Saturday, March 31, 2007

SL's Water Cooler - March 2007 (part 5)

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15 comments:

Cmyst said...

Does anyone know why economists don't consider energy and food costs when determining inflation?
I'm curious, because after my rent payment, the biggest expense I have is food, closely followed by energy (both PG&E and fuel for vehicles). My discretionary spending is directly related to how much money is left over in the budget after paying these mandatory bills.

Cmyst said...

And, uh, why is the blog now identifying itself as "Sacramento Sip(pin)"?
?????????

Diggin Deeper said...

cmyst

I believe its because they'd then have to raise social security payments to retirees due to the rising cost of living index.

Diggin Deeper said...

cmyst

I think the blog is mis-spelled. Should have been "Sacramento Sippn Spin"

paranoid renter said...

The Economist has an interesting article on the subprime market and how it may affect the economy. Basically it said that the economy is capable to absorbing the defaults in that area since the amount of wealth that could get wiped out by the falling housing market is far smaller than the wealth wiped out during the stock market bust of 2001. It's not overly optimistic, but it does say that it's probably not the end of the world.

Gwynster said...

Cmyst,

CPI has food and energy included but Core CPI doesn't.

Core CPI is the figure you usually see in print as the "inflation gauge".

They take them out because because they are highly volatile, i.e., go up and down. What has been happening in that they just go up alot, down a little, up alot more. But we'd never want to track that would we? **wink, wink**

http://en.wikipedia.org/wiki/Consumer_price_index

I'm not sure what is up but I sold 4 paintings this week which is huge. After commissions, it's still a nice chunk to take home extra. I have no idea where this flow of money is coming from.

Patient Renter said...

Gwyn, you're a painter? Have any stuff available to see?

sf jack said...

"I have no idea where this flow of money is coming from."

*******

Oh, I get it. Where you're coming from...

I used to say that here in SF.

Before the dotcom bubble, the real estate bubble and now the much smaller (and less malignant) Web 2.0 bubble.

The money is sloshing around as a result of the ultra-liquid environment provided by Easy Al Greenspan and our very own FOMC.

I say: "Easy money for everyone!!"

Embdddsgnr said...

To all the "WTF?" posters: don't forget what the first day of the fourth month of the year is. . . .

Me, I tend to stay away from most online information sources on this day, but I just had to check my favorite bubble blog! I wish Sippn would comment.

So East Sac. seems to be holding up okay. A few places nearby have gone pending (I'll believe it in 30-45 days). But I have noticed a greater number of places on the market lately, including several FSBOs. Some asking prices have come down a bit after the first open house with no takers. Of course, they're still in the $400-$500K range for places that sold for half that 5 years ago.

Still, Mrs. E and I are almost ready to take the plunge. We could buy a $400K place now with 7-10% for down/closing costs, but I want to wait out the summer. I think even here we'll see greater inventory and maybe 5% lower asking prices by year end. What do the Landers think?

anon1137 said...

! Sacbee Metrolist changed their web interface. I can't check inventory anymore - it only reports "more than 200".

anon1137 said...

. . . but they have it interfaced with Google Maps!! woo-hoo!

It won't be long until RE agents will be a thing of the past. Good-bye to the 6% commission!

Patient Renter said...

"I think even here we'll see greater inventory and maybe 5% lower asking prices by year end. What do the Landers think?"

I can't speak for everyone, but I'll probably be waiting for a few years as I think we'll still see significant discounting up until then. Have a look at the graph on the latest Sacramento Real Estate Statistics site's post, showing the timing of ARM adjustments over the next few years. As you can see, the real pain with ARM adjustments is still to come.

sf jack said...

"Still, Mrs. E and I are almost ready to take the plunge. We could buy a $400K place now with 7-10% for down/closing costs, but I want to wait out the summer. I think even here we'll see greater inventory and maybe 5% lower asking prices by year end. What do the Landers think?"

********

I may not be a Lander, but I have an opinion.

And it is that if you can wait for at least a couple years, your patience will be greatly rewarded.

You'll get a better house in a better location for less money a few years from now, than at any time in between.

I'm not looking for a real bottom in the SF Bay until 2012... and I've recently thought it may even be further out.

I suppose time will tell. But it's definitely on your side.

paranoid renter said...

>>>>>>>>
I'm not looking for a real bottom in the SF Bay until 2012... and I've recently thought it may even be further out.
>>>>>>>>>>>

Looks like I'm gonna be renting for life :-)

Patient Renter said...

Big numbers for Sacramento (from BubbleTracking)

Pre-forclosures/forclosures (% of pre-forclosures moving to forclosures)

03/30/07: 3,581/5,467 (65.5%)