It May Be A Problem Tomorrow
A report from National Mortgage Professional. “A combination of low inventory and a greater interest in homeownership is fueling a wave of residential property bidding wars among buyers across the country. According to Realtor.com, the capital of the ongoing housing bidding wars is Akron, Ohio. With a relatively modest median home list price of $150,000, Akron has seen a 20.6 percent share homes selling above their list price. In a year-over-year measurement, however, the city has experienced an astonishing 91.7 percent increase in the share of homes selling above their original list price.”
“Other cities recording larger-than-normal year-over-year spikes in above-list price sales are Worcester, Mass. (88.1 percent), Lexington, Ky. (86.4 percent), Irvine, Calif. (85.5 percent) and Greensboro, N.C. (81 percent). ‘Multiple-offer scenarios are no longer reserved to the usual big, fast-moving markets,’ says Javier Vivas, Director of Economic Research for Realtor.com. ‘Demand for homes has spilled outward into secondary, smaller markets, and more buyers are gearing up to face fierce competition in more places around the country.’”
From Valley News. “Real estate agent Carol Robert has a new way to sell homes to out-of-town house hunters. Via FaceTime. The Lebanon real estate broker walks around the house using the FaceTime app on her iPhone to give clients a live video tour while she narrates the home’s features. ‘They don’t have time to wait until the weekend to get here,’ Robert said. ‘They have 24 hours before the seller gets two to three offers. It’s a stampede getting into a house. I’ve never seen this.’”
The Capital Times in Wisconsin. “Pat Whyte has been selling homes in Madison for 35 years, and last year’s seller’s market was unprecedented for her. Homes sometimes received up to 20 offers, and unsuccessful offers at $25,000 above asking price were not uncommon. ‘It’s a crazy market,’ she said last May. ‘(Houses are) flying off the market faster than I’ve ever seen.’”
“Last year, Madison realtors described the frantic real estate market, and when the Cap Times checked back in with them last week, many said it’s shaping up to be just as hot, if not hotter. At this point, offering the listed price is not really an option for buyers. ‘We have a little joke in our office that the asking price has become the suggested retail price — (it’s) not exactly the price you’re going to pay,’ said Liz Lauer, a real estate broker with 20 years of experience in Madison. Lauer said it’s the strongest seller’s market she’s ever seen, including the pre-recession housing boom. ‘In 2004, 2005, I never had 18 offers on one house,’ she said.”
“Most realtors prefer a more balanced market, said Matt Winzenried, a local broker associate who’s been working in the Madison area for 12 years. As it is now, ‘buyers go to a open house on Sunday, have 20 minutes to see the house and (then) make a decision to spend $300,000.’”
From Real Daily. “According to CoreLogic, one in five home borrowers use more than 45% of their monthly income to pay off a mortgage. These levels of mortgage debt haven’t been seen by financial experts since the housing crisis of the mid-2000s.Government-backed lenders Fannie Mae and Freddie Mac sold over 73% of loan packages in the back half of 2017, and more than in the first six months. In terms of mortgage lending, Fannie Mae and Freddie Mac saw a 15% rise in new mortgages throughout 2017.”
“Lending to applicants with extremely high debt-to-income ratios was a factor in the increase. Fannie Mae and Freddie Mac are increasingly approving loans for applicants with debt-to-income ratios of up to 50%. The lending corporations also have been guaranteeing with loans with low down payments. Applicants can pay down as little as 3% for mortgage loans down payments with the lending corporations.”
“Stan Middleman, chief executive of Freedom Mortgage, a home lender, says the current mortgage loan crisis isn’t critical yet. ‘It’s not a problem today, but it may be a problem tomorrow,’ said Middleman.”
From the New Haven Independent in Connecticut. “Two lenders quietly became the owners of two properties on the same residential block in Morris Cove during separate, simultaneous foreclosure auctions. One lender, the federal U.S. Bank National Association, purchased a home that has been vacant and left largely untouched since the owner-occupant died nearly seven ago. The other lender, the Idaho Housing and Finance Association (IHFA), purchased a home that is still occupied by a married couple who have been living on Morris Avenue for just over a year, and who said they love their home and hope to stay.”
“No bidders showed up to either public auction, so the banks that own the delinquent mortgages on the respective properties submitted uncontested, successful bids for the two homes.”
“Meta M. Delillo, the owner of a single-story ranch home at 69 Morris Ave., died on Nov. 23, 2011. She had lived in the home since 1992. After her death, her $337,500 mortgage from Financial Freedom Senior Funding was assigned to MERS, then to the federal department of Housing and Urban Development (HUD), and then to the U.S. Bank National Association in May 2017.”
“Before the auction, an independent appraiser valued the home at $135,000. According to a lawsuit filed by the U.S. Bank National Association against the heirs, beneficiaries, and/or devisees of the estate of Meta Delillo in New Haven Superior Court on Elm Street on Aug. 22, 2017, Delillo owed over $316,000 plus interest on her mortgage.”
The News-Journal in Florida. “Daytona Beach Mayor Derrick Henry filed for bankruptcy in 2017 two days before a home he owned in the Derbyshire neighborhood was to be auctioned on the courthouse steps as part of a foreclosure sale. Henry’s Chapter 13 bankruptcy filing on Aug. 9 in federal court in Orlando stopped the foreclosure case, and with it the Aug. 11 sale of the house at 1034 Thunderbird Drive, a non-homesteaded property in the neighborhood where Henry grew up. Henry now lives on Birkdale Drive in Daytona Beach.”
