March 21, 2017

Normalization Follows Years Of Red-Hot And Record-Breaking

A report from the American Statesman in Texas. “Home sales in Pflugerville in January and February are less than half of what were sold in the same period last year. But Brandy Guthrie, president of the Austin Board of Realtors, said that dip does not indicate a weak market. Instead, she said, it is more indicative of a market moving toward normalization. That normalization follows two years of a ‘red-hot’ and ‘record-breaking’ real estate market in Central Texas, she said, which still remains robust this year. She noted the median price of homes rising from about $240,000 in January to $250,000 in February as homes continue to sell quickly and regularly receive multiple offers.”

“Guthrie said a continuing stream of new homes in Pflugerville will continue contributing to a robust Central Texas market. But with demand still high, it will remain a seller’s market. ‘Right now we have a housing shortage,’ she said. ‘Until we can get additional supply for the region, prices will continue to increase.’”

The North Bay Business Journal in California. “2016 was a strong year for apartment sales in Marin County, with multiple offers the norm for both five-plus-unit complexes and smaller, two- to four-unit properties. Both categories saw year-over-year price increases, with some southern Marin prime apartment properties selling at over $500,000 per unit. In central and northern Marin cities, prices are now $201,000–$409,000 per unit, depending on location and amenities. The majority of central Marin prices is currently around $300,000 per unit.”

“Smaller properties also received price increases in 2016. Southern Marin fourplexes sold for as high as $3.55 million. Duplexes in both Tiburon and Sausalito are now selling for $1.8 million–$2.3 million. Just two years ago, the same-sized duplexes were selling for $1.4 million–$2.0 million. Capitalization rates for five-plus-unit properties ranged from 2.69 percent for complexes with 30 percent upside in rents to around 4 percent for apartment properties that sold with rents near or at current market rents.”

“At the same time apartment sales were strong, southern Marin apartment rental rates continued to soften as more new apartments and condos came to market in San Francisco. Southern Marin two-bedroom luxury apartments that were renting for over $4,000 per month in the past two years are now renting for around $3,400–$3,600.”

From Arlington Now in Virginia. “Question: I’ve been renting my unit at the 1800 Wilson condos in the Rosslyn/Courthouse area for the last five years and am wondering why I used to get more rent five years ago than I do today, despite keeping the unit in great condition for each renter. Any ideas? Answer: You may have heard that over the last five to six years, the rental market has hit all-time highs across the country, so it makes sense that you’d expect your rental income to increase. However, the increased rental demand and previously undersupplied luxury rental market in Rosslyn got the attention of some major developers, who recently built larger luxury rental buildings nearby.”

“Don’t expect a huge jump because rental supply is substantially higher now and Central Place, above the Rosslyn Metro station, just started leasing 377 luxury units. However, many of these apartments are in the ultra-luxury market.”

From The Real Deal. “Criminal charges are looming for scandal-plagued Malaysian businessman Jho Low, who has been accused of stealing billions of dollars from a state development fund. Prosecutors’ plans involve charges of wire fraud and money laundering against Low and others, according to the Wall Street Journal, characterizing the scheme to siphon money from the 1Malaysia Development Bhd. as one of the largest-ever cases of financial fraud.”

“In addition to criminal charges, the Department of Justice is looking to seize additional assets from Low, including his $165 million, 300-foot yacht. It is also looking to seize a luxury apartment in Paris and a penthouse in London. Separate from the criminal investigation, the DOJ filed civil lawsuits this past summer, seeking to seize more than $1 billion in assets, including art and luxury real estate in New York City.”

From Crain’s New York Business. “Brookfield Properties has seized control of the Brill Building by foreclosing on a mezzanine loan it held against the Times Square property that had slipped into default in recent months. Real estate investment firms Brickman & Associates and Allied Partners had purchased the building for $185.5 million in 2013, then sold a minority share to additional partners last summer in a deal that valued the property at $310 million but also heaped on debt, according to reports at the time.”

“The takeover took place after the building’s owners couldn’t execute on a plan to lease its roughly 40,000 square feet of retail space for sufficient rents to make their investment pay off. ‘We made an investment four years ago that was predicated on certain retail rents, and instead those rents dropped tremendously, and we couldn’t generate the cash flow we expected,’ said Steven Friedman, Brickman’s chief investment officer, who confirmed his firm and its partners turned the property over to Brookfield. ‘Across the spectrum you’re seeing retail just getting creamed for a variety of reasons, and this is an unfortunate result of those problems.’”

