2015 – Year of the first-timer?

From the Record:

First-time buyers key to housing

Joy Abma, 23, and Dan Charnesky, 24, expected to rent an apartment after their wedding this spring.

But when they looked at the high rents — and the difficulty of finding a place that would take their three dogs — they decided to try to buy a home instead. “We had been saving for a very long time, so we ended up with enough money for a down payment,” said Abma, a nurse who lives in Wyckoff.

After several months of looking, she and Charnesky, a landscaper, are to close on an Oakland split-level house this month. “We thought, ‘We might as well do it while we’re young,’ ” Abma said.

But buying a home when you’re young is more difficult than ever. Thanks to high student debt, stricter mortgage standards and years of slow employment and income growth, people in their 20s and 30s have found it tough to get their first toehold in homeownership — and that’s a problem for the whole real estate market. Without enough first-timers to jump-start a chain of purchases, homeowners can’t trade up to their second and third homes.

First-timers may return to the market in greater numbers this year, however, according to some analysts, who point to low interest rates, a stronger job market and high rents, all of which make buying more attractive.

But in 2014, first-timers made up about 33 percent of buyers — the lowest share in nearly three decades, and well below the historic average of about 40 percent, according to a survey by the National Association of Realtors.

A recent study by the Federal Reserve Bank of New York found that only 32 percent of 30-year-olds owned their homes in 2013, down from 44 percent in 2006-07, before the recession hit. The drop is especially notable among people with student debt, the New York Fed said.

The millennial generation is “not entering the housing market as purchasers or renters at anywhere near where prior cohorts have done,” said Patrick O’Keefe, an economist with CohnReznick, an accounting firm in New York and Roseland. “One of the reasons is the soft job market, and relatively little income growth for those who have jobs.” In addition, he said, they’re “burdened with significant debt, primarily student debt.”

But recent research suggests that young adults would be very interested in homeownership — if they could afford it. A recent survey of people age 18 to 29 by the Demand Institute, which studies consumer demand around the world, found that 24 percent already owned their homes, and 60 percent plan to buy someday. And three in four believe ownership is an excellent investment. But 44 percent think it will be difficult to qualify for a mortgage.

Who they are, what they did

First-timer median age was 31.
One in 10 bought a condo or town house.
One in four said saving for a down payment was difficult.
Of those, 57 percent said student loans delayed saving.
Four out of five used their own savings.
One in four received a gift from a friend or relative.
More than nine out of 10 chose a fixed-rate mortgage.

This entry was posted in Demographics, Economics, Employment, Housing Recovery. Bookmark the permalink.

94 Responses to 2015 – Year of the first-timer?

  1. Essex says:

    I didn’t buy my first home until I was 36. FWIW

  2. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [1] essex

    Same here.

  3. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    Some clarity on business tax reform and why it isn’t as easy as it looks. And this is just one facet of the gemstone that is tax policy.

    http://www.bloomberg.com/news/2015-01-13/bid-to-lower-corporate-tax-rate-stirs-backlash-from-businesses.html

  4. Ottoman says:

    It’s such a balancing act–high student loans are a great way to funnel money to the ruling class and help keep young people in line and less likely to riot, jeopardizing the little money they make. On the other hand, bank loans are also a great way to funnel money to the ruling class and keep people indebted and less likely to riot, jeopardizing their reputations and their homes which they stupidly consider extensions of themselves rather than business acquisitions.

    Thank goodness schools no longer teach critical thinking or someone might get hurt.

  5. Ottoman says:

    I bought a center hall colonial in Summit when I was 25. I love recessions.

  6. Sven says:

    Age got nothing to do. Is what you can and want to do. I bought first home at 22. Sold it at 26 for nearly 2x, after significant sweat equity went in. Rented for a few years. Bought again at 36. Nice equity now in primary, bought a second from foreclosure in the crash. My son is fixing it up, going thru the drill

  7. Essex says:

    I opted to live in a couple of different cities before settling here. Chicago was a cluster and something told me not to buy there. Though we had friends do very well when they flipped a two-flat. It was fine not being encumbered by a home in my twenties and early 30’s.

