A Cooling Is Turning Into An Ever More Widespread Frost
It’s Friday desk clearing time for this blogger. “By nearly every metric, Miami-Dade County is one of the most difficult places to live if you don’t make a ton of money. The county’s median income is a staggeringly low $44,000. What have Miami-area officials done to help the working poor? They’ve encouraged developers to overbuild so many luxury condos for millionaires that it will now take years to sell them all, according to local real-estate analyst Peter Zalewski. Zalewski’s CraneSpotters.com reported at the end of February that it will take 49 months (just over four years) to sell all the luxury condos developers have built across town. ‘It is worth noting this report only tracks those South Florida condos that are formally listed for sale,’ Zalewski wrote. ‘The report does not factor in the nearly 47,450 new condo units currently in the development pipeline east of Interstate 95 in the tri-county South Florida region.’”
“The numbers look worse when broken down by city. In Miami Beach, it will likely take 41 months to sell the 742 luxury units for sale. In Bal Harbour, the 281 million-dollar units will also likely take 45 months to offload. And in crane-saturated downtown Miami, the 505 luxury units available make up a 78-month supply.”
“Sales of Manhattan apartments slowed during the first quarter to the slowest pace in five years, according to The Wall Street Journal. Brokers said sales were dampened by a slowdown in closings in new luxury buildings, as well as a rebellion by condo buyers against high asking prices. As sales slowed, the number of available listings rose, compared with the same period last year. The Journal’s analysis put the median price of a Manhattan apartment at $1.095 million, about 8% below the all-time peak price recorded in the second quarter last year.”
“Gregory Heym, the chief economist at brokerages Brown Harris Stevens and Halstead Property, said some sellers already have made cuts in asking prices that won’t be reflected until sales in future quarters. ‘You are seeing a continuation in price reductions,’ said Leonard Steinberg, the president of brokerage Compass. He said when property isn’t moving, ’sellers will want to acknowledge that, if they want to sell in less than 500 days.’”
“The London housing market is being blighted by ‘an ever more widespread frost,’ as the city’s previously buoyant property prices continue to stutter, the latest data from Nationwide showed. ‘London’s property market shows no sign of giving up its wooden spoon, as the slowdown in the capital worsens,’ Jonathan Hopper, managing director of Garrington Property Finders said. ‘What began as a cooling of prices in the capital’s prime and super-prime postcodes is turning into an ever more widespread frost.’”
“Property agents Savills reported earlier in the year that it is seeing price declines of as much as 4% in residential areas of South West London such as Battersea, Clapham, Wandsworth, Fulham, and Richmond.”
“The era of overall shortage has ended in China’s property market, but new issues of unbalanced allocation and undeveloped services have emerged, said China Vanke Co’s Chairman Yu Liang. Yu said ‘the time of unilateral rapid increases in home prices has ended. If developers still buy land, no matter what the price is, it will be a payback time.’”
“Bubble, bubble’, toil and trouble? Bubble can be a scary word for property investors because it means that real estate prices are inflating rapidly over a short period without the support of underlying fundamentals or demand. For CBRE|WTW Malaysia managing director Foo Gee Jen, asset bubbles are often sentiment-driven, hence they do not provide any standard characteristics for early detection. A bubble will also form when there is excessive liquidity, leading to ‘too much money chasing too few assets,’ especially when the investment market narrows with limited buying options. ‘People should be wary when the value of an asset bloats to a level where the expectation on the economic returns is unjustifiable or has an unfounded basis,’ he tells EdgeProp.my.”
“Universiti Tunku Abdul Rahman’s Faculty of Business and Finance, Department of Economics assistant professor Dr Yip Chee Yin — who specialises in the housing market — opines that the property market, which is currently experiencing a slowdown, has yet to see the worst of it. ‘Housing prices are already coming down [indirectly] at a steady rate because developers are offering rebates, free furnishing and more. All these amount to a price decrease. The sad news is that overhang and unsold properties are at an all-time high in a decade. This may cause developers to default bridging loan payments, thereby resulting in a domino effect on loan defaults and this could cause a financial crisis, signalling the housing market is about to burst.’”
