The Calculations Have Become Upside Down
A report from The National. “Global property has been one of the finest investments of the last decade, with the major global ’superstar cities’ spearheading the charge. New York, London, Toronto, Singapore, Hong Kong, Shanghai, Mumbai and of course Dubai are just some of the cities that have posted double-digit price rises, year after year. While the breakneck growth continues in many global favourites, fears are growing that it all could end in a housing crash. UBS Wealth Management is the latest to warn of a global city housing bubble as monetary stimulus is reversed and interest rates finally start rising. The danger is greatest in Toronto, up significantly in the last year, while Stockholm, Munich, Vancouver, Sydney, London and Hong Kong remain risky, and Amsterdam has now joined this group. Valuations are also stretched in Paris, San Francisco, Los Angeles, Zurich, Frankfurt, Munich, Tokyo and Geneva.”
“Claudio Saputelli, head of global real estate at UBS Wealth Management, says the surge in international demand, especially from China, has crowded out local buyers. ‘Average price growth of almost 20 per cent in the last three years has confirmed the expectations of even the most optimistic investors. This thesis has helped fuel overvaluation and even bubble risks.’”
From the Calgary Sun in Canada. “Calgary’s housing market is not yet in full recovery mode. That’s the conclusion of Don Campbell, senior analyst and Jennifer Hunt, vice-president, of the Real Estate Investment Network (REIN). The authors report home prices, on average, are down slightly from the same time last year. ‘However, when we look at the overall trend, we see prices took a strong move upwards in the first three quarters of 2017, indicating some confidence moving back in the housing market. This demonstrates the housing market appears to have hit a longer-term trough in real estate values. Most of these increases in prices are for detached homes, where apartments and condos seem to be doing worse compared to last year. This is no surprise, given the overbuild situation the city condo market finds itself in.’”
“To sum it up, Campbell and Hunt say ‘the economic fundamental key drivers and the market influencers indicate Calgary’s real estate market is in the middle of the slump.’”
From Al-Monitor on Turkey. “Under the Justice and Development Party’s 15-year rule, housing-dominated construction became a main pillar of the Turkish economy. The building spree is in plain sight, especially in Istanbul where countless new buildings have sprung up across the city. Like other emerging economies, Turkey enjoyed abundant flows of funds from the United States and the European Union, the result of anti-crisis liquidity expansion, which kept the dollar’s price low and encouraged borrowing. Buoyed by this climate of ‘dolce vita,’ Turkish builders — especially those active in Istanbul — rushed to grab any building plots they could find, paying little mind to the prices.”
“It is worth lending an ear to an insider, namely Ali Agaoglu, a top construction tycoon who has built a series of luxury residential complexes in Istanbul. In a newspaper interview, published Oct. 23, Agaoglu warned of impending bankruptcies in the sector. ‘The prices are falling [while] costs are on the rise,’ the outspoken tycoon said, stressing that builders who had bought overpriced plots were in deep trouble. ‘The calculations have become upside down. I personally fear that new Fi Yapi incidents could occur,’ he said, referring to the collapse of a major construction company several years ago.”
“According to Agaoglu, construction companies need to make painful sacrifices to survive. ‘To keep the wheels turning, some will have to cut off a finger; others an arm. At Cekmekoy, we cut off an arm by deducting the cost of the building land,’ he said, referring to a major price discount his company has recently made in a housing project in Istanbul.”
“In sum, Turkey’s housing sector appears headed for a harsh season. And given its central place in the country’s economy, any turmoil in the sector is likely to have a far-reaching impact on the entire economy.”
From Mmegi Online on Botswana. “The market of property, business and residential, in Francistown and surrounding villages are on a downward spiral following the closure of Tati Nickel Mine Company (TNMC) over a year ago. The residential market was affected mainly on the top end when TNMC and other related businesses handed back in excess of 100 executive and high cost houses which caused a glut in the sector with rentals falling by as much in 40% in some instances, said Asan Kunda, a property expert at WKA. ‘In general, rental and capital values across all residential sectors of the residential market have declined especially with the increase in the supply due to construction in the nearby villages of Tati Siding, Tonota and Borolong.’”
“‘The commercial property market has also been in decline with rising vacancy and default levels as most tenants struggle to meet their monthly liabilities due to reduced business as most households can only afford basics,’ he said.”
The Daily NK on North Korea. “Following an unprecedented period of growth, North Korea’s real estate market is experiencing a downturn following the adoption of international sanctions. In addition to fluctuating prices in the general markets, the value of major new apartment developments as well as smaller housing projects have seen a sizable drop in recent months. ‘The disruption in trade with China has led to market instability, which in turn has affected housing prices in the main districts of Sinuiju. While units were being sold for tens of thousands of dollars (USD) just last year, prices began to drop this past spring, and have only continued to fall since then,’ a source in North Pyongan Province informed Daily NK on October 23.”
