August 4, 2017

Many Speculators Filled With Regret Right Now

It’s Friday desk clearing time for this blogger. “North Texas home prices have seen some of the biggest gains in the nation during the last few years. And homeowners who are sitting on top of billions of dollars of new equity are pulling some of it out of the house. ‘This past month, cash out [refinances] were 48 percent of our business,’ said Rodney Anderson with Supreme Lending. ‘People have gotten lucky with appreciation, and it’s time to tap into that.’”

“‘Every single day I see at least five to 10 people who have at least $50,000 in credit card debt,’ Anderson said. ‘I have people who have Wal-Mart credit cards that owe 12 grand.’ But he also finds some borrowers who are back in the same condition two years later having run up credit cards again. ‘They are using their house like an ATM machine — something I advise people against,’ Anderson said.”

“Frank Nothaft, chief economist with CoreLogic, said it isn’t just North Texas homeowners who are doing more cash-out refinancing. ‘We have seen this trend in others markets as well,’ Nothaft said. ‘The other phenomenon is a pickup in home equity line of credit volume, too.’”

“The number of existing homes for sale in Jackson County has risen for the first time since March 2016. New houses are going up in Eagle Point and several parts of east Medford. Even custom home builders are keeping busy. In some cases, however, there has been a leveling off, said Ron Galbreath of Coldwell Banker Pro West Real Estate in Medford. He thinks a combination of heat, smoke and political uncertainty are putting a drag on activity going into August.”

“‘We’ll still have a surge of houses on the market before winter,’ Galbreath said. ‘That new inventory is going to cause the old inventory to get in line or take it off the market.’”

“Pacific Park, the 22-acre mixed-use megadevelopment which borders five neighborhoods in Brooklyn, has been battered by a slew of internal and external troubles since its inception. ‘Best plans are often run awry by market conditions,’ said Ronald Dickerman, head of the real estate fund manager Madison International Realty, which jointly owns a New York retail portfolio with Forest City. He noted that softening rental rates and the ‘extraordinary’ amount of new residential supply in Brooklyn are two of the project’s biggest challenges.”

“Home prices in Toronto have fallen 19 per cent since the market’s peak in April, sliding further in July as buyers continued to sit on the sidelines. The recent price drop came as the number of homes sold fell 40.4 per cent in July compared to the same month last year, TREB said. The number of detached home sales fell 47.4 per cent during the month, while sales of semi-detached houses fell 38.6 per cent, townhouse sales dropped 36.5 per cent and condo sales slid 30.7 per cent.”

“‘There’s nothing positive – there are no really great signs out there,’ said realtor John Pasalis, president of Realosophy Realty Inc. in Toronto. Mr. Pasalis said some of areas where average prices are now lower than they were a year ago – including Richmond Hill and Whitchurch-Stouffville north of Toronto – are also regions that appeared to have the highest number of speculators and foreign buyers prior to the downturn.”

“Despite the increased number of prime lets agreed across north London, higher levels of rental stock have seen weekly rents fall, according to the LonRes Summer 2017 review. In areas of prime London, including St John’s Wood, Hampstead and Primrose Hill, rental stock was up 25 per cent in January to March compared with the same period of 2016. Accidental landlords who can’t sell homes that command higher rates of stamp duty are renting them out to recoup their losses.”

“William Carrington, chairman of LonRes, blamed the slowdown on this miscalculated ‘tax grab’ from the Treasury. ‘They forgot that the London residential market is part of the economy, not a cash cow needing to be milked,’ he said. ‘There are better ways to deflate the market than this.’”

“The Norwegian housing market is expected to cool further this year after prices declined for the third consecutive month in July, but economists see it having little effect on the central bank’s interest rate policy. Tighter mortgage regulations, lower population growth and a boom in construction, flooding the market with new homes, have all contributed to the recent market turnaround. The government was not planning to take any additional measures, the country’s Finance Minister Siv Jensen said. ‘What we see now is a natural cool down of a housing market which has been very heated for a long time,’ she told reporters.”

“Across Auckland values are rising in some parts and dropping in others. QV Auckland valuer James Steele said, ‘The Auckland residential property market is still cooling, with sales volumes down more than 30 per cent below the same period last year while there are twice as many properties listed on the market as there were this time last year.’”

