The Desperation Of The Highly Leveraged
It’s Friday desk clearing time for this blogger. “Just outside Macomb city limits is the Georgetown subdivision with a look reminiscent of the colonial era. However, also part of the landscape — lots of ‘for sale’ signs. Real estate agent Steve Silberer said a few years ago, townhomes in the Georgetown subdivision would have gone for $90,000 on average, but today some are selling in the $50,000 range. ‘If I had a house on the market and I had to sell it, I would probably think there’s a crisis, there’s no doubt about it,’ Macomb Mayor Mike Inman said.”
“But Debbie Kendrick, president of the Mark Twain Association of Realtors, thinks the biggest issue in northeast Missouri is low inventory. She said there needs to be more available housing programs. ‘I’m not talking about apartments,’ Kendrick said. ‘We need more single-family homes.’”
“A new analysis puts Nashville as one of two cities most at risk for seeing home prices decline, elevating the threat level for Nashville’s housing market. Prices look to be softening already. In the past three months, median home prices have steadily declined from $294,000 in June to $280,000 in September.”
“Just in time for Halloween — Tampa Bay has plenty of zombies. Not the reanimated corpses of Walking Dead, but vacant houses that are in some stage of foreclosure but that have not yet been repossessed by the bank. According to ATTOM Data Solutions, the bay area is littered with 477 zombie foreclosures, ranking it fifth among the 150 largest metro regions. Only New York-Newark, Philadelphia, Chicago and Miami are more zombie-infested.”
“A prime example: a zombie in St. Petersburg’s Shore Acres neighborhood that first went into foreclosure in 2008. Several blocks way is a current zombie that has been in foreclosure since 2009 and vacant for years. Throughout the Tampa Bay area, a total of 26,132 homes were vacant as of this fall, ATTOM reported. Many of those are owned by investors who are renovating them or already have them on the market. In Hillsborough County, for example, 4,427 of the 5,974 vacant homes are investor-owned.”
“Nationally, ‘there is evidence that the ultra-tight inventory environment in some red-hot markets is beginning to ease just a bit, with vacant property rates nudging higher in markets such as San Jose, San Francisco, Los Angeles, Boston and Denver,’ said Daren Blomquist, ATTOM’s senior vice president.”
“Preconstruction sales of new low-rise homes fell 73 per cent in the Toronto area in September compared with a year earlier as the home-building sector faces major headwinds from the region’s housing-market downturn. The market for new condominiums also faced a drop across the GTA in September, with builders selling 1,749 units, down 37 per cent from 2,782 units last September. Combined sales of high-rise and low-rise homes dropped 48 per cent to 2,101 homes from 4,077 last year.”
“‘The launch frenzy that had characterized the market over the past year is over,’ said Patricia Arsenault, executive vice-president at Altus Group, which provides data on new home sales for BILD. ‘Buyers now feel that they can take a bit of time to shop around, without fear of losing out.’”
“The first signs of a potential correction in Sweden’s housing market may well appear in the country’s property-management industry. For Sweden’s biggest mortgage bank, Swedbank AB, that means its 221 billion kronor ($27 billion) in loans to property-management firms pose a risk that investors should watch closely, according to Danske Bank A/S senior analyst Matti Ahokas. These are ‘big exposures,’ he said. ‘Nobody really knows what’s happening’ with that market, he said. ‘If they end up in trouble, the banks end up in trouble as well.’”
“In Stockholm county, the average debt-to-income ratio for new mortgages is between 490 percent and 550 percent, according to figures from the regulator. But as Swedish authorities gradually introduce measures to cool the market, the risk of a correction grows if tightening is too sudden or coincides with higher mortgage rates. Ahokas says ‘it’s not easy braking,’ when the market is out of balance. ‘You can’t just tone it down a bit. Markets don’t work that way.’”
“Two-fifths of private homes coming up in Singapore, or 17,178 units, have not been sold, but the market could be flooded with close to the same number of new units soon, largely from the en-bloc fever seizing the market in the past year or so, data released by the Urban Redevelopment Authority (URA) shows. International Property Advisor chief executive Ku Swee Yong felt that there was an oversupply in the market, and this would continue to be a problem down the road. ‘If there is already oversupply, and we’re not able to bring in fresh demand, then it’s more sentiment, rather than real demand,’ he said.”
“Significant parts of the Sydney apartment market and the associated apartment land markets have cracked and are now suffering serious falls. The level of decline is much greater than most were predicting three to six months ago. The repercussions of what has happened in Sydney will quickly spread to Melbourne, although the blows may not be as severe in the southern capital because apartments are already much cheaper than Sydney. Brisbane is already in trouble so may be insulated from further big falls.”
