It’s Been Quite A Paradigm Shift
A report from WCPO Cincinnati. “How hot is the housing market this year? So hot that this is the best time since the peak of the 2006 housing bubble to sell a home, with buyers offering more than asking price in many areas, even in Southwest Ohio and Northern Kentucky. New mom Corey Curran says trying to buy right now is ‘insane! Before we even get in to see houses, they are sold within a couple of hours.’ Husband John Curran says he’s learned the rules of 2018 the hard way. ‘You have less than 8 hours to get a bid in, and you have to go over asking price or you don’t have a chance,’ he said.”
“West Chester, Ohio realtor Lynn Schwarber has one big piece of advice: ‘You’ve got to rush out the first day a listing hits the market,’ she said. Once you get above $300,000 in Butler County, Schwaber says buyers have many more options. And above $400,00, homes can sit on the market for months, she says, because they are competing with brand new construction, with 3-car garages and miles of white granite countertops.”
From the Grand Junction Daily Sentinel in Colorado. “The Grand Valley’s residential real estate market continues to thrive as median prices have surpassed pre-recession numbers and building permits for new homes soar. However, strong demand and a continuing lack of available inventory make the market seem like an inbound train heading toward a still incomplete track. ‘We’re kind of hoping we can build the tracks before the train gets here,’ Bray Real Estate Development Coordinator Kevin Bray said.”
“The number of building permits issued in Mesa County in the first four months of 2018 is up 66 percent over last year, and the 86 permits in April were up 59 percent from April 2017 and the highest for the month since before 2008, according to figures compiled by Bray Real Estate. Bray, however, thinks it’s unlikely this pace can continue due to the time it takes to get a development off the ground. The current pace would put building permits over 1,000 by the end of the year, but the expectation is to hit 850.”
“Cody Davis has been building homes in the valley for 14 years and has noticed a big change from just two years ago. Demand has risen and more builders have entered the fray to meet the demand. ‘Before we were begging people to buy our houses, now people are begging to buy ours,’ he said. ‘It’s been quite a paradigm shift.’”
From the Deseret News in Utah. “A year ago, I asked readers whether the Wasatch Front could help ending up like San Francisco. A year later we’re still on track for that. The median home price in South Jordan, for example, is $425,255 right now, according to Zillow. That’s a 9.1 percent increase over the past year. Figures vary for the rest of the Wasatch Front. In Park City, it’s $679,189. In San Francisco, the median home price was $1.6 million in April.”
“According to the federal Department of Housing and Urban Development, a family of four could earn a salary of $117,400 there and still qualify for federal assistance. While that still sounds like light years ahead of the Wasatch Front (where a salary of $64,000 qualifies), a report in March by the Kem C. Gardner Institute at the University of Utah calculated that if trends from the last 26 years continue, the median home price here will be $1.3 million in 2044.”
“That historical trend, by the way, is an average annual increase of 5.7 percent in the price of a house. I doubt average salaries will increase 5.7 percent annually each year until 2044. If so, they’re off to a really sluggish start.”
The Orange County Register. “Southern California house hunters are putting 9 percent fewer existing homes into escrow this spring, a dip that caused one analyst to make ‘Cracks Appearing’ the title of his latest report. Steve Thomas wrote: ‘Noticeable cracks have appeared that illustrate a cooling market. It is not as if housing has suddenly tilted in favor of buyers. No, there are still multiple offers and plenty of homes flying off the market and into escrow just moments after the FOR SALE sign is pounded into the front yard. Buyers are still frustrated by the lack of available homes on the market below $1 million. Sellers are still in the driver’s seat. Nonetheless, trends have surfaced that highlight a cooling marketplace.’”
“Take the four-county region covered by the Southern California News Group. Thomas’ data from May 3 shows demand at 13,669 new escrows — down 1,341 sales contracts in 12 months or 9 percent. That’s also off 5 percent vs. the previous five years at this time of year. Four-county supply of 29,118 listings was down just 46 residences in a year but 5 percent lower vs. ’13-’17. That translated to local homes taking slightly longer to sell.”
From Park Cities People in Texas. “The slew of people pouring into the Dallas-Fort Worth area is keeping housing market prices high, real estate agents say. But an evening-out process is slowly forming. The market experienced a period of inflation – especially in the Dallas-Fort Worth area – where sellers could name their prices, because of the number of transplants heading to Texas for jobs.”
“But conditions are changing. There’s less of a ‘desperation’ for homes, and buyers are becoming pickier, said Marti Voorheis, an agent with Dave Perry-Miller Real Estate. ‘Prices continue to increase overall, but have slowed since last year,’ Voorheis said.”
From the Post and Courier in South Carolina. “One of the fastest-growing places in South Carolina is seeing signs of a home construction slowdown, easing concerns that an annual limit on building permits is necessary while raising worries about the town’s revenue. Two of four council members at a committee meeting this week, Tom O’Rourke and G.M. Whitley, said the town may need to raise taxes if revenue-generating development slows.”
“The subject of the committee meeting was growth management and Councilman Joe Bustos’ years-long effort to reinstate an annual limit on building permits. But the takeaway was that home construction may not need managing right now. ‘It’s easy to get emotional and look around town and say that things are spiraling out of control,’ said Councilman Bob Brimmer. ‘I think market forces are tapping the brakes on development.’”
“Driving around Mount Pleasant, it might be hard to imagine development is slowing. This year, the town expects to see nearly 2,000 new residences constructed, the most since 2000, but town officials say the development pipeline appears to be turning from a gusher to a trickle. According to Planning Director Jeff Ulma, during the past three quarters — the nine months ending March 31 — the town approved just 61 lots for new single-family homes. During the previous three quarters, there were 588. During the three quarters before that, which would be the first nine months of 2016, there were 677.”
