Vendors Are Starting To Capitulate
A report from Toronto City News in Canada. “A Leslieville home that can’t even be entered due to its dangerously derelict condition is on the market for $699,000, and at least one realtor thinks the dilapidated digs could be a steal. The boarded-up eyesore at 28 Woodfield Rd. has been vacant for years, but a recent price drop of $100,000 has drawn a sudden surge of interest, with a handful of offers already on the table. The home was last sold in March 2013 for $490,000. In July of the same year it went back on the market for a hefty $1.1 million. Neighbour Greg Lehman has lived next door for the last four years and admits that he even considered putting in an offer when the home recently went back up for sale. ‘You get used to it, but of course it’s an eyesore,’ he said. ‘You don’t have a neighbour. It’s just this dodgy, old house. Well, we do have neighbours — they’re just raccoons and other vermin.’”
The Brampton Guardian in Canada. “According to monthly tracking data from the Toronto Real Estate Board (TREB) for April, the average sale price for all types of dwellings in Brampton fell 7.8 per cent, to $703,210, compared with $763,092 in April 2017. Sales fell by 28 per cent, dropping to 807 last month compared with 1,120 the same month last year. Over the past year, the average sale price for a detached home in Brampton fell 8.7 per cent, to $823,963, while the semi-detached sector saw a 7.1 per cent decline, to $632,762. Brampton’s detached home market peaked at an average sale price of $902,211 in April 2017.”
“The condominium-townhouse segment measured by TREB was down 11.9 per cent, at an average sale price of $448,330 compared with $509,162 last April. Despite the soft market to begin the year, which it blames on market intervention last year by the Ontario and Canadian governments, TREB believes year-over-year prices should begin to increase mildly again, starting in the fall.”
From Bloomberg. “The party’s over for now for those sitting on Vancouver’s most expensive properties. Prices at the top end of the market in the Canadian city plunged 7.6 per cent in the six months to March, making it the world’s second-worst performer during that period, according to Knight Frank. Only Stockholm, the Swedish capital, did worse, falling 9 per cent. At the height of the market, foreign money had flowed mostly into the million-dollar-plus segment of detached homes, according to Adil Dinani, a realtor with Royal LePage.”
“‘Those capital flows have shifted now,’ Mr Dinani said. ‘It’s actually refreshing - you have some time to breathe, to negotiate like a regular transaction.’”
From the Globe and Mail. “Citi credit strategist Matt King was among the first analysts to emphasize that the relationships between asset prices, interest rates, and monetary policy were a global, not national phenomenon. The domestic housing market is an excellent example of how this is so. There is a vocal contingent of Canadian investors who believe the country’s consumer debt and housing bubble is the fault of the Bank of Canada for keeping interest rates too low for too long. To the extent Canada imported low Federal Reserve rates after the financial crisis this is true, but these low borrowing costs were probably not as much to blame as many believe.”
“Mr. King published an extraordinary chart showing that China is responsible for 70 per cent of the entire world’s private sector credit creation. Regrettably, we do not have accurate statistics showing the extent of foreign buying of domestic real estate, but there are enough facts available for us to know that foreign buying is a major factor in real estate.”
“It doesn’t take very many price-insensitive Asian buyers to push Canadian housing values higher. And for this, we can point to ultra-loose monetary policy from half a world away.”
From Xinhua. “A surcharge on foreign purchases of homes in Western Australia will be raised from 4 to 7 percent, in line with the state’s latest budget rollout, authorities said. The surcharge applies to ‘all purchases of residential property by foreign individuals and entities’ from Jan 1, 2019, according to a government statement. The surcharge increase comes amid a housing slump in Western Australia, where recent local media reports have pointed to significant falls in properties prices in and near state capital Perth in the aftermath of a mining boom.”
“The latest rate is a ‘remarkable’ decision by the authorities, the ABC News channel quoted industry group Real Estate Institute of WA President Hayden Groves as saying. ‘By adding another 3 percent to 7 percent, what it effectively will do is just disincentivise further any foreign investment in Western Australian property,’ he said.”
