Speculative Activity Is Being Squeezed Out
A report from the Financial Times on Canada. “Officials at major Canadian banks are issuing assurances of the strength of their mortgage portfolios, in spite of strict government curbs on housing transactions, and dropping prices in big cities, as well as a slowdown in transactions. However, with prices dropping and Canadians largely over-leveraged for their homes, David Madana of Toronto’s Capital Economics noted, ‘Everyone agrees it’s a bubble; now the question is, how it ends.’”
From Reuters. “The sharp reversal in Toronto’s home prices has thrown Canada’s biggest property market into chaos, with scores of buyers suddenly short of money and desperate to get out of deals that looked good just a few months ago. Much of that turmoil is not just down to those who bid at the peak and now wanted to get out of a deal, but also to lenders tightening credit and property appraisers lowering their valuations.”
“‘The big issue is with financing,’ said John Pasalis, president of the Realosophy real estate brokerage in Toronto. Pasalis gave an example of a buyer who expected a C$1 million ($800,000) loan from the bank only to have it cut to C$850,000 days before the deal was set to close. ‘All of a sudden you have to come up with an extra 150 grand,’ Pasalis said. He estimated that up to 5 percent of deals were at risk now, something unheard of a year ago.”
From CBC News. “Whether or not Toronto is in a housing bubble — and whether or not it’s already burst — is a hot topic in the city. But one economist says we’ve definitely popped that bubble, which could make things a bit easier for would-be buyers in the months ahead. Doug Porter, chief economist and managing director of BMO Financial Group, shared his thoughts on the city’s real estate market on CBC’s Metro Morning.”
“Metro Morning: ‘Some people were not convinced there was a housing bubble. Why do you believe there was?’ Doug Porter: ‘For those who aren’t convinced, I’m not sure what it would take to convince them. By any traditional definition, we were in the grips of a full-on bubble earlier this year. Anyone who bought near the peak probably has a bit of buyer’s remorse now.’”
From Better Dwelling. “Toronto is seeing the largest decline in sales to new listings in the country, as sales struggle to keep up with the city’s huge inventory growth. Toronto is coming off of a low for inventory, so numbers are expected to grow. Growth this quickly however, with stagnating sales may soften prices. Over the next few months, expect the market to find better footing, as people play the game of price discovery.”
The Financial Post. “Demand for housing could be cut anywhere from five to 10 per cent because of tougher qualification rules being considered by Ottawa, according to a report by Toronto-Dominion Bank out Monday. The report from Beata Caranci, chief economist with the bank and Diana Petramala, also an economist, takes aim at a proposal from the Office of the Superintendent of Financial Institutions. While buyers may be hoping rising interest rates could trigger a crash, those first-time buyers ‘may be holding their breath for a while’ because prices are likely only going to reset back to the levels of where they were before a year of exorbitant gains, the report concludes.”
“‘Listings shot up in the GTA following the policy measures not because homeowners suddenly became incapable of affording their homes but because speculative activity is being squeezed out,’ they wrote.”
‘Six months ago, Bank of Montreal chief economist Doug Porter said what many were thinking and declared that Toronto has a housing bubble. Now, Porter has given that bubble its death certificate. “This is a late bubble. Bereft of life, it rests in peace,” he wrote in a client note last week.’
‘To prove his point, Porter published a chart showing home sales in some regions in Toronto retracing all their gains of recent years. What went up, just came down. The bubble wasn’t supposed to end so quickly. In a client note in February, BMO economist Robert Kavcic estimated that Greater Toronto was still two years away from reaching the sort of unaffordability levels the city saw at the peak of its last housing bubble in 1989.’
‘So why the premature death? It may have everything to do with the new housing rules Ontario’s government put into place for the Greater Golden Horseshoe region in April. Among them are a 15-per-cent foreign speculators’ tax and expanded rent controls. Porter suggests the steep drop-off in sales is evidence that Toronto’s market was being influenced by foreign buyers.’
“Some would argue that non-resident investors were not a big deal in the market. Some would also argue that the earth is flat,” he wrote.’
Think of what is coming.
The huge Canadian housing bubble popping
Oil at $40-45
A hard winter
Chinese money going elsewhere
Madness…
A hard winter…
In my area, the geese have been staging for weeks, honking and gathering and meeting up generally prepping to fly further south. I suspect we’re in for a colder than usual winter. I haven’t seen ay caterpillars yet but I’ll keep an eye out.
We’re still looking at 100-degree weather through WED next week in eastern Washington state. Very little precipitation this summer and no shortage of smoke from regional wildfires.
‘Cold Lake’s population has dropped by almost 1,000 residents, from a peak of 15,736 in 2014 to 14,961 in 2016. Those with public-sector jobs are okay. Everybody else has had to accept 30% to 50% wage cutbacks.’
‘Well-paid oil patch jobs are long gone. The patch used to employ 5,000 Cold Lake residents in construction, operating and oil service jobs. About 3,000 jobs are left in operations and oil service. No construction is currently taking place.’
