March 31, 2008

HousingPANIC Quote of the Day

"At current levels, the average American still can't afford the average house. Despite the creativity of its new policies, Washington can't alter that math."

"The only mechanism to restore balance and get the credit flowing is for prices to fall steeply to a true market level, and for losses (for consumers and corporations) to be recognized and absorbed."

- Peter Schiff, March 2008

89 comments:

keith said...

And in his op-ed, he concluded:

"The quicker home prices find a sustainable bottom, the quicker our economy can truly recover.

Instead, the government is trying to float our allegorical collapsed beach house on a flood tide of new liquidity. But the fixes compound the problem. They're creating runaway inflation, shrinking the value of the dollar -- and heading toward unprecedented government meddling in the marketplace and a diminished sanctity of contracts.

If left unchecked, these policies may save a few mortgage holders and bail out some Wall Street firms, but they'll also wash away the prosperity that Americans have built up over generations."

http://www.latimes.com/news/opinion/sunday/commentary/la-oe-schiff31mar31,0,1983693.story

Anonymous said...

You would have to be an idiot to buy today

Afterthought said...

Considering that a properly timed purchase could save 50k to 100k (or more) I would wait to see if the recession leads to significant job losses.

Job losses will be the thing that moves "prime" borrowers into default.

Each default has a domino effect in neighborhoods, driving prices down further, spurring more defaults.

Pete Schiff ought to talk more about manufacturing.

Anonymous said...

I am an idiot looking to buy a house in todays market. I guess I am lucky though, b/c when I lowball, I just get a seller who won't work with me...I refuse to over pay, and they refuse to realize their 1200 sq. ft. home is not worth 550k. So I am probably an idiot for looking, but definitely not stupid enough to buy at any price. It is all very disheartening.

Anonymous said...

Fellow Friends of HP:

I just closed on the sale of my home for a decent profit. I feel like I just won the lottery as I am renting and watching this disaster play out. My only concern is what this county is going to look like in 2-3 years. My plan is to avoid all major cities at all cost and do a ton of research on the best places to start a family. Scary times are upon us!

Anonymous said...

Let's wait and see. I hope housing prices drop to their pre-bubble levels. Expecting $600K for a measly ranch on a 40 by 100 lot is ridiculous.

Anonymous said...

PETER SCHIFF!!!

You are truly the only voice of logic and reason when it comes to the housing mess........

WHY is your simple message so hard for our worthless "leaders" to grasp????

Anonymous said...

In south florida the price to incomes and price to rents says the home prices have to still come down about $100,000 to $120,000 to come back to historical ratios. The pain is all around me now. I am not sure how much I can endure until I get affected by this sh!t I watched "in the wild" last night. Great Movie!

Rich in FL

Anonymous said...

He is right. SF Chronicle "We have held up in San Francisco pretty well during the subprime crisis and the reason is the average family can't afford to buy a home here."

Anonymous said...

You would have to be an idiot to buy today

Sadly, there's no shortage of idiots in the market. The only good news is that they're all a bunch of broke idiots now that the magic of zero-down, negative am and liar loan funny money is gone.

Marky Mark said...

Especially with the very safe and traditional 20% down, 2.5x income mortgages that actually might get paid back

Marky Mark

Casey Serin said...

Hey FBI, I committed mortgage fraud 8 times over, and stole $250,000 in the process. You gonna arrest me, you p***ies?? Didn't think so.

Hey SEC, I just attempted a pump-and-dump for my favorite penny stock, GSPG. You gonna arrest me, you p***ies?? Didn't think so.

Hey IRS, I haven't filed taxes in three years. You gonna arrest me, you p***ies?? Didn't think so.

Hey California FTB, I never paid the franchising tax for my shell corporation. You gonna arrest me, you p***ies?? Didn't think so.

WHAT WILL IT TAKE FOR ME TO BE ARRESTED?!! I LOVE THIS COUNTRY!!

happy homeowner in the stix said...

Let me play a little devil's advocate here and ask the question: Since when did it become something of a "right" to buy an "average" house?

Seriously. Think about it.

I don't care if someone making an "average" income can afford a home. What I care about is....can the person drawing up the contract afford what he or she is getting?

You could be making far more than the "average" and still have no business buying a home due to all the other obligations (student loans, cc debt, car payments, etc.) that you have.

I know lots of people who are making over 90k who have student loans in the 200k range, along with hefty car payments and other monthly installments. Yep, they are making far more than the average, but they have no business getting a mortgage right now until they pay some of that down. I don't care how "sweet" the deal is.

You could also have someone who is a saving fiend be able to put down a substantial down payment on a house, or someone who inherited a bunch of money who wants to put it down on a house, etc., thereby enabling them to buy a house "out of their league" but with a mortgage they can afford.

