A few anecdotal-ish observations about the economy

[gerryb1]

See post above. Landlords watch rental prices of other properties and adjust theirs accordingly. Other rental properties may still be taken but at a higher price. It's a rental market right now, not a buying market.

Yes, and when people who used to demand 3 units now only utilize 1... the demand for housing units goes down, there are now 2 vacant units that drive the price down.

Oh that's right, there's no inflation in Jordan's world. What's funny is the dog food I buy doesn't have rice, wheat, soy or corn in it.

You feed your dog dirt?

[ronpaulfollower999]

2. Student "loans" are being used to finance lifestyles of young people without careers to eventually pay for the loans. When I went to college, loans and grants were paid directly to the school. Now, the students get the checks and spend them on a lot of things other than school. Is this a backdoor stimulus?

Discuss.

Somewhat. I earned a scholarship from the state of Florida. I probably only spend 40% of the check I get each semester on books. The rest goes to silver and gold.

[oyarde]

Somewhat. I earned a scholarship from the state of Florida. I probably only spend 40% of the check I get each semester on books. The rest goes to silver and gold.

LOL, LOL

[devil21]

Yes, and when people who used to demand 3 units now only utilize 1... the demand for housing units goes down, there are now 2 vacant units that drive the price down.

Not if those other two are being taken by families that left foreclosured houses. You don't think the shadow inventory of empty foreclosed houses figures into these numbers? There's less actual properties available! You would be right if the housing sales market is strong, but it's not.

You feed your dog dirt?

She is fed grain free (aka filler free) products like Eukanuba Naturally Wild - Venison and Sweet Potato recipe. No corn, no wheat, etc.

Somewhat. I earned a scholarship from the state of Florida. I probably only spend 40% of the check I get each semester on books. The rest goes to silver and gold.

That's better than spending it on beer and the other crap Im seeing these loans and grants being spent on.

[Jordan]

Landlords don't have much pricing power? What are you smoking? They set their prices! I did mention that property taxes are rising so this is also pushing up prices. In my area, ymmv, I can tell you for a fact that rental prices are up because of taxes and the multiple roommate arrangements on the rise. With the large amount of empty foreclosed houses (shadow inventory or not), people have to move SOMEWHERE to live. It's a simple reallocation of resources (malinvestment in a way) and it affects those of us that rent and live on our own when other people start pooling resources, thus being able to afford more collectively.

It's interesting that you mention the older large homes coming onto the market. Ive observed a move toward turning these sorts of houses into "apartments" instead of keeping them single family homes. The amount of rent one of those properties can bring in isn't ignored by neighboring landlords and to "keep up", prices rise for the other properties in the vicinity.



Maybe. There's a ton of search hits for things like "student loans for living expenses". Loans designed and marketed to pay for living expenses as a student. This is such a bad idea for so many reasons but it's being taken advantage of.

http://www.studentloanconsolidation....-expenses.html

http://www.ehow.com/how_5325719_appl...dent-loan.html

http://www.loan.com/student-loans/ho...-expenses.html

http://www.ehow.com/list_5949218_gov...ng-school.html



It's possible the people I spoke to didn't understand the exact process under which they receive the money but that's neither here nor there. Loans and grants are being used for student living expenses, not school itself, and that's backdoor stimulus/welfare. No wonder the school loan bubble is past a trillion dollars now.



This is occuring regardless of manufacturer or food content. High quality food, low quality food, whatever. The dog food example was just an example of something that I noticed in particular, hence "anecdotal-ish". It wasn't a linchpin for my observation that banks are starting to lend again and inflation is taking hold.

If you think landlords have pricing power, then you have a very poor understanding of even basic microeconomics. Houses are very much a commodity. There isn't much one can do to differentiate a one house from another if they're in the same area - they were probably built by the same builder at the same time with the same materials and contain all the same fixtures. To suggest landlords have pricing power is asinine.

Student loan money can be used for living expenses. Always could be. That's why schools have an estimated cost of attendance which includes the cost of transportation and a place to live, among other costs.