‘Since the “go-go years” of 2011 to 2014, housing prices have dropped by 25%. A house in a new subdivision worth $500,000 before 2015 sells for $350,000 today. Higher-end homes are near impossible to sell. One home with an asking price of $700,000 recently sold for $511,000.’
‘Is this the new normal, I ask Cold Lake Chamber of Commerce president and retail shop owner Ben Fadeyiw. “It better not be,” he replies.’
Went to Cold Lake back in the 90’s to work with the CAF at their base. That place is a million miles away from everything. And in the middle of July it was in the 30’s at night. The moniker truly fits.
I looked it up on Google Maps. It’s north of Edmonton, and Edmonton is cold and remote.
I can’t imagine what Cold Lake, Alberta is like in January.
Where have you been lately? Maybe I’ve missed it, but I don’t believe you’ve posted for awhile.
Me too
I was working for a major tech company and had to travel up there on a CF DND plane - a modified Canadian version of a Buffalo. It was miserable for 10 days other than the super cheap canadian club with ginger ale.
I was seriously considering myself an alcoholic after 10 days
‘According to a housing market assessment released last month by the Canada Mortgage and Housing Corporation, there is strong evidence of overbuilding in Regina. The long-term threshold for rental vacancy in 2016 was about 4.9 and the rate was 5.5 per cent. According to the report, the vacancy rate was above the critical threshold again this year.’
“So when you get a combination of the rental vacancy rate being above its threshold and also when it comes to new home construction inventory levels being above their threshold on a per capita basis, that combination is what constitutes strong evidence of overbuilding.”
‘According to CMHC, due to overbuilding, “downward pressure on house prices would occur until the excess supply is eventually absorbed.”
‘House sales in Calgary are still sluggish, but that’s not stopping people from putting their homes on the market, according to the latest figures from the Conference Board of Canada. There have been 22,176 home sales in Calgary this year to July, which is 5.7 per cent lower than the same period last year.’
‘However, the number of listings on the Calgary market in July was 44,520 — up 10.6 per cent from the previous year, the board’s report says. The average price of a house in Calgary edged down by 2.3 per cent, year-over-year, to $454,594.’
‘The board’s Metropolitan Resale Snapshot shows that Calgary is among 19 of 28 surveyed markets where transactions continued to cool off. The board classifies Calgary as a buyers’ market, along with Toronto, Oshawa, Edmonton, Regina, Saskatoon, Quebec, Saguenay, and Newfoundland and Labrador.’
That doesn’t leave very many.
‘Amidst news reports of soaring home prices and volatile real estate markets in cities like Vancouver and Toronto, local realtors have a much better diagnosis for the local Eastern Ontario market. “I think we are in a very stable market in this area,” says Nicole Bonin-Bouchard, a realtor with Hawkesbury’s Remax agency. “Here, we have a buyers’ market. We have had a surplus supply of homes on the market. In those cities, you have a shortage of supply, which creates bidding wars and leads to homes being worth much more than maybe they should be,” Bonin-Bouchard explains.’
Those with public-sector jobs are okay. Everybody else has had to accept 30% to 50% wage cutbacks.
Only gov workers survive
China (Gina)
Has committed millions of sheets of special dry wall
‘All of a sudden you have to come up with an extra 150 grand,’ Pasalis said.
Not a peep about the seller all of a sudden having to drop their price?
‘With buyers short of money and sellers desperate to close deals before home prices drop further, many turn to lawyers. Sellers want to sue those dragging their feet on an agreed purchase while buyers look for a way out of a contract without losing between C$50,000 and C$100,000 in deposits.’
‘Real estate lawyer Bob Aaron…is trying to help work out some compromises with sellers either agreeing to give buyers more time to get the money, dropping their price or offering to help with financing.’
“Some people want to walk away, some want half their deposit back, some bury their head in the sand and say ’I’m not closing, if they want to sue, fine.’” said Aaron.’
“It’s déjà vu all over again.”
This article could have been from 2006…
I am seeing this happen more and more here in the States. Where I live in LA County has seen an increasing number of listings go from Pending/Contingent to Relisted, with some places going in and out of contract multiple times. Most of the time the Relisted prices are lowered by 1-3%, but some sellers still hold onto their wish price, many of which look like flips based on the price history.
Here’s an example a couple of blocks from where I live, for which the sign outside read “Sold over asking” in January. I couldn’t help but laugh after looking at the price history…
Date Event & Source Price
10-Jan-17 Sold (MLS) (Closed Sale) $830,000 —
15-Dec-16 Pending (Pending Sale) — —
30-Nov-16 Relisted (Active) — —
30-Nov-16 Price Changed $800,000 —
21-Nov-16 Pending (Pending Sale) — —
10-Nov-16 Relisted (Active) — —
31-Oct-16 Delisted (Hold Do Not Show) — —
6-Oct-16 Listed (Active) $899,999 —
I saw a lot of that when I was househunting in 2012, especially for financially distressed houses.
