S&P: No bubble yet, home prices continue to rise

From HousingWire:

S&P expects home prices to keep rising

Surging home prices throughout the country have spurred talk of a housing bubble, as many markets are still recovering from the last bubble bursting in 2007.

But Standard & Poor’s Ratings Services states that, although double-digit gains are ultimately unsustainable, we may not have reached bubble status quite yet.

Home price appreciation can be attributed to a number of factors, including historically low rates, property purchases by investors who are renting homes out and a shortage in home inventory. In fact, recently the S&P/Case-Shiller home price index hit an 11% year-over-year increase, from 8%.

Across the U.S., home prices are back to 2003 levels, yet they remain far from their 2006 peak. Lack of available inventory coupled with high demand has played a large role in this. In April, the sales of existing homes were up 9.7% year-over-year, while existing housing inventory dropped 13.6% from a year earlier, according to the National Association of Realtors.

S&P states that U.S. home prices are relatively low compared to historical values. Prices remain 28% lower than their July 2006 peak.

Additionally, housing remains undervalued about 8% based on the price-to-income ratio, which takes into account the median sales price of a home relative to median annual incomes. The typical median home in the U.S. costs 4 times as much as the median annual income. It’s now at 3.7 times

Overall, S&P expects that the current pace of home prices gains will not last for long; however, it’s too soon to call this a bubble. In fact, as home values are still below their pre-recession peaks, home prices could continue to rise throughout the year.

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92 Responses to S&P: No bubble yet, home prices continue to rise

  1. grim says:

    From Bloomberg:

    Housing Starts Probably Rose in May as U.S. Expansion Gets Boost

    Housing starts probably rose in May, extending a rebound that is helping shore up the U.S. expansion, economists said before a report today.

    Builders broke ground on 950,000 houses at an annualized rate, up 11.4 percent from April’s 853,000 pace, according to the median estimate of 82 economists surveyed by Bloomberg. Another report may show the cost of living increased in May for the first time in three months.

    Historically low mortgage rates, improvement in the labor market and pent-up demand are spurring optimism among builders such as Hovnanian Enterprises Inc. (HOV) The recovery in residential real estate shows how record monetary stimulus from Federal Reserve policy makers, who meet today and tomorrow, is bolstering economic growth.

    “The underlying demand is improving on strength in the job market and stronger consumer confidence,” said Mark Vitner, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The key for the Fed is seeing a sustainable recovery. As far as housing goes, I think they’re feeling pretty good about that.”

    The Commerce Department will issue its housing starts data at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from rates of 875,000 to 1.02 million.

  2. grim says:

    From CNBC:

    Housing trend: Builders offer ‘home-within-a-home’

    American homes are getting a little congested.

    An estimated 51.5 million people live in multi-generational housing, which typically means three generations under one roof. That number is expected to increase as baby boomers get older. At least 10,000 Americans will turn 65 each day for the next 19 years, according to the Pew Research Center.

    Whether to take care of elderly parents or just to make ends meet for young couples and parents, more families are moving in together. The Williams family is a case in point. When Art Williams’ mother was injured in a work accident, he and his wife decided to have her move in with them. While he was happy to take care of his mom, and she was happy to take care of his two young children while he and his wife worked, the arrangement was a crowded one.

    “It was our first time living with someone else, and it was definitely different,” says Williams, 33. “When she first moved in, my son was four or five, and he kept asking when Grandma was going to go home.”

    But last September, Williams found a solution that made his entire family — even his young son — happy. He bought a NextGen home from Lennar, a national builder that offers multi-generational housing in the Los Angeles area.

    “The concept is to create a home-within-a-home,” says Jeff Roos, a Lennar regional president. “You have a full home with a separate, private apartment attached to it.”

    NextGen homes look like any other, but each includes a separate “near” apartment, featuring a bedroom, bathroom, living area and kitchenette. It is “near” rather than “full” because it lacks a stove, which would technically turn the separate space into a new residence in most zoning codes. The apartment even has its own entrance.

    The idea was born out of a trend that took hold during the recession, where families doubled up to save on housing costs. Kids who had run out of money moved back into childhood homes, heads of families who had lost their homes to foreclosure moved in with siblings, or mom and dad settled in with their children’s families.

    “When that occurred, people lived in a guest bedroom, sometimes a dual master suite, but they didn’t have an independent living space where they can hang out, cook, watch TV, play games, do their laundry,” Roos says. “They’re not just living together; they’re living on top of each other.”

    Roos’ concept isn’t entirely new. The American Institute of Architects has been tracking the popularity of separate living space for years.

    “There was term called ‘accessory apartments’ that dates back quite a while,” says Kermit Baker, chief economist for the AIA. “I think it was a popular concept 20 to 25 years ago that expanded out to au pair or in-law suites.”

    The trend wound down over the years, but it picked up speed again when the economy took a nosedive. In the AIA’s most recent annual survey of architects, 26.7 percent said the design concept was on the rise.

  3. grim says:

    These people are f&cking idiots.

    LG, PLEASE DO NOT LEAVE, WE WANT YOU HERE, WE WANT YOU TO BUILD.

    LG’s exit from negotiations catches foes off guard

    Preservationists suing LG Electronics over a corporate headquarters that would rise above the tree line of the Palisades said they were surprised when the company abruptly ended negotiations last week.

    Scenic Hudson, the New York-New Jersey Trail Conference and the New Jersey State Federation of Women’s Clubs said they were optimistic that both sides could settle their differences in mediation. They were planning to meet with LG this week to present alternative designs for the company’s Sylvan Avenue campus that they said would have preserved the view of the cliffs from the east side of the Hudson River.

