Desperate To Sell In A Supposedly Hot Market
It’s Friday desk clearing time for this blogger. “On the cusp of the summer season and with housing sales overall on a steady upswing, homes at the lower end of the market on Martha’s Vineyard are being snapped up at a record clip. Real estate broker Doug Reece added that sellers now appear to be testing the upper limits of the market. As one indication, he noted that while the median price of properties sold has risen slightly since last year, the figure doubles to $1.65 million when looking at all homes currently on the market. ‘Everybody likes to take advantage of an up-market,’ he said. ‘And that’s okay. But when you see the median price being double what the median price sold is, you wonder where the market’s going to go. You’ve got to wonder at what point a buyer is going to say, no, we’re not going there. So this is going to be an interesting year coming up.’”
“Owners of Manhattan luxury homes are waking up to a simple reality: If you want your place to sell, drop your price. For high-end homes that found buyers in 2017, the median asking price was the lowest in at least five years, according to data from luxury brokerage Olshan Realty Inc. Perhaps sellers got tired of waiting. The homes that found takers this year lingered on the market for an average of 389 days, a record in data going back five years, according to the brokerage. ‘People are thinking harder about price cuts sooner,’ said Donna Olshan, president of the brokerage.”
“Sellers need to be mindful, not of their fabulous floorplans or views, but what a competitor with a similar apartment is seeking for their unit, she said. ‘The most important thing for sellers is to see who’s swimming in the lane next to you,’ Olshan said.”
“There is a construction frenzy across the South Bay. However, the U.S. Commerce Department noticed a hiccup last month. New home sales in the West dropped 26 percent, the largest drop in over six years. ‘I think we’re about to see a shift in the marketplace, and the new home sales may be the leading indicator of that,’ real estate broker Quincy Virgilio said. He’s starting to see a softening of the market. ‘Where I used to get 10 to 12 officers on a property, now I get two or three and where it used to be $100,000 over asking, it’d be $20,000 or $30,000.’”
“The median priced home in San Jose has gone from $800,000 to $1 million, but the number of buyers who can afford to buy that home is at a tipping point. ‘Right now, it’s about 20 percent. Meaning 1 in 5 people, 1 in 5 families, can afford to buy the median-priced home. If that number falls below 20 percent, which it did in 2006 and 2007, typically we see a slowing in the marketplace,’ Virgilio said. No one is predicting a bubble bursting, but change could be in the wind.”
“When a 59-year-old accountant in Shanghai wanted to invest for her looming retirement, she bought two cheap apartments — on the other side of the country. ‘When friends told me about a chance to buy properties in Xishuangbanna, I thought ‘why not?’ said Yuan Junxi, talking of the steamy, subtropical region in Yunnan province, bordering Laos and Myanmar. ‘No buying limits; cheap, easy mortgages; and maybe property prices will jump over there too.’”
“‘The current surge in sales in third- and fourth-tier cities is fueled largely by expectations of a future price rally, not by asset yields, and that’s exactly a sign of a bubble,’ said Zhao Yang, Hong Kong-based chief China economist at Nomura Holdings Inc.”
“Chinese investors are pulling out of Melbourne’s apartment market, prompting a downturn. In the past, they helped drive the inner-city apartment market to new heights. However, around 80 per cent of Chinese buyers will not be able to settle because of trouble getting finance, according to Ming Li, a real estate agent in Melbourne’s eastern suburbs who specialises in selling Australian property to Chinese investors.”
“He said many of his clients had either forfeited their deposits or sold their apartments at a loss. ‘The Melbourne apartment market is cooling down,’ he said. ‘It is kind of the oversupplied market, and the Chinese investors are losing their interest in buying an apartment in Melbourne. ‘The capital gains return is so low.’”
“According to economist Philip Soos: ‘There certainly is a housing bubble in Australia. Since 1996, we’ve seen housing prices inflate above all known fundamentals, such as GDP, inflation, income, rents and population growth. Australia has accumulated the world’s second highest household debt to GDP ratio at 123 per cent and rising,’ Mr Soos added. “All countries that have a ratio above 100 per cent have experienced or are currently experiencing a housing bubble.’”
“After a decade of being able to command high prices, London property sellers are having to offer discounts in order to secure deals, according to real estate listings website Zoopla, which indicates that the price cuts are getting larger in outer London boroughs. Affordability is the main factor. The average London salary is £34,000 while the average property price is £600 000 – far beyond the reach of most city workers. Even with the discounts of at least 20%, homes in many areas with easy commuting access to the city centre still look very expensive.”