“‘Other cities are experiencing a similar shock to their housing markets as well. The value of homes in Pyongsong and Sunchon were skyrocketing before the latest crisis, but have dropped significantly in recent months,’ a source in South Pyongan Province explained. ‘In Pyongsong, an apartment near the train station was going for $60,000 just this past January, but the value has now dropped to $50,000. Even homes outside the city that were once being sold for $5,000 are now going for around $3,200. Buyers are becoming more emboldened while sellers are losing their leverage, and prices continue to drop as a result.’”
From Fairfax Media on New Zealand. “A senior commercial property researcher is picking the looming housing slowdown to be a soft landing rather than a harsh slashing of prices, at least in Auckland. Colliers national research director Alan McMahon said slowing house sales were no indication of demand, despite pending changes to immigration policies. McMahon said his confidence was based on the large number of people who still wanted a house but couldn’t afford them at current prices. ‘People who can afford those houses will just swap them between themselves.’”
From ABC News on Australia. “Rapidly cooling house prices in Sydney and the sudden withdrawal of Chinese investors from the property market may lead the Reserve Bank to cut interest rates, according to investment bank Credit Suisse. ‘Over the past few months, the Sydney housing market has not only cooled down, but has arguably turned cold,’ Credit Suisse wrote. ‘Over the past year, Chinese capital flows have fallen considerably, in part reflecting the impact of stricter capital controls. This fall foreshadows weakness in NSW housing demand in the year ahead.’”
“Credit Suisse argued if its model was anything to go by, it is hard to see a meaningful recovery any time soon. ‘We believe that the RBA will need to cut rates further to deal with the housing market slowdown in train,’ it noted. ‘Without a healthy housing market, the economy does not have other growth drivers to lean on.’”
The Mumbai Mirror in India. “The realty sector in Mumbai is witnessing its worst slump ever, with market rates of properties in several areas, including south Mumbai, dipping below the ready reckoner rates. Prominent developers and industry watchers told Mumbai Mirror that never in the history of the city have they witnessed such a phenomenon, even as debt-laden builders, struggling with slow sales, unsold apartments, and delayed/stalled projects, are pulling out all stops to attract buyers.”
“Ready reckoner rates are values of properties, determined by the government for payment of stamp duty. These rates, published annually, impact the construction cost of projects, as several premiums and charges collected by the civic bodies and the government itself are linked to the ready reckoner values. The body blow to the realty sector has been unsold properties. According to the industry estimates, more than 2.67 lakh residential properties in the Mumbai Metropolitan Region (MMR) remain unsold, of which 1.05 lakh are in Mumbai itself.”
“One of the reasons behind this ‘lack of movement’ is the general sentiment that property prices will slump further. Some of the schemes offered by developers were unheard of in Mumbai’s real estate sector. ‘Times are such that builders have to give more than just membership of a club to flat buyers. Large-scale properties are lying unsold and unless incentives are high, people are not going to buy as everyone seems to think prices will fall further,’ a developer said.”
‘Like other emerging economies, Turkey enjoyed abundant flows of funds from the United States and the European Union, the result of anti-crisis liquidity expansion’
I’ve said many times, when the history of this episode is written, the most important developments will be seen as happening after 2009.
‘McMahon said his confidence was based on the large number of people who still wanted a house but couldn’t afford them at current prices. ‘People who can afford those houses will just swap them between themselves.’
Sure they will Alan.
the swap cost about 7% w commission and transfer stamps and 5 gallons of antique white paint etc.
That is exactly how Edwinna Suratos Firmeza and Cynthia Suratos Lorica ended up serving time in the Dublin Federal Corrections Facility for Women. The FBI takes a dim view of self dealing when there are straw buyers and bank financing.
‘Following an unprecedented period of growth, North Korea’s real estate market is experiencing a downturn’
What do ya know? Unprecedented growth followed by a bust. Sounds like a few other places.
‘One of the reasons behind this ‘lack of movement’ is the general sentiment that property prices will slump further. ‘Large-scale properties are lying unsold and unless incentives are high, people are not going to buy as everyone seems to think prices will fall further,’ a developer said.’
Kind of like FOMO in reverse.
A bubble in North Korea. LMFAO.
Absurd.
Last I heard the whole country only had one block of 16 IP addresses. Funny that somehow the bubble can find its way in anyway.