“Apartments sold as used apartments in the big Sydney apartment estates have fallen by at least 20 per cent. The fall rate for individual sales can rise to 25 per cent. The price fall in new apartments bought either off the plan or as the developer sells a completed apartment are down in the vicinity of 12 per cent. A hypothetical apartment bought by an investor or a residential buyer for, say, $1 million in the boom (most two bedroom apartments were selling for between $1.2 million and $1.4 million) is now selling for $800,000 — a 20 per cent decline. If I want to buy that hypothetical $1 million apartment off the plan or as a completed unit it would cost about $880,000 — a 12 per cent decline.”
“The apartment land market in many areas of Sydney is in chaos. About a year ago prime apartment land in Sydney (with approvals) was selling between $350,000 and $400,000 per apartment that could be developed on the site.”
“Now anyone who bought that land would be lucky to get $280,000 and the desperation of highly leveraged selling and the lack of buyers can result in some land going for $230,000 per apartment — a fall of above 33 per cent. The losses are sickening. Again the great danger is that a vicious circle will develop, creating even bigger falls.”
“The Labour-led Government’s move to restrict foreign speculators from taking a chunk out of the property market is being questioned given a similar policy across the Tasman has done little to curb prices in Australia. Prime Minister Jacinda Ardern has said a Bill to stop overseas buyers from buying existing homes would be introduced by Christmas.”
“Auckland real estate agent Ollie Wall said if a cooler market was the idea behind the foreign buyers policy, that had already been achieved. ‘It has been achieved by the previous government through traditional ways and loan-to-value restrictions. It’s sort of flogging a dead horse.’”
‘The losses are sickening. Again the great danger is that a vicious circle will develop, creating even bigger falls’
We used to call that a bubble popping…
A dream to some…a nightmare to others!
https://www.youtube.com/watch?v=wuTviZDhXEE
++++
“Now anyone who bought that land would be lucky to get $280,000 and the desperation of highly leveraged selling and the lack of buyers can result in some land going for $230,000 per apartment — a fall of above 33 per cent. The losses are sickening. Again the great danger is that a vicious circle will develop, creating even bigger falls.”
$230,000 = land price per door in Australian dollars? That is $175,000 in US dollars per door.
Apartment land in the Sacramento market goes for about $30,000/door. That’s 20% of the Australian value.
Question for the group:
In other countries (ie. Australia) are loan losses eaten by the bank or do other countries package mortgages up into MBS securities and pawn them off to the government(s)?
In this globalized world, US investors could get hurt badly if they invested in Australian bank shares or (it they exist) MBS tranches.
One thing for sure, when this baby really starts to unwind, it’s going to be a mega-mess.
Put on your 10 gallon hat, sit back and enjoy the show.
To add to your question.
What countries are recourse where the banks can go after the mortgage holder’s other assets in case of a foreclosure?
Canada: Full Recourse
https://www.cmhc-schl.gc.ca/en/corp/nero/jufa/jufa_018.cfm
Australia: Full Recourse
http://theconversation.com/debunking-the-myths-peddled-by-australias-property-bubble-deniers-4488
Doesnt mean they cant change the rules and water down the rule of law like the US has done the last 20 years, picking winners and losers based on identity politics.
“…picking winners and losers based on identity politics.”
You can see the terrible fruit policies that target subprime loans on minority neighborhoods have borne:
And the previous episode is soon to be repeated:
It’s terrible to see Mel Watt focus predatory lending on his fellow African Americans.
It wasn’t low income minority neighborhoods that caused the crash. It wasn’t the community reinvestment act. Please read NBER analysis summarized here:
https://qz.com/1064061/house-flippers-triggered-the-us-housing-market-crash-not-poor-subprime-borrowers-a-new-study-shows/
The latest comes in a new NBER working paper arguing that it was wealthy or middle-class house-flipping speculators who blew up the bubble to cataclysmic proportions, and then wrecked local housing markets when they defaulted en masse.
As for those with low credit scores—the “subprime” borrowers who supposedly caused the crisis—their borrowing stayed virtually constant throughout the boom. And while it’s true that these types of borrowers usually default at relatively higher rates, they didn’t after the 2007 housing collapse. The lowest quartile in the credit score distribution accounted for 70% of foreclosures during the boom years, falling to just 35% during the crisis.
So why were relatively wealthier folks borrowing so much?