From Domain News in Australia. “Experts fear a ‘housing slump’ will bring pain for the Australian economy, as mortgage lending takes a sizeable hit in March. In the 12 months to March, investor lending has dropped 16.1 per cent. And with intense scrutiny on bank lending standards, following revelations in the royal commission, a crackdown may lead to further weakness in housing finance data. ‘Very weak March housing finance, tighter lending standards yet to fully impact,’ AMP chief economist Shane Oliver tweeted in response to the data.”
From Radio Australia. “The retreat of investors from the property market is starting to look like a rout, with a big fall in applications in March. JP Morgan’s Henry St John said things have started to turn ugly for housing finance. ‘These developments in investor and high loan-to-income lending are likely unfolding on a faster schedule than APRA may have originally intended,’ Mr St John said. ‘To this point, it is likely that the scrutiny the royal commission is placing on the lending practices of the mortgage-broker channel, upon which the major banks have historically relied on for new lending growth, is acting as an additional catalyst.’”
From News.com.au in Australia. “Sdney’s housing market could turn into a bargain bonanza this winter, with housing experts predicting prices will fall even further than they already have. The median price of a home has already dropped 2.1 per cent this calendar year but new projections from property analysts SQM Research revealed more falls could be on the way. Investors were primarily responsible for driving up prices during the boom from 2013-2016 but have been struggling to get loans since last year, helping ease prices down.”
“Housing experts had earlier thought prices would start going up again once banks began lending to investors once more but this prospect was now unlikely, said SQM director Louis Christopher. ‘It’s now no longer an issue of financing supply but demand for it,’ he said. ‘Investors appear to be looking for other opportunities and are not as interested in the Sydney market any more.’”
“With investors largely absent from sales and the number of Sydney properties available for sale up 34 per cent from last year, buyers are in a strong position to negotiate prices down, Mr Christopher added. ‘Vendors are starting to capitulate,’ he said. ‘Before they were sticking to their guns with prices but they are becoming more negotiable.’”
“Elders Real Estate’s Peter Salisbury said Sydney currently had the best home buying conditions of any point in the past five years. ‘It is a very good time to be a buyer,’ he said. ‘There is more choice and there isn’t as much pressure from other buyers. Last year you could have got about 15 to 20 couples going through an open home. Now you’re lucky if there is five.’”
Looks like Australia’s long run without a recession may be coming to an end. Of course, if that happens the declines in housing prices to now, are going to seem very small.
It seems typical for a real estate crash to precede a recession, and then for the onset of the recession to greatly worsen the real estate crash, due to widespread job loss, mortgage default, and foreclosure.
‘Australia, nicknamed the “lucky country”, has been thriving for a generation. The economy hasn’t shrunk since the early 1990s. Late last year it officially notched up the longest stretch of growth in modern history, says The Economist: 104 quarters, eclipsing the Netherlands’ 103.’
‘Australia looked due for a nasty downturn during the global crisis, but its overheated housing market and relatively high consumer debt load were offset by a booming China, which was enjoying a government-induced lending spree and needed Australia’s metals exports. When the commodities boom cooled, “the diverse economies of Victoria and New South Wales picked up the slack”. The decline in the Australian dollar fuelled agricultural exports and tourism, while the further-education sector successfully enticed foreign tourists.’
‘But now we may finally have reached the end of the road. The housing bubble has been hissing air: one gauge of house price inflation slipped from an annual rate of 11.4% in May 2017 to 0.8% in March. An index covering Sydney and Melbourne found that prices declined by 0.3% year-on-year across the combined state capitals last month – the first annual fall since 2012. In some parts of Sydney, prices have jumped by 50% since 2011. The median Sydney house price is above A$1m.’
‘The pin that appears to have burst the bubble is regulators’ insistence on tougher lending standards. The share of interest-only mortgages banks may issue has been capped, for instance. Expect nationwide annual house-price growth to slip below zero in the next few months, says Capital Economics. More homes are currently being listed than sold. Demand is likely to fall further as interest rates look set to rise from record lows next year. Consumers are tapped out, with household debt now at an eye-watering 190% of disposable income. With debt still on the rise, lending standards won’t be loosened any time soon.’
“A nervous Australian banking system is watching the market closely,” as Peter Grant notes in The Wall Street Journal. There are echoes of the US subprime crisis in the Australian banking sector’s lending practices. They are suspected of offering customers “liar’s loans” for large multiples of earnings with no proof of income, says Katherine Griffiths in The Times.’