“When it comes to retail, Brickman is far from alone. Urban Outfitters CEO Richard Hayne recently compared the challenges facing retailers to the housing bust during the Great Recession. ‘Thousands of new doors opened, and rents soared,’ Hayne said of the rapid increases in retail capacity that marked the 1990s and early 2000s. ‘This created a bubble, and like housing, that bubble has now burst.’”




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105 Comments »

Comment by Ben Jones
2017-03-21 14:25:52

‘Just two years ago, the same-sized duplexes were selling for $1.4 million–$2.0 million. Capitalization rates for five-plus-unit properties ranged from 2.69 percent for complexes with 30 percent upside in rents to around 4 percent for apartment properties that sold with rents near or at current market rents.’

‘At the same time apartment sales were strong, southern Marin apartment rental rates continued to soften as more new apartments and condos came to market in San Francisco. Southern Marin two-bedroom luxury apartments that were renting for over $4,000 per month in the past two years are now renting for around $3,400–$3,600′

Their funeral.

Comment by Ben Jones
2017-03-21 15:26:05

BTW, I took a look at a luxury apartment complex north of downtown Houston recently:

https://www.youtube.com/channel/UCr0kVPTPfgQ9WHYvA4qB04g

Comment by Race Bannon
2017-03-21 17:31:58

Damn…. thats haunting. Looks like smuggled footage of empty everything in North Korea. You’ll find the same thing in and around NoVA.

Comment by oxide
2017-03-22 08:10:30

Land as far as the eye can see… and yet they have to pack people like sardines. In Texas of all places. Levittown, and even a trailer park, would more attractive than this. The commute is probably a nightmare, not to mention the WalkScore…

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Comment by absolutebeginner
2017-03-22 08:30:40

Look at this HBB video. Talk about expanses of land:

https://www.youtube.com/watch?v=tLo-I773VTU

Do you think the Denver sprawl will spread out to Nebraska border in 100 years?

 
Comment by oxide
2017-03-22 09:30:21

Doubt it. We’re overdue for another Black Death.

 
Comment by In Colorado
2017-03-22 09:45:30

Do you think the Denver sprawl will spread out to Nebraska border in 100 years?

There isn’t enough water in the Centennial state to support that many people.

 
Comment by new attitiude
2017-03-22 10:13:23

I can’t stand those tri-levels! Anyone whoever lived in one never will again. They build them here too.

 
Comment by oxide
2017-03-22 10:14:25

Plenty of land where there’s water, even in the supposedly dense East Coast. If you gave every man woman and child in the US a 1/4 acre of land, they would occupy 1/2 of Texas.

 
Comment by In Colorado
2017-03-22 10:49:13

If you live in the west (not the PNW) and you visit est of the Mississippi, you will be blown away by all the rivers and lakes. There is nothing comparable out here. Water rights are a BIG DEAL out here, a very big deal. The City of Loveland purchased the old Hewlett Packard campus just to get a hold of the water rights that were associated with the property.

 
Comment by In Colorado
2017-03-22 10:51:29

Doubt it. We’re overdue for another Black Death.

I think that will mostly happen in the 3rd World, especially in Africa.

 
Comment by PitchforkPurveyor
2017-03-22 11:23:19

“I think that will mostly happen in the 3rd World, especially in Africa.”

I completely disagree. It could happen in the US just as easily as anywhere. I agree with Oxide, we are very overdue. The earth would really benefit from a 75% die off of humans.

 
Comment by In Colorado
2017-03-22 12:13:55

The earth would really benefit from a 75% die off of humans.

The bulk of the world’s population lives in the 3rd world, and they live in mostly insalubrious conditions. Many don’t even have access to potable water. When it happens, it will hit them a lot harder.

Though if it does hit in the US, perhaps our biggest cities will bear the brunt of it, while more isolated flyover might fare better. That could have an interesting effect on demographics.

 
Comment by butters
2017-03-22 14:09:09

from a 75% die off of humans.

Are you volunteering?

