Mid-Week Open Thread (2010-06-23)

Here is your open thread for the mid-week on June 23rd, 2010. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

57 comments:

  1. 1
    Scotsman says:

    Shocking! Shocking, I tell you!

    “I was born in 1963, a year in which the US sold 300,000 new homes. Forty-six years later, we may be back to the same pace, thanks to ill-advised government intervention that sapped the demand for new homes. The annualized rate of new-home sales fell to a 46-year low in May, which had a 33% drop from April’s figures:”

    http://hotair.com/archives/2010/06/23/new-home-sales-collapse-in-may/

  2. 2
    patient says:

    The G20 meeting this weekend shapes up to have the potential of being extremely important for our future. Europe has decided to take responsibility and try to get the debt under control while Obama and Co. urges them to continue to spend money they don’t have to keep the illusion of a recovery going a little longer.

    I think it will be a hard sell for Obama since the government in the UK was voted in to curb spending. People are rightfully scared of the debt load.

    “http://money.cnn.com/2010/06/23/news/economy/g20.agenda.fortune/index.htm”

  3. 3
    patient says:

    RE: Scotsman @ 1 – I think “fell” is a bit strong, how about “tapered off” to a 46-year low?

  4. 4
    deejayoh says:

    By Scotsman @ 1:

    Shocking! Shocking, I tell you!

    “I was born in 1963, a year in which the US sold 300,000 new homes. Forty-six years later, we may be back to the same pace, thanks to ill-advised government intervention that sapped the demand for new homes. The annualized rate of new-home sales fell to a 46-year low in May, which had a 33% drop from Aprilâ��s figures:”

    http://hotair.com/archives/2010/06/23/new-home-sales-collapse-in-may/

    hmmm. Housting starts were at a 40 year low a year ago. Coincidence? I think not. Can’t sell what was never built. At least the source was accurately named

    http://www.ritholtz.com/blog/wp-content/uploads/2009/07/housing-starts-20090717.jpg

  5. 5
    deejayoh says:

    By this source, housing starts are currently at a +50 year low

    http://www.census.gov/const/startssa.pdf

    That new home sales stat will get worse before it gets better, but it seems pretty meaningless in that it is more reflective of supply than it is of demand.

  6. 6
  7. 7
    patient says:

    By deejayoh @ 4:

    By Scotsman @ 1:

    Shocking! Shocking, I tell you!

    “I was born in 1963, a year in which the US sold 300,000 new homes. Forty-six years later, we may be back to the same pace, thanks to ill-advised government intervention that sapped the demand for new homes. The annualized rate of new-home sales fell to a 46-year low in May, which had a 33% drop from April�s figures:”

    http://hotair.com/archives/2010/06/23/new-home-sales-collapse-in-may/

    hmmm. Housting starts were at a 40 year low a year ago. Coincidence? I think not. Can’t sell what was never built. At least the source was accurately named

    http://www.ritholtz.com/blog/wp-content/uploads/2009/07/housing-starts-20090717.jpg

    Are you telling us that the dip in sales of 33% between April and May is due to a 33% dip in supply of new homes between May and April? If not I don’t think your reasoning is the main cause or even remotely so.

  8. 8
    Scotsman says:

    RE: deejayoh @ 5

    “more reflective of supply than it is of demand” ??????

    True in an absolute sense, but really just opposite sides of the same coin unless the market is totally out of balance. I think it says more about the fact that builders aren’t willing to take any speculative risk when they see the housing market and economy continuing to collapse.

  9. 9
    Drone says:

    On a slightly new topic:
    I would like to eventually own a house, ideally in the ever-popular Greenlake region. (I know, I know) I’m willing to save and wait a while, so current property prices aren’t terribly important to me. Quality of life, however, is. I would eventually like to have a house that is reasonable to live in… not super-huge, but not a “cozy cottage” either, with reasonably good insulation/electrical system/etc.