“Calgary’s housing market is not yet in full recovery mode. That’s the conclusion of Don Campbell, senior analyst and Jennifer Hunt, vice-president, of the Real Estate Investment Network (REIN)
\
2016 was your peak bro, unless oil heads for 70$+ kiss it goodbye
People forget, Calgary was the hottest market in Canada a few years ago.
“People forget …”
Bahahahahahahahaha … thank you Lord.
Bahahahahahahahahahahahahahahahaha.
None of this nonsense would work and benefit me the way it does if people were not so incredibly stupid and did not possess such short (or possib,y non-existent) memories.
I’m not sure they forget. Seems to me that they really do believe it’s different this time. Every single time.
I wouldn’t be surprised to see oil hit $70. Fundamentals don’t seem to matter. Massive glut but prices continue marching higher, almost to $55 right now.
The Wall Street Journal
Economic Data
Americans Are Spending More, Saving Less
Some economists say the trend could indicate growing risk in the economy and financial markets
By Sarah Chaney and Harriet Torry
Updated Oct. 30, 2017 10:27 a.m. ET
Americans are saving less as the economy and stock market heat up and they boost their spending on big-ticket items like cars and refrigerators.
The U.S. saving rate fell to a 10-year low of 3.1% in September, down from a recent peak of 6.3% in October 2015, the Commerce Department said Monday.
…
A nation of dummies.
Americans are saving less as the economy and stock market heat up and they boost their spending on big-ticket items like cars and refrigerators.
Are people throwing away perfectly good fridges and buying new ones?
I was in Best Buy a few months ago and saw that they had $4000 fridges. The ones with the LCD touch panels and internet connections.
Is anyone actually buying those things? You can get a pretty decent fridge for about a grand.
Does anyone need granite countertops? No? But pukes spend big money on them anyway, don’t they?
Money they most likely don’t have at that.
Ah, the nesting instinct; gotta love it.
Enjoy your radioactive cooking experience!
What’s Lurking in Your Countertop?
By KATE MURPHY
July 24, 2008
SHORTLY before Lynn Sugarman of Teaneck, N.J., bought her summer home in Lake George, N.Y., two years ago, a routine inspection revealed it had elevated levels of radon, a radioactive gas that can cause lung cancer. So she called a radon measurement and mitigation technician to find the source.
“He went from room to room,” said Dr. Sugarman, a pediatrician. But he stopped in his tracks in the kitchen, which had richly grained cream, brown and burgundy granite countertops. His Geiger counter indicated that the granite was emitting radiation at levels 10 times higher than those he had measured elsewhere in the house.
“My first thought was, my pregnant daughter was coming for the weekend,” Dr. Sugarman said. When the technician told her to keep her daughter several feet from the countertops just to be safe, she said, “I had them ripped out that very day,” and sent to the state Department of Health for analysis. The granite, it turned out, contained high levels of uranium, which is not only radioactive but releases radon gas as it decays. “The health risk to me and my family was probably small,” Dr. Sugarman said, “but I felt it was an unnecessary risk.”
…
For $4,000 you get a Chinese refrigerator with a 1 year warranty which lasts maybe 2 or 3 years, less than a year if you’re lucky and it fails within the warranty period. Pull up any of the reviews on these overpriced pieces of sheet and they fail in short order.
Recommended by and the first choice of DebtDonkeys, Empty Pockets and HousingHens.
Women pukes blow money on household items and other womanly stuff, men pukes blow money on cars and guns and other manly stuff. Both sets of pukes are but tools. Tools and fools.
“other manly stuff”
Hookers.
men pukes blow money on cars
I think the ladies also blow money on cars, they love those pricey SUVs, which keep getting more and more expensive.
I am spending most of my money on faster boats, older scotch and younger women. I’ll just waste the rest.
I must be a real Luddite - my television is 25 years old, my coffeemaker is 25 years old, and my 1994 Civic still runs great.
Blue Skye, LOL!
IIRC, it was a Samsung fridge I saw. Are those made in China or S Korea?
I replaced a refrigerator a couple of years ago. Ended up going with the same fridge I removed…a sub-zero.
In part it was because it fit the space without doing any cabinet work (and it took the old panels as well). In part it was an assumption of reliability.
I nearly choked when I heard the cost though.
When they took out the old refrigerator, from the energy star sticker (starting at 2 cents per kWh), and the sawdust under the fridge, it was clear that this was the original that came with the house. The installer noted that the fridge was about 25 years old, and he commented that “that sounded about right, but the new ones are designed to last 35 years (+/-).”
Fingers crossed that he’s right.
Interesting. I work with CSZ commercial chambers in my job. They get the job done but there are plenty of failures when used hard and continuously. I wouldn’t have expected them to make retail customers that happy.
Haier. Chinese conglomerate that bought GE’s former Appliance Division.
