What Got Us Into Trouble Before
A report from NBC News. “Millennials are growing up, settling down and looking to buy a house — for the extra room and the investment opportunity. Millennials were the largest group of home buyers (34 percent) for the fourth consecutive year, according to NAR’s 2017 Home Buyer and Seller Generational Trends study. After five years of living together in a one-bedroom apartment, Jamil Saeed and Felicity Greenpalm are ready to take the next step and buy a house in Seattle. Saeed, a 29 year old marketing consultant, and Greenpalm, 31, who works for Nordstrom, are thinking about starting a family and that means they need more space.”
“‘We want a yard and a place where we can have all of our friends and family over,’ Saeed told NBC News. ‘I feel like if we don’t do something soon, we’re going to get priced out of the market. Salaries aren’t increasing quickly enough to keep up with the pace that home prices are growing. It’s kind of now or never for us.’”
“Jacob Berg, a 33 year old bookkeeper, and Bianca Rose, a 27 year old insurance agent, recently bought a home in Valencia, California. It took them a year to find the right place: a small house (900 sq. ft.) with two bedrooms, two bathrooms and a two-car garage. They paid $430,000 for it — a price that was well within their comfort zone. ‘We didn’t take into consideration having good jobs,’ Berg said. ‘Unforeseen things can go wrong. If we had to go get a minimum-wage job, we would still be able to afford to make our house payments.’”
From News Channel 13 in Colorado. “A new report from Realtor.com indicates Colorado Springs has the highest percentage of home buyers move in during the first quarter of 2017. If you’re looking to buy or even rent right now: you know the housing market is hot. During this time of year, business for Matt Young is always busy, but right now he’s completely booked. Young said they usually work 10 hour days, usually cranking out 60 moves a month. ‘This year our calls doubled,’ said Young. ‘We’ve noticed so many people are trying to get over here, mainly people from California.’”
“A number of realtors in town said the market is especially booming in Northeast Colorado Springs. Houses in that area range from $300,000 - $350,000. ‘We’ve seen so many people move to the area recently,’ said Lynne Gillick. The good part about a housing bubble? It generally leads to higher economic growth. Keep in mind if you’re looking to move here, act fast. Realtors report homes are going after being on the market for only a few days. The question is now: how long will it last? ‘I imagine it’s just going to continue to grow, and it’s probably going to help the economy.’”
From Cranes Today Magazine. “It has been a tough slog for the crane industry since the 2008 global financial crisis. While there have been occasional moments of optimism with growth in some markets, the trend has been one of declining sales. The big push for the construction market – not just in the US but around the world – came with the growth of residential construction in the early 2000s. When that bubble burst, it took out not only construction but also large chunks of the banking industry that had provided finance for new homes, as well as cranes.”
“The residential sector has been developing slowly since 2007. In 2013, residential construction started to exceed 2008 levels for the first time on a per-unit basis and has continued on a promising trajectory. Randy Robertson, Manitex director of sales and marketing, said, ‘Residential and commercial construction is a big part of what drives our industry. We are seeing a recovery from the recession since 2009: it’s been very long. Everyone’s very cautious though. They don’t want to get into the situation where mortgage companies finance just anybody. That’s what got us into trouble before – we overbuilt.’”
The Union Tribune in California. “Homebuilding was down across Southern California in the first three months of 2017, but nowhere more than San Diego County, said a Real Estate Research Council report. Residential building permits were down by 10 percent in the seven-county region compared to the same time last year and 37 percent in San Diego County. The biggest drop in San Diego County, 50 percent, was in multifamily construction — apartments and condos — but there’s a catch. There were a lot of multifamily projects that began construction at the end of last year and could be a major reason for fewer permits being pulled at the start of this year.”
“Russ Valone, president of local industry tracker MarketPointe Realty Advisors, said there are roughly 3,100 units now in some stage of being built. ‘There was quite a bit of stuff started last year that is still in the construction cycle,’ he said. ‘(This quarter’s numbers) might be a bit of a fluke.’”
“Another potential for the slowdown is investors are concerned that rent has gone up too quickly. Valone said lenders are getting more cautious out of fear the market is getting overbuilt. ‘There’s a little concern out there they are pushing the (rental price) envelope a little too much,’ Valone said.”
