Hillary Clinton recently toyed with the idea of giving every newborn a $5,000 "baby bond" from the federal government to offset college or home expenses when they get older.
When I first read the article, I thought, "Great! When I have another baby, that would be awesome." Then I thought some more: "What about my other kids who were born a couple years ago?" That cooled my optimism a bit.
Now, to be clear, Clinton was merely toying with the idea and not recommending or proposing it. There is a big difference between thinking aloud and pushing an agenda. But here are my reasons why this idea disappoints me:
(1) There is no guarantee the money will be wisely spent if we're just handing over a bond that can be cashed in after X years. So are we actually paying for the next generation's crack addiction? Or funding the next porn start up? Or a million other things which might be okay but not necessary?
Solution: make it an education account that can only be spent for college expenses. Associated problem with that: if the money has already been distributed and is never used, the government is still in debt with no tangible benefit. Boo to that!
(2) Back in the day, I was not a fan of Bill Clinton but I admired one thing he did VERY VERY much: he pushed for fiscal responsibility. The words "balanced budget" have been replaced by the Dubya Generation with the terms "war spending." A huge boo to that. But that's beside the point. When I thought about Hillary running for office, I thought that maybe one upside to her platform would be more fiscal responsibility. A proposal like this disappoints me because it reeks of increased debt.
Let's do the math. CNN estimated four million children born each year in the USA.
$5,000 x 4,000,000 = $20,000,000,000
That's just an impossibly huge amount of money to spend each year on something that only might be beneficial to a select portion of the population. If you want to put that money into education, put it into those who are seeking education NOW and see if it works. If you want to put the money into helping people get into a home of their own, put that money into the market NOW while the real estate and mortgage markets are so perilous.
I'm sure that after the numbers are run and Hillary thinks it over, this idea will fade into obscurity. If it doesn't, I'll be fascinated to see how she proposes making this attractive or even feasible.
In the meantime, my "confidence level" in that one particular candidate slipped a little today. Which is frightening when my confidence level in most of the candidates is already so low.
Saturday, September 29, 2007
Thursday, September 27, 2007
Real Estate Revisited (Fun With Excel)
Here is the full report behind the CNN article I discussed in my last blog entry. I found this online at http://www.realtor.org/Research.nsf/files/MSAPRICESF.xls/$FILE/MSAPRICESF.xls. There is another site for me to bookmark and read regularly. Straight from the horse's mouth, so to speak. Here are home values in Salt Lake from 2004 through 2007 Quarter 2 (in thousands of dollars):
Salt Lake City, UT
2004 = 158.0
2005 = 173.9
2006 Quarter 1 = 203.0
2006 Quarter 2 = 191.2
2006 Quarter 3 = 216.3
2006 Quarter 4 = 223.6
2007 Quarter 1 = 218.0
2007 Quarter 2 = 233.1
Total Change 2006 Q2-2007 Q2 = 21.9%
Some interesting observations from the full report:
* In 2004, the median home price nationwide was $195,200. In Utah (the Salt Lake Metro region, but that takes a long time to type, so let me simplify here...) the number was $158,000, a whopping $37k below the national average. Three years later, Utah is a mere $700 below the national average--but STILL below the national average. This supports my theory (expressed at http://www.utahcountymommies.com/) that Utah is not spiraling toward huge home drops, but merely catching up with the rest of the nation.
A good point was brought up, however, concerning wages. Have Utah wages risen in a commensurate manner? The answer is confusing because (a) we don't know the size of homes being sold in the above info. The prices could have risen from actual price inflation, or merely because more luxury homes were on the market. We don't have the information to sort that out. So before we jump to conclusions, let's remember: we can't jump to conclusions. :-D
I wonder if anybody has information available to the public that states what the same home would sell for in the two different periods? Hmm.
* Is Utah "overpriced"? Well, by definition I have to say no because that is simple economics: if people are willing to pay the price, then it's the right price. Supply and Demand. This isn't like an oil cartel where the average person has little control over prices, so the market is free to adjust as needed. Again, I'm oversimplifying and I realize that, but it's still a valid consideration if nothing else.
One other factor in favor of Utah being reasonably priced is how we stack up with nationwide home prices. While we have enjoyed huge gains in recent years, we are relatively similarly priced with other markets. I put together a little chart to demonstrate. You can view it at http://www.geekuniverse.org/medianprices.pdf. Utah is #45 (of 149) on this chart with a median value of $233K. So we're in the top third, yes, but things are pretty level on the bottom half. I need a statistician to figure out the standard deviations!
