The Punchline For Sellers Is They Followed The Market Down
It’s Friday desk clearing time for this blogger. “Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Like the last housing boom, some are starting to warn these price gains cannot continue. ‘The continuing run-up in home prices above the pace of income growth is simply not sustainable,’ wrote Lawrence Yun, chief economist for the National Association of Realtors, in response to the latest price reading from the much-watched S&P CoreLogic Case Shiller Home Price Indices. ‘From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent while the average wage rate has grown by only 14 percent.’”
“It’s not just San Francisco or Silicon Valley anymore, but a growing number of cities around the bay are now seeing median homes prices of over $1 million. There was some news recently that rents might be coming down, but home prices are still climbing and there’s no end in sight. ‘Sure, there are softening periods and typical cycles, but it’s always going to be restrained,’ said Vice President of Vanguard Properties Frank Nolan. In theory, there has been some downward pressure on the housing market recently. He does expect that home values will plateau at some point, but it’s anybody’s guess when that will happen.”
“‘Three years ago, if you had asked me the same question, I would have said by now something would have happened,’ Nolan said. ‘But the national economy is strong and the local economy is strong. I feel like we live at the center of the universe.’”
“New homes in the Houston region took nearly 5 days longer to sell and commanded slightly lower sales prices on average in April, a new report showed. Time on the market rose from 140.76 days in March to 145.37 days in April, according the HomesUSA.com Index. Houston new home prices fell by $2,664 to an average of $354,750 for the 12-month period through April. Builders have been shifting to more entry-level houses. ‘If you look at the trend lines over the last year, when it comes to the pace of new home sales, Dallas and Houston are going in the opposite direction,’ HomesUSA.com owner Ben Caballero. ‘The strength of the Dallas-Fort Worth new home sales market continues to impress, and the slowing sales pace in Houston is looking more like a trend than a bump in the road.’”
“New home starts rose modestly in Southwest Florida during early 2018, and higher home prices and interest rates could pressure future growth. Builders broke ground on 1,384 local single-family homes during the first quarter, up 2.3 percent over the year, Metrostudy said. The annual start rate of 5,654 units also was up 2.3 percent compared with 2017. Buyers closed on 1,108 units, down 14.1 percent from last year. The annual closings rate of 5,306 units was less than 1 percent above the same quarter last year. The final three months of the year is typically the biggest quarter for closings, Metrostudy noted, and they fell 14.3 percent from fourth-quarter 2017 to first-quarter 2018.”
“‘The greater risk lies in under-construction inventory, which rose 16.4 percent to 2,480 units,’ said Metrostudy regional director Tony Polito. ‘Homes that are ‘pre-sold’ do not always close. If any of that backlog moves to finished vacant over the next six months, this could be a sign of overbuilding and a cyclical peak.’”
“A staggering number of American homeowners remain under water on their mortgages a decade after the housing bubble burst. Almost 4.5 million households — or 9.1 percent — owed more than their homes are worth in the fourth quarter of 2017, according to Zillow, with an estimated 713,000 owing at least twice as much as their property’s value. While the percentage is declining, families in communities with stagnant property values are ‘trapped in their homes with no easy options to regain equity other than waiting,’ said Aaron Terrazas, a senior economist at Zillow.”
“Movement Mortgage said Thursday it is laying off 100 employees nationwide, including 18 in the Charlotte area, as the lender founded by a former Carolina Panthers player braces for an industry slowdown. Movement, based in Indian Land, S.C., attributed the cuts in operations positions to slower than expected loan growth. Affected jobs in the region are all at the company’s headquarters, Movement said.”
“Movement has said it made more than $12.8 billion in mortgages last year, a new company record. At the time, the company also noted it had increased its volume of loans for home purchases for nine years in a row. These are not the first layoffs to hit the privately held company in recent months. In February, Movement quietly laid off employees at its headquarters as well as at other offices across the U.S. ‘At Movement, we have a commitment to long-term growth and impact. This year, we are growing slower than we expected,’ CEO Casey Crawford said in a statement.”
“The average sale price of Canadian real estate is falling, and fast. Canadian Real Estate Association numbers show the average price of a home is down 11.3% in April 2018. Most of the declines are being attributed to the country’s largest and fastest falling real estate market – Toronto. Toronto, Thunder Bay, and Hamilton regions are the fastest falling compared to last year. Toronto saw the average sale price drop to $804,584, a 12.6% decline. Thunder Bay had an average sale price of $217,745, an 11.9% decline. Hamilton – Burlington saw the average sale price drop to $569,490, an 11.3% decline.”
“With the economy struggling to see growth and an oversupply of properties whose prices do not match current market conditions, the real estate sector could take a further nosedive over the next 12 months. Chief Operating Officer of Terra Caribbean Hayden Hutton gave the dim projection recently, as he pointed out that the number of properties to be sold over the next 12 months would depend heavily on a change in pricing. He said a substantial segment of the market had ‘grudgingly re-priced’ adding that this was where some movement was taking place.”
“‘The re-pricing effort has been driven in part by lending institutions marketing and selling distressed properties at scale,’ he said, adding that the re-pricing was taking place at all levels of the market. ‘The punchline for sellers with properties listed in excess of 36 months is they have likely carried their property unnecessarily and followed the market down,’ Hutton said. ‘With the considerable amount of inventory on the market perhaps it’s time for vendors to join together in universal acceptance that the old market is gone and the new market is here to stay, at least for the foreseeable future.’”
