The Fire Sale Showed It Was Hard To Move Investor Stock
A report from Global Times on China. “The era of ’strong demand’ in China’s housing market is over, with ‘imbalanced and inadequate’ development becoming the industry’s top problem, said Yu Liang, chairman of property developer Vanke Group. Yu made the remarks in Shenzhen, South China’s Guangdong Province to explain Vanke’s 2017 performance. ‘In the past 20 years, the unprecedented wave of urbanization in China generated strong demand for commercial residential houses. So we built a lot in a bid to meet that demand,’ Yu said. ‘But things have changed. Many urban housing units have been sold but lie vacant; meanwhile, young newcomers may lack decent housing.’”
From Bloomberg on Canada. “It’s a tale of two housing markets in the Toronto area as Canada’s biggest city gears up for the crucial spring selling season: sales of big detached homes are slow, while condo deals are booming. On one side are people like Karen Berends, who put her C$1.5 million ($1.2 million) house back on the market in nearby Oakville this month after two failed attempts to sell in the past year. She reduced her asking price by about C$51,000, but still there are no takers, and she’s kicking herself for not cashing out last spring when the market was in a frenzy.”
“‘We could’ve walked away with a really good amount of money in our bank account if we had taken the money last year, but our head wasn’t in it at that point,’ Berends said. ‘It’s been a complete 360 this time around — it’s absolutely dead.’”
“Berends has placed ads in several Chinese media outlets in hopes of attracting foreign shoppers. ‘Apparently there are still buyers in mainland China, but they’re not really jumping,’ she said. She’s hoping to retire to a home she’s building north of the city in a few years, but she’s waiting for the right price for her existing house. ‘I’m thinking we might have to take it off and wait till next year,’ she said. ‘It’s just so difficult to know.’”
From Mansion Global on New York. “Despite the biggest Wall Street bonuses since the Great Recession, Manhattan recorded a 15% drop in luxury home buying in the first quarter of 2018, according to data on luxury contracts. Sudden volatility in the stock market beginning in February may also have securities industry employees feeling a little tight-fisted, said Frances Katzen lead agent of Douglas Elliman’s Katzen Team. Her finance industry clients are also turned off by softened luxury prices, preferring not to upgrade if it means selling their current home for less than they think it’s worth, she said. ‘It’s not a seller’s market,’ she said.”
From Domain News in Australia. “A Brisbane unit development has resorted to huge price cuts to move the last of its units, after years of unconventional sales tactics. Prices for Belise apartments in Fortitude Valley were slashed nearly 25 per cent, in what the executive director of the project marketing firm called a ‘dramatic’ price drop. The final few apartments weren’t sold in a 20-unit sale, with the sales team appealing for offers in a close-out sale.”
“The largest price reduction was for the last two-bedroom, two-bathroom unit, down from $632,000 to $475,000. Buyer’s agent Pete Wargent said the fire sale showed how hard it was to move investor stock in Brisbane. ‘People read a lot into it but it’s a bit indicative of the wider market. It’s the end of cycle stuff for new apartments,’ he said. ‘It’s been quite common. If you look around, even the smaller developments are finding the final apartment or two quite difficult to sell.’”
“Mr Wargent said looming settlement risk for off-the-plan buyers meant developers had to be more aggressive to sell their units. ‘I think that’s because the risk of the buyer having the valuation come in at lower than the sale price and then you have to fight to settle.’”
“Since the project was first launched more than five years ago, the developer of Belise offered a five-year settlement deferment plan, with a minimum deposit of $60,000. ‘It might appeal to someone who has no way of getting a mortgage in the next year or two,’ Mr Wargent said. ‘In five years’ time if the market hasn’t improved you can walk away and lose your 60 grand but… I wouldn’t be jumping at it.’”
“From what he could tell, Mr Wargent said the building was struggling to secure tenants, too. ‘I think it’d be fair to say they’re getting tenants but it’s not easy in the current market.’”
“Brisbane-based economist Kerrianne Meulman said the market was still soft in Brisbane, with an oversupply of low-end one- and two-bedroom apartments. ‘There’ll be still more apartment stock to come,’ she said.”
‘In the past 20 years, the unprecedented wave of urbanization in China generated strong demand for commercial residential houses. So we built a lot in a bid to meet that demand,’ Yu said. ‘But things have changed. Many urban housing units have been sold but lie vacant; meanwhile, young newcomers may lack decent housing.’
Hold on Yu, we’ve been told this is just how China builds cities. Maybe that guy was all wet.
Ironically, their response to having overbuilt is to build some more.
This is a strange pronouncement. It must have had official approval. Recall this:
January 16, 2018
“China’s housing market has defied gravity and government restraints for two years, floating on a tide of bank loans and speculation. Until now. In Beijing and Shanghai — two of the country’s largest markets — and other megacities, sales have stalled and prices have dropped, falling slightly in some pockets and dramatically in others. Luo Chuanyun, a 29-year-old liquor distributor, bought his first apartment on Beijing’s northern edge for $150,000 in late 2016, when prices were climbing by more than 20% a year.”