“‘Do we need a permit allocation program? I think we’re entering one of those periods where housing is going to slow on its own,’ Bustos said. Bustos said the town needs ’some mechanism so that we can control growth, if need be, but we’re not going to slam the door too quick, because we need money.’”
“As rapid growth resumed after the recession — no city east of the Mississippi grew as quickly as Mount Pleasant did in 2015 — Town Council responded with a moratorium on apartment construction and sharply increased development impact fees. The town expects to have about 40,000 residences by the end of this year and thousands more have been approved. But if some early indicators prove correct, the desire to build more houses is waning. So far, the slowdown has only been observed with single-family homes.”
The Miami New Times in Florida. “If you ask a random visitor to name five things Miami is famous for, ‘nice restaurants’ is bound to make the list. There’s a reason rich people hang out here, after all. No one is laying out $3 million for a beachfront condo if they have to eat dinner at Denny’s on a Friday night.”
“Politicians and rich folks tend to justify how ludicrously expensive Miami is by claiming the city’s upper-class wealth trickles down to hotel workers, bartenders, and the like, but a new study this week from Trulia shows, once again, that the city’s economy is not designed with the average person in mind. Trulia reports that restaurant workers in Miami-Dade can’t afford 99 percent of homes in the area.”
“Of course, this is roughly the thousandth study that shows that Miami’s housing market is simply not designed for normal people to live here year-round and, instead, is optimized for international investors to stash money they’ve earned overseas in the local real-estate market.”
“In February and March, real-estate analyst Peter Zalewski released a huge bundle of reports that showed the city has let luxury condo developers build an unprecedented glut of million-dollar-plus condos. While the city is in the middle of a historic affordability crunch, Zalewski noted Miami-Dade County has built so many luxury condos that it will likely take four years to sell them all. In the meantime, restaurant workers can barely find a place to live, and thousands of Miami and Miami Beach residents are on waiting lists for affordable homes.”
‘Before we were begging people to buy our houses, now people are begging to buy ours,’ he said. ‘It’s been quite a paradigm shift.’
‘A year ago, I asked readers whether the Wasatch Front could help ending up like San Francisco. A year later we’re still on track for that.’
New paradigms. Frantic multiple offers in Ohio. From the first link:
‘he’s learned the rules of 2018 the hard way. “You have less than 8 hours to get a bid in, and you have to go over asking price or you don’t have a chance,” he said.’
‘Normal rules of buying don’t apply’
‘Forget the usual suggestions about offering 10% below asking price, and setting up contingencies, such as an allowance for a new air conditioner. With inventory tight is many desirable neighborhoods, prices are at all time records in Ohio, Kentucky, and many parts of the country.’
Ahem:
‘Normal rules of buying don’t apply’
Of course they don’t! This is 2018 baby! But you know, higher prices for anything should reduce demand. Record high prices should really reduce it. I wonder if there is something else going on?
“But you know, higher prices for anything should reduce demand. Record high prices should really reduce it.”
Record high prices magically generate wealth and everyone likes to generate wealth so record high prices is seen as a good thing and as such should be encouraged.
“I wonder if there is something else going on?”
Such as what? The suspension of individual thinking replaced by a
hefty dose of groupthink perhaps?
‘California Super-Commuters Are Transforming Sleepy Suburbs Into Busy Metros’
‘Times have changed in this farm town that sits about an hour drive away from downtown Los Angeles. Many dairy farmers sold their land to residential and commercial developers. People from nearby Los Angeles, Orange and other parts of Riverside County began to flock to Eastvale.’
‘In Eastvale, the average rent is $1,581, according to RentCafé. Meanwhile, Los Angeles’ average rent is nearly $2,300. A median home price is $779K in LA. In Eastvale, homes are being listed for $569K. The number of housing units increased 15% in Eastvale from 2011 to 2018.’
‘In Ontario in San Bernardino County, millennials are bucking the perception that they wish to remain apartment renters to purchase homes in Brookfield Residential’s New Haven 1,000-home, mixed-use master-planned community, Brookfield’s Vice President of Southern California Housing John O’Brien said.’
“We’ve found the under-40 demographic makes up more than 80% of our homebuyers,” O’Brien said, adding that the homes range in price from $300K to $600K. “We were initially surprised, but it just goes to show that if you offer people a home at an affordable price, they’ll buy.”
‘Leonard Mercado, 45, has lived in Eastvale for about seven years. A partner at real estate agency and mortgage firm McLeod & Associates, Mercado said he and his wife chose Eastvale because of the city’s growth potential.’
“When we first moved here, our friends were asking us ‘why you are moving to a cow town?’” Mercado said. “But we started placing a lot of clients here because of its affordability and huge lot sizes and my wife and I just said, ‘Why not?’ It’s a great place to invest and live in.”
‘It’s a great place to invest’
Click!
I remember the same super commute stories just prior to the bursting housing bubble last time. Gasoline prices took off making such commutes even more expensive. The more things change the more they stay the same.
You know we do not talk about it very often but just think of the finite natural resources that are wasted due to the housing bubble. People buying much too big houses just for the hope for appreciation not need. People buying vacation homes for appreciation not need. This extra space needs to be heated or cooled. The materials tied up in these buildings is huge. People are buying houses one hundred miles from their work areas due to inflated housing. The same people in government promoting housing bubbles talk about global warming. However, if they truly believed in manmade global warming they would not be advocating policies creating the housing bubble. while this appears to be inconsistent, there is not true inconsistency because their activities consistently advance global government. The housing debt in the developed world in promoting consumption which is being met by goods produced in the developing world. Thus, shifting wealth from the developed world to the undeveloped world. AGW is an excuse to send even more money from the developed world to the developing world. It is the practice of world socialism that is actually going on. I have said all of this before but I think we need to repeat it once in a while for the new people on this board.
