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Tuesday, April 8, 2008
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56 comments:
So I read something in a Wall Street Journal edtorial recently that said, "The Mortgage Bankers Association tracks 46 million mortgage borrowers, and 42 million are paying on time. More than 20 million households own their homes outright and, having worked for years to pay for them, probably don't want to pay for someone else's."
http://tinyurl.com/4durh5
Now, while the WSJ is an excellent paper the people putting out their editorial page aren't particularly...sane. But this figure really startled me; it appeared to suggest that close to half of homes are paid off. Anybody have any numbers on how true that is? I know my mom's house is paid off, but that's because she never went to the home equity well (because of her son's open wallet policy :-) ). Do you think that number includes people who took out loans against their home's equity?
Isn't 20 million roughly 1/3rd of 66 million (20+46), not half?
I see what you're saying; I parsed that sentence to read, "MBA is tracking 46 million mortgages, more than 20 million of which are paid off;" (which I would argue is clearly what it says :-) ) you're arguing that what it says is, "MBA is tracking 46 million mortgages and another 20 million are paid off."
Either way, does anybody have any data to support either interpretation?
Gruntled asked:
"Either way, does anybody have any data to support either interpretation?"
I posted a government statistic a while back that said 40% of all owner-occupied homes and 75% of all vacation/rental homes were paid off. BHs chastised me claiming that because of the easy credit the owner-occupied number had dropped to somewhere closer to 35%.
Either way, there're a lot of properties out there with no mortgage on them and lots lots more with with significant equity. This mortgage crisis is really overblown. If the mainstream media hadn't picked up on these bubble theories and popularized them, the crisis wouldn't have occured. As the government has rightfully recognized, all we have to fear is fear itself ... hence why the plans call for priming the pump with incentives such as that $7,000 tax credit. Fear is being countered with hope. I'd say that's a good strategy ... unless of course if I was one of those hoping to profit off of the fear of others.
"If the mainstream media hadn't picked up on these bubble theories and popularized them, the crisis wouldn't have occured."
Yeah, tell that to Bear Stearns...and
nevermind, whatever.
Obviously the Fed, leading economists, billionares and massive investment banks should have just asked Lance.
Well, I doubt the 20 million that own outright are "paying on time".
So, to me, 46m + 20m = 64m which seems reasonable.
But it is a good question as to whether that 20m had any home equity lines or loans -- and whether they were ever tapped. I have a HELOC myself, so I show it that stats, but I've never touched it. I got it for emergency use only, not for paying for landscaping, etc.
And Lance, if it is so overblown, why the need for bribes (and that is *exactly* how I see it). I agree part of the crash is mania-driven, but so was the bubble and you seemed to think that was the natural process, so why not this?
Folks here may want to read yesterday's WP column by Sebastian Mallaby:
http://tinyurl.com/3kejzm
How can you track a mortgage that's been paid off like 20 years ago?
Doesn't selling to someone else pay off the current mortgage?
So are just 4 million (46-42) not paying on time?
I think the big question on the supposed 20 million who own outright. . . does that 20 million include or exclude HELOCs. Part of the problem with this past bubble was people who owned free and clear taking out of HELOCs to pay for crap.
Example. J6P has paid off his mortgage but has a 100k HELOC of which he is tapping 50k.
Do the stats report, he owns free and clear, or not. I would argue that if it reports free and clear then the stats are seriously flawed.
Debt is debt is debt . . . it doesn't matter if it's a mortgage or just a 100k loan from the bank. The effect is the same.
You owe a crap-load of money and housing prices are declinging, whether it's a HELOC, mortgage, or a loan from your brother it doesn't matter, and you've still got to pay it off.
So I think a better statistic is not how many owe their home free and clear, but what are the debt levels compared to incomes-b/c that will influence everything else.
And there are only 3 ways to pay off debt. 1) default 2) slave to pay it off over years 3) inflate the crap out of the money supply.
The problem with 3 is that it doesn't really solve the problem of debt, it just makes current debt less painful while encouraging people to take out future debt. . . kick the problem down the road a few years.
"So are just 4 million (46-42) not paying on time?"
Without looking into it personally, it would not surprise me if this is correct. Reading MSM reports you might assume "everyone" is in severe financial straights but I just dont think that is the case.
