The Sky Is Not In Fact The Limit
A report from Bloomberg on Japan. “Land prices in Tokyo’s central Chuo ward, home to the famous Ginza shopping district, have jumped by 51 percent in four years. In Osaka, they are up by nearly half. Booming construction of hotels, office buildings, shopping centers and apartments, financed by record lending for real estate by Japanese banks, has driven the gains. Shinichi Hasegawa, the head of the Singapore office of real estate consulting firm B-Lot Co., whose clients are mostly foreign investors, shrugs off any pessimism over Japan’s property market. ‘Japan is very cheap from a global perspective,’ Hasegawa said. ‘I have no complaints about the BOJ’s monetary stimulus,’ he said. ‘They are just so helpful.’”
“Signs of excess supply are already appearing in Tokyo’s housing market. Unsold new apartments and new housing for rent in Tokyo both reached multi-year highs last year. Satoshi Horino, president of Mori Trust Asset Management Co., said he is hearing stories about appraisers calculating returns based not just on purchase price and income, but by adding further price gains, a bold assumption in a country afflicted by price declines for years. He sees this as a contrarian indicator, another sign a reversal is coming.”
“‘It shows land prices have come to a pretty good level,’ Horino said. ‘Prices will fall but I just don’t know when. There is an oversupply of properties — no doubt.’”
From The Sun on the UK. “Average UK rents have fallen for the first time in almost eight years, according to new data. This is the first time since December 2009 that rents have fallen on an annualised basis, according to the latest HomeLet rental index. London has seen the biggest decline over the past year. As well as falling rents in the capital, four other regions of the UK saw rents on new tenancies decline last month.”
“HomeLet’s CEO Martin Totty said: ‘May 2017 saw average rents nationally fall for the first time in eight years when the economy had suffered the shock of the financial crisis. HomeLet rental data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment whilst covering their own rising costs.’”
From Norway News in English. “The latest statistics for housing sales in Norway show that prices have indeed tumbled during the past month. In Oslo, the price fall was more than expected, and marked the weakest month of May in 14 years. New, stricter lending rules clicked in from January 1, at the same time there’s been a homebuilding boom, and that’s widely credited for the downturn aimed at halting double-digit price rises in the Oslo area.”
“‘This is the weakest May we’ve had since 2003,’ Christian Dreyer, head of the real estate brokers’ organization Eiendom Norge told state broadcaster NRK. ‘Housing price growth is abnormally weak.’”
The New India Express. “The house rent market in Bengaluru which has enjoyed inflated pricing in the recent years, primarily riding on the affordability and demand from the IT sector, is now witnessing a slump following job cuts. Residential rents are coming down by up to 10 per cent, with at least Rs 3,000-4,000 drop in rentals for a 2BHK, according to real estate agents in the city. The trend is likely to continue until the stress in the IT sector eases out, agents said.”
“Realtors say while earlier if a house owner quoted Rs 20,000 for a 2 BHK, there would be three or four people in line to take up the house at that price. If someone was eager to occupy it immediately, they would even offer to pay a thousand more. However today, people are negotiating for lesser price and are willing to pay only the minimum amount. ‘The rents have come down by 10-12 per cent and this trend is likely to continue for some more time,’ said Sajid, manager, residential sales and marketing, Silverline Realty Pvt Ltd.”
The Global Times on China. “Apartment rents in first-tier cities have been falling as supplies increase and demand shrinks amid slowing transactions for homes, indicating a steadier property market overall, according to experts. Rents for Shanghai apartments ended a 90-month string of rises in January, data from the Shanghai housing rental index office showed, according to a report by domestic newspaper International Financial News.”
“In recent years, fewer people have moved into Shanghai and the number of permanent residents (those with hukou) has deceased in the past two years, Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, told the Global Times. Also, Hui noted, supplies have been improving relative to demand. Lower rents will help steady the market overall, because people won’t be in a panic to buy, according to Hui.”
“‘With transactions of homes cooling in first-tier cities, some owners won’t sell their properties but will instead offer them for rent, releasing more supply and driving down rents,’ Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told Global Times.”