“There has been a 22 per cent bump in the number of homes advertised for sale across Sydney compared to a year ago, coupled with a similar drop in buyer demand — mostly driven by tighter lending restrictions on investors. It has meant sellers are increasingly competing with each other to attract buyer interest, giving home seekers room to negotiate prices down. James Sarzano, of Ray White North Ryde/Macquarie Park, said in some instances sellers were having to adjust their expectations.”
“‘Vendors are getting more realistic about the changed market,’ he said. ‘They had to come back to reality late last year when they were asking $2.1 million for their property but now they have had to adjust their expectations to $1.5 million.’”
“Australia, you are getting complacent. Over the ditch, the big lesson of the last few generations is that house prices always go up. That lesson has been learned, passed on, reinforced by experience and passed on again. Generations of Australians have grown rich and comfortable by sinking their earnings into real estate. Across Australia, house prices are up over sevenfold since 1986. In Sydney, it’s nearly ten fold.”
“If I lived in Sydney I’d be downright frightened. It’s only a rule of thumb, but when graphs go vertical like the Sydney one has, it can be a sign things aren’t too sustainable. Check out the peak house prices hit in 1890 in Sydney and Melbourne. They went up to almost $100,000 (in inflation adjusted terms). It took another sixty years for prices to rise above this level again.”
“In the same way you can have a once in 100-year flood, or a once in 100-year fire, we can have a once in 100-year house price crash. What makes rare events so debilitating is that we’ve forgotten how to prepare for them. We hold the record — 50 years — for the longest house price rise in history. On average, house prices in advanced economies go down after 12 years of going up. And when they fall they do so for an average of five years, but the record is 18 years of falling house prices (in Japan).”
“Australia hasn’t had a five-year period where national house prices go backwards for a couple of generations. The memory of it is almost forgotten and Australians have started to believe it won’t happen there. And that just makes us all the more vulnerable.”
‘Yu said ‘the time of unilateral rapid increases in home prices has ended. If developers still buy land, no matter what the price is, it will be a payback time.’
‘Chinese investment in US real estate fell 55% in 2017′
‘While experts had expected a sharp decline, the numbers reveal that the bottom fell out. Last year, Chinese companies funneled $7.3 billion into U.S. commercial real estate, compared to 2016, when firms spent $16.2 billion, the report showed.’
‘Los Angeles suffered the steepest percent drop, with deal volume down 67 percent. In New York, investment fell 54 percent — including investment in Hong Kong — and in Chicago, it was down 20 percent.’
‘In Los Angeles, there was a 90 percent decline in hotel volume, said McKinny, Cushman’s senior managing director of China Direct Investment.’
‘In the fall, The Real Deal reported that China’s largest mall owner, Dalian Wanda Group, was selling five foreign developments, including One Beverly Hills, a $1.2 billion condo and hotel project. In July, the company sold $9.4 billion worth of its hotel portfolio.’
‘But Anbang is perhaps the poster child for the fall in Chinese real estate investment in the U.S. The insurance conglomerate acquired New York’s Waldorf Astoria from Hilton Hotel Group for $1.95 billion in 2014 amid the rush of Chinese investment here. In February, China’s insurance regulator seized control of Anbang and said its chairman had been prosecuted for economic crimes, TRD previously reported.’
‘Insurance companies like Anbang, according to the report, were “particularly susceptible to political pressure to reduce speculative real estate investments.”
‘It has been about a month since the last earnings report for Toll Brothers Inc. Shares have lost about 3.8% in that time frame. In the past month , investors have witnessed a downward trend in fresh estimate. There have been six revisions lower for the current quarter. In the past month, the consensus estimate has shifted by 13.5% due to these changes.’
‘Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift.’
It’s deja vu all over again, 2007-2009.
Considering 93% of blacks voted for obama, used the other way…
We are still in a bubble when you specifically exclude 50% of potential customers.
**********
Sacramento home for sale - to anyone who doesn’t support Trump
CBS “News” | March 30, 2018
A Sacramento, Calif., area home is up for sale, but it comes with a catch.
The homeowner has a political preference in mind for the next owner of her house, which has been in her family for decades.
“I told her [the realtor] that I didn’t want her to sell it to a Trump supporter,” said the woman.
She wants a sale contingent upon how someone votes, but is that legal?
“We can ask somebody how they voted, but they don’t have to tell us,” said realtor Elizabeth Weintraub.
She says the “no Trump supporter” request is a first for her.