  8. Juice Box says:

    How bad was the commute into Penn Station this morning?

  9. grim says:

    Bought at 35

  10. chi at NASDAQ to ring open bell with muppets says:

    We need clot to channel a Clockwork Orange in here.

  11. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [4] otto

    “Thank goodness schools no longer teach critical thinking or someone might get hurt.”

    Maybe you should bring this up at your next discount double check? Could save you 15% in 15 minutes.

  12. chi at NASDAQ to ring open bell with muppets says:

    No issue on train as of 8AM

  13. JJ says:

    Piece of cake if you went to Atlantic Terminal!!

    Juice Box says:
    January 13, 2015 at 8:23 am
    How bad was the commute into Penn Station this morning?

  14. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [10] chi

    Like we really need Clot in midtown? Don’t the NYC cops sling enough lead there?

  15. 1987 Condo says:

    Bought investment townhome with brothers at 23, ill fated condo at 26, house at 32.
    So three closings by 32.

  16. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [4] otto

    ” their homes which they stupidly consider extensions of themselves . . ”

    And you bought in Summit? That speaks volumes.

  17. Essex says:

    12. PBS going public this AM?

  18. Essex says:

    16. Summit is on our list simply because it has a decent Sushi restaurant.

  19. FKA 2010 Buyer says:

    Not often you hear an executive use the word “knee capped” in the press.
    ————–
    U.S. hedge fund plans to take on big pharma over patents
    (Reuters) – U.S. hedge fund manager Kyle Bass, who won fame for predicting the subprime mortgage crisis in 2008, plans to take on some of the world’s biggest drug producers by challenging the patents of their top brands, he said on Wednesday.

    “We are going to challenge and invalidate patents through the IPR process … (and) we are not going to settle,” Bass said in a presentation in Oslo, Norway’s capital.

    “The companies that are expanding patents by simply changing the dosage or the way they are packaging something are going to get knee capped,” he said.

    http://www.reuters.com/article/2015/01/07/pharmaceuticals-haymancapital-idUSL1N0UM1OW20150107

  20. joyce says:

    So because it was f-cked up continuously making it more and more complex in the past, we need to be careful now?

    Comrade Nom Deplume, who needs to stop screwing around and get back to work says:
    January 13, 2015 at 7:49 am
    Some clarity on business tax reform and why it isn’t as easy as it looks. And this is just one facet of the gemstone that is tax policy.

    http://www.bloomberg.com/news/2015-01-13/bid-to-lower-corporate-tax-rate-stirs-backlash-from-businesses.html

  21. FKA 2010 Buyer says:

    Interest only loans made perfect sense for people who got large bonuses and used their bonus to pay down the principal. Problem, I don’t know who gets large bonuses anymore.
    ——————————–

    Interest-Only Loans Set the Bar High

    Lenders have tightened qualification standards and mostly offer interest-only options for adjustable-rate mortgages (ARMs) rather than 30-year, fixed-rate mortgages, Mr. Cecala says. “Most lenders think interest-only mortgages are very safe because the borrowers have strong credit profiles and generally put down large down payments,” he adds.

    At Jacksonville, Fla.-based EverBank , for example, a borrower usually needs a credit score of 740 or above, a down payment of at least 35% and a debt-to-income ratio of 43% to qualify for EverBank’s interest-only jumbo product, says Tom Wind, executive vice president of home lending. The debt-to-income ratio (DTI) looks at the percentage of borrowers’ monthly income relative to their debt payments.

    Today, however, they must qualify based on their ability to pay both interest and principal, says John Walsh, president of Milford, Conn.-based Total Mortgage Services. For example, on a $1 million, seven-year ARM with an interest rate of 3%, the monthly payment for the first seven years would be $2,500. But a borrower’s debt-to-income ratio would be calculated using a $5,020 monthly payment of interest and principal at the starting rate.