“Much of the slowdown in the markets was being caused by high prices and banks’ stricter lending criteria, said QV national spokeswoman Andrea Rush, ‘meaning it’s difficult for many buyers to raise finance to purchase and this is now constraining the market.’”

“One of the key engines of Australia’s five-year housing boom is losing steam. Property investors, who have helped stoke soaring home prices in Australia, are being squeezed as regulators impose restrictions to rein in lending. The changes ‘reduce investors’ ability to pay, and means they have to pay owner-occupier values rather than investor values,’ said Angie Zigomanis, senior manager, residential property, at BIS Oxford Economics in Melbourne. The restrictions will take ’some of the bubble and froth’ out of the market, he said.”

“In a complete about face from a year ago, my friends these days are pessimistic whenever the topic of real estate prices is broached. There’s the friend who owns a large luxury apartment in Beijing’s Miyun District. Last year, they put it on the market for 40 million yuan (nearly $6 million) but found no takers. This year, they dropped the price to 30 million, but still no luck. Back when the place was valued at 18 million, some buyers expressed interest, but my friend chose not to sell, figuring the price was bound to rise. They were right: It did rise — but now the house is priced out of its own market. Its value may be 40 million yuan, but even at 30 million no one is willing to buy.”

“There are many reasons for this phenomenon, with one being the fact that the number of people who can put together so much cash is exceedingly small. Add in all the new purchasing and lending restrictions that have been implemented, and the number of willing buyers shrinks even further. The property’s 30 million-yuan valuation exists in name only: In the absence of cash, it may as well be a pile of concrete.”

“Another friend — this one from Shanghai — has had a similar experience. They listed a house of theirs on the Pudong side of the city. The residence was valued at over 10 million yuan, but they listed it for 9 million. Recently, they dropped the price by 10 percent, to 8.1 million, and still no interest! My friend is in a rush to sell but can’t find a buyer. They say they regret not selling at the peak of the market in 2016.”

“In reality, these two friends of mine aren’t the only ones filled with regret right now. Many of the speculators who entered the Chinese real estate market when it was at its peak last year — especially those who bought properties in first-tier cities such as Beijing, Shanghai, and Guangzhou — in hopes of flipping their purchases for profit after a year or two doubtless were not expecting so many new purchase and loan restrictions to be implemented. They’ve all ended up sustaining major losses.”

“Over the past year, I have repeatedly warned of the dangers posed by this round of housing price increases and called for caution against being the one caught holding the baby. Some listened, but most thought of me as the boy crying wolf. Anyone with a basic understanding of market operations knows that slow rises in value can persist over longer periods of time, while sharp jumps precipitate equally sharp drops.”

“The monetary gains in real estate prices over the past few years are of course closely tied to a shift in debt leveraging. They are linked to the massive increase in lending by banks, as well as to the rising levels of debt held by both developers and individuals. To be honest, it’s no wonder piling up capital and money in this fashion led to a bubble. Now, access to funds has tightened, and while you weren’t looking, some of the richest families in China have quietly become some of the most indebted.”

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Comment by Ben Jones
2017-08-04 09:12:12

‘Many of the speculators who entered the Chinese real estate market when it was at its peak last year — especially those who bought properties in first-tier cities such as Beijing, Shanghai, and Guangzhou — in hopes of flipping their purchases for profit after a year or two doubtless were not expecting so many new purchase and loan restrictions to be implemented’

You can see the common thread here is governments/central banks cracking down.

Comment by Ben Jones
2017-08-04 10:19:45

‘when it was at its peak last year’

Again a reference to a peak:

July 23, 2017

“Stephen Curry isn’t used to losing—at least, on a basketball court. But in the realm of real estate, this Golden State Warriors point guard proved that not all he touches turns to gold when he recently sold his home in Walnut Creek, CA, at a loss. In November 2015, Curry and his wife bought the mansion for $3.2 million. Then the couple poured an additional half-million into renovations. A year later, they put it back on the market for $3.7 million. But apparently they’d set their sights too high, because it sat warming the bench with no takers. Finally in July of this year, the home sold for the lowball sum of $3,195,000—more than a half-million less than what Curry was hoping for and less than what he paid for it almost two years earlier.”

