The Red-Alerts Of A Distressed Market
A report from Barron’s on Florida. “To grasp the buying opportunities emerging in Miami’s condo market, it pays to study the prices obtained this year for two remarkably similar apartments next door to each other on the main drag of Brickell, the residential high-rise district in downtown Miami where the sky is filled with cranes and half-constructed buildings. First up is 1060 Brickell Ave., a fashionable building erected in 2008. Apartment #1815, a 945-square-foot one-bedroom, sold in mid-March for $285,000, or $302 per square foot. Right next door stands 1080 Brickell Ave., an elegant building erected just last year. Apartment #2508, a two-bedroom, 1,217-sq.-ft. apartment, sold for $620,000, or $509 per square foot.”
“That’s 69% more per square foot than the slightly older apartment next door that sold just a few weeks earlier. And here’s the thing: Even at that higher price, the condo flipper, who bought the just-built apartment seven months earlier, had to take a $160,100 bath (net of 6% commission) to quickly rid himself of the place.”
“Why the speculator at 1080 Brickell would take such a big hit to get out—and why the resell price of the older apartment at 1060 seems so low—becomes apparent when you look at the chart below, provided by StatFunding, which outlines the rising overhang of condos hitting the Miami market. Peter Zalewski, founder of CraneSpotters.com counts 47,692 new condos in projects east of Interstate 95 in the three South Florida counties of Miami-Dade, Broward, and Palm Beach. The majority of those units are in Miami-Dade County, with the latest wave of projects built mostly around Fort Lauderdale.”
“Of those, 22% have been built and delivered since 2011, with another 24% currently under construction. The remaining units are in early planning phases or actively seeking planning permission. That means the South Florida market is growing by ‘at least 22,000 units—even if they turn off the spigot today—based on what’s been delivered or what’s under construction,’ he says.”
“Let’s put those 22,000 new units in perspective. Zalewski figures 71% of the new supply is in Miami-Dade County. According to Miami Realtors, 1,323 condos and townhouses in Miami-Dade sold in June 2017. That isn’t much of a dent in the inventory of 15,067 condos, almost entirely made of older stock, that are currently for sale. There is already some 14 months of supply in the Miami market, a 20.4% increase in just one year. To that supply, you have to add the wave of new construction coming on-line.”
“No surprise that the red-alerts of a distressed market can be seen everywhere. ‘We’re in the beginning of the downfall. No one wants to catch a falling knife’ Zalewski warns. He notes savvy developers are ‘building with one foot on the brake,’ trying to time when their projects come to market.”
From the Los Angeles Times. “Question: I’ve been the treasurer of our 30-unit self-managed condominium association for more than 20 years and until recently the handling of buyer and refinance escrows and other paperwork for property transactions was a breeze. This year, though, mortgage lenders started asking for a fidelity bond for coverage of the association’s working cash balance — something totally unrelated to the transaction’s escrow account — with losses payable to the lender.”
“We are finding that in order for a person’s loan or refinance application to be completed to a lender’s satisfaction, the lenders are imposing additional requirements that boards must be answerable for. Even beyond the fidelity bond, lenders are sending us complicated forms with many questions about the financial health of our association. And they want the signatures of two board members certifying the truth of the answers. All this is making board directors skittish and apprehensive about completing the paperwork.”
“Answer: It appears lenders are getting more skittish about issuing mortgages to buyers of condominium units as the real estate market recovers from the housing bust, a time when lenders experienced a spate of foreclosures. Now, with prices once again reaching record levels, banks and other mortgage lenders look to be taking steps to protect themselves.”
From Xinhua Net on California. “With unique geographical advantages and natural conditions, U.S. western coast state of California always attracts a great mount of people for investing, sightseeing and residing. However, its stubbornly high housing price also deterred many people who attempt to move in, and many are even considering about leaving the Golden State due to the skyrocketed housing cost.”
“‘We have been renting an apartment for over 10 years, and still cannot buy our own house, as the renting price increases every year. The American dream is about a house and a green card. But here in California it’s not easy to let your American dream come true. Therefore, we decided to move to Texas, it happened to have a good job opportunity for me,’ Yunqi Li, a local resident of Los Angeles, told Xinhua.”
“A research result, released this week by University of California Berkeley’s Institute of Governmental Studies, showed that 56 percent of California residents are considering moving, both the renters and homeowners. For Los Angeles area, 59 percent people are mulling this matter. The housing affordability crisis, happened in every large city of California, like San Francisco, San Jose, Los Angeles, San Diego and Sacramento, resulted in more and more homeless people living at public area.”
“According to a report released by University of California Los Angeles (UCLA) earlier this year, the poverty rate in the whole Los Angeles area had increased from 15 percent to 17 percent between the year of 2011 and 2015. The main reasons causing the poverty are unemployment and unaffordable housing price.”
“There are still many people who think the housing price in Los Angeles is acceptable. Susan Park and her husband moved from the Bay Area of San Francisco to Los Angeles two years ago, and said the housing is affardable here in LA. ‘The house in the Bay Area were very expensive, we could not afford it. We rent a one-bedroom apartment was about 3,000 U.S dollars. Compare with Bay Area, I think the housing price in Los Angeles is affordable and reasonable,’ Susan said to Xinhua.”
