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You obviously don't live in the SF Bay, CA area <g>. From the local
paper around the 94010 zip/650 area codes:
Burlingame, $369,000 - Spanish Style condo, walking distance to
downtown.
Millbrae, $775,000 - 3 BR, 3 BA, gourmet kitchen, pool. (Looks like a
30 year old ranch <g>).
San Mateo, $649,000 - "Charming" Tudor, 3BR, 1.5 BA
Burlingame, $635,000 - Country English Cottage (and it is truly a
cottage <g>) 2BD, 1BA
San Mateo, $1,500,00 - First time on market in 30 years. A farm house
style home. "Unlimited potential" <g>. 2 BR, 2BA. (And it really does
look like an old farm house.
Burlingame, $699,000 - Single story looks to be 50+ yr old cottage. I'd
guess less than 1800 sq ft from looks. Claims 3 BD but they are surely
pretty small.
Too cheap? Then move up to exclusive Hillsborough!
$1,850,000 - New 5 BD, 4 BA on 2/3 acres.
$4,900,000 - New rather large looking 2 story estate. 5 BR, 4 BA, media
room, library, wine cellar & MBR of grand proportions.
$2,200,000 - French Colonial, spacious kitchen, curved staircase, 2 car
garage!
$2,250,000 - Looks like a ranch more than 30 years old. 4BR, 5BA
Believe me, most of the homes in this area at these prices are not huge,
4000+ sq ft on 1 or more acres. The majority are between 1500-2500 sq.
ft, are at least 15 years old and many are typically are on 1/2 acre or
less. Currently, asking prices are usually just the starting point with
offers often escalating by 50k or more above asking. Buyers put
together resumes, offer free trips to Hawaii, etc. Housing prices here
are probably at least 50% higher than they were 4 years ago. This is
the reality and it DOES have large effects on the whole local economy
causing all other prices to escalate in tandem (food, clothing, labor,
services, etc.).
Sadly, it is the relatively successful few who are driving this craze.
Many others are closed out of the opportunity to purchase a house or
even afford an apartment in this area. Last year, I moved to a smaller
apartment when the one bedroom unit (about 1000 ft) I was in rent was
raised to $1700 monthly from $1350. Many have been forced to move to
outlying areas where they commute 2-4 hours daily to get to a job in
Silicon Valley. Although this area may be at the high end, I do not
believe from what I have read that we are alone. It seems that there
are similar stories from other areas of the country such as Boston,
Seattle, NY, Austin, Chicago, etc. Remember that old saw about three
kinds of lies? Lies, Dammed Lies and Statistics? When you average
everything together and look at it from 30,000 ft up, it may look pretty
smooth. But bring your view in a little closer and large areas of
inflation are apparent.
JW
-----Original Message-----
From: listmanager@xxxxxxxxxxxxxxx [mailto:listmanager@xxxxxxxxxxxxxxx]On
Behalf Of Daniel Goncharoff
Sent: Thursday, March 09, 2000 10:28 AM
To: realtraders@xxxxxxxxxxxxxxx
Cc: realtraders@xxxxxxxxxxxxxxx
Subject: [RT] Re: Alan Greenscam, Public ENEMY Number ONE
Does it matter that asset prices have gone into the stratosphere if it's
not
having a perverse effect on the real economy?
If you do think it is having a perverse effect on the real economy,
where is it?
The expected effect would be an exceptional increase in demand, which in
the
short run would translate into higher prices. It hasn't happened. And
that is
why AG hasn't done much.
Regards
DanG
James Taylor wrote:
> No signs of inflation ? Maybe if you are not looking or paying
attention.
> Look at asset prices (real estate & equities) have gone into the
> stratosphere. His actions of lax rates and wreckless monetary policy
was
> his solution to the banking crisis (caused by irresponsible lending
> practices). Now his back is to the wall and he knows this market is
out of
> control. The number of bank failures and economic hardship (the
seeds that
> he has sown) that will blanket this land when the bubble bursts will
make
> the small amount of defaults he avoided pale in comparison.
>
> ----- Original Message -----
> From: Daniel Goncharoff <Daniel.Goncharoff@xxxxxxxxxxxxxxxxxxxx>
> To: <jptaylor@xxxxxxxxxxxxxxx>
> Cc: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, March 08, 2000 8:37 AM
> Subject: Re: [RT] Alan Greenscam, Public ENEMY Number ONE
>
> > It is important to understand the problem faced by Greenspan.
> >
> > The market goes up in an 'irrationally exuberant' way. He says he
will
> > take away the punch bowl as soon as he sees signs of the party
getting
> > out of hand, ie, when he sees inflation rise.
> >
> > The economy keeps growing at a healthy pace. But inflation doesn't
rise.
> > Instead, the increase in wealth from the stock market is reinvested,
not
> > spent.
> >
> > This leaves Greenspan with a dilemma. Does he raise interest rates
> > anyway, risking stifling the economy and creating a deflationary
> > environment? Or does he wait for signs of the stock market bubble
> > translating into artificially higher asset prices?
> >
> > Obviously, he has done the latter. But inflation is not there. The
> > wealth effect is much smaller than economists would have expected.
> >
> > The FT recently had an article saying that spending patterns of
> > individuals reflect a 75% expectation of a serious market downturn.
> >
> > Perhaps it would have been better to assume that raising interest
rates
> > would not have an important economic impact. Perhaps not...
> >
> > Regards
> > DanG
> >
> >
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