“The latest news from New London Architecture, the only body keeping a record on London’s burgeoning towerscape, is sensational. There are planned to be 511 more towers of 20 storeys or more added to the London horizon. Most estimates are that 60 per cent of prime London sales go to foreign buyers, most of these as so-called ‘buy-to-leave’. The former City of London planner, Peter Rees, told me he pleaded for new City towers to be offices, ‘because at least they would be occupied during the day’. In his own Heron Tower, a quarter of the flat keys had never been collected.”
“Previous London property bubbles — as in Victorian North Kensington — saw whole neighbourhoods slide rapidly downhill into multi-occupancy and squalor. More likely to happen is that, like the palazzi of Venice, the blocks will simply sit decaying as nest eggs for laundered cash.”
“Swedish premium property developer Axxonen is ceasing operations, according to the Swedish business site E55. Due to adverse conditions on the property market, the luxury apartments cannot be sold at commercially viable margins, Axxonen told the site via email. Axxonen, which focused on developing premium penthouses in central Stockholm locations, has been in financial trouble for some time. Last week, its subsidiary Axxonen Properties Management was declared bankrupt. Several members of the board have left.”
“Starting with a downturn on the housing market in Sweden last fall, the stocks of many property developers have fallen sharply. The tough times have continued into 2018.”
“Taipei reported the second biggest annual decline in luxury real estate prices in the first quarter of 2018, according to the Knight Frank Prime Global Cities Index. Taipei saw a 7.4-percent decline year-on-year in the first quarter this year, trailed by the Swedish capital Stockholm, which sits at the bottom with the largest price decline of 8.4 percent. Knight Frank pointed out that the number of cities that saw their housing prices decline annually has risen from 16 to 23 in the first three months of 2018.”
“There were 9,000 unsold first-hand private residential flats in completed projects as of March 31, Hong Kong Housing and Transport Secretary Frank Chan Fan said. He explained to lawmakers that these unsold units may be vacant, or units occupied by the developers for self-use, or even those rented out by developers (such as serviced apartments). ‘As developers are not required to declare the occupancy of these unsold units, we do not have information about the number of units rented out by developers among these 9,000 units,’ he said.”
“Sydney’s days of families spilling onto the streets at crowded home auctions or open for inspections have disappeared following a steep decline in demand for housing. This was evident in additional sales price data released by CoreLogic, which showed Sydney recorded its 10th successive month of price falls over May. CoreLogic analyst Cameron Kusher said the city has swung from an extreme seller’s market to a buyer’s one. ‘The mood of buyers has turned,’ Mr Kusher said. ‘They’re looking at the high prices and saying ‘this doesn’t make sense’, so the downturn has become pretty entrenched.’”
“Property investment expert James Nihill of Patrick Leo said buyers had more opportunities to get better deals on apartments. This was partly due to investors rushing to sell units they bought off the plan during the boom from 2013-2017. ‘They’re trying to offload them before settlement starts. It’s all at once so we could see unit prices become more affordable in the eastern suburbs and inner city soon as well,’ Mr Nihill said.”
“Big mortgages and rising rents are putting pressure on even New Zealand’s higher-earning families. Just over half of New Zealand households cut back on heating their homes in winter due to the cost. In Auckland, 55 per cent of households go cold in a bid to save in the power bills. In Wellington, it’s 52 per cent. In Canterbury, it’s 50 per cent. David Marra, manager of the Christchurch Budget Service, said his team were seeing an increasing number of people earning more than $65,000 a year who wanted help - often because their mortgage costs were taking a greater share of their incomes.”
“Statistics NZ data shows 30,000 households earning more than $100,000 last year said they did not have enough money to live on. Another 116,000 said they had only just enough. Financial coach Shula Newland said she saw people giving up house maintenance because they could not afford it. ‘Then they end up with a house that devalues.’ Financial coach Hannah McQueen said many people had resigned themselves to not getting ahead because of their big mortgages. ‘Heaven help us when the interest rates go up.’”
‘This was partly due to investors rushing to sell units they bought off the plan during the boom from 2013-2017. ‘They’re trying to offload them before settlement starts. It’s all at once’
It can happen fast Jimmy. (Can I call you Jimmy?) Now if I was interested in one of these airboxes, I might see a better price after these (cough) investors get nailed to the whipping post and I pick it up for 5 cents on the peso. Then again, given that a lot of these towers are going to be in overall default, why get involved at all?
Realtors are liars.
‘Just over half of New Zealand households cut back on heating their homes in winter due to the cost’
Stay classy NZ.
‘Builders broke ground on 1,384 local single-family homes during the first quarter…Buyers closed on 1,108 units, down 14.1 percent from last year. .. The final three months of the year is typically the biggest quarter for closings, Metrostudy noted, and they fell 14.3 percent from fourth-quarter 2017 to first-quarter 2018.’
‘The greater risk lies in under-construction inventory, which rose 16.4 percent to 2,480 units’
Dang, building more than you sell with thousands sitting there. That’s some shortage!
‘Just over half of New Zealand households cut back on heating their homes in winter due to the cost’
To paraphrase Han Solo: One thing’s for sure, they’re all gonna be a lot thinner.