“In a phone call, Henry told The News-Journal that the bankruptcy was dismissed and he declined further comment. Specialized Loan Servicing had filed to foreclose on the Thunderbird Drive home on Jan. 26, 2016, claiming that Henry had not paid a $455.66 monthly payment since Feb. 1, 2012. The loan servicer said Henry owed $66,251.93 plus interest and other expenses.”
“A document filed Aug. 9, 2017 in the foreclosure case in circuit court stated that Henry had filed for relief under the bankruptcy code and the foreclosure was ’stayed.’ The issue was subsequently worked out with Henry keeping the house. Specialized Loan Servicing asked the court on Feb. 23, 2018, to dismiss the foreclosure action, saying that the payment dispute was resolved and Henry successfully completed a loan modification. Circuit Judge Chris France dismissed it on March 7, 2018.”
“It is the second time a lender has filed for foreclosure on the Thunderbird Drive home against the mayor. SunTrust Mortgage filed for foreclosure on March 27, 2013. That foreclosure was filed a few months after Henry and his wife obtained a 30-year, $256,400 loan from Wells Fargo Bank for the home on Birkdale Drive, records show.”
“SunTrust’s complaint said Henry owed $66,498.88 on the principal plus interest and late charges on the $76,000 originally borrowed for the Thunderbird Drive home. the complaint added that Henry had not paid the $455.66 monthly payment since Jan. 1, 2012. SunTrust Mortgage voluntary dismissed the foreclosure action on Dec. 23, 2013, due to ‘loss mitigation,’ according to court records.”
The Post-Journal in New York. “Jamestown officials understand the importance of trying to eliminate zombie houses in city neighborhoods. Zombie houses, which are houses that are vacant and abandoned that are not maintained during a prolonged foreclosure proceeding, can cause decreases in assessed value for neighboring properties. Along with decreasing property values, zombie houses also lead to serious crimes like arson.”
“In October 2016, city officials were approved for the Zombie Remediation and Prevention Initiative program and received $149,970 in funding. City officials have been able to hire a part-time attorney to represent the city in housing court. ‘We’ve been able to contact banks and tell them there are code violations and safety violations that need to be addressed,’ said Vince DeJoy, city development director. ‘We can also subpoena banks and fine them and pursue them vigorously. We have been somewhat successful. It is a house-by-house process. We’ve had some success in some cases, but it can be overwhelming because there are so many houses going through the foreclosure process.’”
A comment to the last link:
‘Tax sales of forclosed property should be returned to the way it use to be. People went to the site & bid against a couple of other’s that were interested. The highest bid got the property. Now they advertise & put hundreds of “Investers” in a school gym & the bids go up so high that the average Joe can not afford the property. So if you are the lucky one, after you pay the County your bid, you don’t have enough money left to fix up the damn place. So you lose your money from the sale & you quit paying taxes on the plce. Round & round. In comes Land Bank. Buy everything that looks good, tear down everything else. Sell at a high price, get BIG mortage for the new buyers & watch to see how soon it is back on County Tax sale list. Have I missed anything ??’
This sounds like a win/win for Mr. Banker.
😁
“…Have I missed anything ??…”
Land Bank business model seems similar to all those stock/bond/currency trading “academies”.
Only winners are the broker/dealers who profit from trading commissions / friction.
Noted that in today’s news 10yr treasury finally breached 3.0%.
Maybe if this puppy could breach 3.5% or even 4.0% this whole friggin’ ponzi house of cards will finally fall into the ocean.
And not a minute too soon, IMO.
So what happens if the Fed and other central banks start another round of QE?
Did you mean when? As soon as things get painful I think the only way it (or some equivalent alternative) doesn’t happen is if they want to hurt whoever is in office at the time.
If the banking system isn’t bearing the losses, why would they QE?
This time around, all of the losses will land squarely where intended: on the taxpayers.
Interesting thought if TPTB think we actually CAN take our medicine as long as it’s not them taking any. All this time I’ve been operating under the assumption that they concluded that the medicine would kill the host.
“In comes Land Bank. Buy everything that looks good, tear down everything else. Sell at a high price, get BIG mortage for the new buyers & watch to see how soon it is back on County Tax sale list. Have I missed anything ??’
Jamestown, NY is the middle of nowhere. Why do they have a Land Bank? Those are for land preservation, yet upstate NY has nothing but land. It’s not exactly overdeveloped. The younger generations have been moving out for 30-40 years. From this woman’s comment, it sounds like the Land Bank exists to further fleece people and inflate values.
“‘Multiple-offer scenarios are no longer reserved to the usual big, fast-moving markets,’ says Javier Vivas, Director of Economic Research for Realtor.com. ‘Demand for homes has spilled outward into secondary, smaller markets, and more buyers are gearing up to face fierce competition in more places around the country.’”
Gee, where have we seen this before? It starts in the large cities, then spreads like a disease to every nook and cranny.
2018 is 2005 redux.
Here in Columbus, Ohio it’s crazy…i feel like people move here from NJ/CA/NY because it’s so much cheaper to live here. So, they don’t think anything of paying $450k for home that sold for $350k 3 years ago. To them, $450k is a “good deal”, but to fellow midwesterners like myself, i think it’s a “rip off”. Even though corporate relocation will pay our realtor fees if we buy a house within the next year, I’m sitting this one out by renting because the run up on prices and buyer desperation feels like 2005 all over again!.
Same thing happened in my home town in the Midwest during the early-1990s California outmigration. Large expensive McMansions were snapped up for cash by Californians fleeing from fires, floods, earthquakes, riots and economic recession.
