May 30, 2018

There Is An Air Of Doom And Gloom

A report from National Real Estate Investor. “While apartment rents are still growing nationally, in a few cities and submarkets rents are growing more slowly or even beginning to shrink. The number of new apartments scheduled to open in the U.S. totals 274,700 units, up from 235,300 units added in 2017 and 220,800 units added in 2016, according to Reis Inc. Rent growth is seriously slowing down in a handful of markets. ‘We expect total completions by year-end to reach a new cyclical high. Markets such as Nashville and Charlotte, leaders in new apartment construction, will face more pressure at the top end of the market,’ notes an analysis by CoStar Portfolio Strategies.”

“Flooding damaged many houses in Baton Rouge, La. in 2017. For a time, that helped fill many rental apartments in this small city. But now many of the houses are repaired and are attracting apartment renters, pushing average rents lower over the 12 months that ended in the first quarter. ‘San Antonio is another market where supply is the main culprit,’ according to the research firm. Developers opened 11,000 new apartments over the past two years, a 6.8 percent increase in inventory, which is 24 percent above the historical average for 2002-2016.”

“‘Landlords are offering generous concessions,’ says Barbara Denham, senior economist for Reis. ‘There is significant new construction throughout New York City, including the Upper Manhattan submarket. Secondary core submarkets like Long Island City in Queens are also already showing negative rent growth, and led the nation in the amount of new apartments under construction today, according to CoStar.”

From Realtor.com. “College Station is best known as the home of Texas A&M University and more than 68,000 students. But these Aggie football fans got a little carried away on their latest housing boom, putting up too many new residences. As a result there are more homes for sale than buyers to scoop them up. Hence, the discounts. ‘To be blunt, the housing market is crashing right now,’ says Jeff Leatherwood, a broker at Aggieland Properties. ‘Properties built for the purposes of student housing are just overbuilt. We are a huge college town, and most of our market is rental properties.’”

“This overabundance of housing, particularly homes aimed at students, could get worse before it gets better, local professionals fear. ‘There is an air of doom and gloom,’ Leatherwood says. ‘When the school year starts again in September, homes [that didn't get student renters] will flood the market.’”

From the Seattle Times in Washington. “The shift has been sudden: Last year, rents rose about 4 percent. Just two years ago, rents were soaring as much as 9 percent annually. ‘One, two, three years ago, we would literally have people move out and we’d be there to do a quick cleaning, and change the locks, and have someone literally move in a couple hours later. We didn’t lose a day of rent,’ said Chris Benis, who rents out a dozen houses on the Eastside. Some tenants would even rent houses sight unseen.”

“But in the last couple months, two of his houses became vacant and drew just one tenant application each, and it took about a month to rent out each house. ‘We didn’t have people banging down the door to rent’ them, Benis said.”

“Rents at Seattle-area apartment buildings have also cooled way down recently, and are actually below their highs reached last summer. But dig deeper and it’s a bit confusing: Experts have pinned the apartment-rent slowdown on the record number of new apartments flooding the market. Julie Purchase, principal of Avenue One, which manages about 600 single-family home rentals in Greater Seattle, said the huge jump in new apartments has had a chilling effect on the home rental market, too.”

“Purchase said in the last few years her firm could automatically raise rents about 10 percent when a new tenant came in — now they’re cutting rents 5 to 10 percent just to get enough applicants, and even still, it’s taking about two weeks longer to rent the typical house than it used to. ‘I expect it to be tough (to raise rents) as long as they continue to build 11,000 (apartment) units a year here,’ Purchase said.”

“One wild card to watch out for is whether landlords cash out and sell their houses now to take advantage of the for-sale market, which continues to be as hot as ever — particularly now that home rentals aren’t offering the same returns. Purchase said last spring about 5 to 10 of her clients sold their rental houses, while this spring it’s tripled to about 25 to 30. About 30,000 single-family homes across the region were converted from for-sale to rentals during the housing bust. In all, about 145,000 houses in the Seattle metro area are now rented out. There are only about 4,300 houses on the market right now in the metro area, so even if a fraction of those rentals went up for sale now, it could make a difference.”

From the Daily Camera in Colorado. “A group of Boulder renters are facing rent increases as high as $500 a month after their landlord reneged on lower rates. The complex’s owner says the situation was a result of a mistake made by a previous property management company. Caught in the middle are the tenants of Wonderland Creek Townhomes, who have until June 8 to make a decision: either pay up or move out.”

“The former property management group, Brinkman Construction, of Fort Collins, sent out letters March 28 to residents notifying them of the hikes, and a Saturday deadline to announce their intention to stay or vacate. Four Star took over May 1. On May 16, the company sent out a notice that Brinkman had acted ‘without the owners (sic) consent or approval’ and gave the renters one week to decide whether to renew under increases that were $700 to $800 higher than the rates Brinkman offered. ‘Unfortunately, the renewal rates that were offered by Brinkman cannot be honored by the owner as this would significantly impact the community and interfere with the overall well-being of the asset,’ read the letter, copies of which were obtained by the Camera.”