The story ignores the soaring cost of energy as NZ prays to the AGW god.
https://www.reuters.com/article/us-newzealand-energy-analysis/new-zealand-push-on-clean-power-comes-with-high-political-economic-risks-idUSKCN1IX39X
Heating a house with electricity is a pricey enterprise, regardless of KWhr prices. I know a couple who heats their home with baseboard heaters (no nat gas in their nabe). It can cost $300 a month to heat their 1200 sq ft shack in the winter, and juice is relative cheap out here.
I think Ben meant to say “stay frosty”, because thats whats going to happen.
The many, many sheep in NZ (pronounced N-Zed) will be the ones getting thinned on a regular basis. Wool is warmth, no?
Families will have to house together, take on renters. Maybe give us more classic music a la (drumroll. . .) Crowded House?
Families will have to house together, take on renters…
Probably not. This is bubble thinking, assuming that house prices can never come down. Those who paid too much will default and find housing that they can afford.
“Families will have to house together, take on renters.”
In the depression era book, “Ten Lost Years,” there is a story about a family moving into their basement, renting their house. The wife also took on the role of concierge too… no mention of being asked about a tickle.
When you consider the massive entry and carrying costs, combined with their illiquidity, speculating in houses seems absolutely braindead. Add in income taxes on the “flip” and the numbers just don’t make sense whatsoever.
“absolutely braindead” = my customer base.
I think they should import large numbers of low IQ, uneducated immigrants to keep their housing prices up and create the wealth effect, you know the Obama plan.
Which is an extension of the Kalergi plan
http://rense.com/general96/kalergiplan.html
The “we wuz kangs” crowd co-opted by the (((usual suspects))) - and we slave for their worthless paper to pay for their adulterated food, shoddy air boxes, fake medicines and indoctrination camps/schools.
Consult your locally licensed real estate expert and analyst. They’ll show you how great it is to buy.
A staggering number of American homeowners remain under water on their mortgages a decade after the housing bubble burst. Almost 4.5 million households — or 9.1 percent
What % in the 1950s
‘Heaven help us when the intere$t rate$ go up.’
wrench.monkie$.throw$
kinda like when the tiny 3/16″ nut you can’t find, (on accounts it fell past the carburetor throttle body whilst you weren’t looking) slowly vibrates down the intake manifold and then … wait, everything has injector$ now, never mind, nothing can po$$ible go wrong, …it’$ different this time!
(The accelerator seem$ $tuck, huh?)
Poor Kiwis, they don’t have fixed rate 30 year mortgages or MID (they can write it off on rental properties, but not owner occupied properties)
The idea of maxing yourself out on a mortgage is already a foolhardy one, but doing it with a variable rate when rates are at historic lows …
Yeah, people are smart … what do the cut out after the heating goes? The lights? The cell phone? Do they live off of Ramen and bologna sandwiches?
I also believe that all Kiwi mortgages are recourse.
“You got to live somewhere.”
Why not get rich along the way?
Recourse is meaningless when your pockets are empty.
“Statistics NZ data shows 30,000 households earning more than $100,000 last year said they did not have enough money to live on. Another 116,000 said they had only just enough.”
What a bunch of dummies.
“Financial coach Shula Newland said she saw people giving up house maintenance because they could not afford it.”
So?
“‘Then they end up with a house that devalues.’”
Bahahahahahahahahahahahahahahahahaha.
“Financial coach Hannah McQueen said many people had resigned themselves to not getting ahead because of their big mortgages. ‘Heaven help us when the interest rates go up.’”
Again, a bunch of dummies.
‘Heaven help us’
That’s as good a plan as I’ve heard from anyone else. BTW, wearing sweaters to bed helps.
FWIW, the best investment is an electric heated mattress pad and down quilt. You turn it on an hour before bedtime, then shut it off when you climb in. The sheets are fresh-out-of-the-dryer warm, and the down quilt will keep it that way all night. (most heated pads come with two controls, one for each half of the bed, so the lady can be warm without frying the man.)
Down quilts work very well. But they’ll still have get out of bed into a cold house.
Down quilts work very well. But they’ll still have get out of bed into a cold house.
Be like Hillary.
The Quilted Down Robe
‘Taipei saw a 7.4-percent decline year-on-year in the first quarter this year, trailed by the Swedish capital Stockholm, which sits at the bottom with the largest price decline of 8.4 percent. Knight Frank pointed out that the number of cities that saw their housing prices decline annually has risen from 16 to 23 in the first three months of 2018′
Picking up steam. I could have made a post three times as long this morning.
Here’s a treat for you pukes …
“Georgia city sued by fed-up residents over ‘ridiculous’ fines for chipped paint, driveway cracks”
(snip)
About 25 percent of Doraville’s operating budget is reliant on fees and fines, according to IJ, a nonprofit law firm. From August 2016 to August 2017, it raked in about $3.8 million in fines, according to IJ’s lawsuit.”
Bahahahahahahahahahahahahahaha.
“… people in the town were being “punished” for the condition of their property by having to “fund the Doraville city government.”
Bahahahahahahahahahahahahahaha.