“The luxe market had begun to level off right when Curry made his purchase—and then move downward by the time he was ready to sell a year later. ‘Curry paid top-of-market prices in 2015, as that’s when the market really peaked,’ says Cara Ameer, a Realtor in Florida who often handles property for professional athletes. ‘It has taken a bit of a downward trend since then, and the luxury market has been more challenging to sell since some of the foreign money has dried up.’

Comment by @AltFacts
2017-08-04 23:30:46

Poor Steph…and all the other entertainment figures with a financially self-destructive penchant for buying expensive homes at peak price, only to realize when they try to sell a short time later that they got burned.

Comment by Jingle Male
2017-08-05 04:26:05

LOL, that is pocket change for him.

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Comment by In Colorado
2017-08-05 18:13:57

He makes 40 million a year, and that’s just his NBA contract. The typical American spends a higher percentage of their income on a car that he did on that house. He was no doubt able to pay cash for it, which few Americans can say about their car.

Comment by Professor 🐻
2017-08-05 10:42:53

“…governments/central banks cracking down.”

I’m missing it. What I see is a punch bowl forever spiked with Everclear, and a Fed that will discover itself to be out of bullets at the onset of the next crisis.

What might not have been expected, and what may have driven bulls across the equity space was the last paragraph contained in the Monetary Policy Report to the Congress. After much of the report offered an upbeat tone towards forward-looking economic conditions, the last paragraph echoed what has become known as the ‘Fed Put’. The Fed Put is the idea that the Federal Reserve can re-ignite stimulus in the event that equity market declines became too worrisome. This is like a sense of support for equity market participants, as this seemingly attempts to rule out the possibility of another financial collapse.

Comment by Ben Jones
2017-08-04 09:13:46

‘Mr. Pasalis said some of areas where average prices are now lower than they were a year ago – including Richmond Hill and Whitchurch-Stouffville north of Toronto – are also regions that appeared to have the highest number of speculators and foreign buyers prior to the downturn’

You don’t hear the racist thing being hauled out much anymore.

Comment by Ben Jones
2017-08-04 09:16:32

‘Every single day I see at least five to 10 people who have at least $50,000 in credit card debt,’ Anderson said. ‘I have people who have Wal-Mart credit cards that owe 12 grand.’ But he also finds some borrowers who are back in the same condition two years later having run up credit cards again. ‘They are using their house like an ATM machine’


Comment by scdave
2017-08-04 10:00:59

who have Wal-Mart credit cards that owe 12 grand ??

So are they spend-a-holic’s or are they just dead broke and Wal-Mart credit is their lifeline ??

Comment by Sean
2017-08-04 20:09:24

People like my sister. She is addicted to Wal-Mart. She just can’t help herself and goes there a few times a week to seek out ‘good deals’. She also is a minihoarder and flat broke, yet labels me as ’stuck up’ as I haven’t walked into a Wal-Mart in at least 10 years.

Comment by Professor 🐻
2017-08-05 12:07:06

My wife and I are similarly ’stuck up.’ To further the point, we also avoid the neighborhood garage sales, where people try to make a buck offloading the cheap crap purchased at Walmart which they never really needed.

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Comment by 2banana
2017-08-04 10:31:30

Except it is not an ATM.

It is debt. That has to be repaid.

I know they were banking on a greater fool paying an insane amount for their crack shack to make all debts go away.

Madness takes it toll.
— Let’s do the time warp again.

Comment by Ben Jones
2017-08-04 10:48:24

June 26, 2017

A report from D Magazine in Texas. “‘Everyone’s talking about real estate right now,’ says Brady Moore, the founder of Laguna Residential, a realty firm that represents buyers and sellers of high-end properties in central Dallas. ‘This market has been so extraordinary that you can’t go to any kind of social event where someone isn’t asking what their neighbor’s house sold for. And everyone wants to know where prices are going to go next.’”

“But keep looking at the data, and a curious picture emerges. The number of houses changing hands is only slightly up overall from 2016. Plus, sales were actually down in the early part of this year in several previously hot places, including Southlake and East Dallas. In once-white-hot North Oak Cliff, prices declined 3 percent through April. Take homes in the 75214 ZIP code as one example. As of this spring, there were 10 percent more houses on the market in that area than there were at the same time a year ago.”

