April 28, 2018

An Expectation That Prices Would Go Up And Up And Up

A report from the Mercury News in California. “The soaring cost of construction could hobble efforts in San Jose and other Bay Area cities to speed development of high-density housing such as apartment towers, according to a foreboding assessment being circulated in the South Bay. Even worse, while ordinary individuals already face dire financial obstacles when they buy or lease housing, residential rents likely would have to spiral even higher to render the vast majority of Bay Area apartment towers economically viable for developers, experts warned. ‘This is a housing crisis and a housing catastrophe, but if I’m going to kick off a new project, rents have to go higher,’ said Drew Hudacek, chief investment officer for development firm Sares Regis.”

“Renters would be forced to endure an eye-popping 25 percent increase in rents before most new residential towers could be built. ‘We have more than 6,000 units that are fully entitled and ready to be built,’ San Jose Mayor Sam Liccardo told this news organization. ‘But developers can’t get shovels in the ground because the development costs are scaring away the financing.’”

From National Real Estate Investor. “Local and regional banks are making more loans on apartment properties, in some cases significantly more. In one surprising example, the busiest construction lender in the U.S. in 2017 was Bank of the Ozarks. Banks are continuing to pour money into apartment projects, keeping the total number of units under construction high. The new developments will continue to stress the supply/demand balance in a growing number of apartment markets where vacancy rates are beginning to creep up and rent growth is slowing down.”

“‘Regional banks are still searching for yield in this flat yield curve environment… commercial real estate lending is an attractive alternative,’ says Justin Bakst, director of capital markets with research firm the CoStar Group. Banks are also highly conscious that developers are building more new apartments in some cities than the local markets can absorb. ‘Urban infill markets have seen a lot of supply,’ says Mitchell Kiffe, co-head of national production for the debt and structured finance group at CBRE Capital Markets.. That’s beginning to push the vacancy rates higher in some places. ‘Net effective rents probably have not achieved the pro forma estimates set for many projects,’ Kiffe notes.”

The Downtown Devil on Arizona. “A surge of multi-family construction is reshaping the housing market and approximately 2,000 units are set to be added to the skyline by 2020. It is no secret that downtown Phoenix is growing, and rapidly too. Founder of We Heart Houses and real estate investor Michael Del Prete is not surprised by the spur of new residential developments. ‘Money is cheap right now,’ said Del Prete. ‘It is easier for developers to get access to cash to build these buildings.’”

“When the Federal Reserve gives the gift of low-interest rates, investors take advantage. But as they are on the rise, their generosity is fleeting. These apartments, however, do come with a pretty price tag. Because there is a constrained supply of units and demand for housing is so high, according to Elliott Pollack, CEO of Elliott D. Pollack & Co., it is almost statistically impossible to overbuild the apartment market at this time. The market is saturated with one product—housing—but the number is not at all high enough to cause a problem.”

“‘If indeed, there are not enough people that will satisfy rent costs, concessions like six or eight weeks free of rent will be offered to lower the total leasing price. Regardless, at some price the units will be rented—the demand is here. ‘Am I shocked? Am I scared? No,’ Pollack said, trusting that an overbuild situation in downtown will generally be a good thing. ‘Somebody’s going to live in those units at some price and that means that there’s going to be more vibrancy to downtown because there’s going to be more people,’ Pollack said, ‘you can’t focus on what’s there now, you have to focus on what’s going to be there.’”

From Bisnow on Texas. “The Q1 numbers are in and it appears DFW is finally cooling off after years of manic growth. Office vacancy in the metro is up to 20.5%, multifamily is up to 5.6% vacancy. Demand fell short of the deliveries in the multifamily market, resulting in a rise to 5.6% vacancy. Class-A product in Frisco, Allen and McKinney is taking it especially hard as the delivery of thousands of luxury units caused up to 7.5% vacancy in these areas, some of the highest in the metro, according to Marcus & Millichap’s Q1 multifamily report. Much like the office market, job growth should bail DFW multifamily out of its slightly overbuilt pockets.”

From the Baton Rouge Business Report in Louisiana. “‘Where can I build some more apartments? Is there demand anywhere?’ I get asked these questions a lot. Apartments are usually popular developments because financing is easy to come by and developers can always hire ‘experts’ to tell them what they want to hear. The problem, however, is that very few ‘experts’ do the necessary analysis to determine if demand really exists. They use bad data from national sources that may overstate average rents and understate vacancy rates.”

“For example, I recently had the occasion to review one such report that said there was additional demand for student housing in Baton Rouge. Well, anyone who has driven down Burbank or Nicholson drives can tell you that conclusion may be suspect. Apartments identified as Class A, or those considered to be upscale properties, saw average rents decrease by 5.2%, while Class B, C and D properties all posted increases in average rental rates. Vacancy for all units averaged nearly 8%, which is up slightly from a year ago. And over 40% of the properties surveyed were offering some sort of concessions, such as free rent and reduced deposits, in an attempt to lure in tenants.”

“None of these facts, in and of themselves, are cause for concern—until you look at the construction taking place in our market. There were 7,774 units constructed or under construction from 2015 to 2018. That’s an average of 1,944 units per year. For historical comparison, consider that between 2006 and 2013 there were 6,937 units constructed, which is just 867 per year. To add insult to injury, another 2,290 units are proposed for 2019 and 2020, according to the survey.”

“I look at all the upscale student apartment complexes being built along Burbank and Nicholson drives and I think back to when Tigerland was the place to be—until a great new area was developed off Gardere Lane with lots of new ‘upscale units’ (or so they were considered back then) and students flocked to rent there. That didn’t end well. Just saying.”

From The Hook on North Carolina. “The oversaturation of student housing around Greenville, driven by the growth of East Carolina University and Pitt Community College, has led to a split on the city council of how to address the problem. The analysis said the next 10 years the city’s supply of student housing will increase to 2,586, with 1,930 bedrooms currently under construction and expected to be on the market in the next two years. The 2,586 bedrooms will be added on top of the 720 vacant bedrooms which apartment complexes around Greenville currently have, according to the report.”

“In a recent analysis performed by Jessica Rossi, a planner at Kimley Horn, a planning and design consulting group, revealed the city’s supply of student housing is double of what the demand for housing is. ‘Ultimately what the analysis came down to was we found there to be an excess supply of student housing,’ said Rossi.”

From Bisnow on New York. “For the past five years, Douglaston Development Chairman Jeff Levine hasn’t made a single acquisition in New York City. Buying simply hasn’t made sense. ‘The reason being is that in the post-rate-recession environment banks stopped financing. Condos stopped selling,’ he said. ‘Land has not come back to earth far enough … [421a replacement] Affordable New York is not worth the paper it’s printed on.’”

“Levine, who is developing the 554-unit rental building in Williamsburg, Brooklyn, said rentals are a safer bet than condominiums right now. ‘I’ve done condos … couldn’t give them way… I struggled to pay back my debt,’ he said. ‘In a rental, I have more than one bite of the apple.’”

“Increasingly, developers are looking for ways to provide a cheaper product to buyers as they are still working to chew through the oversupply of luxury product on the market. Naftali Group has been inactive for a number of years, but it has recently began acquiring development sites once more, and founder Miki Naftali told the audience he believes $3K per SF is what he would consider the high end of the market. ‘The $5K or $6K a foot is just a dream that happened a few years ago, or at places like 220 Central Park South,’ he said. ‘In 2015, we started to see the market is getting to the point that it is just too expensive.’”

“Alchemy Properties founder Kenneth Horn said there is an oversupply of units in the $5K per SF price point, which he said is not a market he has ever wanted to be in, adding his company prefers to be selling apartments priced from $2,500 to $3K per SF. Alchemy is redeveloping the historic Woolworth Building in Lower Manhattan into luxury condominiums, with a penthouse priced at $100M. If it were to sell at that price, it would smash all Downtown residential records. ‘Two or three years ago, there was certain expectation that prices would go up and up and up,’ he said.”