“‘The real estate of California is like this. I think it’s hard to lower down the housing price. If some people move out, others would move in, since we have more job opportunities and competitive economy here. The housing price would not easily go down in a short time from my anticipation,’ Jason Gu, a real estate agent of Southern California, told Xinhua.”
From Reuters on Texas. “Addressing a real estate conference in flood-ravaged Houston this month, longtime investor Ray Sasser detailed his strategy: buy up to 50 flooded homes at deep discounts, then fix and flip them for a hefty profit. Sasser first followed that game plan after Tropical Storm Allison flooded the city in 2001. He bought homes for 30 to 40 percent of their pre-storm value, spent another 15 percent on repairs, and sold many a year later - at full value.”
“The quick recovery surprised him, he said. ‘This can’t be true,’ he recalled thinking at the time.”
“Tara Waggoner, the Houston market manager for brokerage and online listings firm Redfin, said the firm’s local agents were getting about four times the number of calls they usually get from investors. ‘You have people with millions of dollars to work with,’ she said. ‘They want to go in, pay cash, get the discount and fix it up to sell.’”
“At the Realty Investment Club of Houston - or RICH, for short, Linda Muscarello - who calls herself the Queen of Foreclosure - spoke of the ’subtle psychology’ of negotiating with struggling homeowners. Waving a bedazzled scepter at her audience, Muscarello advised investors to listen and nod when talking to owners of distressed properties, who can often have unrealistic notions of their ability to afford continued mortgage payments. Many homeowners hit by Harvey did not have flood insurance and may not have the money to rebuild.”
“Muscarello advised investors to talk to homeowners as if there is a chance they can avoid selling – even if the investor’s interest is buying them out. When discussing finances with homeowners unable to afford payments, Muscarello advised asking, ‘How short are you?’ ‘It’s very important you say it that way,’ she explained. ‘It’s as if you’re still considering helping them to keep their house.’”
“While approaching a distressed homeowner can feel predatory if poorly handled, selling can help homeowners in some situations, especially if the home’s damage is coupled with job loss or damage to a business. The big question for homeowners is whether they expect to have steady, long-term income that will let them ride out repairs that may or may not be covered by insurance. If not, said economist and University of Houston professor Bill Gilmer, ‘you might just want to give the keys to someone else.’”
‘the condo flipper, who bought the just-built apartment seven months earlier, had to take a $160,100 bath (net of 6% commission) to quickly rid himself of the place’
This has been going on for probably a couple of years now, and the MSM periodically wakes up and reports it. It’s all over Manhattan too.
Astonishing, ain’t?
Another entity to be added to the fraud, “on the take” list: city and county commissioners who seemingly approve any and all real estate proposals.
No matter how insane.
Who gets to pay for the upkeep and eventual purposeful destruction of thousands of dwellings that remain forever unoccupied?
You do, Ben. That’s who. As do I.
When all of this property miraculously converts to socialized housing because nobody can afford to live anywhere - due to decades of printed money and due to outright theft by the players - you will pay a great deal more.
And by socialized, I NOT referring to Section 8. I mean truly near “free” housing for the “poor”. Section 8 will be positioned as an excessively capitalist notion in comparison to what our globalist betters have planned.
If anyone thinks that the nutcases who support ObamaCare and single-payer socialized medicine are going to stop there, think again.
Housing is a right, too. Who says it’s not. You?
‘Apartment #1815, a 945-square-foot one-bedroom, sold in mid-March for $285,000, or $302 per square foot. Right next door stands 1080 Brickell Ave., an elegant building erected just last year. Apartment #2508, a two-bedroom, 1,217-sq.-ft. apartment, sold for $620,000, or $509 per square foot’
‘No one wants to catch a falling knife’
Apparently one did.
It’s all so irresponsible.
To gamble away your children’s and grandchildren’s existence in such manner….the lack of ethics and morals.
Future generations will hate us for what we’ve done.
“It’s all so irresponsible.”
Profitable. The word is profitable.
“To gamble away your children’s and grandchildren’s existence in such manner….the lack of ethics and morals.”
Some people just cannot take a joke.
“Future generations will hate us for what we’ve done.”
That’s then, this is now. Party on.
And by socialized, I NOT referring to Section 8. I mean truly near “free” housing for the “poor”. Section 8 will be positioned as an excessively capitalist notion in comparison to what our globalist betters have planned.
The Brits call it “Council Housing”, but as many councils are finding out, even with Britain’s high income taxes, 20% VAT and other taxes (which makes everything expensive beyond belief) they don’t have enough money to even keep existing council housing safe, hence disasters like the recent Grenfell Tower fire.
Their free health care is the #1 bitch bag
Same for canaduh ,etc.
FWIW, they pay a payroll tax to fund the NHS, so it isn’t “free”. But many are unhappy with the NHS’s level of service and private insurance is becoming a popular job benefit, at least for those with higher income jobs. Lower income folks just get NHS.
I had no idea….its something that we should be touching on occasionally here. Keeping us all up to speed and all that.
Interesting info., Colorado. Thanks.
