One argument I hear repeatedly regarding housing is that rents will increase as people foreclose and seek shelter as non owners. The problem with that argument is that they’re leaving houses behind. Houses that will eventually rent out or be purchased. That will either increase the supply of rentals or reduce the pool of renters if it’s purchased.
Another point. First time buyers who enter foreclosure and are forced to rent again are probably going to have ruined credit and a load of debt which means they’re likely to rent a less expensive place after their foray into the housing debacle.
We also had a residential construction boom. If you look at downtown San Diego you’ll see dozens of new condo towers. I saw an ad on Craigslist the other day. You could rent the place for $1800 a month or buy it for $470,000 plus HOA dues. A large number of those new condos are now rentals.
When you build vastly more places to live than population growth would dictate it’s hard to imagine rents doing anything but falling.
Edit: Photo credits below, or click on the photos - Someone in the comments pointed out that this review isn't well structured. I won't argue with that, my goal here is to occasionally ramble and have fun sticking words together. Apologies to grumpy music lovers. Photo credits at the bottom or just click on 'em.
The Arcade Fire is like a flock of urban pigeons. Humbly aware that they’re only alive because their ancestors survived millions of years of evolution yet unabashedly willing to crap on pretentious hipsters.
Is their music world changing? Maybe, but at the very least you can listen to it without fear of the feeling that comes after really getting into a band and then wondering what the hell you were thinking a few months later. And boundless talent notwithstanding, the violinist is the cutest little bird to grace this planet in quite a while.
Maybe I’m getting old but at this point in my life I’m starting to listen to what musicians are actually saying. I have this sense that they’re just people so damn determined to explain the inexplicable that they’re forced, after realizing the limitations of conventional linguistics, to look for wooden utensils with strings attached to get their point across. Which makes writers uncoordinated musicians I guess. People who pick up instruments without that motivation reek of boy band illiteracy. With Arcade Fire you get the feeling they’re angst ridden due to a birth with only two arms, more of which would surely be put to use simultaneously playing additional instruments.
The lead singer and feminine voice of the band are married. And they’re all adept at music. She jumped on the drums and people were scampering about, grabbing instruments and skillfully flogging various inanimate objects with sticks and ropes. The crowd was happy.
I don’t dance sober, and I wasn’t totally myself, but I would have anyway.
For your viewing pleasure here they are, crammed in an elevator I wish I was stuck in, playing the title track. Photo credits below.
STARTUP UPDATE: The website is coming along, prototype is done, just trying to get it production ready.
The top photo is by Kathryn on Flickr. Check it out here.
The Violinist is Sarah Neufeld, photo is used with permission from Jim Newberry, read more about the photo here.
” A report Wednesday from Goldman Sachs said the December existing-home sales report suggests that ‘U.S. housing market conditions are deteriorating rapidly,’ because inventories of both single-family homes and condos ‘appear to be surging.’ If the market doesn’t bounce back sharply in early 2006, ‘we may need to revisit our view that U.S. house prices are set for stagnation rather than outright declines,’ the report stated.”
I remember thinking back in ’04 how crazy things had become here in San Diego. Affordability was at record lows and sales were booming. I didn’t realize until later that this seeming contradiction was possible due to the use of “exotic” loans that hadn’t seen the light of day since right before the great depression.
I’m not wealthy but I make decent money. The fact that I was priced out and would never be able to afford a home bugged me. Well, lots of smart people are now saying that 2009 will be the year to buy after this bubble pops and real estate loses its luster. There are a lot of smart real estate agents that could be doing more productive things for society so even if this does result in a recession we’ll all be better off in the long run.
I took some photos of the big swell that just hit San Diego including the one above. Check ‘em out here. Here’s a slideshow if you’re lazy. Or there’s a video I took with my little digicam below but the quality’s not great and it’s short because of my tiny memory stick (don’t laugh).
