Saturday, November 15, 2014

Bubblicious

Leucadia's Buffalo Fork house just went pending at $1.225 million, or $694 per square foot.



Game on!

34 comments:

  1. This has nothing to do with the current post but I just learned that this years recipient of Leichtag's trip to Israel went to Peder Norby. Now, Peder lives in Carlsbad and is doing work for them, but he is also buddies with Leichtag, who has spent a lot of money in Encinitas. Coincidence, perhaps?

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    1. So what's your point??

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    2. Norby is on the dole too.

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    3. 11:23, 12:10 makes a good point. 12:54 get over it. Wouldn't it be horrible if someone wealthy liked you?

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  2. Yeah, they're called "call girls".

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  3. EU, price per sq foot is not a good measure. The value of small, older homes on Neptune is driven by land. That home will be scraped to build a larger, $4M home. The delta between the current sales price, and the potential value leaves plenty of headroom for construction cost.

    The existing home has negative value, as the demo will cost money.

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    1. Oops. Sorry. I thought I saw Neptune.

      Carry on.

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    2. Hey, get used to it people. This is the free market at work. I don't say that negatively but that's reality. Those with money will out bid those without. Current homeowners score by higher housing prices. Whether the house above will suffer the fate, all you have to do is look at what has been happening along Neptune. People with the money who want to move here have the resources to replace the remaining one-story homes along the bluff with bigger two-story ones.

      As those opportunities decline, people will try to get as close to the coast or with an ocean view and the process will work its way eastward.

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    3. As a home owner in Cardiff, west of I-5, I have no intention of selling. I bought my home in 1984 for $115,000. It is a twin home with 3 bedrooms, 2 baths a two car garage and a great ocean view. it doesn't seem fair to younger people for this home to be worth possibly a million dollars today. When I am so old I cannot live there anymore, or when I die, it is going to go to a person or family that I think deserves it. And, the price will not be what I could get for it. Not all of us are as lucky as I was, and I don't intend to make a huge profit on my home. I wish there were more people like me around. If sellers would not sweet their sites on so much money, maybe we could have a mix of all people. Just my 2 cents for why it's worth.

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    4. Sorry I didn't proof read. Should have said "if sellers would not set their sights on so much money."

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    5. 1:03, Gimme a call when you're ready to sell. Fellow bloggers should be in your worthy category.

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    6. 1:03,

      See Charles Hugh Smith on the terrible generational injustice of Fed-created bubbles.

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    7. same goes for 11:27

      This is not a free market, it is one of the most manipulated markets in history. It's nothing but silver lining for the top 1% of wealth holders, since the real estate is bubblisciously profitable for them, and keeps the average homeowner a wage slave.

      Don't get me started on rent captivity of the younger generation. It's immoral.

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    8. Manipulated market?? You mean like offering more for a property than it's worth when you know there are no other bidders? That type of manipulation??

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    9. 4:49 PM

      Per your link, "As the generational war heats up, we should all remember the source of all the bubbles and all the policies that could only result in generational poverty: the Federal Reserve. "

      It's all the Feds fault!! Those poor misunderstood bankers and mortgage lenders, not to mention all those house flippers. I'm so glad to know it's never our fault.

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    10. Bankers, mortgage lenders, and flippers all acted perfectly rationally given the incentives provided by the Fed's money-printing and zero rates.

      They did exactly what the Fed wanted them to do: lend, borrow, flip, and drive up asset prices. That outcome was deliberate and inevitable.

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    11. And still going on...

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    12. Bubbles don't need central bankers. See tulip bubble.

      It's the greater fool theory that inflates bubbles. Many of the participants know they are participating in a bubble, they just think that there will be a bigger fool to sell to.

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    13. Bubbles don't need central bankers, just like fire doesn't need gasoline.

      That doesn't mean that someone pouring gasoline on a fire is inconsequential.

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    14. 1:03 - by "artificially " selling your property at lower than fair market value, you will attract a bidding war. You will also be played. But if that is truly your wish (and you have to love living in a country that will allow you the freedom to do that), then I suggest you approach it this way. Sell your property at whatever the market will bear, but should a buyer be deserving of your generosity, the convert your equity into a note at a very favorable (or no) interest rate. Also include a clause in the note that states that in the event of a refi or sale, you have the option to purchase the property back at a pre-negotiated price. That will allow you to provide for some appreciation to your buyer so they can move to a bigger house or out of the area, and allows you to do it all over again with a new buyer!