What I didn’t understand was the newer condo still selling for 70% more than the older unit. Seems like a steep premium in a dropping market.
‘Tara Waggoner, the Houston market manager for brokerage and online listings firm Redfin, said the firm’s local agents were getting about four times the number of calls they usually get from investors. ‘You have people with millions of dollars to work with,’ she said. ‘They want to go in, pay cash, get the discount and fix it up to sell.’
Long time readers may remember that when Katrina happened, I didn’t post much about it as it didn’t seem housing bubble related. Then a flipping storm took over. This is related to yesterdays topic about speculation. Maybe the weather channel should merge round the clock simulcasts standing in puddles with updates on where to get some sweet equity.
Profiting off of someone else’s housing misfortunes is a noble pursuit, Ben.
As noble as ambulance chasing attorneys.
Tara Waggoner, I applaud you for being involved with those who behave in such manner!
Kick ‘em when they’re down, that’s what I always say.
Dirty Laundry - Don Henley
Henley sings about the media; song is just as appropriate for realtors and their “investor” accomplices.
https://www.youtube.com/watch?v=YHimia_Fxzs
‘Muscarello advised investors to talk to homeowners as if there is a chance they can avoid selling – even if the investor’s interest is buying them out. When discussing finances with homeowners unable to afford payments, Muscarello advised asking, ‘How short are you?’ ‘It’s very important you say it that way,’ she explained. ‘It’s as if you’re still considering helping them to keep their house.’
I have a book on foreclosures that was written long ago. This sort of thing has been going on forever. Linda is just a little more mercenary about it. It’s the larger issue that concerns me. Take stocks: all day long you have TV people discussing how to take advantage of this or that situation to rake in the bucks. No one really expects anything else. It’s a big casino - you gamble, you win or lose. But why houses? These used to be the most stable of assets. That’s why you could get relatively low interest rates for many years. Defaults were pretty low. Now shacks are a big casino. Millions of people watch TV everyday trying to imagine slapping in some stainless steel and walking away with a hundred grand.
BTW, as I posted the other day, defaults were way up in Houston prior to the storm. And if these RICH investors are making money, somebody is losing. Right Mel Watt?
But why houses?
Maybe because it is the biggest gamble an individual with no real skill, knowledge, experience or capital can take on? I don’t know the answer, but I think it hasn’t been just houses.
“But why houses?”
Oh, please …
But, since you asked … try this on …
“Now shacks are a big casino. Millions of people watch TV everyday trying to imagine slapping in some stainless steel and walking away with a hundred grand.”
I said this before: Dumb ‘em down, and profit. Lay out a few dotted lines and tell the totally dumbed-down that they will get sumtin’ for nuttin’ and then stand back and watch as these fools willingly and eagerly commit themselves to decades of debt slavery.
Truly, a modern marvel.
Why houses? Because owning several properties makes you sound like a big man. I don’t get the same reaction from people when talking about backdooring an IRA. It’s an ego thing.
Easy to get leverage and easy to make a lot of money apparently.
Ben Jones:It’s a big casino - you gamble, you win or lose. But why houses? These used to be the most stable of assets. That’s why you could get relatively low interest rates for many years. Defaults were pretty low. Now shacks are a big casino. Millions of people watch TV everyday trying to imagine slapping in some stainless steel and walking away with a hundred grand.
Indeed, why houses?
This is an interesting chart from The Economist: House prices indices for five countries: https://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-6
There are similar, though not exact dips and peaks. Curious. Seems like some trans-national phenomenon.
IMF’s global house price index: http://www.imf.org/external/research/housing/
This link, from the Dallas Fed, has house price indices for 23 countries since 1975, as well as personal income indices (2005 is set to 100 for all 23 countries): https://www.dallasfed.org/institute/houseprice/#tab2
I generated a graph from the data table, and removed Croatia, South Africa and Israel. Again, interesting in that several countries exhibit similar movements in their house prices. Very curious, again indicating a trans-national phenomenon. I’ll post the graph eventually, or anyone with intermediate Excel skills can generate it (The Vietnam documentary is starting its 2nd half in about 15 minutes, not enough time to clean up the graph and post). But again, the trans-national similarity in the house prices of many countries is intriguing.
But again, the trans-national similarity in the house prices of many countries is intriguing.
Intriguing, but also easy to explain: we are living in a global liquidity bubble.
“Curious. Seems like some trans-national phenomenon.”
“You’re either with us, or against us” —Dubya
“Now shacks are a big casino. Millions of people watch TV everyday trying to imagine slapping in some stainless steel and walking away with a hundred grand.”
Seems like a logical consequence of the billions of federally-guaranteed mortgages pumped in by the GSEs and backed by Fed purchases of MBS. Speculators will naturally seek the opportunity to ride the resultant financial rocket on its way up.
“A research result, released this week by University of California Berkeley’s Institute of Governmental Studies, showed that 56 percent of California residents are considering moving, both the renters and homeowners. For Los Angeles area, 59 percent people are mulling this matter.”
Not surprising. What’s surprising is how quickly newly arrived Asians (and not newly arrived) are mulling it over.
