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J sub D | September 6, 2007, 12:18pm | #

See my previous post in the "This Is What Happens When You Lend Money to Poor People" thread.

J sub D | September 6, 2007, 12:34pm | #

Let me expand on what basically is my "Fuck 'em" position.

Helping the lenders is just corporate welfare. It's the classic scam of helping the favored rich under the guise of helping the poor. Be careful there, the "rich" favored one year may be out of style the next.

Helping the borrowers is paternalistic and patronizing. It's sendig the message "You're too poor and stupid too take responsibilty for tour own fuckups. Therefore we, the wise and benevolent government will come riding in on our white stallions to rescue you from your own decisions. By the way, while we're hear let's talk about other decisions that you are too stupid, childlike and irresponsibe to make. It's for your own good, you know."

That people can't see through the BS and recognize things like this are government efforts to increase it's control over EVERYONE'S life frustrates me to no end.

But then, I don't have a college degree so I'm probably talking out of my ass. But then again, maybe not.

Trollaphile | September 6, 2007, 12:53pm | #

Great, I can stop paying my mortgage and get bailed out or part of it forgiven.

robc | September 6, 2007, 1:00pm | #

joe,

I dont use it either, but considering your problems with italics, the preview button is your friend.

Paul | September 6, 2007, 1:16pm | #

See my previous post in the "This Is What Happens When You Lend Money to Poor People" thread.

Yeah, it ain't just poor people. It's white, middle class folks who just haaaad to have that overpriced home in the hip, walkable neighborhood, and were willing to do anything to get it including but not limited to taking ARM loans, interest only loans (I know I'm gonna get that promotion this year, I'm sure of it), borrowing against a previous house that hadn't been sold yet, etc. etc.

Lamar | September 6, 2007, 1:18pm | #

As a renter, I say screw 'em all. But screw 'em all equally. The market will contract, and folks might just be able to afford homes again.

joshua corning | September 6, 2007, 1:22pm | #

Countless subprime borrowers got loans and homes and are not now facing foreclosure.,/i>

Yeah, and what about all the markets in Baghdad that AREN'T being bombed? That inconvenient nugget of information always gets lost, doesn't it?

Lets see a small minority of people got to deep in debt and will have to sell their house which in reality they never really owned, never really could afford and probably paid over the value of the home to begin with in the hopes that prices would raise. Wow Joe I can see how this is comparable to the occupation of Iraq.

joshua corning | September 6, 2007, 1:34pm | #

The fun thing about this is that there really isn't a crisis...these people loosing their homes are not destitute, they have jobs and have credit ratings high enough to get loans in the hundreds of thousands of dollar range...and the vast majority of whom will simply sell their homes and either go back to renting (and after a few years of penny saving can go back and try again) or downgrade and buy a more affordable home.

Paul | September 6, 2007, 1:39pm | #

, there is no Dirk Dastardly down at the bank looking to swindle the widow out of the family farm.

That's because there's evidence that the widow of the family farm engaged in serious land speculation in the eighties and then the bottom fell out.

I remember years ago listening Terri Gross interview a woman on NPR. I don't remember who the woman being interviewed was, but she had written some tug-at-your-heartstrings book about how her family lost their family farm to "Dirk Dastardly". At some point in the interview, the woman let fly that her father had done a bunch of land speculation and questionable investments which caused their financial woes. Terri Gross was so stunned that she did a double-take and with a tone of incredulity confirmed what the woman had just said. The woman responded that it wasn't her father's fault he was a bad business man, and then attempted to recover her lost momentum by changing the subject.

Whenever someone's losing their home or the proverbial family farm, I want to get the story before their financial woes, not during or after. Only that way can you best judge who's deserving of help and compassion, and who's trainwreck could have been easily avoided.

J sub D | September 6, 2007, 1:39pm | #

i agree with you in spirit except for the animistic stance towards the government.

it's not a living entity, but more of a mental stance at this point. just a mental stance that can kill, like evil psychics or something.

"The Government inudes elected, appointed, and hired people among it's parts. Collectively these people appear to me to have purposes, intentions and desires. I don't wax philosophically but if it looks like a duck ...

Lamar | September 6, 2007, 1:47pm | #

"There is an abundance of government planning in regards to housing and the end result is this planning has substantially raised the price of housing in much of the US by constraining the supply of available lots."

So when the price of housing falls due to abundance of supply, will those low prices also be the work of the gov't planning that raised the price of housing, and ultimately led developers to produce in abundance? Or will it be free market at that point?