“The purchase put Mr. Luo up to his neck in debt, with mortgage payments of about $15,000 a year on an annual income of a little over $18,000. Mr. Luo said his real-estate agent told him that to find a buyer for his apartment now he would need to sell for half of what he paid. ‘I’d be short too much money,’ Mr. Luo said.”
“Some developers that a year ago put up special crowd barriers when apartments went on sale are now biding their time. In early December, a group of homeowners stormed the sales office of their Shanghai complex, Central Washington, whose developer, Shanghai Zhaoping Real Estate Development Co., was advertising new apartments at prices about 7% less than ones sold earlier in the year. One apartment owner said the new prices suggested the value of the apartment she bought from the developer in March had dropped by about 17.5%.”
“The developer couldn’t be reached to comment. It said on the project’s social-media account that price fluctuations are normal and that talk of substantial price cuts was ‘purely a misunderstanding.’”
“In some neighborhoods on Beijing’s outskirts, prices have fallen by double-digit percentages. In March, main street in the town of Yanjiao was lined with busy property agencies. Buyers who couldn’t pass Beijing residence requirements or afford its prices flocked there, pushing up prices in a sleepy exurb without much of its own economy. Since then, homebuying limits helped push prices down more than 30%. ‘For Rent’ signs now adorn the windows of abandoned brokerages.”
“‘There are people who bought multiple homes who are now trying to sell one to pay off the mortgage on another,’ said Ran Yunjie, a property agent. One of his clients bought an apartment last year for about $230,000. To find a buyer now, the client would have to drop the price by 60%, according to Mr. Ran.”
http://thehousingbubbleblog.com/?p=10315
Wait a minute - Mr. Luo only makes $18,000 per year? That can’t be, all Chinese are cashed up BAZILLIONAIRES!
He’ll have a couple of decades or so contemplating reality as he lives on the remaining $250 a month.
One problem is that the Chinese have also been trained to buy the dips. Housing started to tank there a few years ago (2014 maybe?) but got rescued and went even higher. So I’m sure Mr. Luo and all his peers are expecting that again.
DebtDonkeys are easily trained irrespective of nationality.
I recall ABQ Dan telling us that the Chinese were putting away 50% of their income. Maybe he only ran with the crowd that did the laundry?
Needs explanation which I will supply, if this posts:
https://www.cnbc.com/2015/10/25/china-savings-rate-versus-the-world-in-a-chart.html
Better data (in my opinion), since it is at an individual level:
https://data.oecd.org/natincome/saving-rate.htm
Highland Beach, FL Housing Prices Crater 11% YOY On Plummeting Demand For Vacation Homes
https://www.movoto.com/highland-beach-fl/market-trends/
‘Berends has placed ads in several Chinese media outlets in hopes of attracting foreign shoppers. ‘Apparently there are still buyers in mainland China, but they’re not really jumping,’ she said. She’s hoping to retire to a home she’s building north of the city in a few years, but she’s waiting for the right price for her existing house. ‘I’m thinking we might have to take it off and wait till next year’
Definitely, Karen, you hold the line and chase that market down. It’s what speculators do! Oh, another example:
‘Her finance industry clients are also turned off by softened luxury prices, preferring not to upgrade if it means selling their current home for less than they think it’s worth’
Fight that alligator!
Not gonna give it away!
‘I’m thinking we might have to take it off and wait till next year’
Well Karen - Next year is not looking any better - You missed the Top and now its people waiting to Buy the Dip or Bottom as they say - it just goes down from here. Wha wha whaaaa, thanks for playing house roulette! Mr. Banker has no parting gifts and he’ll take the house back.
‘It’s been a complete 360 this time around — it’s absolutely dead.’
Uh, is 360 the Canadian 180? Because, see Karen, 180 is the opposite direction. 360 is a full circle and the same direction you’ve been going in.
A few months back I asked a co-worker to do an about-face… blank… oops, a civilian. Okay, rotate 180-degrees.
‘Prices for Belise apartments in Fortitude Valley were slashed nearly 25 per cent, in what the executive director of the project marketing firm called a ‘dramatic’ price drop….The largest price reduction was for the last two-bedroom, two-bathroom unit, down from $632,000 to $475,000.’
Ouchy.
‘Mr Wargent said looming settlement risk for off-the-plan buyers meant developers had to be more aggressive to sell their units. ‘I think that’s because the risk of the buyer having the valuation come in at lower than the sale price and then you have to fight to settle.’
That would be the Chinese speculators, who just got cut off at the knees by the builder. Of course, they’ll bail, and down she goes.
