A Market Glut Of Dense, Expensive Housing
A report from the Daily Herald in Utah. “In Utah County, the housing market is not being able to keep up with demand, according to Wayne Parker, Provo’s chief administrative officer. ‘There is a housing shortage along the entire Wasatch Front,’ Parker said. ‘A lot of investors are buying up homes and anticipating flipping those homes.’”
“Orem spokesman Steven Downs added, ‘We aren’t ignorant to the fact that some in our community are frustrated with the number of apartments that have been built in the last handful of years. It is always a difficult balance to provide adequate housing. However, with the occupancy rates remaining near all-time lows, it is safe to say that there is no data to suggest that Utah County is ‘overbuilt’ in regards to housing.’”
From The Columbian. “Apartment construction in the suburbs of Portland is the most active it’s been since 1996. After an intense two years of low vacancies and high rents, the influx of new units may slowly provide some relief to renters, according to Portland-based apartment appraisal specialists Barry & Associates. There has been a rapid increase in urban land value, and available land is becoming scarcer. ‘That pushes apartment developers out to the suburbs, where you can get more bang for your buck,’ said Patrick Barry, a certified general appraiser.”
“For instance, in 2013 the median value of an apartment unit in Clark County built between 1960 and 2000 was $69,756, according to Barry’s analysis of data from CoStar Group Inc., a commercial real estate marketing company. Three years later that median value was $100,037 — an increase of 43 percent. The year-to-year increase from 2015 to 2016 was 30 percent. The value of newly built apartments is much higher, Barry said.”
“For a long time, Clark County’s rental vacancy rate has hovered around 2 percent. People looking for rentals may notice that incentives are being offered again as the market becomes more competitive. Some listings on craigslist.org are advertising two weeks’ free rent, or $500 off first month’s rent, no move-in fees, and water/sewer/gas included along with free cable.”
“It may be strange to recall, but in 2006 Portland was among a list of 10 major cities considered the least expensive rental markets. Back then, average rent was $740 per month, according to Marcus and Millichap. Today, it’s more than twice as high and Portland appears on lists of the most expensive rental markets.”
The Chicago Maroon in Illinois. “Antheus Capital, the parent company of Mac Properties, sold the East Park Tower to a New Jersey investor for $23.5 million in February, according to Crain’s Chicago Business. The East Park Tower is a hotel apartment building. According to Crain’s, when Antheus took out the $112 million loan from LaSalle Bank in 2007, the Hyde Park apartment portfolio was expected to generate around $11.9 million net cash flow each year. However, the highest cash flow the property ever achieved was only $6.1 million in 2015.”
“The investor that bought the East Park Tower is Blumberg & Freilich Equities, a firm usually active in the New York City market. The East Park Tower is the first piece of property that the firm purchased in Chicago. A partner at Blumberg & Freilich Equities, Ted Silverman, told Crain’s that ’so many investors are bidding things up into the stratosphere’ in New York, making the prices in Chicago much more attractive.”
From Modern Luxury on California. “What does a developer do when its luxury housing sits empty? Partner with a shadowy startup to divvy it up and stock it with millennials. At the heart of many of the Bay Area’s tech megacorporations is a simple quid pro quo: In return for free media, professional connections, or cheap rides, you surrender privacy. Now, inevitably, that arrangement has moved into the realm of housing, with a hush-hush startup asking tenants to sacrifice privacy in return for a discount spot inside a gleaming new luxury tower.”
“These arrangements, which come complete with subdivided bedrooms featuring upholstered partitions between roommates’ beds, come courtesy of HomeShare, a startup that carves up rooms inside of unoccupied luxury apartments and then vets and links up strangers to occupy them. Why all the secrecy? HomeShare now operates dozens of units in four brand-new Bay Area luxury towers. And its success and its shyness likely stem from the same source: a market glut of dense, expensive housing. Since the beginning of 2015, nearly 22,000 units have been built or approved in San Francisco (excluding the massive Candlestick Point development).”
“Of these, 19,500—89 percent—are ‘above moderate,’ meaning they can likely only be afforded by individuals making more than $90,000 a year. ‘We are in the midst of the biggest apartment-building boom since World War II,’ says Patrick Carlisle, chief market analyst at the Paragon Real Estate Group. But this boom comes with a downside, and not just for tenants who can’t afford the lavish new spaces popping up downtown like mushrooms after the rain. ‘Lenders seem to be fearful that we are reaching a saturation point for these sorts of units,’ Carlisle says.”