    Because the housing stock in my chosen region is mostly very old/small, I see three options:
    1. Purchase an old, ok-quality house and upgrade it.
    2. Purchase an old house already upgraded by someone else.
    3. Purchase a dump, level it, and rebuild.

    My question to the forum:
    How does one accurately evaluate the costs of these various options? I’ve found precious little real information on the costs of retrofitting properties in our area… is it like a swimming pool that costs a lot to put in but doesn’t add much to the purchase price, or is it like a garage->bedroom conversion that adds only a little value but boosts the price a lot? Is there one category that is likely to become more economical than others over the next 3-5 years? What sorts of costs are typical for these scenarios, so I know how to plan?

    Thanks all!

  10. 10
    deejayoh says:

    By patient @ 7:

    Are you telling us that the dip in sales of 33% between April and May is due to a 33% dip in supply of new homes between May and April? If not I don’t think your reasoning is the main cause or even remotely so.

    No, I’m pointing out that the large scale trend (the 46year low in housing sales, which was the point of the post,…) is due to the lack of supply. Annualized home starts are at a rate of about 600k vs a long run average of between 1-2mm. Scotsman is correct that this reflects lack of builder confidence. But for this statistic, home starts are the problem, not demand. Overall home sales (new + existing) aren’t even close to a 40 year low. Generally the two series correlate quite well but it’s the supply situation that is leading to divergence and the overwrought headlines

    http://bp3.blogger.com/_pMscxxELHEg/Rgg8dv-zZKI/AAAAAAAAASk/yJqqWlFQwos/s1600-h/New+Existing+Home+Sold.jpg

    Media has it wrong, as usual.

  11. 11
    jj says:

    By deejayoh @ 10:

    By patient @ 7:

    Are you telling us that the dip in sales of 33% between April and May is due to a 33% dip in supply of new homes between May and April? If not I don’t think your reasoning is the main cause or even remotely so.

    No, I’m pointing out that the large scale trend (the 46year low in housing sales, which was the point of the post,…) is due to the lack of supply. Annualized home starts are at a rate of about 600k vs a long run average of between 1-2mm. Scotsman is correct that this reflects lack of builder confidence. The home starts are the problem, not demand. Overall home sales aren’t even close to a 40 year low. Generally the two series correlate quite well but it’s the supply situation that is leading to divergence and the overwrought headlines

    http://bp3.blogger.com/_pMscxxELHEg/Rgg8dv-zZKI/AAAAAAAAASk/yJqqWlFQwos/s1600-h/New+Existing+Home+Sold.jpg

    Media has it wrong, as usual.

    The graph you “supply” here goes to 2006, doesn’t include any data for the last three and a half years, and doesn’t give month by month data.

    The new home starts graph is certainly telling, basically saying that a year ago, builders were pretty sure that there was not enough demand to warrant building? But are we sure the supply of new homes is historically small? Perhaps the supply of new homes is historically large or average because of all the unsold new housing units built in the last 5 years… It’d be interesting to see a graph of nationwide new home supply, existing home supply, new home sales, and existing home sales – my guess would be that the sales ratio is relatively constant in proportion to supply ratio.

  12. 12
    softwarengineer says:

    RE: Scotsman @ 1

    I Predicted It Wrong Scotsman

    I thought by now, interest rates would be shooting up…..but historically high decreased new/existing home sales nationally killed that prediction.

    The bad news though, had SWE predicted correctly, the economy wouldn’t be as bad as it is today.

    But stay tuned, the interest rate increases may just be temporarily stalled until it’s impossible to stop it.

  13. 13
    deejayoh says:

    By jj @ 11:

    The graph you “supply” here goes to 2006, doesn’t include any data for the last three and a half years, and doesn’t give month by month data.