California is a disaster. HB1s are the incoming lifeblood. Few outsiders can move there and succeed. Enjoy the slow, ongoing rot, all you Californians out there! It’s going to be with you for decades to come. Look on the bright side….the ceaseless rot will give you the perfect excuse to continue your hedonistic pursuits.
About a month ago, a client of mine whom I’ve known for about 15 years, left California to return to Zambia, his home country. He and his sisters settled in Los Angeles in 1980, became citizens, operated their own businesses. Were successful and enjoyed their lives. Noticed distressing change starting about 2002/2004. Decided in 2015 for home.
Too much crime, too much homelessness. A sister was robbed at gunpoint in 2015; his business was broken into three times in late 2015 and early 2016. Increasing taxes, regulations and operating/property costs adding to his personal misery index.
Upon his departure, I wished him luck.
He said he would be fine (he was excited, not unhappy in the least with his decision) then wished me luck instead. He said he was leaving for better opportunity and a less foreboding future. He felt bad for me because as a native-born American, it’s much more difficult for me to flee.
He felt bad for me because as a native-born American, it’s much more difficult for me to flee.
This is something the average American does not understand. Most people I talk to think that relocating to another country is a slam dunk, when it’s the opposite, you are almost guaranteed to be rejected.
I know because I tried to.
Not because I felt the need to flee. I just wanted to see another part of the world. And live that experience. I love going to/experiencing something alien to me.
It’s very difficult to leave the United States. Its much more difficult to move, say, to Germany, than it is for a German to move to the United States. There’s no comparison.
New Zealand and Australia (I believe) require that someone have a net worth of $500K or more before they will allow people to become citizens there. Theirs is a very good idea.
Married to a Peruvian so if I wanted to leave the U.S. and live there, it would be relatively easier for me.
Until this past year, Peru was a border hopping mecca.
Just leave the country for a few hrs then ask and receive another
183 days.
But now it’s 183 consecutive days out until you can reenter.
‘The housing affordability crisis, happened in every large city of California, like San Francisco, San Jose, Los Angeles, San Diego and Sacramento, resulted in more and more homeless people living at public area. According to a report released by University of California Los Angeles (UCLA) earlier this year, the poverty rate in the whole Los Angeles area had increased from 15 percent to 17 percent between the year of 2011 and 2015. The main reasons causing the poverty are unemployment and unaffordable housing price.’
‘There are still many people who think the housing price in Los Angeles is acceptable. Susan Park and her husband moved from the Bay Area of San Francisco to Los Angeles two years ago, and said the housing is affardable here in LA. ‘The house in the Bay Area were very expensive, we could not afford it. We rent a one-bedroom apartment was about 3,000 U.S dollars. Compare with Bay Area, I think the housing price in Los Angeles is affordable and reasonable,’ Susan said.’
Just running around driving up prices, and moving on.
“causing the poverty are…unaffordable housing price.”
scdave will be shocked.
He thinks Reno is affordable.
He needs to get out more and see how others outside of his gated community live. He clearly is a very fortunate recipient of demographics.
Perhaps he and Downlow Joe can take a month long, off interstate cross-country road trip together. Dave knows about Silly Valley, Joe knows Washington DC (tho he has visited Pittsburgh for a week, so he’s “worldly”).
Perhaps it’s tome to dare scDave to do something - I dared Bill In LA to do something to test his resolve…he never did take me up on it. (Open borders for everyone but him. I have no respect for the open borders folks who will not leave open the door of their personal domiciles to complete strangers).
Anyway.
I doubt Dave has the ‘nads to move to Oklahoma for 6 months, bring no money, no credit and no possessions and take a job that pays $15-$20 dollars an hour.
Start from scratch and work at a job for $30-$40K annually.
I have serious doubts whether dave could handle it.
How about it, dave? Wanna take the dare? Go ahead. Prove me wrong. I would actually love to be proven wrong here.
Mighty Mike:
If you want to take the same dare, be my guest. My proven wrong twice would be even better!
I’ll even sweeten the deal for you (but you alone).
You can move to Arkansas OR Oklahoma. Your choice.
Additionally, you can bring $2000 cash with you.
But nothing else. No possessions. Well, maybe a cell phone and a weeks worth of clothes. But no furniture or housewares. No other cash. No credit cards. No car. (HINT: you might want to move to Little Rock, which has bus lines.)
So what say you, Mike? Up for it?
What exactly is the point of your goofy suggestion? Why are you suggesting it to me?
Why? Kicks.
Your socialist utopian means either:
(1) you’re a well off, family-connected elitist type who has no practical knowledge of what it takes, or,
(2) you’re a bum / leech who has no practical knowledge of what it takes.
If I were to place a bet, I bet on #1. If you were #2, you’d likely have a tougher time stringing a sentence together.
In reality, though, yours is likely a situation very similar to Dave’s. Born in the 1940s or early/mid 1950s, with 1960s-era memories.
An individual who later in life found himself sitting on a nice pile of money, not because you did anything particularly notable to deserve it, but because you lucked out demographically.
Poor people who look toward socialism as a solution I can understand, as misinformed as it is. Wealthy people who look toward socialism are either idiots or miscreants with evil intent. There is no excuse for them.
All that said, I’d love you to prove me wrong. Make me eat crow, for all of HBB to see.