J sub D | September 6, 2007, 2:12pm | #

Hey, I work for the govt. ease up! We're not all bastards w/ an evil agenda. Some of us are just bastards w/ a low salary, a lot of mandated holidays and hazily-defined-redundant-jobs.

True, not all gov't workers are evil, lazy are incompetent. It's just that collectively, the gov't is all three.

grumpy realist | September 6, 2007, 2:37pm | #

What about the people who were encouraged by the "wise experts" at the mortgage companies to go for the ARM, interest-only, "you can buy more house!" loans?

I know we say "caveat emptor", but I think at least a tiny bit of responsibility should be attached to those people as well.

prolefeed | September 6, 2007, 2:59pm | #

But then, I don't have a college degree defacto union certification of intelligence so I'm probably talking out of my ass.

You're doing fine, J sub D. I agree with your points. Don't let the posers who preen about their college education make you think they're smarter than you.

I got a college degree, and used my framed diploma to roll joints (before I became a Mormon, natch), because that was the highest value use that piece of paper had.

Lamar | September 6, 2007, 3:33pm | #

You put an "s" between the < and > when you want the line to start, then to stop the line, you put a "/s" between the < and >. Of course, don't actually use the quotation marks.

dhex | September 6, 2007, 4:16pm | #

my lack of breakdancing skills will haunt me to the grave.

I know we say "caveat emptor", but I think at least a tiny bit of responsibility should be attached to those people as well.

yeah they're fucking assholes, and those that committed fraud should be prosecuted thusly. and have their taints withered by THE MIGHTY URKOBOLD.

SIV | September 6, 2007, 4:31pm | #

Hey, I work for the govt. ease up! We're not all bastards w/ an evil agenda. Some of us are just bastards w/ a low salary, a lot of mandated holidays and hazily-defined-redundant-jobs.

What do you work for the Mexican government?
US Gov workers are paid substantially more than similar jobs in the private sector.

jw | September 6, 2007, 5:08pm | #

Aresen, Sorry.

Kwix | September 6, 2007, 5:59pm | #

Dammit! This shit is pissing me off. I sold my previous house at the height of the market 'knowing' that the roller coaster would dip someday soon. I pocketed the profit and have been biding my time renting a less than optimal place while waiting for the market to drop to a level that will make upgrading my living conditions bearable.

Now that Uncle Sugar is getting involved, I may not see that market drop as far, if at all, as necessary for me to move back into a house. Son of a bitch!!

Paul | September 6, 2007, 7:35pm | #

Some of us are just bastards w/ a low salary, a lot of mandated holidays and hazily-defined-redundant-jobs.

Ok, so we know you're not a teacher. What else might you be...

joshua corning | September 6, 2007, 8:48pm | #

i didn't even bother getting into "lying fucking assholes using other people like meat" bits to characterize lenders.

spoken like a true statist.

joshua corning | September 6, 2007, 8:59pm | #

So when the price of housing falls due to abundance of supply, will those low prices also be the work of the gov't planning that raised the price of housing, and ultimately led developers to produce in abundance? Or will it be free market at that point?

The high prices have shrunk the market. Look at a supply and demand curve. At higher prices the number of buyers drops.

By the way lumar this is simple economics and you have to be an idiot to not understand this stuff.

Also homes have not improved substantially in utility...so in essence people are paying more money in inflation adjusted dollars for getting the same thing they could have gotten for less 10-20 years ago. So no, homes inflated in price without a corresponding increase in utility because of government intervention is not a feature of a free market.

Lamar | September 6, 2007, 10:00pm | #

"By the way lumar this is simple economics and you have to be an idiot to not understand this stuff."

My name is Lamar, not Lumar, Joshua Coming. Alright, even I didn't think that was fair.

I am merely pointing out that free marketers take the credit when prices go down, but blame government meddling when prices go up...even if the inflated prices that are going down are a result of government meddling. I would also point out that houses, at least in the south have gotten larger than 10-20 years ago, while construction quality has gone down and lot size has gotten smaller. I can't blame it all on government meddling, and I can't blame it all on the markets that fueled the real estate boom. It's a mixed bag, at best. I wouldn't call that idiocy, I would call it observation.

joshua corning | September 6, 2007, 10:54pm | #

here you go lamar...two reports on price changes one for portland oregon and one from atlanta georgia.

Note how Portland Or which has smart growth policies has a high rate of price inflation and then note how atlanta which does not have smart growth policies has a low rate of price inflation...