[devil21]

If you think landlords have pricing power, then you have a very poor understanding of even basic microeconomics. Houses are very much a commodity. There isn't much one can do to differentiate a one house from another if they're in the same area - they were probably built by the same builder at the same time with the same materials and contain all the same fixtures. To suggest landlords have pricing power is asinine.

Hogwash. That's like saying two Chevy Tahoes have the same value because they're off the same assembly lines, regardless of the amenities the manufacturer or dealer adds or the upgrades made by owner over the years or the amount of maintenance each has received. I don't know where you live but houses here are not all the same. Maybe when they were built in the 50's they were all the same but not anymore. Some are heavily upgraded, others are nearly as they were when they were built. Where -do- you live Jordan? Location bias probably has an impact, hence the anecdotal nature of my observations.

Student loan money can be used for living expenses. Always could be. That's why schools have an estimated cost of attendance which includes the cost of transportation and a place to live, among other costs.

Glad Im paying for that through grants. Backdoor stimulus on my dime.

[gerryb1]

Not if those other two are being taken by families that left foreclosured houses. You don't think the shadow inventory of empty foreclosed houses figures into these numbers? There's less actual properties available! You would be right if the housing sales market is strong, but it's not.

So then why didn't you go about explaining the distortion the shadow inventory is causing?

The fact remains, the folks rooming together taking up less units then they previously or otherwise would, are driving down the cost of rents and property values, not making them more expensive.

[MelissaWV]

Hmm...not sure I follow your logic here. I should have mentioned that Im talking about houses, not apartment situations.

If a property owner/landlord sees that more people are living together to split costs, they start to ask for higher rental rates across the board. To the landlord, they can attract multiple renters and charge more than a single family would otherwise be able to afford. Im having a hard time explaining my thought clearly.

In my area, there are a lot of young people with service industry jobs that don't pay a lot. When they start flocking together to rent a house (because they can't afford an apartment on their own or the apartments are full already from people that moved out of foreclosed houses), their collective ability to pay more total rent per month pushes prices on rental houses up for everyone else. Hope that makes sense.

The split-up houses go at a higher rate than the rent-a-whole-house, and have for years. I paid $850, I think, as the rent on my house a few years ago (it may have been less; at this point my memory is fuzzy). The people across the street rented by the room, so there were four of them and the TOTAL they were paying was DOUBLE what I was paying to rent the entire house for myself. The individuals thought they were getting a great deal, of course, but the landlord was charging a huge markup.

Now, why doesn't everyone do that?

Well, your premise hinges on a few different factors. Let's round the numbers for the sake of argument, even though it will render them unrealistic. Let's say I was renting at $500/month for the whole house. The people across the street each pay $250/month for a total of $1000/month.

In your scenario, my landlord should have seen that an almost carbon copy of the house I am renting is renting for $1000/month, and been able to charge me that much. No dice. I would not pay that much, and there are oodles of apartments and houses that rent in the $500 range. Any variation beyond, say, a $100 increase is going to send me packing. My landlord can still set the rent, but they are locked in for the life of my contract. Once they give me notice that they are going to price a house at $1000/month rent, they are either going to attract roommates like my neighbors, or they are going to have an empty house... one that they will still have to maintain, in addition to paying to advertise the fact it is for rent unless they just leave it to languish on Craigslist.

In the meantime, in theory, my neighbors' landlord is raking in the dough. Not really. It was amusing to go visit them the first time and see the amount of damage that four college kids and their various pets could cause. Suffice to say that they were never, ever, getting a cent of their security deposit back. The landlord was going to have a losing battle suing them for the damage caused. The property, which once those four graduated or otherwise vacated was going to have to be rerented, needed a LOT of care and repair. There goes most of the "profit" we were discussing earlier, and then some.

In other words, there are a lot more factors at play here other than pure price.

[oyarde]

Four school kids with pets? , probably paint, carpet , at least, in a years time.

[MelissaWV]

Four school kids with pets? , probably paint, carpet , at least, in a years time.

Don't forget the mystery smoke, the mold, the holes in the walls...