 
Comment by new attitiude
2017-03-22 16:01:25

geez… are you guys all in your 80’s?

what kinda loser wants a 75% die off?

 
 
 
Comment by Blue Skye
2017-03-22 05:51:24

Four story garden apartments in the middle of nowhere.

 
Comment by Sean
2017-03-22 07:14:20

I used to live just south of Tomball in Spring, Tx. My guess is they are trying to get the people priced out of The Woodlands into a “luxury” complex. It won’t work because Texas has a LOT of places to build, and it will keep expanding out and out and out. Luxury today is low income housing in 10 years, because 10 miles up the road there will be a new luxury complex. Lather, rinse,repeat.

Comment by aNYCdj
2017-03-22 08:21:49

my DJ partner and her husband just moved from yonkers to tomball……willow lake a Horton project, her sister is one of the sales agents

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Comment by Ben Jones
2017-03-22 08:38:11

I didn’t get much video because it rained so much and my equipment isn’t suited to rain. But the amount of building is hard to describe. It seemed like it was everywhere, especially Katy. Most of it was this 4 story stuff. As a landlord, all I can say is I would never want an elevator to maintain, much less multiple elevators.

I don’t know what to think of this tower living in Texas. One of the reasons I couldn’t record much in downtown Houston was there wasn’t anywhere to park. I understand they throw their trash down chutes. It seems like that would start to stink. Anyhoo, Houston is the disaster we’ve read about. Dallas will probably be worse. There were 12,000 apartments and condos for rent near the downtown hotel I stayed at, with construction everywhere. And it’s not just multifamily. They are throwing up 500k-800k plus shacks on the edges too.

 
Comment by In Colorado
2017-03-22 09:48:21

I understand they throw their trash down chutes. It seems like that would start to stink.

I once lived in a 10 story building that had garbage chutes. We lived on the second floor and once in blue moon the chute would clog. Fortunately the chute wasn’t inside the apartment’s living area.

 
Comment by Ethan in Northern VA
2017-03-22 11:48:26

I think they build 4 stories because it’s the tallest you can go on kindling without moving to concrete.

Here in NoVA they now build these strange townhouses where it’s 4 stories but 2 stories are 1 unit, 2 stories are another (stacked.)

 
Comment by BearCat
2017-03-22 11:50:31

They do that in San Francisco, too.

 
Comment by oxide
2017-03-22 12:26:25

There are a lot of stacked condos in Maryland too. I’m not surprised that developers build them; what surprises me is that people buy them! You get to share a two-car garage with a stranger.

 
Comment by aNYCdj
2017-03-22 18:18:27

Thanks these are all SFH one level, lets see how they feel after a TX summer. Also the RE taxes in Yonkers was more then their mortgage they already miss NYC 28 minutes to Grand Central, but they paid cash for the house and realize just how much financial and marital stress they were under in Yonkers

 
 
 
 
Comment by Race Bannon
2017-03-22 14:37:30
 
 
Comment by Ben Jones
2017-03-21 14:28:18

‘We made an investment four years ago that was predicated on certain retail rents, and instead those rents dropped tremendously, and we couldn’t generate the cash flow we expected,’ said Steven Friedman, Brickman’s chief investment officer. ‘Across the spectrum you’re seeing retail just getting creamed for a variety of reasons, and this is an unfortunate result of those problems.’

Well you know Steve, you guys could have just dug deep and paid what you promised. I guess that isn’t how it goes with you city slicker players. Anybody hiring a CIO who flubbed this investment?

Comment by Raymond K Hessel
2017-03-21 15:02:31

In our oligarch-looted real economy, as opposed to the Wall Street-Federal Reserve “stimulus”-engorged speculative casino, money is tight and getting tighter. How were these “chief investment officers” coming up with their rosy assumptions?

Comment by In Colorado
2017-03-22 08:12:02

How? Because they are completely out of touch with what it’s like to be middle class these days. They think that middle class wages are much higher than they really are. I have noticed this trait in many upper income folks. An anecdote from many years ago: During an NFL strike a reporter was interviewing John Elway, and the topic of player greed came up. The newspaper reporter asked Elway how much he thought he was paid. Elway overestimated by more than 3X and was, according to the reporter, visibly surprised when he learned how little (in his eyes) the well known, local sports reporter was paid.