From West Australia Today. “Talbot Le Page Homes is the latest WA builder to go bust, an Australian Securities and Investment Commission announcement has confirmed. Turquoise Developments, trading as Talbot Le Page, specialised in high-end custom homes across Perth. Housing Industry Association executive director John Gelavis said insolvency happened across all industries and housing was one of WA’s largest industries.”
“He said things were actually looking pretty good for people wanting to build in Perth. ‘The time it takes to build a home has also decreased dramatically because of a significant increase in the availability of trades contractors … who were previously flat out in the mining sector up north,’ he said. ‘The cost of materials has also improved based on the drop off in demand.’”
From CBC News in Canada. “The latest real estate numbers out of Toronto this week show a marked slowdown in terms of prices and sales volumes. The Toronto Real Estate Board revealed Monday that the average price of a home in the GTA was $863,910 in May, down more than six per cent from last month’s level. And the volume of sales was also lower, down by 12 per cent. ‘The market has changed,’ says Christopher Alexander, a regional director at Re/Max Integra, one of Canada’s largest home sellers.”
“Real estate lawyer Mark Weisleder says sellers in the current market are waking up to the new reality that the sky is not in fact the limit when it comes to price. ‘I think we had a little bit of a storm,’ he says. ‘Not a great storm but we had a storm.’”
“Sellers who are feeling the squeeze the most, Weisleder says, are those moving up in the market who are banking on selling their existing place to finance their next purchase. ‘They bought before the government announcements and now they are trying to sell,’ he says, and ‘they are having some difficulty selling for the price they thought they would get in order to afford the new home.’”
“Some of them may be tempted to try to wriggle out of a purchase, but walking away from a deposit or contract of sale isn’t consequence-free, he warned. ‘From a legal standpoint if you don’t close a purchase and a seller sells for less money, you are responsible for that loss,’ he says.”
‘people won’t be in a panic to buy’
‘Land prices in Tokyo’s central Chuo ward, home to the famous Ginza shopping district, have jumped by 51 percent in four years. In Osaka, they are up by nearly half…he is hearing stories about appraisers calculating returns based not just on purchase price and income, but by adding further price gains’
Yeah, seeing a bubble is soooo hard central bankers.
Japan…
1) Population growth is flat for years.
2) Economic growth is variable with higher variability during the late 1980’s (the Japan, Inc. years), and again directly after the 2008 decline which went from -5% to above +2% for a time in 2009-10. Data show that the variability is declining again with economic growth at less than 1% with a significant dip to -2%. (https://tradingeconomics.com/japan/gdp-growth)
3) Easy money by the BOJ has set the bond yield interest rate is at 0% since 2011 and -0.1% since 2016. (https://tradingeconomics.com/japan/interest-rate)
Japan is trying to do the impossible. They seem to want to “spur economic growth” by monetary policy while the gov’t does fiscal policy-based stimulus by running rather significant gov’t debt-to-gdp.(http://marketrealist.com/2017/03/long-can-fiscal-policies-help-japan-achieve-economic-goals/).
This effort has failed. What investors are left with is no return on investment which drives them into the seductive arms of a property bubble which appears to be running on fumes.
So, all dressed up and nowhere to go. We, the US, is in the same fix. I depend on dividend payments which are slim pickin’s in these ‘ear parts.
Regards,
Roidy
1) Population growth is flat for years.
Population in Japan started to decline in 2004…saying it is “flat” is way too generous.
Maybe a bit after 2004…but as of today…shrinking.
They apparently have very hard time seeing bubbles of their own making.
“They apparently have very hard time seeing bubbles of their own making.”
“Apparently”, that the key word here.
If you believe they do not see these bubbles then you are the blind one.
Apparently I misspoke:
“They apparently have a very hard time acknowledging bubbles of their own making.”
Panic buying in my hood. I guess the feds won’t be cutting a dime in spending
You must have lots of neighbors in the defense contracting business.
Trump’s Budget Cuts? More Like Radical Surgery
Steven Rattner
MAY 31, 2017
With a week to sift through the Trump administration’s first full-fledged budget proposal, two inescapable realities have come into sharper focus: the enormous magnitude of the desired cuts in many domestic programs and an utter disdain for numerical integrity.