For more info, search “Who Is Haier? A Look at GE Appliance’s New Owner”.
Sold down the river once more.
Best Buy has some fairly high end stuff. We recently replaced our dryer. The old one had a bad bearing after 10 years. I think we got our $300 out of it.
Paid $550 for a new one plus $125 for a 5 year warranty. The crazy thing are the prices for those pedestals. The pedestal for our unit was $279 at home depot. I still can’t believe they want 50% of the cost of a new dryer, and all the technology / engineering it includes, for basically a box.
I know a dude from Africa that runs a wholesale store, everything from safes to tools to tires. Anyway, I got a matching pedestal for $30 from him.
Why would you purchase a warranty on something only worth $550? Insurance is for life changing expenses relating to medical, house, etc not cheap appliances and electronics
$125 / 5 = $25 yr. I’ll gladly pay $25 a year so that if the appliance stops working I call someone and they come fix it, or replace it. Fixed cost for 5 years.
With a 2 year old, we use the heck out of that thing.
Why would you purchase a warranty on something only worth $550?
Because the new ones break and they’re expensive to fix?
“Why would you purchase a warranty on something only worth $550?”
Because they do not last anymore. In the past, warranties on durable goods were mostly a waste of money, but these days they are oftentimes a sound decision. The “durable” in durable goods has been lost.
My fridge is about three feet high. It sits on a table. Cost less than $200. Alas, it doesn’t match anything.
Probably hard to supply the fixings for a dinner party too!
dinner party…
No complaints from my cook.
No complaints from the pizza delivery guy either.
Probably the freshest fish in town too.
Those pedestals are a ripoff.
I got a new washer a couple of years ago. I bought the “pedestal” at Lowe’s — some concrete blocks, less than $1 each.
“…Paid $550 for a new one plus $125 for a 5 year warranty…”
“Warranties” for appliances are scams.
1) The seller makes more money on the warranty than they do on the actual appliance. That is why the sales people are under so much pressure to push them on you. (And some stores give their sales people a commission on warranty sales).
2) The devil is in the details. Most contracts state that “reasonable effort” will be made to get spare parts. The reality is that these scam repair organizations will always report that the particular part you need is “back-ordered” or “out-of-stock”, “it’s a model change over year”,, etc. So what are you suppose to do, use your neighbors dryer or go to the laundry-mat? All designed for you to capitulate and *buy* a new appliance! These scams have been reported many times on the local TV undercover news (Los Angeles).
Also, I believe there is a limit/per year on the number of times you can report a problem. (Assuming the scam organization even answers the phone).
Perhaps I missed the memo, but the only reason I need a refrigerator is to keep perishable food from spoiling. Four thousand dollars? That’s not a “smart” choice, it’s a stupid one.
This article goes hand-in-hand with the articles describing how everyone is renovating their homes instead of moving. And few people renovate a kitchen without buying new matchy-matchy appliances.
Appliance porn:
Similarly, Greenfield discovered that high-end kitchens—what she dubs “appliance porn”—carry an appeal across oceans, cultures, and continents. “These modern kitchens with granite counters and commercial-grade appliances used to be in the most upscale of houses,” she said. “And then, during the boom, you’d see it in a lot of middle-class homes: the stainless steel stoves and so forth.”
Now, she said, commercial chef’s kitchens have somehow managed to become a prerequisite of homeownership. “I remember there was this one Russian woman whose husband was a real estate developer,” she said. “She had this kitchen out of Architectural Digest, and I said ‘Oh, what a beautiful kitchen. Do you cook?’ And her answer was ‘No.’”
https://www.bloomberg.com/news/articles/2017-04-19/a-look-at-the-ugly-side-of-getting-rich
Americans are spending more and saving less because the FED has forced them to spend everything they earn on housing, transportation, food and necessities, which leaves zero, or less than zero money for saving. It’s not rocket science.
Quincy, WA Housing Prices Crater 11% YOY
https://www.zillow.com/quincy-wa/home-values/
*Select price from dropdown menu under first chart
You’re hilarious HA, posting links that contradict what you are falsely claiming. This copied from your link:
“Quincy home values have gone up 10.3% over the past year.”
That’s not exactly what I would call cratering.
DebtDonkey
Seattle, WA 98117 Housing Prices Crater 9% YOY
https://www.zillow.com/seattle-wa-98177/home-values/
“Over the past year, Chinese capital flows have fallen considerably, in part reflecting the impact of stricter capital controls.”
Capital controls may be more of a symptom than a cause of the evaporating river of cash from China.
Washington DC(Adams Morgan) Housing Prices Crater 13% YOY
https://www.zillow.com/adams-morgan-washington-dc/home-values/
*Select price from dropdown menu under first chart
93021 back at bubble highs. Time to sell and move back to Phoenix AZ ?