    The new home starts graph is certainly telling, basically saying that a year ago, builders were pretty sure that there was not enough demand to warrant building? But are we sure the supply of new homes is historically small? Perhaps the supply of new homes is historically large or average because of all the unsold new housing units built in the last 5 years… It’d be interesting to see a graph of nationwide new home supply, existing home supply, new home sales, and existing home sales – my guess would be that the sales ratio is relatively constant in proportion to supply ratio.

    Yes, it is not current. Just pointed to it to show the historical correlation is very strong. There’s a whole article about it there, if you care to read. And I did “supply” it, no quotes necessary.

    but I do agree, there could be an issue with a backlog of new homes. that banks are allowing bankrupt builders to hold on there books, or maybe keeping themselves because they’re such a good investment.

    On second thought, no, probably not

    http://www.reedconstructiondata.com/news/2010/01/u.s.-inventory-of-unsold-new-homes-isnt-getting-much-better/

    Inventory has been dropping like a rock for quite a while, and is at least at a cyclical low

  14. 14
    Scotsman says:

    RE: deejayoh @ 13

    I think the point everyone is missing, and what the article is alluding to in a very indirect way is that a drop in new home construction means a large portion of the economy will continue to suffer. New home construction is the driver for a number of other industries- lumber, appliances, electrical/electronics, plumbing, labor, etc. So when new construction falls, large sectors of the economy also feel the hit.

  15. 15
    Scotsman says:

    RE: softwarengineer @ 12

    I too thought rates would shoot up by now. But dollars being repatriated and a general lack of demand for loanable funds has kept a damper on them. If anything, low rates are confirmation that inflation is not a risk any time soon and deflation remains the most likely outcome for the near future. Eventually this will change, but perhaps not for years.

  16. 16
    Sniglet says:

    I have just posted the recording of my economics radio show from last night.

    In this episode we discuss stimulus, and whether government spending can jump-start moribund economies. We also explore whether the fact that significant technological advances have resulted from government funding demonstrate a role for the state in economic development.

    http://surkanstance.blogspot.com/2010/06/this-week-on-bear-radio-all-about.html

  17. 17
    Trigger says:

    RE: Scotsman @ 1 – Scotsman – This calls for immediate restoration of tax credits. The govt should reward home ownership by paying even more. Maybe the govt should pay for 30% of the shack’s value. Now this would really get the sales up. You can get the sales up by artificially pumping more and more money.

  18. 18
    Trigger says:

    RE: Trigger @ 17 – I think that the US should not look at Europe – it just needs to spend and then spend some more. And then hike. Relax. If you curb spending – you stifle the economy because now there is lower demand. Then unemployment edges up.

    Nobody will put up with a high unemployment. Living within your means looks absurd. People got used to living beyond their means.

    The new economy goes like this. You spend more than you can afford. Then you hope for a bailout. And then you spend some more.

    The govt should do the following. Encourage spending. Then print. And smile to other nations. And tell everybody that $$ is the last option out there.

  19. 19
    patient says:

    I still doubt that there is not enough new homes to cater for the demand. Price is more likely the reason to the shift in the sales mix between existing and new homes. As long as foreclosures and reos rains supreme new homes will have a hard time to compete for buyers.

  20. 20
    patient says:

    Imo there are two things going on with new home sales:

    1. A historical plunge in May due to the end of the tax credit.
    2. An ongoing change in the sales mix due that pre-woned distressed properties under cuts the price of new homes.

  21. 21
    treaty says:

    IRS Audits Block 10% of First-Time Homebuyer Credits
    http://www.businessweek.com/news/2010-06-23/irs-audits-block-10-of-first-time-homebuyer-credits.html

    “The claims in question included about $9.1 million from 1,295 prison inmates, $18.8 million from people who bought homes before the law took effect and $134 million from situations where more than one filer said they bought the same house, the report said.”

  22. 22
    deejayoh says:

    By Scotsman @ 14:

    RE: deejayoh @ 13

    I think the point everyone is missing, and what the article is alluding to in a very indirect way is that a drop in new home construction means a large portion of the economy will continue to suffer. New home construction is the driver for a number of other industries- lumber, appliances, electrical/electronics, plumbing, labor, etc. So when new construction falls, large sectors of the economy also feel the hit.

