Housing Market hitting bottom still!!!????????? (Chicago, Lincoln: short sale, real estate market, mortgages)

[ajolotl]

Originally Posted by Gioobag

Computer science? The last hurrah in that field was Y2K, and since then it's been outsourcing, H1-b visa scams, and importing cheap foreign labor driving down wages. You must hire the best of the best, because the "middle-class" and middle-age IT professional no longer can raise a family with 4 kids anymore, those jobs are GONE and the wages fallen.

There was never a better time for technology than 1999, it's misleading to suggest it's better today for anyone in that business. Intel, Cisco, MSFT all those stocks have been flat for a decade now. Microsoft just laid off 5,000 employees (first time) and Gates is still whining that we "need foreign talent" here. It's a crock, that traitor just wants cheaper employees (H1-b).

At the same time Google and Apple developers and designers are doing extremely well. Things are always shifting. Of course the bubble heyday of average inexperienced "programmers" making 100K a year doing web developing or fixing Cobol code are gone for good. But a skilled software engineer with domain-specific knowledge isn't someone you can outsource to India and they are the bread and butter of a lot of amazing software companies (an area in which the US is still totally dominant, recession or not). These people demand high incomes.

[BRU67]

Originally Posted by Lookout Kid

One interesting effect where I live (Buena Park, or southern Uptown) is that there are a LOT more young kids around than even a few years ago. On a typical walk to the playground I will often see up to ten strollers being pushed around. Young couples stuck in condos are still moving forward with their lives, and are making it work with less space in neighborhoods they would have abandoned a few short years ago. In some ways it has been a blessing, since these normally transient years have actually been stable in terms of friendships and community. We have a large community of friends with kids in the city, and we are learning the value of creative storage solutions and sleeping arrangements (especially with house guests).

My wife and I pretty much decided that our “starter” home is now going to be our long term home. Yup, we’ll be flying in the face of history by staying in “way station” Berwyn (as the Trib recently called it) instead of using it as a launching pad to our little slice of heaven in the middle of the Back 40. That will have to wait until, oh, forever.

By refurbishing the upstairs and basement, we’ve squeezed about 3,000 square feet of living space plus some creative storage areas out of a Chicago bungalow. If I’m ever inclined to complain, I just need to remember that the family which lived here during the 50 year period prior to us raised two kids, took care of grandmother, and rented out the basement. And from some of these posts it sounds like their house was empty compared to some others!

Amazing how the rampant consumer culture of the past 20-30 years changed the perception of how much house we need. Heck, 5 years ago, if you had less than 6,000 square feet for a family of 3, you were in a tool shed, and absolutely needed – not wanted, needed! -- a bigger house. That way of thinking though, is starting to fall by the way side in the younger generations.

[mh7]

Originally Posted by ajolotl

At the same time Google and Apple developers and designers are doing extremely well. Things are always shifting. Of course the bubble heyday of average inexperienced "programmers" making 100K a year doing web developing or fixing Cobol code are gone for good. But a skilled software engineer with domain-specific knowledge isn't someone you can outsource to India and they are the bread and butter of a lot of amazing software companies (an area in which the US is still totally dominant, recession or not). These people demand high incomes.

Agree 100%. Just because the clowns with english degrees & computer programming certificates from some depaul night class is no longer making 6 figures does not mean there aren't competent technology people making good money.

[Humboldt1]

I may not agree with all the points made by the other posters, but the market as a whole has not performed well over the past 10 years. You would have been better off sticking your money in a CD.

I assume you work in the computer industry by the way you defend those who work in the industry but it is not 1999.

In 1999, I was finishing up my economics degree at Purdue after studying at Washington University, St. Louis (not some night school degrees) and I remember going to the job fairs at Purdue where the computer science and tech guys (often not shaven) would show up in jeans and t-shirts and get jobs over the guys from the Business School (Krannert at Purdue), who were dressed in suits. In 2002 (after I was working), I went back for a job fair and found these same computer science guys were now wearing suits and looked just like the business school people competing for jobs.

A good buddy of mine secured a computer programming job in 1998 paying $95K per year to administer a company website and I don't even think he owned a suit.

