July 3, 2018

You Can Cut Yourself Catching A Falling Knife

A report from the Daily Mail on Australia. “The notorious Sydney housing bubble appears to have well and truly burst, with property prices taking the biggest dive since the global financial crisis nine years ago. Houses in Sydney have suffered price slumps of tens of thousands of dollars as their value drops by more than 6 per cent on average - a bad time to sell and a good time to buy, according to experts. The suburb of Ryde, in the city’s northwest, suffered the biggest price fall, dropping a staggering 7.4 per cent in one year. Property value in the Inner West, meanwhile, is down 7.2 per cent; in the Baulkham Hills and Hawkesbury area, 7.1 per cent; on the Northern Beaches, 5.8 per cent; and 4.5 per cent in the western Sydney suburb of Parramatta.”

“‘We’re finding that a lot of owners are having to adjust their expectations,’ Leighton Avery, of Award Group Real Estate, told 7 News.”

From the Herald Sun in Australia. “It’s ‘an opportune time to be a buyer,’ with less competition at auctions and Melbourne’s median dwelling value at about the same level as 12 months ago. Advantage Property Consulting’s Rob German said buyers were more hesitant amid tightened lending conditions and vendors needed to adjust to where the market was at. Sellers of the three-bedroom house at 40 Esmond St, Deer Park, declined two pre-auction offers subject to finance within the quoted range and it passed in at $485,000, he said.”

“‘People are making those pre-auction offers subject to finance and if they’re not getting it they’re not even turning up to the auction … the auction system is being challenged by the onerous requirements of funding. That stock six months ago was selling like blind Freddy could sell it.’”

“Mr German said a development site with permits for eight townhouses that currently comprises two houses at 10 and 12 Erskine Ave, Reservoir, also failed to sell. The property at 10 & 12 Erskine Ave, Reservoir, remains on the market. He said the vendors bought it for $860,250 in October 2016 and had tried to sell it for $2.5-$2.6 million after obtaining the permits, knocking back an offer of $2.4 last year. The same potential buyer was the only bidder on Saturday, offering $2.3 million. ‘The vendors recognised him so set the reserve at $2.4 million and stubbornly stuck to that and the potential buyer walked away,’ Mr German said. ‘Vendors need to adjust to the market quickly at the moment. It’s already cost them $100,000 in 12 months and he’s the only buyer that they’ve got on it today.’”

From Domain News in Australia. “The Reserve Bank of Australia has dodged concerns surrounding rising mortgage rates, falling property prices and a lending crackdown to extend its record-breaking streak without moving the cash rate. ‘Ongoing home price falls in Sydney and Melbourne will depress consumer spending as the wealth effect goes in reverse,’ said AMP chief economist Shane Oliver.”

“A sustained attack on risky lending practices through tighter legislation and a royal commission has seen mortgage borrowing – particularly interest-only and for investors – slump, with Capital Economics chief economist Paul Dales arguing policymakers ‘have successfully engineered a soft landing in the housing market.’ ‘The clear danger is that this soft landing turns into something more like a hard landing,’ he said.”

The Australian Financial Review. “Chinese mainland investors Lielin Zheng and Tang Zheng have just had a taste of Australia’s bitter sweet residential property market. The Shanghai residents bought a brand new 79 square metre residence off-the-plan in Lendlease’s The Green high rise development in Brisbane for $535,000 in 2013. The development was sold out. Then Lendlease Australia chief executive Mark Menhinnitt said people were ‘embracing the opportunity to be part of Lendlease’s first inner Brisbane mixed-use development.’”

“Dozens of cranes littered the skyline in Brisbane back then. Interest rates were coming down, money was flowing out of China and foreigners were not getting hit with big upfront taxes as they are now. But fast forward less than three years and the two Chinese investors have just sold their apartment for a loss. A big loss. One of the biggest the market has seen.”

“The apartment has been purchased by a local for just $387,000. That is a 27.6 per cent loss for Lielin Zheng and Tang Zheng before stamp duty and other costs, not to mention time and effort. While the motive of those Chinese investors’ decision to sell at such a huge loss is not known, the transaction is likely to have consequences for the market. It is also why Lendlease – easily one of the top three apartment developers in Brisbane – is bracing itself. In February last year Lendlease said its buyers could be broken down into 56 per cent local, 21 per cent from China and 23 per cent from other offshore locations.”

