But back to how a Microsoft hiring freeze (for full time employees) will affect the local housing market. One word – adversely. As MS switches to contractors that means they will be hiring local talent only. You can’t bring in someone from India to work a contract very easily, if at all. The workers MS brings in from other places were a huge part of what fueled the housing boom in this area. Introducing a new consumer making 80k to the local economy puts upward pressure on housing. Contractors are already living here in their own houses. As the economy constricts, even a contractor’s position becomes more tenuous. That contractor may not be feeling the consumer confidence to risk an upgrade. To make matters worse, MS is placing new hires in their Vancouver BC facility. That new hire will likely reside at the BC campus for their entire Microsoft tenure (visa issues). My tiny team just added two FTE’s that way. With the current conditions, I don’t see any politician bold enough to try and raise the foreign worker visa limits in the middle of a recession. Heck, they couldn’t even raise the visa limits from the 9/11 levels during our recent boom. Now it seems like a visa increase is years away. Those foreign worker visas were the fuel to the Seattle housing fire. No contractor is going to supplant himself from say Chicago to here for a 6-12 month project. They certainly won’t buy if they do bother to temporarily uproot themselves. That person is a called a renter.

The MS hiring binge introduced a ton of well paid future home owners. This led to local MS partner companies bringing in their own high paid talent. That is all about to come to a grinding halt, and even a contraction with the MS partner-company payrolls. All of this will result in a shrinking number of potential home owners, ie, ever lower home prices.

The non-MS contractors (Java devs, Oracle DBAs) make wayyyyy more than M$-exclusive contractors. Hands down. The quality of the finished product seems to be better too.

One more interesting development – MS is starting to place full time new hires in their Vancouver BC campus. My tiny team of 10 just added two full time positions up there. Those positions were originally slated for Redmond, but as they are fresh out of visas, they headed north. These new hires will not be transferring here for years at the earliest. This trend will only grow in the near future. So while MS the company is adding new people, many of those new folks will be spending their paychecks on Vancouver real estate. Another hit to the local market…

Thanks for the info. on Reno/Tahoe.

I had a 1/3 acre in Dayton in one of the small subs. Was going to build a home on it back in 2002, decided against it.

I went to Fritsch Elementary on the West Side of CC for a time and spent my summers in C.C. (Most of my family still live in CC or Reno).

I’ll email you offline. Ever met Damian Janssen, Charlie Kitchen or Bill Custer in your dealings? All three are Reno/CC area realtors that are acquaintances of mine.

Thanks again (P.S. Still love the Nugget’s Awful Awful, especially the downtown counter version!).

You have to take into account health insurance and taxes. That would bring a contractor’s earnings down to the same level as a salaried employee.

What the fact of the matter is, the hiring freeze/HR re-evaluation brings more work to contractors, who on the other hand get paid way more then employees.

Contractors work for years. They switch from contract to contract.
Again whether it is effective or not time will tell.

What kind of contractors? V dash or A dash?

I think you see the effects now… Apple and Google are immensely more innovative that Microsoft.

Isn’t the goal is to hire contractors to implement the system after the architecture has been completed. In-house experts will manage the system building. Thus implementers are not required to know anything other than the public interface of the module they are assigned to work on. This limits the amount of business knowledge contractors must possess and allows them to work productively.

Okay, that’s my theoretical BS for the day. My question is, why does my proposed method not work in the real world?

The people who are aghast at the ‘Oh yay, a depression to purge the system’ aren’t upset that credit would be sure under such as situation. They’re horrified by the idea that people cheer on a condition that – last time it occurred in the US – resulted in millions of people starving to death.

There are people here cheering a recession or depression as an equalizer – as a toxin that clears the system. Frankly, I don’t think they understand how much damage the toxin may cause to those who are innocent in all of this.

To cut costs, you need to quit hiring employees and start hiring contractors. To counteract the fact that temporary contractors are less productive because of their lack of institutional memory, you need to hire even more contractors. Therefore, I don’t think hiring contractors is beneficial to Microsoft…you can only throw so many employees on a project before it becomes too unwieldy. Oversight becomes impossible and duplication of work becomes inevitable, with the “one hand not knowing what the other hand is doing” adage coming into play.

As far as Microsoft, the situation with them slowing down on hiring is a neutral effect. In times when they slow down on employees they push work onto contractors which in our area we have a ton of agencies that have contracts with Microsoft. An agency in Kirkland had an increase in work orders from Microsoft this Friday and they are hiring more contractors.