    Total Mortgage will lend interest-only jumbo mortgages up to $3 million to borrowers with credit scores as low as 700, but a 35% down payment is required, Mr. Walsh says.

    http://www.wsj.com/articles/interest-only-loans-set-the-bar-high-1420567670

  22. Toxic Crayons says:

    Freelance reporter arrested by Ocean county prosecutor’s office detective for filming the scene of a single car accident involving another detective

    http://www.app.com/story/news/local/ocean-county/2015/01/10/lacey-reporter-arrested/21579329/

    He refused to give up his camera but promised to copy the footage and share it with detectives.

    Charges were later “dropped” after we learned the reporter secretly recorded the interaction with the detective on his smartphone.

  23. Fast Eddie says:

    Ottoman,

    I bought a center hall colonial in Summit when I was 25. I love recessions.

    Ahh… now we get it. Compassion for the “pour” is justified as long as it’s someone else’s time and money. In other words, not in my backyard. You are a text book bleeding heart l1beral.

  24. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [16] SX

    Mrs. Deplume and I looked hard at Summit. It would have been really convenient for both of us. But, with the exception of her immediate boss, there wasn’t anyone I ever met from Summit that I didn’t want to take a baseball bat to. Not that there weren’t plenty of people like that in the Brig, just not nearly so concentrated.

    Besides, I didn’t need the midtown direct.

  25. Ragnar says:

    My first home was a bilevel in Scotch Plains in the year 2000. Cost over $400k, and we had saved up enough for a 20% equity stake, which I thought was standard. Later I discovered people were borrowing for the downpayment, then people started writing mortgages with minimal equity. Hillarity ensued.

  26. Ragnar says:

    My favorite things about Summit are the downtown shopping area and the Reeves Reed Arboretum.

  27. Ragnar says:

    Someone asked yesterday: “…should not the lowering of wages/cutting of jobs result in lower prices?”

    Here are the basic characteristics of capitalist economies over time:
    Efforts to innovate, compete, and conserve scarce resources tend to drive down the real (adjusted for inflation) cost of most goods. (You can look this up and chart inflation adjusted price trends over time from various databases).
    Real per capita incomes tend to rise, as investments in capital and new innovations drive up the productivity of labor.
    Living conditions improve, as people gain a superior more varied supply of goods and services which they are increasingly able to afford.

    The inflation adjusted price of a Model T Ford would be over $20,000 today. Today you can buy a materially superior and safer car for nearly half that, and a dramatically superior car for the same price. There are a multitude of items now that could not have been available at any realistic price. For $10 you can buy a radio that produces a greater variety of music than the Queen of England could have ever had an orchestra perform over her lifetime.

    Unfortunately, we’re not living in a full capitalist economy, or these trends would be more strongly in effect.

  28. clotluva says:

    “But buying a home when you’re young is more difficult than ever. Thanks to high student debt, stricter mortgage standards and years of slow employment and income growth, people in their 20s and 30s have found it tough to get their first toehold in homeownership.

    Can’t help but notice that once again, the lead article didn’t mention “price”. Has the real estate industry forbidden the discussion of prices by the main stream media?

    I would love to see one of these articles talk about the fact that certain areas of the country are still at bubble-level pricing and that young potential buyers are actually being financially prudent for sitting on the sidelines rather than taking on three decades worth of debt for an asset whose price is being manipulated by every tool conceivable.

    Home pricing based on 30 year mortgages made sense when people lived/worked in the same area for 30-40 years. Unless you work for Uncle Sam, that type of job availability/security doesn’t exist anymore – just ask the folks who are in the process of getting axed in Houston and other energy hubs.

  29. Essex says:

    22. Wtf? Pant up emotion.

  30. Essex says:

    A woman we’ve known for years bought there at the peak. She was the first of our friends to break the $1m mark on a home purchase. Our impression? Houses were really close to one another and the neighbors were typical cork sniffers.

  31. anon (the good one) says:

    @BarackObama:
    Over 58 straight months of growth, the private sector has added 11.2 million jobs.

  32. clotluva says:

    I read #30 as “Over 58 straight months of golf.”

  33. anon (the good one) says:

    @TXRandy14:
    Even Adolph Hitler thought it more important than Obama to get to Paris. (For all the wrong reasons.) Obama couldn’t do it for right reasons

  34. Toxic Crayons says:

    26 – Ragnar,

    IMHO, incomes are growing…but they are growing globally. The rest of the world is catching up to US.

