Success Warrior: The Blog That Embraces ADHD

I said it would and it is

Super short post today and dang it, I can't find the link that I saw yesterday.

Rent is going up.  It makes sense of course.  People can't afford a house so they have to rent.  Supply and demand. 

Renting in and of itself is not a bad thing as long as you set yourself up in a position to pay the rent for the rest of your life. 

With tightening credit rules, it's going to be harder for people to buy a house too.  Paying higher rent will make it harder to save up a down payment.

Most of the people of this nation are being moved out of ownership roles.  The United States and it's laws were created by and for land owners and it looks like we're moving full circle.

Mind Boggling Foreclosures

Can you imagine a place where 1 out of every 27 houses is in foreclosure?  If you can imagine Stockton California, then you can imagine just such a case. 

Las Vegas has a foreclosure every 31 households.  A couple years ago, Vegas was one of the hottest markets in America.  Anyone could flip a house and make money in Vegas.  Not anymore.

It may come as no surprise that there are more foreclosures in places like Vegas and Stockton where it seemed that there was no ceiling on the price of houses and no restrictions on the amount of money people could borrow.

I checked out where Salt Lake City ranked in foreclosures per household.  #63 and they actually have fewer foreclosures in the first half of this year than they did last year.  Interesting.  The new realtor we talked to the other day said that Utah hasn't been hit as hard as a lot of other areas and it appears that he was telling the truth.  I know that I shouldn't be shocked when a realtor tells me the truth but it's a hard habit to get over.  Let me add this caveat.  Utah hasn't been hit as hard as a lot of other areas - for now.

Meeting a New Realtor

So we met another realtor last week.  My brother recommended him so we thought we sit and visit with him to see what kind of guy he is.  He lives right across the street from my brother so he just walked over.  We sat in the driveway and chatted while we watched the kids play and my brother fire up the grill.

The nice thing about talking to an actual realtor instead of someone selling lots for a contractor was that this guy would be working for us.  We told him what we were looking for and he took notes.  We told him our ideal price range and the features we were looking for. 

We talked about the market.  He said that Utah hasn't been hit as hard as some states but that it's definitely a buyer's market.  I told him that we weren't in much of a hurry because there was probably another 18 months of ARMs resets and foreclosures ahead.  He agreed.

He said that since we weren't in a hurry to move, we would be able to watch the market and watch specific houses.  The longer a house was up for sale, the better the chance of getting a better price on it would be.  I knew that but it was nice to hear that he was on the same page with us and would be watching for that sort of thing.

He's going to send listings to us that fit our criteria and we'll let him know if we want to take a walk through any of them.  It's going to be nice to be able to take our time on this.

How Quickly The Lies Are Undone

If you can remember all the way back to 2 weeks ago, you will remember that most of the articles on the subprime mess stated that this would be isolated to the housing sector and that our economy would not be affected.

What's the word today?

The housing fiasco (I've been calling it that for months and this articles calls it the same thing . . . finally) is going to ruin the economy of every country that depends on the citizens of the United States to buy their crap.

Now, didn't I say that not too long ago?  I believe I did.

If Americans don't spend money on crap from China, businesses in China will start laying people off, and this will depress their own economy.

Shock and Dismay!

You are not going to believe this newest development.  Well, you might believe it since we've been spending our time out here in reality as opposed to all the people who live in a different dimension and just visit long enough to do sound bites for a media that is all too happy to print the crap that they are spouting.

Don't get me started on the media since most of them I have noticed lately are complete idiots.

For example, (I told you not to get me started) a mine collapsed in Utah trapping several miners.  At the end of each report and each opening paragraph, there is something like this: "There are no signs of life but rescuers have vowed to keep digging."

Ya think!

"Dude, I don't hear anything, let's call it a day," Bill said.

"We can't give up now.  We need to keep digging.  They could be alive," Gary said.

"Dude, Idol's gonna be on soon and I wanted to get a shower before it started," Bill said.

"Come on guys!  Huddle up.  They could still be alive down there.  Let's make a vow that we'll keep on digging until we find them.  Who's with me?"

Of course they are going to keep digging.  You don't have to tell me.  That's not news.  And please, please, don't ask me how I feel when they go to the families of the trapped miners and ask them how they feel.

"Well, Sue, I feel like punching the next idiot reporter that asks me what it's like to have my husband buried alive and getting closer to death with each stupid question."

