Up for discussion today is:
New Home Sales
May: 1,234K
May Revised: 1,166K
June Estimate: 1,164K
June Actual: 1,131K
New home sales fall more than expected in June
Sales of new U.S. homes fell more than expected in June to a seasonally adjusted annual 1.131 million rate and the median home price fell for the second month in a row the government reported on Thursday, as the U.S. housing market showed more signs of cooling.
The 3 percent drop in new home sales was the first decline since February, the Commerce Department said. Compared with a year earlier, new home sales were down 11.1 percent.
Analysts polled by Reuters were expecting new home sales to cool to a 1.160 million annual rate.
Median selling prices dipped to $231,300, but was still above the $226,100 median price in June 2005.
In a further sign of a cooling housing market, the number of homes available at the current sales rate rose to a 6.1 months’ supply, the highest level since March. There were 566,000 new homes for sale at the end of the month, a record high.
Homebuilder Earnings
Pulte Homes – Reported yesterday after close
April, May, June Orders down 30%
Cancellation Rate 27.4% vs. 14.8% in the prior year
Beazer Homes – Reported this morning
Orders down 16%
“significant increases in cancellation rates”
Pulte and Beazer are part of today’s discussion because I feel the new orders and cancellation figures they released provide insight into both the national market and local real estate markets they service.
However, because these specific securities are part of today’s topic, a disclaimer is necessary:
Disclaimer
The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.
grim
Housing market slowdown rippling across the economy
http://tinyurl.com/pm5t4
it seems as the days go on the msm is printing more stories that do not indicate a soft landing this is going to be a crash landing in most bubble markets
cheers grim
keep up the good work
Tsunami wave 2 heading this way and we still have wave 3 and 4 to deal with.
BOOOOOOOOOYAAAAAAAAAAAA
Bob
“Patient” Homebuyer.
Patience!
Gotta buy it now. What ever it takes right?
Lots of fools feeling the pinch now. The money grubbing sellers found a fool to buy their overinflated crackbox. Now fools are more difficult to find. Those that have a down payment “value” their effort to attain it. I highlight value cuz many have lost the sense of value these days.
Bababababa BUST!
Booooooooooyaaaaaaaaaa
Bob
Do not give any money grubbing sellers any HOPE of selling at these Insulting prices.
NO Bids No MAAS!
Look learn and criticize.
This will knock the wind out of their sali.
hehehehe
Boooooooooyaaaaaaaaaa
Bob
it’s funny how the johnny come lately sellers today are still listing properties way above market rate wasting months slowing chipping the price down. the silver lining is initial asking prices are a bit less out of whack with market rate than a few months ago. the psychology is turning, albeit slowly.
Denial in a previously hot real estate market occurs when a home listed at a high price doesn’t sell quickly, even though just a few months ago houses sold in just a few weeks,” Lawler says in his July 19 Lawler Economic & Housing Consulting newsletter. “The home buyer says, ‘This is weird, but I’m sure it’s just a glitch,’ and does not alter his or her asking price.
“Anger occurs when, after a few months pass, the house still hasn’t sold, and little interest has been shown,” he continues.
“Bargaining begins as the home buyer starts to offer a few incentives, agrees to more open houses, starts to fix up the house to make it show better, and actually agrees to lower the listing price a bit.
“Depression starts to set in when the house has been on the market for about four months or so, and the seller realizes that his or her net worth simply isn’t going to be as high as he or she thought.
“Finally, acceptance occurs when the seller realizes that homes prices have fallen; that he or she will not get peak price of what is now six months or more ago; and that if he or she wants to sell the home, the asking price needs to be adjusted downward considerably.”
This process takes time, Lawler says, which is why home prices in hot markets that cool fast don’t immediately start falling.
hehehehe
Misery index Rising
Bob
grim you should do a monthly section called the greater fool. it would list properties that somene paid asking price or above for in today’s climate. i think it would be quite telling.
“Finally, acceptance occurs when the seller realizes that homes prices have fallen; that he or she will not get peak price of what is now six months or more ago; and that if he or she wants to sell the home, the asking price needs to be adjusted downward considerably.”
This process takes time, Lawler says, which is why home prices in hot markets that cool fast don’t immediately start falling.
Getting close to this point, but I hope grubbing sellers understand the word “CONSIDERABLY”.
HEHEHEHE
Markets are not a one way street
Grubbers!
BABABABABABA BUST!
Bob
our congressmen hard at work protecting the realtors’ lobby (from Redfin’s website concerning recent hearing re: anti-competitive nature of real estate industry)
****************
The Democrats of all people cited states’ rights in their refusal to act, while the Republicans seemed intent on protecting the realtors rather than free markets. Their opposition was impenetrably uniform but also outlandishly varied: do online brokers discriminate against those who lack Internet access? Since realtors are often divorced women starting second careers, aren’t we hurting those who need jobs the most? If lawyers’ fees have increased recently why shouldn’t realtors’? If your service is so great, why isn’t your business bigger? Since you’re not out of business, how could you complain?
It was all political theater, as everyone knew what we never figured out: that Congress would leave it to the DoJ to go after the realtors. An FTC lawyer told me before the hearing started that just having companies like Redfin testify was already alarming to the realtor lobby. “They did a big letter campaign,” he said (the committee members often waved letters at us from concerned realtors in their districts).
*************
Funny Bob, the 5 stages of denial. Did you make that up, or is that actually from an article?
homebuilders aren’t sitting on the sidelines in the lobbying effort (from Bloomberg):
*************************
The National Association of Homebuilders, never a fan of Fed-engineered interest rate increases, complained about this development [rate increases] in a letter to Senator Paul Sarbanes, the ranking Democrat on the Senate Banking Committee, prior to Fed Chairman Ben S. Bernanke’s appearance before the committee on July 19.
NAHB “believes that the Federal Reserve has been relying on deficient inflation measures to rationalize the interest rate hikes that have been taking a serious toll on the housing sector,” Joseph M. Stanton, the association’s chief lobbyist, wrote.
*******************
ah yes, inflation is overstated, not the other way around!
Bernanke is in full agreement with the realtors and homebuilders interests (again from Bloomberg):
**************
As for the links among rising interest rates, a cooling housing market, increasing rents and the surge in core CPI, Bernanke said that the high weight rents carry in that index is one reason the Fed prefers to focus on the core personal consumption expenditure price index. The PCE index, he said, “puts a much lower weight” on rents, he said.
***********************
yes, the proper measure of inflation is to remove food, energy and housing costs from the equation!
after all, price increases only matter when we’re talking about plasma TVs and Nikes, not basic essentials of life!
Lawyers smacking lips and preparing for onslaught of the real estate industry!
Listen up greedy grubbing lawyers your gravy train is here.
BOOOOOOOOOOYAAAAAAAAAAAA
Bob
Think for yourself.
Don’t be a friggen zombie.
Gotta to make the doooooughnuts!
Babababa Bust!
Bob
New home sales down 3% to 1.13 million annual rate in June, Reuters reports. Details soon.
