tag:blogger.com,1999:blog-13164186.post5660209059650698340..comments2024-01-27T19:26:32.604-05:00Comments on Bubble Meter: US Ecomomy Stalls; Headed for RecessionDavidhttp://www.blogger.com/profile/11169148764438565562noreply@blogger.comBlogger53125tag:blogger.com,1999:blog-13164186.post-65852177541276499892007-06-12T14:44:00.000-04:002007-06-12T14:44:00.000-04:00Here's some data about knowledge workers in the gr...<A HREF="http://www.greaterwashington.org/services/publications/human_capital/exec_sum.pdf" REL="nofollow">Here's some data</A> about knowledge workers in the greater Washington DC area. Legal service workers (probably including paralegals as well as lawyers) make up 1.17% of the total population. Of course you have to remember that the total population includes children. Legal service workers make up 6.3% of all <I>knowledge workers</I> in Greater Washington. Keep in mind that knowledge workers are only a portion of the overall workforce. Also, "there are 100,000 more people providing business and financial services than legal services in Greater Washington."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-44227797374823205952007-06-11T22:28:00.000-04:002007-06-11T22:28:00.000-04:00I still can't believe the guy who said there are "...I still can't believe the guy who said there are "about a thousand" big firm lawyers in DC.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-59301295427632088352007-06-11T18:07:00.000-04:002007-06-11T18:07:00.000-04:00Who cares how much lawyers make. Do you have any ...Who cares how much lawyers make. Do you have any idea what the median family income in the area is? Even though many people rent in the area, there are still not enough high salary jobs to carry the housing market at this time especially with lending requirements becoming stricter and stricter. There were many people buying with low initial payments with the expectation that they would simply be able to sell for a profit once the rates reset. The fact that mortgage rates are currently rising is not going to help prices either...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-59746050441183880022007-06-11T09:22:00.000-04:002007-06-11T09:22:00.000-04:00"I'm just not smart enough to figure it out."Quite..."I'm just not smart enough to figure it out."<BR/><BR/>Quite true, because we've gone over this on this site many times before, you you indeed are not smart enough to figure it out. I was trying to be nice and leave it out so as not to totally nail you housingheads because it gets so old, but here goes from MRIS:<BR/><BR/>NVAR: September 2005 sell/ask: 98.09%<BR/><BR/>May 2007 sell/ask: 95.59%<BR/><BR/>DC proper: September 2005 sell/ask: 98.52%<BR/><BR/>May 2007: 97.59%<BR/><BR/>So yep, the ratio of actual sales price to asks are down, which makes the numbers even more stark, which supports my point, which makes you, as you yourself said, "not smart enough to figure it out." Finally, you've said something true.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-71046041761248949992007-06-11T08:29:00.000-04:002007-06-11T08:29:00.000-04:00"Yeah, but they're not going to be able to singleh..."Yeah, but they're not going to be able to singlehandedly support the housing market. Thousands of lawyers can't support the prices of millions of houses. "<BR/><BR/>Right, they can't affect them at all. Oh, wait ...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-59020884224612444962007-06-11T06:52:00.000-04:002007-06-11T06:52:00.000-04:00"Yeah, but they're not going to be able to singleh..."Yeah, but they're not going to be able to singlehandedly support the housing market. Thousands of lawyers can't support the prices of millions of houses. "<BR/><BR/>No, no... don't you get it? In the future all the houses will be owned by lawyers.<BR/><BR/>Instead of each buying a single very expensive house they are all going to buy entire housing developments so they will have places to race their Porches against Saudi princes!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-86877395479934188672007-06-11T00:56:00.000-04:002007-06-11T00:56:00.000-04:00there are millions of privately owned signle famil...there are millions of privately owned signle family residences in the DC metro area?<BR/><BR/>ummm, no.<BR/><BR/>we are in the midst of a very predictable and expected correction of housing prices. why is any of this a big deal?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-67482713555244348562007-06-10T13:13:00.000-04:002007-06-10T13:13:00.000-04:00"So what? That doesn't change the fact that there ...<I>"So what? That doesn't change the fact that there are thousands upon thousands of lawyers in private practice in DC making a buttload of money."</I><BR/><BR/>Yeah, but they're not going to be able to singlehandedly support the housing market. Thousands of lawyers can't support the prices of millions of houses.