October 5, 2017

It’s Easier To Find A House Than It Was During The Boom

A report from the Nashville Post in Tennessee. “On the surface, it’s been a stellar 2017 for the Nashville real estate market. In fact, the city’s real estate sector could easily be placed in the national ’supernova’ category. Despite the positive press, there are complications hidden ever-so-slightly beneath the surface. ‘We are already seeing an absorption rate that just doesn’t work. There are parts of East Nashville where no one should be building new houses. They have plenty of inventory,’ says John Brittle, who has been active in Nashville’s residential real estate sector for 30 years. ‘There are people buying lots where they think they can put two houses but they can only put one. There’s a lot more being built than they think because they don’t study the whole market. The competition is getting really tight, and the developers are willing to go ahead and build and make less per house. That’s going to give us an inventory glut in certain places.’”

“‘By the end of this year, I believe we’ll see investors losing money on real estate deals in certain areas,’ Brittle predicts. ‘[They will have] paid too much for a lot because construction costs went up too high and because of added costs related to regulations such as Nashville’s new sidewalk bill.’”

The Denver Channel in Colorado. “Home prices in the Denver metro area dropped slightly again in September, signaling that the typical seasonal slowdown is underway. The biggest change in September was the number of sold homes. While it’s typical to see a decrease of about 10 percent this time of year, last month saw more than 21 percent fewer homes sold. The double-digit decreases were consistent across single-family and condo properties.”

“According to DMAR, agents have reported that home showings are starting to slow down and some buyers are lowering prices to entice more buyers. Agents also are seeing an increase in homes falling out of contract and going back on the market. ‘We’re starting to see a slowdown in overall housing market traffic even in the lower price ranges,’ said Steve Danyliw, chairman of the DMAR Market Trends Committee.”

The Hartford Courant in Connecticut. “Home sales in greater Hartford perked up in August, but prices paid dipped the most for any month so far this year, a new report shows, as potential buyers remained cautious about making purchases. Carl Lantz, the association’s president and a real estate agent at Re/Max Premier in West Hartford, said houses that have the latest updates in kitchens and bathrooms and are in desirable locations are selling well, often with multiple offers.”

“The trouble is the ’shadow inventory’ of dated homes where sellers are often forced to reduce asking prices to lure in a buyer, Lantz said. ‘There’s insecurity in the economy as a whole in Connecticut where buyers chose to buy homes that are renovated and homes that are not renovated suffer in price,’ Lantz said.”

The Naples Daily News in Florida. “Naples area Realtors had a great summer, until Hurricane Irma came around to spoil it at the end. There was virtually no activity going on in the MLS for almost two weeks after the hurricane, said Wes Kunkle, president and managing broker at Kunkle International Realty in Naples. ‘Next month’s numbers may show kind of a downturn,’ he said. ‘But I think it’s going to be kind of a false downturn hopefully.’”

The Stockton Record in California. “Christina Fugazi was among the supporters nearly two years ago when the council approved a temporary but significant reduction in the fees housing developers must pay before they can build in Stockton. The goal was to quicken the pace of single-family and multi-unit residential construction in the city, but so far the results have been lackluster, Fugazi acknowledged. ‘Building is taking place everywhere around Stockton, but not here,’ said Fugazi, whose council district includes downtown.”

“‘It’s still really challenging,’ Community Development Director David Kwong said of Stockton’s housing conditions. ‘If the market is not there to construct those units … then people won’t build them.’”

From KFYR TV in Montana. “It’s a lot easier to find a house for sale in Sidney, Mont., than it was during the oil boom. ‘There’s like to me houses here it’s hard for people to buy because they can’t afford to buy it because it’s out of their price range,’ said Kim Hall, Sidney resident.”

“During this slowdown stage that’s lasted for at least a year, 130 homes are on the market. ‘This is actually the highest inventory I’ve seen. We are definitely looking at the most options families had to look for homes in a long time,’ said Amanda Seigfreid, Missouri River realtor. Seigfreid says sellers shouldn’t think all hope is lost. Interest rates are still low, so buyers have plenty of options. ‘When there was more people looking, than there was homes available, there was less to choose from prices went up. Right now there’s so much to choose from, the prices have come down,’ said Seigfreid.”