‘Selling could increase rapidly if the economy slows. And without house prices seemingly perpetually climbing, indebted consumers’ confidence may dwindle. All the ingredients for a housing-led slowdown appear in place. Australia’s high exposure to the US and China, and hence to a trade war between the two powers, is also denting confidence in local assets. Australia’s luck seems to be running out.’
If every action has an equal but opposite reaction then they should be lining up for their longest recession ever. Sometimes the best way to win is to not play at all.
Other than selling ore to China, what is Australia’s economy? Last I heard they won’t even make cars there anymore, as all the global automakers are pulling out.
4 industries + large government sector
1. Housing
2. Raw Materials / Mining / Natural Gas
3. International tourism
4. Banking (ANZ Bank which has large subs across Asia, Commonwealth etc)
‘Well, it seems the “impossible” has happened. With the housing market in Sydney actually set to drop, it’s forcing a bit of a rethink from a certain generation. We millennials are kept by two universal truths. The housing market will always be beyond us, and we shouldn’t bother. However, it seems that house prices are actually set to fall in both Sydney and Melbourne, dismissing the previous projections with a wave of the hand.’
‘Instead of the predicted price surge by at least 4 to 8 percent, with Sydney actually sent to drop by a similar margin.’
‘Which is as mindblowing as it is crestfalling. Housing prices can dip? Wha? SQM, the author of the study, believes they know why. The primary reason, they believe, is that the Sydney and Melbourne property markets are overvalued by at least 45 percent.’
As many markets are subject to, we find ourselves at the far edge of the bubble, as the meteoric Sydney property listings (those that have surged by 34 percent) have a historic parallel. The prices, according to Mr Christopher, “…are now at similar levels recorded in 2011 — a point in time when Sydney dwelling prices fell 3 percent for the year”.
‘So, the deepening domicile gloom that has enveloped Sydney since as long as my people have become woke might be very slowly dissipating.’
‘Which is as mindblowing as it is crestfalling. Housing prices can dip? Wha?’
Yeah, believe it or not, there isn’t a golden rainbow waiting on everyone that requires no work to achieve near instant riches. You have to wonder about the policy makers who allowed this kind of insanity to take hold in the first place.
And wonder how many people would have been saved from financial ruin if the market had been allowed to continue correcting in 2011.
Australia Housing Prices Crater Nationally
https://www.perthnow.com.au/business/housing-market/median-house-prices-fall-in-perth-and-nationally-ng-b88818712z
I don’t see anything about Real Estate downturn in Australia or Canada in the U.S. media. The silence is deafening.
Here’s part of an interview of Matt Taibbi by Joe Rogan that discusses the real estate and mortgage mess of ten-or-so years ago.
Old stuff to readers of Arizona Ben’s blog but interesting and worthwhile nevertheless.
(DANGER! WARNING! CAUTION! ALERT!: This video contains multiple uses of THE F-WORD!)
https://youtu.be/31YXsev7O0A
Financially fornicated?
‘Years of easy money have pushed the world’s interlinked property markets to the same frothy extremes seen before the Lehman crisis in 2008, posing a mounting risk to economic and social stability.’
‘The International Monetary Fund warns that houses have increasingly become a commodity like any other, exploited by global investors in the relentless hunt for high-yielding assets.’
‘Property markets have taken on an international character, driven by forces beyond the full control of any one country. A house price crash in any one region can spread by contagion through a nexus of spillover effects.’
No bubble here.
‘Protests from diversity advocates notwithstanding, the Federal Reserve Bank of New York selected another white male, John Williams, to lead what is arguably the most important of the 12 district banks, charged as it is with implementing monetary policy through the conduct of open-market operations.’
‘When word leaked out that Williams was the likely pick for the post, Democratic Sens. Kirsten Gillibrand of New York and Elizabeth Warren of Massachusetts ignored his qualifications in their quest for greater diversity at the Fed.’
“The New York Fed plays a powerful and outsized role in overseeing Wall Street and shaping our nation’s economic and regulatory policy, and needs a leader who will put the interests of working families first and bring diversity and a different perspective to the table,” Gillibrand said in a statement last week. “The New York Fed has never been led by a woman or a person of color, and that needs to change.”