Spend six months in Arkansas, working a job for $15-$20/hour. I’ll even buy you a one-way ticket to Little Rock - coach, not first class. The deal is you must live there for 6 months and arrive with nothing but a cell phone, clothes and $2000. No mooching off of friends, family or government, Mikey. You must succeed or fail by your own wits.
So…you gonna take me up on the challenge?
And no funny tuff - you cannot have any of your possessions shipped, delivered to you. You must start from scratch.
You cannot bring your medicines or doctor with you to Arkansas, either.
NOTE: If the job you take does not have medical coverage, too bad. Healthcare used to be cheap in flyover. ObamaCare put an end to that. $300 a month and $3000 in deductibles are typical in flyover, but could be more than that. Yes, you must pay that from your $30-$40K salary, too.
Or go without, and pay a tax penalty.
Why give him easy cities? Set up in San Diego, Bay Area, LA, Seattle, NYC, or Boston on those terms and lets see what he’s really made of. Hope he likes room mates. It would be a good chance to mingle with some diversity.
LOL. Those crotchety old commies would never defile themselves by rubbing elbows with the unwashed masses from flyover country. Pump your own gas? The horror!
Their fake azz narrative gets harder to maintain by the day.
Why? Kicks.
Somehow you would derive satisfaction from me moving to Arkansas?
Nothing that you wrote makes any sense. Your assumptions about my background and age are false. You probably also assume that I live near a coast. That’s also false. Your hatred of coasts is bizarre and incomprehensible.
Also, you can’t find any statements that I’ve ever made advocating socialism. You’re probably one of those tens of millions who don’t even know what socialism is. I don’t know where you get this notion that health care was cheap before Obamacare. That’s false as well.
So your statements to me today amount to one long rant full of nonsense and lies.
Apparently, MacBeth, you have some objection to some statements that I’ve made. You can’t mount any argument against them, so you make up a bunch of lies about my life and then criticize that fictional character that you’ve invented. Your brain should be studied to see what’s going on in there.
I take it your answer is no?
“I don’t know where you get this notion that health care was cheap before Obamacare. That’s false as well.”
Cheap?
No.
Much less expensive with much better coverage.
Healthcare use to be much cheaper in flyover for better coverage.
Back in 2011, I paid $105 monthly - as an individual - for 80/20 coverage and a $1000 deductible.
If Mikey can show me a plan that matches or betters that, I’m all ears.
MacBeth - this is totally nuts. Why do you think someone would totally disrupt his life on a dare so you can get some kicks?
Why don’t you go ahead and do what you’ve suggested yourself and let us know how it works out. Spoiler alert - nobody cares.
Don’t speak for others, Bubba/ Rental Watch. (Yes, I know you use two user names).
I have already done what I suggested to Mikey. Twice.
Sorry MacBeth. I’ve only used one name here for all the years I’ve been posting, and it’s not Ol’Bubba.
Realtors are liars.
Saw my first “one month free rent” ad in Ventura County, California yesterday. Along with some “no credit check fees” and low deposits to move in ads. Ventura is just north of Los Angeles.
There are so many projects about to come on line before the end of the year that it’ll be interesting to watch asking rent prices move downward.
RE: Affordability in San Diego
A figure on the front of the San Diego Union-Tribune Business section today documents that San Diego home sale prices had settled down to a relatively affordable median level of $300,000 just before the onset of the Fed’s housing market reflation program in January 2012. By this June, prices had blown up to a new historic high of $545,000, a near doubling of prices over a five year period.
No bubble here, folks…
((545/300)^(1/5.75)-1)*100 = 10.9% annual home equity gain on owning a San Diego home since early 2012. Based on the information in Robert Shiller’s Irrational Exuberance book, this rate of return is historically unprecedented before the start of the Housing Bubble around 1996 or so…
Miami Beach, FL Housing Prices Crater 5% YOY
https://www.zillow.com/miami-beach-fl/home-values/
“Now, with prices once again reaching record levels, banks and other mortgage lenders look to be taking steps to protect themselves.”
Listen up, pukes: The higher the price rise the closer to the top prices get. This could only not be true if there is no top to the prices.
If you do not believe any of this then are welcome to visit me and receive from me a free cup of coffee and a free shot at my Dotted Line Special.
(Also, please bring along with you information as to your blood type and a list of all of your body parts that are recyclable.)
Not to worry, Mr Banker: The mortgages are federally insured at subsidized rates, they have all been sold to and securitized by Fannie Mae and Freddie Mac, and the Fed stands ready as buyer of last resort in case rates rise and prices tank.
It’s turtles all the way down.
There must be a reason they are cracking down on condo HOA’s. Lenders can be forced to pay up on government backed MBS/HUD loans in certain circumstances. It’s rational to tighten up as risk gets higher. This is the first instance I can recall since 2012 or 2013.
The lenders should review the amount of money in the reserve accounts. California requires a reserve study but not a percentage of funding. A loophole.
I made the mistake of purchasing a townhome in Rancho Mirage where the reserve study stated the HOA needed $2.5 million and there was zero. The board states they are smart not to waste money sitting in an account. They have kept the fees artificially low and have run the complex into the ground.