A friend who used to own a successful small business thought that the typical household had an income in the 150K range.

Comment by absolutebeginner
2017-03-22 08:35:41

‘A friend who used to own a successful small business thought that the typical household had an income in the 150K range.’

It is around $52,000 from what I dug up on Google.

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Comment by Karen
Comment by Ben Jones
2017-03-22 11:11:58

‘More than 3,500 stores are expected to close in the next couple months…people are now devoting bigger shares of their wallets to restaurants, travel, and technology — like smartphones — than ever before, while spending less on apparel and accessories.’

And they don’t sell phones in malls? When people are spending record percentages of income on rents, it leaves less for other stuff. Remember how the media reported ever higher rents with glee?

Comment by Ben Jones
2017-03-22 11:18:37

‘Pension fund capital directed at real estate is already at record levels. Even for those who haven’t raised allocations as a percentage of assets under management, the dollar amounts have increased along with growth in total investment portfolios…The increased capital flows from pension funds are helping to keep pressure on property values and pricing. Of late, there has been increasing interest in value-add properties due in large part to stiff competition for core assets and a search for higher yields. Real estate investors looking for a hedge against rising interest rates want properties that can take advantage of the improving economy. Value-add properties have room to create rent growth and appreciation…’

http://nreionline.com/investment/more-pension-fund-money-flowing-commercial-real-estate

So they upgrade, raise rents and tenants struggle even more. Brilliant.

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Comment by Karen
2017-03-22 21:32:40

You probably didn’t hang out in any malls while you were here in Dallas, but even in the well-off northern suburbs, name-brand stores have been shuttering and no-name brands/stores are moving in.

It’s strange because the malls here are jam packed with people. You would think the stores could make enough money to stay in business.

Around Christmas I went to the Stonebriar mall here in Frisco and one of those Israeli outfits selling off-label beauty products (the kind you usually see in kiosks in the center of the mall, whose sales people constantly accost passersby) had taken over a large space inside the mall. It was weird. I had never seen that before.

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Comment by Ben Jones
2017-03-21 14:32:30

‘San Francisco, San Jose, Oakland: Bay Area rents take a slide’

‘Bay Area rents, according to most reports, have been slipping for months. (And, at least anecdotally, there are relative bargains to be found these days — the numbers from RentCafe and other data crunchers don’t necessarily reflect smaller complexes or apartments with mom-and-pop landlords.)’

‘Looking at the national picture, RentCafe offered a few possible reasons for the slide: “It seems the recent increase in new construction is creating volatility in the apartment market, cooling down rents across the country,” it said. ..Historically tight markets like San Francisco, Houston, Boston, San Jose and New York all saw average rents drop as well.”

RentCafe noted that “recent construction has also led to a surplus of luxury units in many major metropolises, and that means a loosening market there, too.”

Comment by scdave
2017-03-21 15:11:31

You may be interested in reading this Ben…You also Rental Watch…

http://city-journal.us4.list-manage.com/track/click?u=b75d222a8ff4ade269f9efd3b&id=9d514efda6&e=cc5188f607

Comment by Ben Jones
2017-03-21 15:23:27

Yeah, there’s a shortage in Pflugerville too.

 
Comment by Rental Watch
2017-03-22 01:03:20

I’ve noted CEQA and impact fees before.

And now there is AB 199. I’ve talked to a bunch of people associated with the homebuilding industry in the past 48 hours. If this becomes law as currently written, it has the potential to severely curtail development even further.

Comment by Race Bannon
2017-03-22 13:21:03

The only thing California needs to build is more jails to lock up all these housing fraudsters.

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Comment by butters
2017-03-21 15:17:29

‘San Francisco, San Jose, Oakland: Bay Area rents take a slide’

No no no. Rents always go up and everybody wants to live here.

Comment by In Colorado
2017-03-22 08:14:18

I’d say that rents zig zag, but in the long term they do go up. I know that places I rented 30+ years ago are 3-4 times as expensive now.

Comment by Blue Skye
2017-03-22 10:06:43

30 years…

The biggest expansion of credit in history has been going on for that long. It didn’t start in 2004.