“‘Peripheral areas, which buyers turned to when inner London became too expensive, have seen considerable inflation recently and reached a point where affordability is stretched,’ said Neal Hudson, founder of researcher Residential Analysts Ltd. ‘Before, people got around it with longer-term mortgages, but the limit has been reached.’”
“Less than two months ago, Toronto’s housing market was roaring. Just a single new listing on the market, especially of single-detached homes, would send buyers into a feeding frenzy, clamouring over each other to view properties and upping their bids by as much as 30 to 40 percent in some cases. Then in late April, in a move that some say was unnecessary and politically-motivated, the Ontario government intervened to cool the housing market.”
“‘There were 140-plus listings in the downtown core alone earlier this week. I’ve never ever seen a surge like this before,’ said David Fleming, a Toronto-based realtor with Bosley Real Estate. ‘April was a weird month too — we suddenly started seeing all this inventory creep onto the market.’”
“‘I think there’s a change in the psychology of home buyers and sellers, ever since the government intervened,’ Bruce Joseph of Anthem Mortgages told VICE Money. ‘Perhaps the big cash out is at play now, people listing their homes and wanting to sell because they think prices are going to go down.’”
“Buyers too, seem to think prices are may taper off. One buyer, Oakville resident Vijayalakshmi Govindasamy was surprised to see that open houses in her neighbourhood were deserted. ‘I went to view three properties in Oakville over the weekend. In the first house, there were only two other people. In the second and third houses, I was the only interested buyer.’ Govindasamy says that she was told by one of the realtors present to make an offer for ‘even just $1 million,’ despite the fact that the said home, a single-detached house, was being listed for $1.4 million. ‘Why are people desperate to sell in a supposedly hot market?’”
“Joseph, a mortgage broker in Barrie, Ontario, has long believed that Toronto and its surrounding towns never had a supply problem. ‘That’s just what real estate players want you to believe. Our home ownership rate is one of the highest in the world. If you just go on Kijiji, you’ll see that there is no lack of places for people to live in.’”
Caw!
‘He said many of his clients had either forfeited their deposits or sold their apartments at a loss. ‘The Melbourne apartment market is cooling down,’ he said. ‘It is kind of the oversupplied market, and the Chinese investors are losing their interest in buying an apartment in Melbourne. ‘The capital gains return is so low.’
Well yeah Ming, it’s negative.
A double helping for crow breath:
‘The U.S. Energy Information Administration’s new Today in Energy brief looks at how U.S. drivers traveling this holiday weekend will pay the second-lowest prices in eight years to fill up at the gasoline pump.’
“Gasoline prices heading into Memorial Day weekend average $2.40 per gallon (gal) nationally, up from last year’s price of $2.30/gal. Despite the year-over-year increase, 2017 marks the second-lowest price ahead of the Memorial Day weekend since 2009, when the national average price of retail regular gasoline was $2.31/gal. Relatively low crude oil spot prices, weaker year-over-year gasoline demand, and high gasoline inventories have contributed to relatively low gasoline prices.”—EIA
YOY weaker gasoline demand?!?! Hmmmmm. I smell a cooling season approaching.
I know a lot more people who work from home, at least some days. I WFH 2-3 days a week. It’s saved me a lot on gas and wear and tear.
OPEC successfully forges an agreement to tighten supply and oil prices plunge in response…go figure!
Oil
Oil prices extend declines in Asia after Opec deal
Fast FT
yesterday
by: Peter Wells
Oil prices extended declines in Asian trading after a sharp drop on Thursday when Opec members agreed to extend production cuts beyond the initial deadline to March next year.
The agreement, widely expected by the market, is an attempt by major producers to curtail a three-year supply glut that weighed on prices and hurt the global oil & gas industry.
Brent crude, the international benchmark, had been slightly higher in early Friday trade, but sat 0.6 per cent lower at $51.15 a barrel as many investors in Asia took a break for lunch. West Texas Intermediate was down 0.8 per cent at $48.50.
On Thursday, Brent sank 4.6 per cent when the Opec deal was inked in what was the commodity’s third-biggest one-day drop so far this year. WTI fell 4.8 per cent.
It has likely been a case of “buy the rumour, sell the fact”…
Oil is up right now more than 1%.
Dead cat bounces will happen.
When you are 80% up from the low it is more than a dead cat bounce.
It’s a rubber cat.
Dead cats don’t actually bounce.
Don’t ask me how I know this.
Dead cat splat?
Since during the Obama administration most of the years oil was around $100 a barrel that is not surprising, However, it is still a 5% increase year to year when a good many on this board were stating that oil was heading down not up. Lets see which direction oil takes from here and whom is eating crow. As I stated before oil will be back to $100 a barrel before housing prices return to 2010 levels on a national basis in this country because that nominal price for houses is not returning.