‘Warren said Williams should testify before the Senate Banking Committee. She challenged his “fitness to supervise Wall Street banks, given the San Francisco Fed’s inadequate supervision of Wells Fargo during its many consumer scandals.”
‘What about the San Francisco Fed’s inadequate supervision in the run-up to the 2008 financial crisis? The bank’s 12th district, encompassing nine Western states, was Ground Zero for the housing bubble and ensuing bust. Janet Yellen was at the helm of the San Francisco Fed at the time, from 2004 to 2010. Yet her nomination to become Fed vice chairman (2010) and ultimately chairman (2014) didn’t raise questions of her “fitness to supervise.”
‘It’s true that Yellen had warned internally about the possible fallout from elevated housing prices and the risks of the shadow banking system, according to Fed meeting transcripts from 2007. Publicly, however, she downplayed the effect. And the San Francisco Fed’s regulators turned a blind eye to fraudulent lending practices.’
‘There is one area, however, where the Fed would benefit from diversity, and that’s in the realm of economic thought. For too long, the Fed has been dominated by Keynesian economists and adherents of the Phillips curve, which describes the illusive trade-off between inflation and unemployment.’
‘That may not be the kind of diversity Warren and Gillibrand had in mind, but diverse views on how the economy operates would make for better policy decisions.’
Realtors are liars.
…. and every closing a crime scene.
Because urban Starbucks restrooms need more needles:
https://www.zerohedge.com/news/2018-05-11/starbucks-becomes-americas-largest-public-restroom
store managers will have to be on shift more often to supervise. It will be very long hours for them
What are they going to do about it? Unless someone is going to call the cops and then deal with the fallout from that, there’s nothing anyone can do when someone is locked alone inside a room where they were initially welcome to enter.
The light in the tunnel is just a reflection off a human skull.
Possibly another indicator of the top - Lowe’s is using whistling in their commercials. I’ve heard whistling in financial services commercials too. I think it’s meant to convey a feeling that everything is hunky dory and that easy solutions are waiting for you!
I don’t trust the whistling.
As in ‘whistling past the graveyard‘ ?
A contraction in housing construction and remodeling would impact the employment of a lot of people.
My perspective is probably skewed by having spent part of my life programming various ’simulations’.
When I was 16, while my peers worked at McDonalds, I wrote programs for multiple city planners and consultants that did population projections for the future, breaking down by age and accounting for different migrations scenarios of people moving in and away. They would use these to project future needs for services like schools and utilities.
More recently I’ve done simulations involving thousand of independent economic (& Military) actors in virtual worlds. Emergent behaviors arise and equilibrium is found for a while, but when something gets disrupted you can watch impact and unraveling propagate through the larger world.
So when I’m out and about and see all the contractors trucks at peoples homes, the workers and cranes downtown, the expensive cars in front of the Realtor’s office, the full lots at Home Depot and Lowes, and so on, I can’t help but visual the way and speed with which a “correction” would propagate. It doesn’t take that much in terms of the overall population to go from an ‘economic boom’ to a ‘recession’.
MGSpiffy, this is a very interesting thought. I suppose the extent to which the correction would ripple out to the rest of the economy rests a lot on debt load and flexibility of individual economic actors to adjust to exogenous shocks. If the new cars are bought with savings and not debt, then perhaps the correction will be less brutal. However, given that household debt is at an all-time high, I expect the carnage will be acute.
One of the explanations I hear for why new housing is so expensive nowadays is that many construction workers left the industry and went to Alaska or South Dakota for oil work. So when you have labor shortages in construction, restrictions on immigration (explicit or implicit from Trump tweets), increased input costs for lumber, increased regulations and permitting fees, easy credit, speculation, and lax regulations then you have a disaster in the making.