“As a nod to the about-face, the new, higher rents were presented as discounts from market rates that Four Star could charge; about $200 less, on average. ‘The owner has consciously and generously agreed to a concession,’ the letter read. Scott Woodard, a representative for the group that owns Wonderland Creek Townhomes, said substantial increases were needed because the current lease rates were special, move-in deals offered in the complex’s first year to prop up vacancy.”

“‘We couldn’t continue to honor any more of those rates at that point when we discovered that error’ on May 15, Woodard said. ‘We were back on our heels as far as these letters of intent, and it’s going to cost us a lot of money.’”

“Shelly Darnutzer has already made up her mind. ‘If this is the final offer,’ she said, ‘then I will be moving out.’”

The Democrat and Chronicle in New York. “Kevin Morgan, a nephew of Robert ‘Bob’ Morgan, pleaded not guilty Tuesday morning for his role in a years-old fraud scheme. Kevin Morgan, 42, is accused of fraud in a 62-count indictment that includes Robert Morgan’s son Todd Morgan, 29, and two others — Frank Giacobbe, 43, of East Amherst, Erie County, and Patrick Ogiony, 34, of Buffalo. He was arraigned midmorning in federal court in Buffalo and is being held in lieu of $100,000 unsecured bond.”

“The four men are charged with wire fraud, bank fraud and conspiracy to commit wire fraud and bank fraud. They are accused of obtaining over $167.5 million worth of loans connected to seven properties, including apartment complexes in Buffalo, Syracuse and Avon, Livingston County. Kevin Morgan is the last of the four to be arraigned on the charges in federal court in Buffalo. He is vice president of Perinton-based Morgan Communities, while Todd Morgan is a project manager. Robert Morgan is chief executive officer. Kevin Morgan was indicted on 35 counts, while Todd Morgan was indicted on 26 counts.”

From Rochester First. “Todd Morgan, the son of prominent Rochester developer Bob Morgan, pleaded not guilty to charges of fraud on Thursday. Prosecutors say Todd and his cousin Kevin Morgan misled financial institutions in order to get bigger loans for seven properties across Western New York. Prosecutors say the pair would take steps, like turning on televisions and radios, to make vacant buildings appear occupied.”

“Two loan officers, 43-year-old Frank Giacobbe of East Amherst and 34-year-old Patrick Ogiony of Buffalo, were also charged in the case. And Wednesday, U.S. Attorney J.P. Kennedy said the investigation is still underway and more people could face charges in the investigation.”




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87 Comments »

Comment by Ben Jones
2018-05-30 08:56:09

‘Purchase said in the last few years her firm could automatically raise rents about 10 percent when a new tenant came in — now they’re cutting rents 5 to 10 percent just to get enough applicants, and even still, it’s taking about two weeks longer to rent the typical house than it used to. ‘I expect it to be tough (to raise rents) as long as they continue to build 11,000 (apartment) units a year here’

You are fooked Julie.

‘the current lease rates were special, move-in deals offered in the complex’s first year to prop up vacancy. ‘We couldn’t continue to honor any more of those rates at that point when we discovered that error’ on May 15, Woodard said. ‘We were back on our heels as far as these letters of intent, and it’s going to cost us a lot of money.’

This is one of the funniest things I’ve seen so far. You are fooked too Scott. Turn on the radios!

Comment by Mafia Blocks
2018-05-30 09:43:46

Another newly cast episode of ‘Meet The Cratertons’

 
Comment by Ben Jones
2018-05-30 10:29:23

‘‘I expect it to be tough (to raise rents) as long as they continue to build 11,000 (apartment) units a year here’

Not true Julie. It’s going to be tough for years after they stop, which is a ways off.

‘One wild card to watch out for is whether landlords cash out and sell their houses now to take advantage of the for-sale market, which continues to be as hot as ever — particularly now that home rentals aren’t offering the same returns. Purchase said last spring about 5 to 10 of her clients sold their rental houses, while this spring it’s tripled to about 25 to 30…about 145,000 houses in the Seattle metro area are now rented out. There are only about 4,300 houses on the market right now in the metro area, so even if a fraction of those rentals went up for sale now, it could make a difference’

A shortage indeed. If the Seattle Times is publicly worried, it must be pretty bad already.

Comment by MGSpiffy
2018-05-30 12:50:12

Even thought the Seattle Times is noticing what’s going on, they’re still not doing a good job of actual reporting, which involves asking questions and digging deeper.

The articles yesterday were implying that the glut of one bedroom and studio apartments was directly responsible for SFH rents softening. There is very little overlap between the people who primarily rent each class (young & single, vs families) unless you count frivorsed dads.

Yes SFH rent trajectory is plateauing, but they missed the chance to look deeper and see that there are even more factors at play then just the number of tiny lux apartments coming online downtown. But hey, it keeps the narrative (and solutions simple).