Kind of like that oft repeated statistic that the average american family has 8K in credit card debt. I read somewhere that behind that statistic, the reality is most households have no credit card debt, but there is a small minority with 40-60K debt that when added together make 8K the average for all households.
Either way, there're a lot of properties out there with no mortgage on them and lots lots more with with significant equity.
. . .unless of course if I was one of those hoping to profit off of the fear of others.
"Hope" is lower prices for housing, period. I'm *happy* for those who can now afford housing or who now have hope that they will be able to afford it soon.
If as you say there are so many contented homeowners with paid-off property, then why should they fear what the market brings them?
There are those I know going through the pain of paying too much on their mortgage, and it's not pretty.
Why do you hope for people to be miserable with ever-increasing housing sticker shock? That's what I want to know.
GTE/ Joel & Sonia - for the words "free and clear" to mean anything, you have to assume they included HELOCs since they are secured loans.
When HELOCs are recorded on county land records, they show the maximum amount that the borrower "could" take out even if the amount they have then taken out is zero. Either way however, they show up on land records (just like mortgages) to give notice to third parties (buyers or banks) that before you buy or refinance this place, you need to inquire how much secured debt this guy owes.
UK mortgage lending hits 16 year low.
http://tinyurl.com/5fb4ch
What is taking place here goes way way beyond the DC area. Obviously the bust will manifest differently in different regions of the world but the credit markets that allowed the bubble to form in this region also financed similar bubbles in countless others.
Pending home sales fall to new record low.
http://tinyurl.com/4elkmf
This does not suggest a strong open for the "spring selling season."
joel and sonia asked:
"but so was the bubble and you seemed to think that was the natural process, so why not this?"
you're assuming I don't think it is part of the natural process. On the contrary, I think it is ... That is why we have real estate cycles. And that is why what is going on is normal. Was the boom bigger than usual this time around? Of course. Is the fear dragging down the boom correspondingly bigger? Yes. But the end result will be as it always has been ... Stagnation in general in house prices while inflation of wages (and rents) does its bit to make houses more affordable again.
Yep, this is clearly nothing but a normal cycle.
At least you now seem to be admitting that affordability needs to return to the market rather than inventing fanciful scenarios where DC's affordability doesn't matter.
"NEW YORK, March 12 (Reuters) - The U.S. housing market is the worst in about a century, said Richard Syron, chief executive of Freddie Mac (FRE.N: Quote, Profile, Research), the second largest home funding company."
http://tinyurl.com/4w2xga
"April 8 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the current credit crisis is the worst in at least 50 years.
``The current credit crisis is the most wrenching in the last half century and possibly more,'' Greenspan told a conference in Tokyo today via satellite from Washington."
http://tinyurl.com/5to76p
"April 2 (Bloomberg) -- The International Monetary Fund cut its forecast for global growth this year and said there's a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression. "
http://tinyurl.com/3lhtpy
"BERLIN (Reuters) - The international financial system is in its worst crisis since World War Two, a senior economic adviser to the German government has told a newspaper.
Peter Bofinger, one of the so-called "wise men" who advise the government on economic matters, also told Bild am Sonntag there were clear downward risks to Europe's biggest economy."
http://tinyurl.com/43f9bm
"Current financial crisis is worst, markets to fall further: Soros
4 Apr 2008, 0220 hrs IST,Bloomberg
Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound. "We had a good bottom," Soros said on Wednesday in an interview in New York, referring to the rally in stocks and the dollar after JPMorgan Chase & Co agreed to buy Bear Stearns Cos on March 17."
http://tinyurl.com/3kyece
"SINGAPORE - By bailing out Wall Street and applying "band-aids" to the economy, the U.S. Federal Reserve may well be causing its own downfall - even as it hastens the demise of the greenback as a viable global currency, investment guru Jim Rogers told Money Morning during an exclusive interview.
Because of such strategic missteps, U.S. consumers could be facing a long and painful economic malaise, similar to the "lost decade" of 1990s Japan, or the stagflation-riddled 1970s in the United States, Rogers said."
http://tinyurl.com/5nrkqr
Lance,
"This mortgage crisis is really overblown. If the mainstream media hadn't picked up on these bubble theories and popularized them, the crisis wouldn't have occured. "
huh....??? You're kidding me right?
I guess if the media didn't report on this then:
*- people wouldn't have defaulted on their loans
* - mortage payments wouldn't have doubled for people who took out bad loans
* - investment banks would've be writting down millions of dollars in bad mortages.
