An Appetite That Once Seemed Insatiable
It’s Friday desk clearing time for this blogger. “Combine a strong local economy that’s attracting new residents from other states with a shortage of homes for sale — and that means housing prices are going up across North Texas. Steve Brown reports on real estate for The Dallas Morning News. He talks about the price of finding a home in Dallas-Fort Worth. On the concern that rising prices could lead to a bubble: ‘No one wants to use the ‘B word.’ There is concern because home prices and apartment rents in Dallas-Fort Worth are growing at a many multiple-of-wage increases, and have done so for the last few years. You can’t just keep increasing the price of a commodity of housing faster than the ability of people to pay for it.’”
“‘So a lot of analysts and even the builders themselves recognize that ‘Yeah, this has worked for a while, but we can’t keep growing the price of stuff faster than peoples ability to pay for it.’ And there is a lot of discussion about that worry about that; it’s just right now no one is willing to do anything about because the demand is so strong.’”
“Manhattan resale home prices tumbled by the most in more than four years, a sign that sellers are lowering their expectations in a slowing market where buyers have the option to walk away. ‘Maybe we’re heading out of the period when there was no shame in overpricing your home,’ Jonathan Miller, president of Miller Samuel, said in an interview. ‘We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend?’”
“Renaissance Place, a big mixed-use property in downtown Highland Park, has sold for about $33 million, generating a big loss for the German investor that bought it more than a decade ago. A venture of Metzler Real Estate sold the retail-office-apartment complex to affiliates of Tabani Group, a Dallas-based shopping center investor. Metzler, the North American unit of German bank Bankhaus Metzler, sold Renaissance Place for just $32.7 million, about 38 percent less than the $53.1 million it paid for the property in December 2006, county records show.”
“The sale shows the rising real estate market hasn’t lifted all landlords, especially those that paid up for properties as prices peaking about a decade ago. Though commercial real estate values broadly have bounced back from the financial crisis, plenty of investors that bought just before the crash still would take a hit if they sold today.”
“In an interview with BNN, Sun Life’s Chief Investment Officer Sadiq Adatia said that there is a housing bubble in Toronto and Vancouver and that it’s already starting to burst. ‘I think if you look at Vancouver, we’ve already seen the bubble burst there,’ Adatia told BNN. ‘A lot of people think it’s just the foreign players and that tax that came through, but it actually started before the tax actually got implemented. So, what we’re seeing is probably a further extension of that downturn as result of the foreign tax.’”
“For Toronto, meanwhile, Adatia says the trouble still lies ahead. ‘Eventually we are going to see this market kind of stop and then come off a cliff,’ he said. ‘The longer we stay in this run-up, the bigger the downturn is going to be.’”
“In another indication of Phnom Penh’s oversaturated real estate market, a report says that a third of individual houses in gated communities launched for sale last year have yet to sell, in addition to tens of thousands of units still in various stages of completion soon to hit the market. An industry report released earlier this month warns that Phnom Penh is set to be flooded with condominiums. U.S.-based real estate services company CBRE Group’s Cambodia affiliate said the total condominium supply was set to quadruple in just two years.”
“The new report shows that the construction of so-called cluster landed houses—gated communities of separate, individual living units—is also energetically underway in an uncertain market. ‘There have been strong signs over the past few years that the housing market, especially in Phnom Penh, is in oversupply,’ said Miguel Chanco, the lead analyst of Asean’s Economic Intelligence Unit.”
“The value of a luxury apartment in Dazhi has dropped by half its original price amid the slipping property value of other buildings and apartments in greater Taipei. According to a Taiwan Realty statement released Wednesday, a top-of-the-market Dazhi luxury apartment sold recently for NT$1.445 million per ping (3.3 square meters) last December, whereas it sold for 50.28 percent more, at NT$2.906 million, at its peak. Another luxury apartment in Zhongzheng District experienced a similar drop in prices.”
“While the drop in both property value are seen as a good sign for buyers in the market, it also means, as some have pointed out, that those who bought off-plan property back in 2013 will be posting a loss. This is of course because of the payments they have already made for their purchases, which with the looks of prices now, were more than what they would have had to pay had they bought later on.”
“Senior analyst Chen Ping-chen at Taiwan Realty advised people looking to invest in the luxury housing market to hold off, saying that ‘the time is not here yet.’ According to experts, prices for non-luxury apartments should fall even more back to the level seen in 2005.”
“House prices in the once-thriving mining town have plummeted at an eye-watering pace, taking the fortunes of many a mum and dad investor with them. Those in the mining towns are left with mortgages that can be as much as triple the value of their homes. Piles of red dust rendered virtually valueless. One Moranbah house that sold for $589,000 as the boom was still climbing to its peak in September 2011, sold through mortgagee auction in November for just $118,000.”
“Over in the iron ore centre of Port Hedland, in Western Australia’s north, it’s a similar story. A three bedroom 1960s home in the town centre, once earmarked as a development site when accommodation was in chronically short supply, sold to a first homebuyer in October for $235,000. Just four years ago, in November, 2012, it commanded $1600 per week in rent. The following year it was listed for sale for just under $1.1 million.”
“Morag Lowe, principal of First National Hedland Real Estate, said no-one expected the prices of the boom to last. But, equally, no-one expected the speed of the crash. ‘A lot of people have been caught out, people very experienced in real estate were also caught out,’ she said. ‘I think everyone in our town knew the abnormally high prices were not sustainable into the future and saw it as a windfall or bonus. What we didn’t see was how quickly the downturn happened and the enormity of it. We might have expected a period of adjustment, maybe a 10 to 20 per cent drop in value but the world seemed to change overnight.’”
“‘95 per cent of our sales are bank repossessions,’ said Bella Exposito, a real estate agency owner in the Queensland coal heartland of Moranbah. Ms Exposito echoed similar sentiments. ‘We went to bed with the high of the boom and then woke up in the downturn,’ she said. Both women have been forced to watch, again and again, as everyday people endure the heartbreak of declaring bankruptcy. ‘We’re seeing mortgagee sales and not an insignificant number,’ Ms Lowe said. ‘It’s absolutely horrendous but don’t make the mistake of thinking this is just something typical of mining towns. I have an apartment in Perth I bought around height of demand six years ago when I was getting $680 per week rent. Now, it’s down to $480. In fact, I’m talking to an agent today and it’s on the market.’”
“Ms Lowe said everyone knew the construction phase, that which saw thousands more people flood to the west and mining companies paying once-in-a-lifetime wages, would end. What they did not anticipate was that it would coincide with a dramatic plunge in Chinese demand for iron ore — an appetite that had once seemed insatiable — meaning a free fall in the resource price and mass job losses.”
“What is causing so much dissatisfaction with the housing market? Well, the provision of housing these days in large part, no longer fulfils a social function to provide people with homes within their budget. Instead, it has become a tool of wealth creation – for ‘investors’, financial institutions, speculators, and of course the developers. Investors and speculators buy the finished luxury houses and condominiums in the hope of long-term wealth accumulation. Speculators count on rising land prices. The banks earn loads of interest. The developers earn their profits and run.”
“This wealth accumulation from property has contributed to high income and wealth inequality. It didn’t matter if these luxury homes were left vacant or unoccupied by their wealthy buyers; in the past, rising prices more than made up for any lack of rental income – even as many ordinary Malaysians could only dream of buying their own homes.”