“Sidney resident Tammy Pederson says this is her first time selling her home, and says she’ll just have to be patient. ‘The process it’s slow, but it’s definitely a house worth being seen so we will wait for the right buyer and hopefully it will get sold,’ said Pedersen.”

From Crain’s New York. “It’s a buyer’s market in Manhattan, where more homes traded hands during the third quarter of the year than at any time since 2015. And because house-hunters refused to budge on offers, sellers had to adjust and include discounts averaging 6%, according to a report. ‘Buyers are just sitting there, waiting for the sellers to get in sync with what is happening now, and not what was happening two or three years ago,’ said Jonathan Miller, head of appraisal firm Miller Samuel, which prepared the report.”

“New developments appeared to have a record-setting quarter, but Warburg Realty noted that these figures are actually indicative of when the contracts were signed, and are not a good barometer for what is happening now. ‘Most of those records … pertained to deals signed several years earlier for buildings then under construction,’ Warburg head Frederick Peters wrote in his market report. ‘For those buyers who have wanted to flip their units after closing on them, the resale market has been less kind.’”

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Comment by Ben Jones
2017-10-05 07:11:05

‘Welcome to Manhattan, the new home of the bluelight special.’

Comment by Ben Jones
2017-10-05 07:12:33

‘The process it’s slow, but it’s definitely a house worth being seen so we will wait for the right buyer and hopefully it will get sold’

Don’t give it away Tammy, you’ll screw up the comps.

Comment by Lesser Fool
2017-10-05 12:09:26

The problem is not the asking price; it’s the fact that it’s not “being seen”. If that’s her worry why not just price it real low so that everyone comes to see it?

Also, who is a “right buyer”? A young family that really appreciates this beauty of a house and how well it’s been maintained who can make a reasonable offer, or some faceless Chinese investor who will offer well over asking price, sight-unseen?

Comment by Mafia Blocks
2017-10-05 12:15:25

Empty pockets better known as dumb borrowed money doesn’t comprehend the term “reasonable offer”. They’re told what to pay. That is reinforced by the empty pocketed fools who came before them who have no hopes of ever recovering from their mountain of debt and losses.

Comment by Ben Jones
2017-10-05 07:14:29

‘It’s still really challenging,’ Community Development Director David Kwong said of Stockton’s housing conditions. ‘If the market is not there to construct those units … then people won’t build them.’

Maybe you need a billboard telling everyone there’s a shortage of shacks in California.

Comment by Mafia Blocks
2017-10-05 07:18:03

“buyers chose to buy homes that are renovated and homes that are not renovated suffer in price”

Why? Because houses are rapidly depreciating assets. The slow drip of bank account robbing depreciation day after day after money losing day.

Comment by Senior Housing Analyst
2017-10-05 07:27:47

Naples, FL Housing Prices Crater 4% YOY


Comment by Mike
2017-10-05 07:36:48

This won’t help housing

Comment by Mr. Banker
2017-10-05 08:56:04

A nation of dumb sh1ts.

Comment by GuillotineRenovator
2017-10-05 11:30:10


Comment by Jingle Male
2017-10-06 07:10:21

That is almost as many deaths as the ones caused by firearms each year. The number will have no impact on home sales……

Comment by Ben Jones
2017-10-05 07:44:38

‘the city’s real estate sector could easily be placed in the national ’supernova’ category’

There should never be a supernova in housing.

‘We are already seeing an absorption rate that just doesn’t work. There are parts of East Nashville where no one should be building new houses. They have plenty of inventory’

I hope no one overpays in such an environment.

Comment by taxpayer
2017-10-05 08:10:28

on House Haters HIVtv show e nash is totally cool if you play guitar

Comment by CHE
2017-10-05 12:45:48

Nashville eh —

My bedroom window in my apartment overlooks a street full of 1930’s 1.2M+ 2 bed 1 or 2 bath bungalows in West Hollywood, CA.

I met one of my neighbors who lived in one of those bungalows several years ago and would see him out occasionally at the local watering holes.

He recently moved to Nashville. It did seem like a hot market and he kept “not getting” places he was trying to buy. He finally DID “get” one. Looked like a modest 3/2 40-50 yr old crap shack on a decent size lot.

I distinctly recall him in the bar a week before was about to move scared fecesless because he was having trouble getting the financing through and said he was going to have to get lid of his car lease to make it work.