* - a house 3 doors down wouldn't have sold for 650 k 2 years ago and is now on the market for 450 k
Sometimes you can figure out it's raining outside without first watching the weather report.
Steve said:
"huh....??? You're kidding me right?
I guess if the media didn't report on this then:
*- people wouldn't have defaulted on their loans
* - mortage payments wouldn't have doubled for people who took out bad loans
* - investment banks would've be writting down millions of dollars in bad mortages.
* - a house 3 doors down wouldn't have sold for 650 k 2 years ago and is now on the market for 450 k"
Yes, all this is happening ... But just like the "buy now or be left behind" spiel was an exaggeration so is the percentage of people affected. Just look at how many people either have their homes paid off or have substantial equity in them (and that's just about anyone who owned a home prior to something like 2003. Even those of us who "moved up" in recent years brought substantial equity with us to our new homes.) The number of people truly affected is relatively small ... even when you count the number of people being hurt currently by having to sell for lower than real value because the media has blown this out of proportion and helped to freeze the credit markets. Fear begets fear ... and what started off small with a few idiot "economists" unfortunately got spread by idiot bloggers and then picked up by the main stream media. Ever see that commercial where everyone is following some idiot into a hole?
Harriet asked:
"Why do you hope for people to be miserable with ever-increasing housing sticker shock? That's what I want to know."
But that's not what said. I said that if history is to be our guide nominal house prices will stagnate as inflation pushes up the price of everything else ... including wages.
Lance, all I can say is "wow."
"Yes, all this is happening ... But just like the "buy now or be left behind" spiel was an exaggeration so is the percentage of people affected."
You were one of the people pushing that particular theory of real estate investing! Do you think we don't remember?
"Fear begets fear ... and what started off small with a few idiot "economists" unfortunately got spread by idiot bloggers and then picked up by the main stream media."
A few "idiot economists" huh?
And where did you get your degree in economics?
That is what is so sad about your various pronouncements. You lack even a basic understanding of the fundamentals at play and instead just make up buzz-word laden "theories" that invariably predict good things for you personally...
Scroll up and look at the list of people being quoted in those articles I provided you. Alan Greenspan, Jim Rogers, George Soros, Richard Syron, Peter Bofinger, the IMF...
Ask yourself if they are the type to be swayed by a few "idiot economists" and "idiot bloggers."
I understand it is humiliating to be in your present position with regard to your various predictions and pronouncements but as they saying goes, when you are in a hole you need to stop digging.
Here is a report I found interesting. (PDF)
http://tinyurl.com/4u29pq
lance said . . .
"But just like the "buy now or be left behind" spiel was an exaggeration . . . "
????????
Okay . . . who are you and what have you done with the real lance. The real lance I've been reading for the past couple of years is part of the "buy now, you'll be priced out forever!!" "international city" "DC to become Manhattan" mantra.
Hmmm, if lance is having a change of heart maybe the bottom is closer than I thought (lance as a contrarian indicator-i.e. when he says "RE is horrible, don't buy" . . . BUY!!!)
Leroy,
Thanks for the article from the Center for Economic Policy and Research. Bloomberg News recently discussed the Center's findings in the article. It brings to light the collateral damage left in the wake of highly inflated housing and creative loans. What we are experiencing is quite different from other housing bubbles. This is new and the recovery will be slow and painful. The culture of greed that justifies over-buying and hyper-consumerism has devoured itself. Greed always does.
People didn’t just “move up.” They went into the stratosphere and our collective arrogance refuses to accept that they have made very serious mistakes in judgment and ethics. We all will suffer at the throne of greed.
I thank God everyday that I own a home in Atlanta. I have been a homeowner there since 1978 with the exception of 1 year. The quality of the homebuilding, the beauty of the neighborhoods, and the economic stability and quality of life found there is difficult to replicate elsewhere. And it is far more beautiful and cosmopolitan than DC could ever hope to be. No, it isn’t a tourist town and for that I am forever grateful. Hordes of tourists don't equal quality of life either.
I am sorry for the fallout of irresponsible buying here. People often act out in a herd-mentality, and often make very inappropriate and ill-advised decisions when there is a stampede. People in general are also delusional and very uneducated on the principles of economics and markets. I came to a big conclusion over 30 years ago; people believe what they want to believe. They haven’t done anything since to change my mind on that. Hey, the last I read the Flat Earth Society still has some members.