  35. anon (the good one) says:

    @timsimms:

    Just, wow.
    And the good taxpayers of Texas pay for drivel like this.

    @txrandy14

  36. Anon E. Moose says:

    Rags [26];

    I was going to take a swing at that comment as well, but you’ve done a fine job. Your comment brings this quote to mind:

    Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

    This is known as “bad luck.”

    -Robert Heinlein

    I’ll just add that Pumpkin’s simplistic view of production and the relationship between the cost of inputs and the market price of the finished goods, together with an assertion that he ‘dumbed in down for us’ was quite funny.

  37. anon (the good one) says:

    @chrislhayes:
    As a general matter, Hitler-invading-Paris jokes are definitely a tough genre for US congressmen to pull off.

  38. Toxic Crayons says:

    WTF? Did Anon just post a tweet that’s critical of Obama?

  39. Toxic Crayons says:

    Looking mighty presidential….

    Governor Christie ‏@GovChristie 15m15 minutes ago
    You see, our dreams are the same. https://www.youtube.com/watch?v=4a1Ll9gS9ls#t=30 … #NJSOTS2015

  40. Anon E. Moose says:

    Tool [30];

    Leftists are impressed by big numbers because they are so bad at math. 11.2 MM/52 ~ 200k per month. Working age population growth is ~100k / mo. Number of people NOT COUNTED in the workforce (read as, not “unemployed” according to the administration’s fantasy headline numbers) who actually want a job immediately increased by 400k in Aug 2012 (just for one example).

    Of course you don’t know or care because you stopped reading this after 141 characters.

  41. Essex says:

    Christie dreams of seeing his winkie again…..

  42. anon (the good one) says:

    -Robert Heinlein

    “In books written as early as 1956, Heinlein dealt with incest and the sexual nature of children. Many of his books (including Time for the Stars, Glory Road, Time Enough for Love, and The Number of the Beast) dealt explicitly or implicitly with incest, sexual feelings and relations between adults and children, or both.[76]

    The treatment of these themes include the romantic relationship and eventual marriage (once the girl becomes an adult via time-travel) of a 30-year-old engineer and an 11-year-old girl in The Door into Summer or the more overt inter-familial incest in To Sail Beyond the Sunset and Farnham’s Freehold.

    Peers such as L. Sprague de Camp and Damon Knight have commented critically on Heinlein’s portrayal of incest and pedophilia in a lighthearted and even approving manner.[76]”

  43. Fast Eddie says:

    clotluva [27],

    Bingo. It’s all about price and everything else is bullsh1t and noise. I’ll say it again: We are at least 10% to 15% overpriced in this area and the real discussion never comes up. Most people posting here think the world started when this blog was founded. ZIRP, flat-line wages, a sea of underwater mortgages, unchained property taxes all barely crack the surface. It…is…that…bad. There’s no equity and people pulled out in a panic when the market bottomed in 2008. No where to run, no where to to hide. The lack of insight and failure to see the big picture afflicts the muppet majority.

  44. Anon E. Moose says:

    Anon [41];

    You’re still traumatized by those episodes of “Different Strokes” and “Blossom”, aren’t you?

  45. FKA 2010 Buyer says:

    Let’s call this article what it is, an advertisement for realtors. I wouldn’t be surprised that some realtor spoon feed this article to the reporter. Smart on their part because the masses are uninformed, but this gives them hope. I too can buy a home.

    Remember all those “flip stories” early 2000s? Sure you knew some friends that were able to make a few bucks here and there if they bought and sold by 2005. People thought it was smart investing on their part but it was all dumb luck. So you wanted to get in on the action too, knowing NOTHING about the real estate market, and make your first purchase…in 2007/2008 with a 3% down payment.

  46. Fast Eddie says:

    First-timers may return to the market in greater numbers this year, however, according to some analysts, who point to low interest rates, a stronger job market and high rents, all of which make buying more attractive.