From Curbed Miami in Florida. “There’s some mixed news on the Monad Terrace front in Miami Beach. The pre-construction luxury condo development planning to rise off 13th Street and West Avenue sold a penthouse that was offered at $7.6 million, per Miami Luxury Homes, to an undisclosed buyer at an unknown price. However, not all is peachy with the Jean Nouvel-designed project, which expected to break ground in January but has yet to do so.”
“Monad Terrace Property LLC (of JDS Development Group) was served with a $45.8 million foreclosure lawsuit by EO Monad Terrace, as first reported by The South Florida Business Journal: ‘Monad Terrace Property Owner acquired 14 homes from 2015 through 2016 for a combined $51.15 million to assemble land for its project. It received a $46.8 million mortgage from EO Monad Terrace in June 2015. According to the complaint, the mortgage originally had a maturity date of June 15, 2016, but the loan was extended four times. During the last extension on Jan. 17, 2017, the maturity date was moved to May 17, 2017. The complaint says that the borrower has not repaid the mortgage at maturity and owes $45.8 million in principal.’”
“‘The lender filed this lawsuit during the course of the negotiations over a brief extension that would facilitate the closing of the refinancing,’ says attorney Jonathan Minsker, who represents Monad Terrace’s developer. ‘The lawsuit is entirely without merit, and Monad will respond in due course. In the meantime, Monad expects to close on the new construction loan shortly.’”
“Monad Terrace’s nearby sales gallery launched a few months ago. Prices started at $1.7 million.”
‘Valone said lenders are getting more cautious out of fear the market is getting overbuilt’
Crow time Rental Watch.
They are talking about multifamily in one market. I’ll start picking feathers from my teeth when we are overbuilding nationally…but I’ll probably be the one to note it, since I’m looking carefully at those numbers.
Trailing 12-month in CA is approximately 100k units (about half of what is needed). HOWEVER, the most recent “annualized” data is at about 133k…this is based on one month of information…we’ll see if this uptick continues.
Latest reading in the US as a whole is about 1.2MM units (about 75% of need).
There will be continued upward pressure on rents and prices nationally until there is more supply being added.
BTW, it is worth noting that multifamily starts in San Diego County fell by 50% because of a “fear” of overbuilding…yet rents rose 11% over the past 12 months.
There are 3,100 units at some stage of construction in San Diego County, a market with 3.25MM people and about 1.2MM housing units.
If half of the 1.2MM units are rentals, and ALL of those new units remained vacant, it would add 0.5% to the vacancy rate, which according to the Census was 3.6% in the last quarter…so the vacancy rate would rise all the way to 4.1%…still 3 points lower than the national average of 7.0%…yawn.
Does this look like rents are rising?
https://sandiego.craigslist.org/search/apa?query=free+rent&availabilityMode=0
May 16, 2017
“Builder Wermers Companies said the market has slowed following a surge in new-apartment construction over the past several years and as lenders have tightened credit for real estate loans. Tom Wermers said lenders are skittish about all the new apartments being built and may be concerned rent growth will not be as high as originally thought. Borre Winckel, CEO of the San Diego Building Industry Association, said builders have chased high-end buyers and renters, but there are only so many wealthy people.”
“‘That demographic that can can afford the top tier is thinning out,’ he said. ‘We don’t have the middle market happening anymore.’”
http://thehousingbubbleblog.com/?p=10087
May 9, 2017
“Because REITs are publicly traded they offer a window into the San Diego rental market. Despite a good start to the year for many apartment-focused REITs, Aimco CEO Terry Considine said an increase in more apartments coming on the market could begin to affect the bottom line. ‘The supply of new apartments continues to increase and there are many markets where new lease rent increases have slowed or turned negative,’ he said during a conference call with investors.”
“Dan Castro, founder of New Jersey-based Robust Advisors, has worked for more than 25 years with REITs. He said the first thing he looks at is how the trusts are financed and then examines their earnings. Another important factor, he said, was how broad their portfolio is. Most of the REITs operating in San Diego have properties all over the United States. ‘If somebody is 60 percent in Southern California, if that market goes down, you’ve got a problem because you’re not diversified,’ Castro said.”
http://thehousingbubbleblog.com/?p=10079
May 3, 2017
“The number of building permits issued in San Diego County in the first quarter of this year could suggest a slowdown in construction of new homes. The head of San Diego’s Building Industry Association, Borre WInckel said 1,409 building permits were issued in the first three months of 2017 in San Diego. If you multiply that by four, a total of 5,636 new permits would be issued this year, considerably fewer than the 10,000 issued last year. Winckel said developers can not make middle class housing pencil out because of the high cost of government regulation, and voter resistance to new development. He said the high-end of the housing market is saturated and workforce housing is stagnant.”