The Journal Sentinel in Wisconsin. “Things have changed since fall 2015, when David Winograd unveiled plans to develop a 12-story, 164-unit luxury apartment development in Walker’s Point. Construction costs increased, Winograd said. More importantly, several other new apartment projects surfaced in downtown Milwaukee and nearby neighborhoods. So, Winograd canceled his plans to build the $30 million development.”
“That project’s demise is a high-profile example of a drop in apartment development activity throughout the Milwaukee area, including its suburbs. Wangard last May received city approval for its proposed $24 million project at N. Water and E. Brady streets. The firm continues to pursue all three projects, but there are no definite construction start dates, said Stewart Wangard, chief executive officer. Part of that hesitation is tied to the large number of new apartments being built nearby, he said. About 1,200 new apartments are being completed in 2016 and 2017 within a three-mile radius of the firm’s three projects, Wangard said.”
“‘We knew that there was going to be a spike,’ he said. ‘We’re now working through that.’”
The Daily Orange in New York. “For citizens who have led, observed and revitalized the city of Syracuse for decades, the development of private student housing is another chapter in a story about the city’s housing market, which has been subjected to the push and pull of the University Hill tide. But the rate at which the industry is growing has raised concerns among community members that Syracuse is approaching a tipping point between opportunity and instability.”
“The city, which had eight existing student housing properties at the time, saw a wave of development proposals at the end of 2016. Since then, three projects have been approved by the Syracuse Industrial Development Agency to add 1,240 beds to the city by the 2018-19 academic school year. ‘What really is the concerning element right now is that there are seven, eight, nine of these developers coming — all with the same product, all at the same time,’ said David Mankiewicz, who came to Syracuse in the late 1970s to work with the Metropolitan Development Association. ‘So the question is: How deep is the market? Where are the students who are going to fill all that space?’”
“Mankiewicz fears the consequences an overbuilt student housing market will have for the city because he has already seen what happens when the market isn’t deep enough. Early on in his time in Syracuse, Mankiewicz saw vacancies plague the downtown corridor after a surplus of office buildings were constructed — disinvestments he said took the collective efforts of the Syracuse community 30 years to fix — and watched downtown bleed retail when shopping malls surrounded the suburbs of Syracuse heading into the 1980s.”
“‘In a city the size of Syracuse, it takes forever to fix those mistakes when we overbuild. So that’s my fear here. We’re going to do it for the third time. We’re going to do it to ourselves,’ Mankiewicz said. ‘The result is going to take us back, and I don’t know how many years it will take to fix what’s left behind of the neighborhoods.’”
‘Mankiewicz saw vacancies plague the downtown corridor after a surplus of office buildings were constructed — disinvestments he said took the collective efforts of the Syracuse community 30 years to fix…‘In a city the size of Syracuse, it takes forever to fix those mistakes when we overbuild.’
In Texas it took more than 15 years of looking at empty buildings and watching companies fold over and over. Taxes don’t get paid, people lose jobs cuz we don’t need to build anything. One might think that with thousands of egg heads at the Federal Reserve, somebody might have seen this coming. I did and I have a budget of zero.
This CRE thing, when you add in retail, is enough to drag us into recession. Then it really gets tough.
Now think Syracuse.
No industry except the university…
Insane public unions…
Insane property taxes…
Dreary and long winters….
Etc.
Yet, people still choose to live there.
They’re throwing taxpayer money at the student housing projects in Syracuse as well.
Population in upstate NY cities has been grinding downward since 1950. Syracuse is no exception. They can’t solve excess housing with building more housing even if they do say “it’s for the children”.
‘in 2013 the median value of an apartment unit in Clark County built between 1960 and 2000 was $69,756…Three years later that median value was $100,037 — an increase of 43 percent. The year-to-year increase from 2015 to 2016 was 30 percent.’
‘There has been a rapid increase in urban land value’
Oh sure, this kind of thing happens, what, never? I spotted this land bubble hearing Bozeman Montana lots had tripled in three years. And it was in Omaha and Perrysburg, I pointed it out as it was happening. Now we are a few years down the road and it’s gonna be a disaster.
went into walmart this morning and plenty of full baskets and ebt cards being whipped out.
Second of the month? I guess people were partying too hard on a Friday to do the midnight thang.
Why do you support those moochers who run WalMart?