Keep building and building and building.
Gluts and gluts and gluts of inventory piling up on the clearance racks.
Hehhehehe
Bob
New Home Sales 1,131,000, down 3% vs May. Price – average $231.3K vs $235K in May. Mean price $290.6K in June vs $295.3K in May. Northeast down 11.3% MOM and down 37.5% YOY.
june is the biggest closing month from spring sales and the #’s were pretty weak. that means july and forward should be really bad. as bababababababababababababa bob says look out below
richard
i got a greater fool story for you. we went to see a duplex in manalapan in april, asking price 399k. when we asked the usual question…why is the seller selling, realtor told us relocation, the seller separately told us he wants to move to matawan for “easy communting to the city” reasons..now i can tell u, matawan does not have the highest end houses but they are reasonable..we thought to ourselves probably a lateral move if anything. With a little investigation, found out this guy bought a million dollar home in marlboro and sold his duplex for 395k to someone who financed 100% AGGHHH!! I just want to shake this buyer…what are u thinking? BTW, properties were sold in early 90s for 140-170k in this development and as little as 250k in early 2000. Talk about bag holding!!
Do NOT trust a realtor.
If you feel they have made a statement that you believe is questionable Just ask them to “Put it in writing”.
“PUT IT IN WRITING”!
REMEMBER THIS.
all your potential buyers. don’t think for one second the agent showing you houses is representing your best interests. they’re not. they represent the agency they work for. the only person that ever represents you in a real estate transaction is your attorney. sometimes the home inspector will have your best interests in mind, depends on who feeds them new business and their ethical standing.
remember this folks. ask your realtor nothing about what to do/not to do. they don’t represent you.
anon 10:40, it seems there are always a few greater fools out there to bail out even greater fools. that’s how the ponzi scheme works. still i believe most of the greater fools have already been fooled. home prices are flattening and soon heading down y-o-y. even the fools are starting to see that buying a property isn’t going to net them appreciation anytime soon.
remember folks, if you buy today, make sure you get a good deal for your time, patience and quality as a borrower. plan on staying at least 5 years, more likely 7 and comfortably afford all the costs that go along with owning a house. remember housing expenses are always more than you think they are so be conservative so you can ride out the storm that is coming.
The finger pointing has begun. Expect more of this duplicitous crap in the coming weeks and months.
===============================
The strength of the housing market in future months is dependent on Federal Reserve decisions on interest rates, National Association of Realtors Chief Economist David Lereah said on July 25.
“If the Fed overshoots and the economy slows too much, some of these local economies will be hurt and that could hurt housing in a significant way,” Lereah said.
==============================
In reality, I would say that the BOJ is probably more important that the Fed at this juncture. Who cares about the front-end of the Yield Curve? If mortgage rates do not clip 7.0%+ across the board, I would maintain that it fails to be an impediment to the market. Exotic loans are the prey of bank regualtors – the NAR should change its rhetoric.
This post has been removed by the author.
Imagine it read this way….
=========================
The strength of the housing market in future months is dependent on [bank regulators restricting the use of exotic mortgages], National Association of Realtors Chief
Economist David Lereah said on July 25.
“If [they put in rules restricitng the use of option ARM mortgages] and the economy slows too much, some of these local economies will be hurt and that could hurt housing in a significant way,” Lereah said.
Bob…you’re not the only one waiting for [“greedy money-grubbing”] lawyers to pounce all over this one.
At least one local subprimer is hiring 40 people to sit around and sympathize with all the suffering greater fools over the next year. PR-speak that reads, “Let us comfort you…you wouldn’t sue the pants off of your best friend, would you?
Pat
word is that litigation heavy firms are recruiting all out at my law school alma mater this fall as opposed to the corporate heavy firms that have dominated the last couple of years
law firm hiring practices as a leading indicator?
Market is “Cooling”
Another realtor SPIN!
NOT!
It is ICE COLD, Frigid.
The only realtor I trust is Suzanne because she researches things.
It is interesting how you guys just look at the price of the homes and never takes mortgage rate into consideration, those fools that you talked about, they got their saving from the low rates.
The rate went up from 5.5% from last year to 6.5% this year, so unless the price drops more than 10%, you are still paying the same monthly mortgage.
If you do the math, let’s say you bought a house with a 500k mortgage at the rate of 5.5% last year; your monthly mortgage would be about $2,839.
This year, with the mortgage at about 6.5%, unless you get it for less than 450k, you are still paying for pretty much the same thing each month, and if the rate goes up to 7.5%, which I think we will see pretty soon, you will have to get the same house for less than 410k to get any saving, and that is an 18% drop from 500k. At 8.5%, you will need to get it at 370k, which is 26% drop, and 9.5% it will be 340k, which is a 32% drop.
The same goes on, if you can afford to wait and manage to time it right, you will probably get some deals; however, not everyone can’t afford that luxury of sitting around and waiting. Also, don’t forget that while you are waiting, your rent money is also going into someone else’s pocket.
well said! very well said indeed.
Because at some point I will be able to refinance that 8.5% down. So, I’d rather have a 300K mortgage than a 500K mortgage. It’s all about the principal.
Hey A-hole anonymous 12:56,
Your mortgage payment is going into someone elses pocket also….the bank. You’re a short-sighted, month to month payment centered idiot. Your payment is steadily going into the banks profit and your “asset” is depreciating. Sounds like you lose twice.
You make your money when you buy, not when you sell you numbskull. That statement may be to abstract and complex for your little mind.
You must be a knuckledragger..I mean Realtor.
– Truth
Anonymous said…
The rate went up from 5.5% from last year to 6.5% this year, so unless the price drops more than 10%, you are still paying the same monthly mortgage.
I’d rather be paying off the same house that cost me $400,000 @ 7% interest than $500,000 @ 5.5%.
if I ever have to sell, I won’t be in the hole and I can make additional monthly payments beforehand. If you pay $100,000 too much for a house, that wil always come out of your pocket.
By the way, the prices have already come down by 10% in the last six months. I rented a condo in February and several units were on the market for $329,000 then. Now there’s one on the market for $299,000. $30,000 loss in six months vs 1.5% difference in interest. That works out to be $2,250 in extra interest for the six months which can be written off on taxes. I’ll take the interest
If anyone wants a good read, pick up Freakonomics.
How is this relevent to this blog? The authors compare realtors with the Ku Klux Klan.
Here is that particular chapter’s excerpt:
http://www.freakonomics.com/ch2.php
You have to really read the book to see how this really intertwines (information asymmetry and incentive abuse)
http://www.freakonomics.com/ch2.php
this guy probably pays $20 a month for a $7000 TV and thinks he’s getting a deal
The same goes on, if you can afford to wait and manage to time it right, you will probably get some deals; however, not everyone can’t afford that luxury of sitting around and waiting. Also, don’t forget that while you are waiting, your rent money is also going into someone else’s pocket.