First, no budget in my 40 years of following fiscal policy has attempted to reallocate outlays as radically as this budget does. Most of the commentary has focused on the cumulative spending changes over the next decade; look instead at the proposed outlays for 2027 to understand the full extent of the proposed shifts.
As the chart below shows, defense receives an increase, Medicare and Social Security retirement are left almost entirely unchanged and pretty much everything else is massively trimmed. (All projected changes are in relation to current law, and these figures are not adjusted for inflation, making the effective cuts from today’s spending levels that much greater.)
…
‘Shinichi Hasegawa, the head of the Singapore office of real estate consulting firm B-Lot Co., whose clients are mostly foreign investors, shrugs off any pessimism over Japan’s property market. ‘Japan is very cheap from a global perspective,’ Hasegawa said. ‘I have no complaints about the BOJ’s monetary stimulus,’ he said. ‘They are just so helpful.’
If you think about it, what’s the downside? There are plenty of people that will defend them. “Oh they saved us from eating gruel!” People get stucco? They’re victims! Just write a book like Bernanke and call yourself courageous. Give $150,000 speeches, take that you reckless money printers!
‘Oil futures fell hard Wednesday toward 2017 lows as the Energy Department reported a surprise jump in U.S. crude stockpiles’
Not a surprise if you visited west Texas recently. This is the dry cleaner effect. Easy credit, no one shuts down. Even the Saudis are borrowing money. Break even spirals down, they still can get loans. The bigs are borrowing money to pay dividends.
See comment below on DJT’s nominees to the Fed.
The music of cheap money/credit is about to stop.
God bless DJT.
A boy can dream, but I”ll believe it when I see it.
“The bigs are borrowing money to pay dividends.”
The variety of economic distortion fostered by the Fed’s easy money regime is limitless.
Houses in our nabe selling in under 2 weeks. Taxes keep rising.
Moar evidence of inflation: Doctor visit bill $125 higher than last years yearly check-up. I think Doc’s are realizing those of us who pay cash with high deductible are a new cash cow. We still get a discount for cash but it’s essentially eaten with the higher bill.
Not cool.
Did you negotiate the price BEFORE you had the doctor’s appointment.
Did you look at other doctors?
If you are paying cash - you need to do some work.
It is my understanding that under the ACA that preventive care (such as annual checkups) are not subject to the deductible.
In my little burg it would be hard to negotiate prices, as pretty much all private practices have been bought out by Banner Health or Poudre Valley Health. Some specialists seem to be independent still, but even those are increasingly part of some conglomerate.
From what my GP told me, he and his colleagues at his practice were more than happy to sell out to Banner, as he no longer has to deal with the non medical aspects of the practice. He’s now an employee and at the end of his work day he goes home and forgets about work.
A few years ago my brother was on an HD plan and when he asked for an estimate for a minor procedure, which mostly involved lab work he was laughed out the door and was told it would cost what it would cost and they could NOT give him an estimate, never mind negotiating the cost.
they could NOT give him an estimate’
they usually don’t
Elections have consequences…
There is a difference in parties.
God Bless DJT.
——
Trump set to make first moves at completely revamping the Federal Reserve
Jeff Cox - CNBC - Monday, 5 Jun 2017
President Donald Trump appears ready to remake the Federal Reserve in an image that will be considerably different than what investors have known for many years.
Should Trump nominate the two men and they receive confirmation, it will represent the first steps in a possible substantial remaking of a Fed that has practiced ultra-loose monetary policy for the past decade but has been tight on banking regulations.
If the Quarles and Goodfriend moves are indicators of what’s to come, things could start getting less comfortable for Yellen. Both are considered solidly conservative, in line with the Republican president and Congress but perhaps not with Yellen.
Being that Goodfriend is known to not be a fan of the easing programs the Fed instituted to spark the economy, is “skeptical” of the central bank’s plan to roll off its $4.5 trillion bond portfolio, and is likely to favor a rules-based approach to setting policy, that could set up further conflicts. Goodfriend did not respond to a request for comment.