“As I stated before oil will be back to $100 a barrel …”
It is three years since oil crashed to $50 and reality cannot find a toehold with this one.
What’s amazing is that with major collusion, it struggles to get above 50 bucks.
I suspect that another $10Tr or so in Central Bank Money for building useless skyscrapers might give it a push.
“What’s amazing…”
Also that major collusion is legal in the case of oil and housing, but not fish.
What’s amazing is that with major collusion, it struggles to get above 50 bucks.
Which is why there is no need for government invention concerning so-called “cartels”.
$25 Oil is Coming, and Along With It a New World Order
If you believe they can get battery prices down, we already have a shortage of lithium and cobalt with the latter just shooting up in price, we are just trading a shortage of one finite resource for an other. Hard to see how the prices for batteries fall when the inputs are soaring in price.
$25 oil could end the middle east wars. think of the money we would save!
Evidence that is a quite doubtful prediction:
http://www.investors.com/politics/commentary/obama-is-826000-short-of-his-1-million-electric-car-promise/
Look at battery/solar technology changes in the last 5 yrs to answer your questions.
HANG ON TIGHT!
Professor Bear:: Also that major collusion is legal in the case of oil and housing, but not fish.
The fishing lobby doesn’t have the cash.
“Drag a 100 dollar bill through Congress, you’ll never know what you find.”
“Drag a 100 dollar bill through Congress, you’ll never know what you find.”
I would expect to find spirochetes.
Raven-ramen™
I topped off my tank this afternoon and paid $2.039/gallon for regular unleaded in NC. It’s been a long time since it’s been that low around here.
$3 in CA still. Seen it at $3.49
“There certainly is a housing bubble in Australia. Since 1996, we’ve seen housing prices inflate above all known fundamentals, …”
The only way fundamentals are ignored is from external money into Australia, namely Chinese property buyers. Again, this is unregulated global money flow. I remember back in the 90’s Russia had a financial bust and shortly afterwards so did Brazil and a number of other places. Brazil? Well, it turns out that the Inverstors in Russian short term debt were having to sell Brazil to pay for the Russian default.
This caused Long Term Capital Management to begin to crater due to over-leveraging of LTCM’s ‘Investments’. See nothing was supposed to be internationally correlated. Because of this, it was safe to take risk in one place like Russia because that didn’t effect another place like Brazil. When this was found to be so much used Kleenex, LTCM had to be rescued by Wall Street, and it was thought by the US Govt that the miscreants had learned their lesson about leverage and Dark Markets. Well, they didn’t.
Now, it appears to be even more international, and I mean more interational than it was in the 2007s. Leverage is again a mess. Look to the property markets and regions as Canaries-in-Coal-Mines. Chinese are forced to back off, and property markets everywhere slump. Let this continue… Well, I’m pretty sure that I’m not going to be able to really avoid it this time. I did last time without too much trouble.
Regards,
Roidy
‘There is a construction frenzy across the South Bay’
Wah? But. Rental Watch has assured us there are almost no shacks going up in all of California.
‘Joseph, a mortgage broker in Barrie, Ontario, has long believed that Toronto and its surrounding towns never had a supply problem. ‘That’s just what real estate players want you to believe. Our home ownership rate is one of the highest in the world. If you just go on Kijiji, you’ll see that there is no lack of places for people to live in.’
http://www.dof.ca.gov/Forecasting/Economics/Indicators/Construction_Permits/
I never said that “no shacks” were being built. I just said that half of the needed shacks were being built.
In 2014, there were 85k units started in CA.
In 2015, there were 98k units started in CA.
In 2016, there were 100k units started in CA.
The first 3 months of 2017 are showing fewer starts than the first 3 months of 2016.
The average from 1975-2000 was 167k units per year.
The average from 2001-2016 (yes, INCLUDING the boom years) was 115k units per year.
The estimated need per year is 200k.
So they are building a lot in a few places (DTLA, SF Bay Area). Big deal. That does nothing for the overall supply/demand imbalance in the state, which continues to get worse.
This is not a cyclical problem…it is structural, and has been going on since CEQA was passed.
IIRC CEQA was passed before I was even born. The boom and bust since then never happened, eh?
You can still have booms and busts in an environment with overall supply shortages…the booms are just exacerbated, and the busts are more abbreviated.
6 people sharing a one bed room is not creating any new housing demand. Lets stop the 9 years in running emergency measures and we can talk. Everything else is bogus.
The average from 1975-2000 was 167k units per year.
The average from 2001-2016 (yes, INCLUDING the boom years) was 115k units per year.
This boom started a lot longer ago than you (or most people) are willing to admit. It started long before 2001.