Don't you want to reward that kind of responsible (as in the polar opposite of "I can't afford it unless I got no money down and a 1% teaser rate because I gotta have an expensive ride to impress people I don't even know") behavior?

If that means homeownership drops to say, 30%, why is that such a bad thing? There is no shame in waiting until you can afford something before you sign on the dotted line. That includes houses, not just cars and other goofy crap.

Besides, with all the people on this blog going off about how renting is superior, those of us who bought a house are fools, houses now only go down in value, you never own a house because you are still paying property taxes on it, yada yada yada....seems like you still harbor some "renting is second best behavior" if you are posting this, Keith.

Anonymous said...

Is buying so bad in light of our ill-conceived monetary policy? Once hyper-inflation has had its way with the dollar, perhaps a 200K fixed rate mortgage today could be paid off with a few gold bars in a few years?

Anonymous said...

bwa ha ha ha

Peter Schiff, the same Peter Schiff whose father is a nutjob fighting the IRS. Yeah good person from whom to take advice.

Face it losers the bailout is here. Your tax dollars will be used to prop up housing prices. They are talking $1 trillion now of taxpayer money. Rent now and be a renter forever.

Anonymous said...

Yeah but....It's never been a better time to buy....BRAHAHHAHAHAHAHA!!!!

Anonymous said...

I heard that one this weekend.

greenspans new page said...

Couldn't have said it better myself.Prices are still too high.the crook paulson is on right now talking about some new bullshit plan for the fed.I wonder if abby joseph as GS blew him this morning?

consultant said...

Keith,

Supply side economics, globalism-NAFTA, extreme free market capitalism, get government off our backs, ownership society-whether intended or not-is driving us back to the 19th century.

Our country has become focused on the "housing industry" because we shipped just about every other industry overseas. How else are large numbers of people suppose to earn a living?

Of course, housing was never meant to be an industry. Certainly not something to be bought and sold repeatedly, flipped and diced up like stocks or other paper assets. That's why housing prices rose so quickly over the last 15 years. We have witnessed the perfect storm of a nation with little "mass" industry left and the collapse of rules and enforcement in financial markets. Money has to go somewhere, and it went into one of few areas that hadn't been exported overseas or ruthlessly exploited-housing.

One of the solutions to this crisis of course is to let housing prices drop to market affordability. Oh the pain to come!

Like Iraq, there are just no easy or painless ways out of this mess. We are just beginning to see some of the unintended consequences from this reckless behavior.

Unlike Iraq, this behavior had its roots planted before the disastrous Bush administration took office. Republican and Democratic administrations enabled this beast over the last 35 years or so.

Now the questions is, can we turn the beast back into a kitten?

Anonymous said...

Here comes war with Iran. This will make war in Iraq look like a leisurely stroll through Central Park:

War With Iran Launches on April 6th

Buzz Saw said...

I'm waiting for Dopes to weigh in on this one. Dopes has been on fiyah lately.

Anonymous said...


Here comes war with Iran. This will make war in Iraq look like a leisurely stroll through Central Park:


Yet another dailykook making a fool out of himself.

Anonymous said...

.


If you buy today.....


My wife and I looked at a home in So Cal last fall,

representing agent was the owner as well.

Priced at 1.1mil,

she asked if "we would care to make an offer"?

We said not yet!

Went down to 950k

then 879k,

then taken away...

just found out it has just re-listed by another agent at $749k


A $350k drop in about six months!

It will be interesting to see if it sells, and how long it takes to sell at this price or any other price!


.

Amtex said...

Sorry, that Iran attack "story" was from 2007. Nice try though.

Anonymous said...

"Face it losers the bailout is here. Your tax dollars will be used to prop up housing prices. They are talking $1 trillion now of taxpayer money. Rent now and be a renter forever."

This is the typical scum that makes up the Democratic Party and who supports Hillary.

Anonymous said...

Most people don't understand basic math. That's the problem.

Mark in San Diego said...

THERE IS NOT BAILOUT!. . .in response to all of those who think the government is going to do a bailout of Joe 6 Pack. . .NOTHING, I repeat NOTHING has really been done or will be done. . .Bear Stearns YES. . .Lehman, etc. YES. . .but so far none of the proposed or bailouts has done one damn thing to bailout 90% of homedebtors. . .prices are still dropping about 2% a month in bubble areas (actually 2.5% here in SOCAL), and despite all the Hillary/Obama talk. . .they would not even take office for nearly a year. . .larger Fanny mortgages (over 417K) will do little here because as the man said, "housing prices are still too high to afford.". . .its the math!!!

