HAR.com


                    xponent
                    Da Moneez Maru
                    rob

                    _______________________________________________
                    http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com

                  • David Brin
                    Testing without Re: ________________________________ From: Rceeberger To: Killer Bs (David Brin et al) Discussion
                    Message 9 of 16 , Feb 25, 2009
                      Testing without "Re:"


                      From: Rceeberger <rceeberger@...>
                      To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                      Sent: Wednesday, February 25, 2009 6:25:30 PM
                      Subject: RE: On the Housing Market


                      On 2/24/2009 11:22:40 PM, Dan M (dsummersminet@...) wrote:
                      > > Thanks John!
                      > > Those were pretty much the kinds of arguments I was seeing in 2006-2007
                      > > that
                      > > made me anticipate the bubble bursting.
                      > > Do you see the correction lasting 12 - 18 months or perhaps longer?
                      >
                      >
                      > I
                      > won't argue with the basic premise, because I saw it too...especially for
                      > the coasts, NV, etc,

                      Sure, those areas were what tipped me off that something was up, though to be honest, I anticipated the bubble bursting only in the highly priced areas with the rest of the country riding it out mostly unmolested. I saw the loan problems as being a parallel situation and never expected such a dramatic implosion.


                      > but I have found that it is more expensive to live in a
                      > 1350 sq. foot apartment that's
                      > not as nice as my house than it would be if I
                      > bought my old 2950 sq. foot house at the price I sold it, paid 20% down,
                      > and
                      > lost the interest on the down payment money.  This figures in all the
                      > costs
                      > of maintenance, the but not the 400 sq. foot of storage for furniture
                      > and
                      > books and stuff that we are storing until we move to wherever Teri gets a
                      > call.

                      Down on the far south side of town, also on the pricey side of real estate, 1000 sq ft runs $800 - $1000 depending on how nice the appointments are.  Of course there is a price level above and one below, depending on ones income bracket.


                      >
                      > On the whole, up on the north side of Houston,
                      > it's cheaper per sq. ft. per
                      > year to own than to rent.  I think that's
                      > very unusual for the US, so I
                      > think Houston is just below the live because of expensive downtown
                      > rentals....if we weren't hoping to leave soon, it wouldn't make sense to
                      > rent.
                      >
                      Right now houses in Clear Lake are quite inexpensive. Prices are way down from 2005 levels. 10 - 20 percent in many cases. When I was first recognizing the bubble, I noticed a lot of billboards advertizing homes in the 400-500K range and I wondered who in the hell were buying these homes. I still have no idea.

                      For John, one of the better real estate sites I visit is HAR.com


                      xponent
                      Da Moneez Maru
                      rob

                      _______________________________________________
                      http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com

                    • David Brin
                      Alas, both versions came through. Nick, have we run out of solutions here? david ________________________________ From: David Brin To:
                      Message 10 of 16 , Feb 25, 2009
                        Alas, both versions came through.  Nick, have we run out of solutions here?
                        david


                        From: David Brin <dbrin@...>
                        To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                        Sent: Wednesday, February 25, 2009 7:58:46 PM
                        Subject: On the Housing Market

                        Testing without "Re:"


                        From: Rceeberger <rceeberger@...>
                        To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                        Sent: Wednesday, February 25, 2009 6:25:30 PM
                        Subject: RE: On the Housing Market


                        On 2/24/2009 11:22:40 PM, Dan M (dsummersminet@...) wrote:
                        > > Thanks John!
                        > > Those were pretty much the kinds of arguments I was seeing in 2006-2007
                        > > that
                        > > made me anticipate the bubble bursting.
                        > > Do you see the correction lasting 12 - 18 months or perhaps longer?
                        >
                        >
                        > I
                        > won't argue with the basic premise, because I saw it too...especially for
                        > the coasts, NV, etc,

                        Sure, those areas were what tipped me off that something was up, though to be honest, I anticipated the bubble bursting only in the highly priced areas with the rest of the country riding it out mostly unmolested. I saw the loan problems as being a parallel situation and never expected such a dramatic implosion.


                        > but I have found that it is more expensive to live in a
                        > 1350 sq. foot apartment that's
                        > not as nice as my house than it would be if I
                        > bought my old 2950 sq. foot house at the price I sold it, paid 20% down,
                        > and
                        > lost the interest on the down payment money.  This figures in all the
                        > costs
                        > of maintenance, the but not the 400 sq. foot of storage for furniture
                        > and
                        > books and stuff that we are storing until we move to wherever Teri gets a
                        > call.

                        Down on the far south side of town, also on the pricey side of real estate, 1000 sq ft runs $800 - $1000 depending on how nice the appointments are.  Of course there is a price level above and one below, depending on ones income bracket.