“This problem of property-based wealth accumulation is hitting cities around the world. It was only yesterday that I saw an ad in a local newspaper advertising real estate as an investment in the Kensington area of London. Coincidentally, the Guardian carried an article about a UN report on housing a couple of days ago, pointing out that the number of vacant units in the Kensington area had risen by 40 per cent.”
“The UN special rapporteur on housing Leilani Farha is due to present a damning report on the commodification of housing at the UN Human Rights Council in Geneva: ‘Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth. It has become a financial commodity, robbed of its connection to community, dignity and the idea of home.’”
“Her report examines how housing, representing almost half of all global assets and more than twice global GDP, has become a repository for global capital, and the impact of the commodification of housing on affordability and homelessness. ‘The financial world has essentially operated without any consideration of housing as a human right and States are complicit: they have supported financial markets in a way that has made housing unaffordable for most residents.’”
“‘This is an issue of accountability,’ she says. ‘Government accountability to international human rights obligations has been replaced with accountability to markets and investors.’ Very little of this is likely to be reported in the corporate mainstream media, which earn a lot of ad revenue from developers and are loathe to say anything negative about the property market. Even today, property gurus are still talking up the market, despite the visible evidence of so many unoccupied high-end homes and commercial or retail lots pointing to a slump. Hardly anyone in the property sector will use the S-word (Slump) or the G-word (Glut).”
‘So a lot of analysts and even the builders themselves recognize that ‘Yeah, this has worked for a while, but we can’t keep growing the price of stuff faster than peoples ability to pay for it.’ And there is a lot of discussion about that worry about that; it’s just right now no one is willing to do anything about because the demand is so strong.’
That kinda wraps it up in a nutshell. Heck, it even makes you guys sound thoughtful. But no one wants it to stop it because they are making loads of money, Steve. Let’s not sugar coat it: they know it will end badly, but the greed is more important.
Steve doesn’t report and check facts and verify. He’s given a script and narrative and he hands it to the editor for publishing.
The public is still waiting for these media people to do their job. This issue is so monumental it decided an entire national election.
True story: when I was growing up we got the DMN delivered to our house everyday. As the 80’s bust unfolded, I would read the horrors play out every day. When I first started this blog and things started to pick up in 2005, I sent a link to him. He wrote back and said, “Interesting. But why a blog on the housing bubble?”
Why indeed.
Regards,
Roidy
“But why a blog on the housing bubble?”
“Because it’s there”
http://www.forbes.com/global/2001/1029/060.html
And because the prices are as high as Mt. Everest…
I used to deliver DMN’s cross town rival, the Dallas Times Herald, on my bike in grade school back when Dallas had two dailies….
Didn’t the 2005ish bubble take a while to hit flyover country? The coasts were certainly bubbly by that time.
Slightly….. Prices had already doubled between 94 and 2001 at interior of the US.
The only places that weren’t hit by the bubble were primary homes in Trumpy and depressed rural areas, which is what I think you mean by “flyover.” Metaphorically, the bubble popped before the equity locusts could ride the “rolling bubble” that far inland.
Meanwhile, geographic flyovers like Vegas and Phoenix bubbled up awful, as did rural flyover vacation and second homes.
Didn’t the 2005ish bubble take a while to hit flyover country?
There is a delay. Which means that in some places the downturn was minimal because the rescue kicked in faster than the bubble pop reached them. So even less of a lesson was learned in those places.
Now theres a beaut.
good analogy
Denver crashed hard back in 2007, but too few remember.
http://picpaste.com/denver_map.jpg
Denver crashed hard back in 2007, but too few remember.
The lunch bunch do remember, but tell themselves that it was an aberration and won’t happen again.
I don’t think that wave quite made it to NW Wyoming. Then the oil/coal boom started.
“The only places that weren’t hit by the bubble were primary homes in Trumpy and depressed rural areas, which is what I think you mean by “flyover.”
Good Lord!
When I first started this blog and things started to pick up in 2005, I sent a link to him. He wrote back and said, “Interesting. But why a blog on the housing bubble?”
Translation: me and mine are heavily invested in this, and we’re not going to expose it
I interpreted it as showing how some people can recognize a bubble easily in their area of interest and completely miss it in something else that they think of as normal.
‘No one wants to use the ‘B word.’ There is concern because home prices and apartment rents in Dallas-Fort Worth are growing at a many multiple-of-wage increases, and have done so for the last few years. You can’t just keep increasing the price of a commodity of housing faster than the ability of people to pay for it.’
That’s where ever-loosening lending standards come in handy.
Similarly:
‘Morag Lowe…said no-one expected the prices of the boom to last. But, equally, no-one expected the speed of the crash. ‘A lot of people have been caught out, people very experienced in real estate were also caught out,’ she said. I think everyone in our town knew the abnormally high prices were not sustainable into the future and saw it as a windfall or bonus. What we didn’t see was how quickly the downturn happened and the enormity of it. We might have expected a period of adjustment, maybe a 10 to 20 per cent drop in value but the world seemed to change overnight.’
Yes, the “we all knew” 20/20 after-sight.
“mining companies paying once-in-a-lifetime wages, would end. What they did not anticipate was that it would coincide with a dramatic plunge in Chinese demand for iron ore — an appetite that had once seemed insatiable — meaning a free fall in the resource price and mass job losses.”
Save some tears for later. Iron ore didn’t start to take off until 2005. By 2011 it went from $11 (metric ton) to $180, all because of insatiable Chinese demand. Last year it had dropped to $40. Now it’s @ $80. It’s all about China and what they will build going forward.
Debt pulls in demand from the future. China pulled in $30Trillion in demand from their future. Their debts may not get paid back, but their demand will.
How much more rebar is China going to need?
Debt pulls in demand from the future.
More than that. Worse. It creates “demand” that never would have existed otherwise. Which is why the aftermath is so ugly.
Debt is wasteful, of resources, of lives, of the future.
‘An analysis of Calgary’s downtown office space by Avison Young warns that the vacancy rate could hit 30 per cent in the next two years if the province’s economy doesn’t turn around.’
‘Jeff Thompson, senior vice president at Core Commercial Real Estate, said he’s seen landlords dropping head leases anywhere from 20 to 30 per cent, and occasionally even more. “We just did a deal where they were able to cut the rent in half, and they stayed in the same space and everything else stayed the same,” said Thompson.’
‘Throndson’s report noted an interesting pattern in occupied office space over the past decade. From a 2006 peak to a 2009 slump and again now, occupied office space has returned to about 33 million square feet (msf) in Calgary’s core. “These figures demonstrate that the occupancy level hasn’t really changed in time over the past boom-and-bust cycles,” said Throndson.’
‘The difference between 2006 and now is the extra 10 msf available for rent, with more coming available soon.’
extra 10 msf
That bust is going to last a very long time.
‘An analysis of Calgary’s downtown office space by Avison Young warns that the vacancy rate could hit 30 per cent in the next two years if the province’s economy doesn’t turn around.’
They don’t understand. You can’t “turn around” an entire economy based on misallocated resources and the illusionary/temporary “demand” created by them.
It all crashes, and then something else, something better, can be built in its place. Or would be built, if the government and central banks didn’t interfere again.
Don’t move to Denver.