I expect the reporters will continue to be surprised and caught off guard as this things plays out.

 
 
Comment by whirlyite
2018-05-30 10:39:17

“Scott Woodard, a representative for the group that owns Wonderland Creek Townhomes, said substantial increases were needed because the current lease rates were special, move-in deals offered in the complex’s first year to prop up vacancy.”

Well, with those increases I’m sure the vacancy problem will just go away!

Comment by Carl Morris
2018-05-30 10:48:10

I don’t think any of those vacancy stories are from Boulder, where that story of the price increase is from. Boulder hasn’t allowed many new buildings to be built because they religiously resist growth to avoid becoming a suburb of Denver AND to enrich the current owners. I do expect a crash there someday, but they may be one of the very last to fall.

Comment by Ben Jones
2018-05-30 11:03:41

September 18, 2017

“More than 1,000 apartments and rooms for rent are sitting empty in Boulder right now, either too expensive or too old or just too inconveniently located for someone to claim. Renters have never had more choices, as reflected in the 7.9 percent vacancy rate — a 10-year high watermark. ‘We cringe every time we see a new complex approved,’ said Gary Epperson, of Longmont’s PMP Realty, which manages hundreds of for-rent rooms and homes in Longmont. He admitted there is always a chance of oversupply as financial backers of such projects, reacting to a stated need, overindulge on the promise of a healthy return.”

“The picture is much the same across the region. From 2011-2016, 56 percent of all new housing units in Boulder County were multi-family, the projects more likely to be rented than owned. And active development in the two biggest cities, Boulder and Longmont, is even more skewed: For every single-family unit under construction or in the permitting process, there are three planned multi-family dwellings.”

http://thehousingbubbleblog.com/?p=10205

January 5, 2018

“The crazy-hot real estate market that Boulder County has experienced the past four-plus years began to cool in 2017, but you might not know it. Homes are still selling for record highs. Well-priced properties still bring multiple offers. And homeowners this year got hit with property tax assessments that — combined with values of commercial properties — grew 35.7 percent from 2013, the largest increase in at least 20 years, according to the Boulder County Assessor’s Office. ‘The market has definitely slowed some — thankfully, I would say,’ said D.B. Wilson, of Re/Max of Boulder, who provided the data. ‘It takes awhile for everyone to realize the market has turned.’”

http://thehousingbubbleblog.com/?p=10304

October 3, 2017

“Baby boomers have inspired a building boom across Boulder County as developers rush to construct senior housing for a local population that, by 2030, will make up a fifth of the county’s residents. A dozen developments have been constructed since 2012, with three more under construction or in planning. All told, they will add nearly 1,000 units to the county’s stock of senior housing. But as the silver tsunami sweeps the local housing market, some areas are feeling flooded. Lafayette, home to more than a third of new senior housing since 2012, is contemplating a temporary halt to boomer-focused building that, it says, is overwhelming the city’s emergency services.”

“The glut of senior construction has not been restricted to Boulder County. Apartments and assisted living facilities are going up all along the Front Range. Elizabeth Borden said that, at any given time, she is tracking 30 properties under construction for her senior housing market analysis company, The Highland Group in Boulder.”

“Market-rate assisted living units average $4,000 per month on the low end, Borden said. Memory care dwellings begin at $5,000 per month. Only a handful of properties — four or five, according to Borden — in the county accept Medicaid. ‘If you’ve got enough money to pay for it, you can find the housing you need,’ said Borden. ‘If you can’t afford those market rents, you’re down to some very limited choices.’”

http://thehousingbubbleblog.com/?p=10220

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Comment by Carl Morris
2018-05-30 11:12:59

Interesting. But Boulder County != Boulder. Longmont has no problem with building all they can. In that first quote he says “Boulder” but immediately starts talking about Longmont. Suggests to me that he meant Boulder County.

 
Comment by In Colorado
2018-05-30 14:01:24

Good point Carl. While the City of Boulder has restricted construction for decades, Boulder county has not. Boulder has the so called “Green Belt” to isolate it from the rest of the county.

That said, I can’t stand Boulder. Too many limousine liberals for my taste.

 
Comment by Carl Morris
2018-05-30 14:45:09

That said, I can’t stand Boulder. Too many limousine liberals for my taste.

Having lived there for years, I can’t argue, but there are plenty of people (particularly east of Foothills Parkway) who don’t fall under that description. And the famous liberal tilt is mostly about virtue signaling. As I’ve mentioned here before as soon as the Hispanic percentage in a given school reaches a critical threshold they abandon the school so fast you can’t imagine it’s the same people. But it is.

All in all I like the place…I’ve been missing some of the restaurants there a lot lately.

 
Comment by In Colorado
2018-05-30 16:01:55

And the famous liberal tilt is mostly about virtue signaling.

Absolutely.