The appraisers should give value to an HOA that has a high reserve funding versus one that doesn’t.
I ran/sold from that place like my hair was on fire.
Very interesting find. It was around the last peak that bad HOA stories started to surface in some of the buildings I keep an eye on. Now I wonder if the reason those stories came out at that time is because of this kind of lender issue…
Bubbles are great for corrupt HOAs because buyers feel excused from any due diligence thanks to bidding wars and an endless supply of greater fools, so who cares if the building is well-run as long as the lobby looks shiny? I can see why lenders want assurances that the building finances are stable - should have been doing that all along.
From the Xinhua article:
“According to my understanding, immigrants are the major cause for growing housing costs. The weather, the location and the good opportunities attract more and more immigrants, LA is usually the first choice for new immigrants, especially the Asian and Latino immigrants,” William Yu, the economist of UCLA Anderson Forecast, said.
Well, there you have it.
And then after a few years in Cali, like the person Ben quoted in his excerpt for today’s post, these immigrants move on to Texas, where the state government here counts them as “domestic migration”. And then they drive the prices up here as well.
Real Wages Keep Powering Ahead, but Can the Trend Last?
Shifts in inflation result in stronger overall gains for earners, but changing dynamics may end that
By
Eric Morath
Updated Sept. 24, 2017 11:03 a.m. ET
You probably can’t tell from looking at your paycheck, but hourly wages in the U.S. are racking up solid gains. That is, if you take very low inflation into account.
Average wage growth has been steady, unspectacular and below historic norms for several years. But workers have been able to stretch their paychecks farther because inflation is so low.
Real wages for nonsupervisors, which take inflation into account, topped $22 an hour this year, the best inflation-adjusted reading since January 1973, according to Labor Department data. The nonsupervisory figure covers about 70% of the workforce and excludes managers who are more likely to receive bonuses, stock options and other forms of nonwage compensation.
In the past decade, real-wage growth has been stronger than during the economic cycles of the 1980s, 1990s and early 2000s, according to a paper the Brookings Institution’s Hamilton Project released Sunday. Inflation-adjusted wages have increased at a 0.82% annual rate since the recession began in late 2007. In contrast, real wages declined in the 1980s, and rose at 0.71% and 0.31% rates, respectively, in the cycles of the 1990s and early 2000s.
https://www.wsj.com/articles/real-wages-keep-powering-ahead-but-can-the-trend-last-1506265200
You probably can’t tell from looking at your paycheck, but hourly wages in the U.S. are racking up solid gains
Hmmm … could that mean that we aren’t getting these mythical raises?
If I stay at my current job, it will be the third year in a row that I won’t get a raise, even though in my latest performance review I was rated overall as “outstanding” (the highest rating).
I’m expecting a couple of job offers to finally arrive next week. We’ll see how good the pay bump is, if any at all. It wouldn’t be the first time I got an offer for a lateral with no pay increase.
Hmmm … could that mean that we aren’t getting these mythical raises?
Spot on, inCO.
Notice that they quote “average wage growth”. The average is fairly meaningless, as it is affected by outliers—it would be more illuminating if they would quote the median.
Do you really believe wages will triple or quadruple to meet grossly inflated prices?
Of course not.
Prices will continued falling to dramatically lower and more affordable levels to meet wages.
Redwood City, CA Housing Prices Crater 13% YOY
https://www.zillow.com/redwood-city-ca/home-values/
is there any value out there anymore? Everything seems ridiculously overpriced.
People buying grossly overpriced tech stocks sure have some br@ss balls.
Their free health care is the #1 bitch bag
Same for canaduh ,etc.
Btw you work 3.6 times as many hours to pay for hc today vs.
1950s (Forbes)
Big gov
‘President Trump and Republican leaders plan to cut the top tax rate for the wealthiest Americans to 35 percent and dramatically reduce taxes on big and small businesses, according to details leaked to Axios.’
‘Realtors and home builders won’t be happy with the doubling of the standard deduction. That’s because lots more people will take the standard deduction and many fewer will itemize their tax returns. A prevailing belief in the real estate world is that under those conditions, fewer people will take the mortgage interest deduction, which could mean fewer homes being purchased.’
https://www.axios.com/exclusive-trump-gop-to-cut-top-rate-to-35-percent-2488858973.html
What if the UHS see the MID eliminated and property taxes not deductible?
“94,785,000 Not in Labor Force; At 62.9%, Labor Force Participation Stuck Near 38-Year Low”
https://www.cnsnews.com/news/article/susan-jones/no-records-set-august-number-employed-americans-drops-participation-rate
I should know this, having had a macroeconomics course or two along the way, but why isn’t the unemployment rate more like 37.1% than 5% if only 62.9% of us working age adults have jobs?
Retirement isn’t considered to be unemployment. That’s one reason.
Retirees are excluded.
Stamp.Feet.Now.
We’ve been over this before. The statistic includes every person aged 16 and older.
https://data.bls.gov/timeseries/LNS11300000
It also includes every person who is either employed or looking for work. That’s the definition of participation.
Excluding retired.
Sorry.
If you are a college student, are you unemployed?
Stay at home mom?
Don’t want a job (for whatever reason)?
