What a difference a day (or 20) makes!

Thursday, September 22, 2005
I have an unhealthy affinity for things trite. You know, "old sayings", adages, conventional wisdoms - that sort of thing. Stuff like never judge a book by its cover or you never get a second chance to make a first impression. I especially enjoy splatting things I've recently observed against them to see what sort of mess it makes.

Well, anyway, onward to first impressions, and second chances. I'll pick two examples, one national and the other very local.

The obvious national choice is Katrina. I spent a few minutes last night poking at a couple websites and sampling the commentary of Sep. 1, 2005. I'll leave any such effort to any readers who might drop by (in other words I'm too lazy to provide the steenking leenks and it couldn't be easier to find some for oneself). It was, for the most part, amazingly overwrought and/or inaccurate. The reality is few of us knew a darned thing about New Orleans, its levees, its floodwalls, its canals (which are canals and which are giant, openface drainpipes?). Even now, three weeks later, we know precious little. There is uncertainty (Captain's Quarters) about what actually happened to the levees... err... floodgates... err... floodwalls... err... canals... err.. Whatever! Was there topping, scouring, rampaging barges, bad design, bad construction?

On the local front My Little Neighborhood is undergoing some change. Apparently most folks prefer unending stability in matters of neighborhood. As always, not everyone is completely enamored of everyone else and old wounds fester long and deep and there are issues of "be careful what you wish for". To try and make what should be a short story less interminable - there have been changes in My Little Neighborhood recently. Specifically there have been a number of homes sold, some of which have become "rental properties" (gasp!).

To try and bring this local example toward some conclusion, the three nearest homes most directly involved in the non-stability have been lying fallow for a little while - unoccupied. This is not a case of flight or blight or obvious deterioration. As with many (most?) places real-estate prices, including rents, have risen rather dramatically and while they may be stabilizing they are well beyond the reach of those one might consider economically downtrodden.

One might imagine, I suppose, that unoccupied homes might add to the peaceful repose of a neighborhood. Nobody is amazingly quiet under normal circumstances. On the other hand Nobody is not at all good at keeping up with the yardwork and folks who move out to make way for Nobody seem remarkably prone to leaving behind large piles of stuff that doesn't seem to evaporate quickly.

Unkempt yards and non-evaporating piles of stuff have a remarkable ability to generate noise and attract visitors. They generate noise by winding up the normally peaceful neighbors to a tizzy. What's happening to our neighborhood?!? Who can pay that much money for a house and not live in it?!? Are we going to be pushed out by investors?!? As for the visitors, well, they are apparently some subset of the yard-sale aficianados and roving packs of "bored" teenagers. The first category is harmless (and provide a useful scavenging function IMHO). The second is potentially problematic.

Needless to say the tizzies were increasing in intensity.

Lo and behold, however, just yesterday a rising crescendo of whirring and rumbling and thumping and banging began. A quick, "what the heck is all this noise" recon discovered a yard crew working feverishly, a roofing gang working, well, diligently if not quite feverishly, and a moving van disgorging stuff. Oh, and yeah, some large, noisy municipal vehicles removing at least portions of the noise and visitor generating piles. The activity was well distributed among the fallow fields. One yard crew over there. One roofing crew over there. One moving van over there with the stuff removers working threading themselves among the lot.

3 comments:

Rick Ballard said...

You know how to strike fear accross a continent. Last weekend, while walking past a real estate office here (I am as far from the Pacific as you are from the Atlantic) I noticed that there were more 'For Lease' ads in the window than I had ever seen before. Where once two ads would have been the usual, there were now eight. All for houses at what is considered the 'starter' end of the market - $350K-$450K - and all leasing for rents that will barely cover payments on no interest loans, property taxes and insurance. It appears that we may be entering the 'greater fool' period of the market with the wind beginning to pluck the froth from the top of the wave.

I had hoped to spend the holidays here but plans must accomodate circumstances. They really don't ring a bell.

MeaninglessHotAir said...

You raise a lot of good issues here. One of them is: what is the housing bubble doing to real people who fall below the ability to buy outrageously priced housing? Is it destroying the American dream? Our cities are going to start filling with more and more empty houses and more and more families who can't afford to buy them.

Most of the houses in Boulder were built under the assumption that the town would never have anything but poor students and poor professors living here. They are small and cheaply constructed. Somewhere along the way Boulder became a magnet for trustifarians from New York and California who can and will pay any price. Little houses that aren't worth a tinker's damn are selling for 800k. As long as most of the people living here bought long ago it doesn't really matter much because they already have their houses. But it has reached a point where most of the people living here couldn't actually afford their own houses. In the course of time it will destroy the community.

Knucklehead said...

Rick,

Perhaps we should tug on Dennis the Peasant's cape and ask if there's some tax advantage driving this investment in rental properties.

A couple years back I noticed that virtually everyone I knew who owned a small business was ugrading to rather pricey autos. I finally asked a couple of them and the explanation was that there was some tax law that some how opened a short window that made it a no brainer economically.

Then again, it could just be that the bulk of the herd has noticed where the lead cows went.

I sure don't get it.

Meaningless,

Sitting around thinking, "I couldn't afford to buy the home I own" is pretty fascinating, isn't it. It is a common topic of conversation in my area and, so far, leaves pretty much everyone shaking their heads wondering what the heck is going on and where the heck is going on.

I keep seeing articles claiming it isn't a "bubble" and that there's some fundamental alteration real-estate valuation.

The last time I heard that sort of story, that P/E ratios no longer mattered, that stocks should now be valuated by growth/earning ratios (or whatever it was), I lost my shirt (well, the coat I was counting to keep me toasty through the long cold winter ;>).

When the rules break down it may be a good indicator that there aren't any rules at work anymore.

Then again, on the other hand, I remember my parents, at just about my age give or take, shaking their heads and saying stuff like, "I don't how you kids do it. We couldn't afford to buy the house we live in."

I can't tell if everything has changed or nothing has changed.