Taxpayers have to give their employees food staps because walmart wont pay their employees enough.
APR 15, 2014
Report: Walmart Workers Cost Taxpayers $6.2 Billion In Public Assistance
Aren’t you always going on about welfare being cheaper than prison?
https://s-media-cache-ak0.pinimg.com/736x/41/bf/74/41bf74e45a9ae34918e143e6ad1f7907.jpg
good try.
So you dont mind taxpayers getting hosed, while WMT shareholders laugh.
The nice thing about Walmart is they earn piles of profit. Piles. Unlike Amazon who haven’t earned a penny since day 1.
‘In a focus on the first quarter of 2017, James Nelson of Cushman & Wakefield sat down with Kas Sanandaji of Property Markets Group, Greg Kalikow of The Kalikow Group and Kaled Management, and John McCarthy from HUBB NYC to discuss their current projects and business strategy, and what they expect from 2017.’
‘Greg: As a primarily residential group, I think right now you have to have a longer investment horizon. I think the cap rate is coming up and price per square foot is going down.’
‘James: Retail asking rents are down across the board in every single sub‑market, and availability is now at 20‑plus percent in pretty much every major sub‑market. How does this impact where you are looking for retail investments?’
‘Johnny: Retail is undergoing a few changes right now…It is changing the retail make‑up and there has been a sales shift in New York City, and with that there have been some retailers that don’t survive, some that find it tougher to compete in the city and it has created some vacancy.’
‘Looking a SoHo for example, how do you make money as a retailer paying rent over $1,000 a square foot? And on top of that, the dollar is really strong and that makes it tough for the tourism sales. It is just about getting the market to come back down and find out where retailers have the sales to make money and be profitable in those locations.’
‘James: How do you view the overall stock of both condo and rental product in the city?’
‘Kas: I think that condos are going to have problems. The issue is that it takes 36 months to get price feedback on a sale of a condo from the time that you make a decision to make an investment.’
‘When people see an eye‑popping profit, all of a sudden capital rushes towards building condominiums and that is why the condo business has a tendency of being a very cyclical business. We saw a huge amount of capital go into the price of land, we have had very, very low interest rates, and financial services did incredibly well coming out of the downturn. As a result, a huge amount of supply got pushed into the marketplace.’
‘James: Is it feast or famine for that very high end where only the best product is going to sell and then everyone else is going to suffer? What do you make of that super‑high end product?’
Kas: In good years with relatively low interest rates, Manhattan absorbs approximately 1,800 units a year of new product. If we have roughly 5,000 units of product coming into the marketplace, either in the marketplace now or that commenced construction before the lending markets essentially shutdown in August of 2015, you have got about a three year supply of condos before you get to a place where you are starting to have under-supply issues.’
‘I think that there is an exacerbating factor that may drag that out past three years because interest rates are going up, and I think people underestimate what that is going to do to both cap rates on existing assets and especially as it relates to the liquidation of condo inventory…So in summary, land prices are going down and liquidation is going to be slow.’
‘James: What kind of concessions does it take today to get an apartment rented?’
‘Greg: The amount of Manhattan landlords that issued concessions two years ago was under five percent, and now it is somewhere in the 33 percent range.’
Oh dear…
‘We saw a huge amount of capital go into the price of land’
Informative post Ben…Thx
either in the marketplace now or that commenced construction before the lending markets essentially shutdown in August of 2015,
Which lending markets shut down in August of 2015? Was that the end of QE? If the lending market shut down 18 months ago, then whence the money for all these new projects in Syracuse, Utah, etc?
If the lending market shut down 18 months ago, then whence the money for all these new projects in Syracuse, Utah, etc ??
Forward commitments…It takes many years to get these projects approved and ultimately built…3 possibly 4 years…The developers must have forward commitments on loans to be able take down the land and start the entitlement process…What he maybe saying is forward commitments from lenders shutdown in August of 2015 meaning that, if he is correct, you won’t see new developments start in his area going forward..
He’s talking about Manhattan condo lending. Multi-family is still getting a lot of funding in most markets.
Greenwich Village Manhattan Rental Rates Crater 7% YoY
https://www.zillow.com/greenwich-village-new-york-ny/home-values/
“He’s talking about Manhattan condo lending”
Not a lot of “super‑high end product” in Syracuse is there.
There is luxury student housing.
The rooms I knew of at the Cuse were a long way from luxury but long on fun.