Anonymous said...

I am an idiot looking to buy a house in todays market. I guess I am lucky though, b/c when I lowball, I just get a seller who won't work with me...I refuse to over pay, and they refuse to realize their 1200 sq. ft. home is not worth 550k. So I am probably an idiot for looking, but definitely not stupid enough to buy at any price. It is all very disheartening.

-----------------------

And your going to keep waiting cause ain't no one gonna give you a home for free. You best pay the half million for the small dump. That goes for all bitter renters.

Anonymous said...

My Wife and I are in the process of selling our home in Nashville. We invited a realwhore over so we could listen to his lies. We have no intention of using a realwhore at at all. We just wanted to get a laugh at what he had to say. So when he started to quote Lawrence Yun of the NAR about how things are turning around for the better I asked him to leave my house. He was stunned. I said to him his whole profession is so corrupt and filled with snake oil salesmen.

econ101 said...

I agree; the faster prices fall, the faster homeowners will change their behavior; i.e. it's better for folks not to assume that they're not living in a goose that lays golden eggs.

the central idea is "market cap" and the idea that "market cap" is based on the prices of a handful of items today not a huge handful of items tommorrow.

eric in vegas said...

"WHY is your simple message so hard for our worthless "leaders" to grasp????"

Because in this case the truth hurts too much.

"Face it losers the bailout is here. Your tax dollars will be used to prop up housing prices. They are talking $1 trillion now of taxpayer money. Rent now and be a renter forever."

If the government is trying to prop up home prices they're doing a very bad job.

Anonymous said...

Here are some gems from an unemployed REIC couple still in denial. The entire article is a good read. And she thought that she was getting a sugar daddy. Hahaha...I love it:

"For Mysti, 37, all her efforts to find work since she lost her job last May have been futile. She said she believes the attention given to subprime borrowers who have run into trouble paying their mortgages work against her and other former colleagues. It's almost like having "Enron" on your resume.

"The media has somewhat tarnished the subprime industry and all the employees, and portrayed them as being dishonest," she said. "We're not dishonest. Not everybody was a bad borrower. Not every company was a bad lender."

"We're still both in shock that it could go from something so good to so bad so quick," said Kent, 59. "New Century in 60 days went from top of the heap to out of business."

The two didn't say exactly how much money they made at their last jobs but Kent admitted they each had six-figure incomes.

Today, they're trying to get by on his unemployment benefits of about $450 a week, which covers only about an eighth of the basic payments they owe every month.

Their home equity line, mortgage, health and life insurance premiums alone cost about $10,000 a month. Still, they are trying to hang onto what they call their dream home with a view of the Pacific Ocean where they live with Mysti's 11-year old son.

Kent estimates the mountainside home in San Clemente, Calif., which they bought in 2005, is worth 20% less than it was a year ago. And in the current market, he said he's not sure he could sell it for even that amount.

"We've used up most of our reserves, cashed in her 401K," said Kent. "We're going Mach 1 into a wall. When we run into it, then we've got to decide what to do next."

Despite their financial problems, the Copes have worked hard to protect their credit rating, staying current on bills. And they've made cutbacks: trading in Kent's Corvette for a Suburban and getting rid of the gardener, for example.


http://tinyurl.com/32gpmr

DOPES said...

MY HOUSE PAYMENT IS TWICE AS MUCH AS RENT SO I CAN PAINT THE WALLS ORANGE!!!

DOPES!!!

Happy Homedebtor said...

Re: 2.5x income ratio being traditional. What planet are you from? I've *never* seen that ratio be standard/typical except in Keith's fantasy world. Standard/typical is 3-4x. 3 is low, 4 is high. During the bubble, people were getting 7x w/ IO Option ARMs. With liar loans, you're talking 100x so we won't really discuss those.

At 2.5x my 100K salary in '04, which would be more than 2x the median *HOUSEHOLD* income in PG County MD *now*, I would've been able to buy a 20-yr-old SFH that was about 2K sq ft above ground in 2000: WELL before any bubble had even sniffed around.

You guys live in dreamland. Take the median household income for a county/city/etc, find the median price for a home in that area. Divide the home-price by the income.

> 5x: bubblicious
> 4x: overpriced
> 3x < 4x: right-priced
< 3x: underpriced, investment opportunity.

In my county, my wife and I have roughly 2x the median household income, and houses are now selling for around 4x median income.

Our particular home is currently down about 10% +/- 3% from what we paid, and we got it 13% off peak. Our mortgage is now 3x our income: that ratio is lower than *anybody* I know who bought in the last 5 years. In 6-24 months, that ratio will drop to between 2 and 2.5.