Recall that back then the mantra was that housing prices would keep rising forever. Since owning a home is one of the best ways to build wealth in America, most of those with sterling credit already did. Low rates encouraged some of them to parlay their credit pedigree and growing existing home value into mortgages for additional homes. Some of these were long-term purchases (e.g. vacation homes, homes held for rental income). But as a Federal Reserve Bank of New York report from 2011 reveals (pdf, p.26), an increasing share bought with the aim to “flip” the home a few months or years later for a tidy profit.
From the Reuters article:
“They said the U.S. Civil Rights Act should be amended to create mechanisms that would uncover discrimination and penalize those who discriminated against minority borrowers.”
That’s already IN the 1968 Civil Rights Act — Title VIII: Fair Housing Act. Those mechanisms already exist as the enforcement. So I’m not sure what they want. Longer statue of limitations? Retroactive reparations?
“So I’m not sure what they want.”
The Civil Rights Act espouses equal opportunity, which is a laudible objective.
But what they want is equality of results, which can only be achieved through discriminatory lending practices which are nominally illegal, but accepted in practice so long as the discrimination puts tradiitionally underrepresented minorities at an advantage over nonminority groups. The strategy is likely to backfire if those who are not favored by the policy refuse to play along.
“Retroactive reparations?”
That seems to be what Mel Watt is after.
“So I’m not sure what they want.”
In an ideal world, which doesn’t exist in American politics, they should want to provide a level playing field that eliminates racial discrimination and other forms of unfairness from the market.
In practice, American politics don’t happen without an unlevel playing field.
“…creating even bigger falls.”
It is right painful when your behind lands on them Joshua Tree quills.
‘Nationally, ‘there is evidence that the ultra-tight inventory environment in some red-hot markets is beginning to ease just a bit, with vacant property rates nudging higher in markets such as San Jose, San Francisco, Los Angeles, Boston and Denver’
Here’s a song for Jingle:
‘I feel tears wellin’ up cold and deep inside
Like my heart’s sprung a big break
And the stab of loneliness, sharp and painful
That I may never shake’
‘Now the race is on and here comes pride up the backstretch
The race is on and it looks like heartaches’
https://www.azlyrics.com/lyrics/georgejones/theraceison.html
Oh, his heart isn’t gonna ache.
He’s paying down $600 a month in principle! You can’t do that if you are debt free.
My biggest challenge is going to be replacing cash flow as I sell my properties. We have invested $250,000 in equity to produce produce about $40,000/year in cash flow (includes $15,000/ year in principal reduction.)
That equity is now about $1,200,000. We will net about $900,000 after taxes and depreciation recapture.
Where should I invest that $900,000 to get $40,000/year (4.4%)??
You can’t.
And you just provided a prime piece of evidence that the housing market is a bubble on the path to bursting.
The nature of Ponzi financing is that investors realize outsized gains in some special investment class for a protracted period of time compared to returns on other available investments, as hordes of investors pile in to join the speculative mania. This is followed by a collapse and a protracted period of outsized losses when the market finally sobers up.
I just saw a house pending for $1 million in the town I was raised. It’s less than 2k square feet, but it’s in a “quaint” area. This is a town with low wages. $300k would be a high price for it in normal times.
I can’t get 4.4%?
Sure I can. It just takes a little management. I am lending money at 5%, 6% and 10% to various people on 5 year fully amortizing loans.
I just bought out a limited partnership interest from some heirs wanting cash: 9% return.
Good deals are out there….it’s just more challenging than collecting rent on a high quality real estate portfolio.
“just bought out…9% return.”
More imaginary return?
Liar.
Well….. DramaDebtDonkey has been known to tell a few tall tales here and there.
We looked at his numbers a while back and it was clear he was making less than 1% ROI. Not great next to the risk of the large debt. Let’s hope our friend cashes out before the music stops.
“We”??
You……. looked and couldn’t tell the difference between equity and debt as it relates to NOI and ROI. You thought my cash flow return had to be based on the total value of the property, not on the amount of equity invested. I remember because I was astounded you were so ignorant.
Indeed. Not including borrowed money as part of the “investment” isn’t ignorant, it’s dishonest.
Blue, I think it is pretty common practice on a leveraged investment to only divide return by the cash investment that was put in, not the whole after-leverage total at-risk… That’s how leverage produces higher rates of return—but does carry with it amplified risks as well.
“Leverage giveth, and leverage taketh away”, as I like to say.
Call me old fashioned then. When I learned business economics, borrowed money spent with the same ROI requirements as saved money. If you don’t consider the loan a real obligation in case of loss then you are a liar the minute you borrow the money.
I’m not surprised if manic leveraged speculators make up their own ways of talking about things, so as to obscure the truth. In the casino, you can put your bet on a tab, but be sure you are betting real money.