According to the Fair Housing Act, political party affiliation doesn’t fall into one of the seven protected classes. They include race, religion, color, disability. National origin, sex and familial status.
Why would a Trump supporter want to live in Sacramento?
The capital city of the Sanctuary State, the state that is also the most impoverished state in the country.
Hi everyone,
I want to first thank Ben for creating this wonderful website, and everyone has 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.
In the process of house hunting last spring, 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!
I’ve seen this post before…
Hi BlueSkye,
I swear this is my first time posting here. I posted the question today on yesterday’s post. But right after I posted my question, I noticed that Ben has a new post for today. So, within ten minutes, I posted my question here for the second time.
I know Ben accurately predicted the housing bubble 1.0. I am the first time home buyer, however am put off by the price from last spring. I just have the anxiety of the real estate price will never come down to be affordable for a very long time. I am saving 20-30% of my income hoping to buy when the price is more reasonable. My rent is going up by 10% and the real estate in Chandler AZ just got crazier.
Coupled with my personal observation, I did some research and found this post:
https://www.cnbc.com/2017/09/26/stop-sugarcoating-the-housing-market-economist-warns-that-buyers-face-increasing-troubles.html
I am very afraid that the last great recession is creating the class of landlord and renters, and I will never be able to be afford to own a house.
If you don’t mind, would you please let me know your thoughts on my post?
Thank you very much!
Hi Tina,
” I will be priced out of the market forever…”
That right there should make you very cautious. It is unlikely.
If you can’t afford something, don’t buy it. Landlords all over the world are getting crushed already. There will be housing for you that you can afford. Wait until you can afford before buying.
Wait until you can afford before buying ??
That’s BS advice given your past posts.
Tina. Blue Skye thinks anyone who borrows money is a moron.
First question you need to answer before buying is your job secure or your ability to get another local job if you were layed off. If you feel secure Then you are half way there. Next thing would be having one year of savings left after your down payment equal to one year of your current obligations. IE, mortgage, car loan. If you plan on staying in your home for the long term (7 years or more) go ahead and do it. You may not get another opportunity to borrow long term fixed rate money at these rates again.
Well of course Dave, I think if someone considers paying three or four times what something is worth (bubble prices) and has to borrow for 30 years to pay for it, they should not walk, but run in the opposite direction.
Who gives a chit BS what something may be worth in “Your Mind”. What matters is what it’s worth to her or anyone else that wants to buy. Most people are not interested in living on a boat Mr. Scientist.
“I think if someone considers paying three or four times what something is worth (bubble prices) and has to borrow for 30 years to pay for it, they should not walk, but run in the opposite direction.”
Precisely.
Further to the point. Paying multiples of construction cost for a rapidly depreciating asset and then financing it is a fools errand.
I posted my response where you originally asked your question, but I’m reposting here in case you missed it.
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
Says the guy who lives in moms basement.
Housing my good friend.
San Francisco, CA 94109 Housing Prices Crater 16% YOY As California Loses Population
https://www.zillow.com/san-francisco-ca-94109/home-values/
https://snag.gy/m5EzRB.jpg
Someone woke up on the wrong side of the insane asylum today!
That was a good roll in the dirt boys.
Did you feel that I was impolite Jeff?
Warning for Tina: One of the commentors in the above thread just got his real estate license. It’s wise to take NAR talking points with a giant grain of salt.
As to whether and when to buy, I would save my money for now and buy after the next recession hammers prices. I was in a position to buy back in 1988, but did much better by delaying my purchase until 1992, at which point I had a substantial downpayment saved up and homes were on fire sale. Unless you are a trust fund baby with money you can afford to lose, I’d wait until the media headlines say that it is a terrible time to buy, due to the foreclosure crisis and recession underway.
“If you don’t mind, would you please let me know your thoughts on my post?”
Be careful of what you wish for. That being said, here goes …
Warren Buffet: “When ignorance is combined with borrowed money the results can become interesting” (perhaps not an exact quote, but close enough.)
There is no shortage of ignorance on this planet and, until recently, there was no shortage of borrowed money. Combine ignorance with borrowed money in a bidding war and the most ignorant bidder will submit the highest bid, and the highest bid sets the price of the house AND the price of the house sets the VALUES of the comps.