    “We saw glimmers of hope that we could reach a compromise,” said Hayley Carlock, a lawyer with Scenic Hudson. “We thought we were making progress.”

    But on Friday afternoon, LG officials said that the mediator had called off the talks, then blamed their opponents for breaking a negotiated truce in a public relations war over plans for the company’s site for a 143-foot-high building at 111 Sylvan Ave. In a statement, the South Korean-based company said that “groups aligned with the interveners” ignored an agreement not to discuss the issue with the media.

    LG’s decision to end talks came a week after the New Jersey Conservation Foundation, a land-preservation group, released a letter signed by four former New Jersey governors – Democrats Brendan T. Byrne and Jim Florio and Republicans Thomas H. Kean and Christie Whitman — objecting to the height of LG’s proposed headquarters.

  4. grim says:

    From Bloomberg:

    California Home Prices Up Most in 33 Years, Realtors Say

    California home prices rose by the most in three decades as a shortage of houses on the market spurred competition among buyers, the California Association of Realtors said today.

    The median price for an existing single-family home jumped to $417,350 in May, up 32 percent from a year earlier, the Los Angeles-based association said in a statement. It was the 15th consecutive annual increase and the largest since at least 1980, when the group started tracking the data.

    Parts of California, including the San Francisco Bay area, have “extremely low housing inventory,” leading to the increase in prices, the Realtors association said. The median price in San Francisco surged 28 percent from a year earlier to $947,260, breaking a previous record set in May 2007.

    “The Bay area, in particular, has been experiencing strong price appreciation, thanks to the region’s robust economic growth, extremely low housing inventory and an increasing demand from international buyers,” Don Faught, president of the group, said in the statement.

    Sales in the state fell 3.6 percent from a year earlier to an annualized rate of 431,370 homes, the association said.

  5. Juice Box says:

    Everytime I stop at the Palisades I look I’m over to the Bronx at Tracey Towers which dominates the skyline and I remember why I will never go back to live there. I HAVE THE THANK the developer who put up those massive towers that can be seen from the unobscrureed views of the Palisades.

  6. grim says:

    From the Daily Record:

    Demolition to begin on Denville flood homes

    Township and Morris County officials gathered on Riverside Drive Monday for a ceremonial beginning to demolition of flood-ravaged homes along the Rockaway River.

    Mayor Tom Andes, clutching a sledgehammer, thanked municipal and county representatives for their work in securing the funds needed to buy out 11 homeowners on the block, where flooding has troubled residents for decades. That flooding reached a tipping point during heavy storms in spring of 2011, followed by Hurricane Irene in August 2011, which drove several families from their homes for the last time.

    As of Friday, the township had closed on eight of the 11 buyouts. A ninth buyout is expected to be completed by next month.

    Ward said Denville was one of 13 municipalities in New Jersey awarded FEMA grants for home buyouts, and that no municipal funds were being used. County Freeholder Ann Grossi, who attended the ceremony, said the buyout plan was among the first of its kind in the United States. The county became the primary funding source at $1.781 million, while FEMA added $1.503 million. Another $393,000 came from the state Department of Environmental Protection’s Green Acres program.

  7. grim says:

    I suppose we’re going to need to tear down the radio tower in Alpine as well as portions of the CNBC campus since both are visible from NY.

    I’m not sure I follow this whole notion of “unpierced treetops”, I’ve been to the Cloisters. Do they not let you turn your head to the left anymore? Perhaps we should start tearing down buildings in Fort Lee, Englewood, maybe even the GWB too?

  8. anon (the good one) says:

    economic theory ain’t working for teatards and regressives. from WSJ:

    “It’s the inflation, stupid.
    Getting lost amid all the chatter about the Fed potentially trimming its bond-buying program is the fact that expectations for future inflation are coming down, a development that could actually keep the central bank stimulating the economy longer than previously anticipated.

    “Despite all the talk of tapering and interest rate spikes, virtually every measure of inflation in the U.S. economy is going in the wrong direction,” Dan Greenhaus, chief global strategist at New York-brokerage firm BTIG LLC, wrote to clients.”

    Investors will get another reading on inflation this morning, when the government’s consumer-price index (CPI) is released. As Ahead of the Tape scribe Spencer Jakab pointed out in today’s column, consumer prices last month are seen rising by only 1.4% from a year ago, well below the Fed’s target inflation rate.

    This matters because businesses and households act largely based on how they project future prices. If the expectation is prices will fall, consumers may hold back on spending right now with the hope of making those same purchases cheaper at a later date, a dilemma that could slow the economy, which the Journal pointed out last week.

    The Fed, which has a 2% inflation goal, doesn’t want prices to veer too much above or below that level. But if the economy is entering a disinflationary environment — where inflation continues to slow — the Fed could have more fuel to continue buying bonds at current levels, or even increase the pace of its asset-purchase program.”

  9. It’s all turning to shit. Fast.

  10. Prepare for the end of days.

  11. Brian says:

    I think I’m seeing inflation on my dinner plate lately. My wife bought the usual pack of boneless pork chops from the supermarket……they weren’t any more expensive than usual for a pack but man, they cut them razor thin now. I guess on the bright side it’s easier for a busy family to cook them since they only take like 5 minutes on each side on the grill and we’ll all be eating smaller portions and losing weight.

    8.anon (the good one) says:
    June 18, 2013 at 7:16 am
    economic theory ain’t working for teatards and regressives. from WSJ:

    “It’s the inflation, stupid.
    Getting lost amid all the chatter about the Fed potentially trimming its bond-buying program is the fact that expectations for future inflation are coming down, a development that could actually keep the central bank stimulating the economy longer than previously anticipated.

    “Despite all the talk of tapering and interest rate spikes, virtually every measure of inflation in the U.S. economy is going in the wrong direction,” Dan Greenhaus, chief global strategist at New York-brokerage firm BTIG LLC, wrote to clients.”