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Comment by In Colorado
2017-03-22 10:57:27

FWIW, I recall people back then complaining that rents were too high, compared with 30 years before. I know my studio apartment rent in the 1980’s was 3x of what my parent’s mortgage payment was in the 1960’s.

 
Comment by Rental Watch
2017-03-22 11:19:14

2%-3% inflation over many decades does tend to add up.

 
Comment by Ben Jones
2017-03-22 11:46:49

US wages haven’t gone up in decades. Technology should make things cheaper, not more expensive. The first computer I bought in the 90’s cost 3 grand and had single digit k ram. A new Prius is almost a third less costly than the first year.

The house I grew up in was built in 1921. It has really solid beams, craftsman laid brick, hardwood floors. These shacks being built today are tree houses by comparison. $500k for an old apartment in Marin yielding 3% and some rents falling 20%?

 
Comment by Ben Jones
2017-03-22 11:59:16

‘when patients pay their own medical bills, they act like normal consumers ― comparing prices and looking for value. And when patients act like prudent consumers, doctors who want their patronage must respond by competing on prices, convenience and other amenities.’

‘Consider cosmetic surgery, one of the few areas of medicine where consumers pay out of pocket. The inflation-adjusted price of cosmetic medicine actually fell over the past two decades — despite a huge increase in demand and considerable innovation [See Figure]. Since 1992:

-The price of medical care has increased an average of 118 percent.
-The price of physician services rose by 92 percent.
-The inflation rate, for all goods and services, as measured increased by 64 percent.
-Yet cosmetic surgery prices only rose only about 30 percent.’

‘Consider botulism toxin injections, such as Botox and Dysport. According to surveys by the American Society of Plastic Surgeons, the average fee to administer botulism toxin was $369 in 2012, compared to $365 a dozen years earlier in 2000. Groupon and LivingSocial have occasionally offered Botox deals for as little as $99, with $149 quite common.’

‘Another competitive service is laser skin resurfacing, which cost about $2,556 in 1996, according to the American Society of Plastic Surgeons. Physicians began offering less-invasive, fractional laser resurfacing that reduced recovery time. The cost of fractional laser skin resurfacing fell to $1,113 by 2012. Yet, couponing websites have offered numerous laser resurfacing deals for only $299. One Dallas-area Med Spa even offers this service, available with a one-year membership, for as little as $149 — a mere fraction of the cost elsewhere.’

http://healthblog.ncpa.org/why-cant-the-market-for-medical-care-work-like-cosmetic-surgery/#sthash.6fVjK8aQ.dpbs

 
Comment by FTHB wannabe
2017-03-22 14:32:23

Because the billing system is too complex. Even some professionals in the health care industries have trouble understanding them. Hospitals charge EVERYTHING they can, using EVERY procedure codes that have the slightest chance to get allowed. Oh yeah, if you do not have an insurance company to deal with that bs, you are out of luck. There should be a huge fine to improper billings to solve the problem.

If the prices for medical services were easy to understand, we would have much less demand for insurance, leading to much less health care costs to the society as a whole.

Also, there are tons of fraudulent doctors and hospitals exploiting the system. It is estimated that over 10% (a very conservative number) of the medicaid expenses are attributable to fraudulent claims.

 
Comment by Rental Watch
2017-03-22 14:56:58

The other problem is that doctors pay no attention to the cost when they determine which tests to order, etc.

A friend of mine is a cardiologist…he doesn’t think twice about ordering up a lot of blood panels in his daily routine. However, he admits that if he knew the cost, he might be more judicious (ordering them sequentially, or not order some), rather than order everything at once.

He has no incentive to order fewer blood panels.

 
Comment by Karen
2017-03-22 21:45:10

‘when patients pay their own medical bills, they act like normal consumers ― comparing prices and looking for value. And when patients act like prudent consumers, doctors who want their patronage must respond by competing on prices, convenience and other amenities.’

Yes, yes, yes. This article is wonderful.

The government-”health insurance”-complex helps prop up the price of medical care in the same way the government-sponsored-mortgage industry helps prop up the price of housing.

And I definitely prefer the term “customer” instead of patient. I don’t need anyone’s paternalism.