“That’s the new name for middle-class housing, is ‘workforce housing,’ he said. ‘That in essence has stopped, so if we don’t figure it out how to re-energize the supply of workforce housing, this area’s in trouble.’”
http://thehousingbubbleblog.com/?p=10072
March 27, 2017
“In a little-noticed statement, the Treasury bureau responsible for investigating financial crimes shared a remarkable money laundering statistic last month. Thirty percent of the cash purchases of high-end real estate by shell companies in six major cities involved a suspicious buyer, according to an investigation conducted by the Financial Crimes Enforcement Network to find out who was behind the deals.”
“In some neighborhoods, the condos may be sold out — but empty. In Manhattan, for example, the blocks between Lenox Hill and Central Park, between 63rd and 70th Streets, are nearly 40 percent unoccupied, according to the Census Bureau. On the Upper East Side’s most exclusive tract, along Fifth Avenue, more than a quarter of properties are vacant.”
“The reality is similar in other exclusive neighborhoods throughout the country. More than half of the beachfront properties in the neighborhoods at the ends of Miami Beach, Bal Harbour and the southern tip of South Beach are unoccupied. Because of unoccupied downtown condos, the South Beach neighborhood of San Francisco is one-fifth unoccupied, in the middle of one of the tightest housing markets in U.S. history.”
“In certain neighborhoods overlooking the beach in Los Angeles and San Diego, the story is the same — a third of properties in Malibu are vacant, as are half of the homes in San Diego’s Oceanside neighborhood.”
http://thehousingbubbleblog.com/?p=10033
February 25, 2017
“Jeffery Hayward, head of Fannie Mae’s multifamily mortgage business, shared a few highlights from 2016, as well as initiatives that Fannie Mae is embarking on in 2017. MHN: Where are you seeing a concentration of new supply? Hayward: Dallas will have a lot of new units coming online. So will Austin and Denver. Seattle has been that way for a while, along with San Francisco, San Diego and L.A. Typically the new construction is aimed toward higher rent and income levels.”
“MHN: How will market forces impact loan quality this year? Hayward: There are some challenges in the market around new supply, meaning there are some markets with lots of new supply coming in. There will be a little bit of stress on the market because there is so much new production coming on. Particularly, there are about 12 or 13 markets in which there is a preponderance of new supply. All of that doesn’t necessarily fit what we do because some of it is very high-end product.”
http://thehousingbubbleblog.com/?p=10007
February 12, 2017
“San Diego apartment rental prices continue to go up, up, up with the average price of a two bedroom apartment now around $2,200. But, there may be some good news on the horizon. The good news is vacancy rates are starting to creep up in San Diego County, mainly in the North County, Chula Vista and East County, said San Diego County Apartment Association spokesperson Molly Kirkland. ‘All the new stock coming to market tends to be higher end,’ said Devin O’Brien who works at Zumper, one of the largest rental web sites nationwide. ‘We’ve seen pretty much most of California go crazy.’”
http://thehousingbubbleblog.com/?p=9995
January 17, 2017
“Towering over a part of San Diego known more for offices than apartments, The Rey is one of downtown’s biggest apartment complexes in years. Coming in at 22 stories with 478 apartments, the development will balloon to more than 900 units if it decides to build a second tower already approved by the city. It lives up to its luxury status with a rooftop pool complete with a lounge and kitchen area, two-story gym, expansive views, top of the line appliances, and a lobby that looks more like a fancy hotel than an apartment building. Residents will pay for the amenities with rents about 24 percent more than the average rent in San Diego County.”
“Its opening comes as national trends appear to show a major slowdown in rent growth for luxury units, but most local experts say San Diego will not suffer the same fate because the need for more apartments is so high. Realtor Jason Cassity, who works downtown with sellers and renters, said he has noticed rent growth slowing downtown at other complexes and ones where his firm serves as property manager. ‘We used to property manage a few doors and, almost religiously, assume we could raise the rent 10 percent every year or every turnover. That’s not the case anymore because of the increase of supply,’ he said.”