    Agree with that totally. But new construction is much more likely to go up at this point than further down.

  23. 23
    matsayswhat says:

    RE: Drone @ 9

    So with family in the remodeling/construction industry (I’m actually the only person in my immediate family that isn’t), being a homeowner and buyer multiple times in the past myself, I can tell you:

    1. There is a lot to be said for being able to remodel your house at your own pace, the way you want it to be done. I really like the fact that when I finish my basement, I’m going to be able to have it done in such a way that it fits my families needs, and since I’ll be staying in my house for quite a while (if not forever), I’ll get a lot of enjoyment and use out of my upgrades. At the same time, there is a lot to be said for not having to deal with expensive upgrades. I REALLY like that my house house has brand new windows and electrical. Those are pricey replacements (probably about 15-20k each on my house) that I’m happy I didn’t have to deal with.
    2. Buying a house upgraded by someone else is often the cheapest of the options you listed, but also offers the lowest amount of personalization. With something like say, a roof, that may not matter to you, but your idea of a nice kitchen may be much different than someone else.
    3. Demoing and building can be done, but in my opinion, unless you have some serious bank to spend, it’s not worth it. The demoing costs money, you’ll have to deal with all of the permitting, the plans, the builder, and if you don’t have the cash to pay outright you’ll have to try getting a build loan, which I’m not even sure if banks are giving those out to individual parties with the economy the way it is. At the end of it you’d have a home built just for you with everything new, but it’s probably the costliest option. If you’re loaded and are going to build a custom home, go for it, but if not, I’d personally advise against it. I looked into this at one point, though I was looking at empty lots and even with all of the resources I have available it didn’t pen out.

    As for determining which is the best deal, I’d suggest watching home prices in Green Lake, both what listing price and sold price is. If you’re honestly interested in building your own place you could start talking to a builder and they’d be able to start giving you an idea of what kind of cost you’d be looking at based on size, etc.

    As for price associated with upgrades, I think the general rule of thumb in remodeling is that kitchens and baths have the best ROI since they can do a lot to make an old house look less dated, but I use “ROI” reluctantly as if you remodel it should be for you, not because you think you’re going to make money on the back end. As for garage to bedroom conversions, I’ve never understood how those can add much value since they are often done poorly and look super obvious from the outside (thus making the house look unbalanced). I’d be curious to know if such conversions actually add value today, post bubble.

    Good luck and save your money! The less you owe to the bank, the better!

  24. 24
    pfft says:

    By Scotsman @ 1:

    Shocking! Shocking, I tell you!

    “I was born in 1963, a year in which the US sold 300,000 new homes. Forty-six years later, we may be back to the same pace, thanks to ill-advised government intervention that sapped the demand for new homes. The annualized rate of new-home sales fell to a 46-year low in May, which had a 33% drop from Aprilâ��s figures:”

    http://hotair.com/archives/2010/06/23/new-home-sales-collapse-in-may/

    car sales plunged the same after cash for clunkers. one month’s data doesn’t mean anything. car sales recovered after the CFC program ended.

  25. 25
    pfft says:

    By patient @ 2:

    The G20 meeting this weekend shapes up to have the potential of being extremely important for our future. Europe has decided to take responsibility and try to get the debt under control while Obama and Co. urges them to continue to spend money they don’t have to keep the illusion of a recovery going a little longer.

    I think it will be a hard sell for Obama since the government in the UK was voted in to curb spending. People are rightfully scared of the debt load.

    “http://money.cnn.com/2010/06/23/news/economy/g20.agenda.fortune/index.htm”

    austerity will do little to reign in debt.

    would you rather have a job or a slightly lower debt level?