The values of the comps is considered to be wealth and this wealth is indeed something that can be cashed out and spent. But, going back to my first statement, all this wealth is ultimately dependent on ignorant people getting access to borrowed money, something they used to be able to do rather cheaply but maybe not so much anymore.
So, ask yourself, if high prices are the result of the combination of ignorance and borrowed money what will happen to prices if, say, the borrowed money gets a bit pricy to borrow or is simply yanked away?
Why buy it when you can rent it for half the monthly cost? Buy later after prices crater for 75% less.
Rancho Cordova, CA Housing Prices Crater 7% YOY As Sacramento Area Economy Slows
https://www.zillow.com/rancho-cordova-ca/home-values/
Tina: I am very afraid that the last great recession is creating the class of landlord and renters, and I will never be able to be afford to own a house.
Maybe so. Change is a constant.
Realize this though: these expensive houses are being traded by people who already have houses with similar valuations. I think very few first time buyers have down payments to buy typical middle tier houses. You hear people again saying they could not afford to buy their houses for the first time again.
So if you feel you must buy, and you believe house prices will only continue to increase, consider buying something lower end, so you limit your debt. And buy something you’ll actually enjoy being in, that won’t wind up being a money pit due to maintenance issues.
Back when it was all sketchy loans, but now it’s wealthy people.
Job losses is the only thing that is likely to cause huge correction?
• Most of the loans which defaulted during the first housing bubble were prime loans. There have been multiple “august” analyses of this, not just wishful thinking from bitter renters.
• IMO, it was speculative demand fleeing the market which caused the downturn which can explain the prime loan default phenomenon (others here have argued here that the loans were not really prime). Can we measure speculative demand (i.e. demand for the asset because of a desire to sell it for more later)? The NAR probably has a good feel for what it is, but I doubt they release any such measure.
• It is true there were many neg-am and IO loans then. Which I think supercharged the house price runup. But defacto zero down is standard today.
• We’re still in a mania IMO. My definition of a mania is when a magic asset appears, which cannot credibly drop in price. However, to be fair, government and central banks have used monetary policy (i.e. redistribution) to print money and pump money into the market, resparking the mania. If they promise to do it every time - maybe the house prices can always be stabilized in the face of a downturn.
• Also, IMO we’re at an inflection point: The Fed is trying to raise rates, which have been falling since the late 80s. And it’s trying to reduce the size of its balance sheet. Just to maintain the size of its MBS holdings in 2017, the Fed had to buy 274 billion in new mortgages. Lower the size of the balance sheet means less money being injected into the FIRE sector.
Reality is IMO, no one knows what the future holds. The Fed knows what it’s thinking and so do the weather makers, the heads of big financial firms. The efficacy of monetary policy is the reigning paradigm at the moment.
My personal opinion would be: wait a couple of years. Prices are already very high. Are houses going to be even less affordable two years hence? I doubt it - they’re pretty unaffordable right now - the horse has bolted. OTOH - I could be totally wrong and prices could go utterly stratospheric and you’re totally missing out. But realize stratospheric prices bring the thing that politicians love - commensurately higher property taxes. And buying a place with high maintenance costs - these things are not going to help your bottom line.
Real estate does go in cycles, some large, some small, per Case Shiller.
Some opinions to ponder.As always, YMMV.
“We’re still in a mania IMO. My definition of a mania is when a magic asset appears, which cannot credibly drop in price.”
Well said.
Some of the magic assets are already tarnished.
“However, to be fair, government and central banks have used monetary policy (i.e. redistribution) to print money and pump money into the market, resparking the mania.”
The wild card is whether the Fed and GSEs in the Trump/Powell era will perpetuate the Obama/Bernanke/Yellen era policies to reflate the bubble and keep it propped up.
Realize though that monetary policy is not going away. It gives central banks much more power, it gives politicians more power, and most assuredly the two do work together, despite the protestations that the central bank is independent.
However, the cost is that monetary policy is, IMO, linked to the rise of nontraditional politicians here and in Europe, but not in Japan, where it seems to be working quite well for them.
The reason for this is that monetary policy - the extraction of purchasing power from one group and providing it to another - doesn’t apparently do much to improve the prosperity of the groups from which it is extracted. And politicians are very enamored of monetary policy, and they may well believe the advertising of economists who tout its myriad benefits.