Most of the investors in Belise are from Taiwan. There is a quiet desperation hanging around the place. It doesn’t help that there is some ear-splitting deep excavation happening right next door. They are building yet another unit tower right next door.
Managed to pass the RE license exam for California this week. I’m good at taking SAT/ACT/GMAT types of tests but not so good at memorization of legal stuff, so it required some study. So now I have a license but am unaffiliated with a broker.
And speaking of local agents, I looked up Casey Serin. Turns out he hasn’t sold a house in over a year. So I looked him up on FB and he’s gone all in on some kind of scheme to get other people to let him rent their properties on Airbnb for a cut. Still having credit problems too. I’m kinda curious why he got out of real estate when his reviews were good. Maybe he just didn’t make much money. Looks like he was only selling about one property a quarter and they were cheap stuff way out in the country up in the hills.
Congrats Carl!
Maybe if I move back to Folsom you can help me find a house.
At this point I have no plans to get involved in that sort of thing unless one of my wife’s friends in China needs some assistance. But I have met plenty of agents that I can tell you to avoid :-). So far I only met one I would voluntarily work with. And he used to be in tech so it might be an engineer mindset thing.
Congrats Carl.
unaffiliated with a broker…
Be careful out there Carl. A girl can get hurt working the street without a “broker”.
Hahah :-). Actually the law requires me to make friends with a broker if I’m going to work the streets.
“Managed to pass the RE license exam for California this week.”
Right on… kudos!
Now for that boob job, and remember a handful isn’t enough.
Hahah…you’re reminding me of a radio stunt I heard about one time that involved a guy getting implants…
I let my re license lapse but I’m going to renew it.
Realtors are liars.
….. and every closing a crime scene.
…except for Carl
I expect no mercy here :-). But yeah, what a wretched hive of scum and villainy the industry is. Even worse than I thought. I honestly thought the folks here were exaggerating for comic effect. Actually no.
“But yeah, what a wretched hive of scum and villainy the industry is.”
😁
Not gonna ridicule you. You’re keeping your friends close and your enemies even closer. Wise move.
They Donk.
My county has 1 licensee per deal,sign of the peak
Carl, I’m going to think of you as our guy on the inside from now on!
One thing I’ve learned so far is that lots of people have licenses but don’t talk about it. I can almost guarantee there are others here :-).
Leesburg, VA Housing Prices Crater 8% YOY As Federal Budget Impacts Northern Virginia Housing Market
https://www.movoto.com/leesburg-va/market-trends/
You mean this video is no longer an accurate representation of the Sydney (or Oz in general) housing market?!
The Auction: A Love Letter to Sydney
And the hits just keep on coming…
https://www.cnbc.com/2018/03/29/under-armour-stock-falls-after-company-admits-data-breach.html
“Under Armour admits data breach affected approximately 150 million MyFitnessPal accounts…”
I can’t find a Space Station umbrella.
I went shopping, thinking I was going to buy an enclosed trailer. There are a few criteria which are non-negotiable (size, must be white, etc.), but nothing out of the ordinary. I pay cash, so I thought it would be a pretty painless process. I could not have been more wrong.
What I have experienced is nothing short of the worst customer service I have ever encountered when trying to make a big ticket purchase. It seems the bubble is so overheated around here that they can’t even keep the trailers on the lots. When they come in, they’re gone. So, I have no trailer, and I cannot even get them to call me back.
You’re in Florida. And when the guy goes in the back to talk to his manager tell them to call you. If they don’t, you have been saved.
There is a place in Georgia I think that makes such to order and will deliver. Search online.
Can’t keep the trailers on the lots? This is rather new to me. Why would the bubble make these trailers so attractive? What people are hauling in these trailers that they are so in demand? House-related stuff? Lawn mowers? Dirt bikes? Water pumps?
An interesting point of view …
https://wolfstreet.com/2018/03/29/73-billion-lottery-u-s-voluntary-taxes-americans-pay-eagerly/
The bigger the prize, the more money it attracts. Which makes the prize bigger. Which attracts more money. Voila mini-bubble.
And the more people it attracts the likelihood of sharing the prize increases.
There are two factors that control the prize:
1. The odds of winning the prize, which may be slim but nevertheless is something that can be calculated, and …
2. The number of other people who have also won the prize - the number of people who also chose the winning number - a factor that cannot be calculated.
The number of other people who have also won the prize - the number of people who also chose the winning number - a factor that cannot be calculated.
The odds of that happening can also be calculated
How so?
I wish more states would take this psychology and use it for good.
I’m a big fan of “prize-linked” savings accounts (which are less common than they should be).
The accounts pay a smaller-than-market interest rate. However, some interest is put into a “prize pool”…the more money you have in your bank account, the greater your opportunity to win a portion of the “prize pool”.
So, instead of making 1.5% on your money, perhaps they only pay you 1.25%, but there is a chance any given month of winning thousands of dollars…and the larger your bank balance, the greater your chances.