  26. 26
    patient says:

    RE: pfft @ 24 – I’m really curious about June’s sales numbers. Closings should be close to or above yearly highs. This is one of few times I’m curious about pendings as well.

  27. 27
    pfft says:

    two great points on climate change.

    1) 97-98% of the climate researchers most actively publishing in the field support the tenets of ACC outlined by the Intergovernmental Panel on Climate Change

    my favorite:

    2) the relative climate expertise and scientific prominence of the researchers unconvinced of ACC are substantially below that of the convinced researchers.

    the climate change denying “scientists” are a lot dumber than supporters of climate change. that is no surprise. most of the deniers are either republican hacks, right-wing think tankers or professional skeptics.

    New study reaffirms broad scientific understanding of climate change, questions media’s reliance on tiny group of less-credibile scientists for “balance”
    http://climateprogress.org/2010/06/21/pnas-study-climate-science-media-balance-deniers/print/

    climate change is real. 97%+ scientists agree.

  28. 28
    pfft says:

    By patient @ 26:

    RE: pfft @ 24 – I’m really curious about June’s sales numbers. Closings should be close to or above yearly highs. This is one of few times I’m curious about pendings as well.

    one month’s data won’t mean much. the fact that we plunged so bad just mean’s the next few months should be better.

  29. 29
    patient says:

    RE: pfft @ 25 – What I want make no difference. It’s what the majority of the public perceives to be the best plan that matters. In Europe they believe that in the long run living within your means builds indepedence,stability and influence. They proved that at the UK election. I agree with them.

  30. 30
    pfft says:

    By patient @ 29:

    RE: pfft @ 25 – What I want make no difference. It’s what the majority of the public perceives to be the best plan that matters. In Europe they believe that in the long run living within your means builds indepedence,stability and influence. They proved that at the UK election. I agree with them.

    everyone does. now is not that time. not when we have big unemployment. the UK won’t join the Euro and we know why. they wantt control over their monetary and fiscal policy. if they were in the Euro they would be mentioned with the PIGS. right now the 30 year bond in the UK is yielding less than the US 30 year.

    would you rather be estonia? they just joined the euro and celebrated. they are lauded for their fiscal austerity. they also needed 20% unemployment to get there. no thanks. do you want 15% unemployment in the US but 3% budget deficit? again, no thanks.

  31. 31
    patient says:

    RE: pfft @ 30 – You just keep pointing at potential problems with austerity. You don’t think continued borrowing have implications? Do you have kids? Probably not, you seem to want to kick the can to younger generations. It’s taking the pain now or later you can not grow yourself out of the level of debt we are in, at one stage it’ts going to hurt, the longer we wait the bigger the pain.

  32. 32
    Drone says:

    RE: matsayswhat @ 23
    Sweet, thanks for the info. That’s about what I expected, so it’s great to know that my instincts are in the right place. I think my ideal would be to find an existing property with the difficult stuff upgraded (windows, electrical, maybe insulation) and an unfinished basement that I could work on later.

  33. 33
    Civil Servant says:

    Hi Drone — I would also add the suggestion that if you will be sharing your house with anyone else, make sure that he or she is on board with both your work plan and its timeline. I’ve known people who bought houses with the same admirable perspective on remodeling/renovating as you have but gradually grew weary (or, cough, at least one of the house-buying party grew weary) of living in a construction site. It seems easy to underestimate the extent to which work and other obligations can get in the way of ongoing house projects.

  34. 34
    Drshort says:

    Tim,

    I often have issues with this site on my iPhone or iPad. Specifically, there’s a long lag time for some comments to appear like I’m seeing old copies of the page. Maybe a 20 minute lag or so.

    For instance, I can see Ardell has a post on the sidebar but when I go into that page her comment isn’t there yet.

