May052016
Build more houses in California? Yes! in my back yard!
In a bold statement against local development opposition groups, a new movement touts the positive aspects of providing new housing for the next generation.
Local community opposition groups, also known as Nimbys, are a potent force in California politics. Overcoming nymbyism requires local politicians to stand up to emotional and vociferous constituents and approve projects for the greater public good. Often such a move is political suicide, so politicians take the easy way out and give in to nimby demands.
A classic example of rampant nymbyism is the local opposition to affordable housing in Huntington Beach, California. In order to comply with State law, the City of Huntington Beach is required to provide affordable housing. Residents of the city strongly object allowing the riff-raff into their neighborhoods, so they show up at city council meetings to voice their opposition. The City Council caved in to nimby demands only to be strongly rebuked by a Superior Court judge who ordered them to comply with State law.
With the political system corrupted by nimbys, the courts take more aggressive action. But does it really need to be that way? Is it possible to educate nimbys and change hearts and minds?
It’s an uphill battle, but some activists are up to the challenge.
In Cramped and Costly Bay Area, Cries to Build, Baby, Build
An activist who calls her group BARF is pushing for more housing, pitting cranky homeowners and the political establishment against newcomers who want the region to make room for them, too.
By CONOR DOUGHERTY, APRIL 16, 2016
San Francisco does not have enough places to live. Sonja Trauss, a local activist, thinks the city should tackle this problem by building more housing.
Across the country, a reversal in urban flight has ignited debates over gentrification, wealth, generational change and the definition of the modern city. It’s a familiar battle in suburbs, where not-in-my-backyard homeowners are an American archetype.
(See: Everyone in California wants to be the last new resident in their neighborhood)
In San Francisco, though, things get weird. Here the tech boom is clashing with tough development laws and resentment from established residents who want to choke off growth to prevent further change.
Ms. Trauss is the result: a new generation of activist whose pro-market bent is the opposite of the San Francisco stereotypes — the lefties, the aging hippies and tolerance all around.
Ms. Trauss’s cause, more or less, is to make life easier for real estate developers by rolling back zoning regulations and environmental rules.
That’s not an accurate depiction. We don’t need to roll back any laws to allow more development: we must change our hearts and minds about providing new housing. If people lobbied city councils and county governments for more houses rather than no houses, decision makers would approve more projects. Zoning and environmental laws are not as much of a barrier as local politicians.
Her opponents are a generally older group of progressives who worry that an influx of corporate techies is turning a city that nurtured the Beat Generation into a gilded resort for the rich.
Those groups oppose almost every new development except those reserved for subsidized affordable housing.
Existing homeowners feel a little guilty for the way their exclusionary policies crowd out their neighbors, co-workers, and children, so they support affordable housing policies that are as effective as fighting a forest fire with a garden hose. These owners feel Progressive and enlightened despite their obvious hypocrisy.
But for many young professionals who are too rich to qualify for affordable housing, but not rich enough to afford $5,000-a-month rents, this is the problem.
Adding to the strangeness is that the typical San Francisco progressive and the typical mid-20s-to-early-30s member of Ms. Trauss’s group are likely to have identical positions on every liberal touchstone, like same-sex marriage and climate change, and yet they have become bitter enemies on one very big issue: housing.
What’s really strange is that well-educated progressives don’t recognize the hypocrisy of their stand on housing. Opposing new development and trying to maintain an unjust status quo is a behavior they typically accuse Conservatives of engaging in.
You hypocrite! First take the beam out of your own eye, and then you will see clearly to remove the speck from your brother’s eye. Mathew 7:5
YIMBY Groups Are Organizing Across the US to Make Cities Build More Housing
We know that the housing crises facing big American cities right now can be solved by building more housing. And we also know that for years, the construction of this new housing has been prevented by NIMBY groups—you know, those who say “Not In My Backyard.” Now YIMBY groups—yep, “Yes In My Backyard”—are organizing to counteract decades of NIMBY damage.
California needs a grass-roots movement like this to turn the tide. The selfish interests of local nimbys is difficult to overcome. Unless their minds can be opened to the greater good that results from more housing units, they will continue to lobby for their narrow self interest at the expense of the next generation.