7/27/2006 12:56:19 PM
Please will you save your rhetoric for someone else!!!!!!! Once again, sometimes renting makes much more sense than buying, this is one of those times. Go back in history, 1895-1920, the early 80’s and 1990-95, were also periods of time where you would have been better off renting. Why buy when you have much lower prices coming??? Who wants to put a good chunk of $ down for a depreciating asset??? Put your $ in a 5.5% interst bearing account and wait for the drop. Question, if you wanted to buy a stock that was priced at 60 but you were convinced that it will come down to 30-36, what would you do??? PATIENCE,PATIENCE,PATIENCE!!!!!!!
BC Bob
“not everyone can’t afford that luxury of sitting around and waiting.”
Wow. Dumb. There is never a need to BUY a house.
>>By the way, the prices have already come down by 10% in the last six months
i have a similar story i’ve told here recently. in a condo complex near me 6 months ago closed sales were in the $425k area with one peaking at $450k about 9 months ago. 3 identical units are on the market now for $392k, $409k and $429k. the last 2 guys obviously haven’t gotten the memo yet. assuming the lowest priced unit goes for $392k would be an 8% haircut. it’s only going to slide more.
That is very true, that is of course the ideal situation, buy houses when they are cheap and then try to refinance later. But not everyone can afford the luxury of waiting; also you never know how long you will have to wait.
Last year’s rate was the lowest in 30 years, so unless you are very lucky, I don’t think we will be seeing that again any time soon.
And no, I am not a realtor, I happened to be one of the fool that bought a 3 bed room house last year, I had been renting and waiting for the market to drop, the same way many of you are doing now, but when I had to start my new family, I just simply can’t wait any more. I did get a 30 year fix rate at 5.5%, so I consider that my saving. I knew the market was going to drop, so I looked for a house that I don’t have to sell, it is near a campus when I went to school so I know I won’t have problem of renting it out when my family have to move on. No insult is needed, I have seen things from your point of view too, I am just pointing out things from another angle.
Anon 12:56, your calc’s are correct, but that thinking of “what’s my monthly pmt” is what drove prices up. Now it is also what will help drive prices down. The combination of first time buyers being able to afford less, plus people whose ARM’s are resetting who have to sell. Since there is no longer a huge influx of first time buyers that can buy homes because of low rates and exotic mortgages, you have no more upward pressure, people that bought and haven’t sold yet are screwed and have increased inventory. This affects every price range level. Then add in people that have to sell because of resetting mortgages. It comes down to pure supply and demand, supply exceeds demand and prices must drop.
Side note, I was speaking to my realtor recently and he said June was scary slow, slow enough that you think the agency is not going to be able to pay the bills if this continues. He said July’s been better because there were a bunch of people that had to buy in order to get into a house before the school year started, etc. He expects that to end shortly and it to go back to scary June levels of no sales and no one at open houses in August unless prices drop significantly.
The only buyer that will be left is someone who doesn’t have to move into a new home immediately for school reasons, etc. This buyer can be patient and when everything unfolds in the fall you’ll see 5 houses for every 1 buyer. Lowest price will win. The other 4 houses won’t get sold until they lower the price enough to entice first time home buyers to start buying again.
Why buy a house now when it’s only going to be worth 30-40% less in a year or two.
A mortgage can be refinanced to a lower rate, but the purchase price is forever.
“I knew the market was going to drop, so I looked for a house that I don’t have to sell, it is near a campus when I went to school so I know I won’t have problem of renting it out when my family have to move on.”
Will your potential rent roll legitimately cover your future cost of carry? Most data in this area would point to no.
Will you be able to afford a second down payment to carry your future primary residence, or will you need to mortgage the heck out your current home which will become a future investment property. This would place further pressure on the need for sufficient rent roll to cover a larger cost of carry.
“I’d rather be paying off the same house that cost me $400,000 @ 7% interest than $500,000 @ 5.5%.”
I would make it a case that the 500k house will get soaked with a higher property tax.
To all those cheerleaders for the current real esate market please read this article;
http://www.stock-market-crash.net/florida.htm
Ironically, there were no buyers on the sidelines after this fiasco!!!!!!!!
PATIENCE,PATIENCE,PATIENCE
BC Bob
anon 12:56
I understand what you are saying, you dont like people saying that they want to wait because you “could not” for family reasons. I started my family in 2004 (when the bubble was in its most beautiful phase…growing) but until my child is ready for school, I can and will rent..heres why (1) I will have a 50% downpayment (whether or not I pay that all up front we will see, but can definitely make extra payments as time goes on and (2) prices will drop at least 30%. Even with interest rates at 10%, I will come out better. BTW, I am looking at 600k properties whose fair market value is 400k IMHO.
Also, I realized through renting that (1) I REALLY don’t NEED a 2-story foyer & living room to heat throughout the winter..I would rather have that $$ getting interest in the bank, (2) that I don’t need to pay 10-14k in property taxes for the kind of place I want to buy, and that (3) my time with my daughter is invaluable…I don’t want to spend it working some 12 hour job to afford a monthly PITI payment that is 2x what I am paying in rent. Congrats on your purchase. It sounds like it was a good decision FOR YOU…not me..I am waiting.
The previous owner was renting the house out; I know how much he was renting it out for. With the mortgage+property tax that I paying for, I am losing money if I rent it out at this point, but I am betting that the rent will go up when the housing market cools, and with inflation, in 10-15 years, it will probably cover what I need to paying for each month, I know it is a gamble, but it is also a gamble when you just sit around and wait. Timing the market is not an easy thing to do.
Besides, I bought less house than I could afford, my monthly payment is only about 20% of my wife and I’s combine income, and we already have plan to put money aside for our 2nd house.
I debated with myself for a long time before I decided to buy, I know renting is an option, but the quality of life is just not the same, especially when you are planning to settle down. I also don’t want to deal with moving and doing renovation when I have small kids in the house. For all of you who can afford to wait, good luck to you.
anon 3:04
20% sounds reasonable and quality of life sounds good too..but please tell me you did not send your child(ren) to daycare so that your wife could work so that you could afford PITI! Your child’s quality of life is important too!
pat,
Can you explain your 11:27 comment ? Do you mean that a local subprimer is hiring 40 new LO’s ? Thanks.
CNS
Kids only cause financial problems
If I have any, it will only be one
“please tell me you did not send your child(ren) to daycare so that your wife could work so that you could afford PITI! Your child’s quality of life is important too!”
There was a 20/20 episode one Sunday that featured two working parents of modest means who had been sending their kids to daycare for 7 years. A financial planner sat down with them, and calculated that the wife’s income was entirely wiped out by daycare costs, and she could have spent the past 7 years raising the children, while the family actually saved more money.
She broke down in tears, and quit her job soon after.
So many people don’t spend the few minutes to run some calculations regarding life-changing decisions (or simply don’t know how).
On a semi-related note, I’ve seen people rent retail space in a mall (easily $6,000/month in rent) and then try and sell posters, or some other nonsensical item that would take moving a few hundred thousand units to cover rent and make a profit. They go out of business soon after. A half hour of running some numbers would save many people a fortune.