I think a 1% return on a huge investment is something to be ashamed of, not something to lie about and say you made X% on “your” money.
I’m not afraid to be schooled differently by any other honest folk Prime.
I’ll call you old fashioned—and respect you for it, Blue.
I think you and Jingle are talking past each other, really; he’s using ROI when he really means ROE, and you’re calling him on the traditional definition of ROI. I agree with you that the full purchase price of the home really is the “investment” value. But his use or (slight mis-use) I think is also fairly common practice among RE investor. Maybe RW can speak to what that is common practice at the the larger commercial end rather than the mom-n-pop end.
“That’s how leverage produces higher rates of return—but does carry with it amplified risks as well.”
If you only mention your returns when you are winning the gamble, then leveraged bets look pretty attractive.
“I think you and Jingle are talking past each other, really; he’s using ROI when he really means ROE, and you’re calling him on the traditional definition of ROI. I agree with you that the full purchase price of the home really is the “investment” value. But his use or (slight mis-use) I think is also fairly common practice among RE investor. Maybe RW can speak to what that is common practice at the the larger commercial end rather than the mom-n-pop end.”
Problem is nobody here believes a word from either one of them.
Maybe RW can speak to what that is common practice at the the larger commercial end rather than the mom-n-pop end.
Magical thinking, dissimulation, fraud, and criminality.
It’s amazing how degenerate gamblers have changed traditional business metrics and definitions in an attempt to normalize and mainstream their fraud.
“Everybody’s doing it.”
The fact that this is now “common practice” just proves how rampant the corruption is. Just like all the fraudulent accounting happening within companies.
No one has changed any rules. ROI has always been Return On Investment.
You are probably confusing ROI with Capitalization Rate, which is the income divided by the total price. My Cap Rate is computed by taking the income after expenses ($18,200) divided by the purchase price ($260,000).
6.8%. I hope you understand the difference now.
You……. looked and couldn’t tell the difference between equity and debt as it relates to NOI and ROI. You thought my cash flow return had to be based on the total value of the property, not on the amount of equity invested. I remember because I was astounded you were so ignorant.
Oh, I understand just fine.
Silverton, OR Housing Prices Crater 17% YOY
https://www.movoto.com/silverton-or/market-trends/
Case - Shiller home price index up 5.8% year over year.
DebtDonkey
Forks, WA Housing Prices Crater 14% YOY
https://www.zillow.com/wa/home-values/
So - what percentage between 0 and 100 is a crash?
++++
“Preconstruction sales of new low-rise homes fell 73 per cent in the Toronto area in September compared with a year earlier as the home-building sector faces major headwinds from the region’s housing-market downturn.
I think 0 is a crash for the specuvestor. Price needs to keep going up or they are crushed. Grow or die sort of thing.
Cash flow……that’s the important part. Ben buys for cash flow too. Prices go up or down with the cycles, but if there is good cash flow, it still makes sense (cents).
You’re such a liar. If it were about cash flow, you wouldn’t be selling. It was about speculation - you bought houses gambling that their prices would increase. People like you are nauseating.
I’d also add that anybody can be an internet hero. I would bet my bottom dollar that all your figures are nothing but lies, which is why you’re selling. You are trying to capture the appreciation to bail you out of what is probably a cash flow negative situation.
Think about it - why would anybody be selling cash flow positive property that they supposedly bought at a low price when rents were also low, at a time when prices have climbed and rents have almost doubled? It makes no sense. You’re full of it.
Jingle Male is selling because he’s getting old and he wants to retire and he wants to cash out his responsibilities and enjoy his retirement in a different location. I don’t see anything wrong with that.
Jingle bought low and is selling higher and made some profit in-between. That’s what Ben is doing too. Isn’t that what you’re supposed to do? How is this nauseating? Would it be nauseating if he made the money in stocks instead?
…”cash out his responsibilities”…
What does gambling on price appreciation have to do with responsibilities?
It’s DebtDonkeyTalk.
The responsibility of overseeing the condition of rental properties, and collecting rent; i.e. it’s a job with some stress and he wants to retire stress-free.
And what is wrong with gambling on appreciation and winning? Would you be so full of bile if he had made the money gambling on appreciation in the stock market?
I’m not full of bile. I just think that gambling on appreciation is…well…gambling.
No different than the stock market, except with the stock market you don’t have the headaches of collecting rent, making mortgage payments, repairing and maintaining properties, keeping tenants happy enough to stick around, finding new tenants when the old ones leave, evicting tenants who stop paying their rent, etc. etc. etc.