One, I bookmarked an article a few years ago but I have not seen anything to show it is not valid today. It also in way explains the trouble Tesla has today. People that think that all the problems go away for Tesla when it produces 5000 Model three vehicles a week, it appears to be half way there, are missing this. Battery prices have not come down in price the way Elon Musk thought they would. Thus, by producing more Model 3s Tesla will lose less per vehicle but will still burn through the same amount of money per quarter since the cars cannot be produced profitably without further reductions in price of batteries, Similarly, wind and solar seem to have stopped dropping in price just prior to financial viability and cannot reach it until their erratic production can be stored economically. The Chinese producing things like solar panels at a loss is just one more hidden subsidy that cannot be sustained. Trump’s tariffs only hurt because there is real dumping going on. Here is the great article from a few years ago, I am a little surprised that it is from Harvard but I think that just gives it more validity since it contrary to the ideology of the institution. I will send it in the next post since I am having trouble pasting it.
http://environment.harvard.edu/news/huce-headlines/whither-solar-power
Good article, and very informative. It was from 2016, so many of the assumptions are a little dated already, especially the levelized cost of energy (LCOE). Solar and wind are the cheapest source of new electricity without any subsidies for almost any country. New Mexico and Saudi Arabia solar is less than $.02 per KWH. Compare that with the average $.10-$.12 per KWH in the US.
The problem is solar’s intermittent nature and storage, transmission, and coordination. We are seeing lots of progress on that front. If (more likely when), that get’s solved, coal dies an immediate death (well, it’s actually already dead since nat gas has supplanted it in the US).
The article did touch on some of the novel ways of storage solar that were non-battery such as the possibility of thermal solar array, molten salt, and flow batteries. Also, I appreciated how they talked about the idea of using car electric batteries as a backup to the grid during peak hours and recharging during the night (when electricity is expensive).
I especially liked this quote:
“We have solved lots of environmental problems before by hard laws and not just because things have gotten cheaper,” Keith said. “I actually want to protect people’s lives, and I think it’s worth paying something for environmental protections.”
From a global health standpoint, countries like India, China, Pakistan, and Mongolia are basically gassing large amounts of its citizens in densely populated urban areas thanks to cheap, dirty energy. We know that the side effects of pollution are an in birth defects, lowering life expectancy 5-10 years, and increased infant mortality.
Oops, I said New Mexico is where solar is <$.02 per KWH. It is not New Mexico, it is Mexico.
Aren’t they making their own batteries? If so the extra profit on the battery side should offset the unexpected loss on the car building side.
I saw that they’ve announced a date for when they are going to start taking deposits on the AWD performance model 3. I’m a little tempted just for some fun speculation and it’s the model I would want if I were to actually buy one. But it feels particularly high risk this time…a very real chance of no car and no money back.
It’s shameful these bubble jobs exist in the first place.
@Mafia Blocks:
I actually don’t see them as shameful.
I meant to write a long post here a month or so ago, but got distracted. It would have been about our current state of abundance - that is we’ve squeezed so much inefficiency out of things, we are at an all time low in terms of the labor needed to keep things humming along. Enough that we’re entering an era where there aren’t enough jobs for all, yet we have ’system’ that assumes everyone capable will have a job, leading to the disconnect where we wonder about things like UBI and a permanent underclass/on-the-dole class.
Almost everyone who works at Home Depot, any contractor, construction firm, and many of those employed by Realtors, Builders, etc .. are people just doing what they can to ‘earn an honest living’ as it once was said.
What I would find more shameful is the pure middlemen, double rent-seekers and those who profit off the misery and misfortune of others.
@OneAgainstMany - Agreed. Many of those workers are vulnerable and likely to be on the front lines of any downturn, and by extension their families, etc are vulnerable also. Complex systems are interesting when you look at them closely.
I consider that many of the people we’re talking about live in a “just in time” fashion. You’ve surely heard about “Just In Time Inventory” - like the Ford F150 plant that shutdown the other day because of a supplier fire (and no stockpile as a buffer ). Well, especially for those with debt, and fixed obligations, those paychecks can be seen as “Just in Time” cash-infusions needed to keep the next cog in the machine spinning.
The ideal of course that most of the middle and working class (and much of the upper middle class) have is to have enough savings or resources to wait out any income interruption and not be vulnerable. I’d venture to say that represents less than 25% of us though.
Bubble jobs my friend. Bubble jobs.
