A Cautionary Housing Tale from Japan

I wouldn't even consider buying in this market.

Add to that the uncertainty of being able to keep ownership of your home (due to Kelo v. New London), and only a fool would consider it...

the ionfowarrior

A younger sister of mine ran into financial problems (she and her husband lost their jobs), so they put their house up for sale last December (SF Bay Area). I told her it was overpriced at $759K, that market prices were on the decline, and they should price at $719 or lower. She said she actually wanted $779 but gave in to her agents advice.

As her savings dwindled over the next few months I repeatedly advised her to drop the price. She and her husband were stubborn. All offers were far below what they wanted. A couple more months went by, and me and another sister lent them money to help them get by. She then told me to lay off telling her to drop the price. Okay then, no more help from me.

Over the last few months, they finally re-listed at lower prices, several times. They're currently listing at $719K with no offers, and the bank is probably going to foreclose on them. They've tapped out much of the equity, have no money, no more credit, are behind 4 or 5 payments and may soon be homeless. I suspect there are a lot of stubborn (and sad to say, stupid) people in this situation.

Forgive me for being nosy, but in all this time they still don't have jobs?

ping

Ah, yes. The good ole bubble years in late 1980s Japan, when I also arrived (to live, not just visit) in April '87 with BA in pocket.

Japan * ping * (kono risuto ni hairitai ka detai wo shirasete kudasai : let me know if you want on or off this list)

Japan has gone through banking gridlock since their 1990 stock market crash. (Banks didn't write off their bad loans, and therefore couldn't make new loans.) That hasn't happened here and is unlikely to.

For what it is worth, Japan's banking system is out of "gridlock". Non-performing loans have dropped, originations are increasing, and bank reserves are moving to more normal level.

thanks, for the ping. :)

Thanks mostly to the outgoing Prime Minister. GM should hire him.

Japan is facing a demographic time bomb because of their low birth rate. Since there are no immigrants, there are far fewer buyers to buy houses as time goes by. The opposite is true in the U.S., where uncontrolled immigration and a replacement birth rate is behind the strong demand for housing.

Thanks mostly to the outgoing Prime Minister. GM should hire him.

Yes, Japan has been very lucky to have had a Prime Minister the caliber of P.M. Koizumi.

I hope the next P.M. is as successful. From what I have read of what Mr. Abe wants to do, it sounds like he has an excellent program.

Having two successful Prime Ministers in a row would truly be great luck.

I've read that Koizumi forced Japanese banks to face up to their old debts and broke up the strange postal service savings regime.
How did the Japanese post office get into the bank business ? Was this before the war or a post war development ?

. . . uncontrolled immigration and a replacement birth rate is behind the strong demand for housing.

I have family in both Southern California and the Houston area and can show you what uncontrolled immigration and strong demand for housing does to more than a few neighborhoods.

Three families or 18 single men more into a house designed for one family. Formerly nice neighborhoods turn into third world slums. Real estate values plummet.

When we were married, my wife's parents lived in a nice but smallish house in a neat neighborhood 30 miles east of LA. They sold out in the mid-1990's and bought a house and lot at least double the size 30 miles further east with the proceeds of the sale. Until they retired three years later, they drove 60 miles to work one way! They were up at 4:30 a.m. and on the road by 5:15 a.m. to beat traffic. They got home about 7 in the evening for a quick supper and early trip to bed to start the same routine the next day.

My wife wanted to see the old neighborhood when we were there about five years ago. The old neighborhood was already starting to turn into a slum. She's had no desire to go back since.

" Ah, yes. The good ole bubble years in late 1980s Japan, when I also arrived (to live, not just visit) in April '87 with BA in pocket. "

same story , but I beat you by two years !

How did the Japanese post office get into the bank business ? Was this before the war or a post war development ?

Apparently it has been in the business for a long time --- here's a history that I found at the yu-cho website:

15. History of the Postal Savings Services

1875
January
Postal money order service established
May
Postal Savings Services established (deposit ceiling: JPY 500)

1880
January
International postal money order service started

1881
January
Deposit ceiling abolished

1885
October
Telegraphic Money Order and Postal Order services started

1891
January
Deposit ceiling restored (JPY 500)

1906
March
Postal giro service established

1908
February
JPY 100 million Postal Savings balance reached

1910
April
Annuity and pension payment service started

1915
March
National Treasury Fund receipt and payment service started

1919
July
Government bond subscription service started

1923
September
Emergency Postal Savings payment implemented following the Great Kanto Earthquake

1931
April
International postal giro service started

1937
December
Telegraphic Transfer service started

1941
October
Teigaku Savings established
December
Collection Savings (two-year) established

1942
May
JPY 10 billion Postal Savings balance reached

1948
July
Government bond subscription service abolished

1949
June
Postal agency system started
September
JPY 100 billion Postal Savings balance reached

1951
April
Postal Savings Special Account system established

1956
July
Summary payment system established

1958
July
Telegraphic money order home payment service started

1960
June
JPY 1 trillion Postal Savings balance reached

1961
July
Postal order system established
September
Mutual relief annuity payment service started
October
Time Savings (one-year) established

1962
March
Child support allowance payment service started

1963
April
Postal Savings Women's Monitoring system started

1964
November
Welfare pension payment service started

1971
August
National pension payment service started

1972
January
Housing Collection Savings started
June
JPY 10 trillion Postal Savings balance reached

1973
January
Depositor Loan system established (loan ceiling: JPY 100,000; loan period: six months)
December
Deposit ceiling raised from JPY 1.5 million

1976
January
Teigaku Savings for Wage Earner's Property Accumulation started

1978
April
Six-month Time Savings started
July
Education Savings started
August
On-line Postal Savings Service started

1979
December
JPY 50 trillion Postal Savings balance reached

1980
February
Postal Savings cash dispenser service started

March
Payroll transfer service started

1981
March
Postal Savings automated teller machine (ATM) service started
June
Integrated Account Passbook (Collateralized Teigaku Savings) service started
October
Telegraphic transfer payment at post offices started
On-line postal money order service started

1982
April
Teigaku Infancy Savings started
June
Automatic debit transfer service started
October
Teigaku Annuity Savings for Wage Earner's Property Accumulation started

1983
July
Automatic receipt service started

1984
March
Completion of nationwide on-line Postal Savings network
July
Joint card service introduced
October
Automatic Teigaku Savings started

1985
December
JPY 100 trillion Postal Savings balance reached

1986
August
ATM and cash dispenser services on Saturdays started
October
International Joint Card service started

1987
March
Collection Savings (one and three- year) started
June
Autonomous investment of Postal Savings Funds started

1988
April
Tax exemption on interest for Postal Savings changed to a tax exemption on interest for the elderly and others
Deposit ceiling raised from JPY 3 million to JPY 5 million
Teigaku Housing Savings for Wage Earner's Property Accumulation started
Government bond subscription service started
Government Bond Teigaku Savings started
November
Telegraphic home cash payment service started

1989
June
Money Market Certificate (MMC) started
August
Charges deregulated and charges for postal money orders and postal giro simplified
New Integrated Account Passbook service started
September
Government Bond Endowment Insurance (My Set) started
November
Postal Giro Home Service started

1990
January
Deposit ceiling raised from JPY 5 million to JPY 7 million

1991
January
Postal Savings for International Voluntary Aid started
April
Postal Savings Holiday Service started
September
Education Savings were improved and renamed Education Collection Savings
October
Foreign currency exchange and traveler's check service started
November
Ceiling raised from JPY 7 million to JPY 10 million
Deregulated interest rate type time deposit (New Time Savings) started (deposit of more than JPY 3 million)

1992
January
Change in interest calculation for Time Savings (from monthly to daily basis)
March
Postal giro ordinary inpayment with automated payment machine (APM) started
June
New Ordinary Savings started
Collection Savings, Housing Collection Savings, and Education Collection
Savings interest linked to market rates

1993
March
Telegraphic inpayment on designated date started
April
Automatic Time Savings started
May
Payroll transfer service for national public servants started
Government Bond Time Savings started
Ordinary inpayment and telegraphic transfer using cash card and APM started
Handling charge exemption expanded for the remittance of donations to projects aimed at promoting welfare in foreign regions
June
Complete deregulation of interest rate for Time Savings and Teigaku Savings (MMC abolished)
Time Savings (one-month) started
October
Improvement in product features for New Ordinary Savings (minimum balance reduced from JPY 400,000 to JPY 300,000 and from JPY 200,000 to JPY 100,000) and Swing Service with Ordinary Savings started
Savings consulting service started

1994
January
Tax exemption on interest for savings by senior citizens raised from JPY 3 million to JPY 3.5 million
Deposit (tax exemption) ceiling for Teigaku Savings/Teigaku Housing Savings for Wage Earner's Property Accumulation raised from JPY 5 million to JPY 5.5 million
Deposit (tax exemption) ceiling for Teigaku Annuity Savings for Wage Earner's Property Accumulation raised from JPY 3.5 million to JPY 3.85 million
July
Remittance to payee's account service using the Eurogiro System started
October
Ordinary Savings deregulation of interest rate (including New Ordinary Savings)
Deregulation of interest rate for Collection Savings, Housing Collection Savings, and Education Collection Savings
Time Savings (four-year) started

1995
April
Cancellation of rights system revised
Loan extension started (one-time extension only)
December
Service hours extended for postal savings ATMs (weekday services for ATMs in 180 locations nationwide from 8:00 a.m. to 9:00 p.m.)