If the measure is intended to be indicative of labor market strength (how easy it is to get a job and be paid), you need to exclude people who choose not to participate.
Now, I disagree with excluding “discouraged” workers…those who have been unsuccessful for so long in finding work that they have simply given up, which is why I think U-6 is a better measure of unemployment…but even that’s only at 8.9% now.
I think they only count as unemployed those currently receiving government unemployment benefits.
‘British food delivery company Deliveroo has raised $385 million in private funding, it said on Sunday, as it prepares for expansion to help it compete with publicly traded rivals such as Delivery Hero and Just Eat. The funding values the business at more than $2 billion and will allow Deliveroo to enter new markets, enlarge its technology team and expand its concept of delivery-only restaurants run out of centralized kitchens it operates, the company said.’
‘The company has raised $474.6 million since it’s founding in 2012, according to venture funding data from Crunchbase. Like taxi app Uber, which was stripped of its London operating license on Friday, Deliveroo has been criticized by unions that say it is exploiting staff by not offering basic protections. Some of its delivery riders are pursuing legal action to push for workers’ rights.’
‘Deliveroo has previously said it would give its self-employed riders insurance and sick pay if the government changed the law so that it could offer some, rather than all, the entitlements enjoyed by full-time staff members.’
‘Deliveroo increased revenue by more than 600 percent last year while operating losses mounted, albeit at a slower rate, parent company Roofoods said in a Sept. 20 regulatory filing. Revenue grew to 128.56 million pounds ($173 million) but delivery costs and administrative expenses resulted in an operating loss of 141.05 million pounds, up 367 percent year on year, it said in a filing’
‘Though the company trumpeted a $2 billion-plus valuation, that remains less than half those of its listed rivals. Delivery Hero’s market capitalization is 5.95 billion euros ($7.11 billion) while UK-based Just Eat’s valuation is 4.66 billion pounds’
https://finance.yahoo.com/news/uk-food-delivery-firm-deliveroo-103127804.html
‘Revenue grew to 128.56 million pounds…an operating loss of 141.05 million pounds’
A loss greater than its revenue, and it’s worth 2 billion Yellen bucks.
Sounds like Scamazon and crApple.
Personally, I think Apple products are overpriced. But at least they :
1) Make computers and smartphones, instead of delivering pizza and Chinese takeout
2) Apple does make a hefty profit, at least for now
Doubtful.
How could they not make a profit selling phones that cost $100 to make for $800 or more? And every time they introduce a new model, people line up to buy them, throwing away their perfectly good existing phones.
I seem to recall reading that they have over $200B in cash overseas, lobbying for a tax holiday so they can repatriate it here.
More YellenBux looking for a place to die.
And every time they introduce a new model, people line up to buy them, throwing away their perfectly good existing phones.
Interesting data point on that. I don’t know what the data is in the USA but there were basically no lines in China this time for the 8, which was a big change from the previous releases.
No lines really in the US either. I’m glad Apple is keeping the SE. That’s the cheapest model (and the one I’m using).
If they forced me to pay $1,000 for my next iPhone, I would seriously consider an alternative…the number of things that I need that are tied to the iOS ecosystem are shrinking every year.
So the big question we’ll have to wait another month or two to find out…are they waiting for the X? Or are we past peak iPhone?
Well, since Apple supposedly told their component vendors for iPhone X parts to slow down deliveries, it’s very possible that the 8 and X are landing with a thud.
“They bought it for the appreciation”
Used to be a business would start out small scale, to see if it could make a profit, then use profits to grow. The old school approach is obsolete in a world awash in cheap and easy money.
When the flood of conjured money recedes I wonder if any will be around who still know how to do a business.
When the flood of conjured money recedes I wonder if any will be around who still know how to do a business.
I doubt it. The credit flood has been going on so long that even small business owners think it’s normal to make thin margins and have to constantly roll-over loans to keep cash flow going. I suggested, in a small-business group I belong to, that this is really not a good idea, and that if you need to borrow money constantly your margins are too low. I was told that’s just the way it is now.
Dry cleaner effect, as Ben would say.
A loss greater than its revenue, and it’s worth 2 billion Yellen bucks.
A service where cyclists pick up food at the restaurant and pedal to your house to deliver it.
https://static.independent.co.uk/s3fs-public/thumbnails/image/2016/06/03/14/deliveroo.jpg
This is “tech”. What’s next? Summoning Rickshaw drivers with your iPhone?
At least Uber uses cars. Oh, and London has banned Uber.
Rumblings about fair housing again. Certainly a legitimate issue, if an equally qualified individual of one race is being unfairly treated because of his race, and not because of his creditworthiness. But somehow, I suspect this is about the Newspeak “affordable housing” wherein government injects more money into riskier mortgages at the lower end of the market to keep the party going at the higher ends.
Fair housing in Fairfax County? Not quite, report suggests
by: Max Smith, WTOP
September 21, 2017
The report, released last week for public comment, found that discriminatory lending practices and the county’s development policies have limited the housing choices available to its black population.
In more than 82 percent of the county’s census tracts, the proportion of black households is significantly less than would be expected if black households were able to live where they could afford to live in Fairfax County, the report concludes.