You really do miss your bubble don’t you? Isn’t it great when you first borrow a bunch of money? Wow, if only you never had to pay it back!!! Life would be perfect. :)

You accuse bubbleheads of being perverse? The perverse people are the unaware whom continue to borrow without the slightest clue of the economic repercussions that retarded fiscal policies create. The key to getting the country in order is to get the debt under control–not create more!

Always question authority: Who stands to profit?

I heard DD is in the process of bottoming out. I never bought there for it was just too expensive to pencil for me. I don’t track it. All I follow is 89403 and 89406 because of the military base. I have contacts there and its where I’m waiting to place my money. I want to pick up the homes for 110k-130k. I’m not sure I will get any but who knows. They are very nice homes. All 1300-1400 sq feet, tile roofs, fenced, etc. I’m not looking for residential though. My parents neighbor ( a deputy) just killed himself in his home because of his ex. The home has been sitting for months due to investigation but needless to say its on my list. Very tragic but hey………its right next to Mom. The entire community is mourning the event.

As for the Fitgerald. I also noticed that Nov 08 they are closing the club. When you call nobody answers. They lost alot of landmarks. I tend to go to Peppermill and Atlantis when in town. I also like The Nugget in Sparks.

Leftoverpriced-I have been here for 24 years. I’m 42. It is my intention to retire in Dayton in time. I love Tahoe and Reno-Sparks. I have a vacation home there and were just about to open 500 Realty in Reno. My kids are in school here and its always a push-pull of leaving or staying. I will always be a Nevada guy. I say I will get it open in July 2009. The licensing division in Carson reviewed our website for compliance and as they stated to me ” We welcome different types of real estate models based on Lead Generation.” I will keep you posted!

See you at the Home Show!

Many people have account executives at brokerage houses buy and sell investments.

You may chose to ETrade, you may chose rodfun for a Real Estate transaction.

The 6% I have agrued for years is the cost of doing business. If you do a transaction in New York, back in the day, I don’t know about now, every body has an attorney. 6% from start to finish, to me, is a bargain if you get value. Many people just don’t.

Many people hire a neighbor, friend of a friend, the local shmoe sitting in the real estate office. Way back in the day the shmoe in the office was there because he was in the Real Estate business.

Today everybody thinks they know something about stock, or Real Estate. I hear and read ridiculous assertions about both.

Pay attention, because this is from years, many years of experience, you’re not getting a deal unless you have inside information. If you are not getting insider trading tips get another account executive.

Check the “we want a home to live in” at the door. Real Estate is business. If you are not hiring a baracuda, or a shark to represent you keep renting.

You just saw what happens when you hire the neighborhood cheer leader. Get some advice so you can make wise decisions.

If you are spending a half a million dollars I think you want some one better than an Edward Jones sales person.

I think it’s a mischaracterization – and one I’ve started to hear regularly – that any of the “bears” are eager for a depression. Ask anyone these questions and you’ll understand.

Do they want volatility at their job, with the possibility of being laid off in a difficult job market?
Are they looking forward to their friends/family being unemployed/underemployed?
Do they hope families with children lose their homes?
Are they happy many peoples retirement or those already retired might lose significant portions of their nest eggs?

Nobody will tell you they look forward to any of those things. Or, if someone does love those prospects, I’d rather not deal with them.

What you’re seeing instead is people looking beyond the recession or coming depression and being optimistic that it will make America better. Many people live on Ramen and little sleep for a few years while they go to college. It’s a poor existence, but you put up with it because you know it’ll pay off for the next 50 years.

That’s how I see what’s coming. It’s going to sting. A lot of people will be hurting. People are going to have to help each other to make it through…but maybe, just maybe it’ll make America a better stronger nation. Maybe we’ll see all that we’ve traded over the last 20 years to get 42″ TVs and 4-ton SUVs, and maybe we’ll reprioritize. Maybe we’ll stop trying to be the world’s police, and go back to being the world’s role model. Maybe we’ll realize that the life of an American is not worth more than that of an African, even if we’d like it to be true. And maybe we’ll final admit that the “greatest nation in the world” is not a birthright, that it’s something we all have to work hard for.

Or, we can all just decide it hurts too bad, declare a mulligan, and then pass the bill off to our children.

This analogy got me thinking. You are not the house, the real estate industry is. You can win or lose money, either way the house gets 6% of the pot.

More similarities:
No money is actually being created, it only changes hands.
The average profit of everyone at the table is negative 6% per hand. (excluding finance charges)
The only way the house can lose is if people stop playing the game..

Of course unlike poker, we are dealing in something of value here. Real estate is worth something and the industry does a legitimate service helping to buy and sell. Whether they perform the service well and ethically is up for debate.