Real lotteries “trick” you into buying a ticket with almost no chance of winning–and your money is gone.
PLSA’s “trick” you into saving more money, with the cost NOT being a loss of your principal, but an acceptance of a slightly lower interest rate.
I remember hearing about a scheme along these lines across the pond in the UK. I see this example as somewhat perverse in that it skims off savers interest and puts the profits into the banks’ pockets, unless Man U wins the Premier League and FA. It’s not really what you are describing, but interesting nonetheless:
“Virgin Money’s new Double Champions Isa pays 1.2pc interest over a year, which is far less than current top-payer Charter Savings Bank’s 1.31pc rate.”
“However, if Manchester United win both the Premier League and FA Cup this season, the rate is boosted to 3.2pc. It’s a gamble but in a low interest environment it might be worth it.”
“If the reds don’t win, you’re missing out on a potential £22 a year if you stash your entire £20,000 Isa allowance in Virgin’s Isa, compared to Charter Savings Bank’s offering. But if they are victorious you could earn up to £640 in a year.”
https://www.telegraph.co.uk/personal-banking/savings/manchester-united-cash-isa-pays-32pc-do-double/
The odds favor Mr. Banker, of course.
I’ve always wished that there existed a national savings account that allowed for savers to accrue a guaranteed interest rate several points above inflation, but which would max out at a low amount and tie it to an individual social security number. The catch would be that the government match would only accrue if the cash is saved, not spent over a defined period of time.
Sh!tcoin fall down, go boom:
$6,875.41 Bitcoin price
−$1,040.23 Since yesterday (USD)
−13.14% Since yesterday (%)
Some of the voices here who were so eager to explain how the new world works are now strangely silent.
The new world works the same way the old world works; The vast multitudes of pukes do most of the work and then these pukes voluntarily turn over their hard-earned money to strangers.
Plus ca change, plus c’est la meme chose.
https://en.wiktionary.org/wiki/plus_%C3%A7a_change,_plus_c%27est_la_m%C3%AAme_chose
Waialua, Hawaii Housing Prices Crater 19% YOY As Chinese Nationals Walk From Mortgages
https://www.movoto.com/waialua-hi/market-trends/
Tesla Asks for Model 3 Factory Volunteers to Prove ‘Haters’ Wrong
Dana Hull
Bloomberg
3/29/2018
“Tesla Inc. exhorted its factory workers to prove wrong the “haters” betting against the company and is letting a small number of volunteers join the effort to ramp up output of the crucial Model 3 line.”
“Tesla will suspend Model S and Model X production Thursday and Friday because it’s ahead of target on building those this quarter, Peter Hochholdinger, vice president of production, wrote to employees in a March 21 email obtained by Bloomberg News. An unspecified “limited number” of workers who build those vehicles will have the option to work on the Model 3 line on those two days and Saturday, he said.”
“If Tesla reaches its weekly Model 3 production target, employees will have doubled the size of the company as measured by cars shipped, and output of that vehicle will exceed Model S and Model X combined, Field wrote. He said Model 3 will outsell the battery-electric Nissan Leaf, BMW i3, Audi E-Tron and Chevrolet Bolt and Volt combined.”
https://www.bloomberg.com/news/articles/2018-03-29/tesla-urges-workers-to-prove-haters-wrong-ramp-up-production
Tesla issues its largest recall ever voluntarily over faulty Model S steering
https://www.theverge.com/2018/3/29/17177888/tesla-recall-model-s-size-power-steering
I’m starting to think you have some crow to eat.
everyone up in reno is giddy about the new tesla plant.
Yeah, I saw that. It looks like it will be about an 1-hour fix in the dealership. If the bolt fails, it looks like it makes steering more difficult. No reported fatalities or anything. Nothing like the Takata airbags which are in hundreds of thousands of vehicles and have been actually killing people. To me, this just sounds like Tesla is being pro-active here and actually fixing the problem.
Here is a ranking of auto recalls by manufacturer. Tesla is not on the list, but VW is dead last at 1805 recalls per 1000 cars. Also, a recall doesn’t necessarily say how serious the recall is. I’m pretty sure that Tesla is ahead of that rate in any event.
https://clark.com/cars/automaker-best-worst-recall-history-rate/
I would just ask Ben if you’ve actually driven a Tesla. Maybe they will have a cash shortfall and will have to raise more equity. Maybe they will never turn the corner. But I’ve driven a Tesla and there is nothing else to compare it to. It’s a fundamentally different experience than driving any other car (I haven’t driving a Cadillac with super cruise). There is no way I would buy any other car after driving a Tesla. I’m excited about Waymo’s announcement a day or two ago though:
https://www.nytimes.com/2018/03/27/business/waymo-driverless.html
There is no way I would buy any other car after driving a Tesla…
Strange talk from a guy who says out the other side of his mouth that cars are like cement overshoes.