“Andrew Woo, data scientist for Apartment List, predicts the areas where rent went up the quickest in recent years, like San Diego, will see the biggest slowdown. ‘For new luxury apartments coming online, they may find it more challenging to fill vacant units, which explains why you’re seeing so many specials right now,’ he said.”
http://thehousingbubbleblog.com/?p=9964
January 4, 2017
“San Diego rent prices continued to go up last month, but the speed of that climb has slowed significantly. ‘San Diego saw really large rent increases in 2015 and early 2016 — in the order of 6 to 8 percent over a year ago,’ Woo said. ‘But starting in the middle of 2016 and continuing through this past month, those actually dropped quite a bit.’”
http://thehousingbubbleblog.com/?p=9949
Eat your crow…
“Data from real Answers showed average rent in San Diego County had increased 11 percent in a year, more than any other Southern California county.”
Vs.
“concerned rent growth will not be as high as originally thought”
“could begin to affect the bottom line”
“San Diego apartment rental prices continue to go up, up, up with the average price of a two bedroom apartment now around $2,200. But, there may be some good news on the horizon.”
“most local experts say San Diego will not suffer the same fate because the need for more apartments is so high”
The most negative:
“‘San Diego saw really large rent increases in 2015 and early 2016 — in the order of 6 to 8 percent over a year ago,’ Woo said. ‘But starting in the middle of 2016 and continuing through this past month, those actually dropped quite a bit.’”
The rate of increase dropped…but that was a January article…we are in June.
It looks like there are concerns that rents in San Diego could decline, but such declines are not showing up in the data…yet.
I stand by the data…follow the vacancy rates. You may see certain types of apartments in certain markets suffer, but as long as you have 4% or lower vacancy rates, there will not be broad-based rental declines.
The craigslist search for “free rent” does not show many listings that actually are advertising incentives to move in. The majority of those popping up are catching things like “smoke free” or “pet free” or “free trash/sewer”, etc.
https://www.google.com/?gws_rd=ssl#q=site:craigslist.org+3+months+free
69,000 results from Houston to LA, San Francisco, Seattle, Manhattan, Miami and Denver.
Oceanside is barely even considered San Diego since it is 1/3 of the way to LA and generally a lower income area. It is a massive commute to any corporate job and really there simply to service Camp Pendleton.
The only beach neighborhoods of interest when it comes to unoccupied and popular areas would be, Ocean Beach, Pacific Beach(crappy areas but central), then desirable sea side areas are La Jolla, Del Mar, Encinitas and Carlsbad.
As far as I have seen though there is very little high density housing in any of these areas. Just sparse condo complexes and apartments and a lot of single family homes.
The other thing that you might consider is that we overbuilt significantly for years and years all over the country. Houses have been bought mostly as “investments” for the last let’s say 20 years.
“Inventory” is what’s on the market. It is not what would come to market if sentiment went from greed to fear to despondency. That could be a watershed.
10 million white elephants would cast a big shadow.
“Inventory” is what’s on the market.
Yes, but “supply” is the number of physical homes. I don’t care at all about “inventory”, I care about supply relative to the number of people who want to live in the homes (demand).
If a particular market has a low vacancy rate, it is very hard for me to understand how that market could be generally “oversupplied”.
Sure, there might be too many homes priced over $5MM, or too many pink houses, or too many high-end apartments, but there aren’t generally too many places for people to live.
people who want to live in the homes (demand)
Is that really demand? ZIRP & NIRP makes it more like speculation than demand.
ZIRP and NIRP most certainly influence whether you wish to buy a home (as opposed to renting), and absolutely has an effect on how much you can pay.
HOWEVER, it has no bearing what-so-ever on one’s desire to live sheltered from the elements.
And is the fundamental reason for all the overbuilding.
Sure, there might be too many homes priced over $5MM
If you really believed in supply and demand, these are not 5mm houses. Maybe they are just 3 mil houses, no?
You have no clue about the actual housing market and just parrot the nonsense. Speculation is NOT ‘demand.’
It begs a few questions.
Why aren’t builders building enough houses if there is a shortage? Is there any explanation other than that they can’t sell all that they could build?
Where is the shadow inventory?
Does Vacancy rate really capture houses sought on speculation that would be brought to market in a price collapse?
“Why aren’t builders building enough houses if there is a shortage? Is there any explanation other than that they can’t sell all that they could build?”
Cost…I looked at a couple of builder business plans…about 2 years apart, same builder…direct hard costs were 20% higher over a 2-year period. Lots of labor left the business post-crash (looking for other work), and haven’t come back.
Also, municipalities are running into pension obligation problems…their solution is to pile on “Impact Fees” for new home construction. $50k per home used to be outrageous, now is common.