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182 Comments »

Comment by Ben Jones
2018-04-28 07:54:10

‘Because there is a constrained supply of units and demand for housing is so high, according to Elliott Pollack, CEO of Elliott D. Pollack & Co., it is almost statistically impossible to overbuild the apartment market at this time’

Click!

 
Comment by Ben Jones
2018-04-28 07:57:04

‘the city’s supply of student housing is double of what the demand for housing is’

How does this happen?

‘because financing is easy to come by and developers can always hire ‘experts’ to tell them what they want to hear. The problem, however, is that very few ‘experts’ do the necessary analysis to determine if demand really exists. They use bad data from national sources that may overstate average rents and understate vacancy rates’

And this means fooked:

‘Net effective rents probably have not achieved the pro forma estimates set for many projects’

Comment by Mr. Banker
2018-04-28 08:10:35

“… because financing is easy to come by and developers can always hire ‘experts’ to tell them what they want to hear.”

Bahahahahahaha ….

“The problem, however, is that very few ‘experts’ do the necessary analysis to determine if demand really exists.”

Why should they bother? These ‘experts”weren’t consulted to dispense the truth, they were consulted to supply to the clients words the clients wanted to hear.

A nation of dummies.

 
Comment by Peter
2018-04-28 08:18:37

“because financing is easy to come by and developers can always hire ‘experts’ to tell them what they want to hear. The problem, however, is that very few ‘experts’ do the necessary analysis to determine if demand really exists.”

no risk no fun… no brain no money

 
Comment by oxide
2018-04-28 10:07:42

I keep hearing about this “easy money” and “yellenbucks going somewhere to die.” But this isn’t easy money, it has to be paid back, even at 0% interest. The yellenbucks aren’t going to die; they need to be paid back, even at 0% interest. This is the business equivalent of taking out a HELOC. It’s not an ATM; it’s just another credit card. I guess everyone is looking at the finance charges and minimum payment, and not the principle.

Are you saying that principle is just going to go on the national debt pile and never be paid back?

Comment by Mr. Banker
2018-04-28 10:23:46

“Are you saying that principle is just going to go on the national debt pile and never be paid back?”

Paid back how? Paid back in what way using what?

If our economy was an earned-money economy then earned money could be used to pay back borrowed money. But our economy is not an earned-money economy, it is a borrowed-money economy. The only way money can be obtained to pay back borrowed money in a borrowed-money economy is to borrow it.

Comment by tresho
2018-04-28 10:26:13

Executive summary: The national debt will never be paid off.

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Comment by BlueSkye
2018-04-29 06:14:50

It’s not about repayment, it’s about the interest.

 
 
 
Comment by BlackSwandive
2018-04-28 10:40:03

“I keep hearing about this “easy money” and “yellenbucks going somewhere to die.” But this isn’t easy money, it has to be paid back, even at 0% interest. The yellenbucks aren’t going to die; they need to be paid back, even at 0% interest. ”

Lots of Yellenbucks will die and never be paid back. It’s called DEFAULT.

Comment by BlackSwandive
2018-04-28 10:49:26

Also, think about it this way:

Historically, during a housing sale, a buyer would pay the owner x dollars, let’s use x = $100k for example. So, the buyer gives the seller his $100k savings, or cash from a loan, in exchange for the house. The seller gives the house in exchange for the liquid cash. Each party has not experienced a net increase or decrease in wealth, they’ve just swapped assets. The total of both assets is $200k.

During a bubble, the buyer gives $100k, but then the house price drops 65%. The total of the two assets after the price drop is $135K, not $200k. $65,000 Yellenbucks have just gone to money heaven, never to return short of another massive shot of housing heroin.

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Comment by Carl Morris
2018-04-29 14:23:15

short of another massive shot of housing heroin

And that’s why we’re virtually certain to see another one…and another one. Until the patient dies. Any other result would require the parasites to have a major die off first.

 
 
Comment by Professor 🐻
2018-04-28 11:00:11

DEFAULT = printing press money goes poof = Yellen bucks perish

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Comment by Professor 🐻
2018-04-28 11:14:46

However, note that the residential real estate lending from the Obama era to the present has been federally guaranteed for the most part, meaning that the next foreclosure crisis will land squarely on the U.S. taxpayer, making the case for bailouts far easier to support than if private lenders bore the default risk. This seems like a horrible case of moral hazard for lenders to make bad loans and adverse selection to attract the worst credit risk (subprime) customers to borrow. I took an economics course in Money and Banking out of Hubbard’s book a quarter of a century ago, and the present situation is a textbook example of how not to run a banking system, unless you happen to be a lender enjoying a free federal guarantee or a subprime borrower who qualifies for a taxpayer-funded risk subsidy to provide a lower-interest rate loan than a private lender would offer. The real costs of this scheme are a Sword of Damocles hanging above American taxpayers, waiting to drop with the onset of the next recession.

 
Comment by Professor 🐻
2018-04-28 11:22:02

Luckily the Fed has already established a precedent for buying mortgage-backed securities that back up defaulted loans at price points above what private investors would be willing to pay for collapsed debt obligations, obviating any future need for Congressional approval to authorize taxpayer-funded bailouts. Why pay the political price of Congressional approval when you can do it for free with printing press money?

It’s turtles all the way down!

 
Comment by Carl Morris
2018-04-29 14:24:16

Eventually we all rent from the Fed.

 
 
 
Comment by Pilsung
2018-04-28 13:32:52

The Federal Reserve cue card:

Step 1: Create fake money stealing value from everyone

Step 2: Loan the fake money to people with interest

Step 3: Take people’s stuff when they can’t repay the debt

Step 4: Get government to enforce our fraud

Step 5: Plunder humanity

 
 
Comment by Mafia Blocks
2018-04-28 10:40:40

‘Net effective rents probably have not achieved the pro forma estimates set for many projects’

A nice way of saying, ” we’ve had to slash rental rates by 30% like everyone else has and now we’re telegraphing that we’re going to default so be prepared.”

 
 
Comment by Salinasron
2018-04-28 08:15:02

Build all you want in SV but where are you planning to get water in the future.

Comment by rms
2018-04-28 09:44:07

Anderson Dam, the county’s largest reservoir, is going to be slowly taken apart and rebuilt to meet modern seismic standards. The project is slated to take 7 or 8 years I believe. During this time the county will be entirely dependent on imported water deliveries, a dangerous prospect if a significant seismic event occurs disabling their conveyance route(s).

 
 
Comment by Apartment 401
2018-04-28 08:17:03

Realtors are liars.

Comment by Mafia Blocks
2018-04-28 08:42:23

….and every closing a crime scene.

 
 
Comment by Ben Jones
2018-04-28 08:20:59

‘residential rents likely would have to spiral even higher to render the vast majority of Bay Area apartment towers economically viable for developers, experts warned. ‘This is a housing crisis and a housing catastrophe, but if I’m going to kick off a new project, rents have to go higher,’ said Drew Hudacek’

You paid too much for the land Drew. You got schlonged.

Comment by BlackSwandive
2018-04-28 08:31:12

Land sellers and buyers have very poor math skills these days, because nothing even remotely pencils out. What’s interesting about the bubble this time around is that the volume of land sales, at least in the rural areas, is much lower. I don’t think they’re giving out stated income, NINJA land loans like they did last bubble peak. However, it only takes one yahoo to pay some insane price for a parcel which drives up the price of everything.

Which brings me to a point about real estate that really bothers me. How is it that one sale, oftentimes fraudulent, can all of a sudden set the comps of all surrounding properties? This is a bogus system, in my opinion, and appraisers aren’t worth a plum nickel.

Comment by Mr. Banker
2018-04-28 08:40:47

“How is it that one sale, oftentimes fraudulent, can all of a sudden set the comps of all surrounding properties?”