GTE said:
"Okay . . . who are you and what have you done with the real lance. The real lance I've been reading for the past couple of years is part of the "buy now, you'll be priced out forever!!"
It sounds like you didn't understand what I was saying. I NEVER said buy now or be priced out forever. Buy now or be priced out forever means you'll never be able to buy anything. I said find what you can afford today (and want to live in) and content yourself with that as the future could be worse ... even if prices fell. As Va_Investor liked to point out, if the depression occured which lay as the cornerstone of the BH theory, falling house prices would be inconsequential to those not already in a property since jobs would be threatened and the down payment of securities would go the way of the stock market. So no, it's not "buy now or be priced out forever", it's "stop expecting a bad thing to bring you good".
lance . . .
keep rewriting history-I know what you meant, the rest of those who have read you comments knew what you meant, and YOU know that's what you said. So if you want to lie to yourself and deceive yourself, go ahead, you're a troll anyways so not like it matters.
A depression was never the cornerstone of the "bubble theory". The cornerstone was "prices are out of whack with incomes".
And personally, if a depression does happen with massive job losses, I believe those who don't own homes will be in much, much better positions. The reason: if you don't own you can easily MOVE to where the jobs are, be it Alaska, Dallas, or Mexico. If you own . . . you've got to sell-already tough today, imagine what it would be like in a depression-near impossible. You would either, a) not move, b) sell at a substantial lose, c) keep the house and feed the alligator.
While I advocate owning a house, in a recession/depression, one of the biggest advantages you can have is mobility, which is much easier if you rent.
The number of people truly affected is relatively small ...
lol
I wish.
Four million homes are in default. That's huge by historical standards.
There is an estimate 5% of the population that owns two or more homes that can only afford one. (30% own two homes, historically only 20% to 25% can afford 2nd homes). Oh... we all remember what happens to people who overstretch on 2nd homes in a recession...
I NEVER said buy now or be priced out forever.
Yes you did. You had way too much fun making fun of those of us who didn't buy.
We're in a classic liquidity crunch; however this one is of major proportions.
Lance how can you be saying we bloggers had an effect? You made fun of the fact there are only "14 posters." You had too much fun taunting us about how were were a pitiful minority that would be relugated to the scraps because we wouldn't buy.
kcwood said:
People didn’t just “move up.” They went into the stratosphere and our collective arrogance refuses to accept that they have made very serious mistakes in judgment and ethics. We all will suffer at the throne of greed.
Well worth repeating. The number of people spending 42% or more of their gross incomes on home debt service is amazing. In the past, breaking 35% was cause for alarm due to the expected default rate.
The flip side of the "buy now or be priced out forever" mania is that people are going to have no qualm about defaulting on debts.
Hence why down payment requirements are becoming sane again.
Now for a really insignificant numbrer:
1. The number of americans who have 20% to 30% saved for a down payment or are in a situation where they still can 'upgrade.'
GTE said:
lance as a contrarian indicator-i.e. when he says "RE is horrible, don't buy" . . . BUY!!!
ROTFLMAO
Nope. Its when he admits that he was totally wrong and bought at the peak. ;)
Got Popcorn?
Neil
Leroy @ 4:17 PM:
That's Dean Baker's piece regarding price/rent ratios. I posted that on the weekend bits thread. His main premise is dead on, i.e., government solutions to the mortgage crisis should abandon the assumption that ownership and high RE prices should be propped up, since some folks are better off getting out of their mortgages and renting -- using the reduced housing costs to save for child care and health care. The bottom line is that a bank does not do a borrower a favor by giving him a loan he can't repay while meeting his other obligations.
I do, however, find Baker's "rent cost" v. "own cost" to be a bit apples to oranges. There's likely a wide disparity between the quality of the rent cost dwellings and the owner cost dwellings. For example, he assumes Boston and DC rent for a 2BR to be roughly $1,100, which is $100 less than the 2BR roach-infested dump that my BC roommates and I had in Boston's Brighton area in 1990. I'm not sure what $1,100 currently gets you in Boston for 2 BR but I doubt it gets much. I know that $1,100 will get you a very modest 2 BR place in a very modest part of DC/NoVA.