I agree with you, Dan. Perhaps the most egregious example is China, where they poured more concrete in a three-year manic building frenzy than the U.S. did in the entire 20th century.
With a globe full of crude and more produced daily, energy is infinite.
China is still thanking Obama for his stimulus spending that allowed them to actually build something with its trade surplus. We went in debt paying people not to work with programs such extended unemployment and aid to state governments and to keep employees on the government dime. But as Pelosi said food stamps are stimulus. Unfortunately, his stimulus, stimulated China more than the U.S.
I mentioned my work on programming economic simulations the other day, and though they are usually for entertainment and not government think tanks, I think some of the emergent results to are likely to be reflected in the ‘real world’ when similar events occur.
A big one is when a much used resource that is readily available and cheap for a long time starts exhausting the easy to get at supplies. The obvious analogy is energy, but we could see it in other materials.
If energy gets expensive, we’re not going to see a crash into a mad-max like scenario as some fearmongers/peak-oilists like to think, but will likely see a system-wide ’slamming on the brakes’ and ‘tightening up’ of (core) activities as everyone tries to maintain economic viability of their individual concerns.
Obviously the real world has many more factors than a computer simulation, but we’ve already seen the lengths our governments will go to, to keep the status quo going when energy prices have spiked in the past. So much activity is ultimately dependent on energy and raw materials, that a permanent increase costs (relative to whatever is the absolute value of currency) will change the scope of what most people attempt to do and eventually how they think about it. Granted, it wouldn’t be allowed to play out without lots of attempts to bring back the ‘good old days’ which would eithetr backfire or just kick the can down the road.
“……China is still thanking Obama for his stimulus spending that allowed them to actually build something with its trade surplus…..”
It is Obama’s fault the Chinese don’t trust their government banking system and buy into empty brick and mortar housing as a store for their wealth? You just argued how irresponsible that is from an energy efficient stand point, yet you don’t hold the Chinese accountable for their own actions?
The Chinese are accountable for their actions and Obama’s is accountable for his actions. Obama stimulated demand instead of spending the vast amount of the stimulus on infrastructure. Much of the increased demand swelled the Chinese trade surplus and funded their infrastructure build. Did they waste some money, I am sure they did, but they ended up with a modern infrastructure and we funded it with trade deficits made worse by Obama’s policies which caused the weakest recovery on record.
The only person I “hold accountable” for actions - is myself (at least, in my better moments). I don’t have mystical powers, and so holding others “accountable” is a waste of energy on my part.
You hold political ideology accountable in your votes. You do not elect globalists to office, whether they have the last name of Bush,Clinton or Obama. It does not take mystical powers.
When did an hour commute become a super commute? My dad commuted about an hour each way, 30 years ago. It was the norm since downtown was a no go zone after 5pm. But now that millenials are doing it, they have a cool name for it and MSM acts like it has never been done before.
I did the “semi-super commuter” thing for almost a year between Dallas and Austin and had a super-efficiency apartment in Austin during the week.
Absolutely. Exhausting.
The quality of life hit is very, very high. Younger people can manage better, but they usually don’t realize the damage it’s doing to them.
When that goes on, mental pressure has to be building up - resentment at their circumstances and feeling forced into the situation without a choice. A lot of people ready to explode and say ‘to hell with this’ at the first opportunity to breakout.
When I owned in San Diego my commute started out pretty good, but as the dot com boom and then the housing boom came along, my commute got painful and I took it upon myself to extricate myself from that. I have said on this blog bubbles are a tremendous misallocation of capital and resources and quality of life for the vast majority takes a big hit.
The long commutes and low quality of life probably result in more drug/alcohol use and more road rage as well. Thanks (((federal reserve)))!
I wonder if the Fed has conducted any economic studies into how much substance abuse and how many broken homes have resulted from their pernicious policies.
people ready to explode
I want breakfast!
Hey they are building a Costco there. It might have some potential.
@Mr. Banker
Record high prices magically generate wealth and everyone likes to generate wealth so record high prices is seen as a good thing and as such should be encouraged.
There is a reason they don’t tell you how the magicians do their magic tricks. What if everyone found out that unless they are the chosen with access to magically created helicopter money that the magic wealth is just a future debt against their time and work? And the record high prices mean a record high debt to be paid back? Why, we might have people saying f*8k it when it gets to be too much and just walk away and into the sunset…
“I wonder if there is something else going on?”
Get the last suckers in the room to dance while hoping no one notices that they are sneaking out the exits?
Happy Mother’s Day to any mothers out there.
Here’s a sentimental song, about sons and their mothers. It reminds me very much of my childhood. If you haven’t heard this one before, you should.
At least one time.
https://www.youtube.com/watch?v=uenljOw8_Bc
Your mother reads the hbb?
A mother will never be as disappointed or heartbroken as the day she learns her child became a Realtor.
The only way to console the mother is to tell her at least he or she is not a banker.
😮
Realtors are liars.
“Your mother reads the hbb?”
No, but since you do a Mom story from the late 70s seems in order.
My older brother used to make bongs out of 3 ft plexiglass tubes and plates purchased from the local hardware store and put together after hours at my Dad’s gas station. Mom found it a but for whatever reason she would hid it instead of throwing it away.
The first weekend it happened she and the Old Man were in Pennsylvania for the weekend and he called her up and said…
All right Mom where is it?
Where is what?
Come on you know.
Oh what that tube?
Yeah Mom the tube.
It was behind the folded Ping Pong table in the basement.
Henceforth for the end of his 2 college career, the finish of my high school and college career my brother’s very efficient, well designed several times rebuilt bong was known as “the tube”.
I used to tease my mother with this song: https://youtu.be/OIW4ARVbhrw
That’s one of my all time favorites.
That was a beautiful video, MacBeth. Thank you for sharing it.