This is the magic that drives equity wealth creation. The action of one buyer can produce instant equity wealth for hundreds of the buyer’s neighbors. And the buyer can perform this magic with very little money of his own.

Comment by Mr. Banker
2018-04-28 08:51:02

Let’s do some math:

If a buyer adds, say, ten thousand dollars to the value of a house by agreeing to buy it for ten thousand dollars above “the going price” and if this house has one hundred comps then the buyer adds ten thousand dollars of equity value to each one of the comps WHICH MEANS the buyer added one million dollars of equity value to the comps.

Magic!

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Comment by Albuquerquedan
2018-04-28 10:26:46

Yes, black magic in the long run.

 
Comment by Mr. Banker
2018-04-28 10:56:35

In the long run we are dead.

 
Comment by Professor 🐻
2018-04-28 11:27:58

In the long run, our children are either bankers or endentured debt slaves.

 
 
Comment by bob
2018-04-28 17:15:14

It does not have to be fraudulent…

In 2010 - when buying our current condo, were were off by around $12K. The builder counter offered with 1) a bigger storage unit, 2) 3 months of HOA free (max allowed by rules of the association), 3) prepayment of $9k to our behalf to the HOA account.

I got our price - and the builder got to keep up comparables.

But really not fair for true price.

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Comment by Mafia Blocks
2018-04-28 17:56:59

If the appraisal met, it was fraudulent.

 
Comment by Professor 🐻
2018-04-28 22:15:19

Sounds like the loan for the home purchase was fraudulently misappropriated to cover a bunch of short-term expenses. Was the loan supposed to apply to the home purchase amount at fair market value? If the principle balance was guaranteed, then the taxpayer just guaranteed the value of the house at a price for which it wouldn’t sell…aka appraisal fraud.

 
 
 
Comment by BlueSkye
2018-04-28 10:19:55

set the comps…

It’s part of the mania. A fraudulent or idiotic transaction is welcome, as it only speaks the future truth prematurely.

 
 
Comment by Mafia Blocks
2018-04-28 08:57:20

“You paid too much for the land Drew. You got schlonged.”

Indeed.

A wise man once said, “There is a globe full of usable land where 95% of it goes undeveloped. If you paid more than $500-$1,000 an acre, you paid too much.”

He’s right.

Carmichael, CA Housing Prices Crater 7% YOY As 2016 Vintage Subprime Mortgages Failure Rate Accelerates

https://www.movoto.com/carmichael-ca/market-trends/

 
 
Comment by BlackSwandive
2018-04-28 08:21:05

I’m traveling right now. Spent a little time in Ashland, Oregon the past few days. $600,000 for a tiny little house in town. Median household income a little over $40k. GTFO.

Comment by azdude
2018-04-28 09:52:40

put your roots down up there buddy. become a homeloaner!

Comment by BlackSwandive
2018-04-28 10:52:26

“Homeloaner”

I think it’s “loanowner.”

Comment by Mr. Banker
2018-04-28 11:01:40

I am the loanowner and also the homeowner and will remain the homeowner and the loanowner until the dummy who agreed to becoming my debt slave for the next several decades comes up with the dough to buy himself out of the stupid situation he willingly placed his stupid self in.

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Comment by Professor 🐻
2018-04-28 11:40:29

All your monies and lands are belongs to us.

 
 
 
 
 
Comment by Mr. Banker
2018-04-28 08:25:46

“Renters would be forced to endure an eye-popping 25 percent increase in rents before most new residential towers could be built. ‘We have more than 6,000 units that are fully entitled and ready to be built,’ San Jose Mayor Sam Liccardo told this news organization. ‘But developers can’t get shovels in the ground because the development costs are scaring away the financing.’”

Let’s take a look at this for a minute …

If new housing units are expensive to build then the value of existing housing units will rise. This rise in housing value will be reflected by a rise in rents AND it will be reflected in a rise in the value of equity, a rise in the value of equity in all the housing units that already exist.

A rise in housing equity translates to a rise in wealth - wealth that can be cashed out and spent. Wealth that is spent produces a thriving local economy.

Therefore it is in the interest of all property owners that the building of new housing units remain expensive so that the local economy continues to flourish.

Comment by BlackSwandive
2018-04-28 08:34:27

When you look at the local government fees for building pretty much anywhere, it’s become ridiculous. Not only have they raised all existing fees, they’ve come up with new ones in an all out effort to extract every possibly penny they can. We are in a government fleecing bubble.

Comment by Ben Jones
2018-04-28 08:51:14

I’m not saying fees aren’t too high, but NYC CRE doubled in price from 2014 to 2016:

‘The $5K or $6K a foot is just a dream that happened a few years ago, or at places like 220 Central Park South,’ he said. ‘In 2015, we started to see the market is getting to the point that it is just too expensive.’…‘Two or three years ago, there was certain expectation that prices would go up and up and up’

Is it a coincidence that CRE financing went nuts about the same time?

Comment by Mafia Blocks
2018-04-28 09:23:57

Correct.

These “fees” amount to a few thousand dollars. Last January I filed a permit app for a two building job in NJ at $7 million. Permit fee? $2100.

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Comment by Professor 🐻
2018-04-28 11:51:36

It’s the bidding by bidders armed with easy money financing that drives real estate, stocks, bonds, Bitcoin, and even fine violin bow prices through the roof.

Luckily, thanks to modern manufacturing technology which supports competition that effectively prevents any limit on supply relative to purchase demand, fine guitars can be yours for a song.

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Comment by Anonymous
2018-04-28 19:00:26

Are violin bows the new tulip bulbs? :D

 
Comment by Professor 🐻
2018-04-29 01:07:59

Well actually no. The violin bow market may indeed be in a bubble, just as any number of other big ticket asset categories are these days, thanks to the central bankers’ extraordinary accommodation for the past decade or so. But unlike tulips, which can be grown in virtually unlimited quantities, or Bitcoin, for which a technically unlimited number of new cryptocurrencies could be invented as close substitutes for the original one, that bow is one of a handful of surviving examples by its maker. (More to come on this later when I am awoke!)

 
 
 
 
Comment by Justme
2018-04-28 11:03:09

Total lie by Sam Liccardo, mayor of San Jose. It is not the construction costs nor development fees nor the permit fees that is preventing the construction of new houses. It is the LAND COST.

The SJMN article is just developer propaganda. So I disgree with BSD, and I think agree with Ben and MafiaBlocks, more or less.

But the developer mindset is that land cost is a fixed cost that gets passed on to the end customer. Then these same developers try to get out of paying necessary development costs (roads, sewer, whatnot) because that is their variable cost and a potential for profit if they can get the taxpayers to shoulder the burden. Total BS.

Comment by Mafia Blocks
2018-04-28 11:53:27

There are no “fixed costs”. What is a fixed cost? If plant A concrete is 80/cy and plant B is 90, it’s not a fixed cost. Dirt on Donkey Drive is $1500 /acre and $200/acre on Reality Road, what is fixed?

Comment by Justme
2018-04-28 15:35:32

Perhaps “fixed” was a wrong choice of word. More like “an already sunk cost”, or “a cost that taxpayers will not subsidize”. The main point, though, being the same.

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Comment by Mafia Blocks
2018-04-28 16:28:21

Paying too much for anything simply means incompetence or crime.

Don’t pay too much. Problem solved.

 
 
 
Comment by BlackSwandive
2018-04-28 12:22:34

You misunderstood me. My comment was not saying the fees were the reason that housing got expensive, my comment was pointing out that the fees, on top of all things bubble, are ludicrous. Local governments the country over are looting the public.

 
Comment by BlackSwandive
2018-04-28 12:32:08

Also, builders and developers, as Ben has pointed out so many times, are working off of a fantasy model. It used to be that a builder knew the local market and had a maximum price they would pay for a parcel given house selling prices, incomes, etc.

