The Housing Bubble

Housing

Kings Beach, CA Housing Prices Crater 13% YOY

https://www.movoto.com/kings-beach-ca/market-trends/

I sold 3 houses in the last 6 months. 2 sold (accepted contract) in less than 10 days. The other took 5 months (rural) and several price reductions.

Days on Market is a very meaningful statistic. Yes, UHSP sometimes play with pulling listings to refresh, but that’s mostly in a buyer’s market. There is no reason to do that in Culver City where houses sell in a month.

Did you read my link from the IEA which showed the world would be short 1.5 million barrels a day in 2019? Yes we are producing a lot of oil and NG but the world needs far more than we can produce. Good for the Trump economy, more oil, gas and even coal jobs as the price goes up.

“Yes we are producing a lot of oil and NG but the world needs far more than we can produce.”

This situation is temporary and unsustainable. Economics matter.

A truism that means nothing. Make a true prediction.

I’m not a soothsayer. That’s your failed pasttime.

I found the evidence that you are being misleading. Whether Ben posts it, I cannot control.

Even under the worse case scenario of the article, $2.3 trillion over ten years is not $9 trillion over eight years. Due to the growth in the economy under Trump, the debt to GDP ratio is improving under Trump, it worsen tremendous under Obama. Do the math.

Thanks Trump:

https://www.rigzone.com/news/tenaris_to_resume_operations_at_texas_mill_hire_150_workers-21-jun-2018-156025-article/

That sad panda cartoon is really sad.

May 25, 2018

Investors Suddenly Struggling To Hang On

“Far south of Orlando, the city of St. Cloud has had a lot of room to expand outward and attract developers. St. Cloud has no shortage of land, but it doesn’t have enough local jobs. About 90 percent of the residents who work commute out of the city to get to their jobs. Builders are ‘going crazy’ buying up residential lots and creating a housing bubble, said Craig Shadrix, Ocoee’s assistant city manager. ‘If you had asked me 10 years ago if we would be seeing housing prices from $400,000 to $500,000 up there on a routine basis, I would have laughed, but that’s what’s happening now,’ he said.”

“The City of Trees is getting noticed. The limited run Fixer Upper-style show on HGTV is helping put the spotlight on the booming Boise area in yet another way. The concept is simple: the pair buy a house, make improvements (usually drastic) and work to resell the homes for a profit. Two of the homes on the show with the highest price tags have sat on the market unsold, despite a tidy wrap-up at the end of each episode. A home along the rim at Kathryn Albertson Park was purchased for $350,000 - with another $350,000 into renovation costs.”

“Toward the end of the episode, Robertson tells the camera they have a deal in hand. But the home didn’t sell until well after the episode was produced and the show was aired. The home was removed from the market just Sunday after a price reduction from $989,700 down to $974,900. Another home in Boise’s North End was said to have sold ‘above asking’ during the show, but is still listed for sale - listed since March 10th at $897,700.”

“Nestled into the side of Mt. Soledad about a half-mile from the coast sits the residence dubbed ‘Essencia.’ In more recent years, the group has fallen on harder times — a home on Plum Street in Point Loma sat unfinished for years before falling into foreclosure, eventually netting a handful of misdemeanor charges for Concepto principal Francisco Mendiola. La Jolla’s ‘Essencia’ suffered a similar fate — the property appears to have bounced between a series of investor-owners since it was built, with ten documents related to foreclosure proceedings having been filed against the property between 2008 and 2014.”

“A handful of attempts have been made to sell the property, none publicly successful. In 2007 a listing at $18-20 million failed to attract a buyer, same with a 2008 attempt that ranged from $19.5 down to $14.95 million. A six-month stint on the market for $17.9 million in late 2015 did not result in a sale, nor did 2016 attempts at $16,750,000 and $14,600,000. An attempt to rent the mansion for $20,000 per month also met no takers. The property sat off-market for more than a year before it was re-listed in April, this time carrying an asking price of $14,500,000, the lowest reported to date.”

“Southern California home prices notched yet another record in April, with the median price hitting $520,000. Still, there’s been a shift this year as the number of homes on the market increases slightly and buyers become more price sensitive, market watchers say. ‘We’re still seeing multiple offers on well-priced homes, (but) we’re seeing price reductions on higher-priced homes,’ added Mike Cocos, general manager for ERA North Orange County in Yorba Linda. ‘Now that we have the inventory, buyers are going to take a little longer to pick and choose. … (Buyers) are a little more selective than they were last year.’”