My realtor told me that many of those offers were actually fake. Usually the house was occupied by illegal immigrants or visa overstays, with the bank threatening to foreclose any day. Their friendly realtor (same ethnicity) would put in a fake offer, and the bank would halt the foreclosure 30-90(?) days, while they checked the financing. Of course the financing would fall through, but the occupants got to live there for another 30-90 days. That’s how these folks live — day to day hand to mouth until they are kicked out. Then they move on.
I remember looking at two houses like that, and the occupants were present, and looked at me like death. The *last* thing they wanted to see was an American white woman stranger. I was likely to have real money and put in a real offer, which would kick them out of the house.
Indeed. I should have specified it was about this Pasalis guy’s attitude.
The seller didn’t have to drop his price. The buyer agreed to buy the house for $1M, so the price is set. It’s that the bank won’t lend $1M.
Can’t the buyer put a contingent on the deposit that the house must appraise at the agreed sale price?
Can’t the buyer put a contingent on the deposit that the house must appraise at the agreed sale price?
In the _old_ days, buyers virtually always put in appraisal and financing contingencies, which gave them an “out” for just such a situation… In the raging bubble, though, I’m sure they waived those.
“Wall Street recruiter jumps to her death from luxury NYC home”
https://nypost.com/2017/08/28/woman-found-dead-inside-upper-east-side-luxury-apartment/
“The woman and her husband, Seth Jacoby, purchased the one-family home in 2014 for $3.6 million, taking out a $2.5 million mortgage, according to public records.”
The DebtDonkeys are offing themselves.
“It’s a nice neighborhood, “but there are demons everywhere,” another passerby added.”
A man who said Lindsay was his daughter screamed in “agony” after finding out she had jumped, according to passersby. “It was really harrowing. He screamed and screamed. We thought he was having a heart attack. He came out of the building and said to call 911. But he was clutching his heart,” said Jeffrey B.
What a terrible tragedy to witness.
Horrific.
That one will make you think before overpaying hundreds of thousands for a rapidly depreciating asset like a house.
1. Can they AFFORD the taxes? Insurance? Utilities? Upkeep?
2. Get on the property ladder!
++++++
Detroit’s tiny houses are giving low-income earners a shot at homeownership
Kathleen Elkins - 8/29/2017 - CNBC
Led by Cass Community Social Services, the local project is one of many efforts to help rebuild the metro area after it became the largest U.S. city to file for bankruptcy in 2013. The non-profit bought 25 vacant lots from the city for $15,000, total, and intends to spend $40,000 to $50,000 building a tiny home on each, with the help of a volunteer workforce.
The homes will range from 250-square-feet to 400-square-feet. But the cramped quarters don’t appear to be a turn off.
Residents will rent to own, Brown reports: “They’ll pay a dollar per square foot in rent. They’re also required to take monthly financial literacy classes and volunteer for the neighborhood watch. After seven years, they’ll own their homes.”
The idea is to lower the barrier to homeownership, Faith Fowler, the executive director of Cass Community, tells Brown. “We were really looking for a way to give them a ladder. I mean, they’ve got to climb it, they’ve got to do the work, but we’re providing the ladder.”
Should be interesting to see what kind of residents they choose to win this housing lotto. Because they sure as heck aren’t going to offer these things to the general public for ~$34K (400/month x 7 years).
What if an young white male engineer or teacher wanted to buy one of these houses outright to live below his means? Would he have access to such a deal? Oh HECK no. More likely he is subsidizing these poor people through his taxes. If I were in that situation, I would be tempted to sue under Equal Housing Opportunity. After all, how many white guys would be in such a neighborhood? Wouldn’t they need a white guy for diversity?
Diversity is code for getting rid of as many whites as possible
What if an young white male engineer or teacher wanted to buy one of these houses outright to live below his means? Would he have access to such a deal? Oh HECK no.
The program does appear to be aimed at those with low incomes. However, there’s no evidence that white people are excluded.
I can’t disagree with you, MightyMike… except that every single program likes to use “low-income” and minority interchangeably. Probably because this is generally true in inner cities. However, I wonder what would happen if a bunch of poor whites from northern MI showed up in Destroit demanding access to rent these houses.
Let me translate.
Not….going…..to…..give…..it…..away.
+++++
From Better Dwelling. “Toronto is seeing the largest decline in sales to new listings in the country, as sales struggle to keep up with the city’s huge inventory growth. Toronto is coming off of a low for inventory, so numbers are expected to grow. Growth this quickly however, with stagnating sales may soften prices. Over the next few months, expect the market to find better footing, as people play the game of price discovery.”
To those of you living in long term controlled democrat cities.
This is your future.
Bankruptcy, high property/income taxes and public servants refusing to take any cuts.