* I expected to see home prices plunging in the most bloated markets, with prices gaining in underpriced markets. Now, obviously, there are a lot of factors that could be considered, but something jumped out at me: there is no correlation at all. The top 11 markets in the nation actually continued to gain value during the previous year! Still rising! Let's look at #1, San Jose-Sunnyvale-Santa Clara, CA (five of the top six are in sunny CA):
San Jose-Sunnyvale-Santa Clara, CA
2004: 698.5
2005: 744.5
2006 Q1: 775.0
2006 Q2: 795.0
2006 Q3: 779.0
2006 Q4: 760.0
2007 Q1: 788.0
2007 Q2: 865.0
% change 2006 Q2 - 2007 Q2: 8.8%
Overall change 2004-2007: close to 25% without a single drop.
The metro area with the steepest drop in home values was also the cheapest home segment in the nation: Elmira, NY:
Elmira, NY
2004: 78.8
2005: 77.1
2006 Q1: 86.8
2006 Q2: 87.3
2006 Q3: 93.6
2006 Q4: 78.4
2007 Q1: 75.3
2007 Q2: 71.7
% change 2006 Q2 - 2007 Q2: -17.9%
* Home prices have risen in Utah (on average) $75,100 between 2004 and the middle of 2007. This is a 47% increase from the original price in a relatively short time. How does this compare to other parts of the nation? The top 10 cities in the nation gaining value from 2004 to 2007 Q2 (total) are:
56.58% Boise City-Nampa, ID
56.31% Phoenix-Mesa-Scottsdale, AZ
56.30% Orlando, FL
55.22% Ocala, FL
53.86% Virginia Beach-Norfolk-Newport News, VA-NC
53.85% Spokane, WA
50.34% Cumberland, MD-WV
50.00% Farmington, NM
47.53% Salt Lake City, UT
47.41% Salem, OR
To summarize: The deeper you dig, the deeper you want to dig. More on this later?
Tuesday, September 25, 2007
Real Estate News
I'm kind of a real estate junkie. I'm not sure why, but it's in my blood.
I regularly visit several geeky real estate websites. These are my favorites:
http://www.bankrate.com/brm/news/mortgages/mortgage_update.asp
http://www.boxhomeloans.com/
http://www.utahrealestate.com/ (I wish every state had a free MLS search like Utah does. In other places, you actually have to work through a realtor.)
http://money.cnn.com/?cnn=yes
My brother is a home builder and I love to go talk shop with him. Travertine, marble and custom cabinetry never cease to tantalize me.
I love driving around my valley, getting a feel for the neighborhoods and business sectors. I could have told you eight years ago which neighborhoods would have sharp increases in value. And I would have been right, because I fingered all the developments that are hot now and were vacant no-mans land then. If only I had the cash to put my money where my mouth is. That's essentially what my brother does full-time and he is amazingly successful at it. Like I said, it runs in the blood.
Two or three years ago I asked my brother if he was worried about the "bubble" that was then threatening to burst. He shrugged it off and gave me two solid reasons why he wasn't concerned about the market here in Utah:
1. Home prices in Utah were rising more gradually than places like Phoenix, Las Vegas and numerous west coast metropolises. Places that spiked quickly were ripening for trouble.
2. Because prices were spiking in other locations, people were being drawn to a place like Utah where you could still get a lot of bang for your buck. Hence a steady influx of people moving out of sunny Phoenix and California to a place where they could afford a home of their own. By his logic, the higher prices rose in other markets, the more stable the Utah economy would continue to be.
I talked this theory over with a realtor friend and he concurred that the "bubble" rising nationwide would not affect us here in Utah. That was before the figurative bubble burst. Now most people know that home prices are "regulating" in those areas where they rose so dramatically a few years back. It's in the news all the time. And if you haven't noticed, I wonder: have you had your head in the sand?
So what has happened in Utah after all the speculating? Several interesting things from the last 12 months, but I'll just post the most recent one. CNN reported today that prices have dropped nationwide in 52 major markets. (Comparing the three months ending June 30th, 2007 with the same period 12 months prior, if I read correctly?) The article then lists the percentage change and median home price in 149 different markets.
If you click on the "% change" column, you'll find some good news for Utahns. It looks like this:
Metropolitcan Area Median Price % Change
Salt Lake City, UT $233,100 21.9%
Binghamton, NY $111,200 19.8%
Salem, OR $227,900 16.7%
Farmington, NM $201,900 14.0%
Allentown-Bethlehem-Easton, PA-NJ $274,500 12.8%
*snip*
What it means is that Salt Lake City is reporting the HIGHEST home value GAIN in the nation. Earlier this year, we were predicted by the same source to make one of the highest increases in the nation and I celebrated. Now it appears that the good news keeps rolling in.