 
 
 
 
 
Comment by Senior Housing Analyst
2017-03-21 14:43:07

Redwood City, CA Rental Rates Crater 18% YoY On Record High Housing Inventory

https://www.zillow.com/redwood-city-ca/home-values/

 
Comment by azdude
2017-03-21 14:59:34

“ca real estate is a bargain” expert

 
Comment by Ben Jones
2017-03-21 15:03:25

‘Federal Reserve officials say U.S. commercial real estate is expensive. That isn’t stopping the world’s biggest money manager from saying it’s time to buy.’

‘BlackRock Inc. says property can deliver average yields of 3.5 percent, compared with 3.4 percent for U.S. investment-grade bonds and the S&P 500 Index’s dividend yield of 2 percent. Demand is spreading as far as Asia, where Mirae Asset Securities Co. is buying U.S. real estate, including some of the Seattle buildings that house Amazon.’

‘Property prices have risen enough that Fed Chair Janet Yellen is taking note. Commercial real estate is “high,” she said in January.’

‘Boston Fed President Eric Rosengren said around the same time he’s also monitoring such assets. “If you look at prices of commercial real estate, particularly multifamily properties, they have been going up very rapidly in many parts of the country.”

Comment by Ben Jones
2017-03-21 16:49:52

It’s a good thing you guys have been steadily raising interest rates Eric.

 
 
Comment by Raymond K Hessel
2017-03-21 15:11:44

By the time the central bankers start warning of a housing bubble, it’s already way too late.

http://www.cnbc.com/2017/03/20/australias-central-bank-warns-of-growing-risks-in-housing.html

 
Comment by Crow Puke
2017-03-21 15:29:16

Here’s a bunch of “average Joes” from Toronto giving their predictions. This was from their big real estate wealth expo last weekend. There are some funny quotes.

http://torontolife.com/real-estate/think-going-go-even-sky-high-wealth-expo-attendees-talk-torontos-housing-market/

Comment by Not paid for by Sharia Blue
2017-03-21 15:36:38

Yeah, some of those quotes are insane. Greed, it never goes out of style. Its the new black!

 
Comment by Raymond K Hessel
2017-03-21 16:51:51

Wow. Just wow. Too bad most of these people won’t have a fixed address or Internet connection in another year or so, for a follow-up piece on “Victims of the Bubble.”

This is my favorite:

“Don’t take advice from non-doers and keep only positive people around you. I’m going to look into getting a spiritual mediator.”

Um, yeah. Maybe you should be procuring a cardboard box for your new, more transient phase of life after you become a penniless FB.

Comment by Crow Puke
2017-03-21 17:33:26

The article is sort of ridiculing those people. At first, I thought the author + article was making stuff up, to troll us or something, but when looking at their regular real estate section, it’s full on bubble mode. Maybe those people in the article really did say those things.

 
Comment by redmondjp
2017-03-22 13:12:44

Life Coaches are also popular.

This sounds exactly like the Scamway/Worldwide Dreambuilder/Quikstar brainwashing materials out there. A bunch of my ’smart’ college friends got sucked into it. Shockingly, none of them are in it any longer and they still have their day jobs.

 
Comment by Crow Puke
2017-03-22 16:15:43

-> “Too bad most of these people won’t have a fixed address or Internet connection in another year or so, for a follow-up piece on “Victims of the Bubble.””

I’m curious, why would they not have a fixed address or Internet connection in a year? Are they going to be homeless, wandering the streets?

 
Comment by Crow Puke
2017-03-22 16:31:45

Sorry, I replied too soon. Yes, they will become homeless, and should get good cardboard boxes.

Comment by redmondjp
2017-03-22 20:38:19

Well, the homeless around me simply clog up all the local libraries (as well as the toilets therein) and get their free internet there.

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Comment by Senior Housing Analyst
2017-03-21 16:19:47

Fairfax City County, VA Housing Demand Craters 19% YoY

http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv

 
Comment by Professor Bear
2017-03-22 04:07:14

Did you get caught out long on Wall Street’s bad Tuesday?

 
Comment by Raymond K Hessel
Comment by aNYCdj
2017-03-22 08:23:07

great my car is almost dead so i need a cheap run around car….

Comment by In Colorado
2017-03-22 09:51:35

If you look at the chart they’re still pricey, buy the trend appears to be on your side if you can wait a bit longer to buy.