However, the cost is that the actual increased production of value in the economy is neglected. And this leads to social dissatisfaction. Monetary policy is supposed to extract purchasing power from the society at large, be injected into the FIRE sector and yadda yadda, broad based recovery. However if it doesn’t do that, you get increasing inequality. And if actual production of value is ignored - the thing that actually brings prosperity - then it makes sense there would be social dissatisfaction.
Now, Japan is an interesting case. Their monetary policy seems to work great for them. Their prime minister (Abe) is on his way to being the longest serving prime minister, and their central bank chief (Kuroda) is set to be the longest central bank chief. It could be that they are not ignoring the production of value, and using monetary policy in addition to it. Now if monetary policy can be a covert tool, I think policy makers would be happier, because what it does would not please the sensibilities of those not receiving its largesse. On the other hand, if things are going well, a) it is a subtle redistribution and b) no one wants to upset the apple cart when things are going well.
So, coming back around to housing - I don’t think monetary policy is going away because it’s so good for policy makers and insiders. What that means going forward, especially in a globally interconnected world with central banks in Britain, Europe, Japan and China all in on monetary policy is that the view forward is foggier.
However, the cost is that the actual increased production of value in the economy is neglected.
That is, trade and industrial policy are neglected.
I agree with Ethan. Last time it was sketchy loans, and the bubble depended on housing going up, which depended on having a steady pool of willing and able buyers. When we ran out of buyers to sell to, people couldn’t pay the loans and had to unload.
But now it’s rich people with cash. Sure, they may default on some other loan, but they aren’t going to default on the house mortgage, simply because there is no house mortgage. There probably isn’t enough dumb cash in the US to drive up house prices, but there is globally. Maybe some of them will sell in a panic, but most of them can afford to hang on to the house for a better day.
You watch… as soon as prices start dropping, inventory is going to disappear again. Strangely enough, you know what I think is going to pop this bubble? Trump’s tax law. If they can’t tax deduct interest on these monsters, the carrying costs may be enough to tip them into selling.
Donk,
Domestic borrowed money or foriegn borrowed is all the same. The two are a distinction without a difference.
Leesburg, VA Housing Prices Crater 8% YOY As Federal Budget Impacts Northern Virginia Housing Market
https://www.movoto.com/leesburg-va/market-trends/
“But now it’s rich people with cash.”
This fantasy is destined to collapse once Fed punchbowl removal operations reveal the cash to be dumb borrowed money.
“I’ve seen this post before…”
Housing Hens and DebtDonkeys.
‘people with enough down payment just keep buying houses’
It was like that in bubble 1.0 as well. I was in CA at the time and people who already owned a home would end up buying 1 or 2 more and those that didn’t already own got priced out.
Chances are something will happen, whether it is rising interest rates, oversupply, etc. that’ll take the top off and prices will moderate, especially in places like Chandler. It is tough to do but better to keep your powder dry until then.
I do think there is something to the notion that the era of builders building sfr’s on decent sized lots is over. Everything I see being built is all zero lot homes, or connected housing.
Tina, I am in the same boat–I’m afraid to get into the RE market. After short selling in 2012, I’ve been renting for six years, and it freaks me out how high the rents have increased from year to year. I’ve had to move our family of four, three times already because the landlord needed to not renew our lease so they could get more money from another family. In 2012, rent was $2675 for a three bedroom. Now we are paying $3500 for the same size house. I keep running the numbers, and it still makes sense for us to rent versus buy. I don’t want to be in this situation, but I’m stuck, and the landlords know it, which is why rents keep going up. My hope is that these landlords pull out equity in the homes and blow it on some other investment; or, maybe the big investors with billion dollar RE portfolios will decide it’s time to sell for reasons x, y, and z. Good luck, Tina, keep your head up and know that you are not alone. The American Dream is not a house, but happiness.
Dave, what is so special about your job or whatever that you insist on living in such a ridiculously expensive place?
Good question.
Do you think we are shifting the real estate market from end-user to landlord nation?”
yes because interest rates are so low that will probably change.
co-worker was figuring out his landlords income, wants to sell 4-plex for 1.6M and income about 90k that’s gross after expenses its about 65k.
4% wow. So I guess they are counting on RE appreciation or have a hot 1031 exchange going on ?