It is for the children…
++++
Board sues Puerto Rico governor for rejecting furloughs
Sacramento Bee | 08/28/2017 | Danica Coto
SAN JUAN, Puerto Rico — A federal control board overseeing Puerto Rico’s crisis-ridden finances sued the island’s governor on Monday for refusing to impose furloughs and take other measures it says are needed to save money.
The lawsuit further raises tensions between Gov. Ricardo Rossello and the board, which is demanding public employee furloughs and a pension reform as the U.S. territory tries to restructure a portion of its $74 billion public debt load. The board also requested an injunction to prohibit the governor from refusing to comply.
“While our preference was to avoid this step, we believe it is a necessary measure to keep Puerto Rico on track with its commitments to reduce spending and build stable foundations for its economic future,” said Natalie Jaresko, the board’s executive director.
The lawsuit was filed after Puerto Rico government officials clashed with board members during a public meeting earlier this month in which they refused to implement furloughs or impose a 10 percent cut to a public pension system facing nearly $50 billion in liabilities. The board at the time said furloughs were needed because Rossello’s administration had not achieved $218 million in savings as part of an overall $880 million in required savings.
I think Gov. Rossello has already run out of other people’s money to spend. He will soon have to pay salaries and suppliers with IOUs, and I doubt the suppliers will extend him any credit
Greece is in a similar situation with their gov workforce.
Muh sanctuary:
http://www.thedenverchannel.com/news/local-news/denver-city-council-passes-controversial-immigration-ordnance
Local NPR is framing this narrative as a “civil rights” law, LOLZ.
So when an illegal, that should have been deported, rapes or kills an American citizen of Denver…
1. Will the city council be criminally and civilly liable?
2. Maybe they will “get it” when an illegal rapes or kills one of their own family members.
3. Since the Denver City Council feels they can ignore and violate FEDERAL law they don’t like, I am sure they would be OK if other American citizens in Denver ignore and violate different FEDERAL laws they don’t like.
4. And since the leftist think it is OK to just make up laws they wished they had, they should have no complaints when others take up vigilante justice.
Same argument for the “sanctuary state” of Illinois
Will the city council be criminally and civilly liable?
No, it doesn’t work that way. Also, there doesn’t appear to be anything in the ordinance that violates federal law.
No, it doesn’t work that way.
Which is interesting. Would be nice to see lawmakers/policymakers liable for their decisions, in some way.
Harboring illegal aliens is a felony.
Obstruction of justice Is a felony.
RICO.
No, it’s a city government that’s not cooperating with a federal law enforcement agency. That’s not an example of obstruction of justice.
I see.
So if you or me decided not to “cooperate” with Federal Law on ANY level - what do you think would happen?
If a city decided not to “cooperate” with Federal gun laws, Federal tax laws, Federal environmental laws or Federal rulings on abortions - what do you think would happen?
2banana’s Law:
Conservatives are more than happy to live under the same laws and taxes they want for everyone else.
Liberals/progressives expect to exempted from the same laws and taxes they want for everyone else.
Go look up obstruction of justice. You’ll find that you’re mistaken. Local governments don’t generally have a legal obligation to help federal agencies enforce federal law. You don’t know what you’re talking about. Your law is nonsense. If local police departments are violating federal law, Trump could direct his FBI to arrest someone. If he doesn’t do that, you’d have to amend your dopey law about conservatives and liberals.
Comrade…. stick with housing.
And remember…… Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
Boxborough, MA Housing Prices CRATER 6% YOY
http://www.movoto.com/boxborough-ma/market-trends/
3. Since the Denver City Council feels they can ignore and violate FEDERAL law they don’t like, I am sure they would be OK if other American citizens in Denver ignore and violate different FEDERAL laws they don’t like.
Isn’t this what states with “legal” marijuana do anyhow? Not expressing an opinion for or against, but hopefully folks hold a consistent view here…
There’s no putting that demon weed back in the closet, it’s an integral part of the real estate market of the whole Front Range (except central Denver, because it’s now too expensive to get space to grow in). Too many stories about that I can’t tell.
‘While buyers may be hoping rising interest rates could trigger a crash, those first-time buyers ‘may be holding their breath for a while’ because prices are likely only going to reset back to the levels of where they were before a year of exorbitant gains, the report concludes’
The Reuters article mentions 10 years of higher prices. OK, so 2007, which was a minor blip before a big run up previously. They could be looking at a 20 year or more wipe out. But let’s play along and dial it back one year. That’s between 30-40% from the peak. How many will be underwater? How many refinanced along the way?
‘Officials at major Canadian banks are issuing assurances of the strength of their mortgage portfolios’
We’ll keep that in mind.
June 19, 2017
“A year after getting married, Alex Taylor and Rachel Tuttle decided it was time to buy a home and start a family. But soon after starting the hunt in 2015, their hopes were dashed. Detached homes were averaging $1.2 million, and even though Taylor and Tuttle qualified for a mortgage, they would have faced steep monthly payments of $4,000. They adjusted their expectations and set their sights on a townhouse on the outskirts of the city. Still, the cost was too high. ‘It felt very risky to put that much of your savings into one investment,”’ says Tuttle.”