If you want to make this practical, let me put it in simple terms. If you bought a home one year ago for $100,000, then it would sell now (theoretically speaking) for $121,900. And if you were wavering a year ago but chose to continue renting, you're now $21,900 farther from that $100K condo you were looking at.
The news gets better and better for homeowners (and worse and worse for renters) the higher the stakes. If you owned a home worth half a million, you've just added a smooth $100K to your home's value by simply living in it another year. Nice. (I'll have to blog another day about whether or not we should worry about a late-onset "bubble"' in Utah?)
People so often worry about the expenses of buying a home that they worry themselves into putting off home ownership. But if you look at the whole picture, can you afford not to buy a home with prices ever rising? That is obviously an over-simplification but it's also reality to a lot of people. Mull it over and tell me what you think.
I regularly visit several geeky real estate websites. These are my favorites:
http://www.bankrate.com/brm/news/mortgages/mortgage_update.asp
http://www.boxhomeloans.com/
http://www.utahrealestate.com/ (I wish every state had a free MLS search like Utah does. In other places, you actually have to work through a realtor.)
http://money.cnn.com/?cnn=yes
My brother is a home builder and I love to go talk shop with him. Travertine, marble and custom cabinetry never cease to tantalize me.
I love driving around my valley, getting a feel for the neighborhoods and business sectors. I could have told you eight years ago which neighborhoods would have sharp increases in value. And I would have been right, because I fingered all the developments that are hot now and were vacant no-mans land then. If only I had the cash to put my money where my mouth is. That's essentially what my brother does full-time and he is amazingly successful at it. Like I said, it runs in the blood.
Two or three years ago I asked my brother if he was worried about the "bubble" that was then threatening to burst. He shrugged it off and gave me two solid reasons why he wasn't concerned about the market here in Utah:
1. Home prices in Utah were rising more gradually than places like Phoenix, Las Vegas and numerous west coast metropolises. Places that spiked quickly were ripening for trouble.
2. Because prices were spiking in other locations, people were being drawn to a place like Utah where you could still get a lot of bang for your buck. Hence a steady influx of people moving out of sunny Phoenix and California to a place where they could afford a home of their own. By his logic, the higher prices rose in other markets, the more stable the Utah economy would continue to be.
I talked this theory over with a realtor friend and he concurred that the "bubble" rising nationwide would not affect us here in Utah. That was before the figurative bubble burst. Now most people know that home prices are "regulating" in those areas where they rose so dramatically a few years back. It's in the news all the time. And if you haven't noticed, I wonder: have you had your head in the sand?
So what has happened in Utah after all the speculating? Several interesting things from the last 12 months, but I'll just post the most recent one. CNN reported today that prices have dropped nationwide in 52 major markets. (Comparing the three months ending June 30th, 2007 with the same period 12 months prior, if I read correctly?) The article then lists the percentage change and median home price in 149 different markets.
If you click on the "% change" column, you'll find some good news for Utahns. It looks like this:
Metropolitcan Area Median Price % Change
Salt Lake City, UT $233,100 21.9%
Binghamton, NY $111,200 19.8%
Salem, OR $227,900 16.7%
Farmington, NM $201,900 14.0%
Allentown-Bethlehem-Easton, PA-NJ $274,500 12.8%
*snip*
What it means is that Salt Lake City is reporting the HIGHEST home value GAIN in the nation. Earlier this year, we were predicted by the same source to make one of the highest increases in the nation and I celebrated. Now it appears that the good news keeps rolling in.
If you want to make this practical, let me put it in simple terms. If you bought a home one year ago for $100,000, then it would sell now (theoretically speaking) for $121,900. And if you were wavering a year ago but chose to continue renting, you're now $21,900 farther from that $100K condo you were looking at.
The news gets better and better for homeowners (and worse and worse for renters) the higher the stakes. If you owned a home worth half a million, you've just added a smooth $100K to your home's value by simply living in it another year. Nice. (I'll have to blog another day about whether or not we should worry about a late-onset "bubble"' in Utah?)
People so often worry about the expenses of buying a home that they worry themselves into putting off home ownership. But if you look at the whole picture, can you afford not to buy a home with prices ever rising? That is obviously an over-simplification but it's also reality to a lot of people. Mull it over and tell me what you think.