Agoura Hills, CA Housing Prices Crater 22% YOY
https://www.movoto.com/agoura-hills-ca/market-trends/
‘Chinese Developer Defaults on $364M in Debt One Year After $449M Blackstone Deal’
‘Less than one year after its offshore affiliate paid $449 million to buy a stake in Seaworld from Blackstone, and just nine months after that same unit failed in its $4 billion bid to buy out US senior living operator Brookdale, listed developer Zhonghong Holdings has announced to the Shenzhen exchange that it has defaulted on more than RMB 1.1 billion ($174 million) in debts in the last month.’
‘Zhonghong Holdings announced Monday that it now has a total of RMB 2.3 billion in overdue debts including this latest RMB 1.1 billion batch of overdue liabilities. The past due obligations amount to 23 percent of the listed developer’s net assets, according to a filing to the Shenzhen Stock Exchange. Zhonghong Holdings has a market capitalisation of RMB 12.5 billion.’
‘Shenzhen-listed Zhonghong Holdings’ total debt to equity ratio is at 190 percent, well above the industry average of 84 percent, according to Reuters. The Beijing-based unit’s credit crisis comes just a few months after Zhonghong Holdings’ founder and controlling shareholder Wang Yonghong became a target of Chinese prosecutors due to defaults by various units of his Zhonghong Group.’
‘Wang’s default spree comes just short of 12 months after his Zhonghong Zhouye bought a 21 percent stake in Orlando-based theme park group SeaWorld Entertainment from Blackstone for $449 million in May last year — more than triple the price that the US investment giant had paid for the shares just seven years earlier.’
‘Zhonghong’s announcement of its default was made the same day that Moody’s Investors Service issued a statement warning that some small and mid-sized mainland developers may have trouble paying their bills as China’s housing market continues its policy-induced slowdown.’
“The tightening credit environment will accelerate market consolidation by driving smaller and weaker developers out of business or forcing them to sell their property projects to developers with strong liquidity,” Kaven Tsang, a Moody’s vice president and senior credit officer said in a statement.’
‘The credit rating agency said that it expects the residential property market to continue to become more challenging during the coming year due to slowing home sales.’
Default spree, eh? Doesn’t sound good. Now what would happen if this rush of Chinese money was to go into reverse in say, California? And they seem to be kinda nonchalant about missing payments.
I guess we will know what would happen soon enough. I predict bagholders.
Chinese investment in Los Angeles and U.S. real estate plunged in 2017 on new restrictions
By Roger Vincent
Mar 27, 2018 | 1:40 PM
The DoubleTree by Hilton Hotel Los Angeles Downtown was one of the big local purchases last year by Chinese investors. (Jerome Adamstein / Los Angeles Times)
Speculation that Chinese investments in U.S. real estate would plummet after Beijing enacted tighter regulations on outbound investments last August has proved correct.
There was a 55% drop in new Chinese investment in U.S. commercial real estate in 2017 compared with the year before, as spending fell from $16.2 billion in 2016 to $7.3 billion last year, according to a report Tuesday by real estate brokerage Cushman & Wakefield.
…
Paging Sum Ting Wong, he usually has some keen insight.
I’m sure his brother, Ho Lee F will be making an appearance in the not so distant future as well.
“Now what would happen if this rush of Chinese money was to go into reverse in say, California? ” …
Or even … New Jersey$
“The war of words between Jersey City and Kushner Cos. follows several blows to the project, including the withdrawal of a key tenant and funding source earlier in the year and dashed hopes for $150 million in financing from China. Later, the Kushner Cos. and its partner, KABR Group, pulled an application to the city for a 30-year break from local taxes after Fulop came out against it before his re-election in November.”
Kushner plans to build twin-towers in New Jersey unraveling
Bernard Condon, AP Business Writer
Associated Press April 23, 2018
“With a relatively modest median home list price of $150,000, Akron has seen a 20.6 percent share homes selling above their list price. In a year-over-year measurement, however, the city has experienced an astonishing 91.7 percent increase in the share of homes selling above their original list price.”
Housing Bubble 2.0 has now reached inland from the coasts as far as Akron, OH. Were there bidding wars there in the pre-2007 episode? I know that LeBron James lives there, but COME ON sheeple!
Realtors are liars.
“As it is now, ‘buyers go to a open house on Sunday, have 20 minutes to see the house and (then) make a decision to spend $300,000.’”
Lying for 20 min$ per cu$tomer, thats gotta be better than the time expenditure$ of a u$ed car $alesperson.
Yeah, really. Imagine selling a house in 20 minutes and collecting 6% of the sales price between listing and selling agencies. What a scam.
Lotta of Amish in Ohio … They have no need of gubermint free home roof blue tarp$, knot even for their implements.
Silverton, OR Housing Prices Crater 15% YOY As Rental Rates Plunge Statewide
https://www.movoto.com/silverton-or/market-trends/
“As it is now, ‘buyers go to a open house on Sunday, have 20 minutes to see the house and (then) make a decision to spend $300,000.’”
… using money that isn’t theirs to buy a house that won`t be theirs for probably decades - all this resulting from a decision they make over a time span of twenty minutes.
A nation of dummies.
You’re knot foolin’ oldhwy50, eye sees that gleeful $mile glimmering between your text line$, is that a shiny new gold tooths yer sportin’ there Mr.lender$?
“… is that a shiny new gold tooths yer sportin’ there Mr.lender$?”
Thank you for noticing. This shiny gold tooth that you see hanging so prominently around my neck is the result of an extraction from one of my, er, clients who was a bit behind on one of his payments.
I keep it dangling from my neck for amusement purposes as well as a gentle reminder to all my clients that they should always do the right and proper thing when it comes time to meet their commitments.