Builders seem to finally be responding by building smaller homes…median home size has decreased in the country at a time when there wasn’t a recession–which is very uncommon (not sure it has ever happened before).
“Where is the shadow inventory?”
Concentrated in judicial states, like NY, NJ, FL. They are burning through it slowly due to their process. There is no meaningful “shadow inventory” in much of the country.
“Does Vacancy rate really capture houses sought on speculation that would be brought to market in a price collapse?”
IMHO, yes.
Consider two scenarios:
1. Speculator buys a home and rents it out (vacancy rate stays low).
2. Speculator buys a home and holds it vacant for later sale (vacancy rate creeps up).
In the case of #1, when the speculator decides to sell, he displaces a resident, and that resident is now in the market looking for another place in which to live…whether they buy or rent, they are looking for shelter, and are a unit of demand in the market. If they look to rent, it adds to whatever rental pressures there are, and makes it marginally more likely that another renter finally makes the leap to buy.
In the case of #2, the speculator can bring the home to market faster, AND is adding a unit of supply without adding a unit of corresponding demand.
Now, single units aren’t the way to think about this, but many.
If you have thousands of speculators in category #1, you will have lots more homes on the market, but you will also have a lot of people looking to rent, tightening the rental market, keeping upward pressure on rents (and pressure on people to move from rentership to “owner”ship).
If you have thousands of speculators in category #2, you just have a massive increase in listings, without continued pressure on rents. Bad news if you care about home prices.
If you don’t think vacancy rates matter, look back at what the Census reported as vacancy rates prior to the crash:
Rental vacancy rate was steadily at 10% prior to the bust, vs. 7% now. Homeowner vacancy rate pushed up to almost 3%, vs under 2% now.
Then, it was pretty easy to look at vacancy rates and see that there was too much housing. There were massive home price increases (2x+ the current pace of increase), AT THE SAME TIME we had vacancy rates rising. Clearly non-market forces were in play.
Today, we have home price increases that are still too high (higher than inflation), but those price increases are occurring at a time when there is relatively low vacancy rates. It is reasonable to believe that market forces are playing a meaningful part in home prices.
“Jacob Berg, a 33 year old bookkeeper, and Bianca Rose, a 27 year old insurance agent, recently bought a home in Valencia, California. It took them a year to find the right place: a small house (900 sq. ft.) with two bedrooms, two bathrooms and a two-car garage. They paid $430,000 for it — a price that was well within their comfort zone. ‘We didn’t take into consideration having good jobs,’ Berg said. ‘Unforeseen things can go wrong. If we had to go get a minimum-wage job, we would still be able to afford to make our house payments.’”
478 dollars a square foot oh no
The article mentions it’s an investment and they want to eventually rent it out and buy something bigger.
‘I feel like if we don’t do something soon, we’re going to get priced out of the market. Salaries aren’t increasing quickly enough to keep up with the pace that home prices are growing. It’s kind of now or never for us.’
Fundamentally a mania is in the minds of the participants, and this here is prime proof of a mania.
Sounds like Millennials are being set up to take the fall this time.
Fresh meat. They weren’t available for a reaming last go.
‘Fundamentally a mania is in the minds of the participants, and this here is prime proof of a mania.’
As long as there is a greater fool train arriving at the station.
Being priced out is never a reason to buy a home… they bought the realtor lie. Buy now or forever be priced out. That is basically believing that prices will never come down. If you believe that then its time to take out an interest only loan and get on the trade up ladder to infinite riches.
Kill your 401k, buy homes instead.
Getting priced out is easily the most dangerous lie in the housing market to get would be buyers off the fence.
If you believe that then its time to take out an interest only loan and get on the trade up ladder to infinite riches.
And that’s exactly what people are trying to do. They have given up hope of making enough to retire comfortably by being productive.
‘Unforeseen things can go wrong. If we had to go get a minimum-wage job, we would still be able to afford to make our house payments.’
So they claim to be able to service a $400K mortgage on a ~28K combined income, should worse come to worse). Even if they live in a high minimum wage locale that would only be 36-38K
They’d better stock up on Ramen noodles and get new tires for their bicycles while they can afford them.
Like my good friend Oxide says, they could have rented for half the monthly cost then buy later for 50% less.