Anon 12:56
Your calcs are correct, but the market has not shot up based on the 30yr FRM. The FRM went from about 7.5-8% in 1999 to 5.5% in 2004-05. So as per your calcs, house prices should have gone up by 30%. But they went up by 100% in that timeframe.
As I have pointed out umpteem times before on this blog, this market shot up 50% based entirely on the 50% false discounting of interest that a 1% ARM fetches on a 6% FRM. Had those cheap ARMs not been available this market would have been appreciating at 4-5% annually tops. Today those ARMs are at 6%. So, no more cheap financing, no more buyers who need that cheap financing. Unless the Fed Reserve cuts rates back to 1%, this market will keep sliding until a point where affordability and price are at equilibrium.
EconRealist
“Kids only cause financial problems. If I have any, it will only be one.”
With that outlook, hopefully it’s none.
thatbigwindow,
Trust me on this. Have lots of kids. Three at least – maybe 4 or 5 even ! Perspectives change as you grow older.
I am serious – no joking here.
CNS
“With that outlook, hopefully it’s none.”
Well, think about it. Kids cost money. Lots of money.
From food, to clothing, to sports, to their “allowance” money, college tuition, etc…not to mention the horrible ages of 2-4 where they throw tantrums.
Seems like you would be crazy to have more than one in this day and age. Better off getting a dog or something.
CNS..yes. I put the link out here around the first week of July..was in the Inquirer.
Asked if anybody needed a job in PA.
I’ll look around.
In South Florida and and Ad came on the radio, smae music and energy that they sell cars with; “Lennar, 1 day only sales extravagana, we are reducing prices over $8,000,000, zero down, 4.99% “fixed, introducory rate” (how they get away with saying that is beyond me) they go on to say upgraded features are free…etc.
Unrealtor said: “I’ve seen people rent retail space in a mall (easily $6,000/month in rent) and then try and sell posters, or some other nonsensical item that would take moving a few hundred thousand units to cover rent and make a profit.”
Math, like gravity, is law.
Some interesting comments out there. I rent now, and bank the rest. Since our family is small, I see no need to get a 3 bedroom and drown in PITI payments. So we rent a 2 bed 2 bath condo.
Renting now allows my wife to stay at home with our 7 month kid. It’s priceless! After day care, commuting, tax, eating out, etc, its not worth my wife’s time to work.
We’ll consider buying when it’s time for the baby to go to school in a few years, and we would have amassed a good down payment by then.
As an example, say I’ve saved 10% down payment now. In 3-4 years, I can save another 20%. Coupled with interest at 5% now, I should have 40% DP waiting to buy in 2009-10. Whatever decline in house prices (perhaps 10-20%) means I will have to finance less than 50% of the house….renting is a no-brainer to me for now. I don’t care for the interest /property tax deduction for now since I am in a low tax bracket.
grim said…
“Disclaimer
The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.”
Grim, smart of you to post that, good hedge against the old saying “no good deed goes unpunished”…heck who knows maybe some fannie, freddie, builder execs try to sick the SEC (Swift execution committee) on you, after all they industry shills say a house is an “investment”. While we”re at it…life is speculative!
thatbigwindow,
Nice of you to reply back. Most people would be annoyed at my comment and not respond. (I was serious though).
Money – don’t worry about it. People can bring up kids well for a lot less than what the media tells you. Tantrums – 0-6 years is the best part ! You get to inculcate emotional IQ & coping skills in these kids at the age when they are most receptive to such input.
Also, having only 1 kid is hard on the kid itself (for it to cope with the outside world while & after they are growing up). They need company.
Just give it a shot – don’t analyze this too much. Go ahead and have a couple of kids and you will have the best time of your life after.
CNS
Pat,
Perverse as it may sound – subprime does well when the economy is doing badly (at least so in the past – it might be different in the future). Thus a subprime firm hiring 40 people is very logical.
Some on this blog confuse option ARMS and subprime. Option ARM is not a subprime product. In fact, if things go badly for the current Option ARM owners, they might have to turn to subprime.
CNS
Hey CNS,
I thought of another advantage to having only one kid. When I die, the one kid gets everything and then no fighting over inheritance (which is what I have seen happen with siblings historically)
thatbigwindow,
But you would have brought up your kids so well (with a high IQ and a high emotional IQ) that if they would be fighting at all – they would be fighting to give away the inheritance to the other. Right ? :-)
CNS
never buy the line you’re throwing money away by renting until you do the math. it’s easy.
take your rental costs – interest income earned on money that would be a downpayment on a house – your income bracket tax. compare to the monthly mortgage cost + property taxes + maint fees (if any) – deductions – paid off principal. whatever one is lower will give you a good indication of what it’s worth doing right now. note you can’t nail the costs on home upkeep, landscaping, etc. but it will be higher than renting where you have no responsibility.
last time i ran these numbers for myself i was +1100 a month renting. yes that includes principal being paid off on a house. note owning really doesn’t start paying off until you’re deep into a mortgage meaning you’re paying off ever more principal so for those who want to wait a few years no biggie as it would take you that long to pay off maybe $20k in principal anyway.
It is better to have fought with a sibling, than to never of had a sibling at all.
ANON 3:04 said:
The previous owner was renting the house out; I know how much he was renting it out for. With the mortgage+property tax that I paying for, I am losing money if I
I had been renting and waiting for the market to drop, the same way many of you are doing now, but when I had to start my new family, I just simply can’t wait any more
I am betting that the rent will go up when the housing market cools, and with inflation, in 10-15 years, it will probably cover what I need to paying for each month, I know it is a gamble, but it is also a gamble when you just sit around and wait. Timing the market is not an easy thing to do.
You are an impatient bone head!
Using a newborn child as an excuse to plow into a stupid investment at the peak of the market is just patheticly lame.
Enjoy the frat parties while whatever equity you have this home evaporates.
Your newborn would have never remembered or cared where you lived these first few years or even known the difference if you rented or owned.
But your kids will not be happy when there older and you are broke because of your GAMBLE as you so eloquently phrased it. Negative cash flow on a rental property certainly doesn’t qualify as an investment.
I’m sorry but you need to man up to your mistakes instead of blaming others or circumstances.
Realtor just said things are slow as molasses.
A complete stalemate. Few buyers and lots of sellers wanting their price. trying to tell sellers to start lowering price alot more if they want to sell.
thatbigwindow said…
Kids only cause financial problems
If I have any, it will only be one
7/27/2006 03:24:29 PM
Have two, preferably within 2 years of each other. You get more college financial assistance that way ;-)
General comment about “pent up demand” ..PUD!!
As a renter, I am proudly part of what is now referred to as “PUD” in realty-speak.
Realtors & sellers, please take note…I am not going to jump at the first sign of a price decline. If you are lowering your price once at x% why not more is the next thought I have. Until prices meet fundatmentals, don’t expect my DP to follow you to the bank!