Wednesday, September 19, 2007
Howdy, Sugar!
It's hard to be mad at a face that sweet. And hands that sweet. And pajamas that sweet.
And when I say sweet, I mean it literally. Honey and chocolate chips yesterday. Today Brown Sugar.
*sigh*
You'd think I'd have learned my lesson yesterday and not let him out of my sight, but cut me a little slack. No mother can keep an eagle eye on three boys simultaneously 24/7.
Oh well. At least I got a "sweet" picture out of the deal.
Tuesday, September 18, 2007
Hi, Honey!
Here's a multiple choice question to get your brain working.
Which of the following things have happened within the last 60 minutes here at the author's home?
(a) youngest child decided to drizzle a long, twisting, sinuous line of honey all through the kitchen and dining room
(b) youngest child went to the first of several time outs due to above behavior
(c) author realized that scrubbing the floor by hand and then mopping is NOT sufficient to remove the sticky residue as she realizes her socks are sticking to the floor
(d) three peanut butter sandwiches are made while oldest child demands chocolate chips in his sandwich. author gives in.
(e) oldest child, sugared up on chocolate, decides to eat his sandwich sitting on top of the sticky counter
(f) youngest child (now released from time out) throws tantrum about his sandwich, refusing to eat, then throws a tantrum that the sandwich was taken away and eats voraciously after said sandwich is returned
(g) middle child (bless his heart--hasn't done anything reportable at this point!) sits in his chair quietly eating, only mild fussing about the choice of lunch fare
(h) youngest child decides this is the time to make a messy diaper, seeing as mom isn't busy enough with mopping, demanding 5-yr-olds and preparing everyone to get in the car to deliver oldest child to kindergarten
(i) youngest child does NOT obey the order to stay on the toilet until mom returns with wipes for his bottom
(j) author becomes truly poetic with the first of several, "Are you freakin' kidding me?!?!?"s
(h) youngest child decides he will NOT sit in his highchair and finish his lunch quietly and is sent to the next of his timeouts so mom can actually finish feeding the other two. author is heard to say uncharitably, "i do NOT have time for your temper tantrums now, boy!"
(i) oldest child demands another sandwich plus a myriad of other food with exactly four minutes until time to go to kindergarten. author sighs.
(j) author mops the floor a second time and does not care if the floor is still sticky. tough luck.
(k) author decides it's time to get in the car for kindergarten, unceremoniously ending lunch time and releasing youngest child from time out. author looks around for kindergartener's backpack but it can't be found.
(l) oldest child remembers where his backpack is... bless his heart...
(m) oldest child argues that he's old enough to walk to school alone, and doesn't seem to understand or grasp the concept of the word "no"
(n) drop off is successful and mom starts to look forward to three hours of relatively quiet peace
(o) upon returning to the house, author and two younger children have been in the home approximately three milliseconds before middle child decides it's time to join the action and dumps an entire bag of chocolate chips on the floor which mom just cleaned. author isn't convinced the floor is clean enough to eat off yet and the entire bag is dumped into the garbage while the twins spend a little more "quality time" in their bedroom in the last of the time outs.
(p) twins are removed screaming in temper tantrums from their room and ordered upstairs where they can't make such dramatic messes. as it becomes apparent they have ideas of their own, author scoops them up and carries them (for a combined weight of approximately 60+ pounds) up the long flight of stairs while they scream loudly because child A wants to play with the toy child B is holding and child B has just dropped on the floor making it unavailable to either of them. mom thinks the term "tough luck" once again in her none-too-patient mind
(q) author decides this is a moment worth blogging about and dumps the kids on the floor to turn on the computer.
(r) youngest child decides to continue his perpetuatantrum by rolling across the floor into the other room, then crying something about his "bingers" (translation: fingers) which author can find nothing wrong with
(s) middle child decides he doesn't want to watch THAT annoying video that mom has just turned on. He wants the REALLY annoying one that mom can't stand. mom isn't in the mood to negotiate.
(t) youngest child continues tantrum until point (s) above when he becomes entranced by the annoying little video which is apparently not so bad after all.
(u) author decides she really does love her children as youngest child gives mom a hug before starting a new tantrum--despite the sarcastic tone she employed while quickly and loudly (to drown out the screaming) saying the lunch prayer.
ANSWER:
If you guessed all of the above, you win! Youngest child is still screaming. That boy knows how to be patient when it comes to a temper tantrum. I've seen him cry for over 30 minutes in a row over trivial items in the past. Just a phase? I don't know. I'm tired and I don't want to think about it.