“While the increased supply is a nice change for buyers, for sellers it’s not yet working out. This spring, sales were down 27 percent on the year for the whole area, across all prices. Supply was up. Demand was down. And yet, that’s the scenario playing out in any number of neighborhoods and suburban cities across the area. ‘You can’t expect your house to sell in three days anymore,’ says agent Brady Moore. ‘That’s still happening, but we have more inventory now, and that’s not been great for my sellers, but it has been good for my buyers. And after these past few years, any sense of balance in this market is really appreciated.’”

Comment by GuillotineRenovator
2017-08-04 16:52:11

Call it paying interest on home equity, not much different than paying interest on your savings account money if you wanted to use it.

Comment by ibbots
2017-08-04 13:49:11

‘people who have at least $50,000 in credit card debt’

Seems like that type of stupid just doesn’t get fixed. That guy Anderson advertises on the radio non-stop.

There’s an area not too far from us that has a bunch of post WW2 smaller houses, 1100 sq ft, etc. Good construction just small. They used to go for $125Kish 5 years ago, now they are pushing twice that.

Comment by Ben Jones
2017-08-04 15:10:31

‘he also finds some borrowers who are back in the same condition two years later having run up credit cards again. ‘They are using their house like an ATM machine — something I advise people against,’ Anderson said.’

He advises against it, but processes the loans anyway. BTW every ad cycle on the radio round here has a cash out refi commercial.

Comment by Sean
2017-08-04 20:13:43

Just like the Scorpion and the Frog - it’s in his nature.

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Comment by Yaan
2017-08-05 09:15:21

The leopard doesn’t change his spots.

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Comment by Mafia Blocks
2017-08-05 10:29:46

That’s right. DebtDonkeys never learn. ;)

Comment by Rich
2017-08-04 15:27:53

What would be the interest rate on that ??

Comment by rms
2017-08-04 17:44:52

“…at least $50,000 in credit card debt…”

Once they have a 30-day late payment the “Universal Default” clause is exercised, and the interest rate is reestablished above 20% APR.

Comment by GuillotineRenovator
2017-08-05 08:15:33

I think credit card spending is a large part of what’s keeping the economy propped up.

Comment by rms
2017-08-05 09:35:16

“I think credit card spending is a large part of what’s keeping the economy propped up.”

No doubt about that. I work in a place that requires regular credit reports with judgement actions, major background checks, urinalysis testing, physical exams, etc., and more than 3/4 of the applicants are denied in the opening salvo… the credit report. I read sometime ago that the Sacramento Sheriff’s Office boot-camp applicants being denied were even higher yet.

Comment by Can Bubble
2017-08-04 09:23:12

In case you’re curious how much money people in Toronto (average home still over $750,000) earn, I copied this from an email sent to me by a recruiter:


Finance & Accounting

Corporate Controller, $140,000
Accounting Manager, $133,000
Manager, Financial Reporting, $120,000
Manager, FP&A, $120,000
Treasury Operations Manager, $115,000
Manager of Internal Audit, $112,000
Manager, Canadian Tax, $100,000
Manager, Accounting Risk, $98,000
Financial Reporting Manager, $95,000
Senior Corporate Accountant, $85,000
Financial Analyst – Contract
IT Audit Consultant – Contract
Project Technical Lead – Contract
Tax Manager – Contract

ERP Manager, $125,000
UNIX/Linux Administrator, $94,000
ERP Business Analyst, $80,000
Technical Support Analyst, $75,000
Systems Administrator, $70,000
Bilingual Help Desk Analyst – Contract
Enterprise IT Solutions Architect – Contract
IT Specialist – Contract
Tier II/III Support Analyst – Contract
Technical Support Specialist – Contract
Web Application Developer – Contract

Comment by RangerOne
2017-08-04 13:39:01

Those incomes seem pretty common for a city region and as averages you can expect top performers in each of those areas are probably pulling down a 20% premium on top of those numbers.

Granted any single one of those incomes can’t carry a $750k home with a standard 20% down. At least not safely.

The only way its possible is by putting 30% plus down.

Alternatively I think what is more usually happening is dual income families are buying the average $750k places. The second income earner may only earn half what the prime one does and that makes a $750k place swing-able. If you happen to have two higher earners you can all of sudden pull up to about a $1 mill place.