    Investors will get another reading on inflation this morning, when the government’s consumer-price index (CPI) is released. As Ahead of the Tape scribe Spencer Jakab pointed out in today’s column, consumer prices last month are seen rising by only 1.4% from a year ago, well below the Fed’s target inflation rate.

    This matters because businesses and households act largely based on how they project future prices. If the expectation is prices will fall, consumers may hold back on spending right now with the hope of making those same purchases cheaper at a later date, a dilemma that could slow the economy, which the Journal pointed out last week.

    The Fed, which has a 2% inflation goal, doesn’t want prices to veer too much above or below that level. But if the economy is entering a disinflationary environment — where inflation continues to slow — the Fed could have more fuel to continue buying bonds at current levels, or even increase the pace of its asset-purchase program.”

  12. grim says:

    Bye bye car dealerships – I’ve been following this story for a while now. I’ll sum it up as “Why can’t you buy a car online?”

    From the WSJ:

    Tesla Clashes With Car Dealers

    Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he’s up against his toughest challenge yet: Local car dealers.

    Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., TSLA +1.89% wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.

    The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state’s most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.

    The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry’s earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T.

    Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees. Dealers say Tesla’s direct sales violate those laws. These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.

    Franchise laws don’t apply to Tesla, Mr. Musk has said, because the company has never had franchised dealers. This argument has been a winner for Tesla in court skirmishes with dealers in New York and Massachusetts. It has fared less well in state houses where lawmakers are more attuned to the concerns of important local employers and political donors.

  13. freedy says:

    Highest paid State employee is the Rutgers woman’s Basketball coach.

  14. 1987 condo Buyer says:

    #10…been prepared for last 12 years…meantime….
    #12….Travel agencies, Insurance brokers…car dealers….will be interesting to see internet impact continue on these…

  15. anon (the good one) says:

    @billmaher: Palin is on Fox & Friends now? They must have had a meeting and said, Who is the one person in the world who could make this show dumber?

  16. Comrade Nom Deplume, Halfwit dumbass says:

    [15] anon,

    When is your close up?

  17. grim says:

    What are you guys going to do when the end times come?

    Nobody will need accountants, traders, it geeks, lawyers, etc. You folks basically have zero marketable skills by trade.

    Can you weld? Can you frame a house? Can you fix a diesel engine? Can you make biodiesel? Do you know enough about electronics to wire a solar array or get a shortwave radio fixed and running? Can you run a tractor? Can you stitch up a wound without killing the patient? Probably the only folks here that stand a chance are the tradesmen, and the doctors (and the guys who can home brew).

    You sure you have enough gold stored up? What happens when someone wants 10 ounces for a 5 day course of antibiotics? Or 10 ounces to fix your generator? Or 10 ounces for a pig? Without marketable skills to barter, you are all screwed, you will run out of money in a few short months.

    That said, can you run? Can your kids run? Can you hike 25 miles a day for days on end? Have you ever even tried it? I’d wager most survivalists can’t make it to the end of the block and their kids would be bitching about wifi or Facebook by the time you passed the 3rd house.

    For all this talk about preparedness, very few actually are, and I wouldn’t put my money on the survivalists at all.

  18. JJ says:

    “Across the U.S., home prices are back to 2003 levels, yet they remain far from their 2006 peak”.

    From that article it says we are back at 2003 prices. 2003 was an insane bubble year. The price of homes on 1-1-2003 is very different than price of homes on 12-31-2003. Just saying we are back at 2003 does not mean much unless we know month.

  19. JJ says:

    Yes. But exactly where am I finding an arc welder, a shield, gloves and an electric source in the Apocalypse, most likely you would be using tin snips and a rivet tool to connect metal.

    Running a tractor is easy. I used to run a steam roller in a job I have and man those things have no brakes, you shift from forward to reverse and the weight makes it hard to control. Easy to take out a fence or run over someone.

    C and D students will rule the world in the Apocalypse. I took blueprint reading, welding, small mechanics, wood working, lathing, auto mechanics and advanced automechanics. My crazy teacher made us make a took box, plumbob, screwdriver and hammer from scratch before we started out projects. Said we had to make our own tools. A 3,000 degree kiln and an arcwelder at 8am means you better have your coffee first even if you are 12 years old. We also put together broken lawnmover engines from scratch, rebuild carbs, welded exhaust systems. etc.

    In Sandy contractors and FEMA folks kinda suprised on my own with no tools or power and no help what I could do in a matter of days. I am like McGyver

    Can you weld? Can you frame a house? Can you fix a diesel engine? Can you make biodiesel? Do you know enough about electronics to wire a solar array or get a shortwave radio fixed and running? Can you run a tractor? Can you stitch up a wound without killing the patient? Probably the only folks here that stand a chance are the tradesmen, and the doctors (and the guys who can home brew).

  20. anon (the good one) says:

    11. that’s why decided against upgrading…inflation is not there

  21. chicagofinance says:

    repost
    chicagofinance says:
    June 17, 2013 at 11:30 pm
    The End Is Nigh (Clot’s Children Television Workshop):
    http://www.nbcnews.com/health/sesame-street-creates-first-muppet-have-parent-jail-6C10345061

  22. grim says:

    Housing starts up to 914k (Up 28.6% year over year), but miss estimates of 950k.

  23. grim says:

    CPI headline up 1.4% in the last 12 months, Core up 1.7%.

  24. Painhrtz - Disobey! says:

    Grim I’ll take it one further do you know basic irrigation, pest control, and fertilizer skills to grow more than a garden’s worth of tomatos?