Instead of adhering to those standards and eschewing high prices, they threw caution to the wind and decided to pay exorbitant amounts for the land while constructing false narratives of wealthy retirees and rich Millennials who wanted luxury housing and all sorts of bogus amenities in an effort to justify their stupid land deals. In turn, they built a bunch of product at price points which hardly anyone can afford. It’s the price, stupid.

Comment by Ben Jones
2018-04-28 15:28:51

It’s vastly complicated by the merchant builders. These guys are operating on spec and as at least one long time apartment owner said, they don’t care about the health of the market. And there’s this general attitude:

“Kolter Urban President Bob Vail, who is developing the Alexander, said that there is something of an arms race for amenities in the new supply of high-end homes. ‘You see that across the U.S. There are [apartment] buildings in Atlanta, Denver and Dallas that are nicer and more fully amenitized than condominium units, because that’s what it’s going to take to get people to choose that building,’ Vail said. ‘It’s just sort of a differential advantage. It’s really become a race in those more in-demand markets.’”

“Though the market is healthy now, the developers agreed a slowdown is possible as new supply takes time to be absorbed, construction costs rise and actionable sites get harder to find. Low salaries in Palm Beach County mean that not many workers can afford high rents. When an audience member asked whether they were concerned with an economic downturn, Vail responded half-jokingly, ‘Condo developers, we don’t forecast those kind of things, you know what I mean? We’re just go, go go,’ he said. ‘And the faster we go, the faster we get to the closing, and then, I’m not going to say we don’t care, but … ‘ The audience chuckled as he trailed off.”

http://thehousingbubbleblog.com/?p=10407

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Comment by Carl Morris
2018-04-29 14:29:21

There are [apartment] buildings in Atlanta, Denver and Dallas that are nicer and more fully amenitized than condominium units, because that’s what it’s going to take to get people to choose that building,’ Vail said. ‘It’s just sort of a differential advantage. It’s really become a race in those more in-demand markets.

It’s almost like they know that not everybody is going to survive the next downturn…implying there is more than enough supply already.

 
 
Comment by Carl Morris
2018-04-29 14:27:28

they threw caution to the wind

And what would have caused that change in behavior?

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Comment by Apartment 401
2018-04-28 08:30:55

“Over the past decade, more than 3.5 million Americans have left high-tax blue states like California, New York, and many others in the Northeast, for low-tax red states like Arizona, Florida, and Texas.

While the migration has been happening for years, conservative economists Arthur Laffer and Stephen Moore are forecasting the next significant movement out of blue states could be right around the corner.

Earlier this week, in an op-ed in the Wall Street Journal titled “So Long, California. Sayonara, New York,” Laffer and Moore spoke about a provision within the brand-new tax bill that could create a mass migration of roughly 800,000 people - fleeing their estates in California and New York for better days in low-tax states over the next three or so years.”

https://www.zerohedge.com/news/2018-04-28/liberal-crisis-800000-people-are-about-flee-new-york-california

Comment by Albuquerquedan
2018-04-28 08:37:18

Just before the new census too, it may be the difference in the electoral college. Now a swing of a state but just a few electoral votes could be the difference in a close election.

Comment by Professor 🐻
2018-04-28 12:00:48

Here comes the flood of California and New York Democrats to the Red States. Could get interesting if the political balance in Flyover shifts substantially to the left.

Comment by Albuquerquedan
2018-04-28 12:12:58

It is the Republicans that tend to leave. It might even turn New Hampshire and Colorado back into the Republican camp.

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Comment by Professor 🐻
2018-04-28 12:29:07

That’s a point. The more conservative your politics, the more crazy California politics seems.

 
Comment by Albuquerquedan
2018-04-28 15:30:42

Then why would flyover turn left?

 
Comment by Albuquerquedan
2018-04-28 15:32:06

Misread your last comment sorry

 
 
 
 
Comment by Professor 🐻
2018-04-28 11:55:23

“…could create a mass migration of roughly 800,000 people - fleeing their estates in California…”

Great news to anyone awaiting the restoration of sanity in California housing prices.

Comment by GreenEggsAndSpam
2018-04-28 15:35:50

I keep reading about this Golden State Killer but then the name they give him isn’t Jerry Brown. What gives?

He, Gray Davis and the rest of the scum in Sacramento were the biggest golden state killers of the last 20+ years.

Comment by GreenEggsAndSpam
2018-04-28 16:11:27

Here is that golden state utopia

https://www.youtube.com/watch?v=f1wlV0X7CJM

Doctors worried about outbreaks because of all the human waste and drug use - we might have to nuke it, just to be safe!

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Comment by Pilsung
2018-04-28 22:32:35

California’s descent into Third World collectivist dystopia will only accelerate from here.

 
 
Comment by Taxpayers
2018-04-28 12:31:10

See howmonewalks.com

 
 
Comment by Apartment 401
2018-04-28 08:36:36

“If Amazon.com Inc. picks Denver for its new HQ2, residents could see rents going up more than ever.

According to research by Zillow, Denver rents could increase an additional 2.3 percentage points each year if Amazon picks Denver. Only Nashville would see rents rise more (2.4 more percentage points) than Denver’s in the country if that city is selected.

What would an additional 2.3 percent increase in rent mean? Zillow estimated that the current median rent in the Denver area is $2,047. If Amazon picks Denver as HQ2, that would jump to $2,168 in 2019.”

https://www.bizjournals.com/denver/news/2018/04/26/denver-rents-would-zoom-if-amazon-builds-hq2-here.html

 
Comment by Apartment 401
2018-04-28 08:43:19

Every dollar that is sucked into the black hole of overpriced housing is a dollar that will not be spent in the “real” economy:

“The subsequent recovery has been long but, by American standards, weak. Traditionally, the US has recovered sharply from downturns and had several years of fast growth. In the 1960s, for example, the US economy grew by 4.9% a year on average while in the 1990s it expanded by 3.6% a year on average. The average during the current expansion is 2.2% and it is the first business cycle since the second world war in which there has not been a single year of growth above 3%.

US wages have waxed and waned during each of the postwar recoveries except for the most recent one, which has seen wage rises remain low for almost the entire period.”

https://www.theguardian.com/business/2018/apr/28/america-long-slow-boom-recovery-last-economics

Comment by Mr. Banker
2018-04-28 09:05:47

“Every dollar that is sucked into the black hole of overpriced housing is a dollar that will not be spent in the “real” economy:”

Every dollar that is sucked out of the equity of overpriced housing is a dollar that can be spent in “the borrowed money” economy.

And the “borrowed” dollar spends just as well as the “real” dollar.

 
Comment by BlackSwandive
2018-04-28 10:57:43

“The subsequent recovery has been long but, by American standards, weak. Traditionally, the US has recovered sharply from downturns and had several years of fast growth. In the 1960s, for example, the US economy grew by 4.9% a year on average while in the 1990s it expanded by 3.6% a year on average. The average during the current expansion is 2.2% and it is the first business cycle since the second world war in which there has not been a single year of growth above 3%.”

This says it all in a nutshell. Worse, when you subtract construction and real estate, and all things housing, from that 2.2%, it exposes the sobering reality - this is nothing but a sham economy.

Comment by Mr. Banker
2018-04-28 11:09:38

“Worse, when you subtract construction and real estate, and all things housing, from that 2.2%, it exposes the sobering reality - this is nothing but a sham economy.”

These things are local. Construction is local. Real estate is local. All things housing is local.

Q. Where are most things you buy made? Where are the shoes you buy made? Your TV, where is it made? Is it here or is it somewhere else?

It used to be here, now it is somewhere else.