Didn’t you already do that once before?
Cactus, 93021, that’s where I am. Prices are too high. Some higher end homes 850K+ sit and reduce prices, some others sell at insane prices. Who in their right mind is paying these prices? Sales history shows some sellers are trying to offload because they bought their homes at the bubble1 high. Other sellers are selling because they bought at the low between 2010-2012 and they are ready to cash in on their investment.
I’m on the sidelines watching. I sold in 2016 (before the market popped up fast, ugh…)
August & September Zillow says 93021 is “cold”
August & September Zillow says 93065 (Simi) is “cold”
August & September Zillow says Thousand Oaks is “very cold”
When I watch surrounding areas:
Calabassas is cold
Malibu is very cold
Westlake is hot
I’m waiting to get my performance report email for October from zillow, doesn’t 3 months in a row make a trend?
I only see Indians at open houses. It seems like many asians are selling. If there is a white guy wandering the house, he’s saying, “Dear God, you have got to be kidding me! Who would pay this, and the HOA is how much?!” Haha! Too funny…
I was at an open house in early September in the Highlands gated community at a house that’s the best priced/square ftg house in the area. I wrote down what the realtor said which follows:
“The market is slow and this is a buyers market. The seller will accept 25K less. All brand new aplliances, fridge, and washer and dryer are included. Seller paid off the mello roos. The sellers are very motivated and already closed on their new home. The market is very slow and quiet and will get more quiet as we get closer to the holidays. Sellers bought 200 acres outside of Austin, TX with 4500 sq ft home on the property with tennis and pool in the community. They have horses and need acreage.” Realtor said she’s seeing sellers pull their homes off the market after sitting all summer without selling. The realtor also said “the new over priced inventory that’s come on the market in the last couple weeks won’t sell at asking.” This home is still sitting on the market and was first listed in July. It has a tiny back yard working against it. That realtor also said, “I’m moving to Prescott, AZ. After living here all my life, there’s nothing classy about living in California anymore.”
30% to 40% of homes in these areas are listed at 800K+ but a realtor told me only 10% of buyers are willing to buy in this price range, which means prices must come down. The realtors have also said it’s tough selling anything 900K+ and people are not moving up from size/price into the next size/price bracket. It seems like 7 out of 10 sellers are leaving the state. Many realtors have told me that the market is acting strange and have validated that the market will turn down. The realtors that pretend the market is solid either try to be overtly positive or they keep quiet and try to be vague about market conditions, (they answer questions about the market side-eyed, either giving you a nod that the market is mis-behaving or signaling they are lying).
Those are simply some of my observations about these areas. Going to the open houses to talk to realtors is great for research. The realtors flip from super positive to more honest when they find out I don’t have my own agent knowing they would write both sides of the offer.
Same old sheet, different day. People cashing out of one bubble and buying in another bubble. Once CA crashes hard, and their new place in Austin craters, they’ll be licking their wounds wondering what it was they liked about Texas in the first place, as they ride the market to the bottom.
You have to rent. Wait it out.
Cactus, I am renting and I loathe it. Except, I like feeling temporary just in case we want to pick up and go. I read this blog everyday for my daily pep talk TO WAIT this out! I’ve actually backed out of escrow twice on two properties since April. I felt no peace about buying each of those properties which compelled/forced me to back out. I hope my gut instincts are steering me right…
My husband and I have always worked in high tech in this area and we always get the itch to leave CA. So we do leave but then we always move back. Crazeeee and fantastic!
2005 sold and moved to Washington state
2007 moved back to So Cal (better offer)
We watched the housing market and waited…
2010 bought a foreclosure
2016 sold and moved to Tucson, AZ (higher pay)
Did not buy in AZ (gut said, “NO!”)
2017 moved back to So Cal (higher pay/ensnarement…)
Now renting and waiting…
This last move to AZ lasted 8 months. Since moving back I feel like things are awry. Nothing adds up. The housing market doesn’t make sense. Societal decay is setting in. I see more homelessness. People are going through our apartment trash dumpsters all day long. Friends are getting layed off. Strange times… There’s an imbalance in the financial system. I read on this blog somewhere, that Econ 101 says recessions start in the boom. It seems like that’s happening. I’ll be looking for a house to rent in January to wait this out for 1 to 3 years if needed. Frustrating but worth it. I’m not going to wait for the bottom, but it’s foolish to buy in today’s market. I equate buying a house today to betting your entire life’s savings on the highest highs of the stock market, say Amazon stock. Buying an overpriced house today is no different, except hopefully you’ll have a tangible asset left when your money (bet) evaporates until it cycles back up again… I feel bad for current buyers who aren’t getting value for their hard earned $.