"Nope. Its when he admits that he was totally wrong and bought at the peak. ;)"
That only happens in Scooby Do. In the real world people like lance just keep denying it long long after everyone else has concluded they are a fool. Then they just disappear one day.
As for never saying people would be priced out...
"This is not good news for people who hope to someday buy. It's low interest rates that allowed so many people to become homeowners during the last 5 years or so. A class of perpetual renters will have been created where its members can never work their way out of their condition." Lance June 23 2006
" "Why live here when I can move to Atlanta, take a 10% paycut and afford a really decent house at half the price?"-anon
Ah, you're finally getting it. The higher than average prices we've experienced here help separate the wheat from the shaft. As the weak (i.e., those who can't learn to deal with change) leave, the area itself gets stronger. Good bye! Don't let the door of your rental slam you in the ass on your way out!" - Lance April 07, 2007 7:19 AM
http://tinyurl.com/3toj8d
2 Things I take issue with:
1) Statistics in a historical/environmental vacuum are meaningless. 77% of people were employed during the Great Depression, so what's the big deal? That's almost 4 out of every 5 people having jobs! Oh, wait, you mean full employment is about 96%? Oh well.
When you weigh some of these statistics that are getting bandied about wildly these days, you have to put them in a historical perspective, relate them to current trends, something. There are plenty of statistics/facts/whatnot that seem completely absurd, but they are the norm and have been for some time. On the other hand, there are statistics that don't seem particularly unusual but are in fact shocking when placed in the proper context.
2) Atlanta as a more cosmopolitan city than DC. I'm not sure I follow this. Granted, I am somewhat biased, but having grown up in the DC area and lived in Arlington and Georgetown and having spent a year living in the Atlanta area, I think I have a little bit of perspective on both. I love both cities, have had a lot of fun in both places. I currently live in the DC area, however I do plan to eventually migrate South (although probably not Atlanta).
All that being said...I think in most counts DC is the more cosmopolitan city than Atlanta. When I think of cosmopolitan I think of restaurants, nightlife, museums, sporting events, financial weight, business establishment, and things along those lines. You'd have a hard time selling me on the idea that Atlanta is more cosmopolitan along those lines than DC is.
sean . . .
I believe you've got the facts wrong-(goodness government schools can't teach people how to think) . . . . Great Depression unemployment 23% != 77% of the population employed. unemployment = # employed/# SEEKING EMPLOYMENT-(i.e. actively want jobs). We won't go into all the different types of unemployment U1-U9 I think, but the bottom line is unemployment does not take into account the entire population.
If we look at society in Great Depression times, women generally did not work, and men were generally the sole provider of the family. So each family/household had roughly 1 provider-and by family they had more than 2.3 kids. So what that stat really means is during Great Depression times ~1 in 4 households did not have an income . . . and THAT is HUGE! And even if you have a job, there is something called UNDERemployed . . . meaning you need a better job/more money to fit your skill level.
So yes ~25% of families having little to no job was a big deal. The dirty little secrets about the GD are that it was caused by a) massive debt, b) inflationary policies of the 20s, and c) MASSIVE government intervention in the 30s and d) if you avoided debt and had a job, you did alright. The problem was that finding a combination of little/no debt + job was hard.
As far as Atlanta . . . I'm from there so I am biased, but you truly haven't visited much if you think there is little to do. Buckhead, Hawks, Thrashers, Braves, Falcons, for sports, plus 2 major colleges, there are plenty of bars, night scene, etc. Atl. was recently rated as the #1 city for singles (I don't think it gets that way with nothing to do).
In addition, the freeways are MUCH better maintained, the entire infrastructure is better. Traffic is horrible-but really only during rush hour. When was the last time you could drive 70 on 66/495 on a Sat/Sun. afternoon.
As far as the two . . . IMO the biggest advantage to DC is the history/museums/US Gov. type stuff to see and do. I personally love to go to the museums, etc. The biggest disadvantage . . . DC is full of little & big pricks who think they are king of the world b/c they work for the US government and are some GS 15. They look down on the rest of the world b/c they aren't "important" when the truth be told the GS 15 is probably less important than the average joe.
DC-great place to visit, fun with the family- horrible to raise a family in.
Atlanta-decent place to visit-nice world's largest fish tank:-), pretty good place to raise a family.