But that was a long time ago.
Somebeach you’re right.
Boom in luxury apartments for Syracuse college students brings worries, too
By Rick Moriarty | rmoriarty@syracuse.com
November 14, 2016 at 9:30 AM
Syracuse, N.Y. — Syracuse has suddenly become a magnet for developers of expensive student apartments loaded with amenities.
They don’t come cheap, at least not by Syracuse standards. Rents average around $1,000 to $1,200 a month — per bedroom. (In contrast, rents in apartment homes in the university area typically range from $500 to $600 a month per bedroom.)
Unlike most apartment buildings, rents at purpose-built student apartment projects are usually per bedroom, rather than per apartment. So an apartment with four bedrooms could bring $4,000 a month in rent for the property owner. That’s at least twice the typical rents at similar sized apartments in downtown Syracuse.
http://www.syracuse.com/business-news/index.ssf/2016/11/boom_in_luxury_apartments_for_syracuse_college_students_brings_worries_too.html
This reminds me of one of the top ten worst deals I’ve seen. It was a condo tower to be built in Vegas near the Stratosphere during the bubble. The land was $50MM. The budget was 4 line items, with land being one of them. The budget was $250MM, and they wanted a few million dollars to go through the planning process.
I don’t know specifically, but at the bottom, land prices were probably ~10% of this peak type number.
There was no chance we would take part in such a thing, but I asked one question just for kicks. How are you going to compete with all the thousands of other condos that are being built?
I’ll never forget the answer: “This project is going to be special.” Click.
When there is clearly too much supply being developed, the marketing for these projects turns away from developing rational reasons why a homebuyer is going to purchase the units, and turns toward how you can convince capital to invest.
The ONLY way you can convince someone to invest in building more in a market with too much supply under development is to convince them that your project is unique, and will stand out among all the competition.
Sometimes the reasons are correlated, but often times, what an investor thinks will sell units is different than what will actually sell units.
When it comes down to it, in a weakening market with too much supply, no one gives a sh*t if a club sponsored by an A-List actor is located in the building if the price is too high, and especially if such amenities drive the HOA dues through the roof.
‘its success and its shyness likely stem from the same source: a market glut of dense, expensive housing. Since the beginning of 2015, nearly 22,000 units have been built or approved in San Francisco (excluding the massive Candlestick Point development).’
‘Of these, 19,500—89 percent—are ‘above moderate,’ meaning they can likely only be afforded by individuals making more than $90,000 a year. ‘We are in the midst of the biggest apartment-building boom since World War II,’ says Patrick Carlisle, chief market analyst at the Paragon Real Estate Group. But this boom comes with a downside, and not just for tenants who can’t afford the lavish new spaces popping up downtown like mushrooms after the rain. ‘Lenders seem to be fearful that we are reaching a saturation point for these sorts of units,’ Carlisle says.’
Well, you “build your way out of a bubble” guys got what you wanted, and here we are.
The reader who sent in the Wisconsin article added this in the email:
“A personal observation on Milwaukee area SFH: Some suburbs have reached the panic buying phase (rising prices + rising rates = “we have to buy NOW”). I’ve seen mediocre houses get offers within days. One house in the outer suburbs that sold for $162K in 2014 listed for $224K a couple weeks ago and had an offer the next day.”
“But it’s different this time.”
This time the money will dry up before demand does.
“Mortgage giant Freddie Mac today announced a new program that will allow lenders to give mortgages to buyers without credit scores. While the program may remind some observers of housing bubble loans, Freddie Mac says the program is a ‘responsible’ way to enable unconventional buyers to purchase homes. ‘We’re committed to supporting responsible lending and improving access to credit for all borrowers, including first-time home buyers, low- and moderate-income buyers and underserved populations,’ said David Lowman, executive vice president of Freddie Mac’s Single-Family Business.”
http://thehousingbubbleblog.com/?p=10030
Nothing like doubling down on an already subprime housing market
the only people I know without credit scores are here illegally.
subprime car loans too:
http://www.reuters.com/article/us-banco-santander-settlement-idUSKBN1702EN?feedType=nl&feedName=usdai&utm_source=Sailthru&utm_medium=email&utm_campaign=US%20Daily%20Investor%20Update%202017-03-29&utm_term=US%20Daily%20Investor%20Update
Dirty deeds, but their hands are clean.
Oh ya there’s no subprime, right?
