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You don't understand the relationship. The only thing to expect from them is more of the same. They are the predator and we are the prey.
I realize that this is virtually true. But I refuse to believe that corporations *have* to behave this way by their very nature. Some fairly big companies (e.g., Trader Joe's) seem to be able to generate substantial profits without treating their employees or customers like crap. Profit-making doesn't have to be brutal. It just often turns out that way in the U.S. because we the people allow it to.
Wow... so many little things to address on this thread
Quote:
Originally Posted by K-SawDude
I realize that this is virtually true. But I refuse to believe that corporations *have* to behave this way by their very nature. Some fairly big companies (e.g., Trader Joe's) seem to be able to generate substantial profits without treating their employees or customers like crap. Profit-making doesn't have to be brutal. It just often turns out that way in the U.S. because we the people allow it to.
Well... I want to give you something to ponder on as you say this. It often depends how competitive the business is too.
Most of the most ethically responsible companies, whether it is labor practices, community donations, environmental practices, or sustainable farming and production practices are companies that interact with end-user consumers and have to maintain brand management (Ben & Jerry's comes to mind as another great example).
A few exceptions do occur, but they usually need a marketable trademarked label to use like "fair trade coffee."
However, there are many other companies out there where people are less choosy on brand name and more choosy on raw numbers or are companies that simply only sell to other companies and their brand is not a big deal.
The sad thing is many of our most highly competitive industries (which is good for tight competition at keeping prices low) are resource extraction industries and industrial producers that don't sell to end-user consumers. Often they are in situations where the lowest market costs...no matter what... wins. Often wholesale of raw materials is sold at the absolute lower price (a penny over doesn't sell) This means in a highly competitive industry... even a company that wants to do good is forced not to do so if it raises their costs even a little bit. That is why some environment regulations are ultimately important. Some labor regulations are important.... etc..
It isn't that companies don't have to do bad things and it isn't that many doesn't do good...but that doesn't mean every company/industry has that kind of leeway.
Quote:
Originally Posted by livinginbuffalo
I'm sure there are many people who stretched and were irresponsible about how much they could/should afford and frankly, I'm sick of everyone blaming the banks. Read your mortgage docs and get an attorney to advise you! On top of that, many people who could very well afford those homes when they had nice paying jobs that then lost their jobs should not be frowned upon either.
few points to make here about financial institutions.
It is very much the bank's problem. It is the problem of the people who borrowed money from them as well. It is the fault of the risks both parties were taking.
The banks take risk by lending money out. It is their job to protect themselves and manage that risk and make sure the people they lend to don't overextend themselves just as much as the people borrowing. For so many people to have made poor decisions it wasn't just solely the people, but also the bank's fault for not protecting themselves, their stockholders, their investors, and even our nation's interest because of the important economic externalities of having a stable financial industry.
It also one reason why some people are starting to analyze how industry decision makers are paid. It isn't that it is wrong they can make alot, but they were working under a system where they could take long-term risks (on behalf of the stockholders), but make high short-term profits from those high risks. Either way those decision makers end up very well in the end at the price of home owners, stockholders, and the FDIC insurance system and in part the taxpayers.
Part of the problem was there was a lack of truly good risk auditing from outside companies. Part of the pay + bonuses for finance executives needs to come from not just short-term profit, but from stringent auditing of long-term risk getting those short-term profits put on the stockholders. That is part of what happened there was alot of poor risk-audits done to help sell mortgages between banks.
However, even with that said... when people get into this blame game we ultimately start to lose sight of the general picture. The reason the housing market collapsed had more to do with people losing their jobs and not being able to find work fast enough to make their payments. They were also unable to sell their homes at a high enough value to recover what they owed. This started ahead of of the bubble completely bursting.
For many quarters during the 2000's the median wage actually decreased, while the cost of living increased. Then there was a period where the gas prices spiked very high for a prolonged period. These things mixed together caused a drastic decrease in consumer spending, which over time kind of hit the last nail in the coffin as so to say.
The fatal flaw I see with many of the talking heads on TV is the idea that the housing bubble caused the recession. The recession happened without the housing bubble and made it burst. The housing bubble made things worse and dug our financial industry in a hole. It should be up to the banking industry to cover their own backs and mitigate those risks, even if not for the sake quite frankly uneducated borrowers.
I think the ultimate problem was both borrowers and the lenders/banks expected wages to eventually start increasing... at least with the cost of living increases and expected the job market to be at least stable enough most people could find a job after 4 months of being out of work.
To me that is the risk that... both parties in those contracts didn't account for that risk enough.
This was compounded worse by the fact the bank's felt comfortable enough home values would keep increasing or stay stable, even when riskier mortgages fell under.
Quote:
Originally Posted by livinginbuffalo
I wonder what you all think about housing prices in S. Forsth/N. Fulton that are Golf communities. I do worry about the abundant amount of land still available in Forsyth county and feel people will keep moving north and that new construction will make the prices on existing homes come down even more. But I can't imagine that anyone will start building new golf courses with homes around them, do you think? I'd like to think that if we buy a house, one we can afford, in a golf community that is 5-10 years old that we will be ok in the long term. What are your opinions?