I don’t think its smart and its much nicer to have a place one income can carry. But its what people in cost cities do and we collectively bid up cheaper and cheaper housing tiers as the higher ones are pushed out of reach.

Comment by GuillotineRenovator
2017-08-04 16:54:53

Yeah, and they’re the ones who get burned the worst. Apparently, STEM degree = debt donkey.

Comment by Apartment 401
2017-08-04 11:02:07

Realtors are liars.

Comment by Sketch
2017-08-04 12:28:58

Not only that, I’m not convinced they have the ability to discern anything beyond ‘closing the sale’!

Comment by Mr. Banker
2017-08-04 13:12:56

They are useful idiots. They work, I reap.

Churn ‘em and burn ‘em. When one cycle ends they starve. When another cycle starts up another batch springs forth to take the place of the starved until such a time that they, too, will starve. The only thing that endures is the debt and those of us worthies who benefit from the debt.

God’s Plan.

Comment by aNYCdj
2017-08-04 12:05:47

Still not a single report of anyone using the House ATM to pay off everyone’s student loans, that would be the first thing i would think about with all that equity going unused. give your kids grandkids a fresh start and then go into foreclosure say in a year or two

Comment by 2banana
2017-08-04 14:19:23

Why payoff debt that many people think the government is just going to forgive….

Comment by Mr. Banker
2017-08-05 05:46:21

“Why payoff debt that many people think the government is just going to forgive….”

I like this sort of thinking. Reminds me of the La Brea Tar Pit.

Comment by Apartment 401
2017-08-04 14:51:25

I overheard someone I work with discussing this yesterday.

Comment by aqius
2017-08-04 15:06:32

exactly. I expect Uncle Sam will bow to pressure & forgive all those student loans sooner or later.

looks like the trick of it is to find a large bubble to ride early on, then, when it threatens the “common good” you can hold out for a mass debt jubilee!

who coulda’ node

Comment by 2banana
2017-08-04 14:26:46

Oh my.

Couldn’t imagine Hillary, obama or Jeb even thinking about this…


Trump weighs slashing one of the most popular tax deductions
Yahoo - 04Aug2017

Unlike rent payments, the interest for a mortgage payment can be deducted from taxable income. It’s a major benefit of owning a home, and critics have pointed to it as a huge driver in American inequality.

As Matthew Desmond, author of “Evicted: Poverty and Profit in the American City,” wrote in May, it’s actually one of the main entitlement programs in the United States. “But by any fair standard,” Desmond wrote in the New York Times, “the holy trinity of United States social policy should also include the mortgage-interest deduction — an enormous benefit that has also become politically untouchable.”

Many countries like Australia, Canada, and Britain don’t have this deduction, which is ostensibly there to increase homeownership. Economists don’t think this necessarily works, however, instead simply allowing for the purchase of larger houses and benefiting the wealthy. According to the Tax Policy Center, it’s a very regressive policy, disproportionately helping boost the top 20% post-tax income.

Trump is willing to at least consider touching a politically untouchable issue.

Despite being one of the most expensive tax breaks, costing the country—mostly the renters, who don’t get the benefit—$77 billion in 2016, Trump and Treasury Secretary Steven Mnuchin will face massive blowback should they pursue this policy.

Comment by Neuromance
2017-08-04 16:01:07

I don’t believe Trump is going to do anything to harm real estate. He’s a developer. My example is Elizabeth Warren: she actually came from the lower classes, was correctly identifying problematic financial issues years ago before anyone else was publicly saying them. But when the time came to address a root cause of runaway higher education costs (government firehosing money at students who firehose it at higher ed), she demurred, choosing only to rail again rising interest rates on student loans, and seeking to suppress them. The net result of that of course would only be to allow larger loan balances, with the lower interest rates. Why’d she do this? She’s a law school professor - she knows what side her bread is buttered on.

And nothing unexpected with any of this. If the only way to have a political system work is to staff it with saints and altruists, it will fail.

But, my takeaway is that no politician or regulator is going to work against his or her personal interests. And when special interests can legally align the politician’s financial and personal interests with their own, this can lead to suboptimal social outcomes.

Comment by GuillotineRenovator
2017-08-04 16:57:25

She’s really disappointing.

Comment by MightyMike
2017-08-04 20:12:35

Why’d she do this? She’s a law school professor - she knows what side her bread is buttered on.