Ok dude - your house has appreciated hundreds of thousands of dollars - you should be able to pay cash for a modest TN crapshack?

Now it makes sense - I did some research.

- He sold for 1.32M. But he BOUGHT for 950k back in 2007. No wonder when someone on the street had to sell quickly and asked 750k he went in to a meltdown. (this was like 2011ish)

- He never seemed to have *a* job. He had all sorts of projects with washed up celebrities and drag queens. Towards the end he was constantly bitching about his Air BnB “guests.” (Scrubbing toilets sucks!) He was also helping to manage another house on the street some rich NY d-bag bought to Air BnB.

Methinks he must have pulled most of his “equity” out of the house.

Comment by Apartment 401
2017-10-05 15:59:45


Comment by oxide
2017-10-06 13:38:02

So he was trying to buy in Nashville while he stilled lived in W Hollywood? Why didn’t he move and rent for a year first? Or why didn’t he buy a boonie-land house 20 miles away from the city center and try to move closer later? Taxes, maybe?

Comment by taxpayer
2017-10-05 08:08:59


crowd fund - no money of your own !!!
even HA will do this deal

Comment by 2banana
2017-10-05 08:31:22

What could go wrong?

It’s gold Jerry! Gold!


CMG Financial, a mortgage lender, just launched HomeFundMe, the first online platform that allows borrowers to crowdfund the down payment on a home purchase without fees and with the backing of mortgage giants Fannie Mae and Freddie Mac.

“This allows you to tell your story. It allows for folks to be able to buy into the story of what it is you have, your loan story, your home story,” said Christopher George, CEO of CMG Financial and vice chairman of the Mortgage Bankers Association. “Our tag line is, ‘Fund your way home.’ We think homeownership still is very sensible and, done correctly, is a good idea to step forward toward wealth, stability and quality of life.”

As an incentive for encouraging prospective homeowners to attend credit education courses and counseling, borrowers can also receive grants of up to $2,500 once they’ve completed the free classes. After that, the platform will match donations at $2 for every $1 raised, up to $2,500.

One of the biggest criticisms of lending during the housing boom and ensuing bust was that homeowners were able to finance their properties so easily, with little to no money up front, so they had no “skin in the game.” They, therefore, found it much easier to default on the loans when home prices crashed and walk away from the homes altogether.

“I have qualms with anybody getting a loan who can’t put some down payment down themselves. Those types of borrowers typically are one water heater away from missing their payments, going into default, maybe losing the house to foreclosure,” said Rick Sharga, executive vice president at Ten-X, an online real estate sales and auction company.

Comment by CHE
2017-10-05 12:53:02

I don’t understand the obsession with a downpayment.

For me, it’s not the down payment - it’s the actual monthly nut. Even with a 10-20% down payment, no debt and almost 6 figure salary, I still couldn’t comfortably afford an equivalent of what I rent.

So if I can’t do with all that going for me, how are all these programs with 0, 3, 5% interest rates and other gimmicks going to help the poor saps who are worse off? The monthly payment would be even higher?!!?!

Comment by 2banana
2017-10-05 12:58:39

It used to be in the bad old days of when banks ate their bad loans…

Nearly all required 20% down.


If the market had a 10% downturn - you were not likely to walk away. And you would struggle to make the monthly payments because you didn’t want to lose your 20% in a foreclosure.

As we have seen. Those with 0-3% down payments will walk in a heartbeat (or just not make payments knowing the foreclosure process can take years)

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Comment by Rental Watch
2017-10-05 16:50:38

And more importantly, if you did walk away, the bank could sell the home and get repaid.

Comment by 2banana
2017-10-05 08:23:32

But…but…fake news with fake statistics claims obama was the deporter in chief.

Just think - every illegal caught and deported is one more apartment or house added to the inventory


U.S. Border Crossings Are Fewer, Riskier and More Expensive
WSJ | Oct. 5, 2017 | Alicia A. Caldwell

The final few hundred yards of the journey into the U.S. for a group of 23 Chinese immigrants was a crawl through a cramped tunnel from Mexico. They emerged in the U.S. in late August from a two-foot-wide, weed-obscured hole, just beyond a U.S. border fence here.

There the trip came to an abrupt end.