    The millennial generation is “not entering the housing market as purchasers or renters at anywhere near where prior cohorts have done,” said Patrick O’Keefe, an economist with CohnReznick, an accounting firm in New York and Roseland. “One of the reasons is the soft job market, and relatively little income growth for those who have jobs.”

    I mean, this is satire! Hilarious! You pom pom wavers are a f.ucking scream!!

  47. nwnj says:

    When Eddie finally buys it will be time to sell.

  48. Liquor Luge says:

    Gubmint don’t want us learning no history; that way, the same chumps get set up for the swindle du jour over and over again.

    “I identify with_____party.”

    “It’s obvious they have WMDs”

    “War with _____is inevitable.”

    Baaa, baaaa……

  49. Liquor Luge says:

    Nwnj (46)-

    It’ll be time to buy when our children’s children are adults.

  50. FKA 2010 Buyer says:

    Have to admire how kids are using tech these days are in finding ways to get through college.

    New York University and Columbia University were recognized by SeekingArrangement this week as the third and 11th fastest growing “Sugar Baby Schools” of 2015, just behind first place’s University of Texas and second place’s Arizona State University.

    http://www.nydailynews.com/new-york/n-y-schools-fastest-growing-sugar-baby-schools-site-article-1.2075175

  51. Fast Eddie says:

    When Eddie finally buys it will be time to sell.

    One can’t sell when one is not qualified.

  52. 1987 Condo says:

    Some will find this interesting:

    Aetna Sets Wage Floor: $16 an Hour
    Plan Highlights Debate Over Pay at Bottom of Wage Scale

    Amid signs of a tightening labor market, Aetna Inc. plans to boost the incomes of its lowest-paid workers by as much as a third in a bid to draw top prospects and reduce turnover.

    The move by the big health insurer highlights larger debates over the pace of the economic recovery and the compensation of people toward the bottom of the wage scale. Around 12% of Aetna’s domestic work force will see a raise to a floor of $16 an hour, primarily employees in customer service and billing-related jobs. Aetna, which also said it will cut health-care costs for many of the same employees next year, follows Gap Inc., Starbucks Corp. and others in raising the lower limit on workers’ wages.

    ……Mr. Bertolini said Aetna hopes to reduce its turnover costs of around $120 million a year and improve the quality of job prospects and the engagement of workers who interact with consumers and health-care providers. He said he isn’t certain the changes will pay for themselves in purely financial terms, but the cost is small relative to Aetna’s size. “I’m willing to make the investment to see whether or not this happens,” he said.

    Mr. Bertolini, who said he had recently asked Aetna executives to read economist Thomas Piketty’s book on wealth inequality, also framed the move in more idealistic terms: “It’s not just about paying people, it’s about the whole social compact,” Mr. Bertolini said, adding, “Why can’t private industry step forward and make the innovative decisions on how to do this?”

    http://www.wsj.com/articles/aetna-to-boost-incomes-of-lowest-paid-workers-1421105445

  53. grim says:

    Sure, but what that article didn’t say is that it’s for Aetna’s remaining in-house staff only, and that they’ve already outsourced most of their customer service to third parties. The remaining Aetna customer service and management employees are not typically front-line/tier 1 agents, but are higher level reps dealing with escalations, complex cases, etc. These employees are already making this near this wage or greater.

    Try again, this is marketing fluff, they are claiming a higher wage floor because they’ve outsourced everyone under that floor.

  54. FKA 2010 Buyer says:

    Grim… msg caught in mod

  55. joyce says:

    53
    In Albuquerque, police said SWAT team member Dominique Perez and former Detective Keith Sandy fatally shot Boyd, who had frequent violent run-ins with law enforcement. Video from an officer’s helmet camera showed Boyd appearing to surrender when officers opened fire, but a defense lawyer characterized him as an unstable suspect who was “unpredictably and dangerously close to a defenseless officer while he was wielding two knives.”

    I’m going to go out on a limb and say the detective wasn’t defenseless.

