Author: Aaron Weber

A quick summary of the Economist’s arguments about real estate pricing:

People say prices are stable because supply is static. That’s not true:

• New buildings are constructed, and old buildings retrofitted for new uses.
• The rate of increase in supply lags behind demand. If the need for offices drops off suddenly, the supply will still be increasing, since it takes so long for buildings to get built. This can cause excess supply.
• The increasingly precarious financial situations of many families means that foreclosures could cause a glut of available properties.
• Increasing numbers of non-resident owners means that properties are more likely to be sold in a tough economic period (owner-occupiers are more likely to try to stay put), which again could lead to excess supply.

People say prices are stable because there is an inherent value in property that does not exist in stocks or other securities. However, the price of property does not necessarily reflect its inherent value: it reflects what people are willing to pay for it. Real estate speculation can and does distort the market. One measure of distortion is that property purchase prices have been rising faster than rents; this cannot continue any more than spending can outpace income for very long.

People say that prices are stable because interest rates are low. However, low inflation means that these interest rates aren’t really all that good: borrowing at a higher interest rate, but during a period of higher inflation, is equivalent or better. This involves calculating the difference between the nominal and real interest rate, based on the eroding burden of your debt just due to inflation.

Examples or warnings: Boston suffered a significant drop in pricing in the late 1980s and early 1990s. Office rental prices are 50% of what they were a year ago in Boston. San Francisco prices have dropped significantly since 2000 as well. Hong Kong real estate prices are off 60% from their peak a few years ago, and Japan’s are severely anemic as well.

So there. Not like it matters, since I, and most my cohort, are not in much of a position to buy property, nor are we responsible enough to own and maintain it properly.

The Fool thinks that prices are slowing, but we won’t have a sharp decline. The Economist says it’s a bubble and it’s going to pop. Sell! Sell! Sell!

I’m up above the 160 pound mark now, which is pretty exciting, although I’m still recovering from a cold so we’ll see how that affects things. I am increasingly tempted to try to count my calories and protein intake, just to see what’s happening.

A lot of the information on men and eating disorders is pretty old– 1999-2001, mostly. I think it was one of those media frenzies that didn’t quite catch on. I mean, I’d at least expect a Livejournal community centered on it, given the number of pro-anorexia groups. Oh, there’s a few: a whole Hydroxycut interest group, for example, and the odd suspiciously self-aware workout journal though. But even the weightlifting groups are populated nearly exclusively by women. I wonder if it’s a LiveJournal thing, or a distribution of illness thing, or labeling, or what.

Say it with me folks. Church, State. Not the same thing at all. Keep them distinct. Mixing them is harmful to both. I see an article like the one yesterday about the Catholic Church’s opposition to gay marriage and I think, well, of course they oppose it, but that’s all the more reason to allow it! Think about it: they oppose gay marriage because their religion opposes gay marriage. There isn’t a civil or secular rationale that would oppose it at all.

Time to write more strongly-worded letters to my government officials.