@MGSpiffy
I was talking with my father yesterday about one of his new projects going up. He has a 170-unit apartment development that is filling up at 5-10 units per week in Salt Lake City. We were talking about late fees and the property management company he contracted with and the potential eviction rate. Since he’s well-to-do, I think he is sometimes a bit disconnected with the “just-in-time” or paycheck-to-paycheck crowd.
He said to me, “Some people just are really bad at managing their money.” I replied, “Well, some people just have intermittent income sources. Like, maybe they work a gig job, or their hours are variable.” I read a study by Lawrence Katz and Alan Krueger (Harvard and Princeton) that 94% of all jobs created since 2005 was in the alternative work category (read: independent contractor, freelancer, contract worker). Basically these are the Uber and Lyft drivers or the Task Rabbit people; it’s the side hustlers. While I readily concede that there are people who blow their money on things that are foolish, but I just wanted to get him to consider that being late on a rent payment wasn’t necessarily a moral failing. It may be that their labor arrangement just plain sucks.
‘The boarded-up eyesore has been vacant for years, but a recent price drop of $100,000 has drawn a sudden surge of interest, with a handful of offers already on the table. ‘You don’t have a neighbour. It’s just this dodgy, old house. Well, we do have neighbours — they’re just raccoons and other vermin.’
You see a version of this out of California every couple of days. “Old burned out wreck sells for a gazillion bucks with 50 offers over asking!” Yeah, all is well, nothing to see here.
That speaks to the value of the land. You’ve been talking about inflated land values for a long as I can remember.
There’s a globe full of usable land where 95% of it goes undeveloped. If you paid more than$500-$1,000/acre you paid too much.
How much of this 95% of usable land is within a reasonable commute of employment centers?
There’s unemployment centers in every county in the US. With 100 million unemployed there needs to be.
95%.
If the land close to the employment centers was not expensive this would not occur:
https://www.pri.org/stories/2018-05-11/seven-stories-sows-inside-chinas-high-rise-hog-farms
Also, the Softbank Vision fund threw a huge chunk of change at Plenty (vertical agriculture). The main player in the space is Aero Vertical Farming:
http://aerofarms.com/technology/
Sarasota, FL 34231 Housing Prices Crater 10% YOY
https://www.zillow.com/sarasota-fl-34231/home-values/
*Select price from drop-down menu on first chart
‘an extraordinary chart showing that China is responsible for 70 per cent of the entire world’s private sector credit creation’
Why are we allowing them to exchange these printed up Xi bucks for our pesos?
‘Regrettably, we do not have accurate statistics showing the extent of foreign buying of domestic real estate’
Yeah, the REIC has been keeping that from happening for how many years now? One thing the media has not looked at was the previous situation to the current. Yes, Australia and Canada are taking measures to pop the bubbles. But for years before, they did practically everything to encourage it. Which included facilitating money-laundering.
Yep, I called it - and the top - several years ago when I saw the hottest markets start to lose their shine and all those markets had one thing in common - chinese money. Fake, like everything they do in that sh-thole country. Why? Because there’s too many criminals, or maybe just too many criminals in power. But then look around, where is that not the case? Damn few places governed by sane people nowadays.
Heres the early stages of a bubble bursting:
1) inventory at high end rises significantly, few buyers to absorb
2) mid to low end still in panic moon shot - driving sales stats higher due to the different mix - REIC says “all is well!”
3) At the same time, price per square foot in the high end starts to come down.
4) Coinciding with this is a bubble in other assets, so those people sell and convert to “tangible” assets, mainly RE which causes spikes here and there that the media and other RE clowns love to tout but make no mistake, the trend is down
5) Media cant hide the price cuts on the high end. At the same time, uncle scam and its army of fake banks loosen lending standards to try and suck in any and all fools they can - mostly to help bail them out of their own positions
Tired of this nonsense. We need to get the death penalty for some of this white collar crime, and I’m not talking 30 years and a dozen appeals. I want verdict->guillotine in 30 minutes or your pizza is free.
“But for years before, they did practically everything to encourage it. Which included facilitating money-laundering.”
Which the US has done non-stop for a 20+ years.
Endorsing widespread, wide-scale top-to-bottom fraud, larceny, forgery and other crimes is no way to run a country.