U.S. Border Patrol agents arrested the 21 men and two women, along with seven others from Mexico, and they now face deportation after being turned over to U.S. Immigration and Customs Enforcement.

President Donald Trump has made cracking down on illegal immigration a priority of his administration. He has promised to arrest and quickly deport people trying to sneak into or living illegally in the U.S., build a wall at the Mexican border and hire at least 5,000 new Border Patrol agents. Though many of those measures have yet to materialize or even get funding, the number of people caught crossing the border since Mr. Trump took office has plummeted in comparison to past years, according to U.S. Border Patrol statistics.

While that falloff may reflect the deterrent effect of the new administration’s hard-line approach, there has also been a longer-term shift in the pattern of illegal migration to the U.S.

“Now what you are seeing are people who are more desperate,” Mr. Massey said, adding that smugglers have raised their prices as the border has become more fortified. “You are paying more for more services. The cost of getting though the border without inspection has really skyrocketed.”

“As the price goes up, the number of people crossing goes down,” Mr. Massey said. “And as the price has gone up, the methods used have become more serious.”

About a decade ago, agents were thought to have caught only about 69% of people trying to cross the border. By 2016, according to the government report, about 83% of border crossers were being caught.

Comment by 2banana
2017-10-05 08:26:27

Not…giving…it…away syndrome


And because house-hunters refused to budge on offers, sellers had to adjust and include discounts averaging 6%, according to a report. ‘Buyers are just sitting there, waiting for the sellers to get in sync with what is happening now, and not what was happening two or three years ago,’ said Jonathan Miller, head of appraisal firm Miller Samuel, which prepared the report.”

Comment by Mike
Comment by jeff
2017-10-05 09:24:36


Comment by Mafia Blocks
2017-10-05 09:41:00

Millions of poor people were roped into massively inflated mortgages in the last 10 years.

Comment by cactus
2017-10-05 10:10:41

Friend at work who buys , tears down and rebuilds Mansions in pacific palisades and Brentwood has a funny story.

Their 5.1M dollar house for sale has a offer from 2 guys one a doctor one a executive who write letters about how this is a perfect home for them and their young children, IDK were they got the kids? OK not important.

So friends husband and partners are thinking about it. Next day a old dude, 75 years old with his drop dead gorgeous 25 year old wife show up, wife likes it so the old guy on the spot makes a full price cash offer 15 day escrow. SOLD

The selling realtor wants the full 5%. the old guy has no realtor just a walk in. My friend says no so realtor folds for 2.5% 127K

RE madness rolls on in super rich LA

Comment by jeff
2017-10-05 10:42:18

Old Guys Rule

Comment by junior_kai
2017-10-05 12:01:02

Dumb money becomes smart money, and the old guy has gone dumb.

Just saw a few more friends get brand new toyota pick ups - around 30K. A few of them probably dont make much more than that either. In the last 6-12 months I must know 2 dozen guys who have upgraded - must be some pretty nice terms.

Comment by junior_kai
2017-10-05 13:13:38

Also just found out a friend bought a house - didnt even know he was in the market, but his girlfriend is expecting so maybe nesting instinct kicked in. Anyway, hes a .gov worker, probably makes @75K and not quite 30. Cant get a place cheaper than 400K where he bought, and that would be pretty much a shack or a condo. He was looking at places a year or two ago and I told him to wait as its going to implode. He’s the second guy around that age that I know has bought in the last 6 months, and neither are in a very good position IMO.

Once again the carnage is not going to be pretty.

Comment by 2banana
2017-10-05 13:36:03

Unmarried girlfriend pregnant with his kid buying a house he can’t afford….

It’s Gold Jerry! Gold!

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Comment by junior_kai
2017-10-05 16:29:33

He hasnt gotten back to me with his new address, so I searched recently sold but couldnt find anything - maybe just happened and not in the online database yet. Curious how much of his neck is on the chopping block - might have gotten something for around 500K. I figure the parents might be writing checks down the road if something goes south, seen that before.

I did find the records for a former boss’ house - he sold it a few months ago - started out at 900K, took a year and a half to sell - for 750K. He bought when the bubble was just starting to get into gear for 530K and put a decent amount in for upgrades - kitchen, bathrooms, paint, maybe even a new roof as its pretty old. With property taxes and interest not sure he came out with much at the end. Now he and his wife are empty nesters and renting a small cottage while he wraps up what is likely his last year of work before he retires and they figure out what to do next.