    I fit most of those questions so I should not be worried. Personally I’m just going to go the brutal dictator route. The survivalists will be the easiest prey.

  25. 1987 condo Buyer says:

    #17…right on…my local police have access to more fire power and equipment than probably any survivalist….I am not certainly going to fight to survive in some kooky post-apocalyptic world…I do plan on retiring early and traveling, etc. and hope to get it in before Clot gets his wish….

  26. Ottoman says:

    As everyone remembers, S&P was spot on in its analysis of and recommendations during the last housing bubble.

    The government is only one of many entities that have the technology to remove most, if not all, natural plant pollinators from the face of the earth. And most commercially available seeds are only viable for a year or so and they must be harvested and stored correctly. Perhaps developing a taste for kudzu might come in handy. On the bright side, a resurgence of scurvy will greatly reduce the incidence of painful bj’s from unskilled women.

  27. Fast Eddie says:

    I hate you all!! Kidding. ;) I’ve been very busy and I’m back at my old job again. The last gig s.ucked to high heaven. Carry on.

  28. Sima says:

    #17 Grim –
    Absolutely agree. It is so sad that most people around me are clueless about anything to do with the outdoors – whether gardening, cutting wood, anything involving “labor” in the outdoors or their properties. Everything is outsourced.
    And the next generation is being raised to know even less. I once had to give a talk to a classroom of 6 year olds about compost and dirt, and so I had a bucket of dirt with earthworms to show them. Most kids had NO idea where to find worms! They were not allowed to play outside and dig in the dirt and so were clueless. They didn’t have vegetable gardens, didn’t help with lawn care (raking or weeding), and so were totally ignorant about what was around them in the real world. Very sad.

  29. Sima says:

    Fast Eddie – contract work or the job which you left because you were underpaid?

  30. Juice Box says:

    re: # 12 Laughable – “concerns of important local employers”

    Auto dealer lending is pushing a trillion dollars a year. Without those pushy auto salesmen, and backroom finance dept also pushing all of the add ons and junk like they do with home mortgages there is less money to be made when it’s just a few clicks of a mouse to have a new car show up delivered to your front door with no middlemen involved.

    Most auto loans are then packaged, securitized and sold on Wall Street to investors, and many dealerships are part of a chain some of which can be traded on Wall St like AutoNation.

    It’s not local employers anymore.

  31. A.West says:

    Grim,
    I totally depend on civilization, and in particular, advanced civilization. I don’t even like gardening. I don’t want a gun. Anarchy is the rule of thugs with guns.

    I donate money to the Ayn Rand Institute to try to prevent civilization from collapsing by promoting the use of reason in culture and the concept of individual rights in politics.

    If end times come, I’d try to move to China, which is a far, far inferior place to live than the US, and is actually more likely to suffer from a jarring economic/political crisis than the US in my lifetime. But it’s somewhat uncorrelated.

    If anyone here wants a free copy of the novel “Atlas Shrugged”, I’ll gladly buy and send you one via Amazon. Just send me a message telling me where to send it.

  32. JJ says:

    That is why Ally Financial is a member of TBTF and one of the biggest banks around yet not a single branch. Auto Lending is a massive business and Ally has a near monopoly,

    However unlike student loans they do credit checks, have short loan terms and have collateral.

    But a GMC Denali, make one years worth of payments, default, they hit on-start button as soon as you have engine off, disable car lock you out then use GPS to come get it back to dealer ship and resell it keep your years worth of payments. And then sue you for any difference. Plus Ally requires, theft collision etc and most loans the car is under warranty so repairs are kept up. Ally borrows at near zero as it is a TBTF bank. Ally is huge in the ABS space, the paper is highly rated. Now that they dumped Rescap and only do on-line bank and car loans the business is golden. Lets hope they dont get stupid again and do subprime loans.

  33. Juice Box says:

    re#17 – re: ” end times come” It is my firm belief if we suddenly ran out of energy and everything ground to a halt the zombie hoards would be busy raiding the big box stores warehouses along the highways in search of food after they have cleaned out the local supplies. While the hoards run one way I will be heading another way preferably on a sailboat far from reach towards warm waters. With the right equipment and warm weather I would only need to survive a few short months until the vast majority of land lubbers 99% are taking a dirt nap. You won’t be able to barter your way out of it there isn’t enough locally grown food and it would not take too long for most of you to starve.

  34. Comrade Nom Deplume, Halfwit dumbass says:

    [17] grim,

    True enough, it’s a source of (limited) concern. I’ve tried to keep up the old Boy Scout skills and what I’ve learned in trades, and I read what I can, but I’m not devoting time to it to the detriment of other things. I’m probably well prepared for short periods of no or limited services (e.g., Sandy) but not much more until my preps improve. It’s a slow process but I can’t justify ramping it up. The tail doesn’t wag the dog.

    FWIW, I’ve noticed that most committed preppers are actually in the prepper trade.

    Understand that while we could revert to a level where we must be more self reliant, I don’t subscribe to a Clotesque TEOTWAWKI type of world.

  35. grim says:

    34 – Most people would be far better off training to run a marathon and keeping in shape as their “prepping”. At least that has real-world benefits should that whole armageddon thing fail to pan out.

  36. Comrade Nom Deplume, Halfwit dumbass says:

    [35] Joyce,

    It gets better. Recall that employers who must offer care must offer a “reasonably priced” option. The definition of that is 9.5% of comp. but some analysts point out that this is regressive in at it will hit low earners much harder. And the law says only that you have to offer insurance–if your employees refuse it because its too expensive and bare-bones, oh well . . .

    I’ve said it before, I’ll say it again. This bill was so bad for the left that the only reason some members voted for it is that people will get so pissed off, there will be a groundswell for single payer.