Friday Harbor, WA Housing Prices Crater 6% YOY As Seattle Area Housing Glut Expands
https://www.zillow.com/friday-harbor-wa/home-values/
*Select price from dropdown menu on first chart
“I wonder if there is something else going on?”
Government massively intervened in the last housing downturn, thus shielding most people from the consequences of their stupid decisions. Prior to the last downturn the paradigm was housing never goes down on a national basis. Due to government intervention, the paradigm was only slightly modified to housing never goes down on a national basis for more than a few years and then it goes even higher. As long as government has policies that seem to have a bid under housing, the FOMO will be greater than the fear of a downturn. Of course, this will allow the bubble to grow to a point where the government can go down with the bursting of a housing bubble. We came close last time and we cannot afford to add another ten trillion in debt to fight the next collapse in housing.
‘the FOMO will be greater than the fear of a downturn’
Yeah, but as we’ve seen over and over, this burns out. Unfortunately what is discovered is that once the shack stops being an imaginary growth machine, the rest of the economy has been suffocated and fails to support the debt incurred. What I’m saying is:
“After a decade of soaring real estate prices that have turned ordinary homeowners into paper millionaires and added billions to the provincial GDP, the B.C. economy finds itself in a dangerous position, says an SFU professor. ‘We have an economy that’s been made dependent on this through a faulty policy framework and this is a bad long-term model,’ said Josh Gordon, an assistant professor in the school of public policy at Simon Fraser University.”
“The province relies so heavily on the real estate industry that a crash would have major impacts on both the economy and the everyday British Columbian, according to academics and former finance ministers who spoke with CBC News. ‘This is why you shouldn’t design your economy around real estate and real estate price appreciation,’ Gordon said. ‘There’s a range of dynamics that happen in housing bubbles and booms, which is that people take on a lot of debt. So when that process stops or reverses, there’s a lot less discretionary spending that happens, so you would see an impact in the retail sector and so on,’ he said.”
http://thehousingbubbleblog.com/?p=10429
“There’s a range of dynamics that happen in housing bubbles and booms, which is that people take on a lot of debt.”
Debt that remains and remains and remains all the while pouring money into my coffers.
😁
“So when that process stops or reverses, …”
The horror!
“… there’s a lot less discretionary spending that happens, …”
… a LOT less …
“… so you would see an impact in the retail sector and so on,’ he said.”
Which snowballs.
Ain’t it fun?
😁
“Of course, this will allow the bubble to grow to a point where the government can go down with the bursting of a housing bubble.”
All by design. Part of the overall plan.
The globalists would like to see nothing more than the housing market be destroyed.
What better way to create the large, permanent underclass needed for a socialist takeover? Destroying private medicine is helpful, of course, but it’s hardly the enchilada that housing is.
Full-on socialized housing paid for by taxpayers is the socialist’s wet dream.
Homeless People = Socialist Win.
Micro-Housing = Socialist Win.
‘realtor Lynn Schwarber has one big piece of advice: ‘You’ve got to rush out the first day a listing hits the market,’ she said.’
‘Once you get above $300,000 in Butler County, Schwaber says buyers have many more options. And above $400,00, homes can sit on the market for months, she says, because they are competing with brand new construction, with 3-car garages and miles of white granite countertops.’
And then you are fooked:
‘competing with brand new construction’
“‘Palm Beach is completely on fire,’ said Todd Michael Glaser, a high-end homebuilder who made his name in Miami but has lately been concentrating on Palm Beach County. ‘I’ve never seen the amount of $8M to $70M homes as in the last three and a half, four months. It’s staggering.’ It’s not just single-family homes that are hot, but a new wave of high-end condos and mutifamily apartments, especially in downtown West Palm Beach.”
“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
One.. last.. score.. before the party’s over. It’s a drug.
Re: $300K to $600K in Butler County. This is Ohio, north of Cincy, population 375K with room to expand, not NYC or SF. Per Google:
The median income for a household in the county was $47,885, and the median income for a family was $57,513.
So average houses are on average 6x .. up 12x … the average income? The averages are not looking so good…
Happening everywhere. There are all sorts of places out west where a tiny little 100 year old house is $650k, and median household incomes are $45k. That’s sustainable, right?
All these news stories talk about are the local Joes who are losing the bidding wars. So who’s winning these bidding wars? Equity locusts from California? Tax refugees from NY/IL? Chinese hoping to establish a colony? AmericanHomes4Rent trying to lease out to entire clans of illegal immigrants or refugees? Who?
Instant FB’s. They are likely a combination of types…..but they all will be squeezed in a few years.
Only “loosers” are winning those bidding wars. They don’t know that - yet.
I live in Butler County - Liberty Twp, which is adjacent to West Chester - which where I grew up. West Chester is the well to do area of Butler County (South East Butler).
Butler County is home to Middletown (Ohio’s leader in heroin deaths, Hamilton (run down county seat) and the western side is pretty rural (Oxford / Miami University). West Chester will have a higher avg Income - easy access to Mason / Blue Ash / Cincy for jobs.
I’ve known several people who sold their house in the area and yet to hear of any bidding wars - but a small sample I guess. Handful of bids over and under the asking price. Neighbor across the street was asking $250K sold for $240K (appraised value) to all cash Chinese couple. They had one other bid for $260K. Friends listed for $235K down the street and had bids for asking and one for $245K. From people at work - several who took offers over asking had a b!tch of a time closing as the house did not meet the appraisal and loan would not go through.
Like everywhere else - building new expensive homes. Down the street from me is a new hood where I would say avg home is mid $600K. Most subdivisions though seem to be mid $300K and up. Not sure who is buying all these places - but they seem to have no issues selling new stuff.