  35. 35
    pfft says:

    By patient @ 31:

    RE: pfft @ 30 – You just keep pointing at potential problems with austerity. You don’t think continued borrowing have implications? Do you have kids? Probably not, you seem to want to kick the can to younger generations. It’s taking the pain now or later you can not grow yourself out of the level of debt we are in, at one stage it’ts going to hurt, the longer we wait the bigger the pain.

    the kids would be a lot better off if their father and mother both had good jobs, their schools had teachers, their cops stopped people from hurting mommy and daddy and their parents could save for college.

    again, austerity will do little for the debt. show me the debt is a problem. what market signal are you reading that we are not? the US is borrowing for 30 years at under 5%.
    I had to read the yield on the 2 year 3 times. it’s 0.68%. that is not a typo.

    http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

    the market is saying the US debt is manageable. every time there are problems elsewhere the dollar rallies. the dollar bottomed in the spring of 2008. more than two years ago.

  36. 36
    David Losh says:

    i tried to place this comment on the Rain City Guide about four different times, but it is blocked some how.
    http://raincityguide.com/2010/06/22/can-seattle-home-prices-drop-another-22/

    This site is extremely frustrating. It’s very difficult to submit a comment, but let’s try this again.

    Real Estate appreciates at about 4% per year. The price of housing units is tied to, but not a part of the Consumer Price index. Inflation is easier to show

    http://www.inflationdata.com/inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm

    With inflation at about 6% at it’s peak, you can see that the price of housing got way out of control. A 45% drop from the peak seems extremely reasonable. Like I said you have to go back to 1998 to actually see that the rate of appreciation was pure fantasy.

    My point about Seattle lagging was the amount of development that was still going on here after other markets had already crashed.

    As I have been thinking about this today I can now see where sniglet got the 80% down from the peak. When you look at inflation you can see no amount of printing will fix our economic problems. I don’t want to get into it right now, but it makes sense that we have diverged from inflation.

  37. 37
    pfft says:

    the XHB was up over 1% today…

  38. 38
    David Losh says:

    RE: Scotsman @ 8RE: deejayoh @ 5RE: deejayoh @ 4RE: Scotsman @ 1

    Three words: International Building Codes. OK, Scotsman, you’re going to love this because it is a government plot to derail the construction industry. Three more words are Master Builder Association, and I might as well throw in the National Association of Realtors.

    The problem with construction starts is that they can be anywhere. One of the first video clips on the Seattle Bubble was of million dollar mansions being built in, I think Butte, Montana. Every one wants a million dollar home in Butte.

    I talk about the homogeneous pricing of housing units. Where a town house in Issaquah is selling for the same price as a town house in Seattle. The building cost is about the same. The price of the dirt could even be the same, at the time, in the day of million home production.

    Today a builder better get it right. They’ve got bills to pay.

    The second part is that buyers are more savvy, and will wait to buy closer in. So, in my opinion, supply is meeting demand.

    As for the rest of the economics that go along with home construction, a new construction home only needs to last five years. After five years every one is down the road. I know paint crews are busy, I know I’m busy, I know sheet metal fabricators are busy.

    I think we are coming into a time when people are going to have to fix what’s broken, in what they paid too much for, and can’t sell.

  39. 39
    Scotsman says:

    RE: David Losh @ 38

    “…. of million dollar mansions being built in, I think Butte, Montana.”

    Forget Butte. How about a $6.0 MM home in Cle Elum, in fact a whole development of similar homes? Who buys these things? (I know, I know- people who can afford them) Still, even if I had the money- and why on an acre and a quarter instead of 50 or 100? I mean, if you want to “get away from it” then. . . get away!

    http://www.johnlscott.com/propertydetail.aspx?IS=1&ListingID=300350857

  40. 40
    David Losh says:

    RE: Scotsman @ 39

    OK, yes, I follow Rosilyn, Suncadia, and Cle Elum, a little bit. It’s fascinating that you can go there and have seasons. Snow in the winter, hot summers, babbling brooks, with towering trees.

    It started as a Trends West camping community, now it’s sixteen? golf courses.