You’ll be really disappointed if you do…
And if you do move here, you can pay $2,500 a month to live in this:
http://www.picpaste.com/20170303_064251.jpg
It has a walkscore of 93, and is on the same block as a Botox clinic, LOLZ
I’ve got a PC800 and PC490 baling onto 4 Euclids in rotation in a 4 minute round trip to the stockpile and Euclids can’t keep up.
Are they end-dump or bottom-dump?
End of course. We don’t do highway Donk.
Botox Clinic?
“Putting the hot back in Mama.” ( A real street billboard at Homa and Veterans Hwy in Metairie, La. I saw it myself.)
Location, location, location.
Regards,
Roidy
Every woman over age 30 I see walking around Cherry Creek has her face frozen in time with Botox.
I’m working on the 5th floor today, come up and see me…
Every realtor over 30 is sporting a Botox perma-grin.
Frown lines are so Twentieth Century. Botox.
Every woman over age 30 I see walking around Cherry Creek has her face frozen in time with Botox.
She ain’t gonna bag a six figure beta bux replacement for her “starter husband” and a 5000 sq ft house in Highlands Ranch with a wrinkly face.
“you can pay $2,500 a month to live in this:”
Is that just condos/apartments or is that ground floor for retail mixed use/smart growth?
I don’t know what ground floor will be. The third through ninth floors will all be rental apartments. I’ve heard the asking rents for the ninth floor, two bedroom, corner units will be $4,000-$5,000.
Cherry Creek has alot of old (19th century is considered old in Colorado) money. Janus’ global headquarters is a few blocks from here, but Bill Gross doesn’t work in that building…
That is almost certainly ground floor retail. The second floor might be offices. What is that butt-ugly building next to it, with the skinny windows? A prison?
And if you do move here, you can pay $2,500 a month to live in this
It that near Colfax? Is it walking distance to the Convention Center and a “dispensary”?
It’s two blocks from the corner of 1st and Steele, the center of Cherry Creek. The dispensaries are on the other side of Colorado Blvd in Glendale, which btw is one of only two municipalities in metro Denver that stay open until 11:45pm (the other one is Lakeside just west of Sheridan).
Ahhhh … Cherry Creek … “everyone wants to live there(tm)”
The dispensaries are on the other side of Colorado Blvd in Glendale, which btw is one of only two municipalities in metro Denver that stay open until 11:45pm
And the fast food places are open all night, and deliver
There is a sandwich chain in Colorado called Silvermine Subs. Even in podunky, dispensary free Loveland the local one is open until 3AM. From what I have heard during the wee hours of the morning they cater to a “special” demographic.
:-)
“And the fast food places are open all night…”
Got the munchies covered.
That crappy looking electric green thingy? What’s that supposed to mean?
Roidy
California Public University Fires 79 IT Workers; Replaces With H-1B Visa Holders
http://www.zerohedge.com/news/2017-03-02/california-public-university-fires-79-it-workers-replaces-h-1b-visa-holders
lower and lower prices (labor) are good for the economy –right?
Considering the quality of undergraduates coming out of universities these days, they will be able to replace all the teaching staff at the UG level in STEM and related subjects with H1-B visa holders. Then they can really reduce the tuition.
In costal california the profs will be in a dilemma whether they like low wages and free market or protectionism to ply their trade.
Faculty salaries aren’t the reason tuition is so high. Some schools have more 6 figure “administrators” than instructors.
Just like the salesmen/ mba types in all incorporated/ limited liability companies earning astronomical salaries. I truly think that these sales type mentality in all professions bred that culture where ‘”form” became important than “substance”.
America started it and spread it to other countries. Something akin to Pax Romana. Thus the dilution of responsibility and accountability in all these high paying admin / sales type positions.
On a different note, did you look at the salaries these IT peeps were getting? At least some of these positions are glorified clerks, me thinks, which attracts a ton of marginally qualified people that know how to milk the system.
You are responsible for how much your earn. Go out and make a killing!
“On a different note, did you look at the salaries these IT peeps were getting?”
That pay is middle-class if you’re in the SF Bay Area. A family really needs two of those incomes around there to drive late model cars, take vacations, kids in college, etc., sounds insane I realize.
That pay is middle-class if you’re in the SF Bay Area.
Yup. The pay for those types of jobs is much lower in flyover.
I guess to them it made sense to offshore some of those IT jobs. Those highly paid “administration” jobs? Not so much. Not surprising, since it was the administrators who made the decision,
Going back to instructors, most of them are either low paid part timers or even lower paid Teaching Assistants (TA’s).
There are some state schools that have held back the tide on overpaid bureaucrats, they’re the ones that charge about $5000 per year on tuition (or less). As college attendance continues to decline it will be interesting to see how schools will cope with declining revenues. Some will cut costs and others will keep raising tuition.
It is kind of surreal to consider that in order to get a job that pays $40K that students have to take on as much as 100K of debt. I’m sure those pricey, sprawling campuses with their posh student centers, the luxury dorms, the dining halls with chefs and the parking lots full of the administrators’ luxury German cars makes it all worth it.
In unrelated news, University administrators voted themselves another record raise.
Funded by another record rise in tuition.
Against a backdrop of declining enrollments coast to coast.
The Fed and our Soviet-style BLS numbers say inflation is less than two percent.
http://wolfstreet.com/2017/03/02/costco-costs-hit-by-inflation/
The UC and Cal State schools are full of highly paid bureaucrats who don’t do anything useful, but they have to replace the few people who actually do real work with cheap foreigners to save a few bucks.
I was reading an article about this and from what I could discern it seemed like it wasnt so much a question of salaries paid, but rather benefits, and this is one way to reduce future liabilities. Those sweet, sweet pensions and health benes are killing any organization that still has them.
“Those sweet, sweet pensions and health benes are killing any organization that still has them.”
Uh… Doesn’t it depend on the overall comp package the employers offer and the employees agree to take, including what kind of pensions? In principle, pensions are deferred compensation, so an employer can offer lower pay now in exchange for postemployment compensation. Congress totally strangled the U.S.private system in the 1980s with an excessive regulatory burden, but the basic concept of old age insurance seems preferable to having everyone becoming a ward of the state in their old age.
“…and health benes are killing any organization that still has them.”
Many pension plans that provide health care benefits are having difficulty with the added expense of Obama Care premiums, i.e., the sharp increases don’t pencil-out.
Weren’t those pension health plans already Cadillac type plans?
But in any case, given how steadily premiums have been rising over the past decades it would have to give any actuary a head ache.
“Weren’t those pension health plans already Cadillac type plans?”
The issue is that current subscriber’s premiums rose to absorb the additional expense of Obama care. My sister’s husband is an IT contractor in Palo Alto, and their premiums nearly doubled for the same plan. They’re both fairly progressive liberals, so I privately chuckled when I heard of their misery.
I’m in a similar situation where I pay steep additional premiums to avoid the local HMO plan; we see specialists where and when we want. FWIW, health care in flyover land really is different than a large metro like Seattle.
The issue is that current subscriber’s premiums rose to absorb the additional expense of Obama care.
FWIW, mine did not. But my employer is large enough to be self insured, with United Health Care managing the claims.
But in any case, premiums have been skyrocketing, both before and after the ACA, and that hasn’t been helping anyone who has to buy insurance.
‘‘Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth. It has become a financial commodity, robbed of its connection to community, dignity and the idea of home.’