“… as of 2012, the median income was $43,311 and more than 30 percent of the population lived in poverty. ”
http://www.foxnews.com/politics/2018/05/31/georgia-city-sued-by-fed-up-residents-over-ridiculous-fines-for-chipped-paint-driveway-cracks.html
Portland, OR 97201 Housing Prices Crater 11% YOY As Excess Housing Inventory Floods Market
https://www.zillow.com/portland-or-97201/home-values/
*Select price from dropdown menu on first chart
Portland, has really grown over the years. I was gone for 12 years and return to town and was shocked by how much traffic there is pretty much all day long. We had friends who had to move back to Portland, and they’re pretty much miserable by how much traffic they have to deal with every day. You add that with high housing costs, homelessness and hipsters it’s not the town then once was.
it’s not the town then once was
You can’t go home again.
Same nonsense in my hometown - can’t go anywhere without having to fight the herd
Portland’s added 110-120 thousand people to the city limits since you went away. Not sure what the numbers are for the metro area overall, but you can extrapolate. How many highways have been added in that time?
It’s not just Portland, though. I’ve only been in the Seattle area for 10 years, but I remember clearly the congestion level then vs now and it’s no comparison. It was one of the factors for getting a home in the middle of things instead of commuting in from the outskirts.
“…shocked by how much traffic there is pretty much all day long.”
Same goes for San Jose, CA… “all day long traffic.”
DC has you all beat (except maybe LA). 8-9 years ago, traffic was still light enough that the local radio station didn’t do the traffic report on weekends. Now, they report the traffic every 10 minutes 7 days a week… and it seems there are as many crashes and delays on a weekend as during the week. And they only have time to cover the major highways (I-66, Route 7, 270, 70, 95, Beltway, 50 to the Bay Bridge). Accidents on a secondary artery? You won’t know until you’re in it.
Huge influx of immigrants, Millenials, and anchor babies growing old enough to drive. I admit that I’ve added to the mess.
If Amazon chooses any of the three DC-area sites, it’s going to get worse. No matter what the Walk-Score tree-huggers say, each one of those jobs will bring at least one car with them.
Rampant crime and a failing economy tends to do that.
https://www.realtor.com/realestateandhomes-search/San-Sebastian_PR
‘In theory, there has been some downward pressure on the housing market recently. He does expect that home values will plateau at some point, but it’s anybody’s guess when that will happen. ‘Three years ago, if you had asked me the same question, I would have said by now something would have happened,’ Nolan said. ‘But the national economy is strong and the local economy is strong. I feel like we live at the center of the universe.’
I thought the inland empire was the center of the universe.
‘A staggering number of American homeowners remain under water on their mortgages a decade after the housing bubble burst’
There’s a chart at this link with the break down by city. Some surprises, including Riverside.
Sponsored content article provided by the National Association of Realtors:
“Experts estimate the appreciation in metro Denver neighborhoods is roughly 12-15 percent on average every six months.”
https://www.thedenverchannel.com/news/our-colorado/flipping-out-first-time-home-buyers-in-colorado-now-dealing-with-another-competitor
That’s completely sustainable over the long term.
/sarc
‘Movement Mortgage said Thursday it is laying off 100 employees nationwide, including 18 in the Charlotte area, as the lender braces for an industry slowdown. Movement, based in Indian Land, S.C., attributed the cuts in operations positions to slower than expected loan growth. ‘
‘Movement has said it made more than $12.8 billion in mortgages last year, a new company record. At the time, the company also noted it had increased its volume of loans for home purchases for nine years in a row. These are not the first layoffs to hit the privately held company in recent months.’
Right off a new record and they are in the second round of layoffs. ‘it made more than $12.8 billion in mortgages last year, a new company record. At the time, the company also noted it had increased its volume of loans for home purchases for nine years in a row’
‘Braces for an industry slowdown’.
‘On pace to finance 1 in 10 homes purchased nationwide by 2025′
‘Freddie Mac’s Home Possible Advantage and Home Possible products are designed for low-to-moderate income homebuyers and/or individuals purchasing or refinancing properties in target areas. Compare to Fannie Mae HomeReady.’
‘Although similar to the Fannie Mae HomeReady program, Home Possible offers different benefits for qualifying homebuyers in the areas this program was intended to target.’
‘Home Possible specifications: 1-Unit, fixed-rate only at max LTV of 97% and max loan amount at $453,100. Min FICO 660 (with manual underwrite).’
‘Some of the benefits of the Home Possible programs are:Low down payment options. Lower MI Coverage/MI Premium for LTVs Exceeding 90%. Interested Party Contributions Allowable.’
https://movement.com/loan-product/freddie-mac-home-possible/?referrerId=
‘Federal Housing Administration Loan: If you’d love to buy a home but lack credit, a down payment, or are unable to cover closing costs, an FHA loan may be the solution. FHA financing was developed to provide homebuyers with an alternative to conventional financing and include attractive and flexible guidelines.’
‘Low 3.5% down payment. 100% gift funds – the entire 3.5% down payment can be a gift from parents, relatives or an employer. FHA allows seller to give up to 6% of the home’s purchase price to an FHA buyer to pay for closing costs and pre-paid costs. Flexible credit qualifying – because it is government-backed, it’s possible to qualify for an FHA loan with a lower credit score than on conventional loan programs.
‘Upfront mortgage insurance may be financed or paid in cash. May also be an option for borrowers with limited equity looking to refinance.’
https://movement.com/loan-product/fha/?referrerId=
‘High Balance Mortgage Loans: If you want to buy in an area considered high cost, or where properties typically exceed loan limits set annually by the Federal Housing Finance Agency, our high balance mortgage loans may be the solution you’re looking for. Movement offers high balance loans from both conventional and government home loan programs. Ability to choose from a fixed-rate or adjustable rate.’