So they claim to be able to service a $400K mortgage on a ~28K combined income
Repeat after me. “There are no subprimes. The lending’s been a lot tighter since 2009.”
saw that story also about min wage backup plan for mortgage and, although I applaud the fact they at least TRY to be cautious, life has a funny way of leaning into the curve when you’re swinging for the bleachers.
part 2: quick follow-up about the young couples mortgage plan. as an image of “old Biff Tanner” shaking his head at “young idiot inexperienced Biff Tanner”, even as he tries to help his younger self with advice, the stubborn dumbazz just HAS to do it HIS way.
at first.
Maybe they saved up and dropped a large downpayment or something. Or the reporter changed what they said.
maybe they did have a large down payment, Ethan.
and possibly the reporter did skew the facts.
still. c’mon . . . that’s FOUR HUNDRED THOUSAND DOLLARS for housing!! just the mortgage.
they would get eaten alive by all the carrying costs w/any minimum wage job(s). You can’t just go primal like digging your own well, septic, no sewage connections, water, garbage, power, yadda yadda that each state/county/city uses to pile on the fees, surcharges, taxes. pretty much mandatory now. very hard to go off-grid.
and the state of CA uses that purchase price as as the basis to set everything as high as possible going forward.
forever.
trust me. I’m pretty much at ground zero staring into the mushroom cloud with no sunblock!
Yeah I call bullshit. Dual minimum wage job ($56k probably generous) would be burning at a hefty negative to hold onto even a $320k home loan at 4% interest…
$2000 carrying cost right there against a $4600 gross monthly. Thats up to basically 43% DTI which is the full back end ratio even allowable.
That is emergency mode and only sustainable with a good emergency savings and 0 other debt.
Valencia California—Berg and Rose House
Track houses. 864 sq feet. All over $400k. WTF.
–Planet Past
“They paid $430,000 for it — If we had to go get a minimum-wage job, we would still be able to afford to make our house payments.’”
How much is minimum wage in California????
10.50
Impossible.
$10.50 x 40 hours x 52 weeks x 2 people = $43,680.
Now subtract income taxes. Now subtract property taxes. Now subtract insurance.
I’m sure a licensed and professional real estate agent researched this.
I don’t think it matters anymore. Nobody cares. They’ll just let you keep the house.
All sorts of things are possible with subprime and a little bit of fraud.
And a green handshake.
Probably around $2k to carry the house with a take home of maybe $3k after tax on two minimum wage jobs. Pay next to nothing in income tax.
Still $500-$1000 bucks left to pay, food, bills and necessities is going to require a slow burn on savings for most. With no ability to handle an emergency.
Clearly the statement was either taken out of context or the have a different definition of “able to carry”.
It’s the new math they’ve been teaching these kids.
Kids is right. “After five years of living together in a one-bedroom apartment, Jamil Saeed and Felicity Greenpalm are ready to take the next step and buy a house in Seattle. ”
Still no mention of rings and papers. They better not have a falling out.
Rings and papers don’t prevent falling out, it just feeds the lawyers.
“The pre-construction luxury condo development planning to rise off 13th Street and West Avenue sold a penthouse that was offered at $7.6 million, per Miami Luxury Homes, to an undisclosed buyer at an unknown price. However, not all is peachy with the Jean Nouvel-designed project, which expected to break ground in January but has yet to do so.”
So let me get this straight: this place doesn’t even exist except in renderings, right? And yet a “penthouse” was sold? Lawsuits are filed?
Wut?
The “buyer” is probably the developer’s brother in law….seriously…happens all the time!
A rundown one-bedroom London mews house described as ‘beautifully derelict’ has been put on the market for a staggering £2.5million.
The dilapidated property, which sits over a large double garage, is on Pindock Mews in Little Venice, a street previously lived in by the likes of punk rocker Sid Vicious and girlfriend Nancy Spungen.
It has just 1,484 sq/ft of floorspace and is need of full renovation, despite boasting a mammoth price-tag.
http://www.dailymail.co.uk/news/article-4576912/Beautifully-derelict-London-home-market-2-5m.html
Beautiful my fragrant rear end.
And for perspective, mews were the original affordable housing, and for the poorer classes at that, not even middle-class. Coachmen and stablemen lived in mews for cheap because only they could tolerate living above the horse’s fragrant rear ends.
If they need to make payments with a minimum wage job they can? Good lord. I’m a mech engineer and wouldn’t consider taking on a $350k+ mortgage (or one at all, heh). The other couple is a marketing consultant and one works at Nordstrom? Maybe the Nordstrom is a high up manager? but still. I love the “We need more space for just in case we have some friends over for BBQs, and maybe a swingset for our future unborn children”.