And Chinese yea they just buy RE because they follow each other and some head Chinese said buy RE you’ll be rich. Good thing they like to work hard.
“My realtor told me because the interest rate is so low, many of her clients bought three houses before rate hikes.”
These people will scatter like dust in the wind if the Fed eventually normalizes rates.
Think a good exercise is to walk amongst a herd of cows moving slowly forward, pushed on bye the crowd gate, … on a moonless night. … Focuse$ yer attention, … forgets about the $hit you smell & are walking through, just $tay alert!
Le$$ons from the farm
And there’s plenty of DebtDonkeys and HousingHens on the farm.
All our barnyard friends.
Tina:
Living in NYC forces you to think differently about space and what you own and the cost of it.
Do you downsize , condense or rent storage units that are very expensive.
People in flyover country have the advantage of space and flatness or terrain and can easy to fill up a 2 or 3 car garage with stuff or heck you can get a plastic Home Depot shed to put in the back yard … believe it or not we did in Manhattan we had a small yard so i put a shed in it to store a bike and other stuff…
so by going digital do you really need huge furniture to store tons of records cd’s books dvd’s Tube or projection tv’s anymore I cleaned out Thousands of records cd’s over the years all stored mostly in wav files on a few hard drives.
so instead of a buying a 4-5 bedroom McMansion do you really need more then 2 or 3 if you want to start a family?
so instead of a buying a 4-5 bedroom McMansion do you really need more then 2 or 3 if you want to start a family?
Depends on how many inlaws and friends will be staying with you from the old country.
And there it is.
The theft of political power, corruption, subverting the rule of law and the descrution of American citizens.
******
Illegal Immigration Gives Cities Political Power
National Review | March 30, 2018 | By JAMES W. LUCAS
The Commerce Department has announced that a question will be added to the 2020 Census asking about respondents’ citizenship status. Democrats have responded with fury. While their argument is that the question will discourage illegal immigrants from participating in the survey, there is another, related reason why the urban elites who now dominate the Democratic party are afraid of this simple question.
With this question, the 2020 Census will better quantify the extent to which immigration, including illegal immigration, gives Democrats disproportionate political power - despite the fact that immigrants themselves are not allowed to vote. This happens because seats in the House, and consequently Electoral College votes as well, are given out based on the total number of people residing in a state.
California illustrates the problem. While the Census Bureau stopped asking about citizenship on the main Census form in 1960, it has continued to ask about it in other surveys. One of these, the American Community Survey, shows that the non-citizen proportion of the population in the states varies widely, ranging from 14 percent in California to less than 1 percent in West Virginia. Based on these estimates, California, the first sanctuary state, has five or six more members of the House than it would if House seats were based on citizen population alone.
I only need 1 illegal for tree work and that s only for 3 hours per year ,so 1 per 200 homes
I just wanted to say that I’m seeing an increase in reduced prices on listings for land and houses in my area on Zillow. The mood seems very different than last year, which I think represents the high water mark for the echo housing bubble.
No “pent-up demand” for $500,000 starter homes happening here:
https://www.zerohedge.com/news/2018-03-28/nearly-70-us-counties-average-worker-cant-afford-buy-home
W orange man trump signing 1.3 trillion spending the swamp area is saved
Liberal World Order, R.I.P.
The liberal world order is under threat from its principal architect: the United States.
Article by Richard N. Haass
‘After a run of nearly one thousand years, quipped the French philosopher and writer Voltaire, the fading Holy Roman Empire was neither holy nor Roman nor an empire. Today, some two and a half centuries later, the problem, to paraphrase Voltaire, is that the fading liberal world order is neither liberal nor worldwide nor orderly.’
https://www.cfr.org/article/liberal-world-order-rip
As reported by real journalists at the New York Times:
https://mobile.nytimes.com/2018/03/29/opinion/2016-exit-polls-election.html
“Liberalism is in retreat. Democracies are feeling the effects of growing populism.”
Now there is an interesting statement. Perhaps some definations are in order …
“Democracy: asystem of government by the whole population or all the eligible members of a state, typically through elected representatives.”
Okay so far …
“Populism is a political philosophy supporting the rights and power of the people in their struggle against a privileged elite.”
So how is it that “Democracies are feeling the effects of growing populism” in that democracy and populism seem to be two terms that describe the same thing?
