“Prices and volumes are down every month for Nov, Dec, and Jan. Here are dates, volumes, and prices from the Palo Alto Weekly for every sale in Atherton, East Palo Alto, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Redwood City, Stanford, and Woodside, as reported by California REsource, which gets info from the County Recorder’s Office:

PA Weekly of 06 Nov 2004 has 78 sales, median price $851,000
PA Weekly of 03 Dec 2004 has 63 sales, median price $750,000
PA Weekly of 28 Jan 2005 has 57 sales, median price $720,000

Palo Alto 2003 median price was reported in the Palo Alto Weekly of 6 Oct 2004 on page 15 as $1.07 million. Counting 89 sales at random throughout 2004, the Palo Alto median was $830,000 in 2004, a loss of 18%.”

Bay Area Housing Crash Continues

“SAN FRANCISCO (MarketWatch) — Dominion Homes Inc. (DHOM) said its fourth-quarter profit dropped 89 percent on slow sales. The company also said it does not expect to be profitable for the first quarter, although it expects to be profitable for fiscal 2005, but with lower net income than in recent years. Fourth-quarter earnings fell to $1 million, or 12 cents a share, from $9.6 million, or $1.19 a share, a year ago. Revenue for the Dublin, Ohio-based home building company was $115.5 million vs. $166.3 million a year earlier.”

Dominion Homes Q4 profit falls on slow sales

An excellent assessment of Social Security from Bill Gross of Pimco. “Rob Arnott of Research Affiliates LLC, sub-advisor of PIMCO’s all asset strategy and a co-collaborator with Peter Bernstein on several articles about risk and future asset returns, has advanced what I consider to be the most realistic take on Social Security and Medicare trust funds. Pre-funding these systems, he argues, “is basically irrelevant.” And (in my own words) it matters little whether the system is pre-refunded with Treasury bonds or privately held stocks. The fact is that both of these financial assets represent a call on future production. If that production could possibly be saved, like squirrels ferreting away nuts for a long winter, then Treasury IOUs or corporate stocks might make some sense. But they can’t. Future healthcare for boomer seniors can only be provided by today’s teenagers, twenty-somethings, and even the yet to be born. We cannot store their energy today for some future rainy day. Nor can we save food, transportation, or entertainment for anything more than a few years forward. Each must be provided by the existing generation of workers for those who have retired and are presumably incapable of working. And, as Chart I points out, the ratio of retirees to workers - the dependency ratio - soars from 0.2 retirees for every worker to 0.35 over the next 20 years or so. There’s your problem, and neither privatization nor any goodly number of government bonds deposited in the Social Security trust fund can solve it.”

Sizing Up Social Security

Unfortunately, Bill doesn’t mention the role of productivity improvement in alleviating the demographic problem by delivering more goods and services per worker. But to get better productivity we need investment, and to get investment we need savings.