    This is exactly what I’m talking about.

    Yes, you need that acre for the septic.

  41. 41
    patient says:

    RE: pfft @ 35 – I’m not going to try to change your mind pfft, I’ve read enough of your rants to realize it’s a waste of time and furthermore I don’t care what you think or write about the subject. It’s not like the buy now propaganda that can ruin a persons finances, health and family. If a few readers of SB believe that you are right about borrowing and spending it makes no difference whatsoever to them or anyone else. I think you are dead wrong though and no, you can’t change my mind about it either. I do wish you were right though, I really do.

  42. 42
    matsayswhat says:

    RE: Civil Servant @ 33

    Your thinking is correct on windows, and electrical, but I’d add roofing to that list too since it’s isn’t cheap and generally isn’t the kind of home improvement project anyone ever wants to (or should) take on.

    As for insulation, I wouldn’t worry about that TOO much… Unless you’re going with some alternative to fiberglass, it’s actually relatively cheap. My first house didn’t have an insulated crawl and I put in about 800 square feet of paper faced R32 for ~$300. And I’m pretty sure you can still deduct that from the energy efficiency tax credit, so you’d get 1/3 or so back. Also, there are services that can do exterior wall spray in and attic spray in pretty affordably.

    And basements are awesome. Especially during hot summers :)

    RE: Drone @ 32

    I have a very understanding wife, though I’ve learned that she always needs at least ONE bathroom working :D

  43. 43

    This pertains to what I’ve been saying all along about people who walk away. You can’t base your decision on what the rules currently are because the rules can change.

    Two aspects to the story. First, a 7 year rule on new mortgages for walk away folk. Second, they’re going to be suing when they can.

    http://www.loansafe.org/fannie-mae-targets-borrowers-who-walk-away

  44. 44
    Scotsman says:

    RE: Kary L. Krismer @ 43

    Yup, saw that- they think they’re going to change the economic reality. Does anyone know how many states are recourse verses non-recourse? Also, they can change the rules both ways, in that when the economy is completely stalled and the pressure is on the government to fire up the housing market old loans can be forgiven or ignored, along with credit scores, etc. It’s all politics, and subject to change.

  45. 45

    RE: Scotsman @ 44 – I don’t know if they can change the economic realities, but they can change the BS that some entities are spouting indicating that you can walk away without any consequences.

    I don’t think this policy goes far enough. It really should be a lifetime ban subject to applying for exceptions. If you had a contract with someone, and they defaulted “strategically,” would you ever enter into another contract with that person again? I don’t know why the result should (as opposed to would) be any different just because you’re dealing with the government’s money.

    Finally, when I see the list of non-recourse states, from memory it’s only about 13 or so, but even those are not really non-recourse. I’d like to see a source that has decent information on creditor rights in the different states.

  46. 46
    Scotsman says:

    RE: Kary L. Krismer @ 45

    I agree they need to take steps in this direction, I’m just not sure how much impact it will have. After all, it’s only the Fannie/Freddie loans, not the whole market. And I think I remember reading that there’s a push to close down these two and start over with something else, although I’m not sure what that gains anybody except the political cover of having two effectively insolvent embarrassments go away.

  47. 47
    patient says:

    RE: Kary L. Krismer @ 43RE: Kary L. Krismer @ 45 – Good. The main outcome of this will be that people will become much more careful with borrowing and buying when there is a significant risk of depreciation. If now the government could stop being such a poor role model when it comes to financial responsibility it would not be viewed as such hipocracy to target and lecture individuals and we could be on the way to some serious improvements.

  48. 48

    RE: Scotsman @ 46 – I suspect others will follow suit. I wasn’t saying months ago that you can’t count on today’s conditions being the same because I thought this wouldn’t happen.

    One other thing I think will happen, that started over two years ago, is that rates will be more risk based.