  37. Comrade Nom Deplume, Halfwit dumbass says:

    [36] grim

    Agreed, which is why I am thing full advantage of the lovely ChesCo countryside.

    And I don’t like the term prepping. Just learning and practicing self reliant skills, both individually and as a family, serves a prepper end but it also has real and immediate benefits.

    But I despair of getting the girls out in the garden for long.

  38. raging bull jj says:

    Bronz boys dont do this prep stuff, you are going so soft. Heck I survived 12 years with no food or a bedroom growing up. I know you are living the dream in your Mike Brady Split but dont go all soft on me.

    Juice Box says:
    June 18, 2013 at 10:07 am
    re#17 – re: ” end times come” It is my firm belief if we suddenly ran out of energy and everything ground to a halt the zombie hoards would be busy raiding the big box stores warehouses along the highways in search of food after they have cleaned out the local supplies. While the hoards run one way I will be heading another way preferably on a sailboat far from reach towards warm waters. With the right equipment and warm weather I would only need to survive a few short months until the vast majority of land lubbers 99% are taking a dirt nap. You won’t be able to barter your way out of it there isn’t enough locally grown food and it would not take too long for most of you to starve.

  39. A.West says:

    Agreed with grim. The best prepping is staying healthy. It’s a good idea to have some shelf stable goods, more for weather disasters than societal collapse. Knowing how to fix stuff yourself is a good idea, but I cannot claim much skill there.
    Societies don’t collapse that easily. Instead they tend to splinter and focus on legal plundering. Argentina and Venezuela haven’t even collapsed yet, despite lots of hard work toward failure. Even in the revolutions of the USSR or China, “prepping” would have been worthless. Same for plantations in the South during the US civil war. People hiding food and gold were shot and are now long forgotten.

  40. xolepa says:

    (11) To the contrary. Bought pork loin at Restaurant Depot last week for $1.80lb. 9 lb package, but I cut it up, vac seal and freeze for my kids. Make it into pulled pork. You can feed a whole family for a week on this stuff. Shop Rite usually sells it for $1.99 per pound. 18 bucks for the whole week.
    There must be a lot of pigs in this country.

  41. xolepa says:

    And bought 88%lean at Costco for $2.79lb. That’s pricing of last decade.

  42. Brian says:

    There is no such thing as an energy shortage. We are constantly bombarded by energy and surrounded by it. We just don’t yet know how to harness it via fuels.

    There can only be fuel shortates.

    33.Juice Box says:
    June 18, 2013 at 10:07 am
    re#17 – re: ” end times come” It is my firm belief if we suddenly ran out of energy and everything ground to a halt the zombie hoards would be busy raiding the big box stores warehouses along the highways in search of food after they have cleaned out the local supplies. While the hoards run one way I will be heading another way preferably on a sailboat far from reach towards warm waters. With the right equipment and warm weather I would only need to survive a few short months until the vast majority of land lubbers 99% are taking a dirt nap. You won’t be able to barter your way out of it there isn’t enough locally grown food and it would not take too long for most of you to starve.

  43. Nomad says:

    Good video – As I heard it, Dick Proenneke wanted to try living in Alaska alone. In his first year of preparation (no pun intended) he went up there and cut down a bunch of trees with a hand saw and left them to dry out for a year.

    Next year, he went back, hand raked ground to level it, dug up river stone and put in pail and covered raked area for foundation for his log cabin. Video just under 10 minutes.

    http://www.youtube.com/watch?v=iYJKd0rkKss

  44. 1987 condo Buyer says:

    #40….. “People hiding food and gold were shot and are now long forgotten.”…bingo!
    Not really sure what “surviving” gets you if you are on 24/7 search for food, safety and shelter….or holding off countless intruders….

  45. Nomad says:

    Tesla already has licensed their technology to Toyota for the RAV4 electric. Wonder if they won’t license to another entity (that may or may not currently be mfg autos) for electric autos at (relative to Tesla) a lower or more mass market price point? Tesla could continue making the higher end cars, reap $ from licensing and get a large lead on developing, owning and monetizing the charging infrastructure.

  46. Brian says:

    The sun came up again today.

  47. Libtard in Union says:

    I noticed the pork pricing was insanely low recently as well. I bought pork ribs at SR for $1.50 per pound a couple of weeks ago on an in-store special. And they were awesome with the rub Gator bought back home with her from Memphis. Strange, looking at the commodity charts on hogs, this stuff shouldn’t be so cheap.

  48. raging bull jj says:

    NJ food prices are way down in last year, mainly cuase Rex Ryan and Chris Christie both went on a diet.

  49. Brian says:

    Really, I have no idea what food costs. I let my wife do all the shopping.

  50. Fast Eddie says:

    Sima [29],

    I’m back at the lesser paying fulltime job but it’s far better.

  51. JJ says:

    Higher Mortgage Rates Won’t Hurt Housing Affordability: Freddie Mac
    Rates will have to rise as high as 7% before home purchases become unaffordable, economists at housing giant Freddie Mac say.
    By Shanthi Bharatwaj, Staff Reporter

    Mortgage rates will have to rise as high as 7% before home purchases becomes unaffordable in most parts of the country, according to economists at housing giant Freddie Mac

    The economists estimate that median-income families can afford to purchase a median-priced home with a 10% down payment and a 30-year fixed-rate mortgage in most parts of the country with the exception of some high-cost markets (primarily San Francisco south to San Diego, and Washington, D.C., north to Boston).

    Affordability is calculated by requiring that principal, interest, taxes and insurance not exceed 28% of gross monthly income.

    According to the economists, most of these markets can easily absorb the impact of higher interest rates without derailing the housing recovery.