So gambling on the stock market seems like a smarter move, provided that both housing and the stock market always go up.
I find investing in real estate to be much more satisfying than investing in stocks (though I do both). I can control my housing investments so much more effectively, since I manage them myself. I also understand real estate better than stocks.
Oxy correctly pointed out I am getting ready to retire. We plan to move to San Diego and buy a condo on the water. I am looking forward to the next chapter of life. My biggest challenge is going to be replacing the cash flow. If I was going to stay in Nor Cal, I would consider keeping the assets and hiring a manager.
….and thanks Oxy for explaining the situation to the trolls while I was away.
….and BlackSwanDive really has the money quote on the HBB today with this:
“…….at a time when prices have climbed and rents have almost doubled?”
Rents have almost doubled? Prices have climbed?
This is EXACTLY why owning real estate can be a great investment…..as shown to you by BlackSwanDive.
“I can control my housing investments so much more effectively, since I manage them myself.”
Reminds me of why my daughter is happy to drive but won’t fly.
Reminds me of why my daughter is happy to drive but won’t fly.
Exactly.
Lots of people overestimate the risks of flying and underestimate the risks of driving. Feeling in control (whether you actually are or not) completely changes how risky something feels. Along with “I do it a lot and nothing bad has happened yet”.
I spent 1% on miscellaneous sht on my shack
0 is the beginning of a crash for Ponzi assets, as the flow of investors into the asset class that until recently produced outsized gains suddenly reverses to exit mode, and excess demand morphs into excess supply. The result is a negative second derivative of investment gains with respect to time, as exiting investors drive the 0 into negative territory, and every decrement in the rate of return fuels more exits.
Before long, the negative rates of return integrate into a very large cumulative loss, and that is before taking into consideration the compounding effect of leverage. Many of those who took the bait and leveraged up to the hilt will lose their entire investment, including all the cumulative payments they made, when they go into foreclosure. Too bad, so sad, as they could have been renting at a fraction of the monthly payment and investing the residual in savings.
We’re renters (by choice), but renting in our location is no gift. Rents have been rising precipitously such that it is cheaper to purchase a townhouse than rent the condo we’re in. So why don’t we do it? Because we think/hope for a correction. We might be wrong though. There is always that chance.
Is it still cheaper when you factor in the opportunity cost of your 20% down payment? Or would you go subprime too and rent from the bank instead of your landlord?
We could pay cash for most houses in the area we live in, so the bank wouldn’t be our landlord. We value mobility though and are not sure where we want to put down roots where we are currently living, hence why we are renting. Anytime we do look on Zillow at houses, I instinctively think that most everything we see should be cut in half as a fair valuation. The prices seem absurd and irrational. It feels like a shortage of reasonably priced alternatives (rentals or starter housing) is extorting young families to jump in over their heads.
Sadly there is not a lot of opportunity cost for our cash due to historically low interest rates. Most of our assets are in risk-free assets (FDIC-insured CDs, treasury bonds, etc.). We missed the big run up in the stock market because we were cash heavy but we sure aren’t about to jump in now. Again, I’m willing to admit this could be a mistake.
We feel that paying overpriced rent is better than making an overpriced purchase decision on a house. We just want some builder to come along and build a no-frills housing at a price point that seems reasonable. Instead it’s all luxury.
We might do something like this:
http://www.thebucketlistfamily.com/
“Nationally, ‘there is evidence that the ultra-tight inventory environment in some red-hot markets is beginning to ease just a bit, with vacant property rates nudging higher in markets such as San Jose, San Francisco, Los Angeles, Boston and Denver,’ said Daren Blomquist, ATTOM’s senior vice president.”
Once the Fed-engineered short squeeze runs its course, you can bet your bottom dollar that inventory will swell in many markets formerly regardedas red-hot, as investors race for the exits.
“Ahokas says ‘it’s not easy braking,’ when the market is out of balance. ‘You can’t just tone it down a bit. Markets don’t work that way.’”
This lesson is soon to be relearned in the U.S., as nothing was learned from the 1996-2012 episode.
“A prime example: a zombie in St. Petersburg’s Shore Acres neighborhood that first went into foreclosure in 2008. Several blocks way is a current zombie that has been in foreclosure since 2009 and vacant for years. Throughout the Tampa Bay area, a total of 26,132 homes were vacant as of this fall, ATTOM reported. Many of those are owned by investors who are renovating them or already have them on the market. In Hillsborough County, for example, 4,427 of the 5,974 vacant homes are investor-owned.”