Looking at Zillow in the Liberty / West Chester area for what it is worth - seems like 2/3 of what is out there is foreclosures (39 homes in Liberty under $300K and 28 were foreclosures at one point). I would say any older homes $275k-$300K can sit some on the market some as it competes with the new mid $300K stuff.
Lynn, my advice to you, cut your commission and get as many clients as you can quickly and tell them to sell quick. Be the ant, and save that money because it is going to be a long winter, grasshopper.
Naples, FL Housing Prices Crater 6% YOY
https://www.zillow.com/naples-fl/home-values/
https://snag.gy/m5EzRB.jpg
Best of all there will never be another recession
This looks like the year when all the garbage finally sells for peak pricing. I am now seeing land that has been on the market anywhere from 400 days to 2500 days showing sold for full price. It’s insanity.
What is this world coming to when you bribe people to deliver a deal and then the deal comes apart anyway? No wonder so many democrats and European politicians are attacking Trump for pulling out of the deal. Not the type of information that you want coming out just before your re-election run. So if Obama negotiated such a good deal, why did the Iranians have to bribe people to pass it? I am sure MSNBC will cover the story soon:
http://www.thegatewaypundit.com/2018/05/oh-boy-iranian-regime-threatens-to-release-names-of-western-officials-who-took-bribes-to-pass-nuke-deal/
How was anything thinking that Iran seriously intended to honor the agreement anyway? It was clear all it meant was they would make an extra effort to keep their nuke program hidden. It’s as if the most of the world was in on the scam…
Why are we allowed to have nuke programs, but not other countries?
Other countries do have nuclear programs. Only a few countries are denied the programs and they have a history of engaging in things like terrorism. We have decided that its in our own interest to discourage countries that may attack us with nuclear weapons from having them. It seems pretty logical to me. I think countries that have on a regular basis “death to America rallies” and have engaged in terrorism against us should be on our short list of no nuclear weapons.
It was rhetorical, Dan.
Ok it was not clear to me by the context. Unfortunately, many people do hold that belief. I am not sure Obama was not one of them.
It’s as if the most of the world was in on the scam…
You name the scam, and “alot” of the world is in on it.
‘Cracks Appearing’
Now is the time to buy Hawaii Big Island real estate, where they really are making new land!
North America »
Hawaii on alert as cracks from volcano spread
Scientists measure cracks in the road in Hawaii.
Photo: Reuters
Terray Sylvester
May 9 2018 2:30 AM
Emergency crews said they were poised to evacuate more people as fissures kept spreading from Hawaii’s erupting Kilauea volcano, five days after it started exploding.
Around 1,700 people have already been ordered to leave their homes after lava crept into neighbourhoods and deadly volcanic gases belched up through cracks in the earth.
The evacuation zone could now grow as fissures are spreading into new areas on the eastern side of the Big Island, Hawaii Civic Defence Administrator Talmadge Magno told a community meeting.
“If things get dicey, you got to get out,” he said. “If you live in the surrounding communities … be prepared. Evacuation could come at any time.”
Rivers
Kilauea has opened 12 volcanic vents since it started sending out fountains and rivers of lava on Thursday, officials said. Lava was not flowing from any of the vents on Monday.
Resident Heide Austin said she left her home just west of the current eruption zone after noticing small cracks appearing at the end of her driveway.
One eruption near her home “sounded like a huge blowtorch going off”, said the 77-year-old, who lives alone. “That’s when I really got into a frenzy.”
…
‘Noticeable cracks have appeared that illustrate a cooling market.’
In the case of Hawaii, the cracks are evidence of a red-hot market!
the cracks are evidence of a red-hot market!
and no one could have predicted it!
Here’s my citizen’s science take on the Kiluaea situation:
1) The red hot lava lake in the middle of the Hawaii Volcanoes National Park has melted through its own lakebed, draining the lava that was formerly impounded in the lake into the network of underground lava tubes in the surrounding area.
2) The sudden influx of pressurized red hot lava into the cooled, solidified network of lava tubes at lower elevations results in the tubes melting from the inside, creating the potential for the roofs of the tubes to melt, resulting in cracks in the ground or fissures through which lava can escape onto surrounding lands.
3) If the meltdown of the lava tubes network passes a critical threshold, then large-scale subsidence of the drainage area of the lava lake could result, followed by much wider inundation of surface areas by fresh, red-hot molten lava.
“…fresh, red-hot, molten lava.“
The lava lake was an amazing sight to behold while it lasted. It sounds like it may have merely been a fleeting historic opportunity which is no longer an option for Hawaii Big Island tourists to enjoy.
Gulp.
Environment
May 11, 2018 / 10:40 AM / Updated 16 minutes ago
Huge fissure opens on Hawaiian volcano; some defy evacuation order
Terray Sylvester
PAHOA, Hawaii (Reuters) - A massive new fissure opened on Hawaii’s Kilauea volcano, hurling bursts of rock and magma with an ear-piercing screech on Sunday as it threatened nearby homes within a zone where authorities had just ordered an evacuation.
The fissure, a vivid gouge of magma with steam and smoke pouring out both ends, was the 17th to open on the volcano since it began erupting on May 3. Dozens of homes have been destroyed and hundreds of people forced to evacuate in the past 10 days.
As seen from a helicopter, the crack appeared to be about 1,000 feet (300 meters) long and among the largest of those fracturing the side of Kilauea, a 4,000-foot-high (1,200-meter-high) volcano with a lake of lava at its summit.
“It is a near-constant roar akin to a full-throttle 747 interspersed with deafening, earth-shattering explosions that hurtle 100-pound (45-kg) lava bombs 100 feet (30 meters) into the air,” said Mark Clawson, 64, who lives uphill from the latest fissure and so far is defying an evacuation order.
…
Lava meets home in paradise = ugly!
I’m sure the insurance actuaries saw it coming.