“A group of Montreal condominium buyers fear they’ve lost both their deposits and their condos after the unfinished building they were to move into in Saint-Henri was sold to another developer. It may be a case of buyer beware: real estate experts and commercial lawyers say buying into a new condo development often doesn’t work out as planned. ‘I feel kind of scammed,’ said Ying Zhang, one of 14 buyers taking both of the developers to court in the hope of either getting their condos or their money back. ‘How can you pay a down payment and now have nothing?’”

“It was an ambitious plan: Donna Pirie offered to give away her £1.7m Aberdeenshire mansion in a competition, but she wanted to sell £3.75m worth of tickets to do so and give £1m to charity. In the end, she sold just 10,000 tickets at £25 each – totalling £250,000 – despite national newspaper coverage, so she ended up with a net loss of £31,500. Pirie is one of a growing number of people who are trying to sell their homes through ‘win a house’ schemes. The slowdown in the property market over the past year has led to an explosion in the number of properties being offered as prizes, particularly by homeowners who fail to achieve the asking price they want.”

“Sam Mitchell of online estate agents House Simple thinks sellers simply need to lower their prices. ‘If you are finding it difficult to sell your property, rather than resorting to desperate measures, take a step back and find out why it might not be selling,’ he says.”

“Guo Qirui says it’s a lonely journey when he goes home to his rented luxury condominium in Phnom Penh, where the Chinese retail executive has lived for nearly half a decade. The majority of the homes, sales agents and residents say, are sold to absent Chinese landlords. ‘Probably half of the completed units have been handed over but every night it’s all dark. Not one light is switched on,’ Guo told Reuters.”

“‘In terms of the high-end segment there is oversupply,’ said Ross Wheble, Cambodia country head at property consultancy Knight Frank. ‘This is a question that everyone’s asking in terms of sustainability. With Chinese investors buying these units, are they actually going to be occupied?’”

“The hype is such that some like Beijing native Jiang Zheming bought a unit last month despite having never visited Cambodia before. Another Chinese buyer who asked to only identified as Alex, said he bought more than 100 flats. CBRE and Knight Frank said there were already signs the market was softening. The frequency of new launches has fallen while landlords were reducing their asking rents, they said.”

“Chrek Soknim, chief executive of Cambodian property agency Century21 Mekong, said he did not think a market slowdown would be bad for locals given that these apartment owners were mostly Chinese. ‘If they can’t sell, it’s not a problem for us.’”

“Mortgage revaluations of second-hand homes in inner Brisbane are between 20 per cent and 30 per cent lower than the prices they originally exchanged for, one more sign of falling demand and over-supply in the Queensland capital, according to private property lender Development Finance Partners (DFP). DFP, which provides commercial loans to residential developers, has discovered that not only are the values of new dwellings being pushed down, but secondary apartments and townhouses have been swept up in the downward slide.”

“The large number of newly completed apartments – about 8300 – expected to hit the city in 2017-18 will only worsen the problem DFP says, quoting the latest residential data from property research group BIS Oxford Economics. An additional 5000 units are in the pipeline for 2019.”

“‘It’s a shock and it pressures those owners who do not have substantial equity,’ DFP director Matthew Royal said. ‘The new, shiny, state-of-the-art properties are easier to let and those owners, keen to get cash flow, may set a rental that is lower than rentals applying for nearby, older, properties. Making things worse is that, in a new development a large number of rental properties emerge at once, flooding the market.’”

“Adding to the woes of lower rents, banks are refraining from refinancing interest-only loans, forcing many borrowers to repay both principal and interest. ‘Lower rents push down a property’s value, reduced cash flow arrives as principal and interest needs to be paid and an investor, financially comfortable up until then, is suddenly struggling to ‘hang on’, Mr Royal said. ‘Unfortunately I am predicting more pain than gain for the most exposed assets this time next year.’”

http://thehousingbubbleblog.com/?p=10443

Are you entertained jingle?

“I am a 50 year old single father (never married) to a 6 year old with Aspergers/high functioning autism. I just went to probate court and was awarded shared physical custody on the condition I am no more than a 15 minute drive from my son’s school. I have had him a minimum of 3 days his entire life. I am currently 47 miles away. I’m about 15 minutes north of Boston and his mother is 30 minutes south of Boston. As far as my financial situation goes I own my small single family home outright - not fancy but a small condo alternative (4 rooms, two bedrooms, 1 bath 900 sq. ft.).”

“Anyway, in addition I have about 100k cash on hand, about 15k in my 401k (started very late) and ZERO debt. I am a nurse for the state and make about 80k / year with great benefits and a good pension. My question is - do I rent or suck it up and buy.”

Ordinary people, trying to make hard decisions in a screwed up world. How entertaining! La la la, oh how I want to buy an airbox in San Diego!

‘How can you pay a down payment and now have nothing?’

‘How can you pay a down payment and now have nothing?’