1996
January
National tax payment from postal savings account and tax return payment by transfer to Ordinary Savings account started
Counter telegraphic cash payment started
March
Remittance to payee's address service using the Eurogiro System started
May
Automatic debit transfer for radio wave usage fees started
September
Nursing Care Time Savings started
Disaster Voluntary aid account established

1997
March
International Remittance Card service started
April
Donation component choices on Postal Savings for International Voluntary Aid expanded from flat 20%, to 20%-100% in 10% increments
May
Revision of charges for postal money orders and postal giros with a revision of the consumption tax rate
Teigaku Infancy Savings abolished
International telegraphic transfer with Pa-lu-lu (integrated passbook with fund remittance capabilities) started
Regular transfer Teigaku Savings started
November
Receipt notice with telegraphic in-payment and transfer data transmission started

1998
January
Education Collection Savings deposit ceiling raised from JPY 1.5 million to JPY 2 million
April
Growth in the range of international remittance service and identity confirmation in accordance with the revision to the Foreign Exchange Law
May
Giro account receipt notice service via fax started
Telegraphic inpayment and telegraphic cash payment messaging service started
Maturity Lump-Sum Transfer Time Savings started
Exemption in donation transfer charges expanded
Postal giro handling charge collection for public service payments improved
June
Ceiling per outpayment note or advice of outpayment
increased (from JPY 5 million to JPY 15 million for outpayment note and JPY 100,000 to JPY 300,000 for advice of outpayment)
October
Joint Card issued with Citibank (Postal Savings World Cash Card) started

1999
January
Time Savings amounts revised (from JPY 1,000; JPY 5,000; JPY 10,000; JPY 50,000; JPY 100,000; JPY 500,000; JPY 1,000,000; and JPY 3,000,000 to JPY 1,000 and over in increments of JPY 1,000)
ATM and cash dispenser tie-up service started
Debit Card service (telegraphic transfer using designated terminals) started
Certificates with Savings Customer I.D. Photograph started
May
Telegraphic transfer with transfer terminals started
Telegraphic inpayment with inpayment-only cards started
November
Sales of lottery ticket started

2000
January
Service hours extended for postal savings ATMs (weekday services for ATMs in 37 locations nationwide from 7:00 a.m. to 11:00 p.m.; services for ATMs on Saturdays, Sundays, and national holidays in 77 locations nationwide from 9:00 a.m. to 7:00 p.m.)
March
Mutual remittance service between Postal Savings and private banking institutions started
May
ATM services on May 3-5 started
Inpayment ceiling per application for government bonds increased (from JPY 5 million to JPY 10 million)
June
Cash payment service with International Joint Card started

2001
January
Automatic loans using Government Bonds as collateral started
February
Per transaction limit on debit card service set at JPY 1 million
April
Nursing Care Time Savings improved
(People who are recognized as Care-need Categories 4 or 5 do not need to present physician's medicalrecords)
May
Postal Savings Joint Agent Card service started
July
Receipt of compensation to patients in Hansen's disease treatment centers via money transfer started.

2002
January
Service for changing personal identification numbers (PINs) at ATMs and cash dispensers started.
Coin handling with ordinary postal savings accounts at ATMs started.
Funds transfers between post offices and private financial institutions using an ATM launched.
Multi-payment network service use started.
Handling of defined contribution pension plan (individual pension plan) started.
March
New Welfare Time Savings started.
Yucho Internet Home Service begins full-scale operations.
April
National Pension Insurance Premiums can be paid from postal giro accounts.
Telegraphic transfers from automatic transfer terminals suspended.

From what I can remember, other countries have also had postal savings. I looked at our USPS website, and on their history page they too list a USPS postal savings plan beginning in the U.S. in 1911, and terminated in 1966.

he's talking Tokyo Japan...
so it's a safe assumtion he is correct with his statement of 2 -12 square feet rooms.