‘Her report examines how housing, representing almost half of all global assets and more than twice global GDP, has become a repository for global capital, and the impact of the commodification of housing on affordability and homelessness. ‘The financial world has essentially operated without any consideration of housing as a human right and States are complicit: they have supported financial markets in a way that has made housing unaffordable for most residents.’
‘This is an issue of accountability,’ she says. ‘Government accountability to international human rights obligations has been replaced with accountability to markets and investors.’ Very little of this is likely to be reported in the corporate mainstream media, which earn a lot of ad revenue from developers and are loathe to say anything negative about the property market. Even today, property gurus are still talking up the market, despite the visible evidence of so many unoccupied high-end homes and commercial or retail lots pointing to a slump.’
This is pretty much undeniable. Right out in the open, everybody knows if house prices fall substantially, the global economy will get hit. But all we get is talk. I was thinking about this: the Federal Reserve has warned about bubbles in farmland, bio-stocks, junk bonds, and most recently commercial real estate. But what have they done? Nothing, about any of these markets. Just who is supposed to be the regulator? Whose job is it to take away the punch-bowl?
‘‘No one wants to use the ‘B word.’ There is concern because home prices and apartment rents in Dallas-Fort Worth are growing at a many multiple-of-wage increases, and have done so for the last few years. You can’t just keep increasing the price of a commodity of housing faster than the ability of people to pay for it.’
‘So a lot of analysts and even the builders themselves recognize that ‘Yeah, this has worked for a while, but we can’t keep growing the price of stuff faster than peoples ability to pay for it.’
Note that they keep “growing” the prices. Not content to make the profits of 2014, or 2015, it’s upward! Here’s a tip Janet: they aren’t going to rein themselves in. Despite all the supposed worry, they keep jacking prices up and the public is fine with it because that’s exactly what they want too. When you get a critical mass of market participants, buyers and sellers, who fully expect prices to grow to the sky, you have a mania.
“you have a mania”
And an unprecedented excess, empty supply of housing units.
By the end of 2018, Denver will be overbuilt by about 50,000 units.
All you need to do is to import 200,000 more people.
You should be able to get a good deal on a used pick up truck by then, as the market will be flooded with them
I was just talking to the dude in the coffee kiosk (that is closing after 23 years in April, because redevelopment) and he told me the Coda apartment building at the corner of 1st and Steele is 18% occupied.
“18% occupied”
Denver, CO Rental Rates Crater 5% YoY
https://www.zillow.com/denver-co/home-values/
There is also a 300 unit apartment complex just finished in 2016 near lower downtown (Denver) that has only a few tenants.
At first I thought the building did not have even one tenant, but I saw that someone was trying to sublet their unit which they had rented during the summer.
I have tried to contact the management company to see if they are actually marketing their units and they do not even return my calls or emails.
They must have just given up on marketing the units. Probably their marketing team would cost more than the expected return. (These are supposedly high-end and high priced new apartments).
Yet, if you ask Joe 6 pack in Denver, they will tell you there is an apartment shortage and things are booming!
There is also a 300 unit apartment complex just finished in 2016 near lower downtown (Denver) that has only a few tenants.
One benefit to the sale of property is that many of the terms of the sale are public information. Minimally you can determine that a property was put up for sale, delisted due to it being sold or not, when the property was last purchased, the list price, and the sale price. If you dig a bit deeper into county records you can determine the number of mortgages on the property.
With rentals all the information on vacancy and lease terms is proprietary. All you have is the rental listing (which may or may not correspond to a specific unit being offered), not the final rental terms. So there’s no reliable feedback to tell you if a given unit was actually rented at the listed terms (or rented at all). I would assume property managers/landlords don’t normally share this information with other managers/landlords, lest they risk charges of price fixing.
You’re in a position to know there are very few people living in this building. How many others are out there? How do these high-vacancy buildings (which by definition are listed at above-market rates) effect the overall market? How easy is it to determine that this is the case?
“I have tried to contact the management company to see if they are actually marketing their units and they do not even return my calls or emails. They must have just given up on marketing the units.”
Very interesting. Similar to bank-owned properties during the bust, where repeated phone calls from interested buyers on properties listed FOR SALE went unanswered. I guess we can thank mark-to-model for keeping this war on deflation alive and well, now in the rental market too.
Ok, I’m wondering about a few things. Here goes:
1) High demand in N. Texas? Isn’t Texas the state that has no real zoning laws or regulations? Ever been to Denton, Dallas-Fort Worth, Mineral Springs, etc? Wide open spaces with little zoning? House builders and developers can meet this demand given time. They will meet it, and they will conform to development infrastructure regulations. This is why Texas didn’t get the ‘Housing Boom’ in the 2000s.
2) Over development in Australia, China, America, Russia and Japan with falling populations, Europe with a level population, what gives? What is going one here? I didn’t have a clue, so I googled it.
This is what I found: “Population in the world is currently (2017) growing at a rate of around 1.11% per year (down from 1.13% in 2016). The current average population change is estimated at around 80 million per year. Annual growth rate reached its peak in the late 1960s, when it was at 2% and above.”
What this means is that the rate of the rate of growth is highly negative, and this is astounding to me. This was a constant increase in population year over year of 2% in the 1960s but 1.11% this year. A global pop. of 1Billion will be 1.02Billion a year later and 1.04B a year after that which is a constant rate of increase of 2% in the 1960s.
Now, in 2017, the rate of increase has been almost cut in half. So, we have 7.5Billion increasing at 1.11% which gives slightly less than 7.57Billion a year later. Still increasing but the rate of increase is falling by 2% per year from 1.13% to 1.11%. If this is kept up as a decreasing rate of increase we will get to negative population growth of -0.2% in some 90 years or so.
I’m starting to suspect that supply is out stripping projected demand in a number of areas. We do see over-supply in housing over a large number of varying markets. This points to efficiency in meeting demand, but also an over-estimate of future demand.
For example, over estimating demand is what happened in the 1980s petroleum markets. There was a $40/barrel market in 1984 with a projected demand that would cause the price to increase to $100/barrel. Investors were acting as if $100/barrel was “in the bag.” Well, it wasn’t. The price was around $11 to $12 / barrel in 1988 or so. Houses did the same thing in 2007.
Hmm.
Regards,
Roidy
Despite all the talk about everyone moving to North Texas from other states, the fact is that for every American who moves here, another one moves out. The net migration of Americans to Texas is barely positive. Almost all of the population gains here have been due to immigration. Funny how these reports never mention that.
And yes, there is land as far as the eye can see.
That was supposed to read, “Despite all the talk about everyone moving to Texas from other states…”
This link is contrary to what you are saying:
https://www.texastribune.org/2016/04/20/texas-top-destination-domestic-migrants/
I’ve looked into Texas available land for development. Not in-depth but just noodling around. It seems that most of the population growth in Texas is centered around Houston-San Antonio/Austin - DFW.
These places seem to have more than enough developable land to handle the influx. I looked at San Francisco and Palo Alto on google maps. Compare the available land areas to Austin, Houston, or DFW. Texas is the hands down winner. It is also why SF-PA property zooms to the point of unreal stupidity. Huge boom in high-tech, but no where to grow once a certain limit is reached. Looking at google maps, SF-PA is solid city all the way to Hollister, Ca on both sides of the Bay. Is there any viable property left to use? SF-PA to Hollister is 92 miles BTW.