Note also that both regions (not cities these stats are regional and only use the cities names for reference) have had strong demand....the difference between the two being that Portland has a government mandated constrained supply while Atlanta does not.

http://www.realtor.org/Research.nsf/files/06GAAtlanta.pdf/$FILE/06GAAtlanta.pdf

http://www.realtor.org/Research.nsf/files/06ORPortland.pdf/$FILE/06ORPortland.pdf

If you want to do other comparisons here is a link for all the other regions in the naiton:

http://www.realtor.org/Research.nsf/pages/MetroHomePriceAnalysisReports?OpenDocument

anonymous | September 6, 2007, 11:43pm | #

The real estate market is propped up by government intervention in various ways that it benefits current home owners to the detriment of renters (like me).

joshua corning | September 7, 2007, 12:22am | #

This may be a disaster for the 14%. But not for the 86%

you should also note that most borrowers do not get sub-prime loans.

I have benifited from government restrictions on the supply of housing.

This really is the insidious part of smart growth...in essence it taxes lower income people such as first time home buyers, young families and renters and gives that tax to the more wealthy.

Claims of preventing sprawl (which really do not pan out as Levine has demonstrated in his book "Zoned Out") do not justify this regressive fleecing of the less wealthy.

Lamar | September 7, 2007, 12:51am | #

"So it is your position that "the south" has run out of land?"

No!! They just cram more houses into a smaller area. I don't know why people go for that, but they do...or did.

Sure, Portland has less development, but it is also a much smaller metro area, and it has has higher job growth. These are also contributing factors. Also, Atlanta was much higher in subprime mortgages. The study didn't say whether that translated into higher default rates. But it suggests that easy money is helping to further spur development, at least more than in Portland. If I'm not mistaken, Portland is also just flat out wealthier.

And another difference between Portland and Atlanta: Atlanta has a big water problem festering. Portland doesn't. Say what you will about limiting development, but the water problem has blown up in Atlanta's face before, and it is a problem that isn't going away. As north Florida develops, Atlanta's strategy of litigation isn't going to settle the problem over the next 10 years. The costs of providing water will cause the cost of homeownership to rise even if the houses stay cheaper.

One final, purely subjective, aside: Atlanta is just gross. Portland is gorgeous. Perhaps there's a premium for that.

Marv | September 7, 2007, 1:20am | #

Rather than let the market make the long overdue adjustments; our alleged political leaders want to take over more aspects of our lives. You're right on target when you point out that many of these borrowers should never have been loaned the money to begin with. So now the rest of us are supposed to rescue them from themselves?. Just more evidence of the ever growing nanny state.

joshua corning | September 7, 2007, 2:56am | #

fuckme!

Russ 2000 | September 7, 2007, 9:18am | #

I am merely pointing out that free marketers take the credit when prices go down, but blame government meddling when prices go up...

Can you give evidence of any good or service where prices went down when a middleman was added to the supply chain?

Lamar | September 7, 2007, 11:19am | #

I see your problem, Corning. You're trying to find an explanation that explains the whole thing in one tidy little package. Unfortunately, the world doesn't work like that. For example:

"Portland has a 4.0% job growth and Atlanta has a 3.5% job growth....This would not explain average home prices of 242,000 for Portland and 166,900 for Atlanta."

First, it is most certainly relevant that Portland is a smaller metro area. Your lack of explanation why you think an area's size is irrelevant to the development of that area is telling. Governments are smaller, debt offerings are more expensive, infrastructure is delayed, etc. Capital and resources (not to mention developers, materials and labor, labor, labor) are more available in a major metro area. Then, of course, you are ignoring population density (GA has 141/Sq.Mile, OR has 35/Sq.Mile). Irrelevant? Or statistics that add value to property and create demand for an area?

Second, I didn't say that the higher job growth in Portland was a complete explanation. I said it was a contributing factor, and it clearly is.

"Also, Atlanta was much higher in subprime mortgages. This would imply a higher demand for homes in Atlanta then in Portland."

WTF are you talking about? It could also imply more poor people.

Let's also not forget who pays to build the roads, water pipes, T&D systems and sanitation that make the far out inexpensive suburbs and exurbs possible. Most of those costs are spread out via taxes or utility rates (though some are localized via impact fees).

There are too many factors contributing to an area's real estate market to say government meddling is a determining factor. People will pay obscene amounts of $ in NYC for an 800 foot room with a shitter in the hallway and you can't pin it all on gov't meddling. There are demand dynamics that you simply aren't accounting for.