  56. joyce says:

    53
    I remember that situation. It was the cop who said he was going to shoot the suspect while talking with other officers on the scene:
    http://krqe.com/2014/09/29/officer-speaks-of-using-force-before-james-boyd-shooting/

    And while this second story isn’t relevant to whether it was murder or not, it’s good to know our public officials have our best interests at heart. So not only was this guy not charged with a crime (only fired), he wasn’t barred from being a cop elsewhere:
    http://krqe.com/2014/03/19/cop-involved-in-sunday-shooting-had-rocky-past-performance/

    I assume this would increase the department’s/town’s civil liability.

  57. FKA 2010 Buyer says:

    [57] Joyce

    Bad cops movement to another department clearly exceeds the movements by bad priests. The institution must be protected at all costs.

  58. Bystander says:

    21 Toxic,

    I thought that movie Nightcrawler was made-up. Guess not.

  59. Libturd in Union says:

    “Even Adolph Hitler thought it more important than Obama to get to Paris. (For all the wrong reasons.) Obama couldn’t do it for right reasons”

    Worst tweet ever on so many levels, even if does knock Obama.

  60. 1987 Condo says:

    #52…nevertheless….5,700 current US based employees are getting an average 11% increase. Do I think it really impacts discussions on this board, not really, since we are looking at higher end earners in general here. But, without a doubt, the labor market, at certain wage levels, is tightening.

  61. Libturd in Union says:

    How long before gasoline is free?

  62. Libturd in Union says:

    What happened to my rally?

  63. chicagofinance says:

    Walked the NYC Penn Station hallway from LIRR station to 8 Ave IND……there was an army guy posted in front of every store front on the north side of the hall.

    Comrade Nom Deplume, who needs to stop screwing around and get back to work says:
    January 13, 2015 at 8:31 am
    [10] chi

    Like we really need Clot in midtown? Don’t the NYC cops sling enough lead there?

  64. chicagofinance says:

    Happy to see my Starbucks protected by two guys in fatigues and a rifle……finally we can enjoy the first stage of our Brazilification……

  65. joyce says:

    Do you know if it was military or cop dressed in military attire?

  66. chicagofinance says:

    Actually….a true NYC moment would have been standing outside a Starbucks with a doppio espresso next to a army guy with a rifle and on the other side was the homeless guy playing “I’m Popeye the sailor man.” on his recorder flute……

  67. Libturd in Union says:

    Just once, I want to see those police dune buggies they have parked down there in NY Penn, move.

  68. chicagofinance says:

    Above my pay grade…..

    joyce says:
    January 13, 2015 at 2:09 pm
    Do you know if it was military or cop dressed in military attire?

  69. Libturd in Union says:

    Actually, on the Starbucks side of the station is the electric guitar player who plays along with a tape. He does a great rendition of ABC, 123. Which is kind of funny as most of those digits and letters are trains served by the station. I affectionately call that dude Essex.

  70. Toxic Crayons says:

    CC speaking live

    http://www.nj.com/politics/index.ssf/2015/01/watch_live_chris_christie_delivers_2015_state_of_t.html

    He locked the local NJ reporters out of his press briefing and only allowed national media in.

  71. joyce says:

    And maybe he was working off-duty in uniform

    chicagofinance says:
    January 13, 2015 at 2:12 pm
    Above my pay grade…..

    joyce says:
    January 13, 2015 at 2:09 pm
    Do you know if it was military or cop dressed in military attire?

  72. Essex says:

    69. I wish!

  73. Toxic Crayons says:

    Christie says “I’ll be HERE in one year”. (no presidential run?)

  74. NJGator says:

    Lib 69 – That would be ACE 123…to catch the B you have to haul your ass over to the Manhattan Mall on 6th Ave.

  75. Libturd in Union says:

    I said ‘most’ of them.

  76. Statler Waldorf says:

    Looks like another case of Suicide by Cop.

    “frequent violent run-ins with law enforcement … wielding two knives.”

  77. joyce says:

    Since when did you start believing the self-serving statements made by defense attorneys?

    Statler Waldorf says:
    January 13, 2015 at 4:06 pm
    Looks like another case of Suicide by Cop.

    “frequent violent run-ins with law enforcement … wielding two knives.”