Last weekend the New York Times profiled Sonja Trauss, the voice behind the Twitter account @SFyimby, who also heads the advocacy group BARF (that’s Bay Area Renters’ Federation), and spends her days testifying at City Hall in favor of projects that would add more housing stock to the city. Her cause has been embraced by tech leaders, and bashed by those who don’t want to see more development (I guess you might call them NIMBYs):
Today Ms. Trauss’s group is one of several pro-housing organizations (GrowSF and East Bay Forward are others) that represent a kind of “Yimby” party, built on the frustrations of young professionals who feel priced out of the Bay Area. BARF has won the backing of technology millionaires — Jeremy Stoppelman, co-founder and chief executive of Yelp, is the group’s largest individual donor — and the encouragement of local politicians.
She would also find friends at the building industry association. Because I have a long association with the building industry, some want to label me as advocating for self-serving reasons. I am not an industry shill. I strongly believe that more housing that’s more affordable is better for everyone in California.
San Francisco might be experiencing the most painful housing crunch, but Trauss is not alone in her campaign: In almost every major US city there is now a group organized behind the YIMBY label. … Even smaller cities like Santa Monica, nestled in a corner of Los Angeles, has a @SaMoYIMBY group that exclaims, “We ain’t afraid of no growth.”
YIMBY groups are benefiting from the negative perception of the term NIMBY, but also because of their unified cause. … YIMBY organizations … have quickly united around the singular issue of more housing—and an explosion of national media coverage highlighting their shared mission.
Nimby should have a negative perception, despite public relations to the contrary. One retired professor in San Diego actually declared that those who fight developers are heroes. She feels no shame for her efforts to deny homeownership to the next generation of Californians.
We owe it to our children
Where are our children supposed to live? If every new homeowner opposes new construction, and if all new construction stops, future generations of Californians will need to wait for a previous generation to die or move out of state before a home is available. Most young people won’t be willing or able to wait until then, and they will move away, never to return. Those lucky few that do find a place to live will pay so much for the privilege that they won’t have money left over to live a life.
Is this what we really want for our children?
Do we want to raise our children in a closed society where only the landed gentry live and transient renters survive?
Is making a few pennies more on home price appreciation worth the price paid by future generations?
We owe our children something better.
[listing mls=”OC16082517″]
Speaking of conclusory opinions devoid of any analysis, delivered in a rambling incomplete sentence fashion:
Donald Trump: This is why I’m for low interest rates
http://www.cnbc.com/2016/05/05/donald-trump-a-chance-ill-pick-a-vp-from-field-of-former-gop-candidates.html
The question isn’t whether we will continue to have low interest rates…
The question is how low will they get
Any possible rate hikes will be minimal. They don’t have any endgame where rates are higher.
If they do go higher the whole thing collapses.
“…If they do go higher the whole thing collapses…”
So whats there not to like?
The only endgame that supports higher rates also includes much higher incomes. Given the weak wage growth over the last decade, it looks like we are a long way from an extended period of above-average wage growth.
You’re right. Every change has to pencil out. If you add an extra interest cost, you have to add income or subtract some other expense. If you double the interest, then income better rise substantially. If not, then money rental rates will fall back in line with borrowers ability to pay.
That leads us back to low rates in perpetuity.
Is the helicopter money coming soon? I’m sure that would go over well.
Yes, if not in perpetuity, it will likely persist for much longer than everyone anticipates.
There’s also the line of reasoning arguing that QE caused oil exploration malinvestment resulting in a deflationary fall in consumer prices. So the helicopter drop might cause deflation to get worse, not better.
I totally agree with that line of thinking.
Trump appears to appreciate the FOMC’s moves and direction, yet wants to replace Yellen, and his sole argument is, “Because she’s not a Republican.” Great reason, eh? Most Republicans don’t consider Trump a Republican. Yet this is his litmus test for the FOMC chair.
It plays well to the base. For them, that reason is as good as any, and saying it also deflects the criticism the Trump isn’t a real Republican.
Do you notice how every time we try to understand and explain something Trump says, the result is an acknowledgment that it doesn’t make sense, but is effective political theater playing to his base populist support?
Right… Because none of the other 22 candidates running have said things that play well to their base of support.
Yes, I have noticed that. It’s been the hallmark of his campaign. His base is the least educated among us, and they really don’t care if his statements make sense — many of them don’t have the intellectual capacity to recognize whether or not it makes sense. They are reacting emotionally to someone telling them what they want to hear.