Did I mention I'm sick today and I'd rather just be in bed with some tylenol and benadryl running through my system? Oh and when do *I* get to eat lunch?
If anybody uses the phrase "best job in the world" in the next 24 hours, they better duck.
Which of the following things have happened within the last 60 minutes here at the author's home?
(a) youngest child decided to drizzle a long, twisting, sinuous line of honey all through the kitchen and dining room
(b) youngest child went to the first of several time outs due to above behavior
(c) author realized that scrubbing the floor by hand and then mopping is NOT sufficient to remove the sticky residue as she realizes her socks are sticking to the floor
(d) three peanut butter sandwiches are made while oldest child demands chocolate chips in his sandwich. author gives in.
(e) oldest child, sugared up on chocolate, decides to eat his sandwich sitting on top of the sticky counter
(f) youngest child (now released from time out) throws tantrum about his sandwich, refusing to eat, then throws a tantrum that the sandwich was taken away and eats voraciously after said sandwich is returned
(g) middle child (bless his heart--hasn't done anything reportable at this point!) sits in his chair quietly eating, only mild fussing about the choice of lunch fare
(h) youngest child decides this is the time to make a messy diaper, seeing as mom isn't busy enough with mopping, demanding 5-yr-olds and preparing everyone to get in the car to deliver oldest child to kindergarten
(i) youngest child does NOT obey the order to stay on the toilet until mom returns with wipes for his bottom
(j) author becomes truly poetic with the first of several, "Are you freakin' kidding me?!?!?"s
(h) youngest child decides he will NOT sit in his highchair and finish his lunch quietly and is sent to the next of his timeouts so mom can actually finish feeding the other two. author is heard to say uncharitably, "i do NOT have time for your temper tantrums now, boy!"
(i) oldest child demands another sandwich plus a myriad of other food with exactly four minutes until time to go to kindergarten. author sighs.
(j) author mops the floor a second time and does not care if the floor is still sticky. tough luck.
(k) author decides it's time to get in the car for kindergarten, unceremoniously ending lunch time and releasing youngest child from time out. author looks around for kindergartener's backpack but it can't be found.
(l) oldest child remembers where his backpack is... bless his heart...
(m) oldest child argues that he's old enough to walk to school alone, and doesn't seem to understand or grasp the concept of the word "no"
(n) drop off is successful and mom starts to look forward to three hours of relatively quiet peace
(o) upon returning to the house, author and two younger children have been in the home approximately three milliseconds before middle child decides it's time to join the action and dumps an entire bag of chocolate chips on the floor which mom just cleaned. author isn't convinced the floor is clean enough to eat off yet and the entire bag is dumped into the garbage while the twins spend a little more "quality time" in their bedroom in the last of the time outs.
(p) twins are removed screaming in temper tantrums from their room and ordered upstairs where they can't make such dramatic messes. as it becomes apparent they have ideas of their own, author scoops them up and carries them (for a combined weight of approximately 60+ pounds) up the long flight of stairs while they scream loudly because child A wants to play with the toy child B is holding and child B has just dropped on the floor making it unavailable to either of them. mom thinks the term "tough luck" once again in her none-too-patient mind
(q) author decides this is a moment worth blogging about and dumps the kids on the floor to turn on the computer.
(r) youngest child decides to continue his perpetuatantrum by rolling across the floor into the other room, then crying something about his "bingers" (translation: fingers) which author can find nothing wrong with
(s) middle child decides he doesn't want to watch THAT annoying video that mom has just turned on. He wants the REALLY annoying one that mom can't stand. mom isn't in the mood to negotiate.
(t) youngest child continues tantrum until point (s) above when he becomes entranced by the annoying little video which is apparently not so bad after all.
(u) author decides she really does love her children as youngest child gives mom a hug before starting a new tantrum--despite the sarcastic tone she employed while quickly and loudly (to drown out the screaming) saying the lunch prayer.
ANSWER:
If you guessed all of the above, you win! Youngest child is still screaming. That boy knows how to be patient when it comes to a temper tantrum. I've seen him cry for over 30 minutes in a row over trivial items in the past. Just a phase? I don't know. I'm tired and I don't want to think about it.
Did I mention I'm sick today and I'd rather just be in bed with some tylenol and benadryl running through my system? Oh and when do *I* get to eat lunch?
If anybody uses the phrase "best job in the world" in the next 24 hours, they better duck.
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