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1000983569025715942007-06-08T22:59:00.000-04:002007-06-08T22:59:00.000-04:00"As we have established before, actual selling pri..."As we have established before, actual selling prices as a percent of asking prices have declined, so the decline is even bigger, which makes my point even stronger, thus making you the moron.<BR/><BR/>You just got pw3nd."<BR/><BR/>Yeah, that's right. The numbers are as you say, but you're just not using them because ... well, I'm sure there's a reason you're not using, you know, the actual numbers. I'm just not smart enough to figure it out.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-25275469234541418602007-06-08T22:58:00.000-04:002007-06-08T22:58:00.000-04:00"All this talk about the lawyers in DC ignores the..."All this talk about the lawyers in DC ignores the fact that there are probably far more military, intelligence, and defense contractor employees in the area."<BR/><BR/>So what? That doesn't change the fact that there are thousands upon thousands of lawyers in private practice in DC making a buttload of money.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-10632404440746558852007-06-08T13:50:00.000-04:002007-06-08T13:50:00.000-04:00Keith,Thanks for the clarification re housingtrake...Keith,<BR/><BR/>Thanks for the clarification re housingtraker: Sellers are asking for less and buyers are paying even less than that.<BR/><BR/>Annon:<BR/><BR/>Dismissing my assumptions as from "Fantasyland" and parsing my argument to miss the point is intellectually dishonest. My question to you is, how much appreciation do you need in 10 years to be able to break even? You assume you will make money in the long term, but even you don't have any idea how long that will be, because you don't factor in all the costs of homeownership. You have simply bought into the common assumption that is preached by real estate enthusiast, and never bothered to understand it. Here is a clue: to make money in investments, you need to buy low and sell high. Yes, real estate has tended to always go up. Oh, wait, it just went down for the first time in history. Think there might be a problem? Dismissing my comments will not make it go away.Caveat Emptorhttps://www.blogger.com/profile/14417158283171016454noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-40063724764311291222007-06-08T08:56:00.000-04:002007-06-08T08:56:00.000-04:00"those are asking prices, moron."As we have establ..."those are asking prices, moron."<BR/><BR/>As we have established before, actual selling prices as a percent of asking prices have declined, so the decline is even bigger, which makes my point even stronger, thus making you the moron. <BR/><BR/>You just got pw3nd.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-50117607828266210812007-06-08T07:31:00.000-04:002007-06-08T07:31:00.000-04:00Keep in mind that probably a very large number of ...Keep in mind that probably a very large number of the lawyers in DC don't work for private law firms. There's a big public employer in the area called the U.S. Federal Government. It has a large need for lawyers and is not known for paying as much as private business (except for low-skilled jobs, in which case it generally pays more than private business).<BR/><BR/>All this talk about the lawyers in DC ignores the fact that there are probably far more military, intelligence, and defense contractor employees in the area.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-83224915580715020802007-06-07T21:51:00.000-04:002007-06-07T21:51:00.000-04:00those are asking prices, moron.those are asking prices, moron.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-78200486531063187832007-06-07T19:52:00.000-04:002007-06-07T19:52:00.000-04:00"rather than just waiting around for prices to dro..."rather than just waiting around for prices to drop...Since that isn't going to happen."<BR/><BR/>From Housing Tracker :<BR/><BR/>DC median: 9/05 - 499<BR/><BR/>DC median: 9/06 - 460<BR/><BR/>DC median: 6/07 - 435<BR/><BR/>It has happened, is happening, and will continue to happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-55888426112762113672007-06-07T14:28:00.000-04:002007-06-07T14:28:00.000-04:00James said:"Why would any attorney work in Baltimo...James said:<BR/>"Why would any attorney work in Baltimore if he could make $60,000 extra in nearby DC?"