I’m a millennial and must have gotten into the wrong field, because my mech engr salary wouldn’t let me afford either of these home scenarios.
So glad I left the Boston area!! Talk about dumb money mania.
You really don’t need four semesters of Calculus to do the math, but it doesn’t hurt.
“I’m a millennial and must have gotten into the wrong field, because my mech engr salary wouldn’t let me afford either of these home scenarios.”
You did the right thing. We’re going back to the future, where it’s going to be all about mechanics, not electronics. You will be in demand. You will make a fortune.
Or at least make a living.
Maybe they have savings or made a large down payment? I highly doubt that a minwage job is gonna support that house otherwise.
A $100k household income wouldn’t either. Losses all the way to the poorhouse.
How many instances of do you think they’ll find in that transaction?
When people live life that close to the margin they bring Murphy’s cousins - Broke, Desperate and Stupid into the fold.
A $100K household income can afford a $300K mortgage pretty easily — IF you don’t have to move for 6-7 years.
If there’s a large down payment, then it’s from Mom and Dad.
3x income doesn’t meet the definition of affordable unless there is fraud involved and at that price it’s a virtual guarantee.
“A $100K household income can afford a $300K mortgage pretty easily — IF you don’t have to move for 6-7 years.”
And try married, two kids, cars, college savings, dentist and orthodontist, retirement savings, etc., no fugg’n way on $100k.
With 10-20% down, I think a $430k house starts to border on comfortable at around $120k per year salary. Not terribly hard to get to in San Diego with two decent paying jobs.
The problem is today you would be lucky to find a $430k 2 bedroom condo… And that is not even factoring in probably a $300 a month HOA…
House poor in Cali is a common state of mind. Gambling on future appreciation allowing you to trade up or refi into a livable carrying cost.
I haven’t been willing to take the trade up or house poor gamble… owning costs a tad more than renting right now.
I think we are starting to see “drive till you qualify” restart (I’ve heard more than one market participate note and uptick in buyer activity in the Inland Empire). You can still buy a single-family home for less than $400k in the Western portion of the IE if you are willing to commute. Welcome to hell.
That reminds me…I was seeing cheap houses just west of Patterson and there is a route 130 that goes directly from San Jose to Patterson and it’s not that far as the crow flies so I had to go check it out. I only made it a third of the way and turned back. Totally un-commutable. So now I see why the houses were cheap.
https://www.zillow.com/kalaheo-hi/home-values/
kalaheo, hi prices CRATER 10% yoy
3.3 month break even”
Zillow should get get sued by fb’s
FEAR OF DEPORTATION DRIVES PEOPLE OFF FOOD STAMPS IN US
The stats say illegals can’t get food stamps, no?
I remember children of illegals can get FS and medicaid not the parents
Oh came across this…interesting any building engineers here?
An 11-story timber high-rise planned in Portland’s Pearl District has been approved for construction
http://www.oregonlive.com/business/index.ssf/2017/06/timber_high-rise_planned_in_pe.html
You didn’t know about this?
People who are not legal residents of the U.S. are not eligible to take part in what is formally known as the Supplemental Nutrition Assistance Program.
But many poor families include a mix of non-legal residents and legal ones, such as children who have citizenship because they were born in the U.S. In those cases, it is often an adult who is not a legal resident who submits the application.
http://abcnews.go.com/International/wireStory/fear-deportation-drives-people-off-food-stamps-us-47865988
“People who are not legal residents of the U.S. are not eligible to take part in what is formally known as the Supplemental Nutrition Assistance Program.”
All that does is makes our city streets less safe.
Technically only the legal kid gets the food stamp money, but parents spread the money over the entire family.
I give to the local food bank, but I am seriously considering discontinuing that, because I suspect that the illegal immigrants are living off of a combination of SNAP and food banks. I don’t think anyone should go hungry, but I don’t like this endless flood of people gaming the system either.
Birthright citizenship makes zero sense to me. Why should two visiting none resident people be able to come to a country and have a child who is a naturalized citizen simply because of location?
If in an emergency my wife gives birth abroad I don’t expect citizenship for my child in that country.
I suppose it simplifies some paperwork but I don’t think it is heartless to require the whole family to go through the citizenship process. Or at least make some form of special Visa to allow that.