On the regulatory side, Gardner said the two men would accelerate a Trump administration push to make rules friendlier for community and regional banks rather than big Wall Street institutions.
“revamping the Federal Reserve”
Just end the pig. Please.
Yellen’s term as Chair is up next February. Then Trump can appoint any of the sitting Board members to be chair. So either of conservative guys is eligible for chair in as little as 8 months.
Will the big banks be “repaired” by then?
Selling in the burbs of Denver and condo sitting for 6 months. In spite of what you’ve read, prices aren’t holding. Listings in this area have recently surged by another factor. Seems like buyers are now sitting, waiting and watching.
It’s Denver…
Everyone wants to live here.
Even with the average wage at $40K - they can afford $400k cookie cutter homes and condos
And legal pot!
And downtown is just so hip
And all of California is coming here…
And the economy doesn’t depend on oil/energy anymore…
So you must be peddling fiction.
I see some Santa Cruz-type drug leaches have infested Durango.
merchants are howling.
my sympathies.
sincerely.
Like rental watch says, you can ask $50000 for your broken down chevy cavalier but where is the buyer at that price? Housing is no different.
Rental watch says it’s all organic demand. Someone will pay for that crap.
Please don’t put words in my mouth. Not ALL the demand is organic. However, vacancy rates are low enough that it is hard to claim that development is completely disconnected from actual demand from people who want to live under a roof.
As I understand it non-organic demand is known as speculation. With a green handshake tossed in.
A poor analogy. No one has ever paid $50,000 for a Chevy Cavalier, but people overpay for old, beat up houses all the time, especially during bubbles.
You need Chinese money launderers.
Or South American drug kingpins.
Or Early employees of voyeur technology companies.
All sorts of housing fraud in that list.
I can concur re dr. bills. they are now adding an additional charge to patients above & beyond what insurance normally pays.
And after reading the India reference to falling rents I would NOT want to be in the hellish position of landlord as Indians are well-known voracious “bargain hunters”.
Once they smell blood in the water, you’re in for a relentless browbeating for a larger discount!
ex: I now avoid shopping at Macys during christmas because the Indians/Chinese will bring the checkout line to a dead stop to endlessly harangue, whine & present any expired coupon/discount/defect to price haggle the clerk!
(btw, for all you SJW’s, that’s not “racist”. It’s a well known cultural FACT that they don’t want a fair deal; they must come out ahead or lose face)
Same way at garage sales. Like bargaining over something that costs 25 cents.
But I have the great comeback.
“Buy some more of my stuff and I will give a a good price. Today only!”
And when they have spent lots of time and have a bunch of stuff - I gave them a small discount. But now they have too much time invested to walk away and they pay it (9/10 times)
Americans have forgotten how to bargain. We used to be good at it too…
I don’t mind paying asking price most of the time. I like getting exactly what I want, when I want it. If it happens to be available for cheaper, I’ll find a discount code. I’ll ask for a discount. If it’s free and I don’t want it - I’ll turn it down most of the time. Not worth my energy to deal with it.
Growing up with cheap parents taught me the joy of paying full-price and getting exactly what I want. There is a line of self-respect some people cross that disrespects themselves when they over-haggle. It’s embarrassing to watch, personally.
Or Craigslist or Letgo. Sold a bird cage with bird supplies a few years ago for $10. Got a call from an Indian woman who asked if I would sell it for $2. I said no. She said “How about $2.50? That’s my highest offer.” I hung up and sold it a few days later to some college kid for $10.
I always love the craigslist buyers who call you up and then try to low ball you over the phone.
My standard response:
“The price is firm. Cash only. I have two other buyers coming this weekend so it is first come, first served to those with CASH.”
My guess is that they are haggling you low and then turning around and selling it for a tidy profit for themselves. One of the houses on my block has a garage sale in the front yard every 4-6 weeks for so. They cannot possibly have that much stuff in the house. They must be dumpster diving and reselling, or something like that.
You should visit and drop that you employed by the county excise tax board.
https://www.zillow.com/murphy-tx/home-values/
murphy, tx housing prices CRATER 8% yoy
Oh, *that’s* who you are. I thought our poster “Hi-Z” was just confusing posters with each other. Hi hon.