Madison, Wisconsin - The Rankings
https://www.bestplaces.net/city/wisconsin/madison
Pros
-Attractive downtown
-College-town amenities
-Architectural interest
Cons
-Cold winters
-Cost of living
-Recent employment
How’s the endangered Skeeter colonies fairin’ in that part of the neighborhood?
I wrote last week that, of all the places I’ve been, Washington D.C. was the place where traffic concerns were most central to daily life. Well, of all the places I’ve been, I’ve never seen more people totally wasted than in Madison, Wisconsin (and at the time, I had consumed numerous beers myself). I see that UW-Madison ranked #5 on the Princeton Review’s most recent list of party schools.
Eyes remembers going the Buffalo Chips Saloon for the .25 cents beers in Kearney, NE … Back then, most of the students in the nursing school were girls … Oh, well … The wheels of the bus go round & round, round & round …
gee, not Worcester MA?
scary
‘Fannie Mae and Freddie Mac sold over 73% of loan packages in the back half of 2017, and more than in the first six months. In terms of mortgage lending, Fannie Mae and Freddie Mac saw a 15% rise in new mortgages throughout 2017. Lending to applicants with extremely high debt-to-income ratios was a factor in the increase. Fannie Mae and Freddie Mac are increasingly approving loans for applicants with debt-to-income ratios of up to 50%. The lending corporations also have been guaranteeing with loans with low down payments’
Boy howdy! We got FHA competing with the GSE’s who are competing with USDA (you’d be surprised how many of those are rushed through). Still, I have to wonder, what’s the point of competition between government loan backers? It’s not like their survival depends on making a profit.
“Rising Home Prices Push Borrowers Deeper Into Debt”
http://news.morningstar.com/all/dow-jones/us-markets/201804103315/rising-home-prices-push-borrowers-deeper-into-debt.aspx
“Roughly one in five conventional mortgage loans made this winter went to borrowers spending more than 45% of their monthly incomes on their mortgage payment and other debts, the highest proportion since the housing crisis, according to new data from mortgage-data tracker CoreLogic Inc.”
‘That was almost triple the proportion of such loans made in 2016 and the first half of 2017, CoreLogic said. Economists said rising debt levels are a symptom of a market in which home prices are rising sharply in relation to incomes.’
‘At the same time, the average rate for a 30-year, fixed-rate mortgage has risen to 4.40% as of last week from 3.95% at the beginning of the year, according to Freddie Mac, putting still more pressure on affordability.’
‘These factors “are working against affordability and that’s why you get the pressure to ease credit standards,” said Doug Duncan, chief economist at Fannie Mae. He said that pressure has to be balanced against the potential toll if underqualified buyers eventually default on their mortgages.’
‘Last summer, Fannie Mae moved to back more loans made to borrowers with debt-to-income ratios of up to 50%, up from a typical limit of 45%. Freddie Mac also started backing more of those loans, according to industry researchers.’
‘Fannie’s new policy has resulted in 100,000 new mortgages that otherwise wouldn’t have been made last year and early this year, according to the Urban Institute, a nonpartisan research organization.’
‘Caliber Home Loans, a Texas-based lender, said 25% of its funded loans have debt-to-income ratios of greater than 45%, up from 10% about a year ago.’
‘ So far lenders are making most of these loans to borrowers who have a history of good credit, though that could change. In the fourth quarter of last year, about 78% of the loans with debt-to-income ratios above 45% were made to borrowers with credit scores of 700 or more, according to Inside Mortgage Finance. Although standards vary by lender, usually any borrower below 650 is considered subprime.’
“The problem,” said Guy Cecala, chief executive of Inside Mortgage Finance, “is you’re going to run out of [prime] borrowers.”
‘Sohani Rao, a software engineer in the San Francisco Bay Area, tried to buy a home for about a year but finally gave up a few months ago. Dozens of prospective buyers would show up for open houses, she said, even for homes in poor condition, resulting in bidding wars that put them out of her price range. Ms. Rao said loosening lending standards would only create more bidders.’
“Thing are so bad right now,” she said. “By doing this, they might have even made the problem worse.”
‘Ms. Rao said loosening lending standards would only create more bidders’
I think she’s onto something here. What if all this affordability nonsense is actually making shacks less affordable?
‘Ms. Rao said loosening lending standards would only create more bidders’
More bidders translates to higher prices. Higher prices translates to hefty gains in equity. Hefty gains in equity translates to increased wealth.
Thus … loosening lending standards translates to increased wealth.
Magic!
I just had a thought. If loosening lending standards make shacks cost more, then tightening standards should make them cost less.
If that’s the case we don’t need the GSE’s or FHA to make shacks affordable cuz they do the opposite. So how far to go? Without this government backing that makes things worse, by golly the private markets would have to tote the load. And that would mean markets would determine interest rates and those market participants would have the risk. They might even be picky about loaning money to high risk borrowers.
You know, this is starting to sound like a whole bunch of affordable shacks without near the money and BS we put into it now.
all gov subsidies work that was
HC
EDU
we work 3.6x as many hours to pay for hc vs. the 1950’s per Frobes
You know, this is starting to sound like a whole bunch of affordable shacks without near the money and BS we put into it now.
That all sounds great in theory, but I’m concerned it might hurt our good friend Mr. Banker. There must be a different way.
“I’m concerned it might hurt our good friend Mr. Banker.”
You concern is much valued.
“There must be a different way.”
Well, since you brought it up there is a different way, a different way to express your concern. Come see me at my bank and perhaps we - you and I - can discuss your concerns over a cup of coffee (I’ll buy!) and we can possibly peruse - you and I - the endless wonders offered up by my Dotted Line Special.
