April 23, 2007

HousingPANIC Stupid Question of the Day


Why is skyrocketing housing price inflation trumpeted by the MSM as a great thing, while skyrocketing gas price or banana price inflation reported as terrible news?

45 comments:

Joe Logic said...

Cause they're all monkeys for the REIC, and high banana costs are bad for them.

Mark in Zurich said...

Because stupid reporters are also homedebtors, and want to feel rich. . .I have told people for years that if they live in a nice 100K house, and a much nicer house is 50% more, that is only 50K!. . .about the price of a nice car. . .if a nice house is 500K, then a much nicer house is 50% more or 250K!!!. . .why would anyone want to move up and pay 250K when they could pay 50K??? It does no good when home prices go up this much. . .only bragging rights.

Anonymous said...

Hot off the presses: SF Bay Area prices INCREASE YOY.

SFH Bay Area Median Sales Price:
Q1 2006 - $739K
Q1 2007 - $764K

How's that crash coming so far renters?

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-23-2007/0004571447&EDATE=

anonymous wimp said...

Becuase the average American does not expect to sell all of his used gasoline and bananas for a 300% profit.

area 51 said...

Easy, gas and banana prices don't "always go up".....everyone knows that, silly......
uh, unless we could somehow get Ahmadinejad to regularly threaten to destroy Israel, weekly would be nice......kinda like Realtors(R) threatening us to "buy now or be priced out forever"....

area 51 said...

To anonymous 5:47

Nice try, but after inflation it's FLAT:
764k - 3.25% 2006 inflation equals, drumroll.........
$739k!!!!
CONGRATULATIONS! You underperformed the S&P by a HUGE margin. (-12%) Bully for you!

Anonymous said...

C'mon guys, this is simple.

RE ownership (ala asset bubble) isn't a part of the core CPI. The same goes for the stock indexes, ala DOW 14000.

Bananas, oreos, chocolate, and oil are a part of the core inflation collector (CPI) which will indicate stagflation to the entire world of investors which can spearhead a recession in no time.

happyrenter said...

Troll:
Old News
Northern VA Home prices continue to sag.
March 2006 median $477,000
March 2007 median $460,500
YoY change -3.46%
July 2005 median $500,000

March sales volume -6.1% YoY
Average days on market +75%

Source: Metropolitan Regional Information Systems, Inc.

Anonymous said...

Hot off the presses: SF Bay Area prices INCREASE YOY.

SFH Bay Area Median Sales Price:
Q1 2006 - $739K
Q1 2007 - $764K


You're kidding, right? You're looking at median prices from Prudential, which reflect largely stagnant prices? Come now....

For if you don't know the pitfalls with using median pricing, especially in a cooling market (which your report accurately shows), then you really need to do your research. You also fail to acknowledge the $20k price drops noted in the report in places like Solano and Sonoma Co. (which can be just as meaningless, reflecting condos, etc).

FWIW, the California Association of Realtors and National Association of Realtors both acknowledge that the market has cooled as expected, in typical cyclical fashion, starting last year:

http://www.presstelegram.com/business/ci_5728157

So save the spinning for the clients (i.e. the sheeple who haven't been following this story) please.

David in JAX said...

Anonymous said...
Hot off the presses: SF Bay Area prices INCREASE YOY.

SFH Bay Area Median Sales Price:
Q1 2006 - $739K
Q1 2007 - $764K

How's that crash coming so far renters?


WOW. Did you read the entire report or just the first line. It shows the SF area RE market crashing. Check out all of other numbers.

Anonymous said...

Because reporters are dumb and never took an econ class

keith said...

People don't live in the Dow. People don't have to buy Dow stocks for shelter.

The fact that housing costs, most households' #1 expense, aren't in CPI (anymore) is a joke. CPI is a worthless number, and the government knows it.

Anonymous said...

Even if not playing the Stock Market, anyone who DOESN'T buy a house and puts the down payment (remember those?) into an easily-accessible savings account (earning 5.2%) will stay ahead of inflation, while not losing on the deflation in home equity (and interest on mortgage payments, most of which offers NO tax break) you're going to be paying the privilege to enjoy. We're also not paying PMI, property taxes, etc, etc.

Funny, as I'm actually looking for a rental for another year and the pickings are good: with the glut of vacant houses and desparate sellers, I can rent a 3 bdrm house for what I currently pay for a 2 bdrm apt. Since when has more home for the same price been a problem? That's exactly WHY I'm not buying now: I eventually will buy more house for less money, too.

But hey, your rental bashing is fine by me: I don't want to talk everyone into how much smarter it is to rent right now, as that will just discourage more people from selling and moving into the rental market ahead of the tidal wave.