As I’ve mentioned here before as soon as the Hispanic percentage in a given school reaches a critical threshold they abandon the school so fast you can’t imagine it’s the same people.

I’ll bet a lot of them send their kids to places like Daw$on $chool in Lafayette. I’ve hear that annual tuition is well above 20K.

All in all I like the place…I’ve been missing some of the restaurants there a lot lately.

Its only redeeming feature.

 
 
 
 
Comment by Prime_Is_Contained
2018-05-30 20:25:33

You are fooked Julie.


Julie Purchase, principal of Avenue One, which manages about 600 single-family home rentals in Greater Seattle

Julie will likely be just fine. She manages OTHER people’s rentals; in other words, she’s overhead, not equity. The actual owners will be losing their shirts, but the last thing those owners will want to do in a declining market is to have their units sitting empty. I would guess that property managers will do ok.

Comment by Ben Jones
2018-05-30 20:48:17

‘I would guess that property managers will do ok’

Maybe not in College Station. Could be an opportunity there.

 
 
 
Comment by Ben Jones
2018-05-30 08:59:44

‘‘Properties built for the purposes of student housing are just overbuilt. We are a huge college town, and most of our market is rental properties.’

It isn’t a huge college town Jeff. It’s kinda small actually.

‘This overabundance of housing, particularly homes aimed at students, could get worse before it gets better, local professionals fear. ‘There is an air of doom and gloom’

Your words mate. For my part, I am enjoying the whole thing.

Comment by brazendetre
2018-05-30 13:20:21

Maybe he means the students are huge, as in fat.

Another thought - Ben, consider doing a podcast. Maybe a weekly dissection of all the latest REIC lies with some biting humor ridiculing these fools. Have some of the peanut gallery (us) skype in to offer our witty slams. If it gets huge (not fat huge, but popular), you could hire the guys that did the puppets for crank yankers.

Comment by Mafia Blocks
2018-05-30 16:04:34

That’d be great. WHHB Radio with your host Ben Jones. Exposing the lies, corruption, fraud, treason and deceit in all matters housing.

Calling in today is noted senior housing analyst Mortgage Watch.

 
Comment by snake charmer
2018-05-30 18:16:06

Are we really that witty? Then again, given this reality, the jokes tell themselves.

 
Comment by DirtyLawyer
2018-05-30 22:11:51

This is an outstanding idea.

Comment by oxide
2018-05-31 07:13:49

It’s a great idea, but it sounds time-consuming.

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Comment by Ben Jones
2018-05-30 09:03:08

From the first link:

“The only spots where you might find effective rents dropping are in locations affected by a large number of new developments leasing up,” says Ron Witten, founder of data firm Witten Advisors, based in Dallas. “The concessions which these projects offer during initial lease-up sometimes spread to nearby properties.”

‘New apartments flood Austin’

“Among big metros (the 50 largest nationally), the only spot with actual rent cuts on an annual basis is Austin, Texas,” says Greg Willett, chief economist for property management software and services provider RealPage, Inc., based in Richardson, Texas.’

Somebody is a lion. But this is how these idiots got into this situation. So called experts and consultants told the greedy bashtards what they wanted to hear. Have a good bankruptcy!

Comment by Ben Jones
2018-05-30 09:07:14

‘the only spot with actual rent cuts on an annual basis is Austin, Texas’

Greg, meet Julie. Julie, meet Greg:

‘now they’re cutting rents 5 to 10 percent just to get enough applicants, and even still, it’s taking about two weeks longer to rent the typical house than it used to. ‘I expect it to be tough (to raise rents) as long as they continue to build 11,000 (apartment) units a year here’

 
Comment by In Colorado
2018-05-30 09:22:59

So called experts and consultants told the greedy bashtards what they wanted to hear.

I used to work with a guy who had previously worked for a large consulting firm. He told me that their standard mode of operation was to figure out what the client wanted to do, and then recommend that as the best course of action. He said that clients understood that’s what was being done, and they we OK with that, because if the decision backfired management could say “We hired the best consultants money can buy, and we followed their recommendations”.

As far as real estate goes, should the experts have said what they didn’t want to hear, they would have looked for more “experts” until they heard what they wanted to hear.

Comment by Ben Jones
2018-05-30 09:33:05

’should the experts have said what they didn’t want to hear’

That’s what they are paid for. Otherwise you get this:

‘There is an air of doom and gloom’

That means defaults, bankruptcy, cascading defaults, people lose their retirements, maybe a few suicides.

 
 
 
Comment by Mortgage Watch
2018-05-30 09:03:11

Lone Tree, CO Housing Prices Crater 19% YOY As Housing Correction Ravages Denver Area

https://www.zillow.com/lone-tree-co/home-values/

*Select price from dropdown menu on first chart

 
Comment by Professor Bear
2018-05-30 09:03:54

I guess the Bond King should have stuck with U.S. Treasurys.