‘Loan amounts exceeding $453,100 and up to $625,500 for 1-unit properties in designated high cost areas. Primary residence, second/vacation home and investment property options Condo financing available. Primary residence, second/vacation home and investment property options.’
https://movement.com/loan-product/high-balance/?referrerId=
‘At Movement Mortgage, our Fixed Rate Conventional Mortgages offer the confidence of knowing your rate and payment will not change for the term of your loan. This is a great program for anyone planning on being in their home for a longer period of time.’
‘Additional Information: Cash out available to 85%. As low as 620 fico available. Maximum loan amount of $417,000. Unlimited cash out.’
https://movement.com/loan-product/fixed-rate/?referrerId=
There are planned to be 511 more towers of 20 storeys or more added to the London horizon…60 per cent of prime London sales go to foreign buyers
This is obscene. Why can’t these rich people invest in modern “art” instead? I despise modern art, but at least paint bits of scrap metal don’t need many resources,* and doesn’t take up much land. Or better yet, why can’t these rich people simply keep, say, $30 million and give the rest away? They could buy a nice mansion and live off the cash for decades.
———————
*many of these modern artists are even polite enough to recycle existing junk into “art,” to make a statement. That takes almost no resources at all.
Hey Donk
I think it’s obscene, too, but is modern art as good a money-laundering vehicle as condo units? Central banks won’t prop up art prices.
Central banks won’t prop up art prices.
+100.
As blue says, speculating in the necessities of life is evil. They don’t allow people to hoard ice during a power outage. But how is this different, fundamentally? It’s not, but because there isn’t the time urgency (for example, hours instead of months), they can get away with it.
The Shard is still full of unsold flats.
…coming out of lurking…
I am the one who crazily thought about buying the 120 year old home in which I rent 1 of 2 apartments. Luckily here people pointed out I was on a ledge. Also have ants…again…
Recently found out about ‘Movement’ mortgage. When the ‘For Sale’ sign was put on the lawn it was rapidly followed by a ‘Movement’ mortgage sign. I’ve never really sign a mortgage company suggested on the lawn with a house for sale. Two days ago the ‘Movement’ mortgage sign disappeared from the lawn. Coincidence?
Did do a search on ‘Movement’ and saw in December 2017 they were fined by California state.
House still for sale and getting perturbed by realtors texting times with a less than 24 hour notice. I got a text Saturday about a viewing on Sunday at 8:00 a.m. - 8;30 a.m. I needed some time to compose myself. Wanted to call the realtor and say, “Are you out of your mind! Anyone who comes at the time is indicating they want to go to church with me so wait until I get dressed.” Maybe a nicer response is to say if the realtor thinks it is a ‘reasonable access time’ I will be at the realtor’s home while I cannot be in mine so give me the address. Showings on the past Tuesday, today and tomorrow. ‘Right to quiet enjoyment’ keeping a record.
Spoke with upstairs tenant this weekend. She is looking. Says her upstairs porch slants too. Tenant was the one who pointed out to me that the garage next door (landlord lives next door) was built very close to the property line here. It’s about 2 feet away from the line at the shortest point. Not sure if that is in code/fits zoning laws.
Got an email from the landlord that feedback indicates that buyers would want to live in my place and rent out the above one. So maybe I should start looking. Still took my rent check yesterday though. OK, if you are a maximum of 2 people - one bedroom here, despite what the listing says about 2 bedrooms. Of the 4 rooms, only one meets the definition of having a door, window, and closet. You got kids, you need to take the second floor. In the meantime, I’ve started looking as don’t know what the parking situation will be come winter with a street ban.
There is an open house Sunday on a place less than a mile from here that just went for sale. I’ll be checking out the ‘competition.’ It’s a 4-plex (2 3 bedrooms, 2 1 bedroom) with supposedly 10 parking spaces. Drove by and saw there was a 3 car garage and a good drive way for additional parking. The asking price there is $575K and taxes about $6K. Here the asking price for a 2-unit is $375K with taxes of about $5K. Think both prices are too high when comparing historical data and wouldn’t ‘cash flow’ as a landlord, but what do I know? I’m just a lowly renter.
Oh, and the house on the corner was just listed for sale this week. Think it is a (really big) single family though.
Back to lurking…
So you’re going to that other multiplex open house just to see it, not to buy it, right?
If you live alone (sounds like you do), and if you’re planning to move out of state, you shouldn’t be looking for a house to buy. You should be looking for a job in your state of choice.
Realtors text you to get out of your leased apartment for a showing? On a weekend morning?
The answer is no. I have a lease with a landlord and that is not part of the signed contract.
Do I bother you at your house at 8 am on a weekend?
Then don’t bother me. Unless you pay me for my troubles.
Also - some people do these viewings to steal or to case the place to steal later
Ants.
1/3 Borax
2/3 Sugar
Add water and set it out in any old plastic lid.
They love this stuff and will take it back to the colony. Devastating.
Also found at the dollar store.
Does it work on fire ants?
What I’ve done in the past re: fire ants is boil cauldrons of water and pour it right on the nest. Take a shovel, turn the ground over and repeat to get the few surviving ants.
Eradicates them right away - and the fire ants do not return.
Cheap and no poisons required.
Sounds like too much effort. Buy an aardvark?
Maybe Donk Craterton can weigh in with a hoof or two.