 
 
 
Comment by Albuquerquedan
2018-04-28 08:44:05

I was looking at the first quarter compared to the last two years, it is about twice last years growth rate and four times the rate in 2016. It appears that the Trump tax cut is having a large impact but it is being masked by the fact that for around the last ten years at least the first quarter has been abnormally slow compared to subsequent quarters. It appears likely that Trump this year will have a higher growth rate than Obama ever achieved despite that fact we are late in a recovery and historically high growth rates are achieved at the beginning of a recovery with the sharpest rates occurring right after a sharp decline.

Comment by OneAgainstMany
2018-04-28 18:27:32

I think the Trump tax cuts will definitely have an impact on growth, but I don’t think that real growth is that much higher than during the Obama years. Inflation has ticked up this past year as well. 2017 GDP growth was essentially the same as 2013. In any event, GDP growth is a pretty poor proxy for how the average American is doing. Makes a lot more sense to look at income distribution or wage growth at quintile level. In that respect, there are some meaningful increases going on at the lower level, mostly due to a tightening labor market.

Comment by Albuquerquedan
2018-04-29 06:12:01

The growth rate already takes out inflation. But rising inflation does raise another point, if you have growth of three percent and inflation of two percent, you have nominal growth of five percent. This means with a twenty trillion dollar debt, that any deficit of less than one trillion dollars will actually reduce the debt as a percentage of the GDP. In the end that really is what matters, what is the debt as a percentage of national income. You are right that the aggregate GDP does not mean that the average person is doing better. However, we are now starting to see wage gains in blue collar wages. Just reducing immigration by a little has finally made companies pay more. Hence, the screaming by the Globalists that we need more immigration.

Comment by Mafia Blocks
2018-04-29 06:34:26

What inflation?

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Comment by Anonymous
2018-04-28 08:52:32

In light of some OT discussion yesterday…

My friend I have mentioned before works for the Calif. Dept. of Corrections. So he has a good income, though looking at how he lives you would never know it. More to the point, he also has (in theory) an amazing pension awaiting him in a few years.

Meanwhile, two months ago he got married.

He will be 52 next month and has never seemed to be interested in kids. So why the hell would he want to get married?!

Hmm, think she may have her eyes on a share of that pension?

Comment by Mr. Banker
2018-04-28 08:58:14

The game men play is money. The game women play is men.

 
Comment by Apartment 401
2018-04-28 09:29:52

Friend’s dad became a widower a decade ago. He has a fat GM pension, several rental properties, and a paid off 2500ish ft2 house on 3 acres with a pole barn full of muscle cars.

All the broke women with bad credit came out of the woodwork trying to move in with him and get married.

Comment by Mafia Blocks
2018-04-28 09:34:32

How much you want to bet these gold digging barflies are Realtors?

 
 
Comment by oxide
2018-04-28 09:47:31

Silly me, but aren’t marriages supposed to be about love? HBB makes it sound as if men really don’t love women and their only goal is to slurp up the free milk from the cow without jeaopardizing any assets at all.

Meanwhile, a woman likes getting married because it’s evidence that that man really loves her. Otherwise she feels like the cow giving out the free milk, fearing that she’ll be abandoned the moment the man finds a hotter cow. This applies to women both with and without her own assets. So no, I don’t blame the woman for wanting to get married. If I were ever in that situation, I too would demand rings and papers, or bye bye boyfriend. Better to dump him now than to get attached and then have to watch him abandon me for some younger blonde floozy.

The answer to this situation, of course, is a pre-nup. Some women are scared of prenups, reasoning that if there’s a prenup, it’s a sign that he won’t commit, and is planning to run off sometime in the future. For non-kid marriages, this reasoning is faulty. If a pre-nup is a sign that the guy plans to run off, then not getting married in the first place is even MORE of a sign that the man wants to run off!

Comment by Mafia Blocks
2018-04-28 09:50:43

Hey Donk

 
Comment by tresho
2018-04-28 09:58:45

aren’t marriages supposed to be about love?
Well, marriages are also about hate, unmet dependency needs for both sides, re-enactment of old trauma, etc. It’s a long story…

Comment by azdude
2018-04-28 10:14:14

sadly most are about money.

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Comment by Professor 🐻
2018-04-28 12:11:38

The beauty of a couple things the knot at an early age is that they tend to not think about relationships as a financial contract.

My suggestion for older adults seeking a permanent companion is to establish a financially secure life path (low debt, stable employment, positive net savings, etc.) and seek a life partner of similar means, financial stability, and philosophy. Love is much easier to achieve and sustain against a backdrop of financial security.

 
Comment by Professor 🐻
2018-04-28 12:13:42

tying the knot (don’t know why my autocorrect thought tying was supposed to be thing…)

 
Comment by OneAgainstMany
2018-04-28 18:31:43

Oxide, my best friend sent me a passage from a book he was reading a few years ago while contemplating the health of his own marriage. I found it one of the most profound commentaries on marriage, and the reasons behind why and marry (or do not marry):

We believe we seek happiness in love, but it’s not quite as simple. What at times it seems we actually seek is familiarity – which may well complicate any plans we might have for happiness.

We recreate in adult relationships some of the feelings we knew in childhood. It was as children that we first came to know and understand what love meant. But unfortunately, the lessons we picked up may not have been straightforward. The love we knew as children may have come entwined with other, less pleasant dynamics: being controlled, feeling humiliated, being abandoned, never communicating, in short: suffering.

As adults, we may then reject certain healthy candidates whom we encounter, not because they are wrong, but precisely because they are too well-balanced (too mature,too understanding, too reliable), and this rightness feels unfamiliar and alien, almost oppressive. We head instead to candidates whom our unconscious is drawn to, not because they will please us, but because they will frustrate us in familiar ways.

We marry the wrong people because the right ones feel wrong–undeserved; because we have no experience of health, because we don’t ultimately associate being loved with feeling satisfied.

 
Comment by Prime_Is_Contained
2018-04-29 13:32:14

There is one school of thought in counseling that concurs with this to a significant degree, but believes that we seek out as adults those traits in a partner that may have been part of unhealthy dynamics in childhood for a more healthy reason: in order to have a chance to bring them to the surface, deal with them, and resolve them; for more info, read up on Imago therapy.

 
 
Comment by Albuquerquedan
2018-04-28 10:20:45

Damn this is a great site for real estate advice but horrible for love advice. I have never been married but have been in a twenty plus year relationship which finally ended due to the difficulty of maintaining a long distance relationship. I like women and cats and they both like me a lot. I guess I am an oddity on this site.

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Comment by tresho
2018-04-28 10:31:12

I guess I am an oddity on this site.
What makes this site unique is our concerted attempt to face reality as opposed to collusion with consensual madness. I think that is the link to our discussions about marriage.

 
Comment by Professor 🐻
2018-04-28 12:15:54

“I like women and cats and they both like me a lot. I guess I am an oddity on this site.”

Lol! I’m in your club.

 
Comment by rms
2018-04-29 13:47:46

“I like women and cats…”

I like cats and women, but I avoid cat-women. :)

 
 
 
Comment by BlueSkye
2018-04-28 10:37:00

Interesting that it is always about the milk!

Marriage is about dependencies, the sum being greater than the parts. It is a way to combine fortunes and also a way to divide them.

I do like the affection of the fairer sex, but in my single years I have met enough of them that were after much more than tender love.

LOL, about 14 years ago I was talking to a nice lady and negotiating what relationship might develop. She kept asking me about my house. I kept saying I lived on my boat. Suddenly she understood and all I heard was “click”.

Comment by tresho
2018-04-28 10:45:48

my single years I have met enough of them that were after much more than…
Knowing what others are “after” is almost as difficult as knowing what one’s own self is “after”. The ancient Greeks built a monument at Delphi on which was described “Know thyself”. Easy to engrave, not so easy to accomplish.

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Comment by oxide
2018-04-28 11:56:39

To be fair to the lady, full-time boat living appeals to very few people. It’s not as if she was rejecting a small foundation house and demanding a large foundation house.