Democracy is when the average voter intelligently wants what I want. Populism is when the average voter stupidly wants something else. Totally different.
Not really. Populism has oftentimes led to dictatorship, which tends to be an enemy of democracy and freedom.
True it tends to be one of the stages on the way. But we demonize that stage and don’t pay enough attention to what led up to the populism.
A pure propaganda piece. Either that, or a grotesque and deeply self-serving ignorance. The liberal world order is under threat from a global form of capitalism that doesn’t respect countries, individuals, the Earth, or reality, but does manage to do a great job producing mediocre or bad political leaders and providing think-tank sinecures for alleged thought leaders like Mr. Haass. This preceded Trump by decades.
There’s no mention of the Iraq invasion, which was a seminal event in this country’s foreign and domestic affairs, in the piece. Of course there isn’t, because Haass was a prominent figure in the Bush State Department at that time.
How was Rutgers?
If that’s a reference to Ms. Clinton, she’s one of the leaders the system produces. As is her husband.
The monthly cost to surround Iran from Afghanistan and Iraq is now $15-billion/month. But Richard Nathan Haass doesn’t give a schitt about our men and women in uniform or this country’s infrastructure.
global form of capitalism that doesn’t respect countries
Yeah, that would be those “refugee migrants” whose sole intent is to steal jobs and breed like rabbits (or impregnate the white women to get those light skin genes) to create their own world order. Talk about not respecting countries.
I wasn’t referring to immigration policy at all. But having married an immigrant, I have a lot more skin in the game than a lot of posers on the left for whom immigration is simply a cute vehicle by which to virtue-signal on the internet.
“neither liberal nor worldwide nor orderly”
Very good, and true…
Ben,
I read that piece three times and I’m not impressed. Some very poor observations were made. The author doesn’t even bother to define what he means by terms such as “liberal”. Today’s definition? “Liberal” as in its 1946 interpretation? (I assume that’s the most likely). Or classical liberal? Who knows.
There are at least a dozen, and perhaps two dozen, sentences in that article that are pure drivel. I could go on at length about them (pages and pages of commentary by yours truly), but I won’t.
One wonder$ how much longer they might have gotten had they $atellite feed$ & x4 humungus digital screens to di$tribute sermon$ to the fleeced flock$, like:
“Render therefore unto Hou$ing the things which are Housings; and unto God the things that are God’s”
Oh, to bee caught in an unholy analog world.
“a once in 100-year house price crash…”
You might be on the right track, just not fully realized.
It’s the biggest expansion of credit in the history of the world.
The tough questions to answer are how and how quickly it will end.
It seems like the Fed is playing a game of KerPlunk as it tiptoes away from extraordinary accommodation. At what point the marbles will drop is anyone’s guess.
History suggests they will start jamming sticks back in as soon as the favored marbles at the top of the jar are in danger. The question is can they time that successfully?
Cupertino, CA Housing Prices Crater 10% YOY As Bay Area Tech Wreck Gains Speed
https://www.movoto.com/cupertino-ca/market-trends/
Good Report on Housing Prices without Homeowners.
https://fredblog.stlouisfed.org/2018/03/a-housing-recovery-without-homeowners/
Who needs homeowners when you have a printing press technology and quantitative easing to finance mortgage backed securities purchases?
ABQDan (or someone using his name) answered a post of mine in the last thread. Did Ben let him back on? I hope so. He was so good to talk to when he wasn’t Chinacheerleading. I wonder what he thinks about self-driving cars?
he overdosed on crow.
Mania is attractive, isn’t it?
Housing Donk.
Castle Rock, CO Housing Prices Crater 15% YOY
https://www.movoto.com/castle-rock-co/market-trends/
I thought he was one of the most annoying posters we ever had here, albeit that could have been a reflection of our diametrically opposed world views. He thought oil and China stocks would bubble up forever, while I thought they were both going to crater.
Exactly. I think Oxide likes him because he was always complimenting her. Yawn.
I always appreciate people who think differently from me. Even if they fail to convince me of their argument, it helps me to reanalyze my assumptions and make sure they are still valid to me. Echo chambers aren’t healthy.