Now look at Austin to San Antonio or to Waco either of which is about the same distance from SF-PA to Hollister. Huge difference with lot’s of available land. The difference between Ca and Tx high tech is not obvious. Ca has a seaway to the Far East and Pacific S. America. Texas is the Gulf of Mexico and Atlantic S. America. Roughly equivalent access? I’d buy that argument. Texas is centrally located in the US which is an advantage.
DFW is in about the same position as Austin-SA. Wide open spaces. Houston has some limits to growth in the southeast direction. That is not the killer like SF-PA. SF can only go south toward Hollister while Houston has a shipping port in the southeast and room to run on the other sides.
I want to be clear about one issue, however. Texas has problems with their education philosophy and the influence that peoples religious beliefs have on science, the arts, and history. Suppression of sciences, arts, and history are never to anyone’s advantage. Texas does have a problem with this, or at least a bigger problem than California. Another topic for another time, I guess.
Regards,
Roidy
California is depopulating as well.
Well, look at the source. Just as with real estate, there is a narrative they are pushing here. There are all sorts of ways to skew statistics.
I am talking about Americans moving in and out throughout this period of the “Texas is booming. Everyone is moving here” narrative.
Here’s a more accurate article: http://www.ryanmcmaken.com/2016/01/colorado-among-states-with-largest.html
The Texas article had the actual numbers not some indirect measurement of the number. Texas clearly has more people moving in from other states than are moving out. Your point was wrong, no matter what your source. The measurement you point to just is indirect measurement of the people moving in, it does not show how many moved out. Clearly, when you reconcile the two it shows that very few people are leaving Texas thus any migration in leads to a net migration to the state.
The Texas article you posted quotes statistics that mix in immigrants who first landed in other states and then moved to Texas. They are trying to hide the truth after a spate of articles a few years ago pointing out that almost all of the population gains in Texas were due to immigrants moving here.
The article I posted above separates the two. Since governments are the ones who have access to official statistics, and since they all have a vested interest in lying, those of us who want to tell the truth post what we have access to.
I am here, on the ground. I see every day what is going on and who is moving here. When I had a friend visit me at Christmas, he was surprised that were basically minorities as native English speakers everywhere we went.
Here’s another article that discusses the same thing: http://www.dallasnews.com/business/business/2016/05/04/their-exes-live-in-texas-california-tops-states-feeding-our-population-growth
“Potter added that many of Texas’ new residents are foreign-born, but they have decided to settle in the state after first arriving in California or New York.”
Here’s another more extensive article on this: http://www.miamiherald.com/news/nation-world/national/article41327274.html
“For more than a century, immigration in the U.S. followed a familiar trajectory: Immigrants made a home in the cities where family and friends had settled. And there, for a generation or two, they stayed put, creating Little Italys, Chinatowns and Ukrainian Villages. Eventually, their kids and grandkids decamped for the suburbs.”
“But recently, demographers have noticed a surprising new migration pattern: Increasingly, foreign-born professionals are opting to leave their initial U.S. homes, often in California, Florida, Illinois and New York, and pulling up stakes to head to the Lone Star State.”
“Immigrants generally have become much more mobile over the last few decades. And California, the nation’s most populous state, still receives the lion’s share of international migrants. But Texas leads the nation in the growth of its foreign-born population — and that’s because more immigrants are moving there from other states, according to a new report by the Texas Office of the State Demographer.”
“Today, foreign-born migrants are one of the largest drivers of population growth in the nation’s second most populous state. The foreign-born population of Texas, in total numbers and share of the overall population, is greater than at any point since statehood in 1845. One in six Texas residents was born in a foreign country, and roughly 40 percent of them moved from somewhere else in the U.S., according to the Texas Demographer report.”
What’s more, illegal immigration is hugely understated in official statistics. And it’s not just Mexicans coming here illegally.
You can look up yourself how many Americans are moving out.
Nobody has been consistently against illegal immigration than I have on this blog,but facts are stubborn things and the net domestic migration numbers speak for themselves
I am here, on the ground. I see every day what is going on and who is moving here. When I had a friend visit me at Christmas, he was surprised that were basically minorities as native English speakers everywhere we went.
This reminds me of a anecdote.
We have some friends who live in San Marcos, CA (a San Diego suburb). “Jane” had a part time job at a grade school as a playground monitor. One day, at the end of classes, she was helping out and was approached by a young couple who came to pick up their child. They were from someplace on the east coast. Anyway, upon meeting “Jane” their reaction was “Thank goodness, you speak English!”
the net domestic migration numbers speak for themselves
Not when “net domestic migration numbers” are fudged to include immigrants!
And the original article I posted pulled its data directly from the Census Bureau. The links are all there in the article.
“I’m starting to suspect that supply is out stripping projected demand in a number of areas.”
Your point about a decreasing global population growth is interesting. It suggests we are approaching carrying capacity for our species unless some new technological breakthroughs in agriculture or medicine, akin to the Green Revolution or the advent of antibiotics in the 20th century, further expand food production or reduce mortality.
To get a more relevant comparison of real estate production to needs consider (1) the population growth in rich countries is far slower than less developed ones; (2) most of the rich countries will face Baby-boomer die off over the next few decades, potentially leading to negative growth rates in some cases; (3) lots of housing currently or recently built is unsuitable for aging geezers to inhabit; (4) the glut of luxury housing relative to fundamental needs for shelter is a huge market failure of command-and-control government housing policy.
Hey Prof B,
Will the world population actually get to a carrying capacity level? Or will it crash? Is carrying capacity possible at least in principle?
Regards,
Roidy
“You can’t just keep increasing the price of a commodity of housing faster than the ability of people to pay for it.”
These people don’t pay for it, I pay for it. I pay for it using money that belongs to somebody else.
I pay for a house all at once and then these people pay me back over thirty years or so. This is how it can be done, how it is done.
The price of the house is not the issue, the amount of the monthly payments is the issue.
It’s all fun and games til someone loses an eye.
‘The value of a luxury apartment in Dazhi has dropped by half its original price amid the slipping property value of other buildings and apartments in greater Taipei…Another luxury apartment in Zhongzheng District experienced a similar drop in prices.’
Oxide non-luxury alert:
‘According to experts, prices for non-luxury apartments should fall even more back to the level seen in 2005.’
Well there goes the allure. High and rising prices are the draw.
Econ 101 turned on its head. Take away the high prices and you take away the draw.
People are smart.
When Macy’s raises prices the people flock into their stores and fight over merchandise.
Oh, wait! That’s not happens. When Macy’s LOWERS prices people flock into their stores and fight over merchandise.
But with real estate something else is at work.
Ben, you should shoot some 30-minute videos of your road trip while asking inane questions from yokels along the way.
throw in a ” That’s AMAYYYZING” comment every now & then w/heavy southern accent!
RIP HH
Well, when you buy something at Macy’s, you typically do not buy it with the expectation that it will appreciate so you can later resell it for a profit. In fact, most of the stuff you buy there will be worn out, out of style and wind up on a thrift store rack in just a year or two. Even the durable stuff, say like pricey china or crystal, has minimal resale value.
well, I understand your drift Colorado about Macys but what you do is catch some of sales during the year for the good stuff.