To clarify, if the hype about self-driving fleets never arrive, I would want to purchase a Tesla that I can drive today. In the meantime, I’m happy with my eBike. I’m not going to by an ICE car while I’m waiting for the market to figure out what is viable as far as transportation. I will gladly eat my crow next year if Tesla is bankrupt. I suspect they will not be.
the dealership.
And there’s the rub. There are no dealerships.
My partner owns a Tesla and has been less than impressed with the fit and finish of the car (not recalls, but rattles where there shouldn’t be). He likes driving it, sure, but he isn’t a huge fan of the quality of the build.
In order to get some of the nagging issues solved, he had a hell of a time getting them fixed….because, no dealer network.
Your comment about not wanting to drive any other car I’m sure has far less to do with Tesla vs. other manufacturers, and much more to do with EV vs. ICE (query whether that also impacts recalls).
When other cars start pumping out EVs in greater numbers, Tesla better step up their game with respect to quality.
There are no dealerships.
You say that as if it is a bad thing? Universally one of the worst consumer experiences is buying a car through a dealership. Talk to a handful of people and there will be enough grizzly anecdotes about people being fleeced by the salesman. Part of Tesla’s allure to me is precisely because they have no dealerships. I like their sales model. I want dealerships to go the way of the dinosaurs. Let them convert to service centers and have all purchases made via the manufacturer. A cursory read of dealership history in the US shows that this is an anti-competitive racket if ever there was one. Tons of graft and back and forth between politicians and wealthy tycoons.
My father owns a Model S P100 D, and he had to have some work done and the mobile technician came right to him. It was fast, and efficient.
I am first and foremost an EV enthusiast. I respect Tesla because they pushed the envelope. But I have no problem if any other auto manufacturer ultimately wins the race. I may spring for a used Chevy Bolt coming off its lease if the more affordable Model 3’s are too far away. I do wish the EV tax credit were structured differently though. I think once an auto maker has expended it’s allotment, they should be able to use other car maker’s unused quotas.
There is no way I would buy any other car after driving a Tesla.
Wow, quite an endorsement. I’ve driven them and like them but there are lots of other cars I would like just as much or more. Compared to cheap commuter cars yeah…they are the ultimate commuter car if they would just get cheaper. For road trips or high performance uses lasting more than 10 seconds or so we still need a battery breakthrough. My current object of lust is the Audi RS3. Only software and an E85 fillup away from faster than a P100D even at the dragstrip. On the freeway it’s no contest. All for about 60k. And if I wanted something more in the same class the new M5 is looking good.
Yeah, those sound good like good picks. My penchant for Tesla is with the auto-pilot. I drove it from Las Vegas to San Diego and I pretty much didn’t touch the gas, brake, or really the steering wheel for 90% of the ride (hands were on the wheel ready, I just wasn’t really doing the work). The self-driving (or advanced cruise control if you will) is mainly what I like about Tesla. The relative lack of maintenance and low need for service is what I want too, but that is inherent in all EVs. There are just few moving parts. The newest Model 3s are at 315 miles of range. My dad’s car is 347 highway. I think that’s pretty darn good.
Tesla’s Push to Prove the Haters Wrong Proves Them Right: Gadfly
Bloomberg
Liam Denning
March 29, 2018
Because I try to be fair:
“Here’s the thing, though: Tesla’s efforts to prove its “haters” wrong just proves them right.”
“Start with the nomenclature. Calling those expressing skepticism “haters” serves only to underline the cultish aspect of Tesla’s stock. Yours truly has expressed quite a bit of skepticism about Tesla’s finances and whatnot over the years and been called many variants of “hater” — some quite creative, it has to be said — by more than a few … “lovers” (is that the right term?).”
“This cultish aspect has, of course, worked in Tesla’s favor for a while, letting it tap the external funding it needs in the absence of generating its own. But when it stops working quite as well — as happened this week — that dependence on the kindness of strangers is thrown into glaring relief. Adopting the language of Tesla as an emotional construct rather than a commercial enterprise just reinforces this.”
“Going all-out to get Model 3 production up this one week toward 2,500 — a target that’s been changed so much already it barely warrants the term — would prove what exactly? That Tesla is now on a smooth glide-path to the skies?”
“As my colleague Hull reports, workers might get reassigned from making the existing Model S and X vehicles for this big push (Tesla says pauses on the latter production lines aren’t related to the Model 3). This doesn’t paint a picture of the methodical, efficient production line that enables the wider auto industry to turn a profit in a cut-throat business. Over the longer term, such short-term resource shifting to hit one-off goals is a recipe for inefficiency (read this splendid critique of Tesla’s manufacturing approach by Bloomberg View’s Edward Niedermeyer).”
https://www.washingtonpost.com/business/teslas-push-to-prove-the-haters-wrong-proves-them-right-gadfly/2018/03/29/aa754694-3383-11e8-b6bd-0084a1666987_story.html
I’d rather own a 1967 Shelby GT500.