<BR/><BR/>Probably 'cause he's not good enough to work in DC ... or buy a house there for that matter. There's a reason housing prices (and salaries) are higher here ... They reflect the allocation process that occurs when you have limited availability of something deemed desirable by those with the wherewithal to compete for that limited item. Lawyers get paid much more here than in neighboring Baltimore and West Virginia ... and housing costs a lot more. It's just a fact of life. Nothing to get angry about ... but something to understand if you are going to make good personal decisions for yourself ... rather than just waiting around for prices to drop ... Since that isn't going to happen.Lancehttps://www.blogger.com/profile/12216089306021385355noreply@blogger.comtag:blogger.com,1999:blog-13164186.post-24495367899764768222007-06-07T14:20:00.000-04:002007-06-07T14:20:00.000-04:00"Plus, if you want to become a partner in a law fi..."Plus, if you want to become a partner in a law firm, don't you have to buy into it? They don't just hand you a huge ownership stake for free, do they? That's got to take a serious chunk of cash out of your paycheck in the early years. "<BR/><BR/>You still make more as a young partner than you do as a young associate.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-35768554763947938112007-06-07T13:17:00.000-04:002007-06-07T13:17:00.000-04:00"I could give a sh*t what the real estate market d..."I could give a sh*t what the real estate market does."<BR/><BR/>"And I'm going to prove it by reading real estate blogs and arguing with people and posting."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-72395858717455739522007-06-07T12:27:00.000-04:002007-06-07T12:27:00.000-04:00"Hey james, how come your salary figures for lawye...<I>"Hey james, how come your salary figures for lawyers in the "DC area" includes Baltimore and West Virginia?"</I><BR/><BR/>Because that's how the U.S. Bureau of Labor Statistics classifies this Metropolitan Statistical Area (MSA). Why would any attorney work in Baltimore if he could make $60,000 extra in nearby DC?<BR/><BR/>But if BLS statistics aren't good enough for you, go to salary.com. It lists the 25th and 75th percentile salary plus bonus for an Attorney I in Washington, DC as $79,222 and $112,364, respectively. The 90th percentile salary plus bonus for an Attorney I in DC is $129,125, so your $160,000 number for a typical entry-level attorney is completely fabricated.<BR/><BR/>Plus, if you want to become a partner in a law firm, don't you have to buy into it? They don't just hand you a huge ownership stake for free, do they? That's got to take a serious chunk of cash out of your paycheck in the early years.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-28181103646976495562007-06-06T22:50:00.000-04:002007-06-06T22:50:00.000-04:00Hey james, how come your salary figures for lawyer...Hey james, how come your salary figures for lawyers in the "DC area" includes Baltimore and West Virginia?<BR/><BR/>150k is not what a DC lawyer makes -- the market is 160k IN THE FIRST YEAR. I'm a 4th year, and my raise just took me up to 210K per year, not factoring bonus. For perspective, I only owe 230k on my morgtgage. I could give a sh*t what the real estate market does. If it goes down, good - I'll buy a huge house. if it goes up - good, I'll sell my condo for a lot of money. <BR/><BR/>And there are thousands just like me in DC. Don't kid yourself.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-61988926454850243772007-06-06T22:47:00.000-04:002007-06-06T22:47:00.000-04:00"But on the 160k for 25-year-olds, that's VERY few..."But on the 160k for 25-year-olds, that's VERY few and far between, at some high-end DC law firms. A person sent a link once about DC law salaries at some of those white shoe firms. I think they were hoping to show that a whole bunch of people make a lot of money, but all they showed was maybe 1000 youngsters make some big dollars. That's not anough to support this housing market.<BR/>"<BR/><BR/>hahahaha, yeah, only about a thousand. Keep dreaming. I love the "there aren't that many lawyers making big money in DC" argument. It's about the most pathetic one we see recurring around here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-47455717799089118242007-06-06T15:45:00.000-04:002007-06-06T15:45:00.000-04:00This is Anon 8:56 again. Wow, the person assuming...This is Anon 8:56 again. Wow, the person assuming those certain numbers lives in fantasyland.<BR/><BR/>"Total sunk cost in 1 year: $115,250 (includes your 5% down). How much are you going to need to sell it for to recoup that one year loss?"<BR/><BR/>#1. I AM NOT GOING TO SELL THIS YEAR OR NEXT, so these #s are moot. You should NEVER buy a house unless you plan to live there at least 6+ years. Get some sense. Anyone looking to sell a house after one year will of COURSE lose money. Real estate investment is always a long term proposition (ignoring the foolish flippers and gamblers) and owning a home is not solely an investment.<BR/>#2. You cannot include interest and taxes as sunk costs. Perhaps you could include any delta over those amounts (after taxes) over comparable rental prices.<BR/>#4. I had the seller pay my closing costs.<BR/>#5. I wouldn't use a realtor if I were to sell, which I am not.<BR/>#6. Unfortunately most will never be able to afford a nice home on a single income. So these lawyers likely have spouses, no?