For the 'long-run' I wouldn't worry so much about the undeveloped land being nearby. Before the housing problems started those homes were built in an area where land was abundant. That means the cost of land was low and when people bought a house most of what they bought was the cost to build it (lets just say $100). Now lets say those houses are selling used for $80. Land was abundant before and after. The only thing the housing builders need is for the market values to recover to $100 for building homes of that size and detailing to be built again.
But for the 'short-run' that means there will be a longer period where a home re-sell will have to compete with potential new-build homes, which a) some people find more attractive b) those new homes can change with housing preference trends, while yours can't.
Once that land is built out... you will see values go up. (from the cost to build a similar house... not necessarily just from its current and likely lower current value)
The 3 things I would watch for....
- As people with upper incomes regain their financial footing earlier in the recovery... they might take advantage of decreased undeveloped land values to buy larger lots (than before) in undeveloped areas that are sought after.
-As the market recovers some builders will build several slightly cheaper homes (whether it is slightly smaller or slightly less detail) at the recovering market prices (say $90 instead of $100)... Short-run implication is you are around cheaper homes, even if by small amounts. Long-run implications might be good, because it might limit the development of more golf-course neighborhoods in your immediate area. That would make those properties more rare in the area 20 years out and/or when there is no undeveloped land nearby.
-Developments that were started, but never completed. Say the infrastructure and grading was already completed, but not the homes and the developer went under. Some of the value of that infrastructure is already lost and the bank might be encouraged to get what they can out of it and get it out of their hands. In that case houses considerably cheaper can begin to go in. The bank will want some value from the development already spent if they can't wait for the market to fully recover. That means temporarily you might see a subdivision selling at $400k when they previously advertised $650k and up (by means of a smaller house...not a loss in value).
-Part of me says if you are rich upper 1% (meaning total wealth on hand) and have the cash... this is a good time to buy undeveloped land and sit on for 5 to 10 years for things to settle down and the market to adjust to what it should be in the long-run. There is some evidence this is happening and there is an increase in cash-only land buyers in North Georgia... and in the foothills of the mountains.
-MrPanda
Be cautious here. I would agree with you that jpatlanta might not be giving enough credit to long-term growth potential of the northern suburban market. As Atlanta is rapidly growing we have too many people here with significant wealth than just Buckhead can handle. That is why we are seeing this type of growth northward. Remember in California the reason those beach communities have done so well and spread out is there is always that high premium to live on the beach. Atlanta doesn't have that. The closest premium we can ever get to draw wealth away from Buckhead is that river front, lake front, and golf course properties or ability to have a 10+ acre mini-estate
Outside that Buckhead will always have the area beat in
-Position: between buckhead business, cumberland, Perimeter Center, Midtown/Downtown and reverse commute to Alpharetta and Peachtree Corners. It is the best connected place in the city. If Atlanta were to ever have fewer really wealthy people... they will want to be in Buckhead with the exception of having a premium-feature property (river, lake, large acre, golf course, yada yada)
-Status. It is the old money of the new south (which in a way is growing old now ) For those of us that have been around a long time there will always be that status we associate with Buckhead
-unlike other cities' high value neighborhoods many of the properties in Buckhead are already fairly large estates and built on large lots. Just like further north Buckhead was built on large lots and land was plentiful when the area was first built. In the pre-car era these were the people who could afford a higher priced streetcar ride and they didn't have to bunch houses together for a street car to be feasible. These were the people who could have or pay for a horse or carriage ride to a streetcar or a commuter train station everyday (FYI: the current Amtrak Brookwood station was originally built as one of several small commuter stations for Atlanta's north side to get a quicker ride in town than the streetcars.)
-jpatlanta...
be careful in some respects that much of the new business growth, whether the in-towners like to acknowledge it or not is moving north along Ga 400 and I-85, Peachtree Corners, and in a mini-edge suburban office city at Medlock and McGinnis Ferry. The more this happens the more John's Creek will be perfectly positioned for -part- of the Atlanta high-pay office market. Many of those jobs are high paying intellectual jobs that need access to the region's businesses, the airport, the rail/road hub of the region, but don't need to be be clustered in-town to do well. Even with the recession, they haven't gone away and in many ways the high-pay part of the job base of the area is starting to grow again.
This is what makes the discussion of Orange County so significant. It might not be nearly as large as the rest of the LA metro, but it pulled out and attracted a big share of high-pay job growth.
Buckhead is probably more stable in that if a certain industry in Atlanta goes under other future industries will find the office space attractive if the rent decreases a little bit. However, areas surrounding John's Creek will be attract to new business growth as the cost of positioning themselves downtown + the cost of accessing a limited employee pool with a feasible connection to the city goes up. Many new businesses can operate fine without those added costs and in some cases many benefit from being able to choose exactly how their business operation is built. (as example many tech companies are attracted to the area where they can have a small campus... a nearby office building... a nearby data center.. a near by light R&D warehouse...etc.. Cisco Systems and their campus near Sugarloaf and GA316 is a great example of this.) They would be unable to build the type of functioning environment they see as ideal intown. Although this is still accessible in Perimeter Center at a land premum and could be drawn intown more with projects like the McPherson redevelopment that has the space to build to suit for research/tech development companies.