“Pent up demand”
The non-sense never ends with realtors. Do not listen or trust anything they say. Re-check it here before making a move.
Denial in a previously hot real estate market occurs when a home listed at a high price doesn’t sell quickly, even though just a few months ago houses sold in just a few weeks,” Lawler says in his July 19 Lawler Economic & Housing Consulting newsletter…
This is nothing other than a bunch of BS. You’re quite happy at the prospect of seeing homeowners hurt aren’t you? You’re full of hate.
Pent up demand has been saturated for a number of years. Expect sellers to throw in the towel in the fall where large price cuts will be the norm. Watch sellers slug it out with neighboring sellers for the few buyers left.Should be a fun to watch.
But it’s okay for buyers to face bankruptcy slime.
Only thinking of yourself again slug.
Real estate getting you down. Alot more downside coming so get used to it.
Then the comps will be going down. The comps that all these realtors would happily display, now what?
watch for seller desperation the fun begins. Sellers slugging it out. NO demand few buyers and dropping prices is recipe to substantially lower prices.
I could be argued that artificially low rates combined with a general housing “mania” has borrowed buyers from the future.
Those who might not have purchased currently, but would have instead waited, purchased earlier.
Thus the higher demand we saw over the past 3 years was “borrowed” from the pool of future buyers.
A return to “normal” levels might be impossible, since some of those future normal buyers already purchased (as evidenced by the extremely high homeownership rate).
Thus, there is no pent up demand, only a future of low demand..
grim
Any estimates for GDP tomorrow?
My gut-o-meter is showing a reading of 3.5-3.6%.
grim
Another price reduction.
Everyday see another one then another one. Unfortunately the price reductions are meaningless. $20,000 on a $700k + house is spare change compared to how far those reductions will be next year. So better sell quicly before prices drop alot more.
grim-
okay u are so cool! I like that..”only a future of low demand”!! Makes sense. As my husband keeps asking…where are the buyers going to come from?
grim said…
I could be argued that artificially low rates combined with a general housing “mania” has borrowed buyers from the future.
Those who might not have purchased currently, but would have instead waited, purchased earlier.
Thus the higher demand we saw over the past 3 years was “borrowed” from the pool of future buyers.
A return to “normal” levels might be impossible, since some of those future normal buyers already purchased (as evidenced by the extremely high homeownership rate).
Thus, there is no pent up demand, only a future of low demand..
grim
7/27/2006 04:25:14 PM
Could not agree more.
Here is a great example borrowing from future demand..
Coming of age now includes real estate
More adults under 30 are entering the real estate market, and many are doing it at ages uncommon a decade ago. And buyers are getting still younger.
In 1995, people 25 and younger bought 172,000 homes nationally, said Walter Molony, spokesman for the National Association of Realtors. In 2005, that number jumped to 501,000.
To keep demand high, we’ll need to borrow from even further into the future, by allowing even younger people to buy.
Anyone want to take a stab at the first lender who allows for an “under-18” mortgage? With parents permission of course..
grim
From the WSJ
WASHINGTON — U.S. new-home sales declined in June, while durable-goods demand grew faster than expected and jobless claims fell unexpectedly — suggesting opposing economic forces that could complicate the Federal Reserve’s next monetary-policy decision
So, does the Fed defend housing or defend the dollar?
Sure, I know, price stability is a Fed mandate, but Bernanke has already given himself an out. He can claim that slowing is on the horizon and that the economy hasn’t yet felt the impact of the last few hikes. He can also try to explain away the inflation statistics.
Of course, the irony is that a pause could be quite detrimental to the housing market. The only thing keeping it going IMHO, is the sense of urgency felt by some buyers over rising rates. The realtor’s new mantra is “buy now or interest rates may price you out forever”!
Sorry, got busy. Anyway, we already talked, my wife wants to work, her career is important to her. I can’t imagine myself giving up career neither. We will need other ppl to take care of our kids, but I think it is going to work out, my grandma took care of me when I was growing up, my parents are workacholic, I don’t think I turn out that bad.
rentinginnj – just like this guy on CL? LOL! i laughed really hard every time i searched on CL.
http://newyork.craigslist.org/mnh/rfs/186339845.html
GRIM said:
A return to “normal” levels might be impossible, since some of those future normal buyers already purchased (as evidenced by the extremely high homeownership rate).
So true. Sellers will need to give “employee pricing” soon to move homes just like the car companies.
Thus, there is no pent up demand, only a future of low demand..
Rhetorical question…why buy a house at all? Ever?
If residential real estate becomes a barely-appreciating asset (as it was in the old days of the ’50s, ’60s, and most of the ’70s, before baby boomers got into the act) why not rent…forever?
Is there any reason to own? It’s just a headache and a responsibility. Transaction costs are high going in and getting out. Where’s the advantage?
Seriously…why are you all “waiting” until prices drop to buy? Why buy at all?
I think buying makes sense only to the extent that you can lock in your housing costs at below the present value of long term rent of an equivalent property… your ability to fix your costs like this is mitigated by property taxes which are beyond your control, but owning probably makes sense (in a normal market) IF you plan on staying in the same place for a long time.
it’s just like buying a car vs. leasing— buying definitely makes sense if you plan to keep driving the car after it is paid off, but may not be an advantage if you plan to get a new car every couple of years regardless
“Thus the higher demand we saw over the past 3 years was ‘borrowed’ from the pool of future buyers.”
An excellent point. Less buyers today.
Add in that speculators have left the market. Less buyers today.
Add in that people can no longer “buy” a house for 2 years and cash in on wild appreciaton. Less buyers today.
In summary, less buyers today.
Bring a T-shirt to an open house, one that says “FB,” and give it to the “owner.”
“Why buy at all?”
For me, pride of ownership, tinkering with things, having a yard, the ability to build or paint whatever I want, more space, etc.
Anyway, in my case, renting in New York was costing almost as much as paying for mortgage in New Jersey, so I decided to buy when I was ready to make the life style change.
Another reason that made me make up my mind was after hearing a report on Bloomberg, on the report, the analyst was referring to New York as one of the “superstar” cities, superstar cities has these characteristics, 1) it has jobs, it is where everyone wants to go, many younger people wants to come to New York to look for jobs because of the higher paid. Also, many immigrants, minorities or people with alternative life styles wants to live in New York because it is more liberal, they don’t face discrimination that they might face else where. 2) It is running out of room to build. These also refer to the immediate areas near New York. So unless we see a huge decline employment numbers in New York in the future, how much the real state market is going to drop is still unknown
please…check demos of outflow of nj residents before u post…thanks
There was a time, long long ago, when renting was priced at a premium compared to buying, the opposite of what we see today.
Renters received all of the benefits of housing, with few of the risks, thus rents were higher than the cost of buying, to compensate the owner for their risk.
Properties could be found that rented at single digit multiples of the annual rent rolls. Can you imagine multifamily residential selling at 5x annual rent rolls? Seems like a deal too good to be true, doesn’t it?