 
Comment by redmondjp
2017-03-22 13:13:46

Get a used Yaris - dead-stone-reliable 1.5l 4-cylinder that has been around for 20 years. And nobody will steal it either.

Comment by Carl Morris
2017-03-22 14:34:31

Speaking of Toyotas, if you need a big one the Avalons weren’t very popular and depreciated pretty hard.

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Comment by Raymond K Hessel
2017-03-22 05:19:34

31.5% of Millennials live with their parents. How’d that hope n’ change work out for ya, basement-dwellers?

http://www.nbcbayarea.com/news/local/Theres-No-Place-Like-Home–315-of-San-Francisco-Millennials-Live-With-Their-Parents-416774963.html#ixzz4c1o5Xp00

 
Comment by aNYCdj
Comment by In Colorado
2017-03-22 08:17:51

“almost dead”

Maybe Miracle Max can save it, and if he can’t, rifle its pockets for spare change.

Comment by redmondjp
2017-03-22 13:15:01

They have already sold off their most valuable brands. Not much left that’s worth anything - possibly the real estate underneath some of their standalone locations.

 
 
 
Comment by Blue Skye
2017-03-22 06:59:23

“massive 1MDB embezzlement scheme”

It’s ironic when central banks create trillions out of thin air and shove it into the “economy” willy nilly and some unprincipled character runs off with a wheel barrow of it. There is shock and amazement that anyone is capable of stealing a billion when it’s just a little leak of the trillions the central bank stole from the rest of us.

 
Comment by taxpayer
2017-03-22 07:10:49

ARM loans are back because
1. buyers expect interest rates to fall
2. buyers are shoe horning themselves into a payment

Comment by Fang nu
2017-03-22 07:54:52

Qualifying for an arm means you qualified atthe highest possible payment.
No shoe horning.

Thanks for playing.

Comment by palmetto
2017-03-22 09:44:41

“Thanks for playing.”

The only way to win is not to play.

Comment by Rental Watch
2017-03-22 10:53:57

War Games

Great movie

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Comment by redmondjp
2017-03-22 13:17:54

Yup. Probably one of the best of the 1980s ones.

But as our MIC knows all too well, war is very profitable. Notice that Trump is making sure that they are being taken care of. If he has them on his side, it’s good ‘insurance’, so to speak.

 
Comment by Rental Watch
2017-03-22 14:14:27

“war is profitable” is the most expensive statement ever made…just ahead of “it’s different this time”.

War is politically profitable…warring makes it more likely that a president is re-elected.

War is an economic disaster. Spending $25MM on a smart bomb only to blow it up is very profitable for the ones making the bombs, not so much for those paying for them. Then add on top the loss of human life (and the effects on broken families), and caring for wounded soldiers, etc., and you have an unmitigated economic sink hole.

 
Comment by Avg Joe
2017-03-22 17:44:01

Watched it with my kids. There’s a scene where Matthew Broderick puts a floppy disk in a drive, and my kids are all, “what the hell is that?”

 
 
 
 
Comment by oxide
2017-03-22 08:02:09

taxper, which ARM loans are back? Do you have a link? In the past few years, we have a fair number of low to 0% down-type loans. But almost every loan I have seen is fixed-rate and fully amortized monthly PITI. Once in a while Ben finds something, but the requirements are so strict (very high down payment, very low DTI, high assets) that such loans are clearly granted to people who are already rich.

Comment by sleepless_near_seattle
2017-03-22 09:23:54

I don’t know about ARMs, but I was surprised to see a “how to pay off your mortgage faster by using a HELOC instead of a traditional mortgage” advertisement yesterday. Hadn’t seen one of those since 2007-ish.

 
Comment by taxpayer
2017-03-22 09:40:17

on yahoo financial w donna O-lick etc
riskier loans
yep

now the retail space bubble,art,student loans,car loans,farm land,cre

wow there are too many to count

2 left to pop res re and stocks

Comment by Ben Jones
2017-03-22 09:48:08

Don’t forget the money losing, untraded, multi-billion peso companies engaging in such high tech as taxis, bed and breakfast or sending photos of your whoopties to each other over the inter-tubes.

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Comment by Race Bannon
2017-03-22 12:38:34

:mrgreen:

 
Comment by junior_kai
2017-03-22 14:37:31

Dayum, I thought I was a cynic!