That would be great…if you hurried and sold it before the next crash. The new cars you could buy with that money are too good to bother with the old school fantasy of just using it as a daily driver.
I’d rather own a 1967 Shelby GT500.
For my father’s sake, I’m glad there are people like you. My father purchased about $1 mil of classic cars that he is flipping. The owner passed away and the assets were tied up in a nasty dispute between the children. He bought them from a forced sell (one son wanted to keep them and run a museum, the daughter wanted to liquidate). Stuff like this absolutely has no appeal to me. I desperate tried to talk him out of this purchase. I think he is going to take a bath. He’s a gambler though!
Maybe take Bob Lutz’s advice and buy a Tesla if you think they are going to go bankrupt:
“Auto industry veteran Bob Lutz, 85, is recommending the Tesla Model S to collectors of rare automobiles.”
“Lutz, high on the Model S but down on Tesla as a company, told an audience of vintage-car collectors in Scottsdale, Ariz., Thursday that they should consider buying a Model S “while they’re still available.”"
“With a storied career that spanned BMW, Ford, Chrysler and General Motors, Lutz has always been blunt and outspoken, separating himself from the marketing-speak that pervades the auto industry.”
“Known in the industry as a “car guy,” he’s a lover of the Model S luxury electric sedan.”
“A Model S, especially with the performance upgrades, is one of the fastest, best handling, best braking sedans that you could buy in the world today,” he said at a forum sponsored by collector-car insurance company Hagerty. “The acceleration times will beat any $350,000 European exotic.”
http://www.latimes.com/business/autos/la-fi-hy-lutz-tesla-20180119-story.html
“A Model S, especially with the performance upgrades, is one of the fastest, best handling, best braking sedans that you could buy in the world today,” he said at a forum sponsored by collector-car insurance company Hagerty. “The acceleration times will beat any $350,000 European exotic.”
…….
But the dashboard rattles like a Yugo.
Again, my partner is a “car guy” who owns a Tesla Model S, but also plenty of other cars, including modern and vintage (MacLaren, 80’s vintage Ferrari, Porches, restoring an old Astin Martin, etc., etc., etc.).
If you ask him if he’s going to buy another Tesla, his answer is “maybe”. He enjoys the power/acceleration, etc., but he ties such things to the fact that the Tesla is an EV, and is quite interested to see what EVs other luxury manufacturers produce.
Yawn…
The Financial Times
Financial Services
US subprime mortgage bonds back in fashion
Yield-hungry investors turn to assets blamed for financial crisis a decade ago
…
Is Wall Street’s “Fear Index” keeping you up at night?
Notice how the article below bemoans price declines for the quarter so small that they are in the normal range of volatility for a single day!
The simple reason the Dow snapped a 9-quarter win streak: Wall Street’s surging ‘fear index’
By Mark DeCambre
Published: Mar 29, 2018 5:24 p.m. ET
VIX set for quarterly rise of about 85%, its biggest surge since 2011
The Dow and the S&P 500 halted a record-setting streak of quarterly wins at nine, and the clearest reason why may be explained by the VIX index, widely known as Wall Street’s “fear gauge.”
The Dow Jones Industrial Average (DJIA, +1.07%) posted a quarterly decline of more than 2.3%, snapping the longest streak of quarterly gains for the blue-chip average since an 11-quarter rally that ended in the third quarter of 1997. The S&P 500 index (SPX, +1.38%) booked a 1.2% quarterly fall, ending its longest such stretch since the first quarter of 2015.
…
can central banks and corporate buybacks support these markets forever?
Gainesville, FL Housing Prices Crater 32% YOY As Housing Correction Advances In Cities
https://www.movoto.com/gainesville-fl/market-trends/
good morning master yoda.
I’m going with Rochester
WHICH CITIES LIE IN THE TIANGONG-1 ‘DANGER ZONE’?
Name of city Country Name of city Country
The countdown begins! Out-of-control Chinese space station’s fiery crash to Earth is due on Easter Sunday (but scientists still don’t know where it will land)
Chinese scientists lost control of the Tiangong-1 space station in 2016
The huge object will crash land on our planet between March 31 and April 1
Estimates say it will enter the atmosphere on Sunday at 11:33am BST (6:33ET)
Upon reentry the satellite fragments are likely to turn into a ’series of fireballs’
By Afp and Joe Pinkstone For Mailonline
PUBLISHED: 10:30 EDT, 29 March 2018 | UPDATED: 12:16 EDT, 29 March 2018
Read more: http://www.dailymail.co.uk/sciencetech/article-5558803/Out-control-Chinese-space-station-fiery-crash-landing-Earth-69-HOURS-April.html#ixzz5BErbT0Br
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It’s gonna be another twitter.