I've been there and have seen such small 'homes'...

Interesting story.

I had thought of buying a condo someday, but this should give me a better understanding of economics.


	15. History of the Postal Savings Services

	1875 January Postal money order service established May Postal Savings Services established (deposit ceiling: JPY 500) 1880 January International postal money order service started 1881 January Deposit ceiling abolished 1885 October Telegraphic Money Order and Postal Order services started 1891 January Deposit ceiling restored (JPY 500) 1906 March Postal giro service established 1908 February JPY 100 million Postal Savings balance reached 1910 April Annuity and pension payment service started 1915 March National Treasury Fund receipt and payment service started 1919 July Government bond subscription service started 1923 September Emergency Postal Savings payment implemented following the Great Kanto Earthquake 1931 April International postal giro service started 1937 December Telegraphic Transfer service started 1941 October Teigaku Savings established December Collection Savings (two-year) established 1942 May JPY 10 billion Postal Savings balance reached 1948 July Government bond subscription service abolished 1949 June Postal agency system started September JPY 100 billion Postal Savings balance reached 1951 April Postal Savings Special Account system established 1956 July Summary payment system established 1958 July Telegraphic money order home payment service started 1960 June JPY 1 trillion Postal Savings balance reached 1961 July Postal order system established September Mutual relief annuity payment service started October Time Savings (one-year) established 1962 March Child support allowance payment service started 1963 April Postal Savings Women's Monitoring system started 1964 November Welfare pension payment service started 1971 August National pension payment service started 1972 January Housing Collection Savings started June JPY 10 trillion Postal Savings balance reached 1973 January Depositor Loan system established (loan ceiling: JPY 100,000; loan period: six months) December Deposit ceiling raised from JPY 1.5 million 1976 January Teigaku Savings for Wage Earner's Property Accumulation started 1978 April Six-month Time Savings started July Education Savings started August On-line Postal Savings Service started 1979 December JPY 50 trillion Postal Savings balance reached 1980 February Postal Savings cash dispenser service started March Payroll transfer service started 1981 March Postal Savings automated teller machine (ATM) service started June Integrated Account Passbook (Collateralized Teigaku Savings) service started October Telegraphic transfer payment at post offices started On-line postal money order service started 1982 April Teigaku Infancy Savings started June Automatic debit transfer service started October Teigaku Annuity Savings for Wage Earner's Property Accumulation started 1983 July Automatic receipt service started 1984 March Completion of nationwide on-line Postal Savings network July Joint card service introduced October Automatic Teigaku Savings started 1985 December JPY 100 trillion Postal Savings balance reached 1986 August ATM and cash dispenser services on Saturdays started October International Joint Card service started 1987 March Collection Savings (one and three- year) started June Autonomous investment of Postal Savings Funds started 1988 April Tax exemption on interest for Postal Savings changed to a tax exemption on interest for the elderly and others Deposit ceiling raised from JPY 3 million to JPY 5 million Teigaku Housing Savings for Wage Earner's Property Accumulation started Government bond subscription service started Government Bond Teigaku Savings started November Telegraphic home cash payment service started 1989 June Money Market Certificate (MMC) started August Charges deregulated and charges for postal money orders and postal giro simplified New Integrated Account Passbook service started September Government Bond Endowment Insurance (My Set) started November Postal Giro Home Service started 1990 January Deposit ceiling raised from JPY 5 million to JPY 7 million 1991 January Postal Savings for International Voluntary Aid started April Postal Savings Holiday Service started September Education Savings were improved and renamed Education Collection Savings October Foreign currency exchange and traveler's check service started November Ceiling raised from JPY 7 million to JPY 10 million Deregulated interest rate type time deposit (New Time Savings) started (deposit of more than JPY 3 million) 1992 January Change in interest calculation for Time Savings (from monthly to daily basis) March Postal giro ordinary inpayment with automated payment machine (APM) started June New Ordinary Savings started Collection Savings, Housing Collection Savings, and Education Collection Savings interest linked to market rates 1993 March Telegraphic inpayment on designated date started April Automatic Time Savings started May Payroll transfer service for national public servants started Government Bond Time Savings started Ordinary inpayment and telegraphic transfer using cash card and APM started Handling charge exemption expanded for the remittance of donations to projects aimed at promoting welfare in foreign