  78. chicagofinance says:

    50% off Men’s Overcoats at Macy’s in the Men’s dept on the 5th floor……

    NJGator says:
    January 13, 2015 at 3:48 pm
    Lib 69 – That would be ACE 123…to catch the B you have to haul your ass over to the Manhattan Mall on 6th Ave.

  79. FKA 2010 Buyer says:

    What is wrong with these savages? The fire dept says 89 fires reported after the Buckeyes’ National Championship win. Great win over the ducks.

  80. Hughesrep says:

    80

    Amateurs. Back in the days before they cleaned up the short north there would have been 89 fires for a random home game. Mostly couches and dumpsters.

  81. Libturd at home says:

    I called the results of the three playoff games. Wish I bet the 3 team parlay. Though I don’t sports bet.

  82. chicagofinance says:

    My son won the Bowl Season office pool and $260. It was a dead heat until he picked OSU over Oregon. He predicted 45-20 score.

    Libturd at home says:
    January 13, 2015 at 7:06 pm
    I called the results of the three playoff games. Wish I bet the 3 team parlay. Though I don’t sports bet

  83. Libturd at home says:

    That’s sweet.

  84. 1987 Condo says:

    I’ll be here in a year, does that mean anything? The election is in November 2016 so he really only starts running in Feb 2016….am i missing something?

  85. The Great Pumpkin says:

    I’m not tooting my horn. So don’t take it that way. Early discussion on this board brought this to my attention. Still have failed to meet someone in my life that has bought a home as a teenager besides myself. Pretty crazy.

    At age 31 (bought in the last week of 2011) I had two homes and over a million dollars in real estate. Obviously, had a large mortgage, but that was strategic, since I’m betting wage inflation will occur and knock out a good % of that loan. Btw, I had no choice but to purchase my second home. My income property only had 20,000 left on the loan. Tax season would have been brutal.

  86. The Great Pumpkin says:

    Thank you for the response. I want you to challenge my thought process and prove me wrong.

    I agree that capitalism leads to competition which then leads to a higher standard of living for all. Unfortunately, your answer to my question is wrong. You can’t compare the costs of individual products in 1925 to the same individual products in 2015. So many factors make that comparison irrelevant. For example, how many more products must a consumer purchase in 2015 as compared to 1925. The amount of products a consumer needs to buy for daily use affects the prices in the market. You are better off focusing on percentages. What % of their income went to purchase that 20,000 dollar model t? Also, credit was not as easily available in that era, so you have to account for that also. Like I said, so many factors at play.

    Now I ask again. If you apply this theory of raising wages leads to higher prices. How can you discount that it should not apply the other way. If wages decrease, why doesn’t the price decrease? Because the fed (and basically everybody except poor people) despises deflation. Deflation won’t happen, so how is wage inflation not inevitable to correct this inbalance in the market. Wage inflation is starting as we speak. Couple of years and she will be rocking.

    Ragnar says:
    January 13, 2015 at 9:43 am
    Someone asked yesterday: “…should not the lowering of wages/cutting of jobs result in lower prices?”

    Here are the basic characteristics of capitalist economies over time:
    Efforts to innovate, compete, and conserve scarce resources tend to drive down the real (adjusted for inflation) cost of most goods. (You can look this up and chart inflation adjusted price trends over time from various databases).
    Real per capita incomes tend to rise, as investments in capital and new innovations drive up the productivity of labor.
    Living conditions improve, as people gain a superior more varied supply of goods and services which they are increasingly able to afford.

    The inflation adjusted price of a Model T Ford would be over $20,000 today. Today you can buy a materially superior and safer car for nearly half that, and a dramatically superior car for the same price. There are a multitude of items now that could not have been available at any realistic price. For $10 you can buy a radio that produces a greater variety of music than the Queen of England could have ever had an orchestra perform over her lifetime.

    Unfortunately, we’re not living in a full capitalist economy, or these trends would be more strongly in effect.

  87. The Great Pumpkin says:

    Exactly!!! It is common sense.

    “Mr. Bertolini, who said he had recently asked Aetna executives to read economist Thomas Piketty’s book on wealth inequality, also framed the move in more idealistic terms: “It’s not just about paying people, it’s about the whole social compact,” Mr. Bertolini said, adding, “Why can’t private industry step forward and make the innovative decisions on how to do this?””