I keep the red card handy for those sales like good Lacoste beach towels 75% off . . . The Cellar dish sets all rectangle-like so I can thrown down a tre’ chic dinner party if needed. OXO storage containers. etc
Martha Stewart has good quality stuff overall. some is a little weird but she doesn’t do junk.
(geez, if someone had told 19yr old me that I’d be commenting about MACYS & HOMEGOODS someday I’d laughed my azz off then tell Biff to “make like a tree & leaf”)
I do my dinner parties on paper plates. The round ones.
paper plates no good for after-dinner skeet
Don’t feel bad aquis. Rings and papers have brought down the most manly of men. How is Macy’s for grill tools?
Are the square ones easier to throw?
Who did aqius used to be?
He wuz ALWAYS aqius, the guy who ditched Florida for Cali. It’s good to see him posting more.
Allen, TX Housing Prices Crater 9% YoY
http://www.movoto.com/allen-tx/market-trends/
https://www.zillow.com/allen-tx/home-values/
Data my good friend…. Data.
Sacramento, CA Housing Demand Craters 11%
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
Oh here we go with the Zillow home values nonsense again.
I updated my infographic:
https://snag.gy/pOUw3S.jpg
Thank you.
Anytime, my friend.
the median sale price is biased to the extent that the homes sold in a given period are not completely representative of all the homes in the area.
if high-end homes were not selling very well, but mid-range homes were, then the median sale price will be lower than it should be. It will not be an accurate reflection of the “general” level of home values because the median is taken from the set of mid-range home sales that happened in the period, ignoring the high-end homes that didn’t sell.
I.e. if you have a neighborhood in Frisco,Tx that had 100×1 mill$ homes and 8 were for sale (and none sold for 3 months) but 15 300-500k homes sold in nearby neighborhoods then the median would be 400k (and movoto would show down). The inverse could also be true for the next 6mo (movoto shows way up). Idiot morons like housing Anal pounce on those trends as “proof” of some housing collapse that is nothing more than his wet dream lol
Yet prices fell 9% YoY in Allen, TX.
It’s all in the data my good friend. It’s all in the data.
Keller, TX Housing Prices Crater 10% YoY
https://www.zillow.com/keller-tx/home-values/
Garbage data in = garbage conclusions. I stand by the fact that the median price sold in an area for a given time interval is not necessarily representative of the housing values in a high demand area.
Falling prices and cratering demand my friend… falling prices and cratering demand.
Falls Church County, VA Housing Prices Crater 10% YoY
https://www.zillow.com/falls-church-city-county-va/home-values/
Zillow is house porn. In fact, my wife would rather I look at actual porn than Zillow, and she hates porn.
Regards,
Roidy
Data my good friend….. data.
Alameda, CA Housing Prices Crater 11% YoY
https://www.zillow.com/alameda-ca/home-values/
So, the house prices are leveling out? What is the interpretation and implication of this leveling? People aren’t buying, but why aren’t they buying? Or at least paying what the sellers want.
Regards,
Roidy
Good question….
How is one to interpret falling prices?
Falling prices:
1) Undersupply situation has resolved itself.
2) Market saturated.
3) Over-supply which is not the same as undersupply or market saturation.
Etc. Etc. Etc.
Regards,
Roidy
1) Undersupply never existed
2) Saturated? With fraud?
3) See #1.
The only reason I posted this is the first comment by flukes777
https://www.youtube.com/watch?v=sxJFjO4Skgo
Can someone explain to me how an app that takes pictures and disappears, that has zero cash exchanged, that relays solely on advertising dollars is worth 28 billion? What am I missing? That’s around the same market cap as Target or Adidas.
Listening to the talking heads on CNBC they were gushing about it all morning yesterday.
pets.com ….. all of them. Gadgets, junk, smoke, mirrors.
relays solely on advertising dollars
What’s wrong with advertising dollars? If it’s wrong to rely on that, FB, GOOG should be worth less than 2/3rds of what they are worth right now.
We are overvalued by at least 50% in stawks and roughly 25% in houses. So snotchat valuation is not out of line in this kind of fantasyland we are living in.
” 28 billion? What am I missing? That’s around the same market cap as …
…and disappears”
Like a snap, get in, get out make 50% in 2 days. Gamblers don’t care what they do.
Ask your teenage daughters what they use Snapchat for, LOLZ.
They would NOT like the answer to that question…
“Listening to the talking heads on CNBC…”
They’re just “grooming the chumps.”
SEC says Homex reported fake sales of more than 100,000 homes
http://www.marketwatch.com/story/sec-says-homex-reported-fake-sales-of-more-than-100000-homes-2017-03-03-10912324
WASHINGTON (MarketWatch) — The Securities and Exchange Commission said a Mexican homebuilder reported fake sales of more than 100,000 homes. Desarrolladora Homex S.A.B. de C.V. HOMEX, -4.44% inflated the number of homes sold during a three-year period by approximately 317% and overstated its revenue by 355%, or approximately $3.3 billion, the SEC said. Homex filed for the Mexican equivalent of bankruptcy protection in April 2014 and emerged in October 2015 under new equity ownership. Homex cooperated with the SEC investigation, the agency said, and neither admitted nor denied the findings.
Homex? The name makes me think of this:
https://s-media-cache-ak0.pinimg.com/564x/d1/86/71/d186714fbdfe98411089d57eff87e90d.jpg
This article perfectly demonstrates just how the housing crime syndicate reporting does not jive with the fact that housing demand is at 20 year lows and falling.
You can’t hide 25 million excess empty and defaulted housing units.
http://overflow.solutions/demographic-data/how-does-income-compare-to-home-value-in-u-s-metro-areas/
This is a cool graphic…I’d love to see a comparison to what a similar graph was in 2006/2007.
If you have a chance, I recommend watching “Santa Clarita Diet”, mainly for their portrayal of the main characters as a husband/wife real estate brokerage team. Classic.
Terrorizing the 1% in the new movie, Us and Them. A little taste from the trailer:
http://ew.com/movies/2017/03/03/sxsw-us-and-them-trailer-jack-roth/
Looks like fun.
I’m still very surprised that this got built. When I last was in Bogota, it was a hole in the ground. Now it’s nearly finished and will be the second-tallest building in South America. Note the pictures of the surrounding neighborhood in the “gallery” portion of the link … it’s not the best, to put it diplomatically. For those people who choose to live there, at nighttime it might as well be a luxury high-rise prison. There are far nicer, and safer, areas of the capital.
The building was “crowdfunded” by individual investors, which is a 21st century way of passing financial risks on to others.
https://en.wikipedia.org/wiki/BD_Bacat%C3%A1
This is also interesting.
The “Housing Cost” numbers include costs to own (including mortgage payments and rent)…not just current sales prices…my understanding is if you have a 20-year old mortgage, what you pay on that mortgage is factored in…not only if you were to re-buy the home at today’s market values.
I assume therefore that CA is relatively low because of Prop 13, and Washington DC is relatively high because of people coming/going with government jobs (resetting to today’s mortgage numbers). But still DC is eye popping.
Most of CA’s move happened from 2005-2008…others exhibit similar patters. Look at NV, AZ, FL…big humps.
http://overflow.solutions/demographic-data/how-much-have-housing-costs-increased-since-2005-in-each-state/
Midtown Manhattan Rental Rates Crater 10% YoY
http://www.zillow.com/midtown-new-york-ny/home-values/
And because it’s Friday, Parliament — Dr. Funkenstein:
https://m.youtube.com/watch?v=noqMfTRKNlo
I saw George Clinton and the P-Funk All Stars play the Cleveland Agora on Prospect Avenue in 1993 and it was pretty stellar…
It is Friday…time to get funked up.