regions June Complete deregulation of interest rate for Time Savings and Teigaku Savings (MMC abolished) Time Savings (one-month) started October Improvement in product features for New Ordinary Savings (minimum balance reduced from JPY 400,000 to JPY 300,000 and from JPY 200,000 to JPY 100,000) and Swing Service with Ordinary Savings started Savings consulting service started 1994 January Tax exemption on interest for savings by senior citizens raised from JPY 3 million to JPY 3.5 million Deposit (tax exemption) ceiling for Teigaku Savings/Teigaku Housing Savings for Wage Earner's Property Accumulation raised from JPY 5 million to JPY 5.5 million Deposit (tax exemption) ceiling for Teigaku Annuity Savings for Wage Earner's Property Accumulation raised from JPY 3.5 million to JPY 3.85 million July Remittance to payee's account service using the Eurogiro System started October Ordinary Savings deregulation of interest rate (including New Ordinary Savings) Deregulation of interest rate for Collection Savings, Housing Collection Savings, and Education Collection Savings Time Savings (four-year) started 1995 April Cancellation of rights system revised Loan extension started (one-time extension only) December Service hours extended for postal savings ATMs (weekday services for ATMs in 180 locations nationwide from 8:00 a.m. to 9:00 p.m.) 1996 January National tax payment from postal savings account and tax return payment by transfer to Ordinary Savings account started Counter telegraphic cash payment started March Remittance to payee's address service using the Eurogiro System started May Automatic debit transfer for radio wave usage fees started September Nursing Care Time Savings started Disaster Voluntary aid account established 1997 March International Remittance Card service started April Donation component choices on Postal Savings for International Voluntary Aid expanded from flat 20%, to 20%-100% in 10% increments May Revision of charges for postal money orders and postal giros with a revision of the consumption tax rate Teigaku Infancy Savings abolished International telegraphic transfer with Pa-lu-lu (integrated passbook with fund remittance capabilities) started Regular transfer Teigaku Savings started November Receipt notice with telegraphic in-payment and transfer data transmission started 1998 January Education Collection Savings deposit ceiling raised from JPY 1.5 million to JPY 2 million April Growth in the range of international remittance service and identity confirmation in accordance with the revision to the Foreign Exchange Law May Giro account receipt notice service via fax started Telegraphic inpayment and telegraphic cash payment messaging service started Maturity Lump-Sum Transfer Time Savings started Exemption in donation transfer charges expanded Postal giro handling charge collection for public service payments improved June Ceiling per outpayment note or advice of outpayment increased (from JPY 5 million to JPY 15 million for outpayment note and JPY 100,000 to JPY 300,000 for advice of outpayment) October Joint Card issued with Citibank (Postal Savings World Cash Card) started 1999 January Time Savings amounts revised (from JPY 1,000; JPY 5,000; JPY 10,000; JPY 50,000; JPY 100,000; JPY 500,000; JPY 1,000,000; and JPY 3,000,000 to JPY 1,000 and over in increments of JPY 1,000) ATM and cash dispenser tie-up service started Debit Card service (telegraphic transfer using designated terminals) started Certificates with Savings Customer I.D. Photograph started May Telegraphic transfer with transfer terminals started Telegraphic inpayment with inpayment-only cards started November Sales of lottery ticket started 2000 January Service hours extended for postal savings ATMs (weekday services for ATMs in 37 locations nationwide from 7:00 a.m. to 11:00 p.m.; services for ATMs on Saturdays, Sundays, and national holidays in 77 locations nationwide from 9:00 a.m. to 7:00 p.m.) March Mutual remittance service between Postal Savings and private banking institutions started May ATM services on May 3-5 started Inpayment ceiling per application for government bonds increased (from JPY 5 million to JPY 10 million) June Cash payment service with International Joint Card started 2001 January Automatic loans using Government Bonds as collateral started February Per transaction limit on debit card service set at JPY 1 million April Nursing Care Time Savings improved (People who are recognized as Care-need Categories 4 or 5 do not need to present physician's medicalrecords) May Postal Savings Joint Agent Card service started July Receipt of compensation to patients in Hansen's disease treatment centers via money transfer started. 2002 January Service for changing personal identification numbers (PINs) at ATMs and cash dispensers started. Coin handling with ordinary postal savings accounts at ATMs started. Funds transfers between post offices and private financial institutions using an ATM launched. Multi-payment network service use started. Handling of defined contribution pension plan (individual pension plan) started. March New Welfare Time Savings started. Yucho Internet Home Service begins full-scale operations. April National Pension Insurance Premiums can be paid from postal giro accounts. Telegraphic transfers from automatic transfer terminals suspended.