In a nutshell, this is our crazeee pattern and my simple observations. Until things mellow out and normalize I rent and wait…. (unless of course I get impatient and itchy and move away again. Haha!
“I equate buying a house today to betting your entire life’s savings on the highest highs of the stock market, say Amazon stock.”
It’s one thing to overspend for a movie theater popcorn, a Starbucks latte, or at a chain burger joint. But it’s quite another to overspend for the biggest purchase of your life. That type of overspending will haunt you. The housing purchase must not be the one to get wrong.
This is the kind of pep talk encouragement I need to wait. Thanks, OneAgainstMany.
Rent it for half the monthly cost. Buy later after prices crater for 75% less.
75% less… a girl can dream. I neeeed a deal though, my husband has health issues so we need to be carefully conservative. We are good at hunckering down and slummin’ it while we rent to avoid expensive and foolish rental costs.
Your shelter costs are already 50% lower by renting.
“I’m moving to Prescott, AZ. After living here all my life, there’s nothing classy about living in California anymore.”
That’s funny. I work in high tech and there’s nothing classy about that anymore either. Thinking of bailing in a few years. One more left in High school, a junior. That’s 1.5 more years before Listing.
No earthquakes for 1.5 more years please.
There never was anything classy about California. It has always been an epicenter of various forms of criminality and scams. My great-grandparent moved there briefly more than half a century ago and decided it was full of criminals and fraudsters. They quickly moved back east.
FWIW… Florida is a sunny place for shady people.
Thank you for the boots on the ground info! So Asians are selling to Indians? I wonder how old the sellers are — baby boomers retiring and cashing out to live cheap in another state?
I’d say, it seems like 40% to 50% are boomers retiring and leaving CA. The only homeowners that are moving out of our church are recently retired couples who are moving to AZ, Idaho, Colorado, and Utah. Their homes are dated, some large, they want top dollar but aren’t stubborn about fast and frequent price drops and they seem highly motivated to sell fast (like their window of opportunity is small and narrow). 30ish% are professionals that want out of CA who’ve secured jobs elsewhere and the realtors tell me they are moving to WA state, Texas, the Carolinas, Indiana (near family), only 1 Dr. was moving to Utah. It seems like the mass exodus is influencing much of the west coast markets, Texas and the Carolinas. The other 20% I’m not sure, except there have been a couple boomers/retirees who are selling to buy those new next-gen homes so their grown kids and grand kids can live with them.
When I was selling my house in 2016. The majority of buyers were Indian and it seems like they are in finance jobs. They would come in with very low ball offers.
I wonder why it seems like many asians are selling… They don’t seem like boomers as much. I typically see homes that are 3500 sq ft to 4400 sq ft at the mid to high range but nothing over 1.1mil. Their homes are large, not decorated, no custom paint with modest furniture and there’s very little to no sign of children. They seem like professionals. I wonder if they know they should sell to get out of the market because they know their chinese relatives are buying up properties to simply stash cash. I wonder if they know something we don’t, like we’re being setup for a crash.
I’m fascinated by why sellers move and I’m researching the market so I ask the realtors a lot ot of questions.
Realtors are surprised by my insight and a couple have told me no other buyers talk about future possible negative market conditions and say most buyers are just eager to get in before the market continues to go up.
These are simply observations. I could be wrong about some of them…
Boots info is awesome. It would be fantastic if many readers here dropped by open houses to get an eye witness point of view of what’s really going on and we all report back…
“…like we’re being setup for a crash”
Every bubble is the perfect setup for a crash. This one is ginormous. It isn’t a secret.
Thank you so much for this info! We are looking to move to the Thousand Oaks area but the last thing I want to do is buy in another bubble. We got our butts kicked from our house we bought in 2006. It’s so hard to tell if there’s a bubble coming because realtors will insist the market is hot and you better make your move now. Sure. Heard that one before.
HANSON: HOUSE PRICE BUBBLE 2.0
Note, today’s “AUGUST” Case-Shiller is of JUNE TO AUG sales of MAY TO JULY pendings. Or, very old & known.
The market in the US has peaked. It’s all downhill from here.
From the indictment, a bubble reference:
“The indictment outlines a fairly common money-laundering technique: create an offshore company to accept foreign money and use that company to purchase American property. Then take a loan out against that property. The loan enables the person to have full access to the money without having paid taxes or disclosed the source of the income. Money laundering in the New York City real estate world has become so ubiquitous that it is likely driving up the price of high-end properties. A recent Treasury Department estimate suggested nearly a third of all such properties were obtained suspiciously.”
https://theintercept.com/2017/10/30/paul-manafort-money-laundering-scheme-was-identified-months-ago/
I’ve often wondered if something like this is happening in my neighborhood, as a suspiciously-high number of homes don’t appear to be lived in on a continual basis - another explanation is that some of the people have jobs where they are on almost continuous travel and are never home.