I’m sure the real estate developer saw it coming. But I bet the land was really cheap in 1960, when Leilani Estates was built, as I believe that a similar eruption to the one currently underway had just recently occurred in the same area.
Haha, I always wondered how my brokeass spendthrift acquaintance could afford a house in Hawaii…Pahoa, to be exact. She passed just in time!
This comment was on yesterdays post:
‘I don’t see anything about Real Estate downturn in Australia or Canada in the U.S. media. The silence is deafening.’
And you don’t see the media interviewing FB’s in Miami or New York, but you know they have to be there:
‘According to CoreLogic, measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. CoreLogic’s chief economist, Dr. Frank Nothaft, said: Last year’s hurricanes continue to have an effect on loan performance in affected markets, showing up in statewide data. Serious delinquency rates in February were 50 percent higher than in August 2017 in Texas, and nearly double in Florida, even though the wind and flood damage was primarily in coastal markets.’
‘The 30-plus delinquency rate was highest in Mississippi (8.6%) and Florida (8.1%). Among the 10 largest U.S. metro areas, the highest 30-plus delinquency rates in February were posted in Miami (10.3%) and Houston (8.6%).’
Have you guys seen all the FB reports out of Florida? Neither have I. Those were some storms huh? It’s rains a little and bam! People stop making payments all over the state. And they left out that defaults in Houston skyrocketed before the hurricane. Oops!
And they added this: ‘The states with the lowest 30-plus delinquency rate in February 2018 were Colorado (2.0%), North Dakota (2.2%) and Washington (2.4%).’
2% is really high for prime loans historically. Not for subprime though.
Does this sound like a 2% decline?
March 18, 2018
From the Daily Mail on Australia. “Sydney’s housing bubble may be set to burst as prices fell by up to 30% in some suburbs. A steep fall in buyer demand, a crackdown on investor loans and a curbing of tax benefits are all reasons behind the drop, experts say. The drop, which is the largest since 2008, is a welcome relief for buyers looking to enter the world’s second most expensive property market, 9News reported.”
“The inner city suburb of Darlinghurst saw the biggest drop with buyers seeing a 30.6 per cent fall in some prices. Bellevue Hill also saw a massive fall with prices being 16 per cent cheaper and in Vancluse the adjustment was 13 per cent. Sydney’s southern suburbs of Sutherland and Alfords Point saw a drop in prices of 15 per cent respectively. Experiencing a smaller cut of 10 per cent were Narrabeen, Matraville, Cammeray, Tempe, Coogee, Mascot and Belfield.”
“CoreLogic’s Kevin Brogan says sellers should not be concerned as the market moves to correct itself. ‘At the moment it’s trending towards being a buyer’s market, but I think what we’re seeing is quite a gradual adjustment to the market,’ he said.”
“Compared to this time last year there are 25 per cent more homes on the market and there’s been a twenty per cent drop in buyers, industry figures reveal. Over the last fortnight the auction clearance rate dropped to just 56.1 per cent. At the same time last year 78 per cent of homes were selling.”
From News Nine in Australia. “The cracks are beginning to show in the Sydney property market, with the inflated prices from six months ago dissipating. It’s the steepest drop in a decade, with the average price of a home now priced at $880,743. CoreLogic’s Kevin Brogan said the tide was slowly turning. ‘I don’t think there’s any cause for panic,’ he said.”
“Auctioneer Sebastian Bonaccorso from Elders Inner West and agent Gavin Sanna successfully sold a three bedroom home at Earlwood today for $1.522 million. ‘I’m finding buyers who were able to borrow 1.5 last year can only get to 1.2 this year,’ Mr Sanna said.”
http://thehousingbubbleblog.com/?p=10376
“Sydney’s housing bubble may be set to burst as prices fell by up to 30% in some suburbs.”
Historically, housing corrections were glacial in their pace because houses are illiquid with high transaction costs and turnaround times. With these massive speculative bubbles we’re seeing prices crater at speeds which were unheard of in the past.
“between March 2009 and March 2010, Florida’s top five hardest hit metro areas (Miami, Orlando, Lakeland, Tampa, and Bradenton) had a foreclosure and delinquency rate of 21.2%, up 5% from 2009.”
So the current delinquency rate is actually double what it was in 2009, well into the housing correction and stock market crash. Yikes.
No. The current delinquency rates are less than 35% of the 21% rates…. “….30 + rate..” means 30-days delinquent, NOT 30% of loans are delinquent.
We are not even close to the misery of 2009. That won’t happen until we have a few quarters of recession….my guess is 2022.
There’s a lot of incentive in the system to not be the bearer of bad news, Ben.
Yet the irony is that nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels….. Nothing.
You are right……nothing! HA!
DegenerateGambler
Sarasota, FL 34231 Housing Prices Crater 10% YOY
https://www.zillow.com/sarasota-fl-34231/home-values/
https://snag.gy/m5EzRB.jpg
Couple says would-be “homebuyers” smeared feces, caused $40K worth of damage.
“And I lost it, I just lost it. I was like, ‘I don’t understand why we have to go through this.’ I mean we hired people and now my beautiful dream home is covered in feces and I don’t know how we’re going to fix it,” said Jenny Fisch.’
‘The buyer was pre-approved for a loan but only if he completed a program and improved his credit score. The lender said that never happened. This information was not made available to the Fischs and they only found out after the deal fell through.’
‘The couple said their agent and the buyer’s agent assured them everything was good when they agreed to let the buyers rent. RE/MAX, the buyers realtor, said through a spokesperson that realtors don’t qualify buyers and it is up to the lender.’
“It’s their fault and nobody wants to help us,” said Jenny Fisch.’
‘The Fischs tried to filed a report with the El Paso County Sheriff’s Office but they were told it was a civil matter. They also attempted to contact Child Protective Services because a child was in the home as well as animal control because seven dogs and three cats were found inside.’