  49. 49
    The Tim says:

    RE: Drshort @ 34 – That’s probably a side effect of the caching system I have in place that is (theoretically) supposed to help pages load faster for most visitors. If you are logged in you should be viewing the latest version of the page though.

    It doesn’t look like you have an account. You can create one here.

  50. 50
    Ricoshea says:

    RE: patient @ 31 – I’m with you on this one patient. I rarely see anything pfft posts convincing me differently about the economy. I do however like seeing his posts as they generate great responses from SWE and Scotsman, usually with links. I appreciate the discussions between this group as the links they share help me draw my own informed decisions about the economy. I don’t tend to be quite as bearish as SWE and Scotsman, etc…but I definitely have become more bearish because of the discussions on this board.

  51. 51

    This will be a memorable moment from the Great Recession:

    http://hlcdn.datasphere.com/sites/default/files/imagecache/resize_story_image/iphone_uvillagejpg.jpg

    If you want to know what they’re going, go to Komonews.com

  52. 52
    pfft says:

    By patient @ 41:

    RE: pfft @ 35 – I’m not going to try to change your mind pfft, I’ve read enough of your rants to realize it’s a waste of time and furthermore I don’t care what you think or write about the subject. It’s not like the buy now propaganda that can ruin a persons finances, health and family. If a few readers of SB believe that you are right about borrowing and spending it makes no difference whatsoever to them or anyone else. I think you are dead wrong though and no, you can’t change my mind about it either. I do wish you were right though, I really do.

    why can’t you address at least some of my points?

    do you think kids want their parents working or half a view less percentage points of national debt?

    the fact is we hold 95% of the same views. I know you won’t believe that but it’s true. the one crucial difference is that I am listening to the market while you are telling it what to do. despite the bailout and the stimulus the markets are saying the US will have no trouble paying it’s bills. you might not like it but that’s is a fact.

  53. 53
    pfft says:

    By Ricoshea @ 50:

    RE: patient @ 31 – I’m with you on this one patient. I rarely see anything pfft posts convincing me differently about the economy. I do however like seeing his posts as they generate great responses from SWE and Scotsman, usually with links. I appreciate the discussions between this group as the links they share help me draw my own informed decisions about the economy. I don’t tend to be quite as bearish as SWE and Scotsman, etc…but I definitely have become more bearish because of the discussions on this board.

    there are literally 20 economic indicators that I could show you that show recovery. it doesn’t mean the economy is perfect or that we aren’t heading towards the next bubble. things are getting better even though right now we are slowing a little.

    at one point we were losing 500,000 plus jobs a month. now we are adding jobs. how is that not progress? it may not be perfect but it’s progress.

  54. 54
    pfft says:

    The real question is this. do you want to be Estonia and have a great fiscal situation but 20% unemployment or be the United States?

    the bears are creating the slowdown they have been claiming we’re heading for. their calls and cheers for austerity in Europe will slow the US economy. then they’ll say I told you so. it’s a self-fulfilling bear prophecy.

  55. 55

    RE: Civil Servant @ 33
    When we bought our house in Leschi and moved in before the work was all done, it was just pure misery. I’d go to work all day, then come home and work on the house, then sleep in plaster dust.

  56. 56
    Scotsman says:

    RE: pfft @ 54

    I should have known- you’re wrong about this too. I want to be Estonia!

    No national debt, 21% flat tax, high income, high economic freedom, energy independent, backed currency, one of the highest capital inflows in Europe, already recovering from the slump of 2008, They may well be the last country standing in this mess.

    http://en.wikipedia.org/wiki/Economy_of_Estonia

    You really need a new hobby, because you just aren’t any good at this one. Maybe if you dated one of these hot Estonian women they could teach you about economics:

    http://www.single-baltic-lady.com/?advID=95917

  57. 57
    softwarengineer says:

    Stocks Down This Morning

    Yahoo Finance stuck on yesterday’s data. I wonder why?

    Here’s today’s ticker:

    http://www.nyse.com/

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