While several Fairfax County supervisors raised concerns about certain details or recommendations in the 309-page report, Chairman Sharon Bulova said the higher rate of rejected mortgage applications for minority groups and the higher rate of subprime or other risky loans given to minority
For Fairfax County, the report recommends steps to create more affordable housing such as reducing the number of parking spaces required for each unit, requiring affordable units in more developments, and rezoning more land to allow for multi-family developments.
After public comments, the board is due to receive the final report Oct. 24.
http://wtop.com/fairfax-county/2017/09/fair_housing_fairfax_report_suggests_not_quite/
“the proportion of black households is significantly less than would be expected if black households were able to live where they could afford to live ….the report recommends steps to create more affordable housing”
That is rather stupid. If it is discrimination based on race, affordability isn’t the issue.
NFL
no fans left
It does seem a bit odd to so vigorously exercise “free speech rights” on the job. Anyone behaving thusly in any of the various work environments I have enjoyed over the course of my career would have been disciplined, then fired if the inappropriate behavior continued.
If anything, you keep your politics to yourself at the office, though this time around it does seem “safe” at work to bash President Trump. Has the Screecher won, I’m sure that saying anything bad about her at work would have put you on Santa’s naughty list.
You’d be disciplined for linking arms with someone? I guess that there are a lot of crappy jobs out there. Those players earned good through their years of hard work. They’re judged on their actual job performance on the field.
Isn’t it also odd to be signing the national anthem at “your job”, and to have your job televised?
BTW, I’m reminded of the Seinfeld episode where Elaine was shunned at work after she refused to take part in cake celebrations.
“Get well, get well soon, we want you to get well…”
Exactly.
If anything, NFL bosses should be mandating that their employees keep their political views to themselves while on the job and just play football. They have just alienated a vast majority of their red-state flyover country fans. Local talk radio this morning featured dozens of callers who have pulled the plug on the NFL (cancelling their cable TV NFL packages, for example).
And it’s comical that an African-American who has made it to the ultimate pinnacle of success and has achieved the American Dream, making tens of millions of dollars per year, can stand there and claim racism - if anything, his situation would prove the exact opposite.
If anything, NFL bosses should be mandating that their employees keep their political views to themselves while on the job and just play football.
They’d have to include that in the contracts with the players.
It’s interesting that those callers to right wing AM talk radio, who are often the nastiest, most wretched people you ever hear from, turn out to be such sensitive snowflakes who are so easily triggered.
Sensitive snowflakes? Project much, Mikey?
It’s called voting with one’s pocketbook.
It’s the American Way.
we should all hold hands in unity.
I could end this all in 1 week.
Allow the players to exercise their “free speech rights” by taking a a knee in protest during the National Anthem.
While they are on that knee require them as employees to read the contract of an Arena League Football Player.
What are the salaries of arena league football players?
1 Answer
Stefan Ignjatovic, Business and marketing consultant, focusing on IT and product development.
Answered Sep 21, 2016
As of July 2013, the Arena Football League’s collective bargaining agreement stated that players would be paid $830 per game, which amounts to a salary of $14,940 over an 18-game season. The season covers a span of four months, which forces most players to find employment elsewhere during the offseason. The previous pay rate in the Arena Football League was $400 per game. However, that salary led to a player’s strike prior to the 2012 season. The Arena Football League declared bankruptcy in 2009, in part because the league’s minimum wage was $31,000 per year, while the average salary was $80,000.
https://www.quora.com/What-are-the-salaries-of-arena-league-football-players
Denver, CO Real Estate & Homes for Sale, 3,464 Homes
https://www.realtor.com/realestateandhomes-search/Denver_CO
Denver, CO Real Estate & Homes for Sale, Price Reduced, 864 Homes
https://www.realtor.com/realestateandhomes-search/Denver_CO/shw-pr
25% of all Denver sellers slashed their price at least once
Sorry to go off-topic…but I can’t resist.
http://reason.com/blog/2017/09/21/climate-models-run-too-hot-settled-scie2
Don’t forget actually going to the link.
“The science is settled” my *ss. About the only thing “settled” is that CO2 is a weak greenhouse gas.
All the important things…like how much CO2 influences warming, how much much of an increase in CO2 is too much, or whether there are better options for the resources that could be used to lower CO2 concentrations in the atmosphere, are still hotly (pun intended) debated.
carbon dioxide is rising around 2-3ppm a year in our atmosphere
here are the numbers over the last 10 years from the NOAA
Up-to-date weekly average CO2 at Mauna Loa
Week beginning on September 17, 2017: 403.06 ppm
Weekly value from 1 year ago: 401.08 ppm
Weekly value from 10 years ago: 380.81 ppm
Keep in mind over the last 800,000 years that C02 has never risen above 280ppm in every interglacial- the range from ice age to interglacial is 100ppm- 180ppm during an ice age. The rise from 180ppm to 280ppm take around 10,000 years. Over the last q0 years we have risen 23ppm- a rate that would take about 2500 years in the Milanokovic cycles.
Miami is doomed- sea rise by mid century is projected to be 1-2 feet higher. Heat indexes will make most of the American south and southwest virtually uninhabitable in the summer.
Yawn…