I’ll repeat something I said earlier: adequate money *is* a sign of character, as is a college degree. It means you’re not a criminal, not a druggie, didn’t drop out of life, won’t get into trouble, is willing to work, etc. The gold-digging happens when the woman demands excessive money instead of adequate money.

[as a side note, what was *she* living in? A small apartment?]

 
Comment by BlueSkye
2018-04-28 12:26:43

Oxy, I didn’t invite her to live on the boat with me. I told her I had a good job and was saving money. If I recall correctly, she was renting a house and her roomie had split and she was “between jobs”. I think she was looking for a roof over her head. Pretty simple. I didn’t offer that. End of interview.

If she had asked me what I do in the winter I’d maybe told her I lived in my house, eventually. I was still renting the farmhouse then. I wasn’t keen on the “move in and we’ll get to know each other”.

 
 
 
Comment by Jessica
2018-04-28 13:34:18

Marriages based on love don’t require a prenup.

Comment by rms
2018-04-28 15:20:53

Marriage is for children and their caregiver. Love is a devotion thing. Seems the ladies aren’t happy unless their guy is “under her spell.” The hunks can be had on the side… with an app.

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Comment by tresho
2018-04-28 15:21:54

Marriages based on love don’t require a prenup.
People change. Marriages change.

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Comment by MacBeth
2018-04-28 17:02:18

“Marriages based on love don’t require a prenup.”

Marriage is for society, not the couple in love. You don’t have to be married to remain devoted and in love.

A prenup protects the couple (both people) FROM society.

I’m big in 50/50 prenups for the couple.

As for the kids, judges should leave the kids the house, not the mother or father. Why should kids have their lives uprooted/ destroyed just because Mom & Dad can’t cut it?

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Comment by MacBeth
2018-04-28 17:03:44

Or, better said, “leave the house to the kids”.

The kids shouldn’t have to be shuttled around and forced to make new friends. It’s morally wrong.

Let the parents take turns staying at the kids’ house.

 
Comment by tresho
2018-04-28 17:46:49

The kids shouldn’t have to be shuttled around and forced to make new friends. It’s morally wrong.
Often parents are obliged to shuttle their kids around - mostly to chase jobs.

 
Comment by Anonymous
2018-04-28 19:08:00

Military families have to move every few years. And as tresho pointed out, civilians often need to move in order to obtain or keep a good job.

 
Comment by MacBeth
2018-04-28 21:47:58

“Often parents are obliged to shuttle their kids around - mostly to chase jobs.”

Tough. Too bad for the parents.

Undermine your children and YOU get to pay the cost. Not them. The kids keep the house and the parents are required to reduce THEIR standard of living if need be.

I have zero sympathy for the parents. None.

 
Comment by MacBeth
2018-04-28 21:55:54

And as far as prenup goes, ANY couple with any brains at all will immediately and proactively pursue a prenup.

It’s for their protection against everyone else, not each other.

A married couple is supposed to be a unified front, which is exactly what a prenuptial agreement supports. And if the marriage tanks, the prenuptial protects each individual from theft by any and all outsiders.

Why in the world would a divorcing couple allow ANY third party access to their wealth is beyond me. Talk about idiotic.

 
Comment by MacBeth
2018-04-28 22:04:52

I shouldn’t have said zero - I would have sympathy if physical violence was involved.

But infidelity? No sympathy. “Incompatibility”? No sympathy. One spouse wants to pick wild blueberries in Nepal until the end of time? No sympathy. Fights over money? No sympathy.

 
Comment by BlueSkye
2018-04-29 06:24:29

“Let the parents take turns staying at the kids’ house.”

Have you personally tried this?

Personally, I found infidelity to be grave physical violence. If you and your spouse are become one, infidelity is rape, abetted by the spouse.

 
Comment by MacBeth
2018-04-29 10:59:49

Have you?

 
Comment by BlueSkye
2018-04-29 11:18:33

I guess you are saying no.

Honestly such an experiment in fairness would not have been possible in my case. Dear wife not only abandoned husband, but also children and home.

 
Comment by OneAgainstMany
2018-04-29 12:34:14

MacBeth, I generally agree with your kids-first attitude toward divorce. I think many divorcing couples are so caught up in their own drama, slights, and injustices–perceived and real–that they cast by the wayside the interests of the children. My sister-in-law is going through a divorce right now. As messy as these things can be, it is heartening that the couple is doing the best they can to create some sense of normalcy for the children. Some divorces are certainly healthier than others, and often times marriages where the couple is in it solely for the kids are not paradoxically profoundly unhealthy for the children in the long term.

 
Comment by OneAgainstMany
2018-04-29 13:17:02

often times marriages where the couple is in it solely for the kids are not paradoxically profoundly unhealthy for the children in the long term.

 
 
 
Comment by Bubblebot
2018-04-28 13:51:45

“slurp up the free milk from the cow ”

Ummm….yeah…I’ll stick with my skis and golf clubs.

 
 
Comment by rms
2018-04-28 09:50:10

“He will be 52 next month…”

Piqued… and her?

Comment by Anonymous
2018-04-28 12:17:13

TBH, I don’t know her exact age! I would guess about the same. But it’s really hard to tell.

She is not a young hottie by any means, probably weighs 200+, and is also a druggie (great choice for a person who works for Corrections, eh?).

BTW, they’ve been living together for at least 5 years.

Comment by GreenEggsAndSpam
2018-04-28 15:33:17

Sounds like the typical American woman (and man) over the age of about 30.

Anyone starting to think arranged marriages might not have been a bad idea? Of course, this assumes that each participant comes from an engaged 2 parent household that knows what it takes for a successful marriage - a rapidly declining number at this point. The death of marriage, religion and shame make living quite a minefield nowadays.

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Comment by MacBeth
2018-04-28 17:34:45

I think Hard Times is what is needed to save the institution of marriage.

Real hardship.

They say necessity is the mother of invention. If so, then it also is the mother of reinvention and rejuvenation.

 
Comment by Mr. Banker
2018-04-28 19:15:23

“I think Hard Times is what is needed to save the institution of marriage.”

I might be of some help in this area.

“Real hardship.”

Oh, most definitely I might be of some help.

 
Comment by Carl Morris
2018-04-29 14:37:57

Oh, most definitely I might be of some help.

Definitely. But watch out for your neck.

 
 
 
 
 
Comment by Ben Jones
2018-04-28 08:54:49

‘The Q1 numbers are in and it appears DFW is finally cooling off after years of manic growth. Office vacancy in the metro is up to 20.5%, multifamily is up to 5.6% vacancy. Demand fell short of the deliveries in the multifamily market, resulting in a rise to 5.6% vacancy. Class-A product in Frisco, Allen and McKinney is taking it especially hard as the delivery of thousands of luxury units caused up to 7.5% vacancy in these areas, some of the highest in the metro’

Oh dear…

‘Much like the office market, job growth should bail DFW multifamily out of its slightly overbuilt pockets’

And the sun will come out tomorrow, bet your bottom dollar.

 
Comment by Albuquerquedan
2018-04-28 08:58:30

If the MSM was an honest broker, it would be discussing why the economy was so bad under Obama. The reason it is so important because I think it does speak to how the economy will do going forward. It appears to be over regulation and financial repression in my opinion. Due to that I think that higher interest rates might actually be good for the economy if it makes people more willing to spend. People that actually prepare for their retirements and they seem to fewer each year, have to save more when they cannot invest in safe CDs to generate a return sufficient to fund their retirements. Also, people in retirement cut back on spending when they are earning less. All of Obama’s policies favored debtors including keeping rates below inflation. A reminder of how bad things were under Obama:

https://www.zerohedge.com/news/2017-01-27/barack-obama-now-only-president-history-never-have-year-3-gdp-growth

Comment by azdude
2018-04-28 10:22:06

So I have a silly question for you. How do you get more money in our economy?