Here is a piece from the NY Times, from 1998. Only 8 years ago, but it might as well have been hundreds…
PERSPECTIVES; In Northern Manhattan, Building Prices Strengthen
Prices of rental properties are generally expressed in terms of multiples of annual rent rolls. For example, a building on Broadway between 155th Street and 168th Street might sell in the current market for four times the annual rent roll. But north of Columbia Presbyterian Hospital at 168th Street, values are higher — perhaps four and a half times the rent roll on Broadway and a little less on the sidestreets, and as much as five times the rent roll still farther north on Broadway, St. Nicholas Avenue or Riverside Drive, especially if there are stores in the building.
In a typical situation, total rents might average $550 an apartment, with average rents for a vacancy somewhere between $700 and $800 a month. At $550 a month, a 40-unit building would theoretically have an annual rent roll of $264,000 at full occupancy, and a sale value, at four times the annual rent, of about $1 million.
…
The Goldman estate was the seller only three months ago in a transaction that some brokers see as a bellwether of the Inwood market. Hawthorne Gardens, a property at 4861 Broadway, at 204th Street, was purchased for $6.4 million, or about five times the rent roll, by Richard Parkoff, a major owner-operator, parties in the transaction reported. The building has 161 apartments and 15 stores.
How about that, RE investment properties going for 5x annual rent rolls. Let’s give you a good example of what that means.
Say your rent is $2,000, your annual rent is $24,000. At 5x annual rent rolls, the “value” of your unit today would be $120,000.
Imagine that, investment properties that actually had a positive cash flow. To give you an idea, that $2,000 unit would likely sell for $400,000-$500,000 today, that is 16 to almost 21 times annual rent rolls.
Back to the original story.. Renting was typically more expensive than buying because you had the freedom to pick up tomorrow and say goodbye to your landlord. You could move across the street, to another city. No risk. No worry about taxes, no worry about maintenance, no worry about leaky roofs and an oil tank that leaked even worse.
grim
grim said…
My gut-o-meter is showing a reading of 3.5-3.6%.
grim
7/27/2006 04:26:52 PM
My gut-o-meter is showing a reading of 35″.
time to hit the gym :(
Grim said “Properties could be found that rented at single digit multiples of the annual rent rolls. Can you imagine multifamily residential selling at 5x annual rent rolls? Seems like a deal too good to be true, doesn’t it?”
Grim,
How right you are!!!! In NNJ in 2000 the cost of a dwellling was 10x the annual rent. In 2005 it skyrocketed to 25x the annual rent roll. We can even use this # as the P/E ratio. Looks like the current P/E ratio is totally out of line!!!!!!
BC Bob
update on condo complex near me. here’s the order of price declines as the 3 would be sellers duke it out in a decling RE market.
original asking prices:
$429k
$409.9k
$409k
early this week:
$429k
$409.9k
$392k
today:
$429k
$399.9k
$392k
when you’re in a condo complex and have identical units it’s hard to differentiate yourself except if you have a high-end kitchen/bath setup. these sellers are going to race each other to the bottom until something sells.
Just a simple question:
Why is everyone here cheering for the hard landing?
If or when it happens, it’s going to affect more than just housing price.
It might affect all aspects of life.
i don’t know about the rest of you, but i don’t want my kids being raised by someone other than their parents. the critical years are 0-5 and for those that choose luxury sedans, ferragamo shoes, being on the ‘better block’, and yes $300 jeans should be ashamed of themselves. kids need their parents plain and simple. in today’s society in the tri-state area it’s all about materialism so both parents work so they can have all this stuff that means nothing when compared to the importance of your kids.
eh called me old fashioned in my mid 30’s. i’d rather rent and let my wife stay home with the youngins than force her to work to pay the big expenses on an overinflated deteriorating asset. house rich, cash poor? worst thing you can ever hear someone described.
InvestorDavid:
No matter what I say, I’m not cheering.
But when I have to face pain, real pain, do it quick.
Soft landing would be fine, actually, with me. But talking about engineering a soft landing that is statistically improbable may be creating a bigger problem for all of us than simply correcting the existing problem.
Consider every known factor. Possible escalating war. No real solution to the US energy crisis.
Millions of undocumented workers, with small towns like Hazelton, PA and Riverside, NJ taking futile action against a flood that deserves a yet-unstated national policy.
Now, consider a political budgetary and monetary policy that is bankrupting the unborn.
The unborn that will be funding your retirement.
Do you truly believe that a soft landing is worth betting on?
I’m a gambler, but not a stupid one.
Pat
a stupid and arrogant realtor sent me a house asking for 700K, claiming it is the “right” house for me. I immediately fired back with an offer of 200K. Hope that will wake him up. We are not as stupid as the “realtors”
Two dumb-as-a-stump sellers:
415 Old Short Hills Rd, 07078
2BR (yes 2), 2BA (yes 2) crap ranch.
Crap location too, a very busy road.
$880,000.
http://www.realtor.com/Prop/1065267269
2 bedrooms! I actually laughed out loud when I saw this one. Comes complete with a 1951 kitchen, and matching 1951 bathrooms. This house is easily $200,000 overpriced, and counting. There are over 20 much nicer properties currently on the market priced below this junker. Way to go Sibel Oz at Coldwell Banker, sign that bloated listing!
7 North Beechcroft Rd, 07078
4BR, 3 BA colonial.
Listed at $1.5M for 43 days, no Greater Fools signing up. The solution? Raise the price another $100K! Now listed at $1.6M.
http://www.realtor.com/Prop/1062035597
Nice work Howard Bunn & Cara Moxley at Keller Williams Realty, advise those sellers they demand more! Inventory is up, homes are sitting for months, time to raise the price!
I love it. Added these two to my watch list, just for entertainment value.
My gut-o-meter is showing a reading of 35″.
It’s the steak… It’s always the steak…
grim
Important piece out of Japan. From Bloomberg:
Japan’s Consumer Prices Rose for Eighth Month in June
Japan’s consumer prices climbed for an eighth month in June, signaling deflation may be beaten and helping to justify the central bank’s decision to raise interest rates from near zero percent earlier this month.
Core consumer prices, which exclude fresh food, rose 0.6 percent last month from a year earlier, the same pace as in May and the fastest in eight years, the statistics bureau said today in Tokyo. The result was in line with the median forecast of 37 economists surveyed by Bloomberg News.
The Bank of Japan raised interest rates for the first time since August 2000 on July 14, forecasting sustained growth in the world’s second-largest economy and an end to more than seven years of falling prices. The prospect of further expansion enables companies to pass on rising energy and material costs to consumers and supports price gains, said economist Hiroaki Muto.
“With deflation disappearing, companies will keep lifting prices of their products at a gradual pace,” Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the report. “It was quite natural that the Bank of Japan ended its prolonged zero-rate policy this month.”
“RE: 7 North Beechcroft Rd, 07078
Listed at $1.5M for 43 days, no Greater Fools signing up. The solution? Raise the price another $100K! Now listed at $1.6M.”