Oh least we forget, Atlanta did have the World Olympics in 1996 . . . only LA (twice) and St. Louis (1904) in the US hold that distinction-can't get more "international" than that!
GTE said:
"Oh least we forget, Atlanta did have the World Olympics in 1996 . . . only LA (twice) and St. Louis (1904) in the US hold that distinction-can't get more "international" than that!"
Yeah, I hear it was a blast!
;)
Lance, seriously, you're looking like a freakin' sociopath here. The Atlanta Olympics bomb killed one person and left 100 injured. I like a good gallows joke as much as the next guy, but hanging a sad little a pun off of that is just...repugnant.
As for why I came here: I notice that this site carries no ads and would like to make a financial donation. Anybody know how that can be done?
"Yeah, I hear it was a blast!"
First of all, gruntled is correct, that is about a messed up thing to type and post.
But, hey, what about DC?...we've never had any terrorism...never any anthrax, never any planes crashing into buildings...and aren't you just waiting for the next shoe to drop and that dirty bomb that will render our places virtually worthless?
Heck, the Pentagon just did a gas release test to see how the area would fare in such a scenario.
And all this "cosmopolitan" talk? DC doesn't have a single 5 star restaurant - Atlanta does.
"First of all, gruntled is correct"
Lance, I'm on your side on the housing thing but dominic and gruntled are right.
If you're talking terrorist targets, this is the spot. We've had snipers too.
Another housing related factor is that the Feds are trying to move parts of government out of the area.
lance you just showed your true colors . . .
You're a sick, sick person to make that kind of a comment, it shows the type of person you are.
While I might call you some names, I would still hope no physical harm comes to you in whatever your endeavors.
Financially, while I don't wish it on you, I wouldn't be particularly sad . . . what goes around comes around.
GTE,
Who wished you harm? I certainly didn't. You're exhibiting the typical BH trait of reading into what others say in order to substantiate your pre-set beliefs. Just like "Oh it costs so much more to buy than to rent, that must mean house prices will fall." In your world it can never be "I wonder why the market justifies buying something and locking into what appears to be a high price vs. getting a low 'teaser' rental rate now which I'll pay for dearly when inflation kicks in and my rent escalates wildly"?
As for hosting the Olymipics making a place a cosmopolitan city, I don't see the connection. It really takes more than a 4 month event to make a city a place cosmopolitan.
kh said:
"Another housing related factor is that the Feds are trying to move parts of government out of the area."
Correct ... and it's being presented as a security measure. From what I've heard from those in the know, the truth is that it is a cost savings measure. The Washington area isn't the cheap government town it once was. It makes more sense to move these folks out to less expensive digs. If it truly were a security measure, they'd be moving the president, vice-president, Congress, and agencies out ... and not mid and low level bureaucrats and service people.
GTE, you completely missed my point in regards to my point about unemployment while reiterating it in the process. My point was that 77% employment IS earth-shattering...sarcasm doesn't show up well in text, always a problem. I understand unemployment statistics quite well, and didn't go to a "government school," whatever that means. I was trying to make the point that you can't analyze statistics in a vacuum, as 77% employment might seem great to someone in Sub-Saharan Africa, however to the world's largest economy, it would be catastrophic! I wouldn't wish that on my worst enemy.
Second, in regards to DC vs. ATL, you again make some of my points for me. You reference the Olympics as cosmopolitan, yet that is a party that includes St. Louis, which I don't think anyone would argue is a cosmopolitan city. You mention traffic, yet I don't think that has anything to do with being cosmopolitan (LA=worst traffic but very cosmopolitan; Bismark, ND=no traffic but not so much cosmopolitan).
Restaurants--I disagree that ATL has a better dining scene than DC. I'm not saying its bad, just not better. Same goes for nightlife--nowhere did I say Atlanta's is lacking, however to put it a cut above DC is hardly inaccurate.
Museums & Culture--Clearly DC is a cut above.
Universities--I think G'town, GW, Marlyand stand up just fine against Emory and G-Tech.
Transportation--Highways in both places suck big time, however I'll take metro (in all its crapiness) over Marta any day of the week.