Comment by rms
2017-10-05 19:52:15

“Once again the carnage is not going to be pretty.”

Inputs: girlfriend is expecting, probably makes @75K, can’t get a place cheaper than 400K where he bought… yeah, he’s finished.

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Comment by rms
2017-10-05 19:58:37

Next score… dead bedroom.

Comment by da bear
2017-10-06 08:02:51

You NEVER go Full 5%.

da bear

Comment by Apartment 401
2017-10-05 11:04:32

Realtors are liars.

Comment by Senior Housing Analyst
2017-10-05 11:09:48

Silverton, OR Housing Prices Crater 17% YOY


Comment by Barney
2017-10-05 16:53:40

These “cratering” comments are frequently misleading, as in this instance. The link shows that the homes listed for sale are 21% smaller than in the previous year. Price per square foot currently is up 11% over last year. Please, apples to apples.

Comment by Senior Housing Analyst
2017-10-05 17:16:27

It is the falling transaction price that is important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.

Comment by Rtratt
2017-10-05 18:35:49

So, to be certain I understand (comparing apples to apples), if I see that the apples available in my grocery store are 21% smaller than they were last year, but that the price has increased 11% per pound since last year, the grocer should be able to convince me that apples have “cratered.” I think “Barney” has the better argument.

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Comment by Senior Housing Analyst
2017-10-05 18:49:02

We all understand falling prices. For example, lets examine Redwood City, CA in the SF Bay area. Prices fell 12% YOY. We don’t buy houses by the square foot. We buy the whole house.

Redwood City, CA Housing Prices Crater 12% YOY


Comment by redmondjp
2017-10-05 21:56:05

Are you off your meds again HA? Creating new imaginary posters here so you can have conversations with yourself again?

Comment by Econ_Teacher
2017-10-06 06:38:36

You guys really need to read up on marginal analysis. Then again, your ignorance of economic fundamentals helps explain why we find ourselves in this situation yet again within 10 years. Lucky for you, Ben Jones is offering a helping hand. So is Housing Analyst. Send him some Christmas cookies for the consistent warnings. And read a primer on econ.

Comment by In Colorado
2017-10-06 06:53:38

Ben provides useful data. HA, not so much.

Comment by Jingle Male
2017-10-06 07:28:21

Marginal analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Companies use marginal analysis as a decision-making tool to help them maximize their potential profits.


Comment by Mafia Blocks
2017-10-06 07:48:41

Hello my good friend.

Denver, CO Housing Prices CRATER 16% YOY


Comment by BlueSkye
2017-10-06 08:35:47

In the rise of the bubble people bought the biggest house they could, to get the payout. Eventually when this deflates people will buy as small a house as they can get by with, to reduce the payout expense.

Our friends who are living in the mania will always pop up to dismiss this simple fact.

Comment by In Colorado
2017-10-06 09:43:45

You’ve been writing your “prices crater” posts all these years during the bubble, while prices have soared into the stratosphere.

Don’t you get tired of being wrong?

Comment by Mafia Blocks
2017-10-06 10:21:13

Boots on the ground data says prices are falling. At least in Denver. Sorry my friend.

Comment by hllnwlz
2017-10-06 13:27:07

“Marginal analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.”

Read differently, assuming some critical thinking ability, you would understand that this could also mean the additional benefits of “extra square footage”, a “prime location”, a “remodeled kitchen” etc.

If someone values that additional benefit less than you do, and he is the ONLY buyer, you are SOL.

But good job quoting the interwebz, son.

Comment by Mafia Blocks
2017-10-06 16:52:09

Relax. They’re just a bunch of good friends who are figuring out they paid too much for a shack.

Comment by jeff
Comment by Apartment 401
2017-10-05 11:29:37

No “pent-up demand” for $500,000 starter homes happening here:


Comment by Apartment 401
Comment by 2banana
2017-10-05 12:10:52

How does California pass a law that trumps federal immigration law?

Can Texas pass laws that trumps federal gun laws?

Can Michigan pass laws that trumps federal environmental laws?

Can Virginia pass laws that trumps federal voting laws?