The entire world system relies on the U.S. to run huge trade deficits with China so they can finance huge imports from the developing world of mainly commodities. China was an insignificant world player forty years ago and now it is more important than the U.S. Except for the reality the system relies upon the U.S. tolerating the great wealth transfer from the U.S. due to the trade deficit. Thus the reason that the globalists’ talking heads continued to try to tell us that trade deficits do not matter, Trump by addressing them shows that he does not understand economics. BS. He understands exactly what is going on and is the first president since Reagan who is trying to address it:
https://www.thebalance.com/china-economy-facts-effect-on-us-economy-3306345
Taxes matter,3 states,remote burbs
IL $9000 dem union
Wi $5500 mix
In gop ,right to work
Whoops IN. Gop, right to work $2000
All $250,000 homes w low deworsity
Wow.. $250K home in IL has notably higher taxes than $1M home in Seattle… (same is true for TX I believe).
Tree x is about 2.3% ,but otherwise low tax
IL gets u every which way
When I lived in the DFW area, residential property taxes were pretty close to 3% of purchase price (no discount on assessment) which was the legal cap unless local voters approved a school override.
Checking on my old place, it looks like the rates have changed for the lower.
When I lived in the DFW area, residential property taxes were pretty close to 3% of purchase price
So $15K on a 500K house.
Nice.
It’s going to be sad day in the Centennial State when voters choose the repeal TABOR. Then we’ll also get to hear leftist voters b!tch about how high their property taxes are. Hopefully that day is far off.
These 95 Apartments Promised Affordable Rent in San Francisco. Then 6,580 People Applied.
Text by Emily Badger
Photographs by Jim Wilson
May 12, 2018
SAN FRANCISCO — For $1,200 a month, Patricia Torres and her family were renting a bedroom, a share of time in the bathroom, one vegetable drawer and one shelf in the fridge, and two cupboards over the stove. They rented not so much a home as a fraction of one.
https://www.nytimes.com/2018/05/12/upshot/these-95-apartments-promised-affordable-rent-in-san-francisco-then-6580-people-applied.html
70 applicants per unit. In some ways this is nothing new.
In some locations, like SF or Seattle, I don’t think it’s possible to build enough low income housing to satisfy demand. In others, like in Teton County, ID (*as discussed yesterday), I don’t think it will ever be possible to fill up all the planned/started housing with any and everyone.
I’m not sure how equilibrium will be found.
The equilibrium will be all sorts of creative solutions (higher density, families doubling up, people moving back in with parents, extreme commuting, living in RVs and cars, homelessness, serial evictions, etc.). California is moving towards relaxing the requirements on the ability of local municipalities to impose rent control. I have to say, I am coming around to being on board with rent control.
Oxide said yesterday that one solution would be micro-apartments and dorms. That’s probably right. The tax code and incentives probably have a huge impact on what is built. There surely are ways to incentivize the development of housing stock at the lower end through the tax code instead of what we do now, which is incentivize the higher end. But entrenched interests are keen on preserving the status quo since their house is their greatest asset.
Micro apartments a la Japanese society is a wretched life.
Would you want to live in a “micro apartment”? Might as well live in a casket.
It’s interesting that the “solutions” typically offered nearly always equate to a substantially decreased standard of living.
How about suggesting an alternative to all the above?
Like maybe a return to the gold standard?
@MacBeth:
It’s interesting that the “solutions” typically offered nearly always equate to a substantially decreased standard of living.
I would say this is ‘By Design‘. The last 10 years of QE, money printing and capital policies have been driving the further consolidation of assets into the hands of ‘the elite/those already at the top’, essentially by dilution and uneven distribution.
Many years ago, I worked for a company that was purchased by a certain company in Redmond. I had a nice bundle of stock options from being around at the start. I was probably the only non-board member outside of top-mangement who took careful notes about everything related to our stock & options.
When grants were first issued (it was the ’90s after all) there were 2.5 million shares in the company total. Key investors had the biggest chunk, regular employees maybe 10 to 20%.
When the purchase was announced, I read through the 2-inch thick packet detailing the buyout. About 6 months before the purchase, probably when it was still in the unofficial stage, 2 Million more shares were issued, diluting eveyone’s stake by 40%. From some sleuthing around, the owners and top managers who were on ‘the inside’ and a couple key other people received additional grants to compensate for their dilution, and even increase their actual percentage of the company they owned/controlled. They didn’t lose anything. The bulk of employees did, even though none of them seemed to be aware (until much later).