Lamar | September 7, 2007, 7:02pm | #

Wow, keep comparing traditionally cheap southern cities to traditionally more expensive northern cities. Newsflash: Government regulation makes NYC more expensive than Miami.

Jeeez.

Despite higher housing costs, Portland's foreclosure rate is lower than the national average and lower than dumbgrowth areas like Atlanta. When you can compare an apple to an apple, let me know. Until then, I think it's pretty obvious why a city with land as far as the eye can see is cheaper than a smaller city with the same level of demand.

I'll concede right now: I can't find a small city with housing demand similar to a large city where the small city is cheaper. Smart growth or dumbgrowth, the smaller city is smaller and by definition has less supply trying to feed the same demand.

joe | September 7, 2007, 9:21pm | #

Damn, corning got pwned.

Reduced to noting the greater demand in a larger market and pretending there isn't also a larger supply.

pölitic | September 8, 2007, 3:32am | #

A public discussion needs to develop about the cost and benefits for society that result from government creating a set of perverse incentives for consumers. The economic muck that results requires government to intervene in order to rectify the situation. People need a place to live and I think government can provide a bare minimum, but people do not have a right to a standard of living beyond their means. When Bernanke spoke about the crisis he mentioned the Feds role in the overall economy but also said alleviating individual consumers poor decisions is not his role. Wall Street analysts immediately focused on his concern about the economy and confidently assured listeners he would cut interest rates. Was this overwhelming confidence due to secret knowledge, self-interested delusion, or an attempt to create momentum that will influence Bernanke's decision in lieu of public and corporate expectations. http://beatnik2point0.blogspot.com/

pölitic | September 8, 2007, 3:54am | #

Portland is a beautiful city, and if winter increases the suicide rate I doubt it is higher than the murder rate difference. Smart growth is not inherently smart, but if it is smart it makes a place more pleasant as well as productive. Old buildings may be replaced earlier than necessary when demand for more modern housing exists. I was in Portland this summer and a few discussions did suggest a significant awareness with the smart growth limitations on sprawl, both as a limitation on housing opportunities and with a pride suggestive of a Portland progressiveness.

Question: does the Oregon tax structure have an effect?

Lizzard Lipps | September 8, 2007, 3:58pm | #

Russ 2000 said:
Can you give evidence of any good or service where prices went down when a middleman was added to the supply chain?

Uh, Russ, the price of EVERY good and service goes down when middlemen are in the supply chain. If you doubt me, then the next time you want a Hershey bar, drive to Pennsylvania and buy one from the factory. Let me know how much you saved by cutting out the middleman.

joshua corning | September 9, 2007, 12:06am | #

Reduced to noting the greater demand in a larger market and pretending there isn't also a larger supply.

Oh really joe?

What are prices like in LA? You know the largest city in the country.

joshua corning | September 9, 2007, 12:23am | #

Question: does the Oregon tax structure have an effect?

No. Vancouver Washington which is just across the Columbia river from Portland has the same affordable housing problem. (Don't get exited Washington and Oregon are both heavy into smart growth) Oregon has an income tax structure and Washington has a sales tax structure. I also think Washington has higher real estate sales excise tax then Oregon.

Hmm that just gave me an idea....

joshua corning | September 9, 2007, 4:09pm | #

There is a huge difference in how the market reacts to certain types of demand.

Can one say you are demand centric?

Funny how it is impossible to pin down demand yet supply somehow is assumed to be equal in all markets.

This reminds me of people who believe in ghosts. Anytime you use any sort of scientific method (such as controls) to study the phenomena you are instantly rebuffed by claims that always somehow make the phenomena impossible to examinable. Like magic.

If only we could pin down those mythical housing elves that trick any attempt look at the supply side of housing. But like you said:

If you can compare two similar cities, geographically similar, demographically similar and economically similar, you might be able to make a point. I'm not holding my breath.

You will belch at any evidence that might hint that supply effects housing markets.

joshua corning | September 9, 2007, 7:47pm | #

I think you have a kernal of truth in your argument: smart growth policies make people want to move to those areas while simultaneously limiting supply. But it doesn't explain the discrepancy in housing values.

Well looky here...This pretty much explains it. You are perfectly willing to use the power of the state to lessen the opportunity, tax, and limit the liberties of the less well off to the benefit of the more well off.

Congratulations Lamar you just demonstrated the moral bankruptcy of the left.