I told you this isn't rocket science (fight rising rent with more construction) (San Jose: homes, to buy)

[rodentraiser]

Originally Posted by HappyinCali

LOL! You people say the darndest things! How do you come up with this nonsense? 100 miles! How many households who make $200k commute 100 miles daily? Yeah, all these wealthy commuters from Madera to Cupertino every day are going to bring the next crash! That’s so logical and obvious!

Are you expressing disbelief that people don't commute 100 miles or more daily? Because they do - I've known plenty of them, most of whom finally quit because of the commute. High earners commuting? If they're smart, you bet your life they are. With the dotcom bust still in everyone's head, I think a lot of people are making the money and socking it away right now. Not as many as should be, but a lot of them.

I'm also saying there are only so many people around who make $200,000/year or more. When those people run out, what are businesses going to do?

There are legions of businesses that make a living catering to only people with high incomes. But a lot of them have found out that the supply of high income people isn't infinite. The banks found that out in 2008 with the housing market.

Which would you rather be, a refrigerator salesman who sells 10 $1000 fridges or 2 $4000 fridges? Pick the second thinking you'll always have someone to sell that third fridge to and eventually you're a salesman who's trying to sell $5000 fridges to people who don't exist, because the only people in town who can afford one already have one. And that's exactly what's going on right now.

As for the next crash, the town I live in is pretty well supported by the money the commuters bring in when they work in Seattle and spend their pay here. Those people who commute to work don't grocery shop in Seattle and they don't buy their cars there and they don't travel over there when they want to go to Home Depot. They do all that here. And the only reason a lot of them own houses and buy cars and shop at Home Depot here is because they can afford to do so, since their pay is based on the work they do in Seattle. Those are the people that bring in over $100,000 a year.

What do you think happens to the businesses here if all of a sudden this town is filled with people who only make $40,000/yr or less? What happens to the grocery stores and the restaurants and other businesses when people can't afford to spend money at those businesses anymore?

Then look at cities like Aspen and San Francisco. What happens when service people can't afford to live in a city of high income residents? You go into a store and wait a half hour in line because the store can't attract anyone to work at minimum wage. Or you wait an hour or more in a restaurant to have your order taken because your server is helping 10 tables instead of 5 or 6. The restaurant can't find anyone who wants to work for such low wages. In a city of high earners who can give their kids anything, why would any teenager work a job when what he makes in a month is less than the allowance his parents give him every week?

Tell me this doesn't directly affect you if you live in that city.

[HappyinCali]

Originally Posted by rodentraiser

Are you expressing disbelief that people don't commute 100 miles or more daily? Because they do - I've known plenty of them, most of whom finally quit because of the commute. High earners commuting? If they're smart, you bet your life they are. With the dotcom bust still in everyone's head, I think a lot of people are making the money and socking it away right now. Not as many as should be, but a lot of them.

I'm also saying there are only so many people around who make $200,000/year or more. When those people run out, what are businesses going to do?

There are legions of businesses that make a living catering to only people with high incomes. But a lot of them have found out that the supply of high income people isn't infinite. The banks found that out in 2008 with the housing market.

Which would you rather be, a refrigerator salesman who sells 10 $1000 fridges or 2 $4000 fridges? Pick the second thinking you'll always have someone to sell that third fridge to and eventually you're a salesman who's trying to sell $5000 fridges to people who don't exist, because the only people in town who can afford one already have one. And that's exactly what's going on right now.

As for the next crash, the town I live in is pretty well supported by the money the commuters bring in when they work in Seattle and spend their pay here. Those people who commute to work don't grocery shop in Seattle and they don't buy their cars there and they don't travel over there when they want to go to Home Depot. They do all that here. And the only reason a lot of them own houses and buy cars and shop at Home Depot here is because they can afford to do so, since their pay is based on the work they do in Seattle. Those are the people that bring in over $100,000 a year.

What do you think happens to the businesses here if all of a sudden this town is filled with people who only make $40,000/yr or less? What happens to the grocery stores and the restaurants and other businesses when people can't afford to spend money at those businesses anymore?

Then look at cities like Aspen and San Francisco. What happens when service people can't afford to live in a city of high income residents? You go into a store and wait a half hour in line because the store can't attract anyone to work at minimum wage. Or you wait an hour or more in a restaurant to have your order taken because your server is helping 10 tables instead of 5 or 6. The restaurant can't find anyone who wants to work for such low wages. In a city of high earners who can give their kids anything, why would any teenager work a job when what he makes in a month is less than the allowance his parents give him every week?

Tell me this doesn't directly affect you if you live in that city.

You are posting anecdotes and hypotheticals. I posted facts. The average commute time in the Bay Area is 30 mins. When looking at car only, the Bay Area has the third shortest commute time among major US metro areas. These are facts.

[bmw335xi]

Originally Posted by Nightmare Paint

OP you're a genius maybe you should apply to be part of SF's urban planning I mean, you're so smart man!!! You're the only person in the world that has thought of this!!!

Nope, there are too many idiots who would never vote for someone like me because I don't have a complicated expensive tax wasting 107.5 point plan. However, I do agree with you, I was born with an amazing brain

[TheGreatCurve]

Originally Posted by 2sleepy

What is the "car loan bubble"? As far as I know car loans are fixed rate, so there is no "bubble" that would the interest rate or payment terms on existing car loans

A "bubble" has nothing to do with fixed nor variable rates. It has to do with giving too many people loans, many of which can't really afford them and will thus eventually default on those loans, which is when the bubble bursts.

This is why we had a housing bubble, and now have both a student loan bubble and a car loan bubble. And when loan bubbles burst, credit dries up.

Why The Auto Loan Bubble Matters

https://mises.org/library/auto-loan-bubble-ready-pop

[Ultrarunner]

I've never had any loan other than mortgage debt... the family I in which I was raised is debt adverse... my grandparents made the Great Depression very real to a young kid...

The day my credit card arrived in the mail you would have thought I had just committed financial suicide... grams couldn't say enough how thoroughly she disapproved... and let others know it too.

I had to promise then and there to never carry a balance...

Last year Mom needed to replace her stolen car... the dealer had a problem because we were not financing the car... said it is almost unheard of and they had special rates... didn't matter... Mom was not going to be in debt and that was that.

[bodyforlife99]

Originally Posted by Perma Bear

Even adjusted for inflation it's still something like 100g.

The people living in 1923 were also part of the born at the right time lottery and got spectacular prices on real estate. Maybe you should invent a time machine.

[Perma Bear]

Originally Posted by bodyforlife99

The people living in 1923 were also part of the born at the right time lottery and got spectacular prices on real estate. Maybe you should invent a time machine.

You just ignored my inflation comment

[bodyforlife99]

Originally Posted by Perma Bear

You just ignored my inflation comment

Nah, I just gave you a better example for your cherry picking



You do a great job of ignoring logic.

[Perma Bear]

Originally Posted by bodyforlife99

Nah, I just gave you a better example for your cherry picking



You do a great job of ignoring logic.

You're proving my point that the later you're born the less opportunity you have

[rodentraiser]

Originally Posted by HappyinCali

You are posting anecdotes and hypotheticals. I posted facts. The average commute time in the Bay Area is 30 mins. When looking at car only, the Bay Area has the third shortest commute time among major US metro areas. These are facts.

Seriously? Someone can commute down 280 or 101 at 5pm from Cupertino to South San Jose in 30 minutes? What are they driving? A flying car? Or did they add 40 more lanes since I left?