  88. The Great Pumpkin says:

    You know I do. Another article providing evidence that wage inflation is coming. The smart wealthy are finally realizing that it is either deflation or provide some wage inflation to spur demand. Deflation you can lose it all. Wage inflation, short term loss, that is recovered a 100% plus interest as the market cycle returns it back to their pockets as the economy improves. Make the smart choice. Stop shipping jobs, cutting wages, and importing cheap labor. You pushed too much for too long and have now created massive income inequality that threatens to send the economy into a deflationary spiral. Just suck it up and give the damn raises.

    I’m a 150% convinced wage inflation is already on the way.

    1987 Condo says:
    January 13, 2015 at 12:15 pm
    Some will find this interesting:

    Aetna Sets Wage Floor: $16 an Hour
    Plan Highlights Debate Over Pay at Bottom of Wage Scale

    Amid signs of a tightening labor market, Aetna Inc. plans to boost the incomes of its lowest-paid workers by as much as a third in a bid to draw top prospects and reduce turnover.

    The move by the big health insurer highlights larger debates over the pace of the economic recovery and the compensation of people toward the bottom of the wage scale. Around 12% of Aetna’s domestic work force will see a raise to a floor of $16 an hour, primarily employees in customer service and billing-related jobs. Aetna, which also said it will cut health-care costs for many of the same employees next year, follows Gap Inc., Starbucks Corp. and others in raising the lower limit on workers’ wages.

    ……Mr. Bertolini said Aetna hopes to reduce its turnover costs of around $120 million a year and improve the quality of job prospects and the engagement of workers who interact with consumers and health-care providers. He said he isn’t certain the changes will pay for themselves in purely financial terms, but the cost is small relative to Aetna’s size. “I’m willing to make the investment to see whether or not this happens,” he said.

    Mr. Bertolini, who said he had recently asked Aetna executives to read economist Thomas Piketty’s book on wealth inequality, also framed the move in more idealistic terms: “It’s not just about paying people, it’s about the whole social compact,” Mr. Bertolini said, adding, “Why can’t private industry step forward and make the innovative decisions on how to do this?”

    http://www.wsj.com/articles/aetna-to-boost-incomes-of-lowest-paid-workers-1421105445

  89. The Great Pumpkin says:

    86- btw, why I want you to prove me wrong is quite simple. I’m betting hard that wage inflation will be here by 2020. If you have a loan out between 2-4.5% and we get avg 5 % raises in the economy, boom!!! That’s huge. That loan is almost paying you when you factor in interest write offs. So if I’m wrong, I’ll be destroyed in a deflationary fight. No one in debt survives during a deflationary spiral. Literally, almost nothing is left standing after battling a deflationary spiral. That’s what makes me feel better about my bet. If I lose, everything is fu!ked anyway. So who cares. Lol

  90. The Great Pumpkin says:

    You summed up my point. There is nothing more to cut. If they continue, they will crash the economy.

    grim says:
    January 13, 2015 at 12:34 pm
    Sure, but what that article didn’t say is that it’s for Aetna’s remaining in-house staff only, and that they’ve already outsourced most of their customer service to third parties. The remaining Aetna customer service and management employees are not typically front-line/tier 1 agents, but are higher level reps dealing with escalations, complex cases, etc. These employees are already making this near this wage or greater.

    Try again, this is marketing fluff, they are claiming a higher wage floor because they’ve outsourced everyone under that floor.

  91. Ragnar says:

    If I lose, everything is fked anyway, LoL.
    That’s what Fannie and Freddie said.

    Pumpkin, on your other question, you need to think of real rather than nominal wages. If demand for labor goes up faster than supply, then the real price should rise, and personal incomes as a % of the economy should increase. But keep in mind we’re now talking about the US in a global economy, with a global labor pool, and global basket of goods, yet impacts highly segmented by profession and country.

  92. Liquor Luge says:

    Always comforting to check in here and see Punkinhead conversing with himself.

  93. Nice post! Bookmarked it for my friend later to have a look.

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