Totally agree — imagine what house prices would be with 30% down + 15 year mortgages!
Make Housing Affordable Again!
“These factors “are working against affordability and that’s why you get the pressure to ease credit standards,” said Doug Duncan, chief economist at Fannie Mae. He said that pressure has to be balanced against the potential toll if underqualified buyers eventually default on their mortgages.”
Ease credit standards? Hey Dougy, how about achieving balance by letting house prices fall?
What if all this affordability nonsense is actually making shacks less affordable ??
+1 Ben…
imagine what house prices would be with 30% down + 15 year mortgages!
House prices are high in countries without fixed rate mortgages or MID.
Regarding down payments, I did some google fu and found that it varies by country. In bubbly New Zealand, 20% appears to be the minimum. In Oz it’s only 5%. In the UK it can be as low as 0%.
we work 3.6x as many hours to pay for hc vs. the 1950’s per Forbes
While this is very true, it is also true that HC is very different now than in 1950. In 1950, if you had a bad hip or knee, you were given a walking stick instead of advanced (and pricey) surgery to rebuild the joint.
we work 3.6x as many hours to pay for hc vs. the 1950’s per Forbes
While this is very true, it is also true that HC is very different now than in 1950. In 1950, if you had a bad hip or knee, you were given a walking stick instead of advanced (and pricey) surgery to rebuild the joint.
We pay more for the same things. Take a look at hospital costs to deliver a baby now vs. 1950.
We pay more for the same things. Take a look at hospital costs to deliver a baby now vs. 1950.
But are they the same? Did the 1950’s maternity ward have the same equipment (ultrasounds, monitors, etc.).
If you want to say that those devices are overkill, I won’t argue against that. But a modern hospital is VERY different from a 1950’s hospital.
And what were the liability insurance costs for MDs back in 1950?
We’re paying for that, too.
“We pay more for the same things. Take a look at hospital costs to deliver a baby now vs. 1950.
But are they the same? Did the 1950’s maternity ward have the same equipment (ultrasounds, monitors, etc.).
If you want to say that those devices are overkill, I won’t argue against that. But a modern hospital is VERY different from a 1950’s hospital.”
Equipment costs aren’t the reason for inflated medical care prices any more than the cost of bulldozers and 2×4s are the cause of the housing bubble.
I have a friend who got a knee replacement and she still needs a cane.
When I had my ACL and meniscus done simultaneously (left knee), I had it done by the surgeon who operated on Atlanta Falcons football players at the time.
Upon shredding my knee, I took some time to think about who would operate on me. Then, I waited 4 months for the surgeon I wanted. Then I paid about $700 more out of pocket than I might have otherwise.
That was in 1999.
Worth every damn penny. I haven’t had a single problem with that knee in 19 years. It feels great.
Technology is one thing. Expertise is something else altogether.
Infant mortality rates in the 50s were nearly 5 times what they are now.
https://www.infoplease.com/us/mortality/infant-mortality-rates-1950-2010
The technology and results are vastly different from the 50s.
Infant mortality rates in the 50s were nearly 5 times what they are now.
https://www.infoplease.com/us/mortality/infant-mortality-rates-1950-2010
The technology and results are vastly different from the 50s.
Who says declining infant mortality is due to technology?
That certainly is an interesting chart you linked to, but… details.
First thing that jumped out at me: the 1950 and 1960 figures have a footnote which reads, “Includes birth and deaths of persons who were not residents of the 50 states and the District of Columbia.” Kinda strange. Supposed to be a chart of US mortality rates.
Second thing: Infant is defined as a person under one year of age. There’s a lot more going on in that first year than just childbirth.
I have a friend who got a knee replacement and she still needs a cane.
And I personally know several who are VERY happy with their results. Are you saying that all joint replacements are failures?
tightening standards should make them cost less.
This is what happened in 2009-2012.
tightening standards
This also occurred from 1992-1996.
3.5% downpayment with 5% downpayment assistance as a matter of course isn’t tight by any measure. It’s simply subprime without the subprime name.
Don’t compare medical care of 70 years ago with today. It’s hardly the same. I had an aunt die of rabies contracted from a bat in 1928. Doctors of those times didn’t even know that such things could happen. So her death was preventable (theoretically).
Don’t compare medical care of 70 years ago with today. It’s hardly the same. I had an aunt die of rabies contracted from a bat in 1928. Doctors of those times didn’t even know that such things could happen. So her death was preventable (theoretically).
I’m not comparing medical care. I’m comparing costs.
I have a supercomputer in my pocket that cost less than a desktop cost 10 years ago. And it is superior in most respects.
I have a supercomputer in my pocket that cost less than a desktop cost 10 years ago. And it is superior in most respects.
I have orange juice in my fridge that costs far more than it did 10 years ago. It is not any better than it was then.
So the $50 cup of orange juice served to a patient is legit.
It’s no wonder medicine is full of criminals and incompetents.
“It’s not like their survival depends on making a profit.”
Best to keep those fulfilling the loan application$ with any kind.of.roof over their heads whil$t they go to work & promote some kind of tax depo$its.
Has all the marking$ of what some might call: $elf.fullfilling.profit$ies!
“Lending to applicants with extremely high debt-to-income ratios was a factor in the increase. Fannie Mae and Freddie Mac are increasingly approving loans for applicants with debt-to-income ratios of up to 50%. The lending corporations also have been guaranteeing with loans with low down payments.”
Government-sponsored subprime lending will save the housing market!
We are now getting what referred to as layer risk in 2004-2006.