I have a friend with one of those "night school degrees" from Devry in Computer Programming who makes about $65K per year doing programming and she has 10 years of industry experience. She used to make $40K per year doing programming without a degree until 3 years ago at another employer. I don't think there is much upside for her as a programmer unless she gets into management.

My brother has a degree in industrial management and MIS and used to make $75K per year as a manager at IT firm before going to get his MBA full-time. I doubt he will seek to go back to this industry after that as investment banking is far more lucrative for him.

There are certainly still high-paid tech jobs, but it is not like it once was and never will be again.

The 16 percent unemployment Gioobag quotes is the actual unemployment not the reported 9.5%, which includes underemployed. I believe the 9.5% is still the number we should be working off of. I fully expect the 9.5% to increase to 10.5-11.0% in the next year. The economy has yet to bottom, though many are forecasting that it may bottom before the end of 2009. Let's hope so.

Gioobag,

I disagree with some of your points, but you are right that real estate prices may decline further and approach late 1990s values, especially when you take into account inflation.

[ajolotl]

I'm personally not in the industry but depend on it to some extent. There was an unsustainable period of absurdity. Because that has passed one can not conclude that it is a moribund discipline. The core of IT has continued to grow steadily. I agree history majors making 95K out of college isn't likely to happen again. If you are a serious developer from Stanford, MIT, Carnegie Mellon, whatever you are a hot commodity. These people have their choice of jobs and they are very well paid. I have competed for them and lost time and time again.

[Lookout Kid]

Originally Posted by Gioobag

It seems to me that the average person/family in the USA today has LESS WEALTH than they did in 1999 at the height of the dot.com era. Incomes are down too as compared to 10 years ago.

My interpretation of this is that a 35-year-old of ten years ago has less wealth today as a 45-year-old--and that's simply not the case.

Anyway, the entire premise is just silly since incomes HAVE increased in the last ten years--they just haven't kept up with inflation. So if you're going to state this is a reason that housing should fall to 1998 levels, you need to adjust those 1998 prices for inflation.

[Humboldt1]

I disagree with his reasoning, but don't believe it is not possible for home prices to fall back to 1998-1999 levels. They are already at 2002 levels and still declining.

He is talking about mean now (31 years old) and someone who is 41 now, who was 31 10 years ago. I would argue that average 31 year old now is not worse off than average 41 year old was 10 years ago.

[Lookout Kid]

Originally Posted by Humboldt1

I disagree with his reasoning, but don't believe it is not possible for home prices to fall back to 1998-1999 levels. They are already at 2002 levels and still declining.

He is talking about mean now (31 years old) and someone who is 41 now, who was 31 10 years ago. I would argue that average 31 year old now is not worse off than average 41 year old was 10 years ago.

The language used by Goobag says that the average family "has less wealth than they (emphasis mine) did ten years ago". His grammar reads that he is talking about the same family because of the use of the word "they".

[Humboldt1]

Well,

Using your interpretation I disagree with him. The average 30 year old 10 years ago is better now as a 40 year old. This is kind of unfair for me because of course I am better off now than I was as an undergraduate without a full-time job. I have had years of earnings to build my net worth.

Using my interpretation, I would say that the average 30 year ten years ago is about the same as the average 30 year old now.

Regardless, I believe home prices will continue to decline (which sucks for me as I already own 2, though it should help me buy my next place for less in the next year or so).

I see us getting down to 2000 values before all is said and done in Chicago. Remember, up to 2002-2003, values in Chicago were relatively stable, so only a minor decrease in present home prices gets us back to 2000 values as we are already at 2002 values.

[cohdane]

I don't think the housing market depends entirely on how wealthy the 35-year-olds are. The baby boomers just saw their retirement money get chopped in half. Their knees are going bad so the "soaring foyer" is not their friend anymore. The nest is empty and they don't want to take care of the big house anymore. Maybe they even got laid off "because of the economy" (aka because they were senior employees making tons more money than the juniors who could do the same work a lot cheaper).

How many homes are being listed or in the wings waiting to list? How many qualified buyers are there? There's the rub.