It really started to ramp up somewhere around late 1995 - 1996 when they started loosing % down for FHA’s.
It really started to ramp up somewhere around late 1995 - 1996 when they started loosing % down for FHA’s.
It started a lot longer ago than that.
From 1975 to 2017, CA built approximately 6.2MM new homes (and lost hundreds of thousands to decay/fire, etc. over the same timeframe).
Over that same timeframe, they added 18MM in population.
In the US as a whole, we have approximately 2.4 housing units per person.
Over the past 40+ years in CA, housing development has not been keeping up with population growth.
Puggs, the average housing starts from 1995 to today in CA is 115k per year. The 90’s were pretty weak housing construction years in CA–1.1MM for the decade as a whole (1990 through 1999).
The SoCal market blew in 89 and it didn’t start to improve until Spring-Summer in 1997 when Bank lending standards started to go away. I had several friends that bought converted apartments made into condos at the peak (86-88). It was the only thing that they could afford and the purchase was made with the belief that they would build up “equity” and buy something nicer and live where they really wanted to at later date.
Most of them ended up walking away from the properties over time.
My wife and I were looking to purchase our first SoCal house in 1997. We wouldn’t look at anything that wasn’t an REO or a short sale and it had to be close to the beach, like a few blocks close.
There were hundreds of houses to choose from and if you showed any interest in a property at all the realtor would immediately start talking about further price discounts that the Bank would be more than willing to discuss.
I’ve been watching my not from California transplant friends buying over the past couple years. I spoke my peace but they refuse to listen but now are enjoying the joys of loanownership on their 50-100yr old crapshacks and crapartments
I have lived in SoCal for 37 of my 39 years. Ive seen all the cycles. They also didnt believe me that the drought would ever end. smh
I remember my BIL in So.Cal getting one of those piggy back 80/20 loans in ‘98. And only for, get this…a $190,000 loan! That was a big loan in those days.
I remember thinking at the time that that was an odd way to get a loan. Never had heard of such a thing. I was living in Colorado at the time.
“a mortgage broker in Barrie, Ontario”
Barrie is up on Lake Simcoe. I go through there every summer on the way to fishing camp with my boys. It is not remotely part of the GTA. Curious that a broker from there is making observations on what is happening in Toronto.
About that booming Bay Arean economy:
‘Seven Takeaways from ICSC RECon 2017, Day Two’
‘The bottom line is that this is clearly a tenant’s market, with landlords resigning themselves to low or zero rent growth on renewals for leases signed at the peak of the previous market and meeting tenants halfway on reassignment and subletting provisions, according to multiple brokers and developers. In 2007, landlords wanted their space back if a tenant had to leave, according to Michael N. Hirschfeld, co-lead of the national retail tenant services group with JLL.’
“I haven’t had a landlord in the past six months who was willing to take a firm stand on [space] recapture,” Hirschfeld noted.’
‘Meanwhile, John McNellis, co-founder of development firm McNellis Partners, told an audience that he was happy to make deals with tenants at the same rents as 20 years ago, on a non-inflation-adjusted basis. That in spite of the fact that his projects are located in the Greater Bay Area, one of the stronger markets in the country.’
Nice post Ben. Thx
Retail is getting crushed everywhere. Booming economy, or not.
Booming economy?
You can’t fix that kinda of stupid.
‘Connie Yoshimura is the Broker/Owner of Dwell Realty.’
‘Statewide, only 2,120 new residential units were built in Alaska 2016 — one of the four lowest permit years since 1993. The report called out new housing construction as “tepid at best” in 2016 and said it represented a 12.5 percent decline from the year before.’
‘Significant declines in new housing starts occurred in Anchorage in both the multi-family and single-family category with less than 200 single-family homes permitted.’
‘Just ask any friend or co-worker how their search for a new home is coming along and you’re bound to hear frustrating stories of hours of Zillow searches and drive-arounds.’
‘And missed opportunities with lowball offers or unnecessary home inspection “requests.” With the lack of new home inventory, buyers must understand they are most likely purchasing a home that is probably 30 years old, an age when not only cosmetic obsolescence has set in but functional and perhaps mechanical/structural as well.’
I think AK residents are getting less oil $
Central bankers get concerned about market rigging when it’s done by anyone other than their insider pals.
http://www.telegraph.co.uk/business/2017/05/25/central-bankers-unveil-code-crack-down-currency-market-rigging/
‘As of May 4, the Pinecrest market stayed soft as sales fell 19.7 percent. In Pinecrest homes listed over $1M, there is now 14 months of inventory, down slightly but still a strong Buyers market. It’s tough out there if you’re a Seller. No matter where you live, let me assist you with local expertise, realistic expectations and guidance to get you to wherever ‘next’ is.’ - Hal Feldman (MiamiHal) is a Realtor with RE/MAX Advance Realty.’