Such a question! Asked by my favorite type of customer, one who is dumb as a rock.

“‘We’re still seeing multiple offers on well-priced homes, (but) we’re seeing price reductions on higher-priced homes,’ added Mike Cocos, general manager for ERA North Orange County in Yorba Linda.”

That’s where my cousin’s million dollar house is. I’ll be interested to hear his reports on price moves during the down leg of the cycle. (It won’t likely affect him and his wife except for possible unrealized paper losses, as they won’t need to sell due to inadequate financial means.)

“A handful of attempts have been made to sell the property, none publicly successful. In 2007 a listing at $18-20 million failed to attract a buyer, same with a 2008 attempt that ranged from $19.5 down to $14.95 million. A six-month stint on the market for $17.9 million in late 2015 did not result in a sale, nor did 2016 attempts at $16,750,000 and $14,600,000. An attempt to rent the mansion for $20,000 per month also met no takers. The property sat off-market for more than a year before it was re-listed in April, this time carrying an asking price of $14,500,000, the lowest reported to date.”

I predict many failed accidental Dutch auctions ahead in La Jolla over the upcoming bust years. They have been working like crazy to upgrade clifftop properties into uberluxury designs that target the very thin $10+ million buyer pool. I recently joked with a friend about one of these, saying that the work on the place was scheduled to be completed just in time for the next crash.

Ladies and Gentlemen, for your amusement and entertainment!

‘In our farm’s situation, we’re almost put into survival mode…and in a way, we’re almost our own worst enemies. We try to increase our milk production because you still need that income, but when the milk price drops, we have to produce even more milk’

‘with no profit margin, the question becomes, ‘How can we lose less money in a day?’

‘Think about trying to live today on the income you had 15 years ago.’ That’s how agriculture expert Chris Hurt describes the plight facing U.S. farmers today.’

‘The farm crisis was so bad, there was a terrible outbreak of suicide and depression,’ said Jennifer Fahy, communications director with Farm Aid, a group founded in 1985 that advocates for farmers. Today, she said, ‘I think it’s actually worse.’

http://thehousingbubbleblog.com/?p=10478

The women all control their men
With razors and with wrists
And the princess squeezes grape juice
On a torrid bloody kiss
What will you be wearing there
The lion or the raven hair?
The flesh will all be tearing
But the tail will be my own
In the colosseum tonight

This one’s for the balcony
And this one’s for the floor
As the senators decapitate
The presidential whore
The bald headed senators
Are splashing in the blood
The dogs are having someone
Who is screaming in the mud
In the colosseum tonight

Now it’s raining and it’s pouring
On the pillaging and goring
The constable is swinging
From the chains
For the dead there is no story
No memory no blame
Their families shout blue murder
But tomorrow it’s the same
In the colosseum

A slowly acting poison
Will be given to the favorite one
The dark horse will bring glory
To the jailer and his men
It’s always much more sporting
When there’s families in the pit
And the madness of the crowd
Is an epileptic fit
In the colosseum

No justice here, no liberty
No reason, no blame
There’s no cause to taint the sweetest taste of blood
And greetings from the nation
As we shake the hands of time
They’re taking their ovations
The vultures stay behind
In the colosseum, in the colosseum
In the colosseum tonight

https://www.azlyrics.com/lyrics/tomwaits/inthecolosseum.html

We try to increase our milk production because you still need that income, but when the milk price drops, we have to produce even more milk’

We need to allow more immigrants who are lactose tolerant. Most of the immigrants from the sh*thole countries cannot drink milk as adults. Sarcasm aside, We do not need anymore people period. Perhaps we can justify a few hundred thousand a year with the highest IQs so we can make up for the two point drop in average IQ caused by our recent immigrants but no more.

‘How can you pay a down payment and now have nothing?’

How can you spend your hard earned money on a real estate down payment when you have no understand of financial risk or negative leverage?

“‘Think about trying to live today on the income you had 15 years ago.’ That’s how agriculture expert Chris Hurt describes the plight facing U.S. farmers today.’”

Uhh, most people are. Wages have stagnated. Try to pay attention.

https://www.breitbart.com/big-government/2018/07/01/nearly-half-of-americans-illegal-immigration-crushes-wages/

“Ordinary people, trying to make hard decisions in a screwed up world”

According to some, if only that ordinary person had gambled his life savings and his son’s future at 10-100x leverage in a manmade speculative orgy over a basic human necessity, all his problems would be solved by now.

Janet Yellen, 2014: “The Importance of Asset Building for Low and Middle Income Households” https://www.federalreserve.gov/newsevents/speech/yellen20140918a.htm

Heck, even legal immigration crushes wages. Witness what the H1-B program has done,

The human version of the salmon’s upstream struggle for survival
Executive summary: Spawn ’til you die.