“Taylor is tired of talking about the issue. ‘I know it’s mean to say and I know it would hurt those of our friends who completely over-extended themselves,’ he says, ‘but honestly, we’re praying for a crash.’”
“He’s not the only one. In May, sales dropped 20 per cent compared to the year before in the Greater Toronto Area while active listings surged 42.9 per cent from a record low. Those are the kinds of numbers that cause indebted homeowners to sweat, but serve as a balm for those on the sidelines in Toronto: like Taylor in B.C., many now openly cheer for the market to collapse.”
“The Financial Consumer Agency of Canada found the number of households with a HELOC and a mortgage against their home has increased nearly 40 per cent since 2011, prompting commissioner Lucie Tedesco to caution this month the trend ‘may lead Canadians to use their homes as ATMs.’ Last year, Canadians withdrew $12.8 billion in home equity to fund renovations, according to Scotiabank Economics, and another $3.6 billion for ‘other’ purposes.”
“‘A lot of people have these totally unsustainable lifestyles they’re only able to pull off because, by doing nothing but sit on their ass, their net worth goes up by a few grand every month,’ says Toronto resident Phillip Mendonça-Vieira. ‘I don’t think there’s anyone who doesn’t own property who’s not secretly, like, ‘F–k you, guys. This is unsustainable.’”
http://thehousingbubbleblog.com/?p=10121
It is a cascading effect - and folks on the bottom rung are being screwed (for maybe 10 years)
1. The Toronto real estate board, the banks and others make projections
2. Top 20% agents who make a lot of $s, confuse many in their neighborhood, extended family etc
3. Parents (with the best of intentions) force their late 20’s children to purchase something (with them providing the downpayment
4. Younger couples are screwed for the next 10 years - with no disposable income - and cannot even think about getting pregnant until their mid-30’s
from personal information across the gta (greater toronto area), it is becoming miserable. I have 2 second cousins that literally only eat rotisserie chicken and frozen vegetables at home — unless they hang out at their parents home. So the expensive townhouses are a prison.
literally i have a cousin that had to pretend not to get a wedding invite - since they could not afford a wedding present
this is so miserable. An great woman cannot get pregnant - because she listened to her parents (that got confused) .
How Canada’s real estate market went completely insane
Skyrocketing house prices. Six-figure bidding wars. A Wild-West mortgage market. How did we get to this point—and how does it end?
Apr 11, 2017 Joe Castaldo
‘Not many events can compel people to shell out more than $150 to spend an entire Saturday perched on metal folding chairs inside a chilly, cavernous auditorium. But in Toronto, the prospect of getting rich in real estate will do the trick. Last month, a spectacle billed as the Real Estate Wealth Expo stormed into town, drawing upwards of 15,000 people to see an eclectic mix of speakers, from motivational speaker Tony Robbins to musician and gyration enthusiast Pitbull.’
‘At 8:30 in the morning, a quartet of real estate industry professionals takes the stage to whoops from the crowd for a panel on Toronto’s housing market. Local realtor Daryl King (the “king of real estate!” according to the moderator) tells the crowd the key for first-time buyers is just to get a foot in the door. “We haven’t seen the end of it,” he says of the region’s double-digit surge in home prices. “So buy today, before it’s too late.”
‘One of the biggest challenges for first-time buyers and investors, the panel agrees, is shutting out negativity and overcoming the fear of failure. “The worst thing you can do is listen to somebody that’s never done anything,” King says to applause. “Say that again!” the moderator crows. “That is profound.” King adopts a mocking tone, “ ‘Oh, prices are too high. They’re gonna come down. The market’s gonna crash.’ Yes, it may adjust at one time. But if you never get in the market, you’ll never have a chance.”
‘Despite more business coming his way, Farber is turning down more deals because he’s worried prices have overshot. “How do you lend against a house that should in theory be $1 million, but someone overpaid in a bidding war at $1.4 million, and they want a loan for 75 per cent of the value?” he says. “That’s a scary property to lend on. If the market takes a dip, we’re all f–ked.” Farber recently had what he calls his “Big Short moment,” referring to the movie about the U.S. housing crash. In one scene, a character goes to a strip club to learn what’s actually happening in the housing market, and a dancer lets slip she owns five houses and a condo. For Farber, it was a Toronto cab driver who revealed he owned a handful of pre-construction homes and planned to flip them. “It sounds like a bubble is going on,” he says.’
http://www.canadianbusiness.com/economy/how-canadas-real-estate-market-went-completely-insane/
‘How do you lend against a house that should in theory be $1 million, but someone overpaid in a bidding war at $1.4 million, and they want a loan for 75 per cent of the value?’
Roll with it?
…ha, ha, yes….. become a gyrational enthusiast!
Yes, it may adjust at one time. But if you never get in the market, you’ll never have a chance.