Go Team Trump!
From the article: “So the dubious home equity loans were critical to the scheme.”
Realtors are liars.
Lying Closers
….. and every closing a crime scene.
Has the statute of limitations run out on this song?
https://www.youtube.com/watch?v=cXoaupox2IA
WARNING: well, just WARNING:
Ain’t Gonna Bump No More — Joe Tex
https://www.youtube.com/watch?v=lDHxurHvBFE
I’m in love! 😍
Ain’t Gonna Bump No More (With No Big Fat Woman)
From Wikipedia
“Ain’t Gonna Bump No More (With No Big Fat Woman)” was a composition by Joe Tex and Buddy Killen, and released by Tex as a single in 1977, bringing the musician back to the top 40 of the pop and R&B charts simultaneously for the first time since 1972’s “I Gotcha”. Tex used his aunt Bennie Lee McGinty’s name as composer for tax reasons.[1]
I really should have posted the lyrics along with the WARNING: before the video.
Please accept my apology.
Joe Tex – Ain’t Gonna Bump No More Lyrics | Genius Lyrics
https://genius.com/Joe-tex-aint-gonna-bump-no-more-lyrics
Three nights ago I was at a disco
Man, I wanted to bump, I was rarin’ to go
And this big fat woman, bumped me on the floor
She was rarin’ to go, that chick was rarin’ to go
Then she did a dip, almost broke my hip
She was gettin’ down, that chick was gettin’ down
She wanted to bump some more, but I told her, “no!”
You done knocked me down once
You done knocked me down once
Said if you want to dance find you a big fat man
Y’all both can get on down, y’all both can get on down
Huh!
Chorus:
I ain’t gonna bump no more with no big fat woman x 8
Somebody take her
She’s too big for me
She’ll knock me down
She came over to me, snatched me out of my seat
She wanted to get on down, still wanted to get on down
I told her to go on and leave me alone
I ain’t gettin’ down
You done hurt my hip once
I know what you’ll do
I ain’t gonna bump with you!
I don’t feel like gettin’ down
Don’t feel like gettin’ down
She just shook her head at every word I said
She wanted to get on down
That woman wanted to get on down
She did that dip again and I hit the floor again
She was gettin’ down, Lord, that woman was gettin’ down
Interesting that this was written in 1977. Few people were “big and fat” back in those pre-HFCS and pre-soybean oil days.
Few people were “big and fat” back in those pre-HFCS and pre-soybean oil days.
Yeah, more of an oddity back then. We’re more mean about shaming it now because we’re probably next and we’re trying to motivate ourselves.
I make those broads look like stick figures.
Donk?! Fetch me another bag of Cheetos!
That is some big bottomed liquidity!
Mapleton, UT Housing Prices Crater 5% YOY
https://www.zillow.com/mapleton-ut/home-values/
*Select price from dropdown menu under first chart
Lester Hole is back to pimping monsters on NBC Screws.
New housing vacancy data…trend forming?
https://www.census.gov/housing/hvs/files/currenthvspress.pdf
Second quarter in a row where both M-o-M AND Y-o-Y rental vacancy rates are up, now at 7.5% nationally.
Y-o-Y Homeowner vacancy is up M-o-M, but down Y-o-Y.
Homeownership rate ticked up a bit (not statistically significant).
Digging deeper through the data, other observations:
Y-o-Y household formations is only approximately 500k.
Number of vacant homes held off the market went up YoY, due to there being more “Occasional Use” homes (timeshares, weekend use, etc.), and more “Other” (which includes foreclosures, preparing to rent/sell, need repairs).
There was a large increase in the number of “Rented or sold” (rented or sold, but new occupants haven’t moved in yet) on a YoY basis…largest annual increase going back to at least 2000. We’ll find out shortly if this is due to people moving into new homes (that they own), or apartments. Certainly indicates transition/movement.
There are fewer vacant homes for sale.
There are more vacant units for rent.
“Seasonal” vacancy (homes only intended to be used for parts of the year–resort areas) is at the lowest level since 2006.
There are a million more housing units as compared to last year, and 500k more vacant…but somewhat fewer available for sale, and potentially a lot of people waiting to get moved into their new digs.
Looking at the numbers, seems like rental supply has arrived just at the time rents have started to push people to be buyers again.
Now we wait 3 months to see how these numbers play themselves out.
My guess would be increased rental vacancy again, lower homeowner vacancy rate, and ~750k household formations YoY.