That would work against asset deflation (as rents could rise, decreasing the pain these specuvestors are going to feel)! So continue saying "renting is for losers" all day long, if you want. It works fine by me. :)

burn baby burn said...

CPI is a joke! CPI is a tool the bughouses class uses as an excuse to keep wages artificially low.

Anonymous said...

area 51 said...
To anonymous 5:47

Nice try, but after inflation it's FLAT:
764k - 3.25% 2006 inflation equals, drumroll.........
$739k!!!!
CONGRATULATIONS! You underperformed the S&P by a HUGE margin. (-12%) Bully for you!



Ahh so this is the new renter spin, prices are still going up but not as fast as the S&P...priceless.

And Bully for you? What the hell does that mean grandpa?

Keep renting losers.

uknowwhoiyam said...

Why is skyrocketing housing price inflation trumpeted by the MSM as a great thing, while skyrocketing gas price [is] reported as terrible news?

Good question!

torjusgaaren said...

Because you can't refinance a banana.

Anonymous said...

Do not worry about housing as due to the fact that 53 percent of the population being government employees or dependants this is a communist country and as they will continue their wages being inflation and cost of living adjusted and including the cost of taxations, will as the majority and by action and vote have the money to negate all others property rights and freedoms and housing ala the Soviet Union becomes government controlles and available to the 48% who are the lower classes, without rights and paying the cost of living increases that include the cost of taxations, in, of and by their taxes

Anonymous said...

oops , forgot the fact that the corporate theives, er, ceo's, board and directors, make these people look like peasants, but pay good money to control the puppets that enable this communism that gives them oligarch status

Anonymous said...

Anonymous said...
area 51 said...
To anonymous 5:47

Nice try, but after inflation it's FLAT:
764k - 3.25% 2006 inflation equals, drumroll.........
$739k!!!!
CONGRATULATIONS! You underperformed the S&P by a HUGE margin. (-12%) Bully for you!



Ahh so this is the new renter spin, prices are still going up but not as fast as the S&P...priceless.

And Bully for you? What the hell does that mean grandpa?

Keep renting losers.

April 23, 2007 6:52 PM
--------
LOL, amazing. Its TNTC (Too Numerous Too Count) how many times the REIC trolls have cited the stock market as evidence that the RE market is just fine. But now that someone compares the RE market to the stock market to prove that Stocks are a better investment (FYI, historically they are) the REIC troll slams the post.
Get real loser REIC trolls. Houses are going back to being homes for people to live in and not investments to sit empty to then make short term profits from without adding value to the asset.

area 51 said...

To Anonymous 5:47

Wait, I'm not finished yet,
I guess -12% is IF you paid 100% cash for the debt box. Let's take a more realistic scenario:
How about 50% down (I know, still not very realistic but since you're so smart and educated and rich I'll assume so) That's $370k @ 6%, (Oh BTW that's NEGATIVE 6%) I'll give you the write-off, so we'll be generous and say net loss =4%. (But again, you're so rich you will pay AMT so fuggetaboutit)
OK so net loss is 12% on 370k and 12+4%=16% on the borrowed (margin for you) remainder.
Average loss =14%
DUDE you rock!
OK, OK, if we eliminate the S&P benchmark, (Sorry pipsqueek, but that is the definitive benchmark) you only LOSE 2%.
Well good for you, net LOSS of 2%, that's great. Tell me where to sign up for Anonymous 5:47 HEDGE FUND.
HAHAHAHAHA

Anonymous said...

you are trying to be funny, right?

It would be terrible news if you ate your house every month so were forced to buy a new one.

Or, banana price increases would be different if you lived in a banana that lasted for decades (ignoring maintenance and taxes) and you could then re-sell the banana.

Anonymous said...

I forgot to add that bananas would be different if they weren't making any more bananas!

Anonymous said...

Bananas have NEVER fallen in price. It's always a great time to buy bananas. Are you missing the banana boom?

Anonymous said...

Damn that's a great picture of the President

bickerer said...

Because everyone knows it's good when housing prices go up but bad when gas and bananas prices go up.

How do they know it, programming.

Anonymous said...

man, look at that big pile of potassium...

Anonymous said...

SF bay area prices went up $25K and you idiots think that equates to a loss. No wonder you think renting is better than owning.

RonJon 27 said...

Let's face it. Nobody gives a $h** about what happens to you if you are under 30, and most people who are affected negatively by rising house prices are under 30. You are just a spoiled puke who had the world handed to you.

Nobody gives a $h** that you have to pay 20 times what they did for an education and you have $50k in debt before you even start working for real.

Nobody gives a $sh** that you are going to be left holding the bag paying for the current housedebtors' retirement as Social Security and Medicare cause your taxes to go up 25% while they reside in their billion dollar houses.