Work smarter and harder, or shutup you poor lazy renters. ;) That ratio could *plummet* if Uncles Bushy/Bernanke/Paulson/Obama & Hillary give us an early Christmas present. :D

Anonymous said...

Anonymous said...

"Face it losers the bailout is here. Your tax dollars will be used to prop up housing prices.

So will yours.

Anonymous said...

There is no shame in renting and there is no shame in driving a used mid-size car for that matter!

To all those who still believe "owning" a home with a mortgage is better than renting, please use the Buy or Rent calculator, keeping in mind today property values ARE DECREASING RAPIDLY!

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.htm


"It's always a good time to buy a home." Yes, it IS, if you're a realtor whore!

And by the way, if you can't afford to buy, rent and do not resort to mortgage scams.

Anonymous said...

OH MY WHAT A CRASH

NADSAQ UP 1.3%

Anonymous said...

Massive Wage Inflation will do that same thing and will be politically much less painfull.

Invest in Gold.

Anonymous said...

Its all good we are gonna have

Bank of Ben
Citiben
Goldben Sachs
Countyben Financial
CenturyBen 21
Allben Insurance


Big Ben

Anonymous said...

The supply siders in charge that will loot and leave us are all republicans.

This housing debacle that started in 2002 is all republican.

The national debt that has almost doubled in the last 7 years is all republican on the republican watch.

9-11 happened on the bush watch and 'sleeza was his national security advisor that did nothing to prevent this, as a result she was promoted to secretary of state. They are both republican

Yes, the republican scheittstains accomplished a lot so far in 7 years. Wonder what is next up their sleeves?

Refuse to buy overpriced said...

Why is it so hard for other economists to understand this simple fact?

Anonymous said...

he says falling prices is the only way to restore balance. Is it really the only way? couldn't wages rise and prices stay flat? I would add that I think a significant rise in wages is an impossibility.

Mammoth said...

"Once hyper-inflation has had its way with the dollar, perhaps a 200K fixed rate mortgage today could be paid off with a few gold bars in a few years?"
---------------------------

IF wages inflate as well, or IF you already have some gold bars, then you will be able to pay off that $200K easily.

However, wages are not increasing, so it will not be any easier to pay off that debt in the future.

In fact, since prices for everything else are inceasing, that means it will be more difficult to pay off this debt in the future since you will have less money left over after paying your daily living exspenses.

Good luck everyone!

-Mammoth

Anonymous said...

Here's the solution:

Pull out of Iraq ASAP.

Arrest half of the Bush Administration for corruption and dereliction of duty and put the other half on probation.

Kick the Democrat and Republican incumbents out of office.

Public floggings for FB's and the people who approved their loans.

Build a concrete border wall 20 feet high with razor wire on top and a deep ditch in front of it. Use captured illegal immigrants as the labor before deporting them.

Use non-violent prison labor to harvest the crops.

No more corporate or personal welfare.


Most of our problems will be solved.

Anonymous said...

QWEEFERINO is dreaming if anyone will listen to old Peter.

This is a more appropriate quote of what's happening.

"It isn't a question of whether there's going to be a bailout," says Scott Lilly, a senior fellow at the Center for American Progress, a left-leaning Washington think tank. "It's a question of what kind of a bailout."

This bailout will make great society spending seem like spare change. The starting bid is $300 billion proposed by Barney Frank. And this is before any ammendments/riders have been added. Look for $750 billion easy.

All those FBs you make fun of will be the ones laughing all the way to the bank. While they drive their HELOC financed BMWs, you smart guys drive around in your 20 year old Hondas. Only those helocs will never have to be paid back. Neither will the refi money they spent on clothes, trips, TVs, boob jobs. They get to keep all the toys and the McMansion, with a mortgage payment lower than your shithole apartment. And on top of it they still get the mortgage interest deduction.

DOPES
FOOLS
DOLTS

Take your pick

Anonymous said...

PPT is just shameless. Just look at the graphs today (03/31) around 3:30 PM. It's a straight line up, after the market was heading into the toilet once again.

Hey PPT, you're not fooling anyone anymore. F*ck you Bernanke and Paulson!

Stop wasting taxpayer money to bail the crooks on Wall Street and to fake this rotten stock market as positive.

You keep playing games and this country will explode into riots an anarchy. You better live the country when that happens.

Enough is enough, let these Zionist crooks fail and move back to their POS holy desert.

Anonymous said...

We love ya' Peter!!

Keeping singing the truth, no matter how the bastards try to get you down!!

They can't fight the FACTS and just look like incompetent FOOLS even trying to fight your messages!

Anonymous said...