Rents are down in SanFran. Got a 15% rate decrease last year. Looking for a new apartment and ALL are offering at least two months free. The statistics are also skewed by all the new “luxury” apartments being built. Prices for these are high, but all offer two months free with many of them offering three. And, about 70,000 more are coming online in the next 18 months.
Yee haw! It IS finally bargain hunting time for apartments in the City. In south bay, that’s happening too. New luxury units still being finished and several projects in my neighborhood haven’t even broken ground yet - not sure if the even will.
I was just there. The difference one block makes is amazing. Tents and heroin in the Tenderloin, $4000 a mo units 3 blocks away. All the Uber drivers are living in Daly City.
The quality of life in SF is not worth $2000 a mo. Too many people in a small, hilly, cage.
Scoot is cool though. $3 for 30 min on an e-scooter.
‘Got a 15% rate decrease last year. Looking for a new apartment and ALL are offering at least two months free…about 70,000 more are coming online in the next 18 months’
Crow time Rental Watch.
That’s not ‘data.’
https://www.zillow.com/san-rafael-ca/home-values/
San rafael ca rents CRATER 10% yoy
Rental Watch deals in rental SFH, which is a whole different animal from commercial luxe apt. There aren’t many cities building 50,000 new luxury SFH with Yellenbucks. Expansion in SFH rentals was finished by 2012 or so.
There’s more fraud in single family than multi.
What statements do you think I’ve made about SF?
http://1.bp.blogspot.com/-0q8fIAsczFk/VUANHEhSbnI/AAAAAAAAjRs/oANwXOUviGw/s1600/MBAApr292015.PNG
housing demand CRATERS to 20 year low
is this the one that you debt slaves get wound up about?
Unfortunately prices in San Diego keep going up. So how long will it rise until nobody except billionaires can buy?
Not much longer now. Re-Max is advertising heavily. They always seem to do this just before TSHTF.
I heard a real estate agent complain last week that buyers have completely disappeared and those with deposits down are walking away. I’m in San Diego.
well I will believe it when listing prices drop and rents drop. until then facts are the reality. Most major metros are overheated too much hot foreign money chasing too few inventory.
I’ll believe that when rents stop falling.
People in our circle are buying. I’m talking about families who for years considered themselves priced out, but now that prices have surpassed pre-2008 levels, they finally have decided it is time to buy.
This is a shoeshine boy moment for San Diego housing.
Billionaires don’t live there. Too much traffic. Just laundering the Yuan there.
They do live in Rancho Santa Fe. Keep an eye on inventory there, that will be the tell that the market has turned in SD.
yup that is where people who own the Ferraris and Bentleys are live also in Del Mar.
“So how long will it rise until nobody except billionaires can buy?”
Who lives there when billionaires are priced out?
Tears of fraud and a load of hooey.
Hopefully it won’t go that far…but one possible end point is the Fed owns everything. It’s the logical conclusion to printing every time prices might not keep the banks in business.
but one possible end point is the Fed owns everything
And the Fed, being a private institution, means that we let a random group of bankers print money out of thin air to buy all the assets in the country. Awesome.
It’s private club, and you ain’t in it.
And on the way to owning everything this random group of bankers (or rather, this well-selected group of bankers) who gets to print money out of thin air gets to decide who or what gets funded and who or what does not.
As you said, “Awesome”.
And on their way to owning everything these well-selected group of bankers will be praised by ignorant schmucks for saving the system from the chaos that they, this same well-selected group, played a large part in creating.
The American people: Dumb ‘em down, and profit.
Bahahahahahahahahahahahahahahahahahahahaha.
“…we let a random group of bankers print money out of thin air to buy all the assets in the country. Awesome.”
It’s a great system if you own a big share of the monopoly money press operation.
it appears to me that there can be no demand for goods without a price being considered. So when people say there is a demand for property and that means that the prices can be raised, they are not actually considering what the actual demand for single home is.
this allows them to price without actual knowing what the demand is.
and that negates all consideration of actual values of property .
my first home purchase the real estate salesman would not show me properties which were $1,000 more than what he thought I could afford on the family income as he claimed that his experience would indicate that if I went above what he considered proper for my family income , that in 2-3 years I would be in financial difficulty which could lead to loss of home , and/or divorce.