Have you ever bought something at a store that you didn’t need and probably didn’t even want because the saleswoman was charming and attractive? That’s the Trump appeal.
I think 95% of America doesn’t have the capacity to think critically about anything they hear…so there are those 5% or less of us on this board trying to actually make sense of stuff.
Agreed on why Trump has such broad appeal. Plays to the masses and they don’t know any different. If you think about it…Obama is/was the same way.
How do the avid Trump supporters square their enthusiasm for him, with their hatred for the FOMC, ZIRP, & QE? Supporting Trump doesn’t need to make sense, I guess…
You’re making broad, sweeping generalizations once again, something you regularly criticize Trump for doing. His base of support is so broad, that I doubt a majority have “hatred for the FOMC, ZIRP, & QE”.
The market will decide the ULTIMATE fate of interest rates, not Trump. Nor, the fed. Yes, the fed can print at will to defend low rates, but at some point, the money runs out of purchasing power.
Agreed, which begs the question, why is there so much hate for the FOMC?
They were instrumental in bailing out Wall Street which people haven’t forgotten.
It would be fun to attend a Trump rally, or poll primary Trump voters, and ask if they dislike the Fed, and why.
Yes. The common man sees the federal reserve as an extension of Wall Street — and it’s pretty hard to argue it isn’t.
I suspect it may have something to do with the following:
1) Their private banks get to create the principle out of NOTHING as debt, call it a loan, charge an accruable interest fee, and if the repayment terms of the purchase contract can’t be met, can legally seize the property attached to the principle … all based-on something intially created out of nothing.
2) Their profits are private. Their losses are public.
What percentage of FOMC haters actually understand fractional reserve banking?
3) Erode the purchasing power of the general population by creating runaway inflation through low interest rates.
Since the market and therefore the political climate is controlled by the Central Banks, you have a circular reference in your line of reasoning.
MARK CUBAN: Donald Trump will run a ‘Seinfeld campaign’
https://www.yahoo.com/finance/news/mark-cuban-donald-trump-going-145213141.html
Billionaire business mogul Mark Cuban told Fox News on Wednesday that Donald Trump was going to have to run “the Seinfeld campaign.”
“It’s going to be the campaign about nothing,” he told host Neil Cavuto, using a play on how the sitcom is often described.
Cuban said he did not know whether he would be voting for Trump, the presumptive Republican nominee, or Democratic frontrunner Hillary Clinton. But he said Trump’s near-certain nomination was proof of how “tribal” the nation had become.
“I don’t even think we’re partisan anymore,” he said. “I think we’re tribal, and Donald’s got that ‘What about me?’ tribe behind him.”
Cuban thinks Trump has a shot at winning the election, he said, because he identified a formula early in the campaign that has already proved successful.
“Donald recognized early on that it’s not about issues at all — a lot of people could care less,” Cuban said. “All they care about is, ‘What are you going to do for me?’ And Donald addressed immigration, he addressed trade, he addressed all these things. No substance whatsoever. But he said to people who were concerned about themselves: ‘I can fix it.'”
Cuban said last summer that he would consider being Trump’s vice president should the mogul ask him. But he told Cavuto that the best choice Trump could make would be an experienced politician, such as former House Speaker John Boehner.
“It’s going to be a Seinfeld campaign,” Cuban repeated. “The more Donald talks about issues, the more it plays into Hillary and the more the eyes of his ‘What about me?’ tribe glazes over. They don’t pay attention to it. He picked up on that early on, and that was brilliant of him.”
Trump’s foreign policy speech was actually very well done and I agree with 100% of what he had to say. Of course, it was criticized heavily by the neocons that still wish they ran the party, but that is to be expected. Many of them will probably flip to Hillary for the promise of new foreign wars under her Presidency.
Do you want more taxpayer money funneled into the military industrial complex?
That’s a false dichotomy that I don’t fall prey to. Military spending should be proportional to the level of need.
I think Trump will raise enthusiasm with Republicans by trashing Hillary Clinton. Donald Trump will wage the most negative campaign in history, and it will work. Hillary will try to be above the fray, and she will look weak.
Agreed. The Stop Trump financiers, on both the left and right, will wage an aggressive campaign using Trump’s words against him though. Clinton’s biggest problem is few people would stand in line for an hour-plus to vote for her (enthusiasm low). Whereas I can see long poll lines in deeply red states. However, only a few states matter.
The Real Heroes in San Diego Are Those Who Fight Developers
This isn’t about Finding Nemo or Finding Waldo. Nor is it about the Comic-Con Captain America costumers who visit our city every fall.
Seriously, I found the real Captain America hiding in plain sight in San Diego.
In Barrio Logan, Carmel Valley, Bay Park, Carlsbad, Escondido (Lilac Hills) and Mission Beach.
And they are getting stronger and smarter with each battle that pits neighborhoods vs. high-density infill projects designated “smart growth.”
The real revolutionaries, or disruptive “change agents,” this election year are mostly nameless, law-abiding, often invisible San Diegans who have taken on “the establishment” and are now “winning”—against all odds.
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It started in Barrio Logan. Industry vs. housing, and shipbuilders vs. the neighborhood.
In a close knit Hispanic community, the resistance fought to retain the character of their community against creeping zoning for industrialization. Unafraid of defeat, they fought back against the City Council and the shipyard industry—via a referendum—but lost.
However, during that fight, the locals learned “yuge” lessons. How to organize, shape the narrative, push the non-establishment press, raise funds, recruit volunteers, and rally behind a cause. In short, campaign.
They were the original Captain Americas who helped inspire the next battle in a what is fast becoming a protracted war.
Round 4: Carlsbad shopping center and open space vs. bigger shopping center and less open space.
Arguably the most impressive push back. Again, a fight over precious open space vs. a billionaire Los Angeles developer with plans for another shopping center and a housing development with beautiful renderings of promised hiking trails, shuttles and “robotics.”
The mayor and City Council unanimously approved the project. The citizens not only organized, strategized, raised funds, campaigned, forced a referendum and turned out the vote.
[The “funds” they raised came from the owners of the other local mall who funded the “no” campaign to eliminate a potential competitor.]
These resistance fighters are not two-dimensional comic book characters, but real live Captain America action figures. Stay tuned for the next issue.
So new industrial centers and shopping centers help the housing situation how? IR is so pro-developer he can’t keep his arguments straight anymore.
I am against people who oppose all development for the sake of opposing it. I don’t support all development, as there are certainly bad development proposals that should die, but I strongly disagree with people who oppose all development of any kind.
Judge orders Huntington Beach to open development for low-income housing
HUNTINGTON BEACH – Affordable housing advocates got a big win with an order by a Los Angeles Superior Court judge that the city “immediately comply” with a previous ruling that reinstated provisions for building 4,500 units of housing with potential sites for 410 low-income units.
In January, the Public Law Center, representing the Kennedy Commission, a nonprofit housing advocacy group, won a lawsuit that accused Huntington Beach of violating state law by changing its housing guidelines and eliminating low-income housing in a development plan for North Huntington Beach.
The city filed an appeal and asked for a stay of the ruling during the appeal process. On Friday, Judge Michael Stern denied that request and implemented a previously state-approved housing plan, primarily within the boundaries of the plan for Beach Boulevard and Edinger Avenue.
Sarah Gregory, attorney with the Public Law Center, said the ruling stops the city from delaying while dragging its case out through a lengthy appeal process.
“Basically the city found it politically convenient to take a position that didn’t comply with the law,” Gregory said. “What the court said is the city cannot evade or ignore the law because it’s popular (with voters).”
I can’t imagine why homeowners in Huntington Beach would oppose the ghetto redistribution plan. Proponents haven’t emphasized the benefits of inter-economic diversity, I guess.
Sure, rising crime rates will strain public services, but taxes will rise to compensate. So it all evens out. And it will be much easier to find your stolen tv – you’ll know right where to look.
If they want to require a certain number of new units, available to all, that would be different. Demand would set the price of the new supply and higher income residents would increase the tax base without increasing the demand for local services (as much).
If what is needed is more housing, does it matter if it’s high-income housing? If that’s what sells?
It seems like the low-income housing mandate is the 10s version of 70s era desegregation. It didn’t work then, and I don’t see it working now either. How do you think this law affects property values? Would you be willing to pay $2M for a 4000sf house in Compton? What if next year Compton moved next to your $2M house in Newport? Sometimes bad ideas have to be lived to truly appreciate how bad they are.
Exclusive neighborhoods, exclusive recovery
The analysis, based on data from Black Knight Financial Services, shows that nationally the housing recovery looks like a staircase, with the lowest average price growth in the lowest-value areas.
Between 2004 and the end of 2015, the average home price rose 21 percent in the most expensive Zip codes of major U.S. cities. The average home price in the rest — the bottom 90 percent of Zip codes — rose 13 percent.
The disparity shows how rising income inequality has fed higher wealth inequality, as high-income Americans earn still higher amounts of money, which they can then use to bid on homes. That, in turn, allows them to earn even higher returns than housing does for everyone else.
Indeed, research released this year suggests that the primary driver of higher housing prices in well-off neighborhoods is not bigger homes or renovations but simply people bidding against one another to live in those areas.
“People are paying more to be segregated, is the dark way of looking at it,” said David Albouy of the University of Illinois, who, along with the University of Michigan’s Mike Zabek, showed that inequality of housing values has reached its highest point since World War II. Home values at the high and low ends of the market are now further apart than they’ve ever seen over this time.
Albouy and Zabek worry that an increased concentration of very rich people into super-desirable neighborhoods could hamper the ability of children born poor or middle class to get ahead as adults.
“If there is less income mixing, perhaps that would lead to less equality of opportunity,” Albouy said. Neighborhood house bidding wars “are basically pushing the rungs of the ladder farther apart.”
My kids engage in plenty of “income mixing” with kids from lower socio-economic backgrounds. It’s called, our extended family.
How do your kids handle visits to South LA? Do they notice that things aren’t quite like Irvine?
They’re three and almost five. They don’t perceive these things just yet.
“Albouy and Zabek worry that an increased concentration of very rich people into super-desirable neighborhoods could hamper the ability of children born poor or middle class to get ahead as adults.”
So they’re concerned that the rich are having to pay too much for housing while poor and middle class housing is relatively affordable.
“Sorry Johnny, we can’t afford to send you to college because we aren’t overpaying for housing. If we were only in more debt, we would qualify for the federal loan subsidies. I know you were valedictorian of your class, but there are just too many struggling 3.0GPA 1%-ers struggling to make ends meet. We have to put others first.”
The Day the Republican Party Died
The establishment died, but the party is reborn
“We want to bring unity to the Republican Party,” Trump said. “We have to bring unity—it’s so much easier.” Politicians who had been “vicious” to him throughout the primary, he said, were now calling him asking to come on board.
But unity may not be so easily summoned. As Trump’s hostile takeover of the party drew to a close, many of its leaders, particularly members of the conservative intelligentsia, were in revolt. George Will had denounced “collaborationists” who sided with Trump, branding them “ineligible to participate in the party’s reconstruction.” David Brooks had proclaimed “a Joe McCarthy moment,” adding, “People will be judged by where they stood at this time.” They had stood athwart Trump’s nomination, yelling, “Stop!”—but the Republican voters had ignored them, and now they feared their party was lost.
Could it ever be regained? Many partisans surely would rally around the nominee like they always did, not seeing what was supposedly so world-historically terrible about Trump, or seeing his opponent as a greater evil. But to the anti-Trump faction, the GOP they cherished for decades as a vehicle for right-of-center ideas seemed to be no more. It was likely too late for a third-party candidate to swoop into the breach. With Trump’s nomination, the old party establishment went into exile, perhaps never to return. On Twitter, conservative operatives, writers, policy wonks and talk-show hosts gravely lined up to turn in their Republican registrations. “I am a fiscal conservative and I am a social conservative,” declared blogger Ben Howe. “That will not change. But I will not vote for an egomaniacal authoritarian.” The New York Daily News’s cover showed a red, white, and blue elephant in a casket.
Trump would lose the election—of that these writers were sure. But Trump, at his lectern in his lobby, surrounded by his highly polished family and a large group of men in suits, foresaw something else. He would “go after” Hillary Clinton. He would attack trade deals like the North American Free Trade Agreement. He would build up the military and take care of veterans and “bring back jobs” for everyone, including the Hispanics and African Americans. “Our theme is very simple: It’s Make America Great Again,” he said. “We will start winning again, and you will be so proud of this country.”
Who knows where the national Republican Party platform goes from here? At the state level, Republicans probably don’t need to change too much. As far as a national platform of ideology and priorities, it’s hard to see them pivoting much.
After the horrible 8 years of Bush’s presidency, and the two embarrassing campaign losses to Obama built on the same ideology, the Republican party needed a cleansing and that is why the voters nominated Trump.
Trump is certainly going to excise the long-standing ideologies that poisoned the Republican party. Either that, or he will make things worse, it’s difficult to tell at this point.
Let’s start with these poisonous memes:
Social Security is evil and broke.
The IRS is evil and we need to abolish it and nearly all taxes.
Obamacare is evil and must be repealed. Healthcare delivery in the US was perfect and much better before Obamacare.
I could go on and on…
The democratic memes:
All men are rapists
All whites are racists
All working class people are evil
The US Is fundamentally evil
I find it funny that a US white male capitalist raealtor writes this blog. He is pure evil to the leftists, and the first they would put into the left wing concentration camps. And because he hates fellow white male capitalists, I will help my enemies string him up.
Burn baby burn. More Mukskim immigrants!
Million-dollar home market slumps
The luxury home market may be losing some of its luster.
Average sales prices for homes listed at $1 million or more fell 1.1 percent in the first quarter compared with a year earlier, marking the biggest decline in more than two years, according to Redfin.
The decline at the top marks a stark contrast with the broader housing market, which continues to gain strength. The bottom 95 percent of the housing market saw prices jump 4.7 percent in the first quarter compared with a year ago.
Sales volume of homes priced at $1 million or more rose 4.9 percent — marking slower growth than the rest of the market, where sales volume grew 6 percent.
The weakness at the top of the housing market marks a big shift in the housing economy. After the financial crisis, luxury housing was the strongest segment of the market due to the strong recovery of the wealthy. Now, with stock markets more volatile, demand slowing from overseas buyers and a surging supply of high-priced homes, the top of the market is now among the weakest.
“For years, the high end was driving sales and price,” said Nela Richardson, chief economist at Redfin. “Now, the demand is at the middle and lower price range.”
She added that after 2009, the asset-rich benefited from rising values.
“There was so much stability in asset growth that the wealthy felt comfortable making a large purchase,” she said. “That stability is over.”
Do we have actual data for Irvine? The $1M+ market here doesn’t seem to be slumping as it is nationally.
$1 million plus is not luxury in Irvine!
Really, just the name Irvine does not evoke thoughts of luxury.
No joke. It’s a clean, well-planned city, and most importantly, both of our offices are located in Irvine.
More Americans Say Real Estate Is Best Long-Term Investment
Data shows strong recency bias
* 35% of Americans now say real estate is best long-term investment
* Stocks (22%) and gold (17%) fall further behind as top choice
* Age, income, education, gender all related to views of best investment
WASHINGTON, D.C. — Real estate, already Americans’ top pick as the “best long-term investment” for the last two years, has increased its lead over four other investment choices. Thirty-five percent of Americans now choose real estate, compared with 22% for stocks and mutual funds, 17% for gold, 15% for savings accounts/CDs and 7% for bonds.
Trend: Americans’ Choice of Best Long-Term Investment
http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/urrtbwi9wuimyjn7qw8lna.png
Real estate and gold have switched positions over the last five years as gold prices tumbled and home sales recovered from the 2007-2009 housing market collapse. In August 2011, 34% of Americans named gold as the best investment for the long term, compared with 19% for real estate.
In August 2011, 34% of Americans named gold as the best investment for the long term, compared with 19% for real estate.
———————————————
Result: gold went down, housing went up.
Today, 35% of Americans now say real estate is best long-term investment, gold 17%.
Result: over the next few yrs, expect RE to go down, gold to go up.
PS: I look forward to the comic relief provided by those in denial who attempt to turn this simple reality into rocket science mumbo-jumbo against it 😉
Keep buying gold. You’ll be rich someday. Why argue about it? I’d keep this great secret to myself and corner the gold market.
I saw Peter Schiff comment a few days ago that the 18% rise this year was just the beginning.
It must have been tough to hawk gold when prices declined steadily and deeply for five straight years.
The faux recovery is waning.
Time is on the gold bugs’ side. We can stay solvent longer than the market can stay irrational. The economic distortions are larger now after 8 years of ZIRP.
LOL, I knew I hadn’t “jumped the shark”. Just needed proof.
Cheers to ya, for that!
At this point in the interest rate cycle, the best long term bet might actually be cash.
Please explain your rationale. Thank you.
This poll is a great contrarian indicator. It’s loaded with recency bias, so the poll numbers reach peaks at the same time markets often do.
The seeds of the next housing crisis have been planted
Back when the 2005-07 housing bubble was brewing, photos of impossibly small houses selling for insanely high prices famously made the rounds. It was one of those signals that you look back on and say, “Hmmm … that was a clear indictor of trouble ahead.”
So in what feels like déjà vu, it’s worrying now to see a glorified “tool shed” on the market in New York for a cool $500,000. In Brooklyn, no less. Not even in Manhattan.
Here are some other troubling anecdotal signals on the housing market:
1. A major financial website recently ran a guide to the best cities to “flip” houses in. (I don’t want to encourage the behavior.) Real estate speculation via house “flipping” was another early sign of trouble ahead.
2. A few days later, news arrived that home prices in the Bronx had shot up by an astonishing 30% in the first quarter. Crazy advances in home values were, a decade ago, also a signal of trouble ahead.
3. Ads, then as now, were running on TV for “quick mortgages.”
All of these signals raise a serious question: Are we getting closer to another housing meltdown that will once again damage your investment portfolio?
To find out, I recently checked in with Stephen Oliner of the American Enterprise Institute the Ziman Center for Real Estate at UCLA, who tirelessly tracks the housing market for signs of trouble.
His take was not exactly encouraging. We’re actually a lot closer to potential housing-market problems than you might think. The reason? Easy credit is back.
The notion that you need to save a lot of money to buy a house is again being treated as so much “baloney,” said Oliner.
Ads for house flipping seminars are bombarding the airwaves and the internet lately. That’s how you know the dumb money is rushing in.
Ringleader of ‘largest mortgage modification scheme ever charged’ found guilty
A federal jury needed less than a half hour to convict the ringleader of what the Manhattan U.S. Attorney’s Office called the “largest mortgage modification scheme ever charged” on multiple charges stemming from a scheme that defrauded more than 30,000 struggling homeowners out of $31 million.
According to the offices of the Special Inspector General for the Troubled Asset Relief Program and the United States Attorney for the Southern District of New York, Dionysius Fiumano, also known simply as “D,” was found guilty Tuesday for leading a massive mortgage modification conspiracy that preyed on ten of thousands of homeowners.
Documents and evidence presented during Fiumano’s trial showed that he served as the general manager of sales at Vortex Financial Management, which was also known as Professional Marketing Group, and Professional Legal Network, an Irvine, California-based company that offered mortgage modification services.
As general manager, Fiumano oversaw PMG’s sales staff that included approximately 65 telemarketers and managers.
From approximately November 2011 through May 2014, Fiumano “perpetrated a scheme” to defraud homeowners that were struggling to pay their mortgages by falsely representing that PMG could obtain a mortgage modification through the government’s Home Affordable Modification Program.
“Through a series of false and fraudulent representations, Fiumano duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no mortgage modification service,” SIGTARP and the U.S. Attorney’s Office said in a statement. “In total, through their scheme, Fiumano and his co-conspirators obtained approximately $31 million from more than 30,000 victims.”
Speaking of fraudsters, is it just me, or is anyone else experiencing an increase in auto-dialer sales and fraudster calls to your mobile phone? This violates federal law, yet I’m receiving one every couple of days.
If you increase permissible density it will simply increase land values, which in turn will put upward pressure on housing prices. Developers are pesky critters who insist on this thing called profit. They look at what they have to pay for land and what it costs to build a dwelling and then tack on some sort of profit figure. If they can’t hit that they usually don’t build – at least the smart ones don’t. That may be a reason why so little new housing has built in So Cal in recent years. Developers can’t buy land for a price where it makes sense to build housing. Its also why so much rental housing is being built. You don’t need a down payment to rent, so its much easier to generate income off of rental housing.
I read this interesting blog post yesterday claiming that new development is stifled by Prop 13. The reason being that owners of vacant lots are not incentivized to sell by rising property taxes. This leads to a shortage of available, buildable lots for sale which drives the overall cost for developers way up.
http://kagansblog.com/2012/07/why-there-are-vacant-lots-in-los-angeles/
I’m not sure I buy into this theory, but it was something I hadn’t heard before.
A low tax basis makes it easier to hold out for a higher price in the future, but it does nothing to incentivize someone to use their land foolishly as the author suggests.