In their defense, it now includes another lot of land.
RE: 7 North Beechcroft Rd, 07078
———————————
Yeah… I was thinking 1.28 acres on a (good?) street in Short Hills would be valued high even without a house on it.
But 1.6 mil… probably sells closer to 1.2 if they need to dump it in the short-run.
For Grim and Chi, one of my favorite Homer Simpson quotes:
Homer : “So Lisa you’re not going to eat any meat anymore, not even bacon?”
LIsa : “No”
Homer : “Ham?”
Lisa : “No”
Homer : “Pork chops”
LIsa : “Dad those all come from the same animal!”
Homer : [Condescending] “Yes Lisa, A special magical animal from fairy land!”
You don’t make friends with salad!
You don’t make friends with salad!
(chanting)
Wow, didn’t see that, the second “free” house on 15 Laurel Court looks like a great house too:
http://tinyurl.com/o2uc9
So they’re selling TWO houses for the price of one, both of which are nice houses in nice locations!
But who buys two houses?
Marge: Homer, I have to go out to pick up something for dinner.
Homer: Steak?
Marge: Money’s too tight for steak.
Homer: Steak?
Marge: Eh, suuure… steak.
when you’re in a condo complex and have identical units it’s hard to differentiate yourself except if you have a high-end kitchen/bath setup. these sellers are going to race each other to the bottom until something sells.
As an investor, when I purchase a condo I only look at square footage, and if there is a view, that adds something. I don’t care what you did to your kitchen or bath–it’s your own personal preference.
Now here is a condo work buying at bubble inflated prices!
http://www.peterluger.com/
related from salon.com today:
“How the World Works
by Andrew Leonard
Housing geek heaven
For months, I’ve been studying the housing market economic indicators, learning to distinguish between month-over-month and year-over-year comparisons, the relative volatility of multifamily housing sales figures, and the idiosyncrasies of seasonally adjusted and non-seasonally adjusted data. As I grapple with the granularity of the data, I enjoy watching seemingly random or otherwise inexplicable fluctuations start to make sense. And in an era where every economics professor has a blog, there’s always someone to turn to for further insight.
Today’s release of new home sales figures offers a perfect illustration. In line with other recent data that strongly suggests the housing market is in a serious slowdown, seasonally adjusted new home sales dropped in June, both as measured against May (by 3 percent) and by June 2005 (11 percent).
However, if you look at the non-seasonally adjusted raw data for the whole year it doesn’t look so bad. Eighty-seven thousand new homes were sold in December 2005. By March, that figure had risen to 108,000. April, 103,000, May, 107,000, and then June, back to 103,000.
Thanks to an informative post by U.C. San Diego economics professor James Hamilton, I now have a much more nuanced understanding of how to look at these numbers. Seasonally adjusted data tries to take into account recurring factors that warp the numbers. As Hamilton explains, in the case of housing December is always the worst month for sales and March is the best. So if you just plotted the raw numbers for December to March (or for December to June), you’d think the housing market was fine — in fact, sales of new homes are up 17 percent in June over December.
But sales are always up over that time period. And after crunching the data with a slew of neat charts and judicious context, Hamilton encourages us to look at the numbers with wiser eyes. “In an average year prior to this one, June sales would be 36 percent above the December trough, whereas this year they are up only 17 percent since December. Only 4 years out of the last 41 years (which includes 6 recessions) saw as weak a December-to-June gain.”
It’s fun to watch a master at work. If you are a housing market data geek, and right now, that hobby has become an increasinlgy popular pasttime, as everyone from Bob Bernanke on down wonders if a housing bust is going to drag the U.S. into a recession, Hamilton’s seasonal adjustment post is essential reading.”
Unrealtor, just FYI:
You shouldn’t rely on Google or any other Internet map to find a specific address: they usually are correct only at the “street level”. The house numbers are most often lumped together at the beginning of the street. Therefore, the house marked on your map at the link you supplied may be not the one you described in your post.
Fun opinion question unrelated to steak:
Do you think the folks posting on this Housing Bust question are the same posting on real estate bubble blogs?
http://tinyurl.com/z8bog
Or are they (in general) mostly others?
Pat
“You shouldn’t rely on Google or any other Internet map to find a specific address: they usually are correct only at the “street level”
Actually, when entering a correct address, I’ve found Google maps nearly 100% accurate.
Laurel Court only has 4 houses, and the other three are twice the size of # 15.
http://tinyurl.com/o2uc9
For “free,” any one of those four works for me. :-)
Anonymous 12:56:19 PM said…
It is interesting how you guys just look at the price of the homes and never takes mortgage rate into consideration, those fools that you talked about, they got their saving from the low rate, etc.
Anonymous 12:56:19, you’re post makes way too much sense for the posters on this site. You can tell by their responses that they just don’t want to hear the logic behind it. Haven’t you noticed they’re all chomping at the bit for the bottom to fall out? I venture to guess most of them are not owners, so they
The majority of readers here are not “monthly payment” zealots.
As the amount of financing required falls, he impact of increased rates on the monthly payment (and affordability) is minimized.
To further reduce the impact of the increase in rates, some will choose shorter financing terms, for example, a 15 year fixed instead of a 30 year fixed, in order to reduce both the rate and the total interest paid over the life of the loan.
grim
Grim said
“Imagine that, investment properties that actually had a positive cash flow. To give you an idea, that $2,000 unit would likely sell for $400,000-$500,000 today, that is 16 to almost 21 times annual rent rolls.”
in line of this logic, then buying a condo/townhouse at this range, that could fetch a rent of $2000 is a decently sound investment. because unless the rent go down, you can always make mortgage payment with the rent…
Is that correct, grim?
Maybe my wording is confusing, but no, I don’t think you are following.
Nothing is an investment at 20x annual rent. Unless, of course, you are banking on future appreciation to cover the current negative cash flow. Which is the case for many new “investors”.
grim
Anon @ 10:50,
We typically deal with unadjusted numbers around these parts.
In order to understand the seasonal nature of the data, we’ll typically focus on year over year comparisons (which eliminate it), or graph a year over year comparison.
grim
Anon @ 10:50,
Besides, how much credit can you give to an author who writes an economic piece and gets the name of the Fed Chairman wrong..
It’s fun to watch a master at work. If you are a housing market data geek, and right now, that hobby has become an increasinlgy popular pasttime, as everyone from Bob Bernanke on down wonders if a housing bust is going to drag the U.S. into a recession, Hamilton’s seasonal adjustment post is essential reading.”
I can understand why Ben Bernanke might be wondering about the housing market, but just who the heck is Bob Bernanke?
Oh bother..
grim
What’s wrong with using Daycare? My wife doesn’t want to be a “stay-at-home” mom, and I certainly don’t want to stay home with the kid. Even if it did cost 100% of mine, or my wife’s salary, taking into account tax consequences/commuting/etc. (which it doesn’t).