‘It gets worse. Their insurance won’t cover the damage. A spokesperson for Auto-Owners Insurance said they had no comment on the situation.’
‘Now the couple is paying a mortgage on a home they can’t live in and trying to figure out how to come up with the funds to pay for repairs. The would-be buyers are nowhere to be found and a reporter has not been able to make contact with them.’
Brings to mind the story from a few years ago of the Oregonian who locked up pigs in his foreclosure home.
‘RE/MAX, the buyers realtor, said through a spokesperson that realtors don’t qualify buyers’
You can say that again.
PS: Auto-Owners sux.
They deserve it for believing a lying Realtor.
The tell to this con job was when their “buyer” didn’t “buy” but just offered to rent. The rest was just trimmings - or droppings.
Nobody lies like a Realtor.
Sellers should NEVER agree to a purchase contract with buyer possession prior to closing. If you do though, you need to tell your insurance company so that you have a policy that covers tenants. Sounds like these sellers received bad or no advice prior to entering into this contract. Interesting that the article didn’t mention what firm represented them… assuming they had one.
Charts can be fun. Here’s one that looks as if it might be a whole lot of fun:
https://www.zerohedge.com/sites/default/files/inline-images/Image_2_20180511_TFTF.jpg?itok=GqP99YmB
I think it is clear proof that without the corporate tax cuts there would have been recession. The question is now how will the additional money provided to corporations be spent. Certainly, some will be used for stock buy backs but if the majority is not used for debt repayment and/or making investments that increase cash flow, we will have a recession. Probably another reason the Democrats were so against the tax cut, they were counting on a recession before the 2018 elections.
“defying an evacuation order”
Dan, do you think the Dems are really that deep and far-thinking? I think they just want to tax the rich out of existence. I’m not a fan of the tax cuts myself, but without them, corporations were poised to send even more jobs overseas.
Certainly agree it keeps businesses from relocating. I do not think Maxine Waters could figure it out but George Soros can and most Democrats just follow the party line and GS helps set the line.
Ben,
If you are going to use the phrase “Paradigm Shift”, then you have to include a link to this Dilbert comic. It’s an unwritten rule
http://dilbert.com/strip/1995-08-25
Re: Dilbert cartoon: I have an artist friend who just freaks out if I show up wearing mismatched socks or have fingerprints on my eyeglasses. So I always manage one or the other whenever we meet.
I was looking for the “new paradigm” quote from 2005.
Although the highest end RE is dropping, it seems anything below that (at least in US based RE), is still in a blow off top phase
A fish rots from the head down.
“A fish rots from the head down.”
How are your eyes Professor?
https://www.youtube.com/watch?v=gbNCBVzPYak
Awesome clip… thanks.
I believe my ears are in good working order.
No “pent-up demand” for $500,000 starter homes happening here:
https://www.zerohedge.com/news/2018-05-12/happy-mothers-day-america-12-million-millennials-age-24-36-still-live-their-mums
My first home, bought 21 years ago, in a Dallas suburb was a great ’starter home’ and suitable for a first child or two if needed. Paid $89K for it, or about 2x my income at the time.
It would be interesting if there was enough data to show the changes in a single generation in the mapping of young people’s incomes to what passes for starter homes in their respective locations. Is it just the big growing cities, or have the small towns and middle America seen a shift in the pricing in and out of people just starting out?
Those same starter homes in certain western locations are over $600k.
Structurally unsustainable.
Now, I realized I forgot to compare the changes in interest rates, which impacts the monthly payments, but lets try an account for that. As Mark Watney once said “Ok, let’s do the math.”
Lets look at the total of P&I Payments on that starter home relative to income. I’m using the actual first house I bought to start with. Assuming that I would 50% higher income in dollar terms if at the same point starting out (which puts me over the median income I’ll note) in my 20s
Me in 1997: $45k /yr, $90K house, $72K mortgage @6.5% APR:
Down Payment: 0.4 Yrs of total gross income ($18K)
Mortgage Total: 3.54 Yrs of total gross income
MilleMe in 2018: 67K/yr. $250K house, $200K mortgage @ 4.5%:
Down Payment: 0.75 Yrs of total gross income ($50K)
Mortgage Total: 5.45 Yrs of total gross income
The $250K comes from looking up the EXACT SAME house on Zillow and the county property tax rolls.
Now, if instead of flyover country I was on the west coast
MilleMe? in 2018: 67K yr. $500K house, 50K down. $450K @ 4.625
(note that I didn’t opt for 20% down, assume 1/8 point hit)
Down Payment: 0.75 Yrs of total gross income ($50K)
Mortgage Total: 12.43 Yrs of total gross income ($833k)
So… 1.5x to 3.5x more of the young person’s future is ‘mortgaged away’ for the same starter home just 21 years later.
So yeah, all those millennials saying previous generations had it easier… they’re right.
Now stack on depreciation at $3/sq ft…. taxes…. insurance…. Year after year after wallet draining year.
So yeah, all those millennials saying previous generations had it easier… they’re right.
Yes, they are. Unfortunately, they have voted for bigger government which has made their situation worse.
“So yeah, all those millennials saying previous generations had it easier… they’re right.”
Read “David and Goliath” by Malcom Gladwell. He talks of the luck of timing and such.
Explains a lot, IMO.
Now.. what happens if Interest rates go up a percent or more? The crunching sound you will hear is the camel’s spine shattering…
The lowering of rates is the only thing that’s kept those relative numbers from being even more distorted.
Meanwhile….
Danville, CA Rental Rates Crater 14% YOY As Housing Correction Ravages Contra Costa County
https://www.zillow.com/danville-ca/home-values/
…. and don’t forget to select price from dropdown menu on rental chart.