Sports-wash
We are not talking about quality of life when we talk about being metropolitan. NYC is more or less the undisputed most metropolitan city in the US, however you couldn't pay me enough to live there. Quality of life in DC is certainly debateable, however that is a very distinct metric from being metropolitan. Like I said, I'm certainly not disparaging Atlanta as I like it very much as a city and could likely end up in that part of the country down the road, however it is not more cosmopolitan than DC.
sean said:
"We are not talking about quality of life when we talk about being metropolitan. NYC is more or less the undisputed most metropolitan city in the US, however you couldn't pay me enough to live there. Quality of life in DC is certainly debateable, however that is a very distinct metric from being metropolitan."
Sean you make an excellent excellent point regarding quality of life. Let me qualify this though by pointing out that quality of life is relative to one's means. The quality of life for you or I in say a place like Manhattan might really suck ... because of our relative lack of "means". I mean, I'd rather ride our relatively more safe Metro than their Subway and not have to live in a 500 sq ft box with a brickwall view that costs $1M. But for a Wall Street trader or someone with "old money" it's probably the best the world affords. Limos will take them whereever they want to go and the views of Central Park from their penthouses are unbeatable.
THAT is what can be argued makes a city a truly "international" city. Would a mover and shaker with almost unlimited means (i.e., money) at their disposal rather spend part of their time living in a place like Manhattan, Washington, or Atlanta. Clearly Manhattan comes up above the other two. My belief is that Washington also clearly comes up above Atlanta when you apply that criteria to what makes a city truly and international and important city. The fact that such cities also attract like-minded movers and shakers just serves to strenghten this argument as movers and shakers can't move and shake without constant and in-person contact with other movers and shakers. You and I may not live in that world in this city, but those who'll ultimately determine its fate do. And true, they won't care much whether in the end we end up living in 500 sq ft boxes facing blank walls as they push up the prices buying up the places they need and want. We will though have access to the fine restaurants, museums, and a whole other host of cosmopolitan amenities which seem to follow these people around the globe.
To All,
Sorry, about the blast comment. There was no harm meant. I just didn't see how the argument that hosting the Olympics had any connection to whether a city is international or not ... and I foolishly resorted to gallows humour to make my point.
Regardless of whether an individual would place DC above or below Atlanta I think we can (almost) all agree that DC is not one of the world's elite "international cities."
It is clearly behind the leading US cities, NYC, Chicago, LA, and is somewhere amongst the pack consisting of places like San Francisco, Dallas, Boston, Atlanta, Houston and Seattle.
The idea that DC will be able to sustain bubble pricing because it is a magical "international city" is fanciful at best.
Other far larger and far more "international" cities have experienced serious real estate bubbles in the last few decades and their status as "international cities" did nothing to prevent their housing values from returning to levels supported by incomes.
Hey Lance,
I think I have to agree as to DC not (yet) being an "international" city. There are people who dream of coming to DC, but that's for politics, not the city itself.
On the other hand, I think DC does has the potential to become a true top-tier city. We need to remember that ~15 years ago, DC was such a dump that they offered a 5K tax credit just to buy there (is that still going on?).
The progress made in that time has definitely been night-and-day.
The ingredients are there, time will tell whether they make a souffle or mud pie of it...
I posted this the other day but it bears repeating here re: what makes ATL and or DC a cosmopolitan international city.
Here is a list that I have always liked and having been to over half of the Alpha/Beta & Gamma world cities, generally agree with.
You will note that D.C. is ranked as a "Gamma" player. In the US, it is behind NY, LA, CHI & SF and on the same plane as places like BOS, DAL, & HOU. ATL is a cut below, along with MIA & MPLS.
http://www.lboro.ac.uk/gawc/citylist.html
Re: my last entry - note there are 12 criteria used to rank cities that are not only business related but also cultural & general intangibles related to quality of life. DC likely gets extra points for its influence in the worlds political sphere too.
Also with regard to ATL vs DC. I think an important distinction is (or should be) whether you are talking about OTP or ITP. No offense to the Atlanta boosters here, as I do enjoy the ITP. However when I am in many OTP areas, the last thing that comes to mind is "cosmopolitan".
Many valid comments in the "cosmo" area.
Sean . . . my apologies to the sarcasm . . text is tough on sarcasm.
One last comment on St. Louey. The US Olympics in St. Louey was in 1904 . . . over 100 years ago. At the time it was on the cusp of a "international" city. The World Fair was also there in 1904, it is situated on a major river with access to the whole world. It was the third olympics after Athens, and Paris. At the time it was a very international city.