Poor credit isn’t bad if the LTV is 50%
Low down payment isn’t bad is the DTI is 20%
High DTI may not be bad if the LTV is 50% and credit 750+
But poor credit, high LTV and high DTI is a guarantee of failure.
Looks like we are getting to the layered risk issues we had in 2004-2006.
Good perspective. Price is another layer? I think the price being 300% of sustainable guarantees failure.
Yup. Aren’t there a couple isolated banks that advertise loose lending standards? If you read the fine print, the borrower needs at least one sign of credit worth: high interest rate, high down payment or higher FICO. They can’t be lax with all three.
Donk,
90% of all mortgages since 2008 are 3% down on a low credit score at 4% rate. It’s called subprime.
All three competing against each other to provide more subprime mortgages.
Isn’t 90%+ of all mortgages issued as subprime enough?
What a difference a couple of hours makes on Wall Street!
Stock havens take it on the chin as bond yields rise, with 10-year at 3%
Stocks extend losses as industrials, materials and tech shares sell off
Published: Apr 24, 2018 12:19 p.m. ET
By Anora M. Gaudiano
Reporter
U.S. equity markets extended declines, hitting session lows in afternoon trade on Tuesday, with the Dow on track to a fifth straight session of losses. If Dow closes in negative territory it would be the longest losing stretch since March 2017. The losses were led by a selloff in industrials, materials and technology sectors. The Dow Jones Industrial Average (DJIA, -1.09%) fell 250 points, or 1%, to 24,190. The S&P 500 index (SPX, -0.71%) fell 17 points, or 0.7%, to 2,652. Meanwhile the Nasdaq Composite (COMP, -1.28%) declined 74 points, or 1% to 7,054. Among the worst performers on the Dow, 3M Company (MMM, -8.14%) shares fell nearly 8%, while Caterpillar Inc. (CAT, -4.29%) slumped more than 3%, after trading 4% higher in the morning. Among technology shares, Google-parent Alphabet (GOOG, -4.77%) shares tumbled 4.2% even as the tech company reported earnings on Monday that beat expectations.
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Redwood City, CA Housing Prices Crater 13% YOY As Tech Workers Default On Subprime Mortgages
https://www.movoto.com/redwood-city-ca/market-trends/
10-year T hits 3%. Wasn’t that the magic number for property investors to start dumping assets?
I think that I had read somewhere the number was 3.05% for a different sector to start their sell off, so this may be just the beginning.
Yep. 4% will be another tipping point, as will 5% and 6%.
Just whole numbers on the way to the historic trend of 12% lending rates.
Just whole numbers on the way to the historic trend of 12% lending rates.
There are people who are now “adults” who have never seen or heard of such a thing. Such a world is unimaginable to them. There are posters on this blog who were fuming a few days ago in disbelief at how hard it was to get a loan for a house at 4%. A significant percentage of the population has no sense of reality at all. They are in for some shocks.
If memory serves me correctly, then long-term Treasury yields topped out over 14% in the early 1980s before beginning their long descent to historic lows reached in the post-2009 period.
I realize it’s different now and these levels could never be reached again.
“The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.” —Simon Johson
There you go scarin’ the homemoaner$ lil’ children again! … Eye’m tellin’ Ben …
Frank @ 3.9% , Mr.Bear @ 6%, Hwy50 @ 12%
Drop the roulette$ ball …
Trading Nation: The rate debate
3:37 PM ET Mon, 23 April 2018 |
“I am bullish on the 10-year yield,” Frank Cappelleri, senior equity trader at Instinet, said Monday on CNBC’s “Trading Nation.”
Cappelleri is so bullish on yields that he has one of the highest targets on the Street. He says it’s possible the 10-year yield will reach 3.9 percent, a level not seen since April 2010.
“A classic measured move from the pattern gets us to 3.9 percent,” said Cappelleri. That kind of a move would coincide with resistance levels seen in 2008, 2009 and 2010, he added.
Is the 10-year yield at 3.9 percent a possibility this year?
Yes
44%
No
45%
Unsure
11%
Total Votes: 1297
Not a Scientific Survey. Results may not total 100% due to rounding.
It’s hard to fathom that 8% long-term Treasury yields were the norm when I entered the full-time work force. Now 3% is the major market freakout tipping point!
Here are the next hurdles for government bond yields after the 10-year hit 3%
By Sunny Oh
Published: Apr 24, 2018 4:39 p.m. ET
Bradley Kanaris/Getty Images
What’s next?
In a much-expected moment, the 10-year Treasury note yield (TMUBMUSD10Y, -0.31%) touched the 3% level early Tuesday, which has been closely watched by both bond and stock investors alike.
With that psychological hurdle out of the way, traders and analysts offered up a few of the next bearish milestones the benchmark maturity may pass if it keeps its holds near its recent milestone level. Bond prices fall when yields rise.
Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets highlighted a peak of 3.047% as the imminent support level to monitor. That would see the yield clear the highs seen in January 2014, pushing it to the loftiest levels since 2011.
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I went to an overpriced open house this weekend out of perverse curiosity.
The realtor showing the house and I were discussing how the market is currently insane and we agreed it was due to (a) recent rate increase and (b) it being early Spring. As a checking statement, I told him if I were buying I’d wait until Fall to which he replied that rates will most likely be higher then.
What I thought he meant: “Buy now; it’ll only be more expensive in the Fall.”
What he actually meant: “People have a certain amount they can afford per month. If rates go up, prices have to come down.”
I told him he’s the only realtor I’ve ever heard say that out loud.
10-year T hits 3%. Wasn’t that the magic number for property investors to start dumping assets ??