It wouldn’t affect Harvard University much. They have a huge endowment.

Comment by Ben Jones
2017-08-04 14:54:32

‘Mr. Pasalis said some of areas where average prices are now lower than they were a year ago’

This means these areas are down 30-40%.

Comment by aqius
2017-08-04 15:00:18

haven’t seen that “accidental landlord” term in a while.

Comment by Professor 🐻
2017-08-05 10:09:32

If our landlords don’t manage to sell before the Housing Bubble’s current tsunami crest washes back out to sea, they are likely to accidentally remain landlords forever.

Comment by AbsoluteBeginner
2017-08-04 15:39:08

wow, this is a business:

I only mention them here because they have been advertising on the radio lately.

from the FAQ:

“If these sites are such a good deal, why don’t you just buy a bunch yourself?

Very similar to the publicly traded InterActive Corp. (IACI), our goal since 2009 has been to revenue share with 1000 revenue generating websites. As we can command much higher advertising dollars if we manage a larger network of websites, we’d rather own a revenue share of 1000 sites than receiving 100% of revenues across, say, 50 websites. Plus, managing 1000 sites sounds cooler. “

Comment by Rental Watch
Comment by Mafia Blocks
2017-08-04 15:54:53

Remember…. A ‘housing recovery’ is falling prices to dramatically lower and more affordable levels by definition.

Comment by AdviceSeeker
2017-08-04 16:48:34

Put our rental property on the market 30 days ago. Just went into escrow but $7,000 less than asking. I’m okay with it because prices are stupid high anyhow.

Question: Where do I stash the profits? I don’t trust the stock market right now. Only thing I could think of to stay liquid and make a little while waiting for markets to correct is either add it all to my Barclays high yield saving at 1.2% or open account with a crediy union at 1.11%. I’m not sure if Barclays is exposed to the derivative market which is why I’m looking into credit union.


Comment by rms
2017-08-05 08:02:41

This might be a good time to upgrade your transportation since you have cash on hand. Other than pickup trucks it’s a buyer’s market right now.

Comment by Mafia Blocks
2017-08-05 11:13:34

New pickups are now less than used. Real pickups, not the minivans with a box on the back.

Comment by rms
2017-08-05 16:12:37

Pickups still fetch a premium.

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Comment by Mafia Blocks
2017-08-05 17:37:14

Yet 2017s today are 10k less than 2016s this time last year.

Comment by Professor 🐻
2017-08-05 12:14:08

We’re overdue on the next recession, at which point used car buying opportunities will swell immensely for those who avoided living high on the credit hog during boom times.

Comment by Tarara Boomdea
2017-08-05 21:57:48

I’m in the market. Good news.

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Comment by Mike
2017-08-05 08:15:04

At a minimum, I’d check out the bank strength at

Comment by Mot
2017-08-05 11:02:28

Get aa stock with a steady dividend. You can probably beat that 1.2% pretty easy.

Comment by Professor 🐻
2017-08-04 23:38:34

Is it too early at this point to assume the crash position?

Opinion: Let this be your final warning on U.S. stocks’ overvaluation
By Brett Arends
Published: Aug 4, 2017 3:23 p.m. ET
When prices have risen this high, a market crash has always occurred

Watch out for your exposure to U.S. stocks.

That’s the message of history, even if it isn’t the message of Wall Street analysts and strategists.

As stock prices soar to new heights, the S&P 500 Index has now reached levels of overvaluation only ever seen during the dot-com bubble and in 1929 — an eye-watering 31 on the measure known as the “Shiller PE” ratio.

But even if we fudge the numbers and exclude the depressed earnings from the global financial crisis a decade ago, we still get a reading of 25.5. That’s still way up there, and in almost 150 years, every time stocks have gotten anywhere close, they’ve come crashing down again.

Comment by Larry Littlefield
2017-08-05 05:04:24

“Frank Nothaft, chief economist with CoreLogic, said it isn’t just North Texas homeowners who are doing more cash-out refinancing. ‘We have seen this trend in others markets as well,’ Nothaft said. ‘The other phenomenon is a pickup in home equity line of credit volume, too.’”

I guess we know what that wonderful economy Trump is taking credit for is coming from. Same thing as the W Bush economy of the 2000s. In fact, the same thing as the economic upturn that in fact got rolling in 2016, which Obama took credit for.