Washington, DC 20010 Housing Prices Crater 14% YOY
https://www.zillow.com/washington-dc-20010/home-values/
*Select price from dropdown menu on first chart
At least it shows the rents are dropping
https://oilprice.com/Latest-Energy-News/World-News/Panasonic-Grows-Wary-Of-Tesla-Risks.html
Murphy, TX Housing Prices Crater 7% As Oil Glut Ravages Oil States
https://www.zillow.com/murphy-tx/home-values/
*Select price from dropdown menu on firstchart
here is a hot idea:
https://www.marketwatch.com/story/people-wearing-yoga-pants-are-getting-burned-during-mris-2018-05-09
FWIW, the medical facilities I’ve been to require their patients to wear an issued hospital gown during check-in.
Selfish hoarding is the new black.
Americans are hoarding money in their checking accounts — and that could be a problem
By Quentin Fottrell
Published: May 12, 2018 10:26 a.m. ET
Checking account customers have all been doing the same thing in recent months
…
When times are good, Americans feel confident by keeping little in checking, but when times are difficult consumers store money in checking accounts, effectively pulling back on spending on retail and restaurants. “Yet, the Federal Reserve keeps raising interest rates,” he said.
Consumers had the least amount of money in their checking accounts in 2007, when times were good just before the Great Recession. In fact, they had on average less than $1,000 in their account. Since 2008, the checking account customer has been hoarding more money.
And today? The average checking account customer has more than $3,700 stashed away. The median amount in checking accounts since 1991 is $2,263. “Anything lower than this signifies the economy is doing well,” Moebs said. “Anything above this indicates the economy is not doing well.”
….
Less than 4K is “hoarding?” Really?
I am still stuck on times were good in 2007. I guess the writer could not just admit that times are better now and people have a few more dollars to leave in their checkbooks. Thus he had to come op with a reason to make that a negative. I guess under that logic if we were all in overdraft the economy would be booming. I am sure if Obama was in office there would be a different spin on this.
Less than 4K is “hoarding?” Really?
Not being in debt up to your ears is the new “hoarding”. Really!
Not being in debt up to your ears is the new “hoarding”. Really!
THOSE PEOPLE SHOULD BE TAXED MORE! THEY SAVED MONEY!
What about those articles that say most Americans have basically zero savings and a bunch of debt? One paycheck away from default? Granted, $3700 is more like two paychecks away from default and isn’t exactly “savings” but which is it? Living paycheck to paycheck or hoarding money?
It’s like the fat and hungry situation. Obesity epidemic and kids going to bed hungry at the same time. I guess both can be true at the same time depending on where you look.
losers fight the FED
Someone has to fight the good fight.
More competition in the tightly crowded cryptocurrency space is on the way soon.
Facebook reportedly plans to launch its own cryptocurrency
With an eye towards payments on the social media platform
By Chaim Gartenberg@cgartenberg May 11, 2018, 10:42am EDT
https://www.theverge.com/2018/5/11/17344318/facebook-cryptocurrency-token-blockchain-report-david-marcus
It shows the clear difference between gold and bitcoin. Gold is truly scarce and so are the substitutes for gold. Bitcoins can easily be replaced by another block chain currency and there is no scarcity.
Ben what do you think happens next?
We are at a point here where banks must be feeling extra sassy because they have been completely made whole by the “recovery” in housing prices. Rates continue their slow crawl upward. Homeowners who hung on/invested during the swoon are able to move about/flip at will again as they like. Rents are sky high.
Something has to give. …Or does it?
Well.. Not really.
Remember… A housing recovery is falling prices to dramatically lower and more affordable levels by definition. And considering housing demand is at a 21 year low and falling, housing hasn’t begun to recover.
Whatever. There is a palpable buying panic in the air here in FL and I suspect it is everywhere to some degree (again). Dollars are still dollars and nobody seems concerned with affordability. That went out of style when phones had cords and rotary dials.
So what happens next?
What happens when demand collapses?
I know this one! um…The Government buys everything!
dont fight the fed losers!
My 2 cents….
Ponzis continue as long as new money can be used to pay the interest on old debt.
The Fed has stopped printing and intends to disgorge $600N in bonds and the deficit will
require about $1.2T in new bonds. So new money creation is negative in the US by $1.8T.
However, last I read, China is responsible for 70% of all “new” money creation though they are reportedly slowing that as well. Kuroda and Draghi are still printing. Some of that printed money is forced to be repatriated by UST purchases (lest the source country suffer an undesirable increase in the value of its currency)
To predict the date when newly created money is insufficient to cover interest on existing debt (evidenced by a rise in interest rates) is still a hero call but until that date happens, the bubble continues…
Long-term Treasury yields are contained.
US Treasury yields tick higher, 2-year note rate hits 2008 high
Thomas Franck | Sam Meredith
Published 5 Hours Ago
Updated 1 Hour Ago CNBC.com
U.S. government debt yields ticked upward on Monday after last week’s tepid inflation measures.
The yield on the two-year Treasury note hit 2.547 percent, its highest level since Aug. 12, 2008, when the two-year yielded as high as 2.549 percent.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.99 percent, while the yield on the yield on the 30-year Treasury bond was also higher at 3.122 percent.
…
Maybe social security will not go bankrupt as quickly. Another thing never talked about during Obama’s administration. Since social security is 100 percent invested in us government debt by keeping interest rates low you prevent the trust fund from earning a decent return
Low interest rates make no difference overall with respect to Social Security because the loss suffered by the “Social Security Trust Fund” is made up by the gain to the Treasury, which is the only source of funds for Social Security payments.
Sure, but doesn’t it provide cover for statements like “Social Security is going broke, prepare to pay in more or get less back”? When actually those paper losses on the SS side of the ledger never should have occurred?