The Financial Times
Fund management
Bill Gross’s fund suffered worst day since launch
Decline of over 3 per cent occurred as Italian crisis rocked fixed income markets
new 39 minutes ago

Comment by BlackSwandive
2018-05-30 09:27:13

Good. He’s just another one of the sleazy insiders.

 
Comment by Ol'Bubba
2018-05-30 09:57:30

Bill Gross, the BSD, got schlonged.

 
 
Comment by Ben Jones
2018-05-30 09:28:22

‘They are accused of obtaining over $167.5 million worth of loans connected to seven properties’

Involved with over 30,000 apartments in several states, potential appraisal fraud including the GSE’s, and not a peep out of the national media. Hmmm.

Comment by Mafia Blocks
2018-05-30 09:47:52

Stranger yet is these perps are everywhere.

 
 
Comment by Mr. Banker
2018-05-30 09:40:39

The entire planet is populated by a bunch of dummies. I present to you Exhibit A:

“Bitcoin craze fuels new breed of gambling addicts”

“THE crypto craze is sweeping the world and making people think they can get rich quick. But an ugly truth awaits.”

“A HOSPITAL in the UK has begun offering treatment for bitcoin addicts as the cryptocurrency craze fuels a new breed of gambling addicts.

“Castle Craig Hospital in Scotland has launched a program aimed specifically at people who are hooked on trading digital currencies like bitcoin.

“The hospital specialises in treating addictions and had been asked to help people with cryptocurrency problems. It has already seen patients who are totally consumed with trading in the currencies - including some who were not already suffering other forms of addiction.

“Dr Mark Griffiths, Professor of Behavioural Addiction at Nottingham Trent University, said the addictions were “a subtype of online day-trading addiction. I see these as akin to a gambling addiction”.

“It is a form of gambling [and] people gamble on all kinds of things which makes cryptocurrency trading exciting. Compulsive gamblers like it - it’s mysterious, not really regulated and you can make huge gains - and huge losses - in a single day.”

“And that’s where the havoc begins.

“People dive in because they don’t want to miss out on a good thing and they start putting money in without thinking about the consequences. But the reality is [cryptocurrency] trading is a fascinating idea, but it can do a great deal of harm.”

(snip)

“There are around 13 million people across the world trading in the system.”

Bahahahahahahahahahahahahahahahahahahahahahahahahahahahaha.

“A lot of people hear about something like this [and] they go for a gamble because they don’t want to miss out on the next good thing - a lot of addictive behaviour comes from computers and the internet. This is another specific example that is really, really dangerous.”

“The situation “just goes bad” from there.”

“The patients he had worked with had been desperate and on the verge of suicide.

“They are in desperate need of help and are isolated. People don’t realise if you spend 14 hours or so a day on a computer doing this sort of thing it has really negative consequences on other aspects of your life.”

“Bitcoin trading therefore was a very modern take on an old problem. That means often people had no idea they were at risk until it was too late.

“Anybody who is involved with cryptocurrency trading who thinks they could have a problem, chances are they probably do.”

https://www.news.com.au/technology/online/bitcoin-craze-fuels-new-breed-of-gambling-addicts/news-story/7b20ef68e16e3c260417e8a724cc9cab

Comment by BlackSwandive
2018-05-30 11:32:27

This is the DUMBEST.BUBBLE.EVER.

Comment by BlueSkye
2018-05-30 18:55:55

Poor, poor Alphonso.

 
 
 
Comment by Justme
2018-05-30 10:36:02

>>The number of new apartments scheduled to open in the U.S. totals 274,700 units, up from 235,300 units added in 2017 and 220,800 units added in 2016, according to Reis Inc.

These must the current monthly numbers, right? Not yearly?

Comment by Ben Jones
2018-05-30 10:47:04

It’s the annual numbers I think. Some say we’re working on 300k units, the highest in around 40 years. This doesn’t include condos which are often held for rent. That is what’s killing NYC right now.

Comment by Mafia Blocks
2018-05-30 10:56:14

Now stack on tens of millions of excess, empty and defaulted houses with tens of millions more just beginning to empty and you’ll realize these people have been lying like a rug.

 
 
 
Comment by JAMESJIM
2018-05-30 10:57:48

I need CA housing to pop, looking to move to OC in mid 2019, will be looking to pay cash for house in the 750-900K range, Irvine, Costa Masa, Dana Point.

Comment by BlackSwandive
2018-05-30 11:54:46

2019 is a pipe dream. We’re at the peak right now. It takes YEARS for real estate to correct. The bottom would likely not be until 2023 at the earliest.

Comment by Mafia Blocks
2018-05-30 12:42:04

Why buy it when you can rent it for half the monthly cost?

Buy later after prices crater for 75% less.

 
Comment by taxpayers
2018-05-30 13:28:48

4th qutr odds start for recessions is only 21% vs 2020 60%

 
 
Comment by Young Deezy
2018-05-31 07:44:23

LOL @ wanting to actually move TO california. I want out so bad I can almost taste it.