This is the reality in all markets, even the so-called “hot” ones. When it’s mentioned, it’s usually met with ridicule and scorn by the industry and people interested in high prices. You’ll even be called a liar when you mention shadow inventory. Yet, I can show people houses on the west coast that are bank-owned for 8 years and sit vacant, with institutions like Citbank paying the taxes.
SHILLow doesn’t show % of foreclosed homes in many searches
hmmmmmmmmmm
Got any good examples you could link too? I’m genuinely curious as i live on the west coast and haven’t seen many zombies here.
You’re not looking.
I’ll take that as a “no.”
Hey donk
Hi hon
(yeah I know the drill)
I posted an example, but included a link, so it has to go through the HBB filter…..
Here is one. It has been vacant for 3-4 years. It went into default in 2009 after a Filipino flipper bought it in 2007. The lender can’t even find it in their portfolio. I put an on-line offer in on it 3 years ago and never had a reply.
http://zm.zillow.com/homedetails/63468464_zpid/
WOW, Our Proprietary Software Found 5,964
Verified Vacant Houses - The Best Real Estate Leads!
How Many Verified
Vacant House
Leads Are In Your
Neighborhood?
Search Your Area Now & See How
Many Leads You Can Find For FREE!
Here are some sites that are worth a look:
Zip Codes with the Highest Percentage of Vacant Housing Units in the United States
Cities with the Highest Percentage of Vacant Housing Units in the United States
The city vacancy comparison site has a size bias problem: The places with the highest vacancy rates tend to be very small. It seems that places where nobody wants to live have a propensity to turn into ghost towns.
Do you know where the data is being pulled from? Does the population column represent the number of vacant homes? Surely it can’t be the population of the locality.
Just found these on the fly this morning. Don’t know any more about them than what is presented.
Realtors are liars.
Brisbane is already in trouble so may be insulated from further big falls.
Sounds like magical thinking. “It’s already bad, so it can’t get worse.”
Magical thinking, happy talk, degenerate gambler thinking or donkey logic. Take your pick.
Don’t forget the fraud and criminality.
Look no further than….
“Realtor Accused Of $5 Million Fraud Arrested On Immigration Charges”
http://www.sun-sentinel.com/news/crime/81382130-157.html
Luckily stock markets have reached a permanently high plateau, so there’s nothing to worry about with that…
It’s no plateau. In fact, the stock market always goes up, and can only go up further from here. If you think the market has done well as of late, just wait until Yellen announces this December that interest rate increases are on hold until further notice due to concerns about negative effect higher rates could have on employment.
S&P 500, Nasdaq end at records as tech rally powers gains
Published: Oct 27, 2017 4:38 p.m. ET
Main indexes post weekly gains
Reuters
By Barbara Kollmeyer and Anora M. Gaudiano
The S&P 500 and Nasdaq Composite closed at records on Friday, fueled by large gains in technology shares following better-than-expected quarterly results from heavyweights Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Intel Corp.
Equities were also buoyed by data showing the U.S. economy expanded at a solid 3% annual pace for a second straight quarter despite damages from two hurricanes, while the University of Michigan reported consumer sentiment in October was the strongest it has seen in 13 years.
…
First Corker, then Flake and now Hatch are quitting.
Thank God for DJT.
Draining the swap.
Romney will run and with Hatch’s seat.
*win
http://www.weeklystandard.com/atlantic-reports-that-hatch-will-retire-and-romney-will-likely-run/article/2010244
Why not Mia Love she is Utah 4th district US representative…..time to step up to the senate???
I predict Mia Love is going to lose re-election. She barely won to Scott Owen (Democrat) two years ago. She came out strongly against Trump when Romney did (and when he made those, ahem, “colorful” comments with Billy Bush. Ben McAdams, Salt Lake County mayor, is a popular democrat. He will likely win and swing the district blue.
What insight do I claim for this prediction? I’ve been a state and county delegate for the Republican party in Salt Lake County, but now reside in Southern Utah.
But what if she doesn’t run for reelection, and focuses on the senate?
That would be interesting. She wouldn’t stand a chance against Romney for senate though.
How is Romney going to run for the Senate in Utah when he lives in California. (We saw him yesterday at my son’s cross country meet, where his grandson also ran.)
Aside from his CA house, he has a house in Park City, UT.
https://www.forbes.com/sites/zillow/2013/10/09/mitt-romney-returns-to-park-city-with-8-9-million-home-purchase/#48f0218c326c
Drain the Republican swamp? The risk is they get Democratic replacements!
Don’t feed the drama queen.