“We could’ve walked away with a really good amount of money…if we had taken the money last year, but our head wasn’t in…” Berends said.
Ms. Berends. The world of finance is filled with greedy people. It’s filled with people who do not hesitate to game you. You ignored Zeev Hed’s rule of investing:
Plan the play and play the plan.
You and others Ms. Berends live in the Land of Coulda and Shoulda. You wanted it all and predictably it doesn’t work that way. Consider your greed: “I coulda and shoulda sold last year but my head wasn’t in it.” Your head was dreaming about your future bank statement.
‘I’m thinking we might have to take it off and wait till next year,’ you added. ‘It’s just so difficult to know.’”
It’s easy to know, Ms. Berends. Consider Bitcoins. I posted HERE to sell BTC at $10,000 only to watch it run almost another $2000. That was part of the plan. “LEAVE TEN PERCENT ON THE TABLE FOR MS.BERENDS.”
Plan the play and play the plan, honey. And learn technical analysis if you want to jump in any arena. Stop talking shit. Leave the emotions at the curb.
Oranges, onions, lumber, copper, houses, bitcoins, cars…they’re all the same. Money is ATTACHED to all of them. People think they are different.
‘I’m thinking we might have to take it off and wait till next year,’ Berends said.
You are WAITING for it to go back.” You are still trapped in GREED.
‘It’s just so difficult to know’, you added.”
No, it’s NOT. “Plan the play and play the plan.”
We’re in a Secular Bear market, folks. It gonna be years to run. Welcome to the New Normal where:
The perfect parasite feeds off of the host. It doesn’t kill it.
I posted HERE to sell BTC at $10,000…
Well gosh!
Just goes to show that I don’t catch all the fine print buried in the pile of “I’m UP, UP, UP”.
Find me the post where I said “I’m up, up, up.”
Slander.
You put it in quotes. I NEVER said that. I said leave 10 % on the table and sell at $10,000.
Well I guess it was a mistake to put it in quotes. It’s a paraphrase only. You bragged plenty and were schooling us.
“Slander” is pretty rough after a long lecture on how to read markets. Don’t be so emotional I’d say.
You are having trouble with the King’s English. I DEFENDED it. I did NOT tell you to jump aboard. That was YOUR inference.
Caveat emptor is front and center for any option, future’s contract, or Bitcoin. They burn 85% on a regular basis. People do not heed the disclaimers.
It is what it is. The debate revolves around that.
……………….
Back to housing, and, the game that is being played there.
Yes, defended it and bragged about your position, up 100% if I recall. That’s where I figured you bought at $6,000 if you were a telling it right. I simply missed you sayin you sold at 10. See, that changes everything. Course it was at 12 wasn’t it? Maybe not. Oh well.
Dude
Where are you getting your crap from? POST the 100% boast. It’s real easy to document. Read about the Indian rope trick and the powers of suggestion. You simply make up crap as you go along.
BTC topped at 11,800. That was the TOP of the down channel. I said leave the last 10 percent on the table. I have never sold anything at a TOP.
When BTC was at 10K I told others to EXIT. An Exit is an Exit REGARDLESS of where you made your purchase.
You missed the days of Zeev Hed.
Hi everyone,
I want to first thank Ben for creating this wonderful website, and everyone have contributed your valuable comments.
I lived in Chandler, AZ. I have been holding off buying a house from last spring because at the time the real estate market is so hot. The price is going up by the week. I suspected there was a housing bubble. I am aware part of the reason the real estate prices went up was that some corporations actually moved here, bringing employees. Plus, there is CA exodus because of high real estate prices.
On the process of house hunting, I have seen some Intel Employees just bought to rent. In these two years, several of my friends bought second houses just to rent. My realtor told me because the interest rate is so low, many of her clients bought three houses before rate hikes.
People living in China bought houses because they could. One of my Chinese friends was soliciting any Chinese with a CHINESE passport wanting to buy in Phoenix only need a down payment and the rest of the mortgage will be taken care of.
It seems that this round of housing price hike is different than just buy to sell for higher profit. If these people have enough money and they simply just bought to rent, it seems unlikely that they will sell when the price peak. It looks more like people with enough down payment just keep buying houses to accumulate their wealth, AKA letting others paying their mortgage. Thus, the sell off like last housing crash will not happen.
Do you think we are shifting the real estate market from end-user to landlord nation? I am very concerned that I will be priced out of the market forever if I don’t make the move now.
Any comments will be highly appreciated!
Thank you!
One of my Chinese friends was soliciting any Chinese with a CHINESE passport wanting to buy in Phoenix only need a down payment and the rest of the mortgage will be taken care of.
Interesting, I’m curious how he makes that happen? I’ve heard rumors that there are Chinese banks willing to lend to Chinese people on property in the USA. But all I know for sure is that a normal American bank will not count Chinese income for loan purposes unless it’s been made consistently in the USA for over 2 years. Income made in China won’t get you a loan.