IIRC, 2 yrs ago they also changed the definition so that bad scores don’t look so bad.
Precisely.
San Francisco, CA Housing Demand Plummets 20% YoY On Billowing Housing Inventory
http://files.zillowstatic.com/research/public/City/City_MedianPctOfPriceReduction_AllHomes.csv
Correct link
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
‘Miami-Dade’s spectacular condo-flipping mania is in turmoil, with sales plunging, inventory-for-sale soaring, and new supply flooding the market. It’s not like Miami hasn’t been through this before.’
‘In February, existing home sales of all types fell 10% year-over-year, to 1,835 homes. These sales “do not include Miami’s multi-billion dollar new construction condo market,” the Miami Association of Realtors clarified in its report on March 23. And this new construction market that is not included has become distressed.’
‘Condo sales fell 10% as well, to 954 units. This time, the report didn’t blame the lack of supply. Instead: “Existing condo sales are competing with a robust new construction market.” At the same time, inventory of existing condos for sale, not including new units, rose 10% to 15,289. At the current sales rate, supply soared 29% to 14 months.’
‘Even this “scary” inventory understates the total number of condos for sale. It only includes units listed for sale on the Multiple Listing Service (MLS). But developers normally don’t list their new units on the MLS, and thus they’re not included in the above chart. This is the distressed market that pre-construction condo flippers are facing.’
‘Pre-construction condo flippers make a highly leveraged bet. They buy the condo from the developer during the construction phase. The initial deposit is small. Additional payments are required as construction progresses. But in a booming market, lenders are eager to lend. Then, often around the time the building is completed, flippers try to unload the condo at a profit. This bet has been hot in the condo construction boom around the country. But in Miami, the bet is now collapsing.’
‘This sort of data poses the question: How many people actually live in units they own in these buildings?’
‘For developers, the equation is getting dicey. Stearns: “Stuck with unsold units, some developers have not repaid their construction loans, others have taken out bridge loans to carry unsold units. The developer is responsible for taxes, maintenance fees, and insurance for unsold units, and unsold units are probably negative carry for the developer.”
“Developers may resort to mark-down liquidation or bulk sales of unsold condos as the cycle progresses….”
This is a subscription link:
New Luxury Units Contribute To Rent Drops
Banker & Tradesman-6 hours ago
Boston still has some of the highest, most crushing apartment rents in the nation. But there are signs that years of efforts by City Hall to boost …
-> “years of efforts by City Hall to boost …”
Oh, brother.
I can’t decide if government is intentionally evil, or just a bunch of ‘keystone cops’ bumbling around screwing up everything all the time.
http://www.bankerandtradesman.com/2017/03/multiple-people-charged-mortgage-fraud-conspiracy/
Mortgage fraud alive and thriving
Behind a paywall. Highlights?
San Diego condo glut per jim the realtor:
https://www.youtube.com/watch?v=n3r4wkH2L0w
Yep, sofa chair on the patio.
And what a sad little “kitchen” in one corner of the living/dining room of that condo. With the washer/dryer inside that tiny kitchenette! People sitting watching TV, eating, or chatting, will have the pleasure of listening to the dishwasher and the washer and dryer running. Now that’s luxury for you.
All for the low low price of over 3/4 of a million dollars. Yuck.
It’s amazing how small 1600 sq ft can be when it’s configured all wrong. The bathroom is 2-3 times the size of the kitchen. Heck, even the closet is bigger.
How the heck is that 1600 sq ft? You can 4/2 into 1600 sqft if you cramp, and 3/2 with lots of wiggle room.
https://youtu.be/9_5JOYHeSyk
Jim says: “Agents expect you to pay the list price”
Southlake, TX Housing Prices Crater 7% YoY
https://www.zillow.com/southlake-tx/home-values/
They cant sell anything at these high prices so they try all the gimmicks in the book to get people in cars and homes with little to nothing down.
How much a month harvey is alive and well.
It appears that even the powers that be will do all they can to keep prices from going down. They just want to load everyone up with credit and debt cause its so easy to do when you can create as much as u want for nothing.
If people stop borrowing and repaying with interest increasingly larger amounts alot of things will get vaporized. Things we don’t need and never should have let happen.
. Since then, three projects have been approved by the ‘Syracuse Industrial Development Agency ”
Soviet sounding names
“Falling prices, my friend.”