 
 
Comment by Mortgage Watch
2018-05-30 11:16:02

Seattle, WA 98121 Rental Rates Crater 9% YOY As Market Floods With Excess Housing Inventory

https://www.zillow.com/seattle-wa-98121/home-values/

*Select price from dropdown menu on rental chart

 
Comment by Apartment 401
2018-05-30 11:20:09

Realtors are liars.

 
Comment by Nutshot
2018-05-30 11:45:43

Turbo tax and a couple other websites now have calculators up to estimate your tax return for 2018 and compared to 2017 so you can see the difference pre/post tax reform. Ran a basic scenario where both my wife and I work, child is in day care, and comparing if we had a $300,000 mortgage with $12,900 in annual interest and $4,400 in prop tax.

In 2017 with no house our tax bill was $15,058, if we had owned a house and itemized our tax bill would have been $12,358 (wow buying that house “saves” me almost $3,000….Yay!!!)

In 2018, no house tax bill is now $11,133, and owning a house tax bill is $11,133 (hey wait a minute, are you saying a can’t pretend to be a tax genius to my friends for owning a house…Booo )

On a side note….tax reform lets me keep $4,000 more of my monies ….Yay again!!!!

Comment by taxpayers
2018-05-30 13:27:09

figure 1-2% a year for repairs etc

 
Comment by oxide
2018-05-30 13:27:18

I ran a scenario too. Looks like I will get less in my tax refund, but more in my paycheck, for an overall gain of $800. I hear that this is typical.

Comment by Mafia Blocks
2018-05-30 14:27:16

Hey Donk

 
 
 
Comment by hwy50ina49dodge
2018-05-30 12:01:53

Wonder iffin’ they ever use Amazon delivery $ervice for their need$?

These hedge fund managers made more than $3 million a day last year
Robert Frank | CNBC
Published 1 Hour Ago

To really understand how much the hedge funders earn, you need to break it down, by days and hours. The top four hedge funders earned more than $3.5 million per day last year — assuming they worked all 365 days. And assuming that they worked 24 hours a day, they each earned more than $145,000 per hour, or $2,400 per second.

Put another way, the top hedge funders earned more than twice as much in one hour as the average American makes in a year

https://www.cnbc.com/2018/05/30/these-hedge-fund-managers-made-more-than-3-million-a-day-last-year.html

Comment by MGSpiffy
2018-05-30 12:59:41

I wonder how many of those hedge funds manager already have doomsday retreats in New Zealand and private jets on the standby to evac if the mobs come after them?

Comment by In Colorado
2018-05-30 14:08:52

They need a way to get to the airfield (ditto for their crew). I suppose that a good helicopter can handle that. Of course, there is the possibility that the mobs will be waiting for them by the jet. Imagine arriving at your private airfield, just to find it on fire.

These guys are gonna have to head out well before the SHTF.

Comment by MGSpiffy
2018-05-30 14:53:36

Easy enough to do if you own the media. They probably have the equivalent of their own Red BatPhone to alert them before everyone else finds out.

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Comment by In Colorado
2018-05-30 15:53:52

I suspect they would high tail out between DEFCON 3 and 2. Between 2 and 1 could be a bit risky.

 
Comment by OneAgainstMany
2018-05-30 18:55:46

Plato argued that the richest members of society should earn no more than four times the poorest.

 
 
 
Comment by snake charmer
2018-05-31 07:34:24

The sad thing is, they apparently believe that they can emerge from their doomsteads when everything has blown over, and pick up right where they left off. Or even create a new society which they will proceed to mold in their own greedy, amoral images.

Too bad that $3 million per day can’t buy some perspective.

 
 
Comment by TIC TOK
2018-05-30 15:37:37

So?

Comment by hwy50ina49dodge
2018-05-30 15:52:12

$hame on ‘em for exploiting the U$ taxpayer$ Po$tal $ervice for their toilet paper$ deliverie$.

 
 
 
Comment by Sam (SW)
2018-05-30 12:17:58

Today’s articles confirm my theory that multifamily rents decreasing will affect single family rents. My next theory to prove is that MFR/SFR rents decreasing will affect SFR prices. It looks like Seattle will prove that theory right first.

Comment by OneAgainstMany
2018-05-30 18:58:47

The thing about the Great Recession is that a bunch of people lost their home and so they became renters. And the low interest rates pushed developers into an apartment boom. But now it’s about done, overblown in some areas. If they want to keep building and getting paid, they are going to have to shift to building townhouses, row houses, and condos (the relatively affordable stuff). Their target market is all of those people living at home with mom and dad, doubling up, or in multi-family. All of this should push rent down, at least that is what I am hoping for.

 
 
Comment by Mortgage Watch
2018-05-30 12:35:56

San Diego(Northpark), CA Housing Prices Crater 8% YOY On Plunging Housing Demand

https://www.zillow.com/north-park-san-diego-ca/home-values/

*Select price from dropdown menu on first chart

 
Comment by MGSpiffy
2018-05-30 12:56:32

Was driving back home with lunch from the Teriyaki place when I notice an open house up the street from me. I stopped in to check out the pace and chat with the realtor.