‘let me assist you with…realistic expectations’
Julia Cespedes, Information Broker,”…finishing a Doctorate program for Higher Education Administration Leadership at Nova Southeastern University.”
Absolutely clueless. She’s buying a Ph.d from Nova, a degree mill, to give her credibility when she joins the other clowns at her college.
The message in this vanity newsletter is that when you don’t like the real news you start your own newletter and give everything a spin.
Soon she’ll be signing off as Dr. Cespedes.
Information Broker. What the bleep is an Information Broker, and does that profession require a PhD credential?
Because it’s too overpriced to move here:
http://www.bizjournals.com/denver/news/2017/05/25/population-growth-slows-in-denver.html
There’s some subscriber paywall articles on DBJ about the “human cost” of overpriced housing. Remember, median household income in Denver is less than $60,000.
You’ve said that numerous times despite the fact that data out there shows it to be incorrect.
http://www.deptofnumbers.com/income/colorado/denver/
“the median household income for the Denver-Aurora-Broomfield Colorado metro area was $70,283 in 2015″
For the city itself it’s even higher:
“the median family income for Denver was $85,344 in 2015″
The crows seemed to be calling his name, thought Caw.
https://www.bloomberg.com/news/articles/2017-05-25/chinese-money-funneled-to-far-flung-homes-heralds-bubble-trouble
Are you even reading your own posts, worse case scenario 5.7% growth, and that assumes that they do not mean the growth would be 7.3% without the slowdown?
“Analysts at JPMorgan Chase & Co. this month forecast falling sales and weaker growth in real-estate investment over the rest of the year, with the government likely to succeed in keeping national housing prices “stable.” Bloomberg Intelligence economists Fielding Chen and Tom Orlik estimate that a likely slowdown in construction will shave 0.8 percentage points off the nation’s economic growth rate.”
But Dan, you told us that the Chinese lie about their GDP.
JP Morgan numbers.
Also untrustworthy.
All GDP numbers are untrustworthy but you have to use something to compare one country to another or one year to another
You can compare them all you wish. If the numbers are garbage, then the comparison is meaningless.
Too much money on the line for them to be garbage, might not be dead on but Moody’s does not want to be sued again or even proven wrong and neither does Morgan.
Comparing lies is not a logical way to chart a course. Assuming that this year’s lie is probably adjusted by actual fact is mania.
There’s lots of money to be made promulgating alternative economic facts.
Chinese regulators are as captured and useless as ours.
http://www.scmp.com/news/hong-kong/law-crime/article/2095895/hong-kong-and-macau-regulators-intensify-efforts-against
“On the cusp of the summer season and with housing sales overall on a steady upswing, homes at the lower end of the market on Martha’s Vineyard are being snapped up at a record clip.”
Scum sucking bottom dwellers are fishing down the housing market food web.
‘That’s just what real estate players want you to believe. Our home ownership rate is one of the highest in the world. If you just go on Kijiji, you’ll see that there is no lack of places for people to live in.’”
Joseph must be drinking H.A.’s cool aide cuz it just can’t be true!
The number one reason a house gets axed, in our area, (lot’s of retirees) from potential consideration?
STAIRS.
#2. Master suite upstairs.
He-he, that is sooo true. The older I get, the more I get vertigo from looking at steep staircases both inside and out. Gimme a good old ranch for my golden years, one level or gentle split level.
Cracks me up when I look at some of the houses posted for sale on line in Western North Carolina. All that decking with stairs going up and down the sides and back of the house. I’ll take a nice modest patio or three-step porch, thank you. And it’s not just the stairs, it’s the thought of constantly having to maintain all that lumber.
The golden ticket properties all say…”master suite on main floor”. Ding, ding!!
Are you looking to relocate to that area, or buy a vacation property?
As we know, western North Carolina is where Tampa takes a summer vacation, although I’ve yet to make that trip myself.
I traded a 2 story house for a 1 story house about a year ago, and the stairs (or absence of stairs) definitely was a factor in the calculus.
I don’t miss cutting the lawn on a sloped lot, either.
The tri-level is dead.
wait….Unless each Chinese generation gets a level
Here in Northern VA it’s $500K+ 3 story townhouses as far as the eye can see, except for the box houses with 10′ gaps between them ($700K+)
At least for all the new construction.
Yep, we are planning on moving when we retire. No 1970s split-levels or stairs are considered. Condos with elevators are ok.