Really? Never have a chance for what? A normal middle class life? Does that sound sustainable? If you don’t gamble with us you’ll never have anything?
Every closing is a crime scene.
You’ve war that one out HA. Have your script writers come up with some new material.
Yeah, it’s not worth going to wore over.
Housing my good friend. Housing.
Scripps Ranch San Diego, CA Housing Prices Crater 6% YOY
https://www.zillow.com/scripps-ranch-san-diego-ca/home-values/
Well for me anyway, it was not having chance* at owning a paid-off home at retirement — something still worth going to wore over.
But evidently, I am one of the few who thinks this way.
———————-
*After a quick calc, I realized that it was unlikely that I could pay rent and save enough in the difference to buy a house outright. Even if I rented a 1-bed apt for $1100 and rent rose 3% per year, I would spent $33K more to rent than to buy. (If I add $$ to principle, there are even more savings to buying.)
And then for fun, I ran numbers to simulate paying $1700 for a “luxury” one-bed and then my rent dropping by 1% each year for 30 years. At the end of 30 years I would have saved about $63000 by renting. Sounds good, but what are the odds of rent dropping for 30 years straight?
About the same as $6000 a year in depreciation not happening.
Even if I rented a 1-bed apt for $1100 and rent rose 3% per year, I would spent $33K more to rent than to buy.
When you ran these numbers, what were your assumptions about how your property taxes and insurances payments would increase over the timeline that you compared? I see your assumption that rent increases at 3%—did you assume all else was stable?
“One of the biggest challenges for first-time buyers and investors, the panel agrees, is shutting out negativity and overcoming the fear of failure.”
Haha… you can do it.
http://www.zerohedge.com/news/2017-08-29/study-doping-western-cultures-oxytocin-will-cure-hatred-refugees
Swear to god, someone actually wrote this:
“As co-author René Hurlemann said in a related study; “Given the right circumstances, oxytocin may help promote the acceptance and integration of migrants into Western cultures.”
Widely referred to as the ‘love hormone,’ ‘hug hormone,’ and ‘cuddle chemical,’ Oxytocin is secreted from the pituitary gland during sex, childbirth, and lactation – influencing social behavior and emotion. It has been shown to increase romantic attachment and empathy – invoking feelings of relaxation, trust, and psychological stability.”
Check out the rogues’ gallery photos of the authors of the study. They all have that smug little grin, along with rubbery features. Looks like #s 1 and 7 have already been dipping into their own stash.
First they drugged the school boys, to be less boyish. Now they want to drug everyone. Of course, rapefugees won’t be coerced into taking the drugs, because “reasons”.
Yep, man-boobs everywhere. Sta-Puf marshmallow men.
It’s disgusting what has been done, and what’s being done. Opiods, vaccines, crap in the water, over-estrogenized food. Better living through chemistry, HAH!
I’m wondering if Tyler Durden fell hook-line-sinker for an Onion article. That’s the only explanation for this.
I know what you mean. I felt the same way about the whole Chelsea Manning thing.
This, too:
http://imgur.com/gallery/61Eld
“Study: Doping Western Cultures With Oxytocin Will Cure Hatred Of Refugees”
They tried Oxycontin but that didn’t work.
A problematic narrative for the Alt-Left:
http://www.latimes.com/local/lanow/la-me-far-left-violence-20170829-story.html
One day Antifa is going to wonder too far from Berkeley and show up at a protest where the opposition are not paid actors and someone is going to say… “Now youz can’t leave”
https://www.youtube.com/watch?v=dDrYOEhGNbY
More moral hazard flood insurance coming?
You bet
It’s known in political circles as vote insurance.
I have been following this since seeing the hole in NYC a couple year back.
Noticed a post by Ben yesterday on NYC and the incredible prices being paid.
This……by noted architect Tadao Ando…….
Linky here:
http://www.152elizabethst.com/
Noted for what? Brutalist architecture? (that’s a real architectural style). He says that “living space must be a sanctuary.” Yeah alright.
With a full windows that can be seen up and down the block. Walls made of prison concrete. Waterfalls flowing over the concrete invoking images of some 1910-era factory polluting a the local river. There is such a thing as too minimalist.
Walls made of prison concrete. Waterfalls flowing over the concrete invoking images of some 1910-era factory polluting a the local river.
You’re definitely projecting your values judgements there, oxy—I rather like that look, personally.
The last time house prices went ballistic, in the early-mid 2000s, there was no talk of inventory shortage. Builders were building on everything they could find.
This time when house prices are going ballistic, the rationale is inventory shortage. But with GSE 3% down / close to 50% DTI loans, if builders were building like they were in the mid-2000s, is it plausible that house prices would be stable?
Or is it something other than inventory shortages causing house prices to go ballistic?