Comment by 2banana
2017-10-05 12:26:04

And then the music stopped…


Update on the Deflating Housing Bubble in Toronto
Wolf Richter • Oct 5, 2017

Home sales in the Greater Toronto Area plunged 35% in September compared to a year ago, to 6,379 homes. The plunge in volume was spread across all types of homes. Even condos got hit:

Detached houses -40.4%
Semi-detached houses -30.2%
Townhouses -34.4%
Condos -27.5%.

As total sales plunged, new listings of homes for sale rose 9% year-over-year to 16,469, according to the Toronto Real Estate Board (TREB). And the total number of active listings of homes for sale soared 69% year-over-year to 19,021.

While Toronto’s housing market is still not drowning in listings, the plunge in sales volume and the surge in listings combined is a major change in market direction. And prices have followed.

The average price of all homes in the Greater Toronto Area, at C$775,546 in September, is down 16% from the crazy peak in April. Year over year, the average price is now up only 2.6%.

Comment by CorporateShill
2017-10-05 12:33:46

I watch the Tampa area market closely and I am seeing more ‘back on market’ and price decreases (from the MLS). I did not see any of these 3 months prior. These are lower to mid range priced condos and SFHs. I don’t know if this is indicative of just a seasonal slow down or indicative of the mid-range following the high-end slow down.

One of my colleagues (also a Corporate Shill) bought 2 higher end Tampa condos during the crash and has had to reduce rents to fill a recent vacancy.

Regarding QE causing deflation - Is it more accurate to say that QE causes purchases to be pulled forward such that demand is essentially tapped out after the initial ramp in purchases? Government programs such as Cash for Clunkers pulled a lot of demand forward as well when a large amount of used car inventory was purchased and destroyed by .gov. Now there is a glut of used cars on the market. We can call that program part of the Union protection racket….

Debt donkeys to the Moon!!!

Comment by clark
2017-10-05 13:45:19

RE: ‘Cash for Clunkers pulled a lot of demand forward as well’

No doubt. They certainly also destroyed the low end market. I couldn’t find a used 4×4, under 100,000 miles, for under ten grand, to save my life. It’s just like now with houses, rent for $1100 to $1500, or buy, which is the better deal? Renting for under $800 has all but dried up, a thing of the past, forget about sub-$400. It really is an HGTV mania.

In 2007, we bought a new 4×4, as a consolation prize to offset not being able to buy a house. Mang, do I ever wish, I would have held off. Just a bit, even!

In the background, I can’t forget Mr. Banker saying in response to a poster asking if they should buy, paraphrasing, “Yes, recognize the insanity/mania,… then join it” as if he were Darth Vader.

Again, thank you for your comments, Mr. Banker. That one will forever remain in my mind.

Comment by clark
2017-10-05 13:19:34

It’s been about 7 years since I rented my 3BD 2BA SFH here in the QCA. My landlord has deferred all maintenance, with the exception of keeping up, ‘curb appeal’ by trimming the hedges. The roof has been leaking, worse and worse, for the last 3 yrs. I think its developed a mold problem and I really need to move. It’s not like they don’t know about it, I tell them often. Last year, they said they, “didn’t get around to it” and this year they said a man was coming out to inspect the roof to put in a new one, but I never saw anybody. If it weren’t for the fact my rent never went up, I would have moved long ago. [If my rent never went up, in the face of rising inflation, didn't my rent really go down?].

They kind of shocked me when they asked if I wanted a replacement shed, and asked, did I ever use it. I don’t know how many times I told them the roof was leaking,… and, they say that? The landlord is a new homebuilder, btw. Thank goodness there’s not a worthless city inspector telling them to fix the ceiling, and not the roof, like last time.

I’m considering buying a mobile home as a stop-gap until prices correct. If I do, I’m sure I’ll be viewed as a failure, by my wife, and those I know. All the comparable houses to the one I’m in are renting for $1100 to $1500 per month, it seems to me, as in 2007, the rent-to-buy is shifting, I think, maybe, that’s a tell-tale-sign. And, I wonder, WHO has the money to pay $2800+ per month for the numerous and new construction made available for rent in this area? It’s not like this is beach-front California and the purchase price is a million Dollars. There’s only just so many John Derre executives working here to explain who is able to afford that.