1. Don’t listen to a realtor–they are trying to get you to buy regardless of your personal circumstances.
2. Don’t buy because you fear being priced out of the market. Prices today are cyclically high. It may take a while, but there will be another housing downturn.
IMHO, there are two logical paths for you:
–Rent below your means, save your money, and be ready to pounce the next time there is a downturn; or
–Find a place to buy, but it better be a place where you can live with your family for at least 10-15 years, AND you need to accept the fact that you may very well lose your down payment and need to walk away from the home if there is a bad recession and you lose your ability to make mortgage payments.
I was faced with a similar situation, and I chose to rent. And I’m really glad I did. When the housing crash came:
–I was cash rich (was able to put down a large down payment–so had an easier time with financing the home)
–I was able to buy a much bigger place than I ever expected (because prices had come down)
Tina,
Thanks for chiming in here. I’m going to give you my thoughts and then I’ll let others chime in.
A few points:
1) Interest rates have been at historic lows for about a decade in the US. This the effect of pushing asset prices up because the cost of debt looks cheap. Also, a lot of investors have been “chasing yield”. This has almost certainly had the effect of inflating housing as massive institutional players bought up housing to rent.
2) Long-term, housing rises about 1% a year over inflation, and probably nothing at all once accounting for required upkeep. Since about 2011 or 2012, we’ve had house price increases that have far exceeded median wage increases. In some of the coastal markets and urban hubs, the price increases have been quite steep.
3) Housing prices now are even higher than they were pre-bubble. This is not true for every area, but it is true for many, if not most, of the more thriving metro areas that have a decent economy.
4) New tax laws have mildly reduced the incentive to own a house, especially in the blue states. The first time these laws will go into effect will be next tax year. We still have no idea what the net effect this will have on prices. My guess is that it will take 2-3 years for the policy to dampen prices. With the $10k limit on state and local property taxes and limiting the mortgage interest deduction on homes over $750k, that should put downward pressure on higher priced units.
5) Housing is probably being under-built in some areas, and massively overbuilt in other areas, especially luxury apartments. In other words, we are not building enough, and not the right type, and not in the right areas.
There are a lot of factors that contribute to this. Many local land use regulations, costly permitting, and the rise of “not in my backyard” (e.g. NIMBYs) groups have the effect of limiting new development. Many construction workers and home builders went bust after the Great Recession and permanently went into other industries. Construction costs, labor costs, and land costs have gone up. The end result is that affordable housing is a scarcity and is difficult to build.
To add to that, we have the financialization of housing as a substitute for bank accounts. We don’t really have an idea of how much foreign cash or illegal money is being pushed into the market and how that is further inflating the bubble.
This paradoxically leads to a glut and a shortage at the same time. The bubble aspect comes into play because housing is far too expensive and is requiring debt loads of far in excess of what it has historically been.
Having said all the above, I personally don’t think you should feel any urgency to buy. In fact, I think this would be the absolute worst time to buy. But it all kind of depends on your financial situation. Rents have gone up pretty dramatically too in lots of places. The problem with housing is that it is not something that you can sort of sidestep when there is a bubble, unless you have relatives you can double up with or decide you want to try the RV life.
When you say you are “very concerned I will be priced out of the market if I don’t buy now”, that is almost the very definition of a mania. We are on track for 3, maybe 4, more interest rate hikes this year. We should get to 3.5% interest rate at the Federal Reserve by mid 2019. If that holds, then we would expect mortgage rates to be around 5.5% to 6%. I suspect that will dramatically affect housing. The question then becomes if we will have sideways housing movement for a while as wages catch up, a dramatic implosion of prices, or some combination of the two.
I think builders will start shifting away from luxury multifamily housing and probably start going towards the starter market since that is where the most demand is right now. Better to wait it out and see than to panic buy. Remember this adage: “Act in haste, repent in leisure.”
Cheers
With 25 million excess, empty and defaulted houses out there, the only answer is fraud.
Who benefited directly from the fraud? Indirectly?
Not to mention the fact labor and materials prices are lower today than the we’re 15 years ago.
Duxbury, MA Housing Prices Crater 10%YOY
https://www.movoto.com/duxbury-ma/market-trends/
Hi Tina, I am one of the people that bought a rental property in your area. Thanks so much for the information and opinion. I’ve been wondering if it’s time to lock in gains by selling. I cant believe things will either keep going up or stagnate. I keep waiting for a pullback, but I’ve been wrong so far.
Alameda, CA Housing Prices Crater 14% YOY As Tech Layoffs Ravage Bay Area
https://www.zillow.com/alameda-ca/home-values/
*Select price from dropdown menu on first chart
Thanks everyone for the in depth responses, it was very helpful!