I would say the house’s problem now is they kept pushing for bigger and bigger pots to increase that 6%, but now all they have is $500 limits when people can only afford to play the $100 table. Very few people are playing right now.

I am a little confused, it says November 30, 2008 as the date of the announcement about Fitz???

I completely agree with you on Reno and the Reno metro. My old home in Cold Springs is dropping VERY close to what I paid for it NEW in 1997.

Looks like some REAL bargains are to be had in Reno.

Double Diamond, which I always thought was a totally crappy subdivision (slab floor foundations on a former flood plain/meadow is NOT a good idea long term) seems to be teeming with foreclosures, etc.

My brother lives in DD and to see his home value drop from $480K to $317K with a 1998 purchase price of $201K and no bottom in sight is pretty wild.

Is Douglas County getting nailed as well? I never could understand the appeal of Minden personally.

The West side of CC seems pretty solid so far, what do you see?

Yes, you are dead on in my estimation. The US got a margin call from its largest lender.

http://oldreno.net/fitzgeralds.htm

Yes. If someone else is willing to pay more for a house than it’s really worth, I’m not buying. And that goes for any other investment too. It’s all about value.

Shocking fact: I don’t regard buying a house as an end in itself. Just a cost-effective way to have a place to live – when the price is right.

“What you are seeing right now are the consequences of a decade of an orgy of spending by both Americans as well as the American government”

A generation, not a decade. Take a look at the link below, in particular the debt versus GDP graph. Consumer debt has followed a similar pattern.

United States National Debt

13 year old kids with cell phones, iPods, flat screen tvs in their bedroom and their own personal computers
Women who feel it a necessity to own 700 dollar shoes and handbags
Every family owns a 50k gas guzzling SUV
McMansions everywhere
CEOs with salaries 100 times higher than their workers
Shows like cribs, flip this house, Sell this house, etc
Celebrity worship
etc. etc. etc.

An adjustment of values and work ethic is coming to a neighborhood near you.

Worse, it has only been this year that all my negative investment strategies have finally begun to pay off.

I never wanted us to have a depression, but it is certainly a big relief to now have my friends and acquaintances ask ME for advice (the guy they thought was off his rocker), and see the criticism of my decisions vanish. I may have a thick skin, but it still rankled to have my in-laws and neighbours tell my wife and kids that I was making a grave mistake for our family’s future by not getting back on the housing price escalator.

So, yes, I am feeling SO much better these days.

http://translate.google.com/translate?u=http://www.dwnews.com/gb/MainNews/SocDigest/Economy/2008_10_4_18_16_6_636.html&hl=en&ie=UTF-8&sl=zh-CN&tl=en

http://www.bloomberg.com/apps/news?pid=20601080&sid=akO3ktmnUkyQ&refer=asia

China basically told the U.S. “let us unload our toxic assets through your banks, and we will buy more treasuries. Don’t let us unload our cr@p sandwiches and we are done buying US Debt”.

Guess what happened???? The bailout bill passed.

Personally I think that everything is a bubble. I have stayed away from the stock market because it seems completely over priced. I believe people will wake up one morning and say, hey, wait a minute, the stock market is double or triple the price it should be, but it goes on and on.

The difference between today and any time in history is the internet. That’s the $10s. In the upper right hand corner of this web site is a button to contribute $10 to the Tim’s enterprises.

It’s just $10s for this amount of entertainment.

I come here to be educated about the economy and it seems to be working. When I talk with people about the economy they look at me more sideways than usual. It has to do with this site.

What I would like to do is show the power of the internet by making the Tim a million dollars. That’s what is different today. Huge corporations make billions of dollars putting ads, or buttons, or manipulating internet presence.
Why not the Tim? Better yet, why not you, or the guy down the street.

The internet is a powerful business platform. Corporations use it, manipulate it, build onto it, and it’s gobal. If we all kick the $10s to the Tim he’s rich. He then can do what he wants with his capital, but it’s an experiment.

This site is almost becoming a creepy place with the happiness people would feel, an almost “i was right i knew this would happen so im happy” is the feeling i get from reading some posts. Good luck with that..hoping homes come down 20%+ hey more power to you, but the rest of the sh%t people seem to be wanting is pretty sad.”

No one wants a depression here. People just think that at this point it is growing more and more likely. Even people in the government and in finance have been using the term depression so its not that far out there. People on here have been keeping up with the economic developments for the most part and the future outlook for the economy is not good according to almost everyone except for the people with their heads in the sand. The economy and the possibility of a recession or depression will greatly effect peoples ability to buy homes and therefore is the main topic of discussion here lately because most want home prices to return to reality and for the average family to start saving and stop living off of credit.