Regards,
Roidy
sounds like my parents house, we’ve had realtors tell us recently they have plenty of clients who wanted a handicap ramp and wide doors and the ability to go from one end of the house to the other in a wheelchair.
my dad just liked wide doors and open spaces, and in the years before he passed it really came in handy for him. its almost like he foresaw his future and planned for it.
Yes, your Dad got it. It’s what I’m doing. We don’t live forever nor would I want to.
Roidy
thanks, my mom will be next probably in 5-10 years shes still doing pretty good, still has no need for a walker still can climb the porch steps……
Surely Millennials will rush at the opportunity to fund greed head Boomers’ golden years by buying up their overpriced shacks for top dollar.
Or not….
http://www.zerohedge.com/news/2017-05-26/70-millennials-have-less-1000-saved-buying-house
But the millennials are into experiences, like the experience of foreclosure because you are giving a mortgage with nothing down and have no back up savings when life throws you a curve.
But they probably do want to get into the tapping equity racket:
http://www.msn.com/en-us/money/realestate/a-renovation-boom-is-turning-peoples-homes-into-atms-again/ar-BBByCkF?li=BBnbfcN
http://www.freddiemac.com/research/datasets/refinance-stats/index.html
Timely release 2 days ago for Q1 2017.
Total cash out from refinances in the first quarter was estimated at $19.1B….DOWN from $28.5B last quarter, but up from a year ago (which was $16.4B).
Compared to boom years, when $80B per quarter was being pulled out, this is still pretty tame.
31% of borrowers that were refinancing a 30-year mortgage moved into a 15-year mortgage. This is UP from Q4 (26%) and Q3 (24%) and Q2 (27%). In fact, it’s within only a couple of percent of the highest percentage on record (”record” meaning 1994). People who are doing this are choosing to pay down debt faster (ie. not too stretched on their monthly budget).
However, if I wanted to pick out the negative in the data, 32% of people who were in a 15-year mortgage refinanced into a 30-year. This number is up from 25% last quarter, and the highest reading since 2009. Peak was 50-60% in 2007/2008. People who are doing this are choosing to pay down debt more slowly (ie. they are stretched on their monthly budget).
It is worth noting that in 2007-2008, when so many people were going from 15-year to 30-year amortization, only about 10% of the people were doing the opposite (going from 30-year to 15-year). Lots of people were stretched on their budget, very few who were not.
The numbers today read as lots of people who are not stretched on their budget, and more than typical who are (average going back to 1994 is approximately 25% who go from 15-year to 30-year).
90% plus of foreclosures a few years ago were prime borrowers. For the most part they strategically walked away or lost a job or both. 90% plus.
Lots of other statistics also go along with the crash also…
In the 4 years leading up to the crash, borrowers levered up and pulled out $1.1 Trillion of “equity” from their homes (vs. $255B from 2013-2016).
Leading up to the crash, we were building more than 500k homes per year above the historic average (vs building 300-400k less than the historic average).
This home price cycle will look different than the last one.
borrowers levered up…
Just a symptom of house prices being too high. They’re too high now as well.
You need more than just high prices to get homeowners to “lever up”, you need to have complacent borrowers and complicit lenders.
Regardless of high home prices, the data is evidence of less complacent borrowers and/or less complicit lenders than during 2004-2007.
he data is evidence of less complacent borrowers and/or
No such thing. It’s much worse with fed and local government and its 1000 agencies backing all kinds of loans to everyone.
You couln’t have the current level of overleveraged mortgages without the massive footprint of Subprime Sam’s eezee-peazy federally-insured lending.
They’re too busy experiencing overpaying for tiny houses.
That way they can “experience” where the heck am I going to plug into and where the heck am I going to dump my black tank????
Hint: anything with wheels depreciates FASTER.
which house haters show provides more shuedenfued ?
tiny house haters or international house haters
That’s a tough one. I’ll go with International House Haters for $300. Those inner city loft/condos in third whirled countries could be a serious wild card.
I like your “third whirled”.
I’m a gonna steal that.
The whole “tiny house” thang must be a scam, engineered by the housing syndicate.
It’s hard to imagine there being enough well-heeled hair chewers out there to support such an obviously hedonistic pursuit.
Maybe in California.
The HuffPost piece I posted here the other day notes that women hold nearly two thirds of all student loan debt in the U.S.
No “pent-up demand” for $500,000 starter homes happening there…
“The HuffPost piece I posted here the other day notes that women hold nearly two thirds of all student loan debt in the U.S.”
I am woman, hear me roar
with too much debt to ignore?
https://www.youtube.com/watch?v=V6fHTyVmYp4
Jesus. 3rd wave feminist loaded up on non-dischargeable debt? Millennial males (yes, I understand this may be an oxymoron) will be better off perfecting virtual reality and sexbots.
What Millennial males need to do is start suing women for Emotional Harassment.