How To Handle a Drama Queen
Donna Flagg
Office Diaries
Drama is a symptom—a symptom of childhood. If you participate—on any level—you feed a monster who is trapped in a time warp, but escapes every so often. That monster is determined to suck you into his or her own personal, self-esteem issues (a.k.a. drama) that were never resolved. It is an ego-gone-wild, trying to right some wrong that you need to see contextually with its origins rooted in the past.
Despite their efforts to involve you, there is nothing you can do to change them because changing them means trying to change personal histories, which is not possible. It’s done. It’s over. So, don’t try. You’ll exhaust yourself. Each drama person must decide for him or herself to embark on a road of self-awareness and growth. If he or she doesn’t, the will to remain stuck is impenetrable. The only thing you can do is manage yourself, which is where doing nothing comes into play. Know how to draw a line. Know when to walk away. And don’t be afraid to say that the drama scene doesn’t work for you. That choice is yours to make. And when you do, they will disengage from the behavior—at least with you. They have to. You’ve left them with no alternative.
https://www.psychologytoday.com/blog/office-diaries/201404/how-handle-drama-queen
DramaDonkey? I like it.
Circular firing squads will generate casualties among brothers in arms.
…
Corker’s and Flake’s retreat shows why Republicans so often lose even though the American people are conservative. Democrats want to win. And they put everything else aside to do so.
In contrast, Republicans form circular firing squads. Opposed by Democrats, liberals, journalists, labor unions, academics, assorted interest groups, and lots of folks on the federal payroll, Republicans fight among themselves. “I will not be complicit,” declared Flake. But choosing the liberal establishment over the president makes the senator part of what’s been happening.
…
In Stockholm county, the average debt-to-income ratio for new mortgages is between 490 percent and 550 percent…”
‘it’s not easy braking,’ when the market is out of balance. ‘You can’t just tone it down a bit. Markets don’t work that way.’”
Priceless: You can’t brake it just a little bit!
‘the biggest issue in northeast Missouri is low inventory…‘We need more single-family homes.’
Did anyone here ever see one of those dolls that you pulled a string and they said something?
I’m still pondering what Mark Twain would think about having an “Association of Realtors” named after him.
You must be referring to Chatty Cathy!
One topic that was discussed a lot in the 2008 time frame was all of the banks going bust on the FDIC list. I don’t feel like banks are going bust left and right this time - and certainly nobody’s talking about this topic here. Anybody have an explanation of why that is? If we’re crashing now, this part seems different…
Defaults build to a crest quite a while after resell price has rolled over?
The FedGov has the vast majority of mortgage risk now vs 2008?
“The FedGov has the vast majority of mortgage risk now vs 2008?”
Bingo. The taxpayer’s fully backing the speculators this time. The banks’ loans are guaranteed.
Pass on the risks, keep the rewards. 😁
The banks are in much better shape these days and the housing market in the US is solid. The economy is growing and business is good for most people.
We won’t see much distress until the next recession…..and there are very few signs of that on the horizon. The housing appreciation is slowing. That might be an indicator for a slowdown in a few years.
This man made millions suffer: Tim Geithner’s sorry legacy on housing
Forget the book tour designed to polish his legacy. Tim Geithner’s record on housing will forever live in infamy
David Dayen
05.14.2014 4:45 AM
As Salon pointed out yesterday, Bush-era economist and Romney advisor Glenn Hubbard claims former Treasury secretary Timothy Geithner lied in his book “Stress Test,” when describing a conversation from 2012 about Hubbard supporting tax increases. But while the he said/she said doesn’t interest me, a separate, throwaway statement by Hubbard does matter — in fact, it tells you plenty about Geithner and his policy preferences during Obama’s first term.
“I saw some of the excerpts about housing and I must say I split my side in laughter because Tim Geithner personally and actively opposed mortgage refinancing, constantly,” Hubbard told Politico. “And now he’s claiming this would be a great idea in the country.”
…
Tim Geithner personally and actively opposed mortgage refinancing, constantly,”
What does he even mean by “opposed mortgage refinancing”? How does one oppose refinancing—something that been a part of the mortgage financing landscape for many many decades at a minimum?
I think what this means is that he (Tim Geithner) was initially opposed to government sponsored refinancing schemes (HAMP, HARP, HAFA) designed to refinance mortgages for Americans who who were underwater on their home or who had ARM or interest-only loans.
Banks had a disincentive to do some of these as it would blow up their balance sheet, potentially risk making them insolvent. If this did occur though, the refinancing at lower rates for non-delinquent borrowers would erode the net interest margin, eating into what scant profit was available. Therefore, banks hand to be induced to refinance or the GSEs become the lender of last resort and took the loan off of the banks books.