Even after explaining I was just a noisy neighbor, when I told her I was hearing some really mixed signals from my friends in RE, she launched into the stock “All is great here Citizen! It’s never been a better time buy, and it will always be better to buy now than later.” “Nope, no slowdown here.” She seemed offended that I didn’t speak the party line.

But then I realized - she has $47K in seller’s commissions riding on her drinking the Kool-aid. I’ll take Upton Sinclair’s version of the quote:

““It is difficult to get a man (or woman) to understand something, when his (her) salary depends upon his not understanding it!””

Comment by In Colorado
2018-05-30 15:50:36

A 1.5M house (assuming seller’s commission is 3%)

So, if she’s selling one a month, that’s a cool 500K+ per year in commissions.

Comment by MGSpiffy
2018-05-30 17:43:27

Yeah, ~$1.5M - I thought it was about average/median for existing non-watefront in this zip code. But checking zillow, it’s the 8th cheapest out of 59 houses listed for sale.

She only needs to sell one every 4 months to be pulling $140+ a year.

The problem of course is supply. We have an overpopulation of realtors, and they are hustling to find listings.

Most of the houses I’m seeing listed around here are over $2M (That where new construction starts pretty much - only 14 listing below that mark out of ~6000+ homes in the zip code) and quickly you get into the $3M+ range. And once there, most things are lingering on the market for a while. (Even the realtor admitted that).

I bought at almost exactly 1.0M and that’s with an AGI that’s been over 400 for a few years now, and I have no idea how I could have gone after anything more unless I had a previous place that had appreciated out the wazoo.

Comment by BlueSkye
2018-05-30 19:05:07

“It is difficult to get a man (or woman) to understand something…”

Can’t give up the house hunting addiction?

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Comment by taxpayers
2018-05-31 07:12:47

most time the realtor gets 1.5% they may sell their own listing 40% ? of the time.

 
 
 
Comment by taxpayers
2018-05-30 13:25:12

after snarfing 100+ billion form US taxpayers LA is back to being a shthole state.

Comment by In Colorado
2018-05-30 14:09:53

But it has Disneyland! (OK, it’s in Anaheim, not LA)

Comment by Drater
2018-05-30 17:41:01

Since when is Los Angeles a state?

Comment by In Colorado
2018-05-30 18:15:02

LOL! Taxpayers was probably referring to Louisiana.

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Comment by TIC TOK
2018-05-30 15:22:53

You should never ever get a refund. Always owe money. Why lend the IRS money at 0% for a full year? Always aim to owe a little on April 15.

My tax cut will be in the $7k range. Biggest benefit is the child tax credit. I used to be too “rich” for it. Now the income limit is much higher and I qualify. 2 kids at $2k per equals kaching!! Plus the lower rates kick in another $3k or so. My state has no income tax and combined sales and prop tax is right around $10k so the SALT limit will barely touch me, if at all. Mortgage is well below $750k so that doesnt touch me either.

This was about the best tax bill I could have hoped for, all the new benefits with none of the lost deductions.

Comment by TIC TOK
2018-05-30 15:29:36

Ugh. This was meant as a reply to Oxide further up re: tax refund $800

Comment by BlueSkye
2018-05-30 19:13:11

Good for you! Those pennies are such a joy when you’re throwing a million pounds in a hole.

 
 
Comment by cassiopeia
2018-05-30 16:17:16

Lucky you. Here in California I haven’t done the math yet but I think we are screwed by less state tax deduction. And we don’t own a house.

Comment by TIC TOK
2018-05-30 16:33:52

CA votes 65% Dem who call for more taxes every election. They got what they wanted. Trump is so awesome he cut taxes for those who want less tax and imcreased taxes for those who want more tax. A genius that one is I yell ya.

Comment by cassiopeia
2018-05-30 17:24:35

I did not vote for Dems, neither did I vote for Trump :-(

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Comment by hwy50ina49dodge
2018-05-30 20:32:22

Trump said he was $mart because he pay$ 0 zero taxe$ … How do US soldiers get military equipment?

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Comment by jeff
2018-05-30 15:44:26

Whatever happened to “Sticks and Stones”?

Comment by Apartment 401
2018-05-30 16:36:28

Roseanne’s comment about Valerie Jarrett was probably racist but her tweet about Hillary Clinton being a colostomy bag full of shit was spot on.

Hillary Clinton can not control her bowel movements. And in every recent public appearance she’s been dressed for winter weather in summer to cover some kind of back brace.

Ben Jones, real journalists will not report this, because real journalists only report fake news. Hillary Clinton is too sick, too weak, and too old to be in public office.