They have been dumping for 6 months or more already.
He who dumps first dumps best.
Akron? Worcester? I remember back in 2005, a co-worker returned from a conference in Chicago and told me that the next big real estate speculation opportunity, according to conversations he’d overheard, would be lakefront property in Gary, Indiana, which could be redeveloped. I have relatives from Gary and … no.
morgan stanley thinks 10yr headed for 2.50% by year end
wow, I figured 2019 for recession…………..
From Real Daily. “According to CoreLogic, one in five home borrowers use more than 45% of their monthly income to pay off a mortgage. These levels of mortgage debt haven’t been seen by financial experts since the housing crisis of the mid-2000s.”
“Lending to applicants with extremely high debt-to-income ratios was a factor in the increase. Fannie Mae and Freddie Mac are increasingly approving loans for applicants with debt-to-income ratios of up to 50%. The lending corporations also have been guaranteeing with loans with low down payments. Applicants can pay down as little as 3% for mortgage loans down payments with the lending corporations.”
3% down, 50% DTI ratio. But the loan requirements these days are strict they said! It’s different this time they said!
yes, it is,used to be 33% and the down payment had to be cash in the clear. I remember getting hassled about having money market funds
When was a 33% down payment ever required?
My folks bought their first place in the early 1960’s with a low down FHA loan.
Think he meant house debt to income ratio.
Redmond, WA Housing Prices Crater 9% YOY As Layoffs Ramp up
https://www.movoto.com/redmond-wa/market-trends/
It’s a stampede getting into a house.
And there you have it in a nutshell describing the INSANITY of life in our fair land.
“It’s a stampede getting into a house.”
It’s amazing what rising prices will drive people into doing.
When houses were cheap people were slow to buy. Now that prices are rising people are stampeding to latch on to one.
Econ101 says this isn’t supposed to be so, but nevertheless there it is.
FOMO - Fear of missing out.
Panic buying, afraid they’ll never be able to get a house because prices will never stop rising, etc.
Nothing was learned from the last bust. Nothing at all. All I’m hearing anymore is how it’s different this time, that there will be no banking crisis so prices can’t fall, blah, blah, blah….
“FOMO - Fear of missing out.”
A lot of ladies who are 30 going on 16, still doing selfies, still doing foodie dates, etc., wonder if they’ll ever settle-down and have a baby with Mr Right.
Those aren’t ladies, they’re a syndrome. Any guy in his right mind will steer clear. Let them grow old with their cats and box wine, but they won’t be taking me to the cleaners.
“Stan Middleman, chief executive of Freedom Mortgage, a home lender, says the current mortgage loan crisis isn’t critical yet. ‘It’s not a problem today, but it may be a problem tomorrow,’ said Middleman.”
I see that kickin’ the can has not gone out of style…
Stan is feverishly working on his resume and going to night school to learn a new career.
Oakton, VA Housing Prices Crater 10% YOY As NoVa/DC Homeowners Slip Deeper Underwater
https://www.zillow.com/oakton-va/home-values/
*Select price from dropdown menu on first chart
“Daytona Beach Mayor Derrick Henry filed for bankruptcy in 2017 ”
Nowhere in that story does it say if he’s a Dem or Rep. And the omission means he is a Democrat. That’s how the MSM rolls. Had he been a Republican, the headline would read REPUBLICAN MAYOR FILES FOR BANKRUPTCY. He’s a Dem however, and party affiliation isn’t mentioned once in the article.
What media bias?
It doesn’t mention that he is a transvestite either.
Weekly Summary: HBB-Reported Purchase Price Declines
Posted every Tuesday. Key and quarterly summary posted the last day of the quarter.
–
April 18 - 24
> -34% Cape Town / VAL Sectional Title (yoy -Apr18)
> -20% Toronto - Greater Area / AVG (Apr17P-Aug17)
> -15% Toronto - Greater Area / AVG (Apr17P-Apr18)
> -8% Sweden / CND (yoy -Mar18)
> -7% Sweden (yoy -Q1.18)
> -6.6% [Sydney - Alexandria / CND] (2016-Apr18)
> -6.3% Shanghai / AVG PSM DEV (wow -Apr18)
> -5.7% Sydney / LUX (yoy -Apr18)
> -4.5% Sweden (yoy -Mar18)
> -2.4% Israel (Nov17-Apr18)
> -1.8% Sweden / SFR (yoy -Mar18)
Canada’s central bankers won’t remain stoic much longer.
Yawn… hibernation season seems to be lasting extra long this year. Wake me up when the Fed is done with its tightening cycle.
The Financial Times
Equity earnings
US stocks hit by profit fears and rising yields
Caterpillar suggests first-quarter earnings are a ‘high watermark for the year’
3 hours ago
…
What would it take for you to buy a house in the next 8 months?
Win the lottery.
What would it take for you to buy a house in the next 8 months?
Price drop of 80% would work for me.
This is unsettling.
Climate change is ‘not as bad as we thought’ say scientists
CLIMATE change is likely to be markedly less severe than forecast, a study claimed yesterday.
By JOHN INGHAM
PUBLISHED: 20:19, Tue, Apr 24, 2018 | UPDATED: 20:31, Tue, Apr 24, 2018
It predicted that the impact will be up to 45 per cent less intense than is widely accepted.
Nicholas Lewis, one of the author, said “future warming is likely to be substantially lower than the central computer model-simulated level projected.”
https://www.express.co.uk/news/uk/950748/climate-change-scientists-impact-not-as-bad-on-planet
This is unsettling…
Of course. We have known for a long time that ice ages are cyclic. Are you worried about whether the next one happens in 150,000 years vs 200,000 years?