‘there was no talk of inventory shortage’
I found these in just a few minutes:
February 19, 2006
“The more optimistic believe that empty condos will ease the shortage of affordable apartments, as investors who can’t sell opt for leasing their empty units. Delano said she represents several people ‘who have bought units and now are unable to sell them, so they are contemplating renting.’”
http://thehousingbubbleblog.com/?p=120
February 26, 2006
‘Toni Braglio, president of the Carroll County Association of Realtors, called the drop ‘a seasonal dip before the spring market breaks loose.’ The housing prices are escalating rapidly and creating a great sellers market, she said.’
‘Comparing last month to January last year, when the area was still riding a hot market fueled by high prices, competitive bidding and inventory shortages, creates the wrong impression, said Karen Donaldson, an agent in Westminster.’
http://thehousingbubbleblog.com/?p=174
February 24, 2006
“‘Remember, in January 2005, we were in the midst of a buying frenzy.,’ Olson said. The buying frenzy was partly fueled by a shortage of homes, Broekema said. Homes in a number of subdivisions developed in the last eight to nine years are appearing on the resale market. There still may be shortages in some areas and price ranges.”
http://thehousingbubbleblog.com/?p=162
March 5, 2006
“Despite all the talk of a housing shortage on the South Coast and in California, there’s no lack of homes for sale priced more than $1 million. A recent search on Realtor.com yielded about 500 properties on the South Coast alone.”
http://thehousingbubbleblog.com/?p=224
March 28, 2006
“Fulton said some builders fell for the euphoria of last year’s selling frenzy, which was driven in part by housing investors. The result, he said, is too many unsold homes. ‘They took the ‘Build it and they will come’ attitude. No matter what we build, people will stand in line to by it,’ Fulton said. ‘Now, they’re like, ‘Oops, we have to get rid of this stuff at year end.’”
“Fulton just started work on 300 spec houses, figuring that his company will have homes ready for move-in when other builders have gotten rid of that backlog and are cautious about building more spec homes. ‘There’s still lots and lots of activity out there,’ he said. ‘It’s truly a market becoming more normalized. There still is a significant shortage of land out there.’”
http://thehousingbubbleblog.com/?p=375
May 10, 2006
“Are these developers just bullish on downtown Long Beach real estate, or are they trying to make sales before a possible falloff in the residential market?”
“Some real estate agents agree the number of condos being built downtown may be hampering sales of existing units, but the sponsors of the open house say the area is well-positioned to continue its residential boom. ‘Whether you are talking about downtown Long Beach or Southern California, I think there is a housing shortage,’ said Kraig Kojian, president of the Downtown Long Beach Associates.”
http://thehousingbubbleblog.com/?p=656
I’m not picking on you BTW. I recall being asked about “the shortage” all the time on radio shows and in newspaper interviews.
One of the most interesting things I’ve observed in running this blog, (and it’s probably true about a lot of major events), is how different people remember things so differently!
Here’s a time capsule. How many here remember this?
Monday, February 07, 2005
Fannie/Freddie Regulator Preps For Bankruptcy
‘The Office of Federal Housing Enterprise Oversight is pushing legislation through congress that prepares for the insolvency of the mortgage giants. Patrick Lawler, OFHEO chief economist told a forum “Receivership is a valuable thing”.
‘None of this is reported on the official website of the regulator. Also mentioned in this story was this tidbit;”..a coalition of 37 federal, state, and local groups urged the federal government and Congress to cut ties with Fannie and Freddie Thursday. Warning that Americans are threatened by a potential taxpayer bailout of the two companies”.
http://thehousingbubble.blogspot.com/2005/02/fanniefreddie-regulator-preps-for.html
Ben Jones: I’m not picking on you BTW. I recall being asked about “the shortage” all the time on radio shows and in newspaper interviews.
Facts is facts, I appreciate being informed
I guess shortage is always part of the narrative, along with population growth.
~~~~~~~~~~~~~~~~~~~~~~
Monday, February 07, 2005
Fannie/Freddie Regulator Preps For Bankruptcy
‘The Office of Federal Housing Enterprise Oversight is pushing legislation through congress that prepares for the insolvency of the mortgage giants. Patrick Lawler, OFHEO chief economist told a forum “Receivership is a valuable thing”.
Bernanke was sworn in January 31, 2006. Everything was booming. He was touted repeatedly as being a “Depression scholar.” I remember thinking, that’s weird, what do they know that we don’t?
Scarcity and urgency: oldest snake oil lines in the book. That’s why I never buy it and see it as mania talk. You know what I told those radio guys and reporters every time? There’s no shortage of land nor houses and there never has been. Jeebus, Tokyo proved that around 30 years ago.
I remember 2005 articles in CA newspapers saying we needed to build 250,000 units/year in CA to meet demand. We could only produce 150,000 units due to regulations. High demand….low inventory = prices rising forever.
Then the bubble popped.
In my neighborhood today, occupancy per bedroom is about 30%! When there is another downturn, if it gets bad, there is a lot of standing inventory available.