I’d go nuts if I was at home alone with a 1-year old all day. Sometimes it makes sense to outsource some parts of your life.
grim – bob bernanke – good point, didn’t catch that! guess salon.com isn’t totally up on the housing bubble yet – MSM, always slow to the punch, but we’re getting there…
“I’d go nuts if I was at home alone with a 1-year old all day. Sometimes it makes sense to outsource some parts of your life.”
I think the general point for anti-daycare crowd, is if the mother or father would “go nuts alone with a 1-year-old all day” what would the dude making $8 an hour at the daycare place do?
Kids are sponges, so it makes personal and financial sense to “outsource” them, but it’s fairly easy to make the case this would be at the expense of the child.
what would the dude making $8 an hour at the daycare place do?
The dude at the day care place is at least in a social environment, surrounded by other caregivers, etc.
Until you’ve been at home for a week or two in the dead of winter with a couple of toddlers, you really have no idea about what you’re saying.
I’ve known women with Harvard MBA’s who decide to stay home with the kids because they think it’s the right thing to do. The women slowly go crazy, and it isn’t a pretty picture.
“I’d go nuts if I was at home alone with a 1-year old all day. Sometimes it makes sense to outsource some parts of your life.”
There is nothing wrong with daycare, I am glad it is available for folks who need it (single parents, etc) but if as a renter I had the choice to stay home w/ my child and rent or buy and send a child to daycare so I can “afford” current home prices, the choice is very easy! People are suggesting that homeownership brings more quality of life, I just wanted to make sure you are taking quality of life into account for the little ones too!
i can’t believe people are saying they would go crazy with toddlers around. Where have our values gone? Why have a kid? So you can have someone to will your overpriced McMansion to so that it is not taken by the government?
It was not in the too recent past that families (either wife, grandparents, aunt) stayed home with their kids and some still do. Why are we so focused on material possessions?
Have we become a society that can only “tolerate” todders from 6pm to 8pm and 7am to 8am? In the hours before and after daycare and before and after night-night time?
I’d go nuts if I was at home alone with a 1-year old all day. Sometimes it makes sense to outsource some parts of your life.
7/28/2006 08:49:59 AM
No wonder there are so many fucked up people out there.
You are a real tool.
wife, grandparents, aunt)
I notice that you don’t include any males who haven’t reached retirement age in your cozy homemaker role.
Fellas, stay home with that one year old for a few months, and then get back to me about day care.
Historically, fellas have not stayed home with the kids as we all know..no need to rehash why I said (wife, grandparents, aunt)…
but hey if the fellas are willing and able, more power to them! Some fathers actually enjoy their time with their toddlers and kids. If you have kids, will you please think of adoption as an option?!!
No wonder there are so many fucked up people out there.
You are a real tool.
7/28/2006 10:55:51 AM
Chicago,
So you think my kid has great potential to be “fucked up” because I spend a great deal of money to have my kid go to an excellent day-care facility in my wife’s office building? Where she can visit at lunchtime, all the workers have at least associate degrees in child care (the director has a PhD), they bring in people to do activities such as “music classes”, and he gets to interact with other children. My wife and I must be horrible parents because we both want to work outside the home.
Re: 415 Old Shorthills Rd
Coldwell Banker is big in California. Apparently this agent priced this ranch with a Ca standard.
A 2bed/2bath ranch 60 years old in Palo Alto does worth this much and up, even in today’s market.
KC
Sorry guys for the total transgression from housing but I have to comment.
anon 1:44
You say you work
“because my wife and I both want to work”. okay…
But why the previous statement of..
“I’d go nuts if I was at home alone with a 1-year old all day. Sometimes it makes sense to outsource some parts of your life. ”
It sounds like you both want to work because your 1-year old drives you crazy. Why have kids at all?
The quality of daycare is not the issue. What do you value? As someone with a phd in clinical psychology, I can tell you that a child’s development is incrementally better when the child has enough bonding time with BOTH parents especially during the ages of 0-5. For the sake of your children, I hope you spend quality time with your kids outside of daycare and that they are not “driving you crazy”. Kids pick up on this stuff. It maybe time to check yourself.
chicagofinance said…
No wonder there are so many fucked up people out there.
You are a real tool.
7/28/2006 10:55:51 AM
LOL, Chi. Could not have put it better myself.
Chicago,
So you think my kid has great potential to be “fucked up” because I spend a great deal of money to have my kid go to an excellent day-care facility in my wife’s office building? Where she can visit at lunchtime, all the workers have at least associate degrees in child care (the director has a PhD), they bring in people to do activities such as “music classes”, and he gets to interact with other children. My wife and I must be horrible parents because we both want to work outside the home.
7/28/2006 01:44:18 PM
I think you missed my point.
I really wanted the last word on the daycare off-topic subject.
So I waited. Maybe nobody will read this, maybe someone will.
We are two very loving parents, who unfortunately met late and have had one child only (so far??). Both of us have jobs that contribute to society, health and science, although, as always, we are replaceable.
Our child has been in care since Age 3 months, first with a teacher who was at home raising her own two (she cried when we moved our child to a bigger group setting.) Then, in the best group care setting we could afford. Our child has thrived in this farm-like place. SHE is teaching her parents social skills at this point (soon to be 5). Science as well! The structured activities and developmental time between 8 am and 4 pm will benefit her for life. As you may read in early childhood development studies (search on NPR, State of Oklahoma, etc.), these care settings serve to replace the large family, generational home environment that is now lacking in our society.
Basically, it sounds heartwrenching, but your child is better off with a gang of people who are happy and diverse, than home alone with your wife (or you) all day.
Initially, we put our child in care as a transitional stage until we decided who would stay home. Because of the positive development we experienced, we never changed. Without those qualified teachers, we never would have learned that our child needed Occupational Therapy, for example. We had nothing to compare development against.
People are tribal. Really, even the little ones need a tribe, and if you don’t have a tribe at home, try to find the best one for your child (and read the studies …putting your 3-5 year old into a 2 hour play group 3 days a week is not enough).
I read your “final” comment and I couldn’t agree more.
There is nothing “normal” about one over-educated, over-involved, hypervigilant mom raising one over-scheduled, over-protected, center-of-the-universe child.
The norm in years past was large, multi-generational households, not the one-on-one with no let up that today’s stay-at-home moms create.
Go to any suburban elementary school and talk to the kindergarten teachers about what seems to work best for pre-school children. They’ve seen it all.
Again, nothing wrong with daycare or play groups or tribes raising children but if you are choosing to leave your child with someone else so that you can earn money to pay off your oversized mortgage, it maybe time to reconsider your priorities…or maybe not…you decide in the privacy of your own home. Nobody on this blog can decide this except for you. So question and if you come up with the same answer great, you don’t need to change.
Anon 8:49:59 on 7/28,
I would like to see you spend some time thinking about how your attitude of “my one year old drives me crazy” gets communicated by you to your child.
Your attitude toward your child is present 24/7 in every interaction you have with him/her.
Also please, for your child’s sake, spend some time reflecting on what is driving that attitude.
Sincerely, RoadTripBoy