Comment by Mafia Blocks
2017-08-05 05:22:33

Bedford, MA Housing Prices CRATER 13%YOY

Comment by Doom
2017-08-05 07:24:41

NAR the liars they are continue to push,” put your home om the market for any price and it will magically sell in 45 days or less.”

Most sellers who know nothing but their honest (?) local RE agent who than after 45 days of no offers proclaims something is wrong with just your house and suddenly you have to make a drastic reduction to sell.

This game is happening everywhere, many sellers can’t get a look let alone a real buyer, but of course the NAR never tells you how many homes delisted or sold for a loss or just plain sold to a ” We will buy your house” company.

Pending home sales are like a business for sale, don’t care about your gross what is your real profit. NAR stats are worthless they don’t show the true picture of housing, these are the must have 6 to 7 % commission folks who want only you to take a loss???

Comment by Mafia Blocks
2017-08-05 07:35:37

If you’re shouldering the burdensome weight of a rapidly depreciating asset like a house, you’re gonna take a crushing loss no matter what.

Comment by Doom
2017-08-05 07:29:39

Stock crash 1929, look for jumping out of windows early 2019?

Comment by Professor 🐻
2017-08-05 09:05:47

No need for jumping out of any windows. The Fed stands with firehose in hand, ready to ramp up the bailouts as needed that have yet to end since the 2007-2009 financial meltdown.

Comment by Professor 🐻
2017-08-05 10:12:20

Now that Republicans are firmly in control, is it safe to assume the lax lending standards of the Obama era will go away?

Comment by Professor 🐻
2017-08-05 10:20:31


As San Diego Home Prices Continue To Rise, Some Mortgage Lending Eases
Friday, August 4, 2017
By Susan Murphy
Above: The median price for a single family home in San Diego County in May 2017 was $612,000.

If you applied for a mortgage last month and didn’t quite qualify, you might want to try again this month. Some lending standards have been eased to allow more people to get into the market.

Government controlled mortgage giant Fannie Mae is allowing borrowers to have higher levels of debt and still qualify for a home loan. Previously, the debt-to-income ratio was capped at 45 percent. Now it’s at 50 percent, making room for a larger house payment.

For example, for a household making approximately $7,000 in gross income a month, with a few hundred dollars in debt payments, it could mean a significant loan increase, said Mark Goldman, senior loan officer with C2 Financial Corporation and real estate instructor at San Diego State University.

“Their ability to afford a home with 10 percent down went from about $455,000 up to about $540,000,” Goldman said.

Freddie Mac has allowed a 50 percent debt ratio since 2011, but on a much smaller scale.

Another big change is self employed borrowers are able to qualify for a mortgage loan with just one year of tax returns instead of two.

“So someone who had a big increase in their income in the last taxable year can qualify for a Fannie Mae loan,” Goldman said.

Goldman said the changes should help the region’s affordability.

“One thing we look at is can a family with a median income qualify for a median priced home in San Diego,” Goldman said. “This will help that.”

San Diego’s median price of a single family home in June sold for $620,000 — nearly three times higher than the national average.

Comment by Professor 🐻
2017-08-05 10:51:03

The owner of a local real estate sales firm stopped by this morning shortly after I made that post. He makes his door-to-door rounds of the neighborhood annually, something I find quite impressive. I’m further impressed that he is the only real estate agent I have ever met in SoCal who never once questioned me about our decision to rent.

I mentioned the Fannie Mae move to relax lending standards to 50% of income as a potential source of new buyers. He acknowledged that this is probably not a favorable development for the long run health of the market.

Comment by AdviceSeeker
2017-08-07 01:14:03

Thanks for the advice guys/girls. I really don’t want to be in the market right now. I prefer to stay liquid. I know you can’t time the market and that the subprime lending isn’t going to be the cause of the real estate market down turn, I worked for a company called Argent Mortgage back in 2005, but I can’t shake the feeling that all markets will be bearish soon.

Am I being paranoid? My thought prices on selling was that I would never pay that much for this house. I bought in 2011 for $320k, Put $80k in renovations and just went into escrow at $670k. I’d be crazy not to sell right?

But now what? Sit on the cash and buy blue chip stocks when they crash? Perhaps buy more real estate when they crash?

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