The beautiful thing about scientists is their poignant and sincere honesty.
Snow is starting to disappear from our lives. Sledges, snowmen, snowballs and the excitement of waking to find that the stuff has settled outside are all a rapidly diminishing part of Britain’s culture, as warmer winters – which scientists are attributing to global climate change – produce not only fewer white Christmases, but fewer white Januaries and Februaries. Global warming, the heating of the atmosphere by increased amounts of industrial gases, is now accepted as a reality by the international community. Within a few years winter snowfall will become a very rare and exciting event. Children just aren’t going to know what snow is.
If you write a book criticizing the Settled Science you get to enjoy having a lot of hate mail sent to you …
http://www.climatedepot.com/2018/04/25/death-wish-people-like-you-should-just-die-motherfcker-go-to-hell-skeptical-book-author-moranos-hate-mail-of-the-day/
Bend(Century West), OR Housing Prices Crater 14% YOY As Lot Prices Plummet
https://www.zillow.com/century-west-bend-or/home-values/
*Select price from dropdown menu on first chart
The DNC “hack” wasn’t a hack, it was a direct data transfer to a USB drive. Seth Rich was murdered by the DNC, and the 2016 Democrat primary was stolen from Bernie Sanders by Hillary Clinton and the DNC:
https://www.nbcwashington.com/news/local/Firm-Launches-New-Effort-to-Find-Seth-Rich_s-Killer_Washington-DC-480704311.html
When will the Clintons (and the DNC) stop murdering their opponents?
When will the Clintons (and the DNC) stop murdering their opponents?
When the crime of “Arkancide” is finally recognized and prosecuted.
‘They don’t have time to wait until the weekend to get here,’ Robert said. ‘They have 24 hours before the seller gets two to three offers. It’s a stampede getting into a house. I’ve never seen this.’”
Oh I’ve seen this, Robert. 2007 redux. I’ve also seen how it ends: in tears for the FBs who were in such a mad scramble to get into a house they couldn’t afford in time just before the housing bubble bursts.
The more things change, the more they stay the same.
Oh dear. Looks like the nine-year spree of borrowing money to buy your own stock or get into an overpriced house you can’t afford may be coming to a screeching halt. “Investors” are belatedly starting to balk at the pathetically unfavorable risk/reward proposition of buying US Treasury debt that in any event is going to be printed away by the Fed.
https://www.cnbc.com/bonds/
Didn’t they already try to print it away, at least $4+ trillion worth?
Lots of stupid people are having their asses handed to them about now over the 3% ten year T-bond yield nonevent.
The Financial Times
Global Market Overview
Stock sell-off set to reach Europe
10-year Treasury back over 3% while US earnings worries hit sentiment
updated 48 minutes ago
…
It’s gonna be the same story ahead when the 10-year Treasury yield hits 4%, 5%, 6%, etc. Lots of imaginary round figure thresholds will need to be crossed, with their attendent stock market freak-out moments, in order for yields to normalize.
And don’t forget that rates typically far overshoot the long-term norm in a correction, and that such corrections normally play out over decades. It’s a long, slow grind up from here for long-term Treasury yields to normalize.
Here’s the threat to the stock market from rising bond yields
Published: Apr 24, 2018 4:44 p.m. ET
Corporate debt, high valuations make equities vulnerable: SocGen
Getty Images/iStockphoto
By Anora M. Gaudiano
Reporter
Lofty valuations and record U.S. corporate debt make rising bond yields a risk to the stock market, according to Andrew Lapthorne, head of global quantitative research at Société Générale.
Investors have shrugged off increasingly expensive U.S. stocks in recent years for a number of reasons, including solid earnings, low interest rates and nearly absent inflation. But as both yields and inflation rise, earnings might not be enough to propel stocks higher.
A correction in February that sent the S&P 500 (SPX, -1.34%) down more than 10% combined with a near-20% expected increase in earning growth has lowered the trailing and forward price to earnings ratios. However, both measures remain above historical averages.
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We need more roosters
When your rooster crows at the break of dawn
Look out your window, and I’ll be gone
You’re the reason I’m a-traveling on
But don’t think twice, it’s all right
https://www.azlyrics.com/lyrics/bobdylan/dontthinktwiceitsallright.html
Frankie Valli & 4 Seasons 10 Don’t Think Twice, It’s Alright
https://www.youtube.com/watch?v=KerQKsX0zlw
Roosters, DebtDonkeys, HousingHens, MortgageMonkeys and all our barnyard friends.
One way to make that hefty mortgage payment is to host a sex party …
http://kdvr.com/2018/04/24/neighbors-say-wild-sex-parties-disturb-upscale-castle-rock-community/
Does that sort of activity make housing values in the surrounding neighborhood go down or up?
The risque invitation also advises guests to bring their own condoms and show respect for the “new furniture.”
That could be a line right out of “Soylent Green.”
Another day, another opportunity for risk asset bulls to freak out over post-Yellen Fed punchbowl removal operations…
The Financial Times
Global Market Overview
Stock sell-off reaches Europe on earnings fears
Ten-year Treasury back over 3% as Caterpillar points to growth worries while euro slides
updated 20 minutes ago
The “sell in May, go away” people have an early start this year.
Stock-market bulls lose hope as indexes trade in a tight range
By Ryan Vlastelica
Published: Apr 25, 2018 8:01 a.m. ET
A narrow market is ‘a classic sign of underlying deterioration,’ Morgan Stanley writes
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Seems like azdude is awfully quiet… out buying furniture for ‘da crib?
Glued to Zillow…