To me the key on finding a great rental is the landlord has paid off the mortgage and doesn’t need every last dollar out of your pocket
It’s 2007 Again for Commercial Mortgage Bonds, Moody’s Says
By Claire Boston
June 1, 2018, 11:54 AM EDT
Bloomberg
Commercial mortgage bonds are getting stuffed with the lowest-quality loans since the financial crisis by one measure, according to Moody’s Investors Service, a warning sign that the $517 billion market may be headed for harder times.
The securities are backed by as many interest-only mortgages as they were in late 2006 and early 2007, Moody’s said. Those loans are riskier because borrowers don’t pay any principal early in the debt’s life. When that period expires, the property owners are on the hook for much higher payments.
The percentage of interest-only loans in a commercial mortgage bond is an “important bellwether” for the industry, according to Moody’s analysts, because the loans are more likely to default and to bring bigger losses to lenders when they do. Underwriters aren’t taking steps to fully offset the rising risks, the ratings firm said.
https://www.bloomberg.com/news/articles/2018-06-01/it-s-2007-again-for-commercial-mortgage-bonds-moody-s-says
The other day I posted Krugman quoting Larry Summers saying, “improved financial regulation is not necessarily a good thing – that it may discourage irresponsible lending and borrowing at a time when more spending of any kind is good for the economy.”
I looked up Summers on Wikipedia. Impeccable pedigree and resume. He’s an Official Smart and Serious Guy. MIT undergrad, Harvard PhD, nephew of TWO econ Nobel laureates, son of two Ivy League econ professors, holding a host of senior leadership positions from the World Bank to the Treasury Department to Harvard University itself. And he was a frontrunner to head the Fed itself for a while. Wow.
What is so interesting is how someone like this can so assiduously be blind to the consequences of irresponsible lending.
Dr. Summers would make an interesting medical doctor it seems to me.
Parent: “Little Johnny here has had a treatment-resisting depression.” Summers: “I’m going to prescribe that he smoke a small amount of crack.”
Parent: “Crack? Like… cocaine?”
Summers: “Yes. It will definitely make him feel better.”
Parent: “But… isn’t it extraordinarily addictive? And won’t coming off the drug make him feel worse than before?”
Summers: “We’re hoping for a wealth effect.”
Parent: “What?”
Summers: “What?”
What is so interesting is how someone like this can so assiduously be blind to the consequences of irresponsible lending.
I don’t think anybody will ever convince me that there is any blindness. In the first quote he admitted he wanted irresponsible lending to occur. So basically he’s willing to throw whoever it hurts under the bus to reduce pain for whoever he’s trying to save.
Indeed. Irresponsible lending to counteract the effects of… irresponsible lending. Brilliant. Real “hair of the dog” cure there.
I guess Dalio’s “beautiful deleveraging” (aka monetary policy enabled purchasing power transfer) may have worked so well the first time, that it’s time to do it again.
I can see how policy makers like the upslope of bubbles (which we purportedly cannot identify because, who knows, prices might plateau or climb in perpetuity, right? Can’t disaggregate demand into speculative and consumption demand, so we’ll just ignore that which we can’t measure - the mantra of the economist apparently). But speculative-demand-based price runups - bubbles - (in recent years aided by monetary policy) historically have resulted in significant social dislocation when they pop. The answer is another speculative bubble?
Ultimately, it comes down to making the numbers work for this election. Until they don’t work.
I understand prosperity is hard, chaotic and requires a measure of luck. Monetarily-driven speculative bubbles are more predictable and have definite winners and losers. And I think there are a lot of similarities to taking a crack hit as treatment for depression.
‘Irresponsible lending to counteract the effects of… irresponsible lending’
Plenty of people pointed this out at the time.
Ben Jones: ‘Irresponsible lending to counteract the effects of… irresponsible lending’
Plenty of people pointed this out at the time.
It seems absurd to state what they’re doing bluntly like that. If it were ever presented that way - bluntly, clearly - to Drs Summers and Krugman, the response would likely be something to the effect of “because you don’t hold an econ PhD from an Ivy, you are not qualified to discuss this. I could try and explain it but it would obviously be fruitless, which would waste both your time and mine.”
Unfortunately I/we are qualified enough to provide labor and purchasing power for these schemes.
And some of us do have high-ish IQs, enough so to join those vanity clubs of those with the same attribute. So a thoughtful response to this would be informative, despite gaps in our resumes.
A lot of the social sciences have physics envy. If the luminaries ever deigned to address the curious paradox above, no doubt it would start with some model, IS-LM perhaps, seems to be a typical go-to. And the case would be derived from there. However, I would then suggest taking a couple of undergrad physics courses winding up with an engineering design elective to understand the difference between how things work in the lab and how they work in the real world.
What the social sciences should have is chemistry envy. Very sciency, but heavily experimentally based. I realize natural experiments are hard to come by, but that’s the business, right? Coming up with those experiments, making them happen (as they most assuredly have over the past decades).
Physics is nice because it can all be done at the chalkboard, basic rock-solid equations yielding derivations which also hold true in the natural world, providing testable hypotheses which can then be tested.
Physics does also yield untestable yet elegant hypotheses, like string theory, which is closer to the economic practice.
Monetarily-driven speculative bubbles are more predictable and have definite winners and losers. And I think there are a lot of similarities to taking a crack hit as treatment for depression.”