I used to listen to this song a lot while rebuilding Mustang engines in prison.
“I used to listen –snip– while –snip– in prison.”
Lompoc, CA?
“I used to listen to this song a lot while rebuilding Mustang engines in prison.”
Nothing is dead around here until it’s buried is it?
https://www.youtube.com/watch?v=8DIsCa5J8ZM
Whew. Thanks!
Mr. George Clinton lives in Tallahassee, Fl. I met him when I went to an auto parts store. KEWL!
Regards,
Roidy
P.S. We need to get Dr. Funkenstein to design a Mothership that will deliver to us a funk-expansive dimensional portal. We can then become One Nation Under A Groove. Roidy funking-out. Copy that.
Boulder, CO Housing Prices Crater 6% YoY As Housing Bubble Pops
https://www.zillow.com/boulder-co/home-values/
‘Eventually we are going to see this market kind of stop and then come off a cliff,’ he said. ‘The longer we stay in this run-up, the bigger the downturn is going to be.’
Sounds familiar… Pretty much a replay of the 2007-2012 episode lies ahead, but without the bailouts to make foolish gamblers look like financial geniuses this time.
Thank you for answering my question the other day Professor.
De nada.
“without the bailouts”
Well, that would be quite the thing. We’ll have to see what’s different and what’s same.
A joke that is popular with our Canadian cousins:
Q: How do you tell a book is about Trump?
A: It starts with Chapter 11.
I can only hope that the “Of the banks, by the banks, for the banks” can be rocked. Andrew Jackson’s portrait is in the Oval Office…
“The UN special rapporteur on housing Leilani Farha is due to present a damning report on the commodification of housing at the UN Human Rights Council in Geneva: ‘Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth. It has become a financial commodity, robbed of its connection to community, dignity and the idea of home.’”
The Fed, with its army of academic economists, can’t see the unprecedented global housing bubble, but the UN has spotted it.
Isn’t that special?
“Ms Lowe said everyone knew the construction phase, that which saw thousands more people flood to the west and mining companies paying once-in-a-lifetime wages, would end. What they did not anticipate was that it would coincide with a dramatic plunge in Chinese demand for iron ore — an appetite that had once seemed insatiable — meaning a free fall in the resource price and mass job losses.”
Exactly how old is this article?
It obviously cannot be current, as Albuquerquedan has repeatedly assured us that the Chinese economy has never looked better. No plunge in iron ore demand is possible in the current boom times.
Record demand, so I would say not current:
https://www.bloomberg.com/news/articles/2017-01-13/iron-imports-by-china-top-1-billion-tons-to-absorb-rising-supply
Wow…No wonder Lil Sis made bank on my suggestion to buy a commodities mutual fund after the crash…
Get out of your China holdings while you are able. This will end badly.
Top News
Thu Mar 2, 2017 | 8:10 PM EST
China parliament to signal reform over stimulus to defuse debt bombBy Kevin Yao | BEIJING
China’s leaders are expected to telegraph their willingness at this year’s annual parliament meeting to let reforms overtake policy stimulus as their priority amid concerns over financial instability in the world’s second-largest economy.
Pro-growth policies, evident by a lending binge and increased government spending last year, have fueled worries among policymakers about high debt levels and an overheating housing market.
…
http://mobile.reuters.com/article/idUSKBN16931R
So by the way that Chinese measures GDP and always has, it is going to drop from 6.7% growth to 6.5% o the horror.
The Chinese themselves say their GDP number is phony. Former Premier if I recall correctly.
By the way, GDP per capita is not the same thing as personal income. Latest official stats has per capita disposable (take home) income in the cities at just below $5K. Just in the cities. The rural income is 1/3 of that.
Post that source because it is total BS I posted accurate numbers just a few days ago and for the country as a whole it was more than twice your city number and if you use the PPP it is more than three times that city number for the country as a whole.
The one I posted a few days ago was estimated 2017, here is 2016 from the CIA which excludes the impact of 6.7% growth last year:
https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
Dan, you are implying that the average Chinese worker pulls down the equivalent of $50,000! Your number is $30K per capita and the dependency rate is 1/3.
The CCP puts out statistics. If you are convinced they are BS I won’t bother to explain further.
Dan, you are implying that the average Chinese worker pulls down the equivalent of $50,000
Our now former software engineer colleagues in Beijing weren’t pulling down that much.
I never said that if you look at the per capita numbers it is not anywhere near that. The PPP might be close to that for a software engineer but that means in dollar measurements about $25,000
https://www.glassdoor.com/Salaries/china-software-engineer-salary-SRCH_IL.0,5_IN48_KO6,23.htm
Actually according to this about $21,750
http://www.shanghaidaily.com/nation/China-vows-to-cut-excessive-urban-real-estate-inventory/shdaily.shtml
“for a software engineer”
Stick with “per capita”. Personal disposable income 2016 CNY33,616 = $4,875. A little digging and you can find out that this statistic is only for Urban dwellers.
Straight from Beijing.
You are the one that is now changing it to disposable income from per capital
Blue just post the link
Blue skies for blue skye:
http://www.shanghaidaily.com/nation/China-swears-to-make-skies-blue-again/shdaily.shtml
I don’t believe that I changed the subject from my first comment
“per capita disposable (take home) income in the cities at just below $5K”
Show any proof that your number is just for cities and show any proof that the number is PPP adjusted without the link I cannot verify either
Figuring the Chinese disposable income using a currency conversion underestimates the true purchasing power, the reason that the CIA considers China to have the highest GDP in the world a more amusing but surprisingly accurate measurement:
http://www.economist.com/content/big-mac-index/
The problem with GDP numbers coming out of a country like China, even if their numbers weren’t largely made up:
“Stated alternatively, GDP fails to accurately assess the value of goods and services provided or estimate a society’s standard of living. It is a ruler with irregular hash marks and a clock with erratic ticks.”
“As proof, observe this absurdity: in 1990, Soviet GDP equaled half of US GDP, according to the 1991 CIA Factbook. No one visiting the Soviet Union in 1990 would believe their economy came close to 50 percent of the quality and quantity of the goods and services produced in America. GDP-defined production may have been strong, but laying roads to nowhere, smelting unusable steel, and baking barely edible breads stretches the definition of “production.” And this describes the goods which were actually produced. There is no accounting for the opportunity cost of forfeited essential goods and services.”
“How can this be? Why does GDP poorly reflect economic size and vitality? The blame largely resides with three fallacious concepts embedded within GDP “measurements”:
(1) intermediate goods (e.g., steel) must be eliminated to avoid “double counting”;
(2) government expenditures consist of viable economic activities; and
(3) imports should be netted against exports.”
https://mises.org/library/how-gdp-metrics-distort-our-view-economy
Look Dan, the CIA website is unfortunate. They have confused the Urban average income with the National average income, and you’ve swallowed that hook, line and sinker. I’m not interested in the PPP adjustment dramatically inflates supposed income. Neither is Beijing. I told you the numbers are from Beijing.
Here’s your crow.