                        >
                        > On the whole, up on the north side of Houston,
                        > it's cheaper per sq. ft. per
                        > year to own than to rent.  I think that's
                        > very unusual for the US, so I
                        > think Houston is just below the live because of expensive downtown
                        > rentals....if we weren't hoping to leave soon, it wouldn't make sense to
                        > rent.
                        >
                        Right now houses in Clear Lake are quite inexpensive. Prices are way down from 2005 levels. 10 - 20 percent in many cases. When I was first recognizing the bubble, I noticed a lot of billboards advertizing homes in the 400-500K range and I wondered who in the hell were buying these homes. I still have no idea.

                        For John, one of the better real estate sites I visit is HAR.com


                        xponent
                        Da Moneez Maru
                        rob

                        _______________________________________________
                        http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com

                      • Medievalbk@aol.com
                        In a message dated 2/25/2009 9:00:34 P.M. US Mountain Standard Time, dbrin@sbcglobal.net writes: Alas, both versions came through. Nick, have we run out of
                        Message 11 of 16 , Feb 25, 2009
                          In a message dated 2/25/2009 9:00:34 P.M. US Mountain Standard Time, dbrin@... writes:
                          Alas, both versions came through.  Nick, have we run out of solutions here?
                          david
                          ...with no Re grets?
                           
                          What is a gret anyway?


                          A Good Credit Score is 700 or Above. See yours in just 2 easy steps!
                        • Alberto Monteiro
                          ... May I offer a suggestion? * Set the standard David Brin account to receive no mails * Create (someone else could do it) a dummy account, like
                          Message 12 of 16 , Feb 26, 2009
                            David Brin complained:
                            >
                            > Alas, both versions came through.  Nick, have we run out of
                            > solutions here?
                            >
                            May I offer a suggestion?

                            * Set the standard David Brin account to receive no mails

                            * Create (someone else could do it) a dummy account, like
                            david.brin.kiln@somewhere, run by a 'bot, and subscribe it
                            to the list

                            * The 'bot has the primary purpose of forwarding to the standard David
                            Brin account every message whose subject includes the string "Brin:"

                            * The 'bot has the secondary purpose of forwarding to the list every
                            message it receives from the main David Brin account

                            Alberto Monteiro


                            _______________________________________________
                            http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
                          • David Brin
                            I have to agree with Alberto. Some other solution is needed, since I am getting all subject lines, all the time... ________________________________ From:
                            Message 13 of 16 , Feb 26, 2009
                              I have to agree with Alberto.  Some other solution is needed, since I am getting all subject lines, all the time...


                              From: Alberto Monteiro <albmont@...>
                              To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                              Sent: Thursday, February 26, 2009 9:47:57 AM
                              Subject: Problem with (and, specially, without) Brin: [was: On the Housing Market]

                              David Brin complained:
                              >
                              > Alas, both versions came through.  Nick, have we run out of
                              > solutions here?
                              >
                              May I offer a suggestion?

                              * Set the standard David Brin account to receive no mails

                              * Create (someone else could do it) a dummy account, like
                                david.brin.kiln@somewhere, run by a 'bot, and subscribe it
                                to the list

                              * The 'bot has the primary purpose of forwarding to the standard David
                                Brin account every message whose subject includes the string "Brin:"

                              * The 'bot has the secondary purpose of forwarding to the list every
                                message it receives from the main David Brin account

                              Alberto Monteiro


                              _______________________________________________
                              http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com

                            • Nick Arnett
                              And you re getting this at the email address below? That s what shows up in the headers as the actual address to which the email was sent? I m really sorry
                              Message 14 of 16 , Feb 26, 2009
                                And you're getting this at the email address below?  That's what shows up in the headers as the actual address to which the email was sent?

                                I'm really sorry about this... it was working perfectly before the move and I can't see any reason it shouldn't now.

                                On the other hand, if you don't reply to this message, I'll know that Julia figured it out.

                                Nick

                                2009/2/26 David Brin <dbrin@...>
                                I have to agree with Alberto.  Some other solution is needed, since I am getting all subject lines, all the time...


                                From: Alberto Monteiro <albmont@...>
                                To: Killer Bs (David Brin et al) Discussion <brin-l@...>
                                Sent: Thursday, February 26, 2009 9:47:57 AM
                                Subject: Problem with (and, specially, without) Brin: [was: On the Housing Market]

                                David Brin complained:
                                >
                                > Alas, both versions came through.  Nick, have we run out of
                                > solutions here?
                                >
                                May I offer a suggestion?

                                * Set the standard David Brin account to receive no mails

                                * Create (someone else could do it) a dummy account, like
                                  david.brin.kiln@somewhere, run by a 'bot, and subscribe it
                                  to the list

                                * The 'bot has the primary purpose of forwarding to the standard David
                                  Brin account every message whose subject includes the string "Brin:"

                                * The 'bot has the secondary purpose of forwarding to the list every
                                  message it receives from the main David Brin account

                                Alberto Monteiro


                                _______________________________________________
                                http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com


                                _______________________________________________
                                http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com



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