Today’s speculative bubbles are an exercise in manic depression. In fact, and effectively, manic depression is being TAUGHT. It is becoming institutionalized.
Real-world bubbles are providing the same dopamine-like reactions in participants as cell phones and social media do.
Don’t underestimate the psychosis behind both.
He is unbelievably pompous, arrogant and condescending, a true jerk. It would be tolerable if he was right most of the time. He isn’t, despite all those credentials.
“I looked up Summers on Wikipedia. Impeccable pedigree and resume. He’s an Official Smart and Serious Guy. MIT undergrad, Harvard PhD, nephew of TWO econ Nobel laureates, son of two Ivy League econ professors, holding a host of senior leadership positions from the World Bank to the Treasury Department to Harvard University itself. And he was a frontrunner to head the Fed itself for a while. Wow.”
So much for credentials….
He knows that the debt prompting policies will ultimately collapse the U.S but they promote growth outside the U.S which levels inequality between nations. The ultimate collapse of the U.S will just facilitate this goal. California had fully adopted this model and the spending by the housing equity rich folks spurs temporarily growth within the state, growth outside the country and immigration into the state as people spend not only their incomes but the equity of their houses. But when the housing bust comes they will look at the people of Mississippi as the rich folks. The values of red states have impeded some short term growth but will ultimately be vindicated since the debt model based on using Home equity as collateral is not sustainable.
The dollar’s worldwide hegemony isn’t a law.
But “the American way of life is non-negotiable”. Almost a law?
Heard an interesting exchange on financial news radio this morning. The guest observed that this was the first time that monetary policy and fiscal policy were pulling in opposite directions, so the net result was totally unknown.
It seems to me that monetary policy boosts the “financial” economy, and fiscal policy is geared towards the “real” economy. The financial economy is going about as gangbusters as it could possibly be. The real economy indicators are also rosy as well.
The guest brought up another point as well, that GDP was not an effective measure of social welfare, but it was all we had. I thought of the quote from the Vietnam war: “When you can’t measure what’s important, what you can measure becomes important.”
I thought of McNamara, the technocrat’s technocrat, fighting the war in an MBA-esque fury of skill, monitoring all the data points he could measure, including the all-important body count. By measures like body count, number of trucks destroyed, it was obvious winning the war was just weeks away. Eager young officers wanted to get in before it ended.
One problem was, numbers like “body count” were gamed. Every piece of collateral damage was a dead enemy soldier. And if they couldn’t be found, best guesses were substituted. I wonder how much modern financial numbers are gamed.
Another problem was, it was true a lot of materiel was being destroyed. But it didn’t matter. GDP is great when debt and imputed rent are added in. Lack of spending is now a GDP contributor? Wow. I guess if every incumbent politician wants good numbers, you’ll get good numbers.
Unfortunately, unless you’re Oprah, wishing hard enough (recall Brexit, 2018 presidential polls) doesn’t seem to alter reality.
What about all the foreign money going into the US housing market? A friend of mine is renting from a “Turkish guy” who called him in a panic about having to sell immediately due to some “tax issues” he was having. The Turk asked my friend if he was interested in buying the house? My friend lowballed him and he rejected it. Then he was told that the house would have to be show ready immediately. My friend balked. Within a week, the house was sold. Never even on the market. Who bought it?
IMHO, these foreign “investors” are the reason for the “low inventory”. When will this ever be addressed?
Home sales are running at a 5.5 million annual rate:
• https://www.statista.com/statistics/226144/us-existing-home-sales/
Historic home sales data is here:
• https://www.huduser.gov/periodicals/ushmc/fall09/hist_data.pdf
Sales are higher than they’ve been for all but 4-5 years of the past nearly 50 years.
Question: How is it possible that sales volume is so high with inventory so low?
Either inventory is not that low. Or, people are trading houses at an ever quickening pace. Other options?
Either inventory is not that low.
Hmmm. Inventory is based on what is listed. We see things getting sold without being listed. Therefore sales volume and “inventory” are only loosely connected even though everybody wants to think of them as tightly connected. We have proven the existence of the dark matter/shadow inventory that makes up the majority of the RE universe.
If your friend can visit the house again in a couple months, see who the occupants are. That will tell you who bought the house. Especially if it’s housing renters of a particular ethnic group.
a lease come with the sale so dont move, unless they pay you.
I was just looking at the comments from the other day:
Mr. Banker: “The key is to buy an item today at one price and then pay for it thirty years later with the devalued currency.”
Albuquerquedan: The point is a sound gold backed and convertible currency would end housing speculation in its tracks. It would also end art speculation etc.
I’m not supporting (or not supporting) gold backed currency here BUT - imagine if people had to make money - get returns - the old fashioned way. By creating persistent value.
Imagine if politicians got together and crafted a national industrial policy which created a business and research friendly environment, used the allure of the United States to attract the best and brightest from around the world - imagine how that would go.
But no. Monetary policy, cronyism, an economy based on ever dropping interest rates, currency devaluation, unvoted-on redistribution, and resultant speculation is the way forward. With de facto political bribery legalized, corporations - legal constructs - being treated ever more as people (”If money is speech, rich folks got a lot more of it than you do”). No problems with offshoring intellectual property and the means of production. Drug companies raising essential drug prices by tens of thousands of percent. Our best and brightest telling us irresponsible lending is not such a bad thing.
Wow. But I guess iPhones are not as expensive as they could be, so we got that going for us. Which is nice.