I don't think it could compete for an Olympics today. The main point of that is that cities change and can go one way or the other. DC has made some remarkable strides, but it doesn't guarantee success in the future. DC is a big growing city . . is it the next NY or LA . . . I doubt it.
lance . . .
as for the bomb . . . I was at that park the day before it happened . . . if the baseball event I had tickets for was the next day, I would have been there.
Just for the record: I realized a long time ago that one of the reasons I love Paris is that it reminds me of Washington. Except, you know, that one place is filled with insufferable, arrogant little twits, and the other is in France.
Joel and Sonia said:
"On the other hand, I think DC does has the potential to become a true top-tier city."
Correct ... It now has that recognized potential which it didn't have 10 years ago. The price of stock goes up when a company announces it has developed a fantastic new product or service ... well before the actual production of that product begins. It's the same with cities. It's been recognized on the world scene ... and it prices are adjusting to reflect that ... as well as the miracle of redevelopment we've seen in what were once scarred cooridors from the riots of '68.
The increase of price in DC really is different than the increase in price in places such as San Diego or Orange County which were really the same place before and after the boom. DC really did change ... ditto its adjoining burbs.
"Correct ... It now has that recognized potential which it didn't have 10 years ago. The price of stock goes up when a company announces it has developed a fantastic new product or service ... well before the actual production of that product begins. It's the same with cities. It's been recognized on the world scene ... and it prices are adjusting to reflect that ... as well as the miracle of redevelopment we've seen in what were once scarred cooridors from the riots of '68.
The increase of price in DC really is different than the increase in price in places such as San Diego or Orange County which were really the same place before and after the boom. DC really did change ... ditto its adjoining burbs."
LOL
I give you points for effort, even if that is about all. A city is not a company lance, and it isn't a stock. The overwhelming majority of people buy HOMES because they need a place to LIVE.
and, as I have explained more than enough times before. Even if DC were an elite "international city" (and it isn't) that still wouldn't protect it from a bubble.
"Correct ... It now has that recognized potential which it didn't have 10 years ago. The price of stock goes up when a company announces it has developed a fantastic new product or service ... well before the actual production of that product begins. It's the same with cities. It's been recognized on the world scene ... and it prices are adjusting to reflect that ... as well as the miracle of redevelopment we've seen in what were once scarred cooridors from the riots of '68.
The increase of price in DC really is different than the increase in price in places such as San Diego or Orange County which were really the same place before and after the boom. DC really did change ... ditto its adjoining burbs."
LOL
I give you points for effort, even if that is about all. A city is not a company lance, and it isn't a stock. The overwhelming majority of people buy HOMES because they need a place to LIVE.
and, as I have explained more than enough times before. Even if DC were an elite "international city" (and it isn't) that still wouldn't protect it from a bubble.
Very well said, gruntled. I agree.
This town, and it is a town - not a city, was a lot nicer place before people like lance started moving here thinking it was some sort of Hollywood.
Now it really sucks, and the main reason for that is the low quality of people who have moved here.
lance will respond with some abject gibberish, but that is because he'll never understand - he can't.
It would be nice to think the next administration would be able to make some positive changes.
What is good for DC is largely bad for the country. Huge federal spending, wasteful contracting, countless pet projects and interest groups...
I am not going to turn this thread into a political one but let me just say I hope the next president makes a serious effort to rein in that type of spending. It will hurt DC but it would be good for the country.
I hope I don't get flammed for this, but I just put a listing in 7 corners under contract in 4 days. We had 5 offers.
I know, I know, the first thing you are going to say is that "well you sold it for too low."
Actually, it had a starting price $65,000 over a same sized unit that closed a week earlier. Obviously it wasn't as nice inside, but still, $65k is a ton.
So a properly priced home will sell and there ARE serious buyers out there.
At least in the near-DC virginia area.
Frank - Broker
Blog.FranklyRealty.com
Frank,
Did you mean 65K under? The "obviously it wasn't as nice inside" didn't seem to match the "over".
No question that pricing a property correctly will sell it. I had a real estate agent tell me that she took her own advice a few months ago and lowered the price on her property and voila! It sold! And she didn't wait around months and months before reducing the price.
The statistics from March were telling on that front. Some of the most stubborn sellers seem to be in Fauquier County. Prince William and Loudoun are more aggressively price-cutting, and look at the difference between those counties and Fauquier in terms of getting through the inventory.
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