    “With homebuyer affordability remaining very high, we expect that rising interest rates will have only a small, slowing effect on the home purchase market,” economists Frank Nothaft and Leonard Kiefer wrote in a report.

    Ultra-low mortgage rates has helped fuel a housing recovery over the past year. In recent months, however, a blend of fear that the Federal Reserve will ease its quantitative easing program and improving confidence in the economy has sent interest rates higher.

    The 30-year mortgage rate has moved from about 3.4% to about 4% since May. The speed of the rise in rates and the likelihood of further increases as the economy improves have raised concerns about the sustainability of the housing recovery.

    But the Freddie Mac (Symbol : FMCC) economists believe the concerns are overdone with real interest rates — interest rates adjusted for inflation — still half of what they were prior to the recession. The recent capital market action will, if anything, draw buyers into the housing market. “The capital-market signal is that rates are up from the cyclical trough and are likely to move gradually higher in the coming year. In the short term this may spur renters and other first-time homebuyers who have the financial capacity, to get off the fence and buy a home before financing costs go higher,” they wrote.

    The outlook for refinancing is however much more pessimistic, given that it is a lot more rate-sensitive. The economists expect refinancing volume to touch $1.1 trillion in 2013, down from $1.5 trillion in 2012.

  52. Ottoman says:

    Spoiler Alert:

    My favorite part of Atlas Shrugged is when Dagny develops a three pack a day smoking habit which riddles her once youthful bosom with a raging case of lung cancer; making her so paranoid of being bankrupted by the free market medical and insurance system that she sends her secretary down to the local social security office to grab handouts from the collective she spent her life railing against.

    Or was that Ayn Rand? I always get those two shining models of self sufficiency mixed up.

  53. JJ says:

    http://www.freddiemac.com/pmms/pmms30.htm

    if you look at average mortgage rates since 1971 on this chart I can see why Freddie mac thinks mortgages up to 7% will have no effect on home prices.

  54. A.West says:

    Ottoman,
    Looks like you’ve swallowed the leftist load full throat.
    Leeches look for ways to evade the reality of their inner voids.

  55. 1987 condo Buyer says:

    #64, a 50% increase in rates from 4% to 6% increases a $250,000 30 year mortgage from about $1,200 to $1,500….will $300 a month be that significant? We’ll see.

  56. Bystander says:

    JJ,

    So we have unprecedented run up in houses, unprecedented crash, unprecedented job losses and unprecedented fed printing/govt support yet we can compare these times to historic norms..bs. If rates rise to even 5% you will blow up NY market. People are still leveraging and speculating. Shoot you won’t even gamble on anything but a beach shack beat up by a hurricane.

  57. Statler Waldorf says:

    Quality of life is not always about numbers. This applies to housing, too, within reason.

    “I’m back at the lesser paying fulltime job but it’s far better.”

  58. JJ says:

    In my case the trade up houses property taxes is what scared me off. Not the price.

    Mortgages at 8% can be refinanced. But super high RE taxes are very difficult to get lowered. I mean I no how to grieve and I usually win, but some homes I see have 20-36K taxes, Even if I get 10-20% off after a few times grieving it is still sky high. Plus heat, electric, lawn service, home owners insurance all go up with size of house.

    I own my primary and secondary home outright. Combined taxes on two homes is a little under 14K a year. My primary is small enough where I can see mow grass and do repairs. Now I have someone to do it, but I could if I had to pretty easily. I looked at a 4,000 square foot house with a huge inground swimming pool and almost three acres at one point in 2011 that I could afford the mortgage and even its taxes were not bad. OMG I got a copy of the utility bills, landscaping bills and owner showed me new roof bill. They were gigantic. And I cant go mow three acres. That house was actually in good shape, but you know what when things start going down the road who needs it.

    Folks who were smart enough to get a condo in manhattan prior to 2003 run up with low CC are smartest. The stelth costs of owning a large home will eat you up.

    Bystander says:
    June 18, 2013 at 2:06 pm

    JJ,

    So we have unprecedented run up in houses, unprecedented crash, unprecedented job losses and unprecedented fed printing/govt support yet we can compare these times to historic norms..bs. If rates rise to even 5% you will blow up NY market. People are still leveraging and speculating. Shoot you won’t even gamble on anything but a beach shack beat up by a hurricane.

  59. xolepa says:

    (59) In many, but not all cases. My greatest expense is of course, property taxes. They went from $6000 in 1992 after we finished building the house to almost $17000 20 years later. It has receded a bit to slightly over $16k. Home upkeep is reasonable because we designed it to be high-efficiency. Gas bill at its ever highest, when NG reached it’s peak was $300 for the month. Now worst is about $250. Total living space is about 5300sqft. Electricity cost is higher because we have twin AC units + outdoor hot tub + sauna + inground pool + heat pump pool heater, blah, blah. But then, I don’t need to spend my money for the shore. Grass cutting is $40 weekly for two acre property. Roof is still original, has about 10 years left. Biggest property expense other than that is my wife’s penchant to have all new annuals put in every spring by her horti guy. And I physically work but my butt off.

  60. Statler Waldorf says:

    Surely there’s a middle ground between a split-level and a McMansion?

    “I looked at a 4,000 square foot house with a huge inground swimming pool and almost three acres at one point in 2011 that I could afford the mortgage and even its taxes were not bad.”

  61. Bystander says:

    Bingo, JJ. So, if 2007 was unsustainable then how are 2013 taxes and upkeep costs suddenly affordable for average buyer. I know too many people getting eaten alive by 14k taxes to think NY metro market is suddenly recovered. Structurally we are worse off.