Some Anon sez:
"Use non-violent prison labor to harvest the crops."
- - - - - - - - - - - - - -
Hey man, the violent prisoners can also harvest crops.

Just make them dig with their bare hands, rather than give them a shovel, which can be used as a weapon.

Anonymous said...

Anonymous said...

Yes, the republican scheittstains accomplished a lot so far in 7 years. Wonder what is next up their sleeves?

Iran

DOPES said...

I SPENT A DOLLAR TO SAVE .28 CENTS ON MY TAXES!!!

DOPES!!!

Anonymous said...

Anonymous Anonymous said...

QWEEFERINO is dreaming if anyone will listen to old Peter.

This is a more appropriate quote of what's happening.

"It isn't a question of whether there's going to be a bailout," says Scott Lilly, a senior fellow at the Center for American Progress, a left-leaning Washington think tank. "It's a question of what kind of a bailout."

This bailout will make great society spending seem like spare change. The starting bid is $300 billion proposed by Barney Frank. And this is before any ammendments/riders have been added. Look for $750 billion easy.

Look where? China? Dubai? Singapore? Canada?. The U.S.A. is a broke debtor nation with immoral, greedy little gollums for citizens just like you. They are running their mouths to buy time. There is no money.

Please don't breed.

Anonymous said...

I'm looking to start a local, private, secret barter system (y' know kinda like the system that runs the U.S. only smaller) - any guidelines as to how to do it?

k.w. - southern ca. said...

As the dollar continues to plummet in value, so will the average American's ability to afford a down-payment on a house - even *after* prices have fallen sharply.

Anonymous said...

"We invited a realwhore over so we could listen to his lies. We have no intention of using a realwhore at at all. We just wanted to get a laugh at what he had to say."

You really need to get out more often if this passes for entertainment in your family.

Anonymous said...

silly losers, renting is for kids

Anonymous said...

I'm looking to start a local, private, secret barter system (y' know kinda like the system that runs the U.S. only smaller) - any guidelines as to how to do it?

Capitalists such as Greenspan intentionally destroy corporations and fiat money. There is a method to their madness. Read Atlas Shrugged and move to Galt's Gulch.

Anonymous said...

It is refreshing to hear some one publicly say what we all know.

Scumbag reliters stioll trying to pull a fast one on buyers. Do not trust one relitter.

Anonymous said...

"And your going to keep waiting cause ain't no one gonna give you a home for free. You best pay the half million for the small dump. That goes for all bitter renters."

March 31, 2008 5:18 PM

I TAKE IT YOU ARE TRYING TO SELL YOUR HOUSE OR A REALTOR? And I still would pay half a million for a POS - WOULD YOU???

Anonymous said...

I am no fan of anyone who has been in on creating this mess but I have one question for all the folks who argue "just let prices fall ( a lot ) and have the banks/brokers just fess up to their losses and write everything down NOW" -
the question is: How much of the financial system will vaporize and what happens if it does??? Sure I would love to see the top 10 Wall St. firms go the way of Bare Sterns, but I suspect that will get us to a Mad Max world about 3 weeks after it happens - and I don't pretend to be good at that kind of survival.
Guys like Schiff need to give an answer to what happens then... Until they can give a palatable answer to a survivable financial meltdown, everyone will give Bernanke a free hand to do whatever he thinks will save the system.

Yoski said...

I've been looking at houses in Miami the past few weeks. Upgraded 1200 sqft houses on 7500 sqft lots in a nice n'hood for $400 - 500K. Those houses are worth $100 - 150K tops. Mixed in are foreclosures and short sales ranging from $200-350K for similar dwellings. Private sellers are still in denial. Banks are trying to unload REO for whatever they can get. The bottom is still ways off. check back in a year or so.
This ride is really picking up steam, enjoy!

Anonymous said...

Re: 2.5x income ratio being traditional. What planet are you from? I've *never* seen that ratio be standard/typical except in Keith's fantasy world.

Right on dude. I've also never seen prices as low as the bitter renters here seem to be dreaming about. Whether it's median income versus home price, or rent versus price P/E ratios, looks like they'll be waiting forever. People here seem to think that they're entitled to buy a house where the ownership cost equals what the rent would be, and therefore 100% of the upside as inflation slowly changes the equation in their favour. In other words, they're entitled to free money from any existing owner.

In the real world, no pain, no gain. Most owners endure a few years of tight budgeting in exchange for a more favourable ratio down the road. Around here, no one seems to want to look farther ahead than one year when doing rent-vs-buy calculations.

Regarding that median vs median blather, in major metro areas that will always be out of kilter to some extent because you have a lot of residents with lower incomes but who bought back when prices were lower. They get counted into the median income stat, but since they're not buyers, their incomes have no effect on setting the median price for the market. Prices are set relative to the income of marginal buyers (newer buyers or trade-up buyers). Major metro areas continue to have all the good-paying jobs. To the extent older residents have any effect on prices, it is as sellers (if they retire and leave the area or downsize), and as sellers, their incomes aren't relevant to pricing.

Strong and handsom said...

Attention! Attention!
I am a Zionist with more power than any of you FBers have come up with thus far.

Not only do I own all of the little things like The banks, The media and all The corporations, but I myself with both hands tied behind my back, before breakfast, have the might to dig deep into your paranoid brain and remind you that the loser you see in the mirror each morning is indeed.

Yup
You guessed it

You!

Also, I can crush a boulder with the tip of my pinky nail and control your thoughts with my pencil eraser

DOPES!

Anonymous said...

Our particular home is currently down about 10% +/- 3% from what we paid, and we got it 13% off peak. Our mortgage is now 3x our income: that ratio is lower than *anybody* I know who bought in the last 5 years. In 6-24 months, that ratio will drop to between 2 and 2.5.

Trying to convince yourself that you didn't do a stupid financial move by buying your cancer house, eh?

Those rosy numbers you pulled out of your arse just makes you look dumb and in denial. Your Net Worth must be sinking with the house you rent from your Arab banker. Plus you must be paying a ton of money in gas for living in the boonies. How's that torturing commute doing for your nerves? Haha

You're just another dumb hamster, who got who got gamed by Arab bankers and realtwhores. The reality is that your overpaid for your house, bought at bubble's peak, have no equity, and the housing market will nosedive for years to come. You made a stupid move by buying that cancer house, sheep. Enjoy that iron ball attached to your ankle for many many years to come. Don't forget to go to bed at 8 PM to get up at 5 AM to face that expensive and long commute. That's what I call quality of life!

Anonymous said...

All those FBs you make fun of will be the ones laughing all the way to the bank. While they drive their HELOC financed BMWs, you smart guys drive around in your 20 year old Hondas.

You've been saying that for a year now and nothing happens. All I see is people losing their jobs, homes, credit, going bankrupt, killing themselves, a record 28 million Americans getting food coupons, unemployment skyrocketing, Wall Street melting away. Keep the faith brother. Oh, you seem desperate. You should!

eric in vegas said...

"Look where? China? Dubai? Singapore? Canada?. The U.S.A. is a broke debtor nation with immoral, greedy little gollums for citizens just like you. They are running their mouths to buy time. There is no money."

They'd have to print the money. Paging Mr. Euro.

Martie said...

Wage inflation? So, Wal-Mart will be paying $100 an hour?

Anonymous said...

The average American is not entitled to afford anything. In fact, it's poor people who had no business taking up liar loans that helped created artificial and unsustainable demand for housing. Poor people should be renters. No shame in that. Get some fucking money before you think about taking out a loan.

New NAR AD campaign slogan said...

"Enjoy that iron ball attached to your ankle for many many years to come. Don't forget to go to bed at 8 PM to get up at 5 AM to face that expensive and long commute. That's what I call quality of life!"

Priceless!

Time to punish the guilty said...

The game is over.

Economic Depression is here NOW.

Thanks Big Oil and Halliburton

It is time to punish the Guilty.

Anonymous said...

happy and anon 1:46:

HP is the polar opposite of NAR. NAR says housing only goes up. HP says a 3/2 in California should cost $75K. The truth of course is somewhere in the middle.

I don't know where this idea of 2.5X income came from either. And it is irrelevant. If a mortgage costs 5% you can't tell me the ratio is the same as if a mortgage costs 10%.

You have to realize most people posting here are young and very stupid. They see expensive houses and think some great conspiracy is keeping them down. They read Atlas Shrugged in high school and think the boogeyman is out to get them.

They missed the housing boom by renting. They missed the equities boom by keeping their money in a 1% CD. And since they can't accept that they fucked up, they need a forum like this where they can high five each other and reinforce their poor decisions to each other.

And the best part is their contradictory arguments. On the one hand hyperinflation will occur, sending gold to $5000 an ounce. While that is going on, housing - and only housing - will be in a multi-decade deflationary spiral.

That is the kind of mentality you are dealing with here.

Bittter Renter said...

happy homedebtor's post makes perfect sense except he admits he has twice the average income. Then insults everyone as lazy for not earning as much as he. Hey, hap' - why do you think they call it the average income? To everyone who earns well above average, I'd like to know the following:

1. Are you saving anything, or spending it all to keep up with the Joneses? Happy and his wife live in one of the most expensive suburbs in the entire east coast.

2. What will do in case of a divorce? You may be Happy now, but wifey can leave you just cause she feels like it. Better get to the gym, Happy, and work off that Starbucks.

3. What if one of you loses that six-figure-plus way above average salary? Is it your vast superiority that will guarantee you can waltz into a similar job, even though there's an ocean of type-A middle managers and paper pushers like you out pounding the pavement? Or will one of you get taken down a few pegs?

Being average and living a modest lifestyle is not a bad way to go, as you may suddenly discover yourself one day, you happy jackanape.

Granny Smith said...

"I've also never seen prices as low as the bitter renters here seem to be dreaming about. "

Uh...150% real increase in four to five years is not normal. Housing usually increases by single digits.

So you must not have lived "around here" five years ago, bro. And some of us sold at the peak - we're bubble sitters who saw this coming way back when "flipping" was a new fad. Looks like we were absolutely 100% correct. How you like them apples?

Anonymous said...

WAKE UP SHEEPLE! A 1400 sq ft ranch can't be worth $500K, even if it's in CA, NYC or Long Island...

Anonymous said...

To all the "doomsayers" on this blog: there are places all over the Midwest where housing prices are still 4-5 times the median. (And you can find starter homes at 2.5-3 times the median household incone).

Anonymous said...

to anon 11:13 a.m.

First, I don't "have" to do anything your candy ass says. Second, I am 51, a practicing attorney with an MBA. Hot wife too.

Go take a "have to" crap on a mirror. P.S. Shut Up

Anonymous said...

Anon 11:13
You are so right. These stupid kids don't seem to realize that there is no housing bubble, housing prices are not dropping, credit is not getting more difficult to obtain and pricing out new buyers, foreclosures are not rising, ARMs are not continuing to reset and push underwater borrowers into foreclosure, the stock market did not take a beating the last 8 months, the fifth largest investment bank in the country did not implode several weeks ago, gold and silver and other commodities have not soared over the last few years, inflation is only 2% cause the Fed says so, its always a good time to buy, and the kool-aid tastes better than ever!

Anonymous said...

"The missed the housing boom by renting!"

How? And isn't that good for them.

Happy Homedebtor said...

Anonymous tool said: Trying to convince yourself that you didn't do a stupid financial move by buying your cancer house, eh?

Lessee: My commute is a bit over 30 minutes to both of my offices in diff states, so wow...that commute is just painful.

I get up around 8:45am to go to work, so guess you're off there.

My car pulls just under 30 mpg, and I telecommute 1 day a week, so my commute is maybe $30/week - ooops.

The #s are based on recent sales, appraisals, and the current base-prices + incentives that they're using. :)

Sorry, didn't buy at peak - didn't mean to disappoint you. :D

My net worth is just fine, I didn't put a dime down so I can still walk away if it implodes.

Sucks to be so wrong and bitter, doesn't it?

k.w. - southern ca. said...

You will see prices drop like never before - that is a certainty.

With skyrocketing unemployment, gas and utility prices soaring, food going up, I seriously doubt you or I will sse a rush by the masses to put down-payments on the over supply of rapidly depreciating houses across this country.

Housing should have never become speculative, and we see very clearly now why we should have never done so - the country as a whole is now suffering for it.

Anonymous said...
happy and anon 1:46:

HP is the polar opposite of NAR. NAR says housing only goes up. HP says a 3/2 in California should cost $75K. The truth of course is somewhere in the middle.

I don't know where this idea of 2.5X income came from either. And it is irrelevant. If a mortgage costs 5% you can't tell me the ratio is the same as if a mortgage costs 10%.

You have to realize most people posting here are young and very stupid. They see expensive houses and think some great conspiracy is keeping them down. They read Atlas Shrugged in high school and think the boogeyman is out to get them.

They missed the housing boom by renting. They missed the equities boom by keeping their money in a 1% CD. And since they can't accept that they fucked up, they need a forum like this where they can high five each other and reinforce their poor decisions to each other.

And the best part is their contradictory arguments. On the one hand hyperinflation will occur, sending gold to $5000 an ounce. While that is going on, housing - and only housing - will be in a multi-decade deflationary spiral.

That is the kind of mentality you are dealing with here.

Anonymous said...

"First, I don't "have" to do anything your candy ass says. Second, I am 51, a practicing attorney with an MBA. Hot wife too."

Of course you are. Everyone online is rich and hot. Personally I'm 28, a Calivn Klein underwear model, with a PhD, married to a Victoria Secret model and we earn $10M a year.

See how easy it is to make shit up?

Anonymous said...

My net worth is just fine, I didn't put a dime down so I can still walk away if it implodes.

This revelation alone shows that you know diddley about Finance. Busted!