“‘Brisbane is the most challenging inner-city apartment market in the country,’ said Kylie Rampa, the company’s Property Australia division head. ‘Inevitably there will be a rise in defaults in this market over the short term.’ And where there are defaults there are discounts. And while many might see this as an opportunity to jump into the market – there are now bus tours where you can shop for cheap apartments – remember there is always a risk you can cut yourself catching a falling knife.”

From The Star Vancouver in Canada. “Luxury property developer Westbank is denying accusations that its Chinese website was shut down, a platform that drew sharp criticism for drawing foreign money that some argue has contributed to Vancouver’s inflated real estate market. Under the ‘activity’ section of the website in simplified Chinese, the company promotes a 10 per cent first deposit on purchases, and an unlimited number of homes one can buy.”

“It lists several so-called ‘hot topics,’ selling points including banks lowering mortgage rates especially compared to England, the U.S. and Australia; Vancouver as a home for the global rich; and a 26 per cent increase in condo prices last year. But according to Vancouver housing advocate Rohana Rezel, the company’s Chinese site became inaccessible shortly after he published a post Thursday morning on his website. Rezel wrote he was ‘distressed’ and ‘dismayed’ that the Canadian government was considering a proposal from Ian Gillespie, CEO of Westbank, to potentially build 50,000 units of affordable housing in Vancouver and Toronto run by Creative Housing Society, a non-profit created by Gillespie in 2017.”

“Rezel said Gillespie’s proposed housing project is a conflict of interest with Westbank operations. ‘If you look at what Westbank has done — they have targeted exclusively the Chinese market because his director of marketing, Michael Braun, said that in an interview, posted on his website, that if the Chinese market isn’t interested, he’s not building it.’”

“Those in the real estate industry have a different take. Eddie Yan, a Vancouver and Burnaby real estate agent, doesn’t see a problem with developers advertising overseas as long as locals are prioritized and offered first. A real estate agent for 28 years, he believes a decline in foreign investments could potentially slow the whole economy. ‘When they’re not investing in here, the economy slows down a bit. They don’t buy cars, they don’t come, they don’t bring the money over. On the other side of the coin is, the next generation, like my kids, they really can’t afford to buy.’”

From Global News on Canada. “Seize assets. Prosecute. Pay whistleblowers. Those are just a few recommendations Marc Cohodes has to save Vancouver’s economy. Cohodes is a high profile short-seller and fraud-hunter who earned his reputation finding hidden problems and inflated profits on Wall Street. Lately, though, he’s turned his attention to B.C. Cohodes admits he’s friends with B.C. Attorney General David Eby, who last September hired former deputy commissioner of the RCMP Peter German to conduct an investigation into the province’s money laundering problem.”

“Reports of criminal activity started surfacing a decade ago. While this week’s report by the B.C. government – bluntly titled Dirty Money — links money laundering to B.C.’s opioid overdose and real estate crises, it doesn’t explain why the previous government, under BC Liberal leader Christy Clark, wasn’t able to stop it. ‘The BC Liberals and Christy Clark hid under the guise that it was good for the economy, when in fact unless something happens — and happens soon – it’s going to destroy the economy and may destroy the city.’”

“‘I think [Eby] should prosecute and investigative people who fueled this, people who profited from it on the backs of hardworking B.C.-ers,’ he said. ‘I think the B.C. government needs to seize assets, sell the assets at an auction, split half the money with the Chinese government, split half the money with B.C. and give the whistleblower or finder, say, 10 per cent.’”

“It’s a dramatic proposal for a dramatic problem in British Columbia: the blend of organized crime, drug trafficking and a housing affordability crisis. In his report, German recommended the establishment of an independent regulator for the casino industry to rein in money laundering. Cohodes takes issue with the finding in Dirty Money that only $100 million has been illegally funneled through B.C. casinos. ‘The numbers in my mind are in the tens of billions of dollars and I think the reasons those numbers don’t come out is because the government doesn’t want to scare the hell out of people,’ he said.”

“He’s recommended to Eby that authorities reward whistleblowers who tip off the government to drug trades or luxury home and car ownership. German’s report lists China, Mexico and Colombia as key players in a ‘complex network of criminal alliances’ coalescing with underground banks at its centre. ‘In addition, ‘high rollers’ from China facilitate the flight of capital from China using Canadian casinos, junket operations and investment in real estate,’ it says, which is why Cohodes focuses his arguments squarely on money launderers from there.”