Comment by Mr. Banker
2018-04-28 10:32:58

Borrow it.

Comment by azdude
2018-04-28 10:51:13

bingo! debt = money

Isnt that interesting?

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Comment by Mr. Banker
2018-04-28 11:14:03

It is not only interesting it makes for a very easy living.

Get a puke to sign a dotted line or two and he sends large chunks of his paycheck to you each and every month.

Life is good.

 
 
Comment by Professor 🐻
2018-04-28 12:30:26

Print it.

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Comment by azdude
2018-04-28 12:39:39

why do people go along with this scheme?

 
 
 
 
Comment by Professor 🐻
2018-04-28 12:26:09

“If the MSM was an honest broker, it would be discussing why the economy was so bad under Obama.”

I guess the first point to consider would be that the Great Recession started in December 2007, over a year before Obama took office. I’m not going to endorse Obama’s policy response, but much of his time in office was spent dealing with a financial crisis whose seeds were planted during the Greenspan-Clinton-Bush era, and which had come to fruition by the last year of GWB’s second term.

Comment by Albuquerquedan
2018-04-28 15:50:01

Yes but the normal response is the deeper the recession the stronger the recovery and the recession ended in the summer of 2009. I blame W for the severe recession but Obama for the weak recovery. Both globalists following policies good for the developing world but horrible for the U. S. I objected to W and I objected to Obama. The problem is globalism not Republicans or Democrats. Of course, virtually all Democrats are globalists and most Republicans are also globalists.

Comment by Professor 🐻
2018-04-28 16:17:14

Roots of the crisis run deep, and include Greenspan propping up the stock market after the 1987 crash and bailing out Long Term Capital Markets in 1998, Clinton loosening up lending standards at the GSEs to qualify subprime borrowers and passing the $500K capital gains tax exclusion on a primary residence, and W supporting the American Dream Downpayment Assistance Act. All of these market interventions created a government subsidy premium for asset ownership.

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Comment by Carl Morris
2018-04-29 14:41:10

recession ended in the summer of 2009

On paper. But it was revived with a heroin injection. So there was no real recovery. Just more endless life support. To get the real recovery you are looking for we needed a real recession. The kind where white collar criminals lose all their money and go to jail instead of being made whole.

 
 
 
 
Comment by MacBeth
2018-04-28 17:31:54

“It appears to be over regulation and financial repression in my opinion.”

I call it Domestic Imperialism.

When governments deliberately attempt to undermine their own citizenry in favor of themselves, I don’t know what else to call it.

 
 
Comment by Mortgage Watch
2018-04-28 09:09:26

Albany, OR Housing Prices Crater 18% YOY As Housing Demand Evaporates

https://www.movoto.com/albany-or/market-trends/

 
Comment by azdude
2018-04-28 09:56:44

homes have become e perpetual interest generating machine for bankers. Most people never really own anything. You either rent from a slumlord or the bank basically.

Comment by Mr. Banker
2018-04-28 10:31:42

“homes have become e perpetual interest generating machine for bankers.”

Yep.

“Most people never really own anything.”

Most people are idiots.

“You either rent from a slumlord or the bank basically.”

Yep.

 
Comment by tresho
2018-04-28 10:32:24

You either rent from a slumlord or the bank basically.
You left out the gubmint landlord.

 
 
Comment by Albuquerquedan
2018-04-28 10:25:19

Homes have become a mechanism that the globalists use to create demand for goods produced outside the United States. Americans go into debt to equalize the wealth in the world. Might even be morally justifiable if so much of the wealth did not end up in the hands of so few.

Comment by Mr. Banker
2018-04-28 12:12:44

Wealth ends up in the hands of the few because the many make it so.

Comment by Mr. Banker
2018-04-28 12:15:37

Many pukes work to make the bucks then they willingly send these bucks up the line until they settle into the coffers of the few.

 
 
 
Comment by Mortgage Watch
2018-04-28 10:50:17

“Home Prices In China’s Largest Cities Continue To Fall”

https://www.businessinsider.com.au/china-house-price-bubble-measures-2018-2

 
Comment by Professor 🐻
2018-04-28 10:58:02

The deteriorating global economic picture does not bode well for the continuation of a global property bubble fueled by globe-trotting real estate investors.

The new stock-market fear: Signs that a period of harmonious global growth is crumbling
By Mark DeCambre
Published: Apr 28, 2018 11:50 a.m. ET
The week ahead is packed with events, including the Fed’s policy update, jobs report and earnings reports from Apple and Tesla

It was just three months ago that stock-market investors were being swept up by a euphoria pinned to the idea of economic expansion taking hold harmoniously across the globe—a dynamic that hadn’t occurred since the 1980s, and one that was expected to extend into 2018.

However, less than halfway through the year and some market participants are already spotting cracks in the notion of so-called synchronized global growth, with some fearing that a whiff of stagflation is starting to permeate. Stagflation is typically described as persistently high inflation and high unemployment, combined with weak economic demand.

Comment by Anonymous
2018-04-28 12:23:36

I assume the only reason Tesla issues earnings reports is because they’re required by law. No one seems to care about Tesla’s crap finances, they just keep investing in the company regardless!

Comment by azdude
2018-04-28 13:03:11

its like amazon. No one gives a sh@t about their numbers either.

People are taking some ballsy risks. Its like they no the outcome.

Comment by OneAgainstMany
2018-04-28 18:44:35

I’m not sure which is worse. Facebook’s profits astounded, and yet they don’t strike me as the paragon of a virtuous company. It’s product destroys your happiness and mental health and ruins relationships. It has massive privacy issues as it tracks its users far and wide and the Cambridge Analytica manipulation is very disheartening. Tesla at least is making the world greener and safer. If bond investors are willing to throw money at them during the cash burn, more power to them. They might not get it back, but I’ll buy the car (eventually).

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Comment by Carl Morris
2018-04-29 14:44:51

Tesla at least is making the world greener

Are you SURE? Maybe the work they are doing now eventually will. But I question how green those giant packs of batteries are. I will concede that if you ignore the battery production and disposal it is an improvement to put the energy production pollution in one central location where it can be minimized as much as possible.

 
Comment by OneAgainstMany
2018-04-29 19:04:35

The battery production of an EV front-loads the CO2 required to produce, which is more than that of an ICE car initially, but far less over the entire life cycle. For one metric of green car ratings, see AEEE list. But once the EV car is constructed, the EV car will have far fewer emissions over the lifetime of the car (including other polluting emissions unrelated to CO2). The actual “greenness” of the car depends on the mix of electricity where the car is used. But even so, EVs centralize the pollution to the manufacturing plant rather than allowing it to be dispersed in crowded city centers. If you look at what is going on right now in Germany with their terrible air due to the high number of diesel cars, you’ll see why this is a huge problem. Even in Germany the court has ruled on banning diesel car use in urban areas due to high pollution.

For what it’s worth, I didn’t buy a new Model 3 yet. I was so close, but I chose to buy my wife a new 2018 Chevy Spark and I took her Civic. Figured I’d drive that car for a while until I can pick up a used model 3, Bolt, Volt, or the new VW all-electric van.

 
 
Comment by Prime_Is_Contained
2018-04-29 13:14:23

AMZN’s number only look terrible if you ignore that they are intentionally plowing every bit of potential operating income back into further growth. Think of the last 20yrs as AMZN’s loss-leader period; once they have destroyed enough of the brick-and-mortar landscape, they’ll start increasing their margins.

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Comment by Mafia Blocks
2018-04-29 16:36:59

ScAmazon will always unprofitable for as long as they continue to lose money on every transaction.