Anyway, back to the shocking news.  It appears that the subprime lending fiasco is actually affecting the economy.

"The ECB's injection of money into the system is an unprecedented move, said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., adding that it shows that problems in subprime lending are, in fact, spreading into the general economy." [emphasis added]

Like this is, in fact, some kind of surprise. 

Duh.

Duh.

Duh.

I'm gonna borrow PTE Rick's sign off today.

- sw, tired of idiots and liars and the media which tries to stretch things into news and create drama where no creation is needed and is all too happy to blow smoke up my ass if someone pays them enough money

Full Article

Comfortable? And a New Term - "Credit Crunch"

I learned a new term today that I thought  I would pass on for those of you that have never heard of Credit Crunch before.  If you've been reading this blog for a while, we've talked about the condition but now it appears there is a name for it.

A Credit Crunch is what happens when house prices don't go up so people can't borrow against their equity in order to use borrowed money to buy things.  Spending slows down because of the Credit Crunch.

If people would quit borrowing money in order to buy things, we wouldn't have to worry about a Credit Crunch effecting the economy.  There would be no such thing as a credit crunch.

The same article talks about oil prices, which are going to be going up.  Surprise!  Oil is around $75 to $77 a barrel now and the article ends with this quote:

"People are getting comfortable with the idea of oil pushing above 100 dollars in the coming years."

Which people are comfortable with this? 

Housing and the Economy in the Real World

I have redone the categories to make things a little bit easier to find.  I hope this makes it easier for people to find info in this blog.

I woke up this morning and found out that I still have a mortgage, car loans, 15 pounds of fat on my gut, and brown spots in my lawn.  Dammit!  I'm back in the real world where you can't just conveniently discount the facts that you don't like.

So, what's the real story?  Is housing affecting the economy?  Of course it is.  It goes both ways (the economy can affect housing) and there are lots of other factors but there is no doubt that housing is affecting the economy.  The change in housing is so large that you have to look at people who are saying otherwise and ask, "What are you selling?"

Some are obvious.  A national realtor association predicted that the housing market would bounce back this year.  They made this prediction a couple of months ago.  Guess what?  Housing hasn't even hit the bottom yet and there is no way that it's going to bounce back this year (my prediction).  Obviously, they want people to keep buying houses and so they promised that values would return.

This week, Standard and Poor and another company that rates stocks (Moody's I believe), rated $17 billion of mortgage stock as Absolute Crap (that *may* not be the actual technical term).  What's going to happen to the rest of US stocks?  Here's a little graphic that tells the tale nicely:

The Housing Market Is Still Not Affecting The Economy

That's what the article from Money Magazine that had this chart said.  It went on to say that as long as you don't count houses and cars, the US economy is going strong.

I think that's great and using this persuasive logic, I would like to point out a few things that I have noticed in my own world.

If you don't count my mortgage and car loans, I'm debt free.  Woo hoo!

If you don't count the 15 pounds of fat on my gut, I'm skinny!  Schwing!

If you don't count the brown spots in my yard, my lawn is perfectly green.  What a relief.

Yes, things in my world are absolutely perfect as long as you discount the stuff that isn't perfect.  How convenient.

Average People Can't Buy Average Homes

After looking around at houses the other day, I came to the conclusion that people must make quite a bit more money than I do.  My wife and I came home and ran some numbers through a mortgage calculator and figure that if we can make enough on the sale of our current house, we can buy an average home.

Out of curiosity, I went looking for to see what the people make and I came across an article that shows median family income compared to median housing prices for the first quarter.  It also shows the percentage of homes in the area that are affordable to people with the median income.

Salt Lake City, UT was the closest market to what we are looking at.  Median family income is $60,100.  Median house price this year is $269,000.  The percentage of homes in the area that the median income can afford is 31.6%.

I don't feel so bad now.

We Went Looking At Houses Yesterday

All the reading that I have done over the last 15 months couldn't prepare my mind for the reality.  I've been living out in isolation for 2.5 years and to go back into the city and look at house prices was a shock to my system. 

We went looking at new houses yesterday because a lot of times they are offering incentives and prices that are lower than existing homes.  From what we saw, it wasn't true. 

We had a hard time finding anyone from one company and when we finally did, he was nice but somewhat patronizing.  We told him the price range we were looking for and he said, "Oh, are you first time home owners?"

He's lucky that I just think things in my head and the sentry that stands guard over my mouth is really alert.

I'm not willing to put every single penny that I make into a house.