Falling prices, indeed! I just found out today, for my rental apartment in my neck of the woods in Oregon (3+2, ~1200 sqft) that I’ve been living in for the past year…. When I signed the lease it was $1600/month. Now the same unit is $1200/month. I have a couple months left still. Looks like if I want to renew the lease, it will be significantly cheaper. Yay! Maybe I can negotiate a month or two of free rent too.
#fakenews
Rent always goes up and everybody wants to live in OR.
I thought so too. It was strange — 4-5 months ago, this entire complex was bought by a new investor group. Shortly after the purchase, two units in my particular building had eviction notices posted on their doors (they left), and a few other tenants left on their own. The parking lot was almost empty for a while. I had assumed the new owners raised the rent on people and forced ‘em out. (Since then, it’s been repopulated with new tenants.). So I was pretty surprised today when the apartment manager said that my unit’s price went from $1600 last summer to $1200 today.
what would they drop 25% ?
why not wait till you complain
How big is the complex?
It’s a 300-unit complex in Eugene. Well.. yesterday it was the Sunday-manager person I talked to, and maybe she had incorrect information, so this morning I walked over and chatted with the official manager.
My rent is definitely going down, though not quite as much as I thought. My new rent will be $1300/month for my unit, because I’m on the top floor with vaulted ceilings so they charge a bit more for that. Similar units on the lower floors are in the $1200 range as of right now.
Still, $1300 is a lot better than the $1600 that I’m currently paying. A $300/month savings isn’t a “fortune”, but that’s about what I spend in groceries, so that’s pretty cool.
“Falling prices, my friend” — Yes sir.
“These arrangements, which come complete with subdivided bedrooms featuring upholstered partitions between roommates’ beds, come courtesy of HomeShare, a startup that carves up rooms inside of unoccupied luxury apartments and then vets and links up strangers to occupy them. Why all the secrecy? HomeShare now operates dozens of units in four brand-new Bay Area luxury towers. And its success and its shyness likely stem from the same source: a market glut of dense, expensive housing. Since the beginning of 2015, nearly 22,000 units have been built or approved in San Francisco (excluding the massive Candlestick Point development).”
Brilliant idea, really: Create Potemkin luxury housing demand by subdividing the luxury units in order to cram in Millennials who get to live like Mexicans in housing units zoned for single occupancy.
Is this flavor of ’shyness’ actually legal?
Palo Alto, CA Rental Rates Tank 8% YoY On Plunging Housing Demand
https://www.zillow.com/palo-alto-ca/home-values/
Yellen says she may drain her bond swamp this year.
Any guess on rates?
https://www.msn.com/en-au/money/economy/more-borrowers-behind-on-house-car-loans/ar-BBzdSA5
https://www.bloomberg.com/news/articles/2017-04-03/singapore-home-prices-fall-extending-decline-to-14th-quarter
Here’s an op-ed piece from an Australian economics guy about … well, what else? Bubbles.
https://theconversation.com/what-economics-has-to-say-about-housing-bubbles-74925
“But economists cannot agree on what fundamentals determine an asset price, or how important each fundamental is. As well, the value of these fundamentals can only be estimated, not observed. It’s subjective to the point that someone will always be able to concoct a story based on fundamentals to rationalise why house prices are at the level they are.”
“The wonderful tales from the tulipmania are catnip irresistible to those with a taste for crying bubble, even when the stories are so obviously untrue. So perfect are they for didactic use that financial moralizers will always find a ready market for them in a world filled with investors ever fearful of financial Armageddon.”
“”This combination – high debt and falling asset prices – generates a vicious cycle in which distressed debtors scramble to repair their balance sheets and sell their asset. This in turn pushes the price of that asset even lower, causing further distress to similar owners of the asset, and so on.”
All you posters here are financial moralizers! Crying bubble all the time, jeeze.
We’ve been called a lot worse.
Meanwhile in Australia… their bubble battle keeps going.
http://www.reuters.com/article/us-australia-newzealand-property-idUSKBN17401B?il=0
“Australian regulators first focused on reining in investment loans nationally in 2015, by imposing an annual limit of 10 percent on how much banks could expand their investor loan book.”
“Those steps worked for a while, but the heat is on again in Sydney, where prices are rising almost 20 percent a year, having more than doubled since 2008, and Melbourne, where the pace is over 15 percent, according to property consultant Core Logic.”