I have been awaiting this recession for a long time. It is akin to a nice vomit after three days of drinking. The turds (read: parasitic, inefficient industries) finally get flushed. Are you ready? I am. I certainly am not looking forward to the next 3 years. The dry-heaves are going to hurt. When they subside, I look forward to the prospect of trying to rebuild the steaming pile of doo-doo that has become of our nation. Hey, maybe we can even get a positive savings rate. (baby steps first) When that happens then perhaps we can start work on that $10 trillion bar tab.

This site is almost becoming a creepy place with the happiness people would feel, an almost “i was right i knew this would happen so im happy” is the feeling i get from reading some posts. Good luck with that..hoping homes come down 20%+ hey more power to you, but the rest of the sh%t people seem to be wanting is pretty sad.

I don’t know if its the message or the material in the shirt but it seems to make me look even more handsome by focusing attention away from hair loss, pot bellies /beer guts, and most forms of psoriasis I have to get them in Wal Mart somehow……..

Have you given up on your pitch for all people to donate $10 to this site? It’s a good pitch bro. If you hadn’t made the case, I wouldn’t have donated. The bottom line is, if you use this site regularly, $10 is extraordinarily cheap rent.

Peace out :)

I agree with you both. There are also a myriad of other reasons why this is different than it was in the late 70’s-early 80’s, but those were a few on the top of my mind. There is also the outsourcing of almost all manufacturing jobs in urban core areas throughout the U.S., people living longer (straining entitlement programs), and peak oil (if you buy into it).

Seattle has about 1.2 household incomes per household, on the average. About half of Seattlites are singles, like Softwarengineer. About half the married people only have one income per household. The average income is about $33,000/yr per Census Bureau, albeit this Joe Lunchbox average is decreasing with uncontrolled population growth and wage competitions.

A good witches brew for a Seattle housing price collapse to last for years [decades?].

I think this recession will be worse than the 70’s just for the reason that most households are dual income these days and still barely above water. In the 70’s it was likely that in rough times, Mom could go out and get a job part-time or whatever to help things out. These days Mom and Dad are already both working and still not saving, so the jobloss risk to the household is doubled and the ability to make up any loss quickly is gone.

http://www.oftwominds.com/blog.html

The main difference between now and 20-30 years ago is the level of household debt. The debt burden on the middle class is larger than it has ever been. Now that J6P can’t tap into his home equity, he has been putting more and more of his debt onto credit cards. Credit card balances are higher than they have ever been right now.

There is also a huge amount of wealth being destroyed by the decrease in housing prices. Trillions of dollars in equity has already been erased, and we still have a long ways to go before the bubble is deflated.

Baby boomers are beginning to retire, which is going to continue to be a drain of government entitlement programs (medicare, medicaid, social security, etc.) Many boomers were counting on their new found housing wealth to help them into their golden years. This dream is quickly turning into a nightmare.

This country has become a nation of debtors, and not a nation of savers. This is also the case with the government. What you are seeing right now are the consequences of a decade of an orgy of spending by both Americans as well as the American government. It’s all starting to unwind, and it’s going to be a long, painful lesson for some. When all is said and done however, I believe this country will come out stronger, and people will learn the lesson of “a penny saved is a penny earned”.

I was young in 1979, and don’t remember the recession all too well, but from what I’ve read there weren’t major bank failures, a commercial paper freeze, or a nationwide decrease in housing prices. The American consumer also did not have nearly the amount of debt that he had in 1979.

This is the problem right here. You’re talking about propaganda. If a house is the largest investment you are going to make why isn’t that decision taken seriously?
Why not just have your mortgage rep and an attorney handle everything for you? Why trust the guy at the church? What is wrong with people?

I’ve bought and sold many houses in my career and I always ask advice from people in the business. I make a decision based on current and future economic conditions. It’s my research, but it’s with input. I’m not the sharpest tool in the shed, so I rely on a second opinion, one that I trust has had years of experience.

I’ll say it again, the Real Estate market place never changes. People buy and sell every day for a wide variety of reasons. The stock market is the same today as it was in 1929. People buy, sell, and trade investments every day.

The Bottom??? What is that? Are you really waiting for the market to determine your investment strategy?

You play the odds.

If you’re trying to say the house always wins, that may be true.

In Real Estate you are the house. you make the play, the deal, that makes sense at the time. There are always strategies along the way.

Sales people?
Real Estate is not a commission sales position any more than Stocks are.

Believe me, even in places like Las Vegas and Miami, real estate agents are lying through their teeth talking about how they’ve hit bottom, now’s a great time to buy, etc..
Seattle’s not special, and Seattle’s real estate agents aren’t any more or less ethical than their counterparts in other places.