I love bull markets.
They’re fun until they stop…starting to get more and more worried that this one is on it’s last legs.
Bull markets suck, especially when government duplicity aids and abets them.
“U.S. Homeownership Rate Falls to Five-Decade Low”
https://blogs.wsj.com/economics/2016/07/28/u-s-homeownership-rate-falls-to-five-decade-low/
This explains the record high inventory and record low housing demand.
We are turning into Japan. Don’t be shocked if housing and stocks go into a thirty year swoon when the massive Fed-induced credit bubble finally pops.
No surprise on the plummeting birth rate. Women who can’t afford a shack tend to avoid procreation.
To Your Health
The U.S. fertility rate just hit a historic low. Why some demographers are freaking out.
By Ariana Eunjung Cha
June 30, 2017
Birthrates are declining for teens and women in their 20s — and rising for women in their 30s and 40s. (iStock)
The United States is in the midst of what some worry is a baby crisis. The number of women giving birth has been declining for years and just hit a historic low. If the trend continues — and experts disagree on whether it will — the country could face economic and cultural turmoil.
According to provisional 2016 population data released by the Centers for Disease Control and Prevention on Friday, the number of births fell 1 percent from a year earlier, bringing the general fertility rate to 62.0 births per 1,000 women ages 15 to 44. The trend is being driven by a decline in birthrates for teens and 20-somethings. The birthrate for women in their 30s and 40s increased — but not enough to make up for the lower numbers in their younger peers.
A country’s birthrate is among the most important measures of demographic health. The number needs to be within a certain range, called the “replacement level,” to keep a population stable so that it neither grows nor shrinks. If too low, there’s a danger that we wouldn’t be able to replace the aging workforce and have enough tax revenue to keep the economy stable. Countries such as France and Japan that have low birthrates have put pro-family policies into place to try to encourage couples to have babies. The flip side can also be a problem. Birthrates that are too high can strain resources such as clean water, food, shelter and social services, problems faced by India, where the fertility rate has fallen over the past few decades but still remains high.
…
“UBS Wealth Management is the latest to warn of a global city housing bubble as monetary stimulus is reversed and interest rates finally start rising. The danger is greatest in Toronto, up significantly in the last year, while Stockholm, Munich, Vancouver, Sydney, London and Hong Kong remain risky, and Amsterdam has now joined this group. Valuations are also stretched in Paris, San Francisco, Los Angeles, Zurich, Frankfurt, Munich, Tokyo and Geneva.”
Stein’s Law finally kicks in:
The Replacements — Live at Maxwell’s, Hoboken, NJ, 2/4/86:
https://m.youtube.com/playlist?list=PLVZ43dnfhKqjzTA_Ay5U-q-flLbLciHy-
Is Russian oligarch money laundering legal, if the President does it?
WTF!?
Mueller Expands Probe to Trump Business Transactions
By Greg Farrell and Christian Berthelsen
July 20, 2017, 7:31 AM PDT
Updated on July 20, 2017, 10:16 AM PDT
Special counsel examines dealings of Kushner, Manafort, Trump
Trump lawyer says this goes beyond Mueller’s mandate
Mueller Said to Probe Trump’s Business Transactions
The U.S. special counsel investigating possible ties between the Donald Trump campaign and Russia in last year’s election is examining a broad range of transactions involving Trump’s businesses as well as those of his associates, according to a person familiar with the probe.
FBI investigators and others are looking at Russian purchases of apartments in Trump buildings, Trump’s involvement in a controversial SoHo development in New York with Russian associates, the 2013 Miss Universe pageant in Moscow and Trump’s sale of a Florida mansion to a Russian oligarch in 2008, the person said.
The investigation also has absorbed a money-laundering probe begun by federal prosecutors in New York into Trump’s former campaign chairman Paul Manafort.
…
Ask the Podesta brothers that question. And, oh, maybe Bill Clinton too. $500K seems a bit steep for a 15-minute speech.
“Ask the Podesta brothers that question”
Riiiight.
Full court press keeping all that sheeet out of sight;
capitulate and buy overpriced sh@t cause everyone else is.
“You guys can do this!” —Susanne
being sold for $5,000 are now going for around $3,200. Buyers are becoming more emboldened while sellers are losing their leverage, and prices continue to drop as a result.’”
finally , a place HA can afford
DebtDonkey
Arlington, VA 22205 Housing Prices Crater 5% YOY
https://www.zillow.com/arlington-va-22205/home-values/
Here is a Dog that would have been worthy of the question…
How did you get that dog up there?
Biscuit the Climbing Dog
https://www.youtube.com/watch?v=AwUSkBKobIw