Fundamentally this was an ideological and philosophical dilemma. Falling prices hurt banks and encouraged more individuals to walk away from their home. But a reasonable contingency of individuals wanted a return to normalcy and cheered on the correction of prices. For those folks, the falling prices was clearing out the excess and speculation. But as is the case, sometimes the medicine can kill the patient. Ultimately the play seemed to be one of “reflation” of the bubble via QE and ZIRP.
“…he (Tim Geithner) was initially opposed to government sponsored refinancing schemes (HAMP, HARP, HAFA)…”
That must have been in the pre-runway foaming era.
Banks got bailed out and the rest got screwed.
It was a “moneyed interests bailout.”
Welfare for poor folks? Moral depravity.
Welfare for rich bankers? God’s Law.
Austin, TX Housing Prices Crater 5% YOY
https://www.movoto.com/austin-tx/market-trends/
Keep searching for your one off examples…..meanwhile,
Case - Shiller home price index up 5.8% year over year
Nationwide housing prices are up 6%
DebtDonkey
Wahiawa, Hawaii Housing Prices Crater 13% YOY
https://www.zillow.com/wahiawa-hi/home-values/
It’s got granite
These resort type areas have gone wild
https://www.zillow.com/homedetails/3282-Pickett-Ave-South-Lake-Tahoe-CA-96150/18577725_zpid/
Swansea, MA Housing Prices Crater 8% YOY
https://www.movoto.com/swansea-ma/market-trends/
Keep looking for your little pockets of data…..in the US, housing is up 6%…..
Most US homes are worth less than before the crash:
https://www.bloomberg.com/news/articles/2017-05-03/most-u-s-homes-are-worth-less-than-before-the-crash
I believe your post is correct. If you bought at the top in 2006, you are still underwater. If you bought in the trough after the crash, you made a great investment. Timing is important. I learned this from reading the HBB right here!
The counties up-n-down California’s 99 resemble “left behind.”
Barney in Real Estate
https://www.youtube.com/watch?v=PzPZdmwHqYc
I guess dopers r making bank in dc
Zillow predicts Eckington home values will increase 5.4% next year, compared to a 3% rise for Washington as a whole.
Price cuts now so big increase in the winter
Littleton, CO Housing Prices Crater 6% YOY
https://www.movoto.com/littleton-co/market-trends/
“Real estate agent Steve Silberer said a few years ago, townhomes in the Georgetown subdivision would have gone for $90,000 on average, but today some are selling in the $50,000 range. ‘If I had a house on the market and I had to sell it, I would probably think there’s a crisis, there’s no doubt about it,’ Macomb Mayor Mike Inman said.”
Sounds like affordability has finally arrived in Macomb. Young families who are priced out elsewhere will be able to move to Macomb, purchase a family home at an affordable price and lay down roots. Over the long run, this should be a boon for the area.
Bravo, Mr Market, for defeating the evil designs of politicians and market riggers!
Yeah, I was like, “where is this place?” A Townhouse for $50k sounds about right. Maybe we should move there. Townhouses where we are go for about $200k.
“Tampa Bay has plenty of zombies. … Only New York-Newark, Philadelphia, Chicago and Miami are more zombie-infested.”
It’s hard to believe there are still vacant homes left over from the crisis that ended eight years ago, sitting vacant and crumbling into decrepitude.
There ought to be a law against this, given the armies of homeless people who are priced out of the housing market forever and wander our streets.
just wondering how many people are still living for free, and the banks still wont foreclose on them?
It’s hard to believe there are still vacant homes left over from the crisis that ended eight years ago, sitting vacant and crumbling into decrepitude.
I’m not the least bit surprised—because behavior follows incentives. Big banks acting as servicers are paid MORE for maintaining defaulted loans and properties in their SERVICING portfolios, and “managing” the derelict properties. So we shouldn’t be at all surprised that they linger.
Who is paying banks for wasting perfectly good housing that would otherwise be owner-occupied, if they weren’t sitting on the shadow inventory and letting the homes systemically deteriorate?
Why, your friendly GSEs, of course!
Murphy, TX Housing Prices Crater 5% YOY
https://www.movoto.com/murphy-tx/market-trends/
Prime lakefront property in NW lower Michigan, 2.2 acres, on sale since 2014 without even getting an offer, marked down to $725,000 this year.
The 1/3 of the property closest to the lake is essentially swamp land, I am not sure how anything decent could be built there. The trust that owns it will eventually run out of money to pay the grossly inflated taxes on the property. At that point the plot (in more ways than one) will revert to the county and its insiders.