That was in 1954.
Well Jack, that house was just a little older than my first car. The man said; if you can fix it you can have it.
that house is now estimated at 670,000 and I bought it for 11,500 in 1954.
http://www.movoto.com/redmond-wa/market-trends/
Redmond wa housing craters 9% yoy
Like a broken clock, Housing Analyst. Give it up. Seek counseling.
How many names have you used to post on this board?
Why is the Chinese government once again buying US Treasuries? Is it because they have managed to prevent money outflows and need the asset bubble to continue. After all a lot of Chinese money is tied up in Western countries in inflated assets.
The Chinese buying treAsuries is believed to have led to lower interest rates.
Final push by ChyNAH!
https://disobedientmedia.com/2017/06/chinas-scandal-tinged-push-to-buy-up-hollywood-media/
Here’s more:
https://disobedientmedia.com/2017/06/fbi-documents-show-chinese-influence-in-bay-area-protest-groups/
China fouled its own nest, looking for another nest to foul. US in the crosshairs. Every crappy POS culture wants a piece of the US. Or all of it.
Black Swan incoming.
And just to add, looks like the Black Swan might be the ME, which seems about to blow.
Funny, MSNBC, CNN, CBS, NBC, ABC, etc. are not running 24/7 news programs on how China is trying to influence our elections…and these are not even anonymous sources.
Oh wait - this happened under obama…
Ran across this today. REIT-backed cryptocurrency. Hmm.
http://www.businessinsider.com/startup-working-on-a-real-estate-backed-cryptocurrency-2017-6
Even though this is supposed to be Real Estate “Penthouse Letters” section of the NYTs…
How many of you can spot the craziness?
—-
Glen Ridge, N.J.: Neighborly and Close to Midtown
DAVE CALDWELL - NOV. 16, 2016 - NYT
When Becky and David Middleton, both 41, needed more space for their family of four children, ages 6 to 11, they moved just 10 blocks, paying $840,000 last April for an 1887 Victorian farmhouse with five bedrooms in Glen Ridge, N.J. A kitchen and bathroom renovation is underway.
The Middletons — she is a landscape architect and a yoga teacher; he is a digital adviser — both work at home. When a resident’s power goes out or basement takes on water, Ms. Middleton said, neighbors are quick to help.
The couple “learned to accept” the high taxes, Mr. Farnham said, “because of the quality of schools and the town services.”
“…digital adviser…”
Hehe… wtf?
More importantly, what did their parents do? We all know who bought this dump.
“Apartment rents in first-tier cities have been falling as supplies increase and demand shrinks amid slowing transactions for homes, indicating a steadier property market overall, according to experts. Rents for Shanghai apartments ended a 90-month string of rises in January, data from the Shanghai housing rental index office showed, according to a report by domestic newspaper International Financial News.”
It kind of sounds like China apartment rent the bubble has given way to a crash.
Wow, 90 month rise in RENTS? I’m sorry to say that this is not a bubble, but is instead the Hindenberg. “Oh, the humanity!” is not enough to discribe the calamity that will occurr. Is this international money flow drying up? Looks like it.
Regards,
Roidy
Life inside the “coffin cubicles” of Hong Kong.
https://www.theguardian.com/cities/gallery/2017/jun/07/boxed-life-inside-hong-kong-coffin-cubicles-cage-homes-in-pictures
The University of Colorado and downtown Boulder seen from the top of the First Flatiron, which we climbed yesterday:
http://www.picpaste.com/20170607_181907.jpg
Only renters get to climb this. Mortgage slaves are all still chained to their desks or stuck in traffic at that hour.
“The University of Colorado and downtown Boulder seen from the top of the First Flatiron,”
Student loans as far as the eye can see.
In state tuition at CU, the last time I checked is about $11K per year.
That’s a lot of dough.
Back in the day I was going to augment my civil engineering degree with an MBA from Boulder, CO, but I decided to enter the workforce while available jobs were plentiful.