Ah - corporate tax cuts. I see…

America has the HIGHEST corporate tax rates in the civilized world.

Reducing those, even a penny, will lead to ruin, bankruptcy and misery.

Kinda like even thinking about tinkering with global trade agreements where America has a trade deficit with nearly every country in the world.

Can’t touch those either…

Ben Bernanke is a socialist and globalist fool. And he will never admit, but after obama/Hillary he is the MAIN reason Trump got elected.

up to the voters, a Republican congress will make the middle class tax cuts permanent. To use the procedure necessary to pass them they had to make them temporary, now they can make them permanent.

Let me restate my point: The so-called middle class tax cuts are a political smoke screen. Many middle class families are in for a surprise when their taxes increase under the new tax law.

He who refuses to do arithmetic is doomed to talk nonsense.

– John McCarthy

One of the primary reasons Obama failed is because he left us with uncompetitive corporate tax rates, the government is setting records for tax revenues, once again higher rates do not mean higher revenues and lower rates do not mean lower revenue. More people working for higher wages is the best way to fix both the debt problem and the Social Security problem. More investment is the best way to get more growth.

Then there are the people that claim to do arithmetic and still consistently talk nonsense.

I’m looking forward to when your current round of nonsensical predictions fall on their face, like your call for $80/BBL oil by year-end 2015 did.

May not have gotten the timing perfect but got the direction and the ultimate price correct, that is far better than any prediction you made. Thus, my worse prediction is better than your best. I knew Obama was going to be a disaster an ultimately lead to a far better Republican than could be elected until we endured the pain of another progressive disaster. You still are attempting to defend the disaster.

Comment by Albuquerquedan January 1, 2015

“Prediction: $70 plus oil by the end of 2015″

http://thehousingbubbleblog.com/?p=8782

It was about half that:

http://www.macrotrends.net/1369/crude-oil-price-history-chart

“Prediction: $70 plus oil by the end of 2015″

Pretty fawking amazing prediction. Lots of bandwidth was wasted on non-stop crowing about it.

Where is it now? All you posted back then were articles after article about ten dollar oil. The shale oil and gas industry is about $250 billion dollars in debt due to producing both below costs. I think everyone on this board is aware that sometimes things take a little longer to work out then expected. But if you can figure out the true cost of production eventually things either fall down to that price or rise up to that price. Yellen dollars looking for a place to die kept oil down along with Obama given Iran the right to have nuclear weapons kept the price down longer than expected but eventually it is where it needs to be and will rise even more in the not to distant future.

‘All you posted back then were articles after article about ten dollar oil’

You got a link for that?

No link is available, because he made it up. Attorneys do that sort of thing for a living. They also are fond of losing large sums of money in stupid scams like Bitcoin.

If I could find an easy way to search the archives I could find plenty. Just look around June 2015 and I bet you find one just about every day

Always looking for the easy way out.

lol@Mr. Crowman

Nobody can accuse you of lacking a very energetic imagination.

I know this alone is not a smoking gun but there were numerous others talking about ten dollar oil under his various names and pointing to articles that suggested it. PS Oxide if you want to find where I explained exactly what was going on in the oil market and how it was a political war, you will find it on this date:

Comment by Whac-A-Bubble™
2014-12-12 07:38:35
I’d like to see oil drop to $10 a barrel again as it did during the last Russian currency crisis.
(Comments wont nest below this level)

Comment by Albuquerquedan
2014-12-12 08:37:12
And you are insane enough to think it will happen.

“I assume Bernanke was primarily talking about corporate tax cuts. Of course the 1% came out with a massive tax reduction… that’s a given with GOP tax reform.”

But then, the libs/globalists handed the 1% all of their speculative losses back, by backstopping all of their bad bets. Is there really a difference in terms of who both parties serve? I think not…

“Is there really a difference in terms of who both parties serve? I think not…”

Point taken, which gets to why I have to hold my nose at every election.

higher rates do not mean higher revenues and lower rates do not mean lower revenue.

I would qualify this statement as “higher rates do not necessarily mean higher revenues and lower rates do not necessarily mean lower revenue.” Taxes are an optimization problem, which is kind of the point of supply siders who use the Laffer curve to argue for tax cuts as a reflexive policy choice.

But sometimes higher taxes do lead to higher revenue, and lower do lead to lower revenue. But if you look at what Kentucky did with the Brownback tax cut (e.g. the Kentucky experiment) you will see what bad ideology of tax cutting to the bone did for their state.

I think the Republicans are blowing up the budget now and will go after social security, medicare, and medicaid in a little bit once the deficit gets a bit more out of control.