“That and all-time high household debt prompted the Australian Prudential Regulatory Authority (APRA) to move again on Friday, asking banks to limit new interest-only loans to 30 percent of total new mortgage lending, from 40 percent now, and promising a lot of “monitoring”, “scrutinising” and “observing”.”
“Industry players doubt that will do the trick.”
I thought this was funny:
“And unlike in China, Australians still largely expect government to let the market take its course.”
“”They should … just sit in a corner and not do a thing,” said Lindsay Partridge, managing director of Brickworks (BKW.AX). “Any of the things that they do are going to affect confidence, and that is going to affect construction activity … The state governments should release more land for construction and just let the market run and correct itself.”"
—
I tend to agree. If people want to be idiots, let them. The market will correct by itself. Bubbles will eventually pop by themselves. More interfering is either not going to help much, or make it worse and drag it out longer.
Australia’s fate is tied to China’s fate and right now, China is booming, like I have been saying, China cannot go forever the way it is going but the imminent demise is not here:
http://www.shanghaidaily.com/business/economy/Chinas-Q1-GDP-growth-may-quicken-to-69-CICC/shdaily.shtml
he who kisses the most banker butt wins!
There is the same distance between the dead Hammerhead in this picture taken Saturday and the ocean as it would have been if this Hammerhead’s great-grandfather got fishing line caught in it’s mouth (not in the story) and was pulled from the ocean and onto shore in 1982.
Now as far as the price of real estate rising in Juno Beach since 1982, that’s a different story.
Dead Hammerhead Shark Found On Juno Beach
By Evelyn Romo
Apr 2, 12:07 PM
http://www.850wftl.com/dead-hammerhead-shark-found-juno-beach/
Hedge fund manager with Greenwich ties dies in New York
By Macaela J. Bennett Published 4:04 pm, Tuesday, March 28, 2017
In what’s been reported as an apparent suicide, former Greenwich hedge fund partner Charles Murphy, 56, died at a Manhattan hotel Monday evening.
The New York City resident had most recently been working as a hedge fund manager for New York investment firm Paulson & Co. but was involved in years of litigation regarding his work for Fairfield Greenwich Group. The hedge fund — formed in New York City in the 1980s but based in Greenwich for a short time — was the defendant in a class-action lawsuit for its role as a major feeder fund to scandal-ridden Bernard L. Madoff Investment Securities.
After leaving Fairfield Greenwich, Murphy was hired by his latest employer, Paulson, who lamented Murphy’s death in a statement Tuesday.
“We are extremely saddened by this news,” John Paulson, the company’s founder, said in a statement. “Charles was an extremely gifted and brilliant man, a great partner and a true friend. Our deepest prayers are with his family.”
John Paulson
From Wikipedi
John Alfred Paulson (born December 14, 1955) is an American investor, hedge fund manager and philanthropist. He leads Paulson & Co., a New York-based investment management firm he founded in 1994.[3] He has been called “one of the most prominent names in high finance”[4] and “a man who made one of the biggest fortunes in Wall Street history”.[5]
His prominence and fortune were made in 2007 when he earned “almost $4 billion” personally and was transformed “from an obscure money manager into a financial legend”[5] by using credit default swaps to effectively bet against the U.S. subprime mortgage lending market. In 2010, Paulson earned $4.9 billion.[6] The Forbes real-time tracker estimated his net worth at $8.6 billion as of November 2016.[7
Much like there is a Clinton Body Count (in the 50s now I believe), we should start keeping a Banker Body Count - the number would be far greater.
http://autoweek.com/article/car-news/cash-hood-automakers-offering-deals-keep-car-sales-high?utm_source=DailyDrive20170403&utm_medium=enewsletter&utm_term=headline-center&utm_content=body&utm_campaign=awdailydrive
“U.S. new-vehicle sales are on pace for the strongest March since 2000, with fast-rising incentives expected to help the industry post its first year-over-year increase of 2017.
Sales are projected to rise 3 percent, according to a forecast from Kelley Blue Book. Edmunds projects a 2.1 percent increase, and LMC Automotive estimates a 1.6 percent gain, while ALG is calling for only a 0.2 percent increase. The forecasts translate to an annualized sales rate of 16.9 million to 17.4 million, up from 16.66 million a year ago.
Analysts say they are seeing signs that the market is beginning to erode, even as automakers dangle more generous cash-back and lease deals to keep showrooms busy.”
That’s what happens when prices fall, in this case, massive incentives. Transactions pick up, inventories are cleared and the unemployed get jobs.