  62. JJ says:

    Nope. I looked at that larger house a little further out. The commute was also an issue, the three neighborhoods that are in a good train town, good school with a good class of people 80×100 houses that have four real bedrooms and a two car garage in decent shape are 1.3 million with 27K a year in taxes. Mind you that gets me a commute that is 7 minutes less and two miles closer to city. The bigger house for around same price was 8 miles further out. My wife had a thing is she was paying 1.2 million for a home she wanted it to look like a 1.2 million home.

    Now Sandy has trapped me in my primary anyhow. Prices are down and my NYS grant is up in the air, if I sell I lose it, plus my property tax grievance in up in air.

    If I get the grant, finish my whole renovation and win the appeal I will either stay forever, or sell while home is all new with cheap taxes a deadly combination that buyers all want. Right now I am fixing up the other place and trying to get a tenant in.

    Hard to believe that a five gallon can of good paint is like $250 bucks. Thank God I am just painting and stuff. Cost you a fortune to do a real renovation right now with Sandy.

    Statler Waldorf says:
    June 18, 2013 at 3:17 pm

    Surely there’s a middle ground between a split-level and a McMansion?

  63. JJ says:

    Maybe cause 2014 buyers look nothing like 2007 buyers. Back then it was Mexican gardners buying 750K houses on NINJA loans in 2014 it is a dual income couple with masters degrees pulling down 350K a year.

    House next door where prior owner was a HS degree house painter who paid 600K in 2006 was replaced in 2012 by a lawyer with a working wife who paid 480K. The interest was not issue on loan. It was cost of home and income.

    Bystander says:
    June 18, 2013 at 3:29 pm

    Bingo, JJ. So, if 2007 was unsustainable then how are 2013 taxes and upkeep costs suddenly affordable for average buyer. I know too many people getting eaten alive by 14k taxes to think NY metro market is suddenly recovered. Structurally we are worse off.

  64. grim says:

    You sure households are in a worse position? Figure this one out, from CR:

    Fed: Household Debt Service Ratio near lowest level in 30+ years

    http://4.bp.blogspot.com/-seB6fsoSyDs/UcBo66mO6hI/AAAAAAAAau0/hJENEhII1AA/s1600/HouseholdDSRQ12013.jpg

    The overall Debt Service Ratio increased slightly in Q1, and is just above the record low set last quarter thanks to very low interest rates. The homeowner’s financial obligation ratio for consumer debt also increased slightly in Q1, and is back to levels last seen in early 1995.

    Even the homeowner’s financial obligation ratio for mortgages (blue) is down to 1990s levels. This ratio increased rapidly during the housing bubble, and continued to increase until 2008. With falling interest rates, and less mortgage debt (mostly due to foreclosures), the mortgage ratio has declined to 1998 (and 1981) levels.

  65. BearsFan says:

    It’s an absolute feeding frenzy where I am looking. My wife and I are considering putting everything on hold, as it seems to be a waste of time.

  66. JJ says:

    If you are putting down very little and are afraid of rates rising that is where the feeding frenzy is coming from. Add in folks feel better and folks usually liquidate investments and stocks are way up and bonds are only down a little folks have cash.

    I am seeing more sales near me than expected. The homes near me with no flood damage are back to pre-sandy values. I thought that would take years but it took months. Towns near me outside flood zone that got no water from Sandy are way up. Folks still like to live near beach but now like it better from three miles away!

    BearsFan says:
    June 18, 2013 at 3:58 pm

    It’s an absolute feeding frenzy where I am looking. My wife and I are considering putting everything on hold, as it seems to be a waste of time.

  67. Anon E. Moose says:

    Lib [48];

    I’ve heard that the best indicator of low pork prices is the appearance of the McRib sandwich (not that you’d partake…). Even BK is advertising a pressed mean pork patty with “rib” in the name now.

  68. Anon E. Moose says:

    Refurb [68];

    mean == meat, but it kind of works as written. ;-)

  69. Grim says:

    (not that you’d partake…)

    Why? Is it not on the value menu?

  70. Vela Mint says:

    52 grim,

    FRM is right – it won’t affect housing, which is @ 2006 levels, not 2003 levels, and only for the tax-payer subsidized investor, which borrows from the Fed Reserve Bank member bank at no interest rate all to rent out to John Q and Mary J Public, who saved their money expecting market clearing mechanisms, not dysfunction.

    Stop kidding yourselves. It’s all a farce.

    Mwwwwah!

  71. Anon E. Moose says:

    JJ [52];

    The economists estimate that median-income families can afford to purchase a median-priced home with a 10% down payment and a 30-year fixed-rate mortgage in most parts of the country with the exception of some high-cost markets (primarily San Francisco south to San Diego, and Washington, D.C., north to Boston)

    I wonder how much of the population that geographic description covers. Once you ignore the places where half the country actually lives, then there’s no affordability problem. Lets pack up early and hit the beach! Other than that, Mrs. Lincoln, how did you enjoy the play?

  72. joyce says:

    72
    I laughed out loud when I read ‘San Fran south to San Diego’ … you know, almost the entire state of California.

  73. xolepa says:

    (68) You don’t want to know what keeps that ‘rib’ together.

  74. Vela Mint says:

    Yo, Moose,

    Demagraphics, chema-plastics!

    Bottom lines:
    Fewer families w/ kids in every town (check those 2003 projections from the school board and see how accurate they were – down 20% on kids in a community!!!)

    So who’s gonna buy that mischt box? Only the next fool!

    Undo March 2009 FASB rules on mark-to-myth and restore mark-to-market. Then we’ll see the overdue unwind of epic proportions!

    Beach? Not this year! Enjoy the flotsam and jetsam from Sandy to you – perfect together!

    From the RINO State of NJ,
    VM

  75. JJ says:

    Actually less kids make houses easier to afford. You have dual incomes and low school taxes.