I read this article on Boston real estate dropping 20% in a matter of weeks then I read this article about people using technology to spontaneously gather (that’s a gigantic pillowfight in the street flashmob in the picture) and it dawned on me. Home builders and home equity businesses spend millions on advertisments in newspapers. The newspaper business is suffering because of competition (blogs, websites, etc.) so they’re clinging onto any revenue they can get their inky hands on. They do that by helping the housing industrial media complex through a lack of articles about the decline of the housing market.
What if the flash-mob wasn’t a pillow fight in the street but a selling frenzy? Does the free flow of information necessarily lead to volatility?
The people I’ve talked to who only read newspapers are generally oblivious about a bubble. The demographics of pain from the housing bubble pop will probably be skewed towards the elderly and non tech savvy.
Drank an extra cup of coffee this morning and had my best idea of 2005. Wrote a big post about it and decided to keep it under wraps until I have a working prototype because people search Technorati for “business idea” probably to get the ideas to market before the non-business-savvy idea progenitor.
I’m looking into using Ruby on Rails but I’m probably just going to stick to PHP for now though ROR looks pretty interesting for prototyping.
Most people are saying that there is a real estate bubble in some markets but not in others. If that’s the case then there is no doubt a gigantic helium pocket under the crust of San Diego. My long term vision of the economy is that it’s going to decline simply because it costs less to produce things now which brings down prices but revenue as well. If your car/tv/etc. is incredibly reliable and good enough, why buy a new one? That’s long term though. In the short term, people are going to default and/or cash out their real estate assets and dump it into stocks. So as real estate collapses and people begin to rent another bubble will emerge. People are going to begin investing six figures of equity in stocks they have no interest in other than as temporary parking.
If I had equity right now I’d sell my house, buy a NASDAQ index fund and rent for the forseeable future. The NASDAQ is going to fatten due to the fear of other “oldschool” stockmarkets but it’d be possible to profit from the greater fool theory until that bubble pops.
It’s a weird problem I can’t wrap my head around. The problem of money. An intangible thing that drives our behavior through ideas like the perception of wealth. It looks like we’re going to transition away from a time when employmet was useful as an indicator of productivity because of an assumption of the correlation between employment and productivity. Productivity is going to increase, monetary wealth will decrease and it will be perceived as a bad thing, grim faced newscasters announcing more poor quarterly results. Psychologically that’s going to be damaging for the public and possibly misconstrued as a failure of capitalism.
Ideas for the day:
People don’t care about their standard of living as much as they worry about the social stigma attached to unemployment.
Change creates temporary turmoil, see farmers and the industrial revolution
Should the government intervene, not through government jobs but through wealth re-distribution, more progressive taxation?
I went to the new House Of Blues in San Diego last night. Kegan and Sarah were really pretty good. House of Blues SD is nice but reeks of corporate top downery. I say that as a right leaning curmudgeon with a finance degree so you know it’s bad. H.O.B. is going down the road of Krispy Creme. They’re trying to get big in an era when small is the new big. Short sell.
The White Stripes’ new album on the other hand has restored my faith in music. Even though Rolling Stone is giving it good reviews I still like it. My only conclusion is that to come to a conclusion about music you have to avoid reviews. For example here are a couple of quotes from the best and worst reviews of the new White Stripes album.
“It’s an album so strong and so unexpected that it may change the way people hear all its predecessors. And that’s just a start. Listen long enough, and this album might change the way you hear lots of other bands, too. “
and the bad…
[It] tries putting everything from the buffet on your plate, even the Jell-O you’re not going to eat. C’mon, sounding like a stripped-down version of the Stooges wasn’t such a bad thing, was it?
I guess reasonable people can disagree but I like Jell-O. And just how pervasive a term is subjective? To use the word contrived to describe this album is just dumb. Here’s a quote from Instinct blues “Well the crickets get it, and ants get it , I bet you bet the pigs get it, even the plants get it, cmon now and get with it… so why don’t you?”
On the other hand the album was recorded on analogue equipment. Was quality at issue or are luddites just the new black? On the other other hand they didn’t really promote this album so to say they’re using gimmicky production techniques to stir hype is itself a contrived notion.
It’s a great album, like a good bar scene from Deadwood, but don’t take my word for it.