      - The Sculpin

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    15. 11:48, come to think of it what's the difference between a stakeholder and a flipper?

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  4. I see Shaffer was criticizing people along Crest that oppose the mandates for parking accommodations that are added to improvement permits. She said that the residents were only thinking of themselves and not of others who would want to park there and walk the scenic street. Odd, as the parking accommodation could include sidewalks, curbs and gutters, which would require removal of the very ascetic that attracts people - the old growth trees. Shaffer appears not to think things thru and is quick to judgment. People living in a neighborhood should have priority opinion on how it should appear, given it is not way out of "norms".

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    1. Shaffer lives in close proximity to her neighbors in a sidewalk-covered development. Agree it is odd that she cannot or will not allow for and respect differences.

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  5. Shaffer believes every thought she has in her mind must come out her mouth. She would be better off to "curb" her words so that the "gutter" she speaks does not offend people. In other words, she really needs to keep her unnecessary comments "parked" in the space she has left in her head.

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    1. Now that is topical! Hilarious!

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  6. WC it might be time for new thread on the housing element update that is taking place in our five distinct communities. After seeing the one at the Enc. library, it is not so strange to see the exact 95 parcels that mikey somehow? had access to for his meeting recently that gaspar attended.

    If there is a difference between what is now being proposed by Planning and what we were presented with the norby run ERAC debacle of a couple of years, I would love to hear about it.

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  7. "Bubbles don't need central bankers. See tulip bubble."

    GOOGLE “Kipper und Wipper”. That tulip bubble (and the Thirty Years War) was caused by the intentional debasing of a currency

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    1. Brian,

      Gold bug Ron Paulistas have been predicting third-world inflation at the hand of the Fed for 20 years.

      While I agree that we don't yet know how unwinding The big QE balance sheet will play out, in general, the Fed has been right. They have used the short end of the curve effectively to affect price stability and employment.

      Why hasn't the dollar collapsed? If you are still predicting that, when will it happen?

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    2. We're not talking about inflationistas being wrong.

      We're talking about the Fed creating asset bubbles, which is indisputable.

      But as for the Fed in general being right, enjoy:

      https://www.youtube.com/watch?v=sM_RnA2GIwE

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    3. The Fed's objectives are price stability and employment, not saving speculators from themselves.

      Bubbles are self-reinforcing events of mass delusion. The participants think there is safety in numbers, and everyone else is making money in the short term, so what the hell? Everybody thinks they can be smarter and quicker than the crowd at finding the exit door when the music stops.

      We've had asset bubbles with low interest rates. We've had asset bubbles with higher interest rates. Fed policy plays a role, but it's not the root cause of bubbles.

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    4. "The Fed's objectives are price stability and employment, not saving speculators from themselves. "

      Correct--that's Congress' job

      "We've had asset bubbles with low interest rates. We've had asset bubbles with higher interest rates. Fed policy plays a role, but it's not the root cause of bubbles."

      By definition, a bubble is as artificial price run up from monetary inflation. Bubbles have to be...inflated.

      Crowds sometimes act irrationally and, when information isn't readily accessible to all, they do. A good case can be made against insider trading laws for that very reason.

      We could take the conversation there if you want to--I"m always learning from debate/comments about monetary policy

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    5. "By definition, a bubble is as artificial price run up from monetary inflation. "

      I respectfully disagree. Many if not most bubbles these days are of the "demand-pull" variety. Super Bowl tickets; art; muscle cars; wine; hot restaurants; gasoline--all of these at times experience price spikes that have nothing to do with monetary policy or structural changes to their component costs. The price spike happens because the commodity in question is in limited supply, and the supply cannot be easily expanded to meet demand.

      California coastal real estate is also affected. As the saying goes, we haven't built a single mile of new coastline in many years.

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    6. I think we might be talking past one another. I don't refute that some markets have price spikes because of supply/demand imbalance but I define bubbles as those markets which are affected by the use of force (or threat of it). San Diego County real estate used to sell for below the national average befre Pete Wilson started all the NIMBY laws.

      I don't refute that there is limited supply of coastal land but I do acknowledge that gov't regulations restrict the use and enjoyment of it and monetary policy attracts funds to it. Does that make sense?

      Thanks for good discourse.

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    7. The relationship between Fed money-printing and the S&P 500:

      http://www.zerohedge.com/news/2014-06-06/how-much-more-upside-there

      If you chart it vs. Encinitas real estate you would get a very similar picture.

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