Oh, and telecommuting, means that you have some sh!tty infomercial or Amway type of job. No good paying job allows you to telecommute so much. Unless you're competing with the Code Monkeys from India and Russia. Good luck with that depressing wage which doesn't keep up with inflation and doesn't offer any security.

You're screwed and not getting any younger. And chances are your wife will dump you, loser. Enjoy your retirement in poverty, financial genius.

Anonymous said...

You have to realize most people posting here are young and very stupid.

Not really. I have advanced degrees from prestigious B-Schools, with majors in Business and minor in Economics. Your numbers don't add.

Only 18% of Americans earn $100k / year and a much smaller group earns $200k. Even if you earn $200k, which I doubt, it shouldn't be financially prudent to buy homes priced @ $600k and above as many of you are doing in places like CA, WA, AZ, FL, and NY.

You're over leveraged and taking huge risk for a little or no return. You should just admit that the only reason you're buying those expensive homes waaayyyyy out of your league is to succumb to peer and family pressures and to your wife's stupid nesting instincts.

The 2.5 X Gross Income rule of thumb stands because you can't count on a rosy future in this country anymore. Divorce rate is hitting 60%, property taxes and insurance are skyrocketing, wages are stagnant, while you geniuses keep living beyond your means, always counting with 2 salaries for your expensive and fake lifestyles.

You can fight my arguments with rosy scenarios as much as you want but in reality your numbers don't add in the real world of finance. BTW, I'm a business owner who has been working daily with numbers for more than 20 years.

Anonymous said...

They missed the housing boom by renting. They missed the equities boom by keeping their money in a 1% CD.

No we didn't. Many of us cashed out at bubble's peak, rent for 1/5 of purchase price, and invested in precious metals, foreign currencies, and properties overseas.

But you know that. You're just pulling a Mike Norman here because you're hurting with your idiotic financial decisions. I have no doubt that you're insolvent and will retire in poverty.

Anonymous said...

Right on dude. I've also never seen prices as low as the bitter renters here seem to be dreaming about. Whether it's median income versus home price, or rent versus price P/E ratios, looks like they'll be waiting forever.

Oh really? You didn't watch the video posted here last week about Buy-One-Get-One-Free deals in Cape Coral, FL? Or that homes in CA are collapsing more than 2% per month?

Anonymous said...

Some of the f*cked homedebtors here sound like that idiot from My Money Blog, who got out of his financial hole by marrying a chic with large savings.

That genius just bought a 600k house (probably with her money) while both bring home under $150k per year. He doesn't believe in the 2.5 X rule either. Genius!

He's probably counting on her daddy's inheritance to pay for all that, since all he does is staying on his pajamas at home, trying to make a buck with Adsense, as the wife works her butt off. And sure enough, he has lots of dumb followers. America is doomed!

Anonymous said...

Anon 6: 18

Of course you model Calvin Klein Underwear!!! I believe you!!!! Oh, Honey, Why, Oh! Why...Won't YOU BELIEVE ME??

Kiss.

Happy Homedebtor said...

Confused bitter loser said: This revelation alone shows that you know diddley about Finance. Busted!

Ummm...lets see how confused you are:

1. No, really - I already have it worked out, just need to have my attorneys draw up paperwork should I decide to walk away - thank you, COME AGAIN!

2. Ummm...no, actually *my* boss and some of my developers telecommute 2 days a week. Since I took this job I've overeducated/overcertified/overqualified myself for it, so any other place will give me a promotion/more $$. I'm here because my company paid for my MS, and if I'm around through Feb, they'll have paid for my MBA on top of that.

3. I am actually getting younger - my father is 60 and jogs 7 miles a day now since 5 wasn't enough, retired @ 46 3/4, so I'm trying ot beat that.

Just because you either dropped out, didn't go, or stopped after a single degree doesn't mean the rest of us are lazy self-entitled losers. Some of us actually work our asses off and live below our means. :)

THANK YOU, COME AGAIN!

Anonymous said...

Peter Schiff should be our National Economic CZAR.

He is the only one that can be trusted to actually serve up the unvarnished TRUTH of our situation.

GOD BLESS YOU PETER!!

Anonymous said...

No we didn't. Many of us cashed out at bubble's peak, rent for 1/5 of purchase price, and invested in precious metals, foreign currencies, and properties overseas.

Don't forget to throw in that you unloaded all your tech stocks at the height of the bubble before going into RE. Everyone's a genius on the internet, timing their way in and out of every bubble that comes along. For the 99.99999% of Americans that aren't as clever as you, these market timing alerts probably aren't very helpful. Even you may eventually find yourself on the wrong side of a bubble.