(But aren’t they like a thousand dollars?)
Our best and brightest telling us irresponsible lending is not such a bad thing…
I’m not so sure about that. Those pushed forward to evangelize indebtedness are corrupt.
I got into that with a kid working at the Apple Store last year. I said that I found the price ridiculous, even offensive. (I was nice, don’t worry. I was just pointing out that people slipping from the middle class daily might find the price outrageous.)
He said well, look at it this way, you’d spend that on a mattress. I said well, the BS they’ve been peddling us for years is that a mattress should be replaced every eight years. Good luck with the phone lasting that long, never mind Apple slowing their older phones down. The mattress is a better value, despite them slowing down over time too 😉
San Francisco(south of market), CA Housing Prices Crater 12% YOY As Tech Wreck Slams Housing Market
https://www.zillow.com/south-of-market-san-francisco-ca/home-values/
*Select price from dropdown menu on first chart
‘From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent while the average wage rate has grown by only 14 percent.’
Thanks alot, Ben Bernanke and Mel Watt.
“Three years ago, if you had asked me the same question, I would have said by now something would have happened,” Nolan said. “But the national economy is strong and the local economy is strong. I feel like we live at the center of the universe.”
Aggregate debt continues to rise lock-step with economic growth, but the media doesn’t look at all the numbers.
“Aggregate debt continues to rise …”
Deficit$ don’t matter!, neither does higher intere$t rate$ …
The home buyer hope$ for mortgage $unshine, the farmer for non.hail rain$ …
Drudge is linking to story which states that the Atlanta Fed is predicting 4.8 percent growth for the second quarter. I have my doubts about the prediction. However it is true it is mind boggling how successful Trump’s anti-globalist policies have been even in the face of rising interest rates. If you average the two quarters it is 3.5 percent growth. With 2 percent inflation it means 5.5 percent nominal growth. If that continues for a year any deficit less than around 1.1 trillion will actually cut the debt to GDP ratio which soared under Obama. Moreover the combination of more people working, higher wages and higher interest being paid on the social security trust fund mean that social security is becoming more sound. All this winning has not made me sick yet though. I think the media is not talking about aggregate debt to growth at least in the budget context since it is improving so rapidly under Trump. The only thing worse for the globalist than Trump winning is Trump succeeding and that is exactly what is happening
Finally if we have real growth we do not need the wealth effect to stimulate spending. We can get off the ever expending debt cycle which is actually most pronounced in the blue states with high housing prices. We can have a housing crash in blue states without a national recession. Trump will not have a strong reason to avoid it since he does not rely on their votes and it will leave the nation as a whole more stable. Ever rising mortgage debt exceeding income growth just raises the real potential for a recession in 2020 so Trump is better off defusing the problem and the cap on the housing deductions was a great first step.
Agree with everything you said, here, Dan.
Trump needs to continue to “defuse” as you say.
In 2012, Herman Cain had the most salient idea as far as I
‘m concerned re: debt and overspending. Simply cut all spending and budgets 1 percent per year for several years in a row.
Another way to “defuse”.
but again what type of jobs and where are they? plus how do we reconcile this? People are working just not on the books with taxes taken out….which makes it easier to get gov. benefits today, but means your SS will be far less later based on a much lower taxable income.
http://theeconomiccollapseblog.com/archives/the-truth-about-the-employment-numbers-nearly-102-million-working-age-americans-do-not-have-a-job-right-now
Naples, FL Housing Prices Crater 7% YOY As Retirement/Vacation Property Market Implodes
https://www.zillow.com/naples-fl/home-values/
*Select price from dropdown menu on first chart
Here in the Boston and greater Boston area, every news item is that prices are going up up UP and will continue to go up up UP. People I know who own here seem to all agree that prices will only go UP.
https://boston.curbed.com/2018/5/30/17404868/boston-housing-why-high
http://realestate.boston.com/buying/2018/05/24/home-prices-greater-boston-regions/
I am learning to keep my mouth shut as most “owners” look at me (a lowly renter patiently waiting for a correction) with concerned, condescending dismay if I modestly suggest this trend cannot continue, based on history. Lately, however, I am starting to think that they may be correct - “it is different this time”.
I just read a realtor’s comment on Facebook, posted in early May, referring to a Boston Globe article on best places to live:
“If you’re considering buying a home within the next few years, get your piece of one of these hot Greater Boston towns while you still can! This article describes some of the best areas around Boston to live in and why, but prices there have risen between 50-95% in the last 5 years, depending on the area!!! Based on 2018’s trajectory, prices are only going to continue rising…”
And on a local housing bubble blog, this exchange:
“I sure hope prices cone down. It’s beyond ridiculous. It’s obvious it’s severely over inflated. I’m amazed it’s holding on this long. ”
“It’s holding on because so many people in this region are well-employed, across every job sector. The Longfellow bridge project just finished up yesterday, at a cost of over $300M. Even housekeepers make $50k+/yr here.”
“And that’s why home prices are insane, we’re all fighting for the same housing stock that barely increases year over year, while more and more people move into the metro area.”
“Boston is the 3rd most expensive metro after NY & SF. Strong and diverse local economy, lots of housing demand, dwindling supply (NIMBYism at its finest - can’t blame the moneyed class for protecting its assets). Those of you looking for a 20% fall in housing prices are deluding yourselves.”