Many women bully the sh*t out of men on a fairly consistent basis. And they get away with it.
I predicted some time ago that we’d see the first emotional harassment cases appearing by 2015. I was wrong.
I guess women haven’t yet amassed the kind of wealth (yet) that is appealing to trial lawyers.
That will change.
And many these women have obtained ‘prime’ mortgages backed by 1000s of government agencies.
“On average, millennials who make more money save a smaller share of their incomes. Those making less than $24,000 save about 10% of their incomes, for example, while those making more than $72,000 save just 3.5%, according to the survey.”
The above is from the article Ray posted.
WELL, GEE. Could it be that all these “struggling Millennials” are blowing all their income? I wonder how much they spend monthly on electronic gadgets, eating out, buying “organic”, cars, etc.
In the article, there’s a young lady in Florida who pays $975 for her one bedroom apartment, which is “about a third” of her pay.
Okay.
So where does the remaining $1800 a month go?
She has $1800 available AFTER paying for housing, yet she cannot save any money? Food, utilities, car payment and student pan (even if she has the latter two - the article doesn’t say) costs her $1800 monthly?
Nonsense.
She doesn’t have an income problem.
She has a discipline problem.
“See what you get in North Texas’ limited supply of homes under that key $236,500 price.”
“Only about 20 percent of the houses on the market in North Texas are priced below the median cost of $236,500.”
“Out of the more than 14,000 houses listed with local real estate agents, fewer than 2,900 are priced below the median. And fewer than 1,900 prices are less than $200,000, according to data from the MetroTex Association of Realtors.”
Sounds like a huge wish factor.
As my Korean friend likes to point out:
“Many people stupid and jus’ talk shit.”
It’s time to realize that ZeroHedge has an agenda. They kept people out of the stock Bull market and then hyped Gold at the top. Not too clever. At least, in 1980, we had James Dine getting people into Gold at the bottom years earlier, then riding it up to the top(@$800) and then riding it down to $137. (We now have AMZN in a parabolic rise.)
Then there’s the small issue of Millennials….my sons. Both are smart, exceedingly well-paid professionals. Neither they nor their friends have any desire to buy a house. And fortunately we have GAMED their generation so badly, that most of them can not afford to. Let the hippies, who became bankers, who are now the baby-boomers, take the hit. The lady next door sells multi-million dollar condos. Her concern is whether she can get two million dollars for her home. F**K her, I say.
When did we decide that every college graduate would be able to buy a home without saving up for it for ten years ? Did your parents buy their first house out of college? There are exceptions to everything, but, that wasn’t the case for ANY of my parent’s friends. They rented apartments for years !! Maybe it’s a Northeast thing.
The agent at State Farm has stories to tell about her policy-holders. It’s worthy of a book, I tell ya. Mortgage payments, home insurance, wind insurance… High-end stuff. A stack of policies in trouble. The new deductible exactly equals the cost of a new roof. In the old days we would have been able to afford a mortgage payment. Now the Home Insurance is ANOTHER mortgage payment. (Welcome to Pinecrest and Palmetto Bay in Miami.)
And every person I know is squeezing someone else. I had four financial transactions this week, and, I needed to challenge and correct each one. Who has the time for this sh*t?
Then there’s the student loans that the banks take nearly 4.8% off the top at origination. The banks and colleges PREYED on this generation. People is their sixties have strong opinions about Millennials. You think they’re all lazy wanting to live at home ? And every person on Medicaid drives a Cadillac? That’s the media “talkin’ shit” at you.
THERE HAS NEVER BEEN A RADIO SHOW WITH A PERSON COLLECTING MEDICAID BEING INTERVIEWED. Do you know why? No one wants to listen to the truth and give up their strongly held myths.
From what I have read over forty years—–half of America is doing fine and the other half are insolvent. It’s going to make for an interesting twenty-year voyage.
Lending to each other, suing each other, insuring each other, etc., is not creating wealth like manufacturing tangible goods.
Funny how there’s never any discussion about how Generation X is handling any of this.
Perhaps there’s something to be learned here from that generation.
Perhaps not.
The quiet, ignored generations have this habit of “keep on keeping on” that the louder generations pay no heed to. Yet, somehow, the quiet generations seem to at least “make do”. Why is that?
Because we have no choice but to do so
are any of you lemmings gonna go buy a new car this weekend?
LOL
There’s big subprime auto loan about to pop. The thing is these are the same people they have a “prime” mortgage from 1000’s of government agencies.
What a fukushima!
If you google “TALF”, you’ll see how the Fed helps out the ABS market.
Read an article yesterday about how some auto makers juiced their sales 3 years ago by doing super cheap leases and now the lease returns are under cutting their new car prices. It was infinite q50’s IIRC.