My view on self driving cars, is that the technology is not as advanced as the proponents claim so what people claim will happen in five years will take twenty. As far as China, I was not cheerleading. I think only pat Buchanan and I fully realize how dangerous China is to our economy and security. To fully understand, you realistically have to evaluate how strong economically China is and that is difficult when your own economic situation would benefit from an imminent collapse of its economy. As far as oil approaching $70 a barrel near the peak of US shale oil production, far from the below $20 price that the people that are saying I am eating crow were saying was the proper price for oil
More nauseating BS from Crow Boy. You were gone the entire time your oil blather proved false. And, how about that absolute MELTDOWN in China right now?
As far as “only you and Pat Buchanan” - WOW, what a gem. “I’ll take ‘Who’s a narcissist’ for $2,000, Alex.”
We’re still waiting for the return to $80 that you predicted years ago. Having bought the dip after the crash you said was unpossible, I don’t much care.
I liked Dan, too, oxide.
I didn’t read his posts re: China (just like I don’t read BitCoin posts I see on HBB - which I also consider a waste of time).
I agree. China-related topics aside, Dan was an interesting poster.
‘They had to come back to reality late last year when they were asking $2.1 million for their property but now they have had to adjust their expectations to $1.5 million.’
A bunch of reports these days will say, “prices in Sydney are down 1.2%”. Does this sound like a 1% environment?
‘Housing prices are already coming down [indirectly] at a steady rate because developers are offering rebates, free furnishing and more. All these amount to a price decrease. The sad news is that overhang and unsold properties are at an all-time high in a decade. This may cause developers to default bridging loan payments, thereby resulting in a domino effect on loan defaults and this could cause a financial crisis, signalling the housing market is about to burst.’
Here’s what’s crazy about Malaysia (and it’s true about Indonesia and the Philippines too): their office and retail (mostly malls) is even more overbuilt than airboxes.
How did the entire globe get it wrong on housing?
Because 99% of them aren’t trying to get it right or wrong, they’re just following the herd and trying to make a living, thus making them easy to manipulate if you can control their economic opportunities?
“they’re just following the herd”
Never follow a herd of DebtDonkeys. They always stampede trampling everything in their path.
Miami-Dade County.The county’s median income is … $44,000.
No. Miami has a cash economy. There are warehouse enclaves where no one accepts a credit card or a personal check. Distorted numbers. Avoidance of taxes.
What have Miami-area officials done to help the working poor?
Nothing. Haitians are heading North. It’s NOT the city of brotherly love. If you are NOT connected you stand in long lines.
…according to local real-estate analyst Peter Zalewski.
Who? He’s a mushroom.
Portland, OR 97239 Housing Prices Crater 14% YOY As Heroin Epidemic Ravages West Coast
https://www.zillow.com/portland-or-97239/home-values/
*Select price from dropdown menu on first chart
Did you contribute to Goog’s and FB’s profit today?
Should financially desperate people with low IQs be protected by the government from their proclivity to borrow outrageous amounts of money at usurious interest rates?
On June 19, 2015, Bronx resident Carlos Guerrero-Roa went to an auto dealer in Brooklyn to purchase a 2005 Lexus RX that was being advertised online for $6,900. Guerrero-Roa left with the car that day, only after it was financed with a loan that, according to a lawsuit he later filed, carried an interest rate “well over” 25 percent—a threshold that New York state law deems a felony. But thanks to a loophole in the statute, Guerrero-Roa and countless others in New York end up with auto loans that have high, and possibly illegal, interest rates.
…
Some would ask if he is in it for the long haul, say like 7 years.
Carlos likely doesn’t think past Friday night.
Another one of God’s gifts.
Life is good and the Carlos’ of the world help make it so.
😁
Should people be protected from a government indifferent to usurious interest rates?
Only if lenders are pointing guns at borrowers’ heads and forcing them to take out loans.
Most states have usury laws
Can’t fix stupid
the ability of bankers to create credit out of thin air and loan it to people has got us in this massive hole.
The more credit that is created = the more interest collected
Doesnt it give a lot of power to a certain group of people?
prices are so high because of all the credit creation that in order to make major purchases 90% of the population needs a loan.Coincidence?
Don’t make major purchases at a bubble peak. Problem solved.
Thems that understands interest, earns it; and thems that don’t, pays it.
Gem of a quote professor. I have that one in my quote book. Here is another one of my favorites: