Bubble Meter Blog is temporarily in lockdown mode as someone(s) is posting dozens and dozens of obscene comments. Lockdown mode means that most of the recent posts are no longer accepting comments. I may have to change comment mode to where I have to approve all comments. Any suggestions would be appreciated
Blog Rules: In order to create a more perfect blog, these are the rules that will be followed. Additional rules may be added as necessary.
1) I shall be the final decision maker as to what comments are acceptable on this blog.
2) Any personal insults directed at me or commentators on this site will be deleted. Calling me or others 'stupid', 'moron', 'pathetic' is NOT allowed. Ad Hominem attacks are not allowed against me or commentators. [However, one can call a particular comment 'pathetic', 'moronic' etc if they give a reason.]
3) Any comment that is entirely unrelated to the post is highly likely to be deleted. [If the post is about foreclosures and you comment about conditions in the Chinese prison system].
4) Any comment which uses foul language such as 'f*ck', 'sh*t' or is obscene is highly likely to be deleted.
5) Commentators often ask for more evidence when I post. This is acceptable. Please bear in mind that I have a full time job and can't answer everyone's questions or requests. Attacks against me for not responding to a question or comment are prohibited.
6) Statements that clearly are false will be deleted. [China has less land mass then Singapore. Or everyone in China is wealthy.]
7) If there are any questions regarding blog rules please email me at bubblemeter@gmail.com.
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You may want to move to WordPress. It allows better control over filtering. You may also want to allow some trusted commentators to patrol the blog.
ReplyDeleteKeep up the great work. With prices dropping, you'll have even more haters.
ReplyDeleteAs the crash comes to a head, the trolls will appear. There worried and have good reason to be. The housing market is tanking.
ReplyDeleteDavid,
ReplyDeleteHere's a good story in this morning's Post that merits posting to your blog. It goes to the heart of the argument as to why Washington real estate is no more bubblilicious than Chicago's ... probably far less so:
D.C. Suburbs Top List Of Richest Counties
Nationwide Data on Health Coverage Bleak
By Amy Goldstein and Dan Keating
Washington Post Staff Writers
Wednesday, August 30, 2006; Page A01
www.washingtonpost.com/wp-dyn/content/article/2006/08/29/AR2006082901543.html
David, why are you so senstive about your mom's smelly pussy? You must be stuck with an i/o arm mortgage.
ReplyDeleteSpontaneity is good. Blogs where it takes hours or days for a comment to appear aren’t very interesting, especially where timeliness is important to the topic: they become more like letters to the editor than blogs. Is there something similar to a spam filter you could use?
ReplyDeleteThere’s an article in today’s WaPo about a builder in PG County that’s offering a “low price guarantee” to new purchasers that may merit discussion, too; his marketing people say they’re making the offer because this is the bottom of the market...
I second the opinion that you limit comments only to those willing to assign an identity to their comments.
ReplyDeleteI did it myself just a few weeks ago and it only takes about one minute.
This might not totally rid your blog of the annoying, vulgar posts but it would certainly make it more difficult. Also I really think you would cut down on the unfounded personal attacks.
It's ashame that it has to come to this but I don't think there is any choice. Some of the comments have been getting very bad and very personal.
ReplyDeleteIt's really annoying and time consuming trying to deal with Blogger.com's comment moderation tool.
ReplyDeleteThe only upside: no Espam crap from XXX rated site spiders.
Also annoying as hell (to me, at least): word verification for those of us with actual identities. GGGRRR!
I think the root of the problem is david's mom's hygiene. I mean, gross!
ReplyDeleteYeah, she really is a stank ho.
ReplyDeleteJust ignore the comments. Obviously this is personal and has little to do with the RE market.
ReplyDeleteIt's best simply not to take the bait.
"Just ignore the comments. Obviously this is personal and has little to do with the RE market.
ReplyDeleteIt's best simply not to take the bait."
The problem is that there are certain jerks that flood the post with multiple versions of their stupid comments. Also seeing filthy comments deters people from viewing the post. These jerks must be blocked! It's like selling 250K studios and some jerk writes graffiti on the walls and the developer does not erase them. Any one who is crazy enough to buy these bubblicous condos would walk away from the one with graffiti.
IMHO, 'anything goes' comments lead to the lowest common denominator. Not worth reading. I much prefer wandering through a garden that has been properly weeded and maintained.
ReplyDeleteI think David does absolutely great work in his posts, but his comments are too often filled with garbage.
David,
ReplyDeleteDon't allow anonymous posts. Even those who post anonymously with valid and interesting arguments are annoying to follow because another interjected anonymous comment muddies the dialogue.
This has been a consistent request by many regular contributors here. Do you have a particular reason why you do not choose to block anonymous posters?
Thank you,
My $0.02.
"Do you have a particular reason why you do not choose to block anonymous posters?"
ReplyDeleteSometimes they have intelligent things to say.
David,
ReplyDeleteIf they have something intelligent to say doing the "Other" option (which I do) isn't hugely burdensome. It's exactly one extra field of entry. Lose the Anon, leave the other two, and if it still keeps up, then lose the "Other".
Oh, and Lance that article is really irrelivant. The numbers are _median_. We already all know that Loudon is chock full of people who can afford idiot McMansions, etc... But it's the Bill Gates fallacy all over again. You're in a room with a bunch of people who average out $60K a year. Bill Gates walks in. You're now in a room which averages out $1M a year.
ReplyDeleteDoesn't change much.
The problem for the housing market has little to do with the top end. It has a lot to do with whacked expectations on both buyer and seller side in the middle. Zero new units (and a lot of upgrades) targeted below "luxury", and twits who really couldn't afford "luxury" running up the I/O tab to squeeze in.
John,
ReplyDeleteYour Bill Gates example works is applicable when the discussion involves average income. It is not applicable when it involves median income as is the case here. When the median familiy income in Loudoun County is $98K, that means have the families have a lower income than that and half have a higher income than that. Bill Gates moving into Loudoun wouldn't change the number. He'd be just one more person earning more than the median income. So YES, this article -- and the federal dollars pouring into the region --- is relevant to house prices.
Interesting how the the census report evolved into a topic on its own.
ReplyDeleteThe report can be found here:
http://www.census.gov/prod/2006pubs/acs-02.pdf
A must read for investors. Also a perfect example of the importance of reading the primary source.
As an aside, the Post is a great newspaper, but that article should have been spiked. Even USA Today did a better job of interpreting the report.
"I don't know how one could spin that WaPost article negatively."
ReplyDelete(raises hand)
I can!!!
Despite being the single highest income county in the country and one of the fastest growing counties (if not the fastest growing) in the country, Loudoun county's median home prices are falling YoY.
(lowers hand)
How's that?
ghost said:
ReplyDelete"Despite being the single highest income county in the country and one of the fastest growing counties (if not the fastest growing) in the country, Loudoun county's median home prices are falling YoY.
(lowers hand)
How's that?"
It sounds like you are not familiar with the cyclical nature of real estate ... or with the nature of trends borne out of cycles?
John said:
ReplyDelete"Those folks aren't shopping for McMansions."
And I'm sure not every house in Loudoun is a McMansion. Besides, you're assuming that they are financing 100% of the house. 100% financing is the exception and not the rule ... Particularly when you are talking about a $750K house. This isn't a starter house, this is a "move-up" house. And most people moving up have equity from prior purchases that they can use as downpayments. But, either way, we are getting away from the gist of the article which is basically that there are a lot of people out there with money to burn. When they're not out buying a McMansion, they're out buying their 16 yr old a hummer or a caddie. I believe these census facts put things in better perspective.
john said:
ReplyDelete"But it really doesn't reflect reality. That's why you need to run numerous stats to get any real idea of the situation."
Agreed, we don't get the full picture. But we do know that at least half the families have an income greater than $98,000 per year. That is not an insignificant number of people with the bucks to buy the McMansions. And like tubboy pointed out, while the median income includes the older, probably-lower-earning residents who don't have to buy, the new McMansions would by and large be being purchased by the new wealth in the county who if the older residents weren't factored in, median income would be even higher than $98K. Take an average systems engineer and assume his/her spouse has a clerical job somewhere. Based on the systems engineer's salary alone, chances are that they are already well over that $98,000 figure. With a few years experience, the systems engineer alone would be at or above that median income figure. There's a reason why have so many computer engineering types from India and Asia are coming to the Washington area to ply their trades. And note that these clearance required jobs cannot be "off-shored".
Please moderate 9:39 out. The energy some people put into being awful never ceases to amaze me.
ReplyDeleteJohn said...
ReplyDelete"Sigh...again, folks anywhere near the median _can't afford the McMansions_."
I disagree, I'm near this median and I am able to afford more than the McMansion example. Because like most people, I was a "move up" ... (i.e., large down payment from last property's equity).
Why?
ReplyDeleteYour avatar, which is not only disgusting but about as stale as "all your base are belong to us".
Kudos on eliminating the anonymous posting option. Signing up for a blogspot account ain't all that bad.
ReplyDeleteLoudoun is kind of an interesting situation, due to its rapid population growth. If you go out to Sterling and Leesburg, you'll see that the older housing stock is rather 'modest', befitting a place that was mostly rural just 20 years ago or so. I would imagine that McMansions make up a much higher percentage of the available SFHs there than elsewhere in the region. And no, don't ask me for statistics.
Fairfax Co., on the other hand, is chock full of 'Beaver Cleaver' homes built between the '50s and '70s that are sitting on the market for upwards of $500k. Folks making anywhere near the median income there simply could not afford these homes under a responsible mortgage. I don't think that's a particularly crazy or controversial point, and I notice even the housing heads here are saying there is going to be a 'correction', arguing only as to the amount. It's one thing to say that Ward and June Cleaver will never get to the McMansion, but quite another to say that they should reasonably be priced out of a 1965 3/2 crackerbox.
chriso said:
ReplyDelete"Fairfax Co., on the other hand, is chock full of 'Beaver Cleaver' homes built between the '50s and '70s that are sitting on the market for upwards of $500k."
Again, you are forgetting that just about anyone who owned any property (house or condo)prior to the boom has enough earned equity to put down at least 50% on the purchase of these $500,000 homes. And it doesn't take a $98,000 median income (or anywhere near it) to afford a $250,000 mortgage.
John, You keep forgetting that we are not talking about "upper 10% of the population" affording homes in Loudoun County. We are talking about 1 in 2 families having more than enough income ($98,000/yr) to afford any of the $750K homes you are talking about provided they are putting down even a minimal down payment such as 20% ... And most people have that from their prior homes.
Before anyone gets too bent out of shape pro or con based on the Wash Post article, keep in mind the reporters were drawing conclusions about the suburban RE markets that aren't really supported by the report. Add in the graphs for DC and it's not pretty. Also, looking at 2004-2005 in isolation is almost useless. If you really want to see a disconnect, take MHI from 2000 forward, and match it with the the increase in housing prices.
ReplyDeleteWho knows, maybe DC will do better in a downturn because of all the gov't jobs & related industry. I wouldn't depend on that news story to prove it. BTW, both the WSJ and the NY Times had excellent stories about the census findings.
Again, you are forgetting that just about anyone who owned any property (house or condo)prior to the boom has enough earned equity to put down at least 50% on the purchase of these $500,000 homes. And it doesn't take a $98,000 median income (or anywhere near it) to afford a $250,000 mortgage.
ReplyDeleteSo why are so many of them sitting there unsold? By the way, who 'trades up' to a 1965 3/2 Fairfax crackerbox? That's a starter home in my book. But you do have a good point re higher-end homes, though of course folks seeking to trade up have to sell the old one, and that seems to be a problem, lately.
I mean, Lance, housing *is* going down in price all over this area and stuff ain't selling very well. There just isn't any controversy about that anymore. How far it goes is anybody's guess. In No. Va., purely based on current rental values, I'm going to guess around 50% in the exurbs, 30-40% in the Beltway burbs, and more like 20-30% in Arlington. But those are just guesses, I admit.
As for what happens in your DC neighborhood, Lance, I will defer to others who know DC better. I don't think "un-gentrification" is going to happen, though areas where the process is still in the early stages might get a bit dicey.
chriso asked:
ReplyDelete"who 'trades up' to a 1965 3/2 Fairfax crackerbox?"
People who don't want to sit in traffic all the way from Loudoun just so that they can have more square footage. People who are planning to tear down that '65 crackerbox and build a McMansion. People who have the dough to upgrade that crackerbox with all the best. You get the idea, in real estate it's location, location, location that determines price. And while in '65, that crackerbox may have been a far drive (for the time) away from the jobs downtown, today it is near jobs in Fairfax and (relatively) nearer job in downtown DC than places being built much further out. Everything changes, including neighborhoods.
I dunno, lots and lots of recent homebuyers in Loudoun, since so much of it is brand new. I bet there are a lot more I/O and option ARMs sitting out there than in other parts of the metro area. Probably a lot more worried speculators, as well.
ReplyDeleteBTW, if Lance's demographic-based counterargument ("neighborhoods change") to me were true, then rents would be mirroring housing prices in these supposedly now-hot inner suburbs. But they aren't. In adjusted dollars, I could rent all over N.Va. for the same or less as I could five years ago. Heck, I've seen houses available for only barely more in nominal dollars from back then, which was the last time I was in the rental market, and before the current bubble began in earnest.
originaldcer asked:
ReplyDelete"One could argue that if the homeowners can afford their homes they can also afford to spend he gas traveling to and from their jobs. Why are they selling?"
I can afford to go see a dentist at least a few times a month if I wanted to, that doesn't mean I want to. I.e., I don't see the point of your argument.
And why are people selling? Your implication here is that everybody is selling. I doubt that is the case. Even if inventories are high, that still doesn't amount to everybody selling. A year ago there weren't enough housese to go around. Now there are, and that is a good thing. My guess would be that a year ago you had flippers in the market who are now leaving since the exceptional shortterm profits aren't in the cards anymore AND you had longtime homeowners (such as retirees) holding out for prices to get even higher before bailing. Now they (along with the flippers) have their property on the market. One thing I wouldn't assume is that behind each for sale sign lies a story of someone who couldn't make their mortgage payment. I'd be those don't make up more than 1% of the houses for sale. Flippers in general have money. They go into this with the balls to lose money because they have the money to lose. I know a couple, and each of them had money in their own right an family money on top of it. And they made enough money flipping for a few years there, that even a loss here wouldn't really affect them. Retirees and other longterm homeowners selling now also aren't doing so out of distress. Most of these folks have lots of equity in their homes. They held out till the peak had passed, but they are still going to make money.
chriso said:
ReplyDelete"BTW, if Lance's demographic-based counterargument ("neighborhoods change") to me were true, then rents would be mirroring housing prices in these supposedly now-hot inner suburbs. But they aren't. In adjusted dollars, I could rent all over N.Va. for the same or less as I could five years ago. Heck, I've seen houses available for only barely more in nominal dollars from back then, which was the last time I was in the rental market, and before the current bubble began in earnest."
From what I've read, renters got a reprieve for the last 5 yrs or so simply because so many renters were becoming homeowners that there just wasn't the demand out there to rent. Expect all that to change now that (1) less renters are buying and, more importantly (2) building of new housing units is coming to a stop. Expect rents to soar to catch up with what you'd be paying if you were a homeowner. I've seen this happen before and I don't see a reason why this won't happen now. If I were a renter, I'd ask my landlord for a 5 year lease NOW!
originaldcer,
ReplyDelete2 to 3 years ... but that was then ... information moves a lot faster nowadays ... just look at craigslist ... the last time i rented out something on there i had it rented 3 hrs after i posted ... and had about 50 qualified inquiries ... next time i raise the rent and try to get fewer than 5 qualififed inquiries ...
Lance said...
ReplyDelete“It sounds like you are not familiar with the cyclical nature of real estate ... or with the nature of trends borne out of cycles?”
I think we’re quite familiar with the cyclical nature of real estate:
http://housingpanic.blogspot.com/2006/08/scary-bubble-chart-of-day.html
Robert said:
ReplyDelete"I think we’re quite familiar with the cyclical nature of real estate:
http://housingpanic.blogspot.com/2006/08/scary-bubble-chart-of-day.html"
Isn't this chart coming from that study you mentioned earlier. The concensus was that the study was fundamentally flawed because of a number of factors including that the value of living in the house (or renting it out) wasn't included. If you are basing your housing decisions on this one flawed study, you are doing yourself a great disservice.
There is a "consensus" that this study is "flawed"? Funny, I missed that one. So did the NY Times, which recently published the story without caveat, or Morgan Stanley's top analyst:
ReplyDeletehttp://www.morganstanley.com/GEFdata/digests/20060825-fri.html#anchor0
other stories with charts on the general subject:
http://www.nytimes.com/2006/08/24/business/24econ.html?ex=1314072000&en=efbd8bf0bd45367d&ei=5090&partner=rssuserland&emc=rss
(double-click graphic for extended chart)
also
http://bigpicture.typepad.com/photos/uncategorized/housing_hard_landing_1.gif
lex,
ReplyDeletefrom your last reference above:
"Most economists, including the Federal Reserve chairman, Ben S. Bernanke, still expect the slowdown to be orderly."
and THAT is the bottom line!
"Most economists, including the Federal Reserve chairman, Ben S. Bernanke, still expect the slowdown to be orderly."
ReplyDeleteFor those who actually read the articles linked and not someone's interpretation, the quote is from the 2nd link, and not the last. And I linked the story for the chart, which is relevant to the the overall issue of RE price/inventory since 2000.
As for the Chairman's quote (given in connection with the dog-and-pony show for benefit of Congress)he may well be right. However, his statement is not germane in any way to the validity of Shiller's methodology.