 
 
 
 
 
Comment by Professor 🐻
2018-04-28 12:37:05

Heh heh…

The Financial Times
On Wall Street Ben McLannahan
US subprime auto bears will have their day

Comment by azdude
2018-04-28 12:55:00

“the popping of debt bubbles has caused almost every major financial crisis we have had.” SHP

 
 
Comment by azdude
2018-04-28 13:09:01

” Eventually there comes a point where the economy can no longer service the debt (pay the accrued interest). This situation is delayed by financial asset inflation (stocks and real estate) generating capital gains coupled with deflation in the nuts and bolts sector of the economy which facilitates generating revenue from the asset stripping and looting of the physical economy. This further decreases the revenue generated from the economy’s productive capacity.”

https://dissidentvoice.org/2016/10/money-is-debt/

Comment by rms
2018-04-28 15:30:22

The current bubble is supporting the large cohort of early boomers who have defined benefits that were calculated at roughly 8%, so their contributions don’t cover the load at today’s 3%. In addition, this cohort is poised to live another 7-yrs longer than the actuaries figured. The Xs, Ys and Millennials have to accept their fate, turn around and take one for the team.

 
Comment by Professor 🐻
2018-04-28 16:20:02

Sounds like a great plan for making everyone poorer through asset price inflation, with the exception of current asset HODLers.

Comment by azdude
2018-04-28 17:11:04

thats who has really won during this phony asset recovery.

No assets= SOL

 
Comment by BlackSwandive
2018-04-28 18:30:19

Why do the Demorats insist on waging war against the very poor who they pretend to serve? Mel Watt et al are despicable.

Comment by Professor 🐻
2018-04-29 01:12:49

More po folks in dire straights = more Democratic voters

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Comment by Mortgage Watch
2018-04-28 14:50:14

Castle Rock, CO Housing Prices Crater 5% YOY

https://www.movoto.com/castle-rock-co/market-trends/

 
Comment by tresho
2018-04-28 15:24:46

Money to be made from abandoned houses and squatters in Detroit:

A politically connected charity that was supposed to help people living in properties owned by the Detroit Land Bank Authority wrongly evicted some of them and flipped houses to developers with markups of thousands of dollars.

Comment by Anonymous
2018-04-28 19:27:57

Corruption in Detroit ?! Say it ain’t so!

 
 
Comment by Apartment 401
2018-04-28 15:54:28

Live stream of President Trump rally in Washington, MI, starting 7:00pm EST:

https://www.youtube.com/watch?v=mPFmwLrCLXo

Comment by Professor 🐻
2018-04-28 16:22:06

Never too early to start the 2020 election campaign.

Comment by Apartment 401
2018-04-28 16:30:21

By the end of President Mike Pence’s second term in 2033, this country may actually have a future.

Obama was the greatest political failure of my lifetime.

Comment by Obama Goons
2018-04-28 16:34:40

Obama was the greatest political failure in US history.

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Comment by azdude
2018-04-28 16:53:42

who is this doofus gavin running for gov?

 
Comment by MacBeth
2018-04-28 17:05:39

Obama is in the running. Hard to top Wilson, though.

Lyndon Johnson was bad, too…same with Buchanan, Pierce, Van Buren, Fillmore.

 
Comment by Apartment 401
2018-04-28 17:36:38

I was born in the Midwest and lived there for three decades.

Obama, Bush II, Clinton, Bush I sold the Midwest the f*ck out. America First. And if you have a problem with that, maybe you don’t belong in this country. Globalists GTFO, we don’t need you…

 
Comment by Apartment 401
2018-04-28 17:37:39
 
 
 
 
 
Comment by Mortgage Watch
2018-04-28 17:12:25

Arlington, VA Housing Prices Crater 14% YOY As Subprime Mortgage Defaults Skyrocket

https://www.movoto.com/arlington-va/market-trends/

 
Comment by Apartment 401
2018-04-28 18:07:58

LOLZ #MuhNarrative

The comedian shared some “sexy as hell” photos from her hospital bed:

https://www.huffingtonpost.com/entry/amy-schumer-hospitalized-kidney-infection_us_5ae36ef6e4b055fd7fcbc3a3

No, you look like a single mom in need of some BetaBux gravy off a random Plenty Of Fish profile. Men are smarter now, we won’t pay money for this, LOLZ.

Posting Huffington Post just to illustrate the idiocy that is modern American internet media. Who buys this sh*t anymore?

And regarding housing, men have paid off houses or apartments (living alone, thankfully). Your narrative is over, it’s broken :(

Comment by BlackSwandive
2018-04-28 18:36:27

She appears to be everything I would despise in a woman. Fat and ugly with no exercise, snowflake who can’t accept that her candidate lost, terrible sense of humor, loud and obnoxious, smoker, drinker and druggie. Yuck.

Comment by oxide
2018-04-28 19:23:52

That sounds a lot like what I would despise in a man…

Comment by BlackSwandive
2018-04-28 20:59:16

We sound like a match. :)

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Comment by MacBeth
2018-04-28 21:26:16

Spring is everywhere it seems!

 
 
 
Comment by Pilsung
2018-04-28 22:46:31

Add duplicitous, neurotic, and utterly devoid of class or character.

 
 
 
Comment by goedeck
2018-04-28 22:03:09

” according to a foreboding assessment being circulated in the South Bay ”
I wonder if this guy reads whatdoesitmean dot com.

 
Comment by Mafia Blocks
2018-04-29 03:22:55

crushing.housing.losses.

 
Comment by azdude
2018-04-29 06:19:18

where does new money get its value?

Comment by Carl Morris
2018-04-29 14:48:36

From the old money still having some real (but diluted) value? It’s a share in a so-far-still-going concern.

 
 
Comment by Albuquerquedan
2018-04-29 06:23:01

The EIA continues to estimate that oil production is soaring. However, when the actual figures come out we actually see production stagnation as companies struggle to keep up with the rapid depletion of shale oil wells. For some reason, I trust the state authorities in Texas to get the production right in Texas over the Washington DC bureaucrats. I think what is going on D.C. is the classic just project the line to continue without any analysis. It is what we saw in the first housing bubble, just assume housing will go up 7% per year since it was going up at that rate. Ignore the fact that if wages are going up 2% a year then housing cannot go up 7% a year. In this case, the bureaucratic projections ignore the obvious fact that companies drill their best locations first.

http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/

 
Comment by jeff
2018-04-29 06:34:30

The hourly wage needed to rent a two-bedroom home in every state

Leanna Garfield,

Published 10:31 am, Thursday, April 26, 2018

https://www.sfgate.com/technology/businessinsider/article/The-hourly-wage-needed-to-rent-a-two-bedroom-home-11217302.php?ipid=newsrecirc

 
Comment by azdude
2018-04-29 06:53:03
Comment by OneAgainstMany
2018-04-29 12:36:32

Next creative financing scheme on the docket: qualify more first-time home buyers by getting them to sell one of their kidneys on the black market.

 
 
Comment by azdude
2018-04-29 07:09:24

https://www.gedmatch.com/login1.php

this was the site used to nab the golden state killer.

Comment by tresho
2018-04-29 21:50:27

From the gedmatch website after signing in:

April 28, 2018 We now have facility to allow users to delete their registration/profile and associated DNA and GEDCOM resources. If you are interested in how to use this facility Click here to find more information.

—-

April 27, 2018 We understand that the GEDmatch database was used to help identify the Golden State Killer. Although we were not approached by law enforcement or anyone else about this case or about the DNA, it has always been GEDmatch�s policy to inform users that the database could be used for other uses, as set forth in the Site Policy ( linked to the login page and https://www.gedmatch.com/policy.php). While the database was created for genealogical research, it is important that GEDmatch participants understand the possible uses of their DNA, including identification of relatives that have committed crimes or were victims of crimes. If you are concerned about non-genealogical uses of your DNA, you should not upload your DNA to the database and/or you should remove DNA that has already been uploaded.

 
 
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