Nobody gives a $sh** that you can't afford to live anywhere.

Everybody cares if you default on your mortgage, because that will kill their property value.

Younger folks, you are getting shafted royally!... Too bad you are too busy listening to your ipods and drinking Starbucks to do anything about it!

BTW, did you notice what happened to prices of everything that can't be imported since 2000? Housing, Education, Healthcare?

Instead of having broad inflation, it's been super-concentrated in energy and non-importable goods and services thanks to the global economy.

James Dean said...

RonJon 27 ...you hit the nail on the head!

Anonymous said...

Simple: increased paper wealth (housing ATM) allows people to buy gas, go to the store, and purchase bananas to put in their houses. Other increases are bad because we get fewer bananas.

a.creampuff said...

I detect a banana-creme-puff bubble. Big time!

Anonymous said...

You boomers are going to have a very poor quality of life when you really need it because of your selfish trans-generational subsidies. Guess what, it works both ways!!!! When you are old and feeble, we are not going to take care of you. Don't you wish you lived in a culture that valued it's senoior citizens! HAHA - You Don't lololol

chris g said...

Because houses are typically viewed as investments, not expenditures or consumable items. It is also highly unlikely that I can buy $300,000 worth of bananas without putting down any of my own money, nor would I want to.

Also, I don't live in a banana.

Anonymous said...

torjusgaaren said...

Because you can't refinance a banana.


Huh? You mean I CAN'T take out a BELOC (*banana equity line of credit*) to get at all that equity I've been building in the thing? You're shitting me, right? Damn....

Paul E. Math said...

Well said, ronjon. The reason we think of house price inflation as a good thing is that we think only of ourselves.

Our self-esteem is so dependant on our financial success that we are blind to who is hurt in the process. When someone tells us that we are $200k richer we feel really good about ourselves. We have almost 70% home-ownership so we have a lot of people feeling really good, feeling too much joy to consider the unintended consequences.

Much as we may think of ourselves as being very broad-minded and altruistic, it's really just so much shallow, pablum-puking, knee-jerk liberalism.

Smokey Bill said...

While I have never been a big fan of bananas, gas appears to be way too cheap if the hordes of dorks bouncing around our local river (polluted, btw) on jet skis or roaring up and down in twin inboard ego machines this weekend is any indication.

But the answer to the original question may be that those who write the “news” already own (or make payments on) homes, so report the increase as good news because, for them, it is. As the price of fuel, food, and other non-shelter necessities increases, it is seen as a universally bad thing – I took my kids out for a banana split and had to put gas in my Hummer too… poor me!

Frank said...

All in increase in price means is that your property taxes went up.

You can't trade up to a bigger house, because if yours went up, it means all the other houses in your city went up too.

All an increase in value means is that you can take out home equity lines of credit, and as Suze Orman has correctly pointed out, they're even worse than credit cards.

Anonymous said...

Hot off the presses...

"Mortgage 'meltdown' hits auto sales: GM's Lutz"

Anonymous said...

"Younger folks, you are getting shafted royally!..."

I have been trying to prepare for this since I was probably 16 and am going to be 36 this year. Whenever I bring this up to my peers, I get discounted.

Natural Eyebrows said...

Ronjon 27 points out that the price of higher education is way up. It is up for the same reason that home prices went up. Free money. Colleges can raise tuition with impunity because students can borrow without limitation in the huge student loan market. Lenders have no risk because the gov't guarantees repayment of the loan. This is a bubble too. But there is no asset involved, just a hope of an income sufficient to repay the debt. A hope that may or may not come true. How many massage therapists do we need?

Lost Cause said...

Because the reporters are stenographers for the government, and they automatically print whatever the government thinks they should. When the entire economy is running on borrowed money -- mainly home equity loans -- you do not makes waves. Especially when all of your advertising dollars are coming from the multitude of creative mortgage scams that are everywhere.

Lost Cause said...

It is certainly a sign of desperation to look at San Francisco, and say this reflects a continuation of the housing boom. That city has been in a housing slump for a long while, and any recover yoy compares to bad years before. The city continous to lose population, as does the state, so I would not get my hopes up over such an anomoly.

Anonymous said...

How's that crash coming so far renters?

I don't give a shet if prices never "crash". I am just fine living in a house that is subsidised 50% by my landlord. I have lots of free cash and time to spend it, so go paint the banks house this weekend and shut up.

Anonymous said...

The fact that housing costs, most households' #1 expense, aren't in CPI (anymore) is a joke. CPI is a worthless number, and the government knows it.

It may be a joke, but it's NOT funny. Your yearly raise is based on that worhless number.