Apparently Bejing hasn’t published the 2017 China Statistical Yearbook yet, though the data is available from 3rd parties. So let’s look at the 2016 yearbook (2015 data).
Official Urban vs Rural per capita income
http://www.stats.gov.cn/tjsj/ndsj/2016/html/0616EN.jpg
National average:
http://www.stats.gov.cn/tjsj/ndsj/2016/html/0601EN.jpg
Average disposable income below $5K. Average earned income is only CNY 16,400 ($2,380). They’re making the rest up in Real Estate. Fang Nu.
You can PPP on that all you like.
You need to eat the crow, the CIA numbers I trust far more than your assertions. Second you have shown nothing to indicate that the average country wide number is not the $5000 even if you use the official exchange rate instead of the PPP adjustment. You have used year old numbers when Chinese numbers of soaring. Yes if you look back far enough you can show the Chinese making ten cents per hour. The Chinese have according to the CIA over a 20 trillion dollar economy, you just need to divide that my 1.4 billion to get their GDP per capita and yes the after tax will be lower but not anywhere near what you are suggesting.
The absurdity of your numbers can be seen when you look at expenditures listed in your links. Due to their currency manipulation they claim that the Chinese only expend around $500 per capita on housing per year. However, you have claimed that they have first world housing costs. Care to eat crow on that one? You cannot just convert yuan into dollars at the official exchange rate to understand living standards. Hence the reason that the CIA with ivy league trained economists uses the PPP analysis
To put it simply if the Chinese are expending less than 10 percent of their disposable income on housing how is there a bubble? But that is what your numbers show, along with very little spent on food and clothes. Why is a Big Mac in china so cheap? Maybe an artificial exchange rate which is exactly what Trump and most of his advisors are claming
“you have claimed that they have first world housing costs.”
I suspect you are hallucinating.
I claim they are taking home less than $5,000 per head. That’s what they claim too.
Comedy Central.
And The CIA is claiming that fails to take in consideration a seriously undervalued currency which about doubles that number when the proper adjustment is made and that number takes into consideration children and elderly outside the workforce. There are plenty of American families living on $5000 per capita take home pay, even more living on $10,000 per capita take home pay when the PPP is used.
Do you know of any city in the USA where the average income is less than $5000? Average for the whole city, including the 1%ers. Without Real Estate “Investments” the average takehome pay is only $2,380. With the 1%ers taking 1/3 of all the money, 99% are in the $100/mo club. Round numbers. Sure, with $100 you can live like a king in China.
Do you know any US city where housing costs are $500 per capita per year because that is what your figures show if you do not adjust for an undervalued currency?
Ha! No, but mine would be if I had 1.2 other people living here.
It may be no accident that the rent is 25% of pay.
Yes because countries with virtually no external debt have a history of failure. Not:
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt
Failure of the “country” isn’t the issue.
The entire UK is close to being repossessed.
Arggghh!!!
THE WALL STREET JOURNAL
China News
China Shifts Stance, Letting Dying Firms Go Bankrupt
National People’s Congress meets with new will to end practice of bailing out failing companies
By Chuin-Wei Yap
March 3, 2017 7:14 p.m. ET
SIPING, China—Bankruptcies of Chinese businesses have surged in the past two years, in a sign the state is beginning to take painful steps to trim the bloated industrial sector as it tries to rein in debt.
China’s search for ways to manage its slowest growth in a quarter-century hangs over the annual National People’s Congress, which starts on Sunday. The challenge is expected to drive discussions among delegates on how to unwind…
…
Asia’s Promise Gives Way to Its Growing List of Troubles
…
https://www.aei.org/publication/asias-precarious-rise/
Beware the Ides of March
Stop! This is NOT like the dot-com bubble… it’s much worse, according to this chart
By Shawn Langlois
Published: Mar 3, 2017 3:39 a.m. ET
Economic, demographic and productivity trends all portend stagnation
…
The problem is every time folks try to short the market the various central banks around the world print up some cash and create a little buying and this forces the shorts to cover. It has happened over and over again for 8 years. Most of that 300 point rally the other day was short covering.
Eventually the mother of all corrections is gonna realign prices with reality. A few central banks may undergo major regime change along with the process to restore free markets.
https://www.nytimes.com/2017/03/04/style/palm-springs-hotels-airbnb-vacation-rental-homes.html?_r=0
Dallas, TX Housing Demand Plummets 20% YoY
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
Turnover of housing % doesnt mean there is a reduction of housing demand. Stupid analysis from an idiot lol
Data my good friend. Stick with the data.
Seattle, WA Housing Demand Craters 19% YoY
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
Old Yellen sees no bubbles.
http://www.businessinsider.com/snapchat-ipo-snap-interactive-jason-katz-2017-3
With the stock and housing market so high I wish they would take this opportunity to “align” the interest rates.
Bilking savers out of interest income and forcing them to play in Wall Street’s rigged casino is too lucrative for Yellen the Felon to raise rates of her own volition.
The Fed’s open conspiracy. Stop the oligarchy’s financial warfare against the 99% - End the Fed!
https://dailyreckoning.com/feds-open-conspiracy/
Sweet William must be experiencing a rare moment of joy amidst his incessant stamping of little feet.
http://www.scmp.com/business/global-economy/article/2075890/bitcoin-price-exceeds-gold-first-time-expectations-etf
Dyke & The Blazers - Let a Woman Be a Woman and a Man Be a Man
https://www.youtube.com/watch?v=dZq3jNzlGJE
prince Buster the 10 commandments…..oh yeah do you think the snowflakes at Berkley would riot to this???
https://www.youtube.com/watch?v=df5eGlr3WsM
pS just passed away…..Prince Buster (24 May 1938 - 8 September 2016)
BOOTS !
the re sales season is in full swing. Due to RIF n roll from trump I’m thinking there’s a lot of pucker for buyers in the DC area. Did susan research the 20% EPA chop?
I see inventory building just slightly.
report in
Huh?
FL Housing Demand Nosedives 30% YoY
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
Iris Dement - Let the Mystery Be
https://www.youtube.com/watch?v=nlaoR5m4L80
poor on a 6 figure salary
http://www.cnbc.com/2017/03/03/facebook-engineers-struggling-with-rents-ask-mark-zuckerberg-for-help.html
The internet has come so far:
https://en.wikipedia.org/wiki/TheGlobe.com
https://www.reddit.com/r/investing/comments/5xjq0i/why_do_some_people_make_it_seem_that_rental/
Reading a few threads on /r/investing… lots of sharks looking for guppies with promises of fast easy money.
test
Are ‘Muricans finally wising up and pulling the plug on their TeeVees?
http://finance.yahoo.com/news/number-us-homes-without-tv-200318637.html
“Oil Prices Fall On Bloated US Fuel Inventories, Stalling China Demand”
http://gulfnews.com/business/sectors/energy/oil-prices-fall-on-bloated-us-fuel-inventories-stalling-china-demand-1.1975199
http://www.zerohedge.com/news/2017-03-04/house-was-3d-printed-under-24-hours-cost-just-10000
Ah, but will it meet code?
looks like CAT was doing some shady accounting and got raided.
Hillary Clinton’s destabilization of Libya is the gift that keeps on giving for oil bulls:
https://www.yahoo.com/finance/news/eastern-libya-forces-strike-air-aim-retake-oil-211422970.html
The whole world is watching.
Let’s not f*ck it up this time…