Sorry ya'll ... long post.. a little something for everyone.
Do you see the similarities like i do about Orange County and northern Atlanta? Many of the nice and newer subdivisions with great schools are not nearly as expensive as the older subdivision of LA, and yes, OC is much smaller than LA metro but has attracted top talent of people who want to escape LA. I don't know how you feel, but the 30 mile radius of Atlanta feels like a different place to me than 45 - 1 hour north of Atlanta. Almost like north Atlanta needs to be its own city of county. Perhaps that where the division of Fulton county will happen with Milton County (North Fulton) and Fulton County (Southern half of Fulton)
How do you explain why Milton home prices are in par with Buckhead home prices. Milton doesn't have nearly the city brand name like Buckhead does, but home prices are just as expensive as Buckhead.
There is a golf course community being built by Harcrest homes in Flowery Branch. The location is so far up north near the Lakes but the builders command prices of mid $500s for these golf course homes. That is why i think an airport in Gwinnett is needed. These guys would have to commute 1:30 min to get to Hartsfield airport, and the growth will continue in large numbers to the north. I also thought that as more north you go the land price gets cheaper, but i don't that is the case anymore. I mean look at the location of Milton (which sits north of Alpharetta), but as expensive as Buckhead.
Mr Panda how do you figure Milton is on par with Buckhead for house prices? By what measurement?
Last time I looked a 3 bed 1950's ranch in for example 30327 was worth about the same as a new 5 bed house in Milton or maybe a bit more. I would say the equal house is worth triple in Buckhead at least plus a buyer has to have the money to pay higher taxes etc.
Also no offense but someone must be certifiable to spend 500k on a new build in Flowery Branch unless they are never intending to sell, rub the veneer of a few new subdivisions off in that area and what are you left with.........
cwkimbro: I like what you wrote however have some comments:
as Atlanta gets larger and richer even more people will aspire and want to live in Buckhead and surrounding areas as the real rich always flock together, if anything the disparity between the top areas and others will grow even more in cost, believe it or not there are a lot of rich people in Atlanta who constantly complain about not enough culture/facilities etc and they are already in Buckhead, things like the super high hotels opening and SOB will reinforce Buckhead being the place for rich people in the south,
yeah sure some companies are located in N Fulton but look at the majority of high paying companies ( I mean 500k plus law firms etc) and their locations. Most all really high earners in Atlanta and old money live within 5 miles of Buckhead, new money (IT etc) buys Mcmansions in Alpharetta which can be consitently duplicated, its a different demographic and I think the former is less risky
also I think that everyone forgets that a sizable amount of wealthy people want old homes and not new ones, go to most major cities and older homes with character sell for a premium, I would imagine most truly wealthy people would choose a manison of West Paces over some tacky Mcmansion in Alpharetta, look at that disneyland mess on Old Alabama that took 8 years to sell as an indication of the resale values of some of these houses,
This may interest some of you taken from a comment on a recent advisors report in the metro:
A pillar of support for N Ga housing is the reluctance of banks to foreclose…If the banks foreclose on a property in an area and auction it off and take a hit on their valuation…then they are obliged to reduce their valuation of their entire loanbook in that area! . This would affect their liquidity ratios & put their solvency under stress again. Hence their reluctance to foreclose unless they are confident of recovering their loan. They have swathes of ‘lameduck’ lenders occupying properties where there are huge arrears but no recovery action is taken while they try and cajole some interest out of them! What happens when rates rise by even a fraction? With the GA economy contracting spawning job losses? How long can the banks hold out before these loans need to be written off? Not too long is my guess..This is not going to end well…
page 66 Buckhead median home price : $565,000
page 67 Milton median home price $548,250
I say that is pretty close jpatlanta.
This could be a comparison of apples to oranges. As cwkimbro pointed out, we need to understand what the "typical" Milton house and "typical" Buckhead house are like (sq. footage, acreage, # bedrooms, etc.) for this statistic to have relevance.
Housing (average home pricing) in Buckhead won't recover until the glut of condos is sold.
Clark Howard, via a Wall Street Journal piece from several months ago, said that the best solution might be to turn a few of the empty condo buildings into luxury apartments. It can turn out to be more profitable for developers. And most importantly, it takes all of those units off the market, reducing the condo supply and putting less downward pressure on prices for everyone else. This has happened with a couple of buildings in ATL already.
I do wish they'd do this with one of the condo towers in Atlantic Station as well. The Atlantic may be too large, though.
If the Buckhead average price includes condos, then few people would say we're comparing apples to apples. What's the average price of a freestanding single family home in Buckhead?
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) For those of us that have been around a long time there will always be that status we associate with Buckhead