3.5% smelly Mel watt
0% farm boy
What could go wrong ?
http://www.zerohedge.com/news/2017-06-05/elderly-americans-are-taking-their-grandkids-summer-jobs
Elderly Americans Are Taking Their Grandkids’ Summer Jobs
Pretty soon they’ll be taking the cat’s food.
Overdoses now leading cause of death of Americans under 50
http://www.msn.com/en-us/news/us/overdoses-now-leading-cause-of-death-of-americans-under-50/ar-BBCc2OE?li=BBnbcA1
Not “a” leading cause of death. THE leading cause of death of Americans under 50. A nation committing suicide.
After five years of living together in a one-bedroom apartment, Jamil Saeed and Felicity Greenpalm are ready to take the next step and buy a house in Seattle. Saeed, a 29 year old marketing consultant, and Greenpalm, 31, who works for Nordstrom…
A marketing consultant and a Nordstrom employee. How special. These skills will certainly be in high demand as retail continues to crater and our unmarried, commitment-adverse young couple share the bonding experience of being deeply underwater on their “investment.”
Yeah, I was late to comment above, but I notice a conspicuous lack of rings and papers. And I see this more and more often.
Ox, it has to do with credit, benefits, and being married you have to combine income, but if one is not making hardly anything and they keep separate accounts, they can qualify easily for benefits, like pell grants/student loans, food stamps medicaid, this is the kind of marriage penalty no one talks about.
Lot of single widowed seniors realize they get far less by getting married, but joint property IS joint property and it has to be divided in a equitable way
And still the Chinese embezzlers and money launders keep bidding up Vancouver real estate.
http://www.scmp.com/property/international/article/2097100/vancouver-home-prices-resume-gains-fresh-record
The Chinese and Canadian banks are going to want their money back. In fact they will demand it.
They can demand it all they want. They can even stamp their little feet. But you can’t get blood out of a stone.
But you can take the collateral.
But it’s going to be heavily depreciated, right?
What if the other creditors take the same collateral first?
What other creditors? What is deprecation?
And don’t forget about having to evict the squatters!
hurry…
https://www.corcoran.com/nyc/Listings/Display/5164414
http://liccourtsquare.com/2017/06/06/4-74-48th-avenue-apt-27f-comes-to-market/
5 years ago this month I bought some used paint in the shape of a house.
“used paint .. shape of house.”
now THAT there is some funny stuff. BAM !
LOL. You should sell that to Steven Wright.
Three noted real estate experts agree there is no housing bubble. Go ahead and shut down the HBB, Ben, and all you renters need to go out and become FBs, er, homeowners.
https://theentrypoints.com/the-entry-points-market-blog/relax-there-is-no-housing-bubble/
I’m sure there are countless low wage Londoners waiting to snap up those million pound plus apartments being built all over town.
I counted more that twenty cranes from my perch on the London Eye. Not sure what the office/flat mix was, but I’ll bet there were some flats being built. The tallest building in London is the Shard. You can buy an apartment there for 40 million pounds, or so I was told.
London has no middle class. Everyone was either living in a million pound plus flat (or multi million pound house) or were members of the free sh!t army living in Council Flats. I have never seen such income inequality, not even in coastal California, though the Bay Area isn’t too far behind.
“London has no middle class. Everyone was either living in a million pound plus flat (or multi million pound house) or were members of the free sh!t army living in Council Flats. I have never seen such income inequality, not even in coastal California, though the Bay Area isn’t too far behind.”
Hehe… sounds something like Dickens’ London.
Pity the mortgage prisoners. Maybe leave the occasional bag of groceries on their doorstep.
http://www.telegraph.co.uk/personal-banking/mortgages/mortgage-prisoner-explosion-new-generation-risk-crippling-rates/
Same ol’ story …
NBA star once worth over $100 million now bankrupt.
https://www.youtube.com/watch?v=xqlz3QwM6R4
Totally dumbed-down. Totally.
slackers you lose……..Home Where Marilyn Monroe Died Lasts Less Than 10 Days on the Market
http://www.nbcnewyork.com/news/local/Celebrity-Real-Estate-Marilyn-Monroe-Brentwood-House-Photos-Market-Sale-426976753.html
From 2009 …
Crypt above Marilyn Monroe sold for $4.6 million.
http://www.reuters.com/article/us-monroe-idUSTRE57O02W20090825
$4.7 to be buried face down.
The homes are really sandwiched in that nabe.