“While he says the problem can be fixed, it won’t stop Vancouver’s real estate bubble from bursting. In his view, the market is already essentially frozen. ‘The sooner it resets and resets severely, where hard working B.C.-ers who are born here and want to live here, want to own a place, the better everyone is,’ Cohodes says. ‘Real estate collapsing is a long term plus, but short term it’s gonna be a b****.’”




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83 Comments »

Comment by Ben Jones
2018-07-03 07:42:09

‘While the motive of those Chinese investors’ decision to sell at such a huge loss is not known, the transaction is likely to have consequences for the market’

But they’re laundering money, they don’t care how much they lose, right? What if you are one of the poor bashtards that bought one next door? Fooked!

Comment by 2banana
2018-07-03 07:54:41

But…but…comps! Appraisals! The TAX BILL!

 
Comment by octal77
2018-07-03 08:00:43

“…But they’re laundering money,…”

My gut instinct goes with money laundering.

For many years, here in Irvine (Orange County, Ca), just too many expensive, mostly new, empty (or very lightly occupied) houses.

Have absolutely no hard data to support my theory, but if it looks like a duck, walks like a duck….

Comment by CHE
2018-07-03 12:21:35

1980 ($120k) tract home across the street from my parents in Irvine, CA bought for $1 mil by Chinese two years ago.

They’re barely ever there, and sometimes they let friends stay. Other than that, it sits empty most of the time.

Comment by octal77
2018-07-03 12:26:52

Yep.

You can observe a lot by just watching — Yogi Berra

Just ’sayin…

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Comment by Ol'Bubba
2018-07-03 19:29:58

In 1980 $120k was a lot of money for a house. Even so, going from $120k to $1M in 36 years works out to a compounded annual growth rate of 6.07%.

Like Yogi said, “Nobody goes there anymore. It’s too crowded.”

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Comment by Ben Jones
2018-07-03 07:44:24

‘Eddie Yan, a Vancouver and Burnaby real estate agent, doesn’t see a problem with developers advertising overseas as long as locals are prioritized and offered first. A real estate agent for 28 years, he believes a decline in foreign investments could potentially slow the whole economy. ‘When they’re not investing in here, the economy slows down a bit. They don’t buy cars, they don’t come, they don’t bring the money over. On the other side of the coin is, the next generation, like my kids, they really can’t afford to buy.’

You know Eddie, this is how you got here in the first place. Shacks aren’t a basis for the economy. And listening to used house salesmen about economics makes as much sense as listening to used car salesmen.

Comment by Taxpayers
2018-07-03 10:35:06

Empty homes don’t clog roads or send kids to school=nirvana

Comment by b
2018-07-03 11:19:16

So ….

Pros: if they are paying property taxes (and maybe a foreign buyer and vacancy levy), and dont have kids in the schools or use other municipal services —> City makes out

Cons: drive prices up, there is some money laundering (but impacting China or …), encourage the wrong behavior in the financial and real estate businesses.

Comment by 2banana
2018-07-03 11:56:21

What are the pros of having 20+ family members living in a 4bed/2.5 bath house with 6 cars in the driveway/street?

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Comment by Mortgage Watch
2018-07-03 07:46:10

Naples, FL Housing Prices Crater 7% YOY

https://www.zillow.com/naples-fl/home-values/

*Select price from dropdown menu on first chart

Comment by gun.todd@gmail.com
2018-07-18 15:28:50

Don’t believe the Zillow data. It’s meant to be a reference. Zillow collects tons of data and info from other sources and compile and use proprietary formula to determine forecast and predictive analysis.

Agree that most consumers do use websites like Zillow, trulia, redfin and realtor.com.

 
 
Comment by Ben Jones
2018-07-03 07:48:07

‘Cohodes takes issue with the finding in Dirty Money that only $100 million has been illegally funneled through B.C. casinos. ‘The numbers in my mind are in the tens of billions of dollars and I think the reasons those numbers don’t come out is because the government doesn’t want to scare the hell out of people’

Remember all the years the government would say, “we don’t have data on foreign buyers or money laundering” while they would catch people with suitcases of money, fine them a couple thousand pesos and let them go!