Okay, you don't like Shiller's study. Fine--I don't believe in accepting statistical summaries at face value either. And is alternative rent or ROI important in RE analysis? Of course. You may be surprised to hear that I believe that (generally) owning beats renting. But if there is a consensus that Shiller's methodology is wrong, I would like to know the makeup and basis of that consensus.
lex,
ReplyDeleteI believe it was Va_Investor who'd done a pretty good job of pointing out what was lacking. Perhaps she can repeat it for us?
VA_Investor at 1:30 PM
ReplyDeleteRe real returns, that is a fair point, although if I recall correctly from the chart and the text supporting the chart, Shiller was looking only at price movement (not ROI or rent-as-purchse substitute) and anomalous market behavior since 2000, which is a different question. If, however, for the sake of argument, we are only looking at price movement, I would still like to know if the pricing calculation is wrong and who challenged it. I am in a RE-related biz (not sales) & I am more than idly curious. I will reread the text when I have time.
BTW, back on the real return issue, I don't dispute the premise that pricing alone does not tell the whole story, but that may be the subject of another thread.
I just love the new spirit of civility here (tear in eye).
Lex,
ReplyDeleteIt's not the pricing calcs that are in question ... It's conclusion that is being drawn from the study by at least some bubbleheads (e.g., Robert.) You can't separate the return from the price where the question is "Is buying vs. renting more or less expensive over the long term." Would you ignore the cash dividends paid out by one stock over a hundred year period when comparing it to another stock where earnings were all retained (and no dividends paid)?
"It's not the pricing calcs that are in question ... It's conclusion that is being drawn from the study by at least some bubbleheads..."
ReplyDeleteOK, well, I looked at the chart again (I don't have the book handy) and it's strictly a price appreciation chart--I wouldn't try to draw any conclusion from it regarding the historical long-term rent vs. buy decision either, but that does not make it "flawed"; if so, then the HPI reports generated by the OFHEO are flawed. And if you want to use a stock market analogy, it wouldn't be stock picking but sector analysis.
Your complaint with Shiller is that he is attempting to answer a question that is different from the one you are asking.
lex said:
ReplyDelete"Your complaint with Shiller is that he is attempting to answer a question that is different from the one you are asking."
Thank you. With that, you have hopefully just put to rest Robert's recurrent use of Shiller's study to negate the value of owning real estate.
nomad said:
ReplyDelete"This is what I've seen, for the most part, when it comes to describing the flipper of today."
And I have little sympathy for someone betting the roof over his/her head. On the positive side, to whatever extent the flippers drove up the market, their exit will drive down the market. I just wouldn't estimate this to be the 30% 40% 50% I hear various bubbleheads expressing. I think it is closer to the 10% - 15% that we are already seeing for some properties in some locales. A good value is still a good value and we shouldn't expect much if any of the temporary price reductions to hit these properties. Just IMHO.
Lance said...
ReplyDeleteIt's not the pricing calcs that are in question ... It's conclusion that is being drawn from the study by at least some bubbleheads (e.g., Robert.) You can't separate the return from the price where the question is "Is buying vs. renting more or less expensive over the long term."
“Thank you. With that, you have hopefully just put to rest Robert's recurrent use of Shiller's study to negate the value of owning real estate.”
Ok Lance,
-the Yale economist Robert J. Shiller created an index of American housing prices going back to 1890. It is based on sale prices of standard existing houses, not new construction, to track the value of housing as an investment over time. It presents housing values in consistent terms over 116 years, factoring out the effects of inflation.
The 1890 benchmark is 100 on the chart. If a standard house sold in 1890 for $100,000 (inflation adjusted to today’s dollars), an equivalent standard house would have sold for $66,000 in 1920 (66 on the index scale) and $199,000 in 2006 (199 on the index scale, or 99 percent higher than 1890)-
And why would I post this link? Forget the buy vs rent argument; forget the “investment” theme, and it was certainly not to “negate the value of owning real estate”,it was in response to:
Lance said...
“It sounds like you are not familiar with the cyclical nature of real estate ... or with the nature of trends borne out of cycles?”
This is (only) one chart that shows the “cyclic nature” of real estate. Does it not Lance? If not, please provide data and/or a chart/link that shows this “soft landing” cyclic nature of real estate since 1890, or as far back as you dare go.
And please, I think it’s really about time you put your post where your mouth is and show some type of data, any kind. For goodness sake, look on the back of some captain crunch and post the ingredients. Anything that you deem necessary that indicates that housing can/will sustain current prices.
So, it looks like that obnoxious poster has managed to shut us down? David, check with Blogspot, they must have a means of dealing with this other than forcing you to verify each incoming post. And they, if not you with their help, should be able to trace where his/her posts are coming from ... and block that address. Good luck!
ReplyDelete