 
 
Comment by Mortgage Watch
2018-05-30 15:56:54

“Realtor Arrested For Felony Theft”

Realtor arrested for felony theft

Comment by Mortgage Watch
Comment by Drater
2018-05-30 17:42:56

Every closing is a felony theft…

Comment by Mr. Banker
2018-05-31 05:34:59

Every closing is a gift, a gift that keeps on giving month after month - for years.

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Comment by cassiopeia
2018-05-30 16:15:28

Speaking of rentals. Yesterday on Zillow I came across this foreclosure listing in a very fancy zip code in LA

https://www.zillow.com/homes/for_sale/Los-Angeles-CA-90024/20525205_zpid/96005_rid/34.109104,-118.394337,34.022288,-118.479395_rect/13_zm/4_p/?view=public

I imagine there was a big remodel between the 2015 sale and the 2016 attempted sale, but what caught my attention is they also put it twice on the market as a rental, first at $11,000 and then at 9,900 per month. It obviously did not work out because the house has been foreclosed on and is back on the market at the 2015 price, but I was struck by the totally crazy thought that 9K rent for a 6 bedroom house in a top zipcode is comparatively a better value than a nice 3 bedroom in the same zipcode with an asking price of over 6K (let alone the 5K in my nearby and less fancy zipcode).

https://www.zillow.com/homes/for_rent/Los-Angeles-CA-90024/96005_rid/34.109104,-118.394337,34.022288,-118.479395_rect/13_zm/

So, besides the flood of credit that created oversupply at bubble prices (thank you, Ben, for that lesson), once this starts to play out, what is going to happen to the SFH rental market? Could that also create a feedback loop that will further depress the purchase market? In a non-bubble world, house prices are supposed to correlate with rental prices.

Price History
DATE EVENT PRICE $/SQFT SOURCE
01/17/18 Sold: Foreclosed to lender $1,950,000-34.8% $527
07/11/17 Listing removed $2,990,000 $808 Keller William…
07/04/17 Pending sale $2,990,000 $808 Keller William…
06/07/17 Price change $2,990,000 $808 Keller William…
06/01/17 Listing removed $9,900/mo $2 Keller William…
05/30/17 Listed for rent $9,900/mo $2 Keller William…
03/14/17 Listed for sale $3,299,000 $892 Keller William…
12/09/16 Listing removed $11,900/mo $3 Keller William…
10/19/16 Listing removed $3,499,000 $946 Keller William…
10/10/16 Listing removed $11,900/mo $3 Keller William…
09/08/16 Price change $3,499,000-5.4% $946 Keller William…
07/28/16 Listed for sale $3,699,000+89.7% $1,000 Keller William…
03/30/15 Sold $1,950,000-29.1% $527
Public Record

01/17/09 Listing removed $2,750,000 $743 NRT California
11/21/08 Listed for sale $2,750,000+340% $743 NRT California
08/23/93 Sold $625,000 $169
Public Record

 
Comment by Mortgage Watch
2018-05-30 18:19:24

Arlington, VA Housing Prices Tank 7% YOY As NoVa/DC Market Craters

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

 
Comment by Ben Jones
2018-05-30 19:43:02

Italy on the edge of crisis: Should Europe be worried?

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

“Can we still call Italy a democracy?”

“They will teach us how to vote.”

 
Comment by Prime_Is_Contained
2018-05-30 20:28:35

Thought for the day: the vacancy rate that REITs will happily ignore goes DOWN as rates tick up..

 
Comment by BubblevilleCA
2018-05-31 06:27:58

Just watched this video about real estate in SoCal.

https://www.pbs.org/video/southern-californias-real-estate-bubblereal-or-new-normal-

Have to love how the realtors in this video swing around on the “buy now” mentality after they get set straight by the cast and reporter. I too have many friends and acquaintances that are realtors and the ones I know personally say DONT BUY NOW whereas the others use the logic that interest rates are sooooo low and inventory is running out (I’m a cash buyer and can wait so doesn’t apply to me) Most realtors are liars and know that the money train is coming to a halt and with a huge influx of people with no educational background or degrees aka used car sales gone realtor why not join in and help start the ne t financial bubble and ruin some dreamers futures. My friend got his real estate license here in California just so he wouldn’t have to pay some former Burger King employee gone realtor the crazy commission. He said he paid $60 to go take a 150 multiple choice question test (he paid $99 for a test sim that gave him all these answers) and wahlah a licensed realtor! I would never trust any realtor knowing all this. Might as well find a financial advisor and invest in there pitch for the next Enron!

Comment by Mr. Banker
Comment by Carl Morris
2018-05-31 09:55:57

My friend got his real estate license here in California just so he wouldn’t have to pay some former Burger King employee gone realtor the crazy commission.

Sounds like my kind of guy.

He said he paid $60 to go take a 150 multiple choice question test (he paid $99 for a test sim that gave him all these answers) and wahlah a licensed realtor!

Must be smarter than me. I don’t know how much I passed by but on my practice tests I never did very well. Always passing, but just barely.

 
 
 
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