Back in 2004, the realtor companies in this area only had one or two houses For Rent. Nowadays, they have several dozen, with more coming out every week. Are these the houses The Fed helped to keep off the books? It sure seems like they are being dribbled out, every week there are so many made available, contrary to years gone by when, come Winter time, the flow dried up. I drove down one street to look at a rental, judging by the no-curtains-see-through-look, it seemed like the whole block was empty. It was kind of creepy.

When did the realtor companies get into the rental business? 2007 is my guess. I wonder about the mechanisms behind it all. Realtwhores as landlords, it seems kind of, I don’t know, counter intuitive, or something?

Comment by 2banana
2017-10-05 13:38:54

The beauty of renting.

New roof plus mold remediation plus rotten framing replacement is about 25 grand…easy.

Not to mention no tenant while work is being done.

Comment by Carl Morris
2017-10-05 13:51:13

I’m considering buying a mobile home as a stop-gap until prices correct. If I do, I’m sure I’ll be viewed as a failure, by my wife, and those I know.

As some people may remember here I did that for a while back in Colorado. Worked out well there. But here in San Jose the lot rent is around $1500/mo which kind of defeats the purpose when trying to live cheaply.

Comment by BlueSkye
2017-10-05 14:08:20

“I’ll be viewed as a failure…”

Failure to buy what you cannot afford just to impress? It is the crowd of debt slaves who are the real failures. Don’t drown with the crowd.

Comment by Mafia Blocks
2017-10-05 14:11:59

Sounds like your landlord is cash flow negative.

Comment by oxide
2017-10-06 13:55:23

Whatever you do, pack up your stuff so you can move at a moment’s notice. Then if you have to, you can rent for 6 months or so while you find other housing options. Failure? Yeah sure. Just print a “failure” T-shirt and laugh it off.

Comment by Senior Housing Analyst
2017-10-05 13:28:15

San Francisco, CA Rental Rates Crater 7% YOY


Comment by StantheMan
2017-10-05 14:05:16


Lack of significant new condo inventory is pushing pricing up in several West Coast markets. At the end of August, there were 1,587 new condos on the market across San Francisco, Los Angeles, San Diego and Seattle.
Los Angeles, Seattle and San Diego each have only two major condo developments selling new product, which will continue to provide an anemic condo supply in these markets and drive up pricing in the downtown cores. San Francisco’s condo market has the most units available, and was the only city to report a pricing decline during the summer compared to 2016, according to data from The Mark Co.

Comment by Senior Housing Analyst
2017-10-05 17:17:49

Denver, CO Rental Rates Crater 8% YOY


Comment by azdude
2017-10-05 17:57:44

the second u start to believe in this stock market rally wall street will fleece u.They wont lose money. They need to hand this sh@t off to someone.

Comment by Professor 🐻
2017-10-06 02:02:58

I’m just about to throw in the towel on my pessimism and go all in to stocks.

Am I too late to get in on the act?

Comment by azdude
2017-10-06 04:54:45

that is your best move right now. thank me later!

Comment by Econ_Teacher
2017-10-06 06:42:49

Don’t do it, Prof. Your students need a moral compass and an IQ over 100.

Comment by jeff
2017-10-05 19:12:25

It’s not that I don’t enjoy being a crotchety old man, but these kids coming out of the blocks sure seem to have it stacked against them even if they are trying to do the right things.

Apartment List National Rent Report

By Andrew Woo and Chris Salviati
OCTOBER 01, 2017

Check out our rent reports for the following cities:


Comment by jeff
2017-10-05 21:56:00

Which American Cities Will File Bankruptcy Next?

by Tyler Durden
Oct 5, 2017 5:50 PM

We harp on the massive, unsustainable, yet largely unnoticed, debt burdens of American cities, counties and states fairly regularly because, well, it’s a frightening issue if you spend just a little time to understand the math and ultimate consequences. Here is some of our recent posts on the topic:

America’s Pension Bomb: Illinois Is Just the Start
Stanford Says Soaring Public Pension Costs Devastating Budgets For Education And Social Services
Pension Consultant Offers Dire Outlook For Kentucky: Freeze Pension And Slash Benefits Or Else

Luckily, for those looking to escape the trauma of being taxed into oblivion by their failing cities/counties/states, JP Morgan has provided a comprehensive guide on which municipalities haven’t the slightest hope of surviving their multi-decade debt binge and lavish public pension awards.