    80% of households at my beach place have no kids under 18 living in the house, of that 20% there are kids in catholic and yeshiva. Hardly anyone in school district. That is great as school taxes are low. Plus dont need to maintain parks, libraries, schools etc. All dead space on tax rolls. There are kids, but on vacation homes they can only identify parents as kids dont live there. They get it off deed. They only grab kids when it is their primary.

    Vela Mint says:
    June 18, 2013 at 4:41 pm

    Yo, Moose,

    Demagraphics, chema-plastics!

    Bottom lines:
    Fewer families w/ kids in every town (check those 2003 projections from the school board and see how accurate they were – down 20% on kids in a community!!!)

  76. xolepa says:

    JJ is right. In my town, where kid populations are down, the School board is scrambling to keep teacher jobs. They changed kindergarten hours from half-day to full day. Hmmm. It’s for the kids.
    This population drop occurs in cycles. In the 70’s high schools consolidated in NJ. Not enough kids.

  77. Anon E. Moose says:

    X [77];

    In the 70′s high schools consolidated in NJ. Not enough kids.

    The Baby Boomers graduated. Its all about the Locust Generation.

  78. Chi (21)-

    M’fing muppet should be glad his daddy didn’t face a kangaroo court that rendered summary judgment, stood him against a wall and shot him in his sock puppet head.

  79. Juice Box says:

    Grim bedroom communities

    NJ Daytime population estimates mapped via census data.

    “Were it not for the Garden State Parkway and Routes 4 and 17 running through it, Paramus might be a typical New Jersey suburb, with a population of about 26,000. But the presence of three large malls, as well as office buildings, essentially doubles the borough’s daytime population to more than 52,000.”

    http://www.njspotlight.com/stories/13/06/06/daytime-population/

  80. chicagofinance says:

    Carlos Slim speaks the righteous truth…..
    “When you have an industrial economy like in the past where people … do a lot of physical work and people live less years, it’s OK to retire at 65,” Slim told CNBC. “When you have a society of knowledge and experience and information, at this age is where you are at your best. It’s [foolish] to retire at this age. And you don’t have the physical work, and you have the intellectual work and you are in your best in your 60s.”

    The comment came up in a discussion about what to do to fix the European economy. Many economists and politicians have said retirement ages around the world need to rise because people are living longer and the benefits promised to retirees are unsustainable. However, Slim said, even beyond that, workers are better in their 60s than when they’re younger.

  81. chicagofinance says:

    I looked at the links without reading your cover text first. My conclusion relates to the interest rates as well. Although you cite this information and the source is credible, the impact of zero/low interest rates is so profound, I cannot overstate it enough…..the idea that people are literally paying principal back with their debt service is as critical as it is ephemeral……when the Fed starts to raise in the future, this analysis blows up…….book it…..tag this post and refer to it in 2015…..am I prescient? NFW…..common sense analysis is all…..

    grim says:
    June 18, 2013 at 3:45 pm
    With falling interest rates, and less mortgage debt (mostly due to foreclosures), the mortgage ratio has declined to 1998 (and 1981) levels.

  82. chicagofinance says:

    The End Is Nigh (JJ Pro-life Edition):
    U.S Congressman says he’s anti-abortion because he believes fetuses masturbate

    A North Texas lawmaker is in favor of a ban on abortions after 20 weeks gestation because he said he’s seen male fetuses at that stage pleasure themselves.

    U.S. Congressman Michael Burgess, a Republican representing Denton County and parts of Dallas and Tarrant counties, is a former OB/GYN. He supports a proposed GOP bill called the Pain-Capable Unborn Child Protection Act.

    During a recent House Rules Committee hearing he has gone as far as saying the bill should ban abortions 15 weeks after conception.

    “There is no question in my mind that a baby at 20 weeks after conception can feel pain. The fact of the matter is I argue with the chairman because I thought the date was far too late. We should be setting this at 15 weeks, 16 weeks,” he said.

    “Watch a sonogram of a 15-week baby, and they have movements that are purposeful,” Burgess said. “They stroke their face. If they’re a male baby, they may have their hand between their legs. If they feel pleasure, why is it so hard to think that they could feel pain?”

  83. Fabius Maximus says:

    Clot
    I love Mikey. he’s the funniest owner since Simon Jordan at Palace.
    http://www.guardian.co.uk/football/2013/jun/18/joe-kinnear-newcastle-united-interview

  84. Fabius Maximus says:

    #17 grim

    Amen, so endeth the lesson.

    I would not rule out the geeks, that knowledge of physics, chemistry and mathematics will come in very useful.
    The ones that will really survive will be the hippy communes. They are more suited to putting the benefits of the group above the individual. The worst will be the ones holed up in their Nompounds with their gold and guns. That will break down really fast as there will always be a lack of trust. Will they get ripped off or robbed by the other people they are locked in with?

  85. Fabius Maximus says:

    #31 West

    So the Institute is a taker?

    I still want to know who cleans the toilets in the gulch and what happens when you get sick enough in the gulch were you can’t pay for medical care? What happens? Is there bankruptcy. The doctor is rich enough they don’t have to practice so there is no requirement for them to treat the sick.
    My problem with the Rand books and the whole philosophy is that it takes a very narrow view and spins it to paint a picture. It’s just not an objective (pun intended) view. If you flip the premise the other way where the workers disappear, you get a very different book.

  86. Comrade Nom Deplume, Halfwit dumbass says:

    [86] Fabius,

    As usual, you can’t see the forest for the trees. The Nompound is a commune, just one of a different orgin. Collective action isn’t exclusively a leftist concept.

  87. Comrade Nom Deplume, Halfwit dumbass says:

    Besides, the Nompound will simply invade your commune and take all your supplies, or turn it into a vassal state.

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