Just spent part of this morning esplainin’ to a millennial how Ubuh has almost no barriers to entry, and the guy behind craiglist could probably crush them if he wanted to inside of a year. But they have a market cap on par with General Motors. Ooookay!

 
 
 
Comment by Race Bannon
2017-03-22 09:40:28

The 7, 10, 15 and 30 year mortgage structure is Pick-A-Payment/Pick-A-Rate financing by definition.

 
Comment by Rental Watch
 
 
Comment by Race Bannon
2017-03-22 15:50:28

No income verification, no appraisal every year for 8 years….. What could possibly go wrong?

 
 
Comment by Raymond K Hessel
Comment by Sean
2017-03-22 07:51:57

Huh. Thought Yun would have pulled the “weather” lever instead of the “inventory” lever this month. Maybe he is saving that for March home sales - because it’s only the weather or inventory holding back sales.

Comment by palmetto
2017-03-22 08:59:14

Yeah, what a joke. As long as the Fed and other central banks remain in place, don’t expect too much of a drop in prices, ever. Ever. The banks will hang on to the boxes, let ‘em rot and plow ‘em under before they’ll allow a major drop.

Comment by Blue Skye
2017-03-22 10:16:40

Prices cannot remain in equilibrium. People will not carry lifetime loans of 10 times their gross income unless their greed for profit is satisfied. There has to be rapid price appreciation or collapse. Nothing in the middle at this stage.

If the Central Banks were so omnipotent, how’d they let commodities drop by half?

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Comment by palmetto
2017-03-22 10:45:54

“If the Central Banks were so omnipotent, how’d they let commodities drop by half?”

I didn’t say they were omnipotent. Why’d they let Lehman and Bear Stearns bite the biscuit? I have no clue why they pick which entities to be winners and losers. But they do it.

I suspect there’s more scope for goobermint backstopping in housing than commodities. Just like the student loans that can’t be discharged in bankruptcy.

BTW, I meant to post this for you a while back. Isn’t this somewhere up in your neck of the woods? Ice houses on Lake Ontario. They’re actually kinda cool, but I bet it’s a b*tch for the homeowners.

http://www.democratandchronicle.com/story/news/2017/03/13/webster-homes-made-into-ice-palaces/99114332/

 
Comment by Blue Skye
2017-03-22 11:35:42

Yeah, that’s near me. The day Rochester saw sustained 80 mph winds was very unusual. I won’t go out on Lake Ontario when the wind is over 15. I’ve sat in Oswego for a day or two many times watching the waves crash over the harbor breakwater. I can only imagine what 80 mph would stir up.

 
 
 
 
 
Comment by Senior Housing Analyst
2017-03-22 09:46:55

Clarksville, MD Housing Prices Crater 19% YoY

https://www.zillow.com/clarksville-md/home-values/

 
Comment by palmetto
2017-03-22 13:30:47

Am I a bad person for feeling a wee bit of schadenfreude over the fact that a certain cretin shariablue just had a heart attack?

Comment by oxide
2017-03-22 14:26:58

I won’t be able to answer your question until you provide a name or a link. I haven’t been to youtube lately so I don’t know what a shariablue is. Is that from ♥PJW♥?

Comment by palmetto
2017-03-22 15:27:45

Sorry, oxy, you’ll just have to google, Ben was kind enough to let the comment go through. Here’s hint though: the guy shares a first name with the recently departed Rockefeller. And you can go to ZH and scroll down through the stories until you see the one that mentions heart attack.

Comment by oxide
2017-03-22 17:23:57

OK got it. Wasn’t familiar with the guy, but was familiar with the dot org. However, I had to look up “internaut.” Damn, how self-congratulatory can one possibly be to call oneself an “internaut.” :roll:

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Comment by junior_kai
2017-03-22 14:38:44

I saw that too - hope its the first of many!

Comment by palmetto
2017-03-22 15:23:08

Kek willed it.

Comment by Tarara Boomdea
2017-03-23 08:28:12

Kek

Meme magic - feels good.

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Comment by new attitiude
2017-03-22 14:02:47

The inventory in Boise, ID is at record lows.

Comment by rms
2017-03-23 06:03:19

It couldn’t be for lack of available land.

 
 
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