If you live in any of the ‘red’ cities below, it just might be time to start looking for another home…


Muddy1 Raffie Oct 5, 2017 6:20 PM

Overlay this map with states that voted for Democrats in the national, state, and local elections, and where union embership is big and see the parallel.

Raffie Muddy1 Oct 5, 2017 6:27 PM

I don’t consider them Democrats any more, they are Socialist, short and simple.

Shinebama Raffie Oct 5, 2017 6:34 PM

How right you are. http://rebelpundit.com/media-cover-up-at-chicago-teachers-union-strike-a...


Comment by 2banana
2017-10-06 00:22:12

2banana’s Law:

Long term democrat rule + public unions + free sh*t army = misery, ruin and bankruptcy

Comment by In Colorado
2017-10-06 09:35:06

Hmmm …

According to the color coded map, Denver’s in good shape (relatively speaking) and it doesn’t show up on the table below. Yet I’ve read that PERA is woefully underfunded.

Comment by oxide
2017-10-06 14:05:22

The Northeast and Rust Belt have decades of teachers and services to pay for. The prosperity of the Denver and the Upper South are relatively new, because their young people have effectively imported their education from somewhere else.

In 50 years, Denver, Austin, Raleigh-Durham etc may look just as bad as Destroit.

Comment by Rental Watch
2017-10-06 01:55:44

“The nearly $20,000 reduction represents a savings for qualifying builders of more than one-third of the $57,000-plus price fee before the discount.”

So….$37k just for the pleasure of building a home in Stockton…before you purchase the land, or put in the infrastructure…and that’s a discount from $57k (to which it’s returning).

You’re into a home $100k+ before you even pour a foundation.

Comment by Mafia Blocks
2017-10-06 07:45:00

Incorrect. Read up.


The “fee” is for actual work that is typically performed by the contractor but is instead performed by the municipality. It appears the owner is getting charged 2x for the same work.

Why is the contractor charging for work that is performed by the municipality?

We’re back down to a $1000 building permit with a going rate of $4/sq ft for formed surfaces, a $5k hole in the ground and you’ve got your foundation installed for a whopping $15,000.

Comment by Justme
2017-10-06 10:26:37

Very interesting, but I looked at the website and I could not figure out what basic work or improvements it is that the city of stockton will do for you. Can you please explain exactly what the city is doing for the fees?

>>We’re back down to a $1000 building permit with a going rate of $4/sq ft for formed surfaces, a $5k hole in the ground and you’ve got your foundation installed for a whopping $15,000.

What do you mean here?

Comment by Rental Watch
2017-10-10 16:58:43

Impact fees are not fees for building permits–that is a teeny, tiny part of the whole picture.


The guts of the impact fees are in the Public Facility Fees.

Starting on page F-90.

For Single Family Residential (there are many waivers for “downtown”…they are trying to jumpstart development there, but otherwise)
Ag Land Mitigation Fee: $14k per acre.
Air Quality: $187 per unit
City Office Space: $467 per unit
Community Rec Center: $481 per unit
County Facilities: $1,981 per unit
Fire Stations: $781 per unit
Libraries: $902 per unit
Parkland: $2,798 per unit
Police Station: $591 per unit
Regional Transportation Impact Fee: $3,223 per unit
Street Improvements: $13,226 per unit
Surface Water: $4,587 per unit

$2,174 for a SFR water connection.

That’s, in round numbers, about $30k per door.

The Stockton school district has a fee of $7.23 per square foot….$14k per 2k square foot house.

That gets you to $44k.

I’m sure there are other fees that I didn’t find that get to the reported number, but the point is simple…building permit fees are not impact fees.

(Comments wont nest below this level)
Comment by Professor 🐻
2017-10-06 02:00:11

‘Providing tax breaks for housing investors and then arguing that the property bubble it generates represents increased wealth makes no sense at all.’

No it doesn’t. It’s funny how governments on different parts of the planet use the same specious argument to justify bad housing policy, though.

Comment by Mafia Blocks
2017-10-06 10:57:10

Show me the fees and I’ll show you the work.

Comment by azdude
2017-10-06 04:56:44

my balance sheet is bigger than yours!

Comment by BlueSkye
2017-10-06 08:40:32

So read the graffiti on the outhouse wall.

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