“Baby Bust: US Population Growth Crashes To 80-Year Low”
http://www.washingtonexaminer.com/baby-bust-us-population-growth-crashes-to-80-year-low/article/2610398
I don’t see how. All I see around here is babies, babies, babies. There’s a baby boom going on in my office building. My neighborhood is crawling with kids under the age of 10. Strollers everywhere. Lots of SUV sales (because minivans are just pathetic). You-pick farms being destroyed by toddlers. Then again, the DC area is something like 26% foreign born. It must be different in rural areas.
Me, neither. I was out at the grocery today and the sows were out in force with their sucklings. One of ‘em had blue jean short-shorts stuffed all the way in the crack of her patootie and three spare tires flapping around under a clinging knit shirt of some sort.
The father had to have been three sheets to the wind in order to procreate.
“The father had to have been three sheets to the wind in order to procreate.”
Had that very thought recently at the grocery store checkout line… standing behind an obese toothy woman who reminded me of Eleanor Roosevelt.
Something is terribly wrong with this obesity thing. I don’t think it’s necessarily the fault of the people, not all of them anyway. I really do believe it is an “engineered” epidemic.
“(because minivans are just pathetic)”
https://www.youtube.com/watch?v=AJXVK9-5VEA
Thank you! I’d never seen that one.
If you’re driving kids around the suburbs, minivans are safer, but parents think SUVs are cooler.
https://wheels.blogs.nytimes.com/2009/03/27/are-suvs-more-dangerous-than-minivans/?mcubz=0&_r=0
I don’t see how. All I see around here is babies, babies, babies.
Not in my neck of the woods. Having 1 kid seems to be the norm for middle class couples who choose to procreate (and many don’t).
Anecdote: Some years ago, at the office, I mentioned in a casual conversation that we have 3 kids. I was asked, on the spot, if I was aware of contraception.
With the free sh!t army (especially of the immigrant variety) it’s a different story.
There goes future housing demand. Should be lots of work in the coming years for teardown specialists to demolish surplus McMansion tract homes.
This is why we need positive immigration…..
No, that’s why we need lower housing prices. And I am not talking about Democrat-favored plans to load up young households with impossible debt burdens under the moniker of “affordable housing.”
If nests are generally unaffordable, not much nesting is going to happen. Keeping foreign money launderers away from U.S. residential real estate could go a long way towards restoring affordable prices.
While that is an issue, there are other factors involved.
As some of my son’s friends like to say, they aren’t interested in becoming some woman’s future ex-husband, and source of a steady cash flow for her and her boyfriend.
Having kids is an expensive proposition for working couples. Day care, medical care (thank those HD plans), future college costs, and it’s a wonder anyone who works for a living is having kids
One more time -
opening scene of Idiocracy.
“This is why we need positive immigration”
Sell crazy someplace else, we’re all stocked up here.
https://www.youtube.com/watch?v=Tgz5-8chSlk
Cute.
The sane proposal for a strong society includes a solid program for positive immigration. Fahreed Zakaria has some well researched comments.
https://fareedzakaria.com/tag/immigration/
Miami Beach, FL Housing Prices CRATER 5% YOY
https://www.zillow.com/miami-beach-fl/home-values/
-3.4% ,we have a winner!
My hood predicted .5%
How about yours?
Up 8.5% in my name…..
-3.4% ,we have a winner!
Oh, that’s awesome! I’m excited to see Zillow finally predicting a solid decline somewhere.
Zillow predicted a -5.4% decline in Santa Monica in 2015. I shared it with my son who lives there…..meanwhile prices have continued to rise at 8-10% each year……
Do taxpayers pay for 1,000,000 homes to get new drywall n carpet or ?
Big gov
I paid extra to be on a hill
“I paid extra to be on a hill”
https://www.youtube.com/watch?v=6Hlw_9ldThs
lol, I guess old George is a little late with payroll again:
http://mudgrrl3000.tumblr.com/post/164778013540/hahahahah-george-soros-wheres-our-money
“I can hire one half of the working class to kill the other half” or something like that. Attributed to Jay Gould.
Yeah, but ya gotta pay ‘em.
From Wikipedia concerning Jay Gould …
“Gould, with his seventy millions, was one of the colossal failures of our time. He was a purely selfish man. His greed consumed his charity. He was like death and hell - gathering in all, giving back nothing. To build up an immense fortune for one’s self by fraud is a disgrace to the age, a mockery to virtue, a menace to public welfare. The love of money was the root of all evil in him. The motive that softens the footsteps of the burglar, that nerves the arm of the highwayman, was the same that prompted Gould to break his neighbor up to build himself up. - Rev. Inglehart, pastor of the Park Avenue Methodist Episcopal Church (4 December 1892), quoted in Stead, “Jay Gould: A Character Sketch”
My kind of guy.
Remember….. A house is a rapidly depreciating asset that only costs you money. Alot of money.
Bedford, MA Housing Prices Crater 10% YOY
https://www.zillow.com/bedford-ma/home-values/