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-43526248777621893902007-06-06T07:10:00.000-04:002007-06-06T07:10:00.000-04:00This is anon 6:31"ok, so almost 2 years off the pe...This is anon 6:31<BR/><BR/>"ok, so almost 2 years off the <BR/>peak and you are still saying "wait until next year"? come on - the market has spoken and the result is a soft landing with prices stabilizing. "<BR/><BR/>The peak was in late spring of 2006, at least as far as prices are concerned. We are only 1 year off the peak and prices have barely started to decline. I am not only saying wait 1 more year but wait 2 more years. The indicators we have available to us and some analysis indicate that prices will almost certainly drop at least 15% from the peak. So long as there are still thousands of sellers who are waiting for the market to "recover" so they don't have to cut the price on their house the market is NOT done dropping. <BR/><BR/>1. The Case Shiller index, a trailing indicator, shows the DC area down ~5%.<BR/><BR/>http://www.bizjournals.com/washington/stories/2007/05/28/daily5.html<BR/><BR/>2. Housingtracker, a website that tracks ASKING prices and is therefor a leading indicator, shows the area down ~10% from the peak.(but doesn't take into account that buyers are frequently offering, and getting, less than asking price while during the boom market the reverse was true.) <BR/><BR/>3. Spring is always the strongest period in home sales. It is when the most sales take place and when most of each year's price increases are recorded. With spring now officially a bust, price declines will increase speed.<BR/><BR/>4. Finally, the tightening of credit standards did not begin until early this spring and it is not yet done. The effects of the rationalization of lending practices are not nearly priced into the market yet.<BR/><BR/>"Those that bought before 2005 are sitting pretty. "<BR/><BR/>Check out the "Greater Northern VA Housing Bubble Fallout" blog...<BR/><BR/>That blog only tracks houses that are selling beneath a prior sale. If someone bought their house in 1992 and is now selling for 40% off peak values, it won't show up on that page. Also, those numbers are not the result of an automated collection of data. The creator of that blog compiles them herself. Therefor it is safe to assume she is missing more than a few.<BR/><BR/>When all is said and done the market will hit equilibrium somewhere significantly below 2005 numbers.<BR/><BR/>"You are of course right that real estate moves down very slowly, so any talk of steep declines is ludicrous."<BR/><BR/>The fact that it moves slowly does not rule out steep declines. Just a year ago people were saying that RE doesn't decline, at all. This most recent bubble was unprecidented. This will not end quickly or easily. <BR/><BR/>"It doesn't happen. We could have 2 more years of 1.5% annual declines but that is worst case scenario."<BR/><BR/>Two years of 1.5% declines? We are already down 5% right now. (and that is the Case Shiller index, which is the most reliable you are going to find because of its data collection methods)<BR/><BR/><BR/>I think you fail to grasp what is really going on here. Your "worst case scenario" is far better than the numbers we are already seeing and is nothing compared to the numbers we are likely to see.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-80216590275673027622007-06-06T01:17:00.000-04:002007-06-06T01:17:00.000-04:00"ok, so almost 2 years off the peak and you are st...<I>"ok, so almost 2 years off the peak and you are still saying "wait until next year"? come on - the market has spoken and the result is a soft landing with prices stabilizing."</I><BR/><BR/><A HREF="http://housingbubble.jparsons.net/washington.html" REL="nofollow">Here</A> is exactly what is happening to home prices in the DC area. <A HREF="http://housingbubble.jparsons.net/shiller_graph.gif" REL="nofollow">Here</A> is a century of home prices nationally.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13164186.post-1154635467724217072007-06-05T23:40:00.000-04:002007-06-05T23:40:00.000-04:00This is Anon 8:56.You wrote: "That isn't much of a...This is Anon 8:56.<BR/><BR/>You wrote: "That isn't much of an argument for this being a soft landing however because prices are not done dropping yet. RE markets move SLOWLY, especially down. If prices are still only down a few percent this time next year and the year after we can start to talk about soft landings."<BR/><BR/>ok, so almost 2 years off the peak and you are still saying "wait until next year"? come on - the market has spoken and the result is a soft landing with prices stabilizing. Those that bought before 2005 are sitting pretty. You are of course right that real estate moves down very slowly, so any talk of steep declines is ludicrous. It doesn't happen. We could have 2 more years of 1.5% annual declines but that is worst case scenario.Anonymousnoreply@blogger.com