That’s one way I think of QE and other policies - increase the money supply (inflation), but not everyone gets an increase in their money supply (most people). The connected/insiders/etc got to increase the dollar amount of their assets/holding to compensate for the dilution of dollars relative to real-world or tangible assets/services/goods whatever.
It’s not a perfect analogy, but its how I often think about it, and it fits the huge increase in inequality, especially on the high end.
Of course it’s by design. I’ve said so myself here several times.
What clearly wasn’t by design is Trump and what and who he stands for. It’s why they all hate him so much.
It’s interesting that the “solutions” being touted serve to further decimate much of the population. Ideas that are nearly universally touted by those that already have theirs. By those who think they know what is good for society.
A good number of those who think they know better should be arrested and serve time. Governor Jerry Brown, for example.
Trump would not have been hated so much 20 or 40 years ago.
Disliked? Sure. But not foaming-at-the-mouth hated.
The intense vitriol on display now isn’t due to Trump. He’s simply undoing what was put in place after the year 2000, much of it without the consent or will of the people.
And they hate him for it.
Yes. They thought they were going to have Hillary and an open embrace of the end of the U.S. as a stand alone country. NAFTA would have become a political union of the U.S. Canada and the Mexico. Instead they have a president against globalism.
Yep. And with Hillary in the USA, Trudeau in Canada and an avowed socialist in Mexico.
Never forget, Dan, that you are a deplorable. I won’t forget either.
Yes, clinging to my bible and a gun.
San Francisco, CA 94121 Rental Rates Crater 7% YOY
https://www.zillow.com/san-francisco-ca-94121/home-values/
*Select price from dropdown menu on rental chart
“94,785,000 Not in Labor Force; At 62.9%, Labor Force Participation Stuck Near 38-Year Low”
https://www.cnsnews.com/news/article/susan-jones/no-records-set-august-number-employed-americans-drops-participation-rate
Why do you keep posting a dated number?
What’s the latest number my good friend?
I’ve seen this guys channel before. It’s pretty good and this is out today:
Australian Property Story Continues - Credit, Under/Over Supply? What’s Next
Economy Times
Published on May 11, 2018
https://www.youtube.com/watch?v=NhatlhZJJeg
He points out the quick pre-approval loan sign that is also in Mandarin at 5:25.
dumb.borrowed.money.
Great Comments
Anyone have the fed schedule for selling 4.5 trillion in bond swamp
Big Sur, CA Housing Prices Crater 5% YOY As Speculators Default At Record Numbers
https://www.movoto.com/big-sur-ca/market-trends/
Well the housing boom must be over, because two people I know have become new RE agents. I saw this last time (2006-2007) people moving to real estate. They have no experience other than must be easy money and its different this time.
This is in the Albany Oregon area, where this area is already cooling off if you can look beyond all the housing hype. One guy drives a huge pickup and I made the comment that he must have switched cars with his wife for better fuel mileage. No “clients around here like big trucks” he stated. Gas was up 3 cents yesterday to $3.14.
dont fight the FED or u will be the DUMB money!
You’ll know that the bubble’s over when developers start throwing in a BMW if you sign on the dotted line and close.
Did they leave decent paying jobs to become Realtors(tm)? or do you think it was a last-ditch effort on their part to keep themselves afloat (while trying to let on to anyone they were in trouble)?
One left a decent job because tired of office politics and the other was working a service job, but thought now is the time to get in were the money is. Kinda like people who start investing when the stock market is near the top, instead of buying when the market is in the tank. It will be interesting to see how it goes, but I have see it twice before (tech bust and housing crash)
He better convert that big truck to CNG. In 1930, the world used about five million barrels of oil daily. We now have moved up to a point that next year we will use around 100 million barrels a day of oil. Thus, we will be using around twenty times the oil per year as we did in 1930. Think about that, two decades of use at the 1930 level in one year. Just how do you get back to $1 a gallon when you are using up a finite resource at that rate? I think you have to be huffing gasoline to think that is possible.