Good news for those looking to buy used.
We are gonna buy a new to us used car sometime soon. Haven’t looked much other renting a Hyundai santa fe recently. Not a bad car. 5 yr. 50k warranty. With as little as we drive we’d time out on the warranty
“Sellers need to be mindful, not of their fabulous floorplans or views, but what a competitor with a similar apartment is seeking for their unit, she said. ‘The most important thing for sellers is to see who’s swimming in the lane next to you,’ Olshan said.”
Where did all the buyers go?
They must have decided that they don’t want to live there anymore.
A few houses up the street from our rental:
Frustration and fear: What it’s like to live near a Las Vegas squatter house
All the neighbors are up in arms. I’m a renter; I think there’s only a handful of us here out of about 175 homes. I can’t get that excited about it since we’re held in only slightly higher regard than the squatters.
To be fair, it is a concern. Apparently whoever’s in there also steals cars as part of their repertoire and a few have been towed from the driveway by the cops.
A comment:
He/she exaggerates both the prices of the homes (they’re for sale at that and nobody’s biting) and the nightmare, unless there’s stuff going on I haven’t heard about. Usually they report every move the squatters make on nextdoor.com. As I said, I’m a few houses away. I’ve been amazed at my neighbors boldly getting in these people’s faces like they are.
Interesting to see how the PTB handle subprime auto debt.
‘Deep Subprime’ Auto Loans Are Surging
by Matt Scully
March 28, 2017, 1:50 PM EDT March 28, 2017, 4:19 PM EDT
Risky issuers lead auto-debt securitization: Morgan Stanley
Delinquencies in deep-subprime deals have jumped since 2012
Bloomberg
About a third of the risky car loans that are bundled into bonds are considered “deep subprime,” a level that has surged since 2010 and is translating to higher delinquencies on the loans, according to Morgan Stanley.
Consumers are falling behind on most subprime car loans, but deep subprime borrowers have deteriorated fastest, the analysts said.
The percentage of subprime auto-loan securitizations considered deep subprime has risen to 32.5 percent from 5.1 percent since 2010, Morgan Stanley said.
As Wall Street banks have found it tougher to profit under new regulatory regimes born out of the last subprime crisis, they’ve become more willing to underwrite riskier auto-loan asset-backed security sales. Investors, starved for returns with about $8 trillion of debt globally carrying negative yields, have in turn proven to be insatiable, further facilitating higher levels of risk in the market for the securities.
https://www.bloomberg.com/news/articles/2017-03-28/-deep-subprime-becomes-norm-in-car-loan-market-analysts-say
“Consumers are falling behind on most subprime car loans, but deep subprime borrowers have deteriorated fastest, the analysts said.”
Oh goody. Can’t wait to watch subprime drop precipitously over the edge of a cliff, just like in 2007. Cue up Janet Yellen to assure all that ’subprime is contained.’ How much longer from now until the next round of bailouts?
As I noted in an earlier post, the Fed did step in and buy asset-backed securities, including car loans, back in 2008. The program was called TALF and ran for a few years.
It’s like the Fed doesn’t want prices on leveraged assets to ever go down, even after speculative bubbles. And holding down interest rates, plus intervening directly in the market, creates that spark, that price jump, that pulls in speculators and FOMOs, and voila, and the bubble’s back.
“…the Fed did step in and buy asset-backed securities, including car loans, back in 2008.”
That was part of the last round of bailouts.
“It’s like the Fed doesn’t want prices on leveraged assets to ever go down…”
That’s it right there.
We added 10 trillions or more in debts since 2008. All your jacked up stawk and housing prices are backed by those.
LOL
‘Property Wars’ Star Facing Trial for Wire Fraud in Phoenix
https://www.usnews.com/news/best-states/arizona/articles/2017-05-26/property-wars-star-facing-trial-for-wire-fraud-in-phoenix
“A former star on the “Property Wars” reality TV show has been accused of wire fraud and other charges involving furniture stores he owns and operates in the Phoenix metro area.”
Furniture… another scam industry.
Despite rising interest rates, the fools are still rushing in.
http://www.scmp.com/property/article/2095937/buyers-shrug-aside-rising-mortgages-thousands-throng-sales-offices-snap
More retail news …….There is that Bain capital again,
Will Guitar Center be overwhelmed by its debt? Company has $1.6 billion of debt taken on as part of a $2.1 billion LBO in 2007 by Bain Capital
http://www.marketwatch.com/story/guitar-center-bonds-slide-to-record-lows-on-concerns-about-companys-debt-burden-2017-04-25
Time to go buy a guitar on deep discount…