And the Australians would always say, “we don’t let foreigners buy existing shacks”. Then when asked how many had been caught, they found - none!

 
Comment by 2banana
2018-07-03 07:59:31

Not going to give it away!

Even when staring at bankruptcy.

I bet the alligator cost them more then $100,000 over the last 12 months…

+++++

He said the vendors bought it for $860,250 in October 2016 and had tried to sell it for $2.5-$2.6 million after obtaining the permits, knocking back an offer of $2.4 last year. The same potential buyer was the only bidder on Saturday, offering $2.3 million. ‘The vendors recognised him so set the reserve at $2.4 million and stubbornly stuck to that and the potential buyer walked away,’ Mr German said. ‘Vendors need to adjust to the market quickly at the moment. It’s already cost them $100,000 in 12 months and he’s the only buyer that they’ve got on it today.’”

Comment by oxide
2018-07-03 19:27:09

“knocking back an offer of $2.4 last year. The same potential buyer was the only bidder on Saturday, offering $2.3 million. ‘The vendors recognised him so set the reserve at $2.4 million and stubbornly stuck to that and the potential buyer walked away,”

That buyer sounds like an HBBer through and through. Good on him.

Comment by BlackSwandive
2018-07-03 21:25:18

I’d counter with $900k.

 
 
 
Comment by Mortgage Watch
2018-07-03 08:06:02

Irvine, CA 92618 Housing Prices Crater 12% YOY

https://www.zillow.com/irvine-ca-92618/home-values/

*Select price from dropdown menu on first chart

 
Comment by Get Stucco
2018-07-03 08:14:09

Try not to catch yourself a falling knife.

 
Comment by Ben Jones
2018-07-03 08:28:40

‘Ongoing home price falls in Sydney and Melbourne will depress consumer spending as the wealth effect goes in reverse’

Well that’s the thing about phony wealth effects Shane. They’re phony. Now you find out what happens when people thought they were wealthy and find out they aren’t. Have a good day!

‘A sustained attack on risky lending practices through tighter legislation and a royal commission has seen mortgage borrowing – particularly interest-only and for investors – slump, with Capital Economics chief economist Paul Dales arguing policymakers ‘have successfully engineered a soft landing in the housing market.’

‘The clear danger is that this soft landing turns into something more like a hard landing’

Wait a minute Paul. Landing means on the ground or something. If they’ve already got a soft landing, how could that turn into crater? Unless of course, the whole analogy is a crock.

Comment by 2banana
2018-07-03 08:48:19

But kinda entertaining….

 
Comment by Mr. Banker
2018-07-03 10:04:47

I predict this is what a soft landing will look like …

https://goo.gl/images/4ZUk5s

Comment by rms
2018-07-03 10:18:07

+1 CR8R

 
Comment by Ben Jones
2018-07-03 10:18:11

July 26, 2006

Some housing bubble reports from Wall Street and Washington. “Downward momentum in the U.S. housing market is leading some of America’s biggest mortgage lenders to launch new cost cuts and risk reduction strategies that suggest growing concern that the outlook is worsening for the $9.5 trillion home mortgage industry.”

“‘I’ve never seen a soft-landing in 53 years, so we have a ways to go before this levels out,’ Countrywide CEO Angelo Mozilo said on a Tuesday conference call. ‘I have to prepare the company for the worst that can happen.’”

“At New Century, one of the nation’s biggest subprime lenders, CEO Brad Morrice told Reuters the company has tightened some credit requirements as it puts ‘more thought into loans you want to make or don’t want to make.’”

The Union Tribune. “An avalanche of investors paying top dollar to buy office buildings, San Diego’s commercial real estate market may be showing signs of slowing. GreenPoint Mortgage vacated 110,000 square feet on Willow Creek Road along the I-15 corridor. And Capital One is leaving several floors in the First National Bank tower downtown.”

From MarketWatch. “Pulte Homes announced today net new home orders for the quarter were 9,455 homes, which represent declines of 30% and 29%, respectively, from prior year second-quarter results. ‘Our second quarter results reflect the changing dynamics being experienced in the homebuilding industry,’ said Richard Dugas, Jr., CEO.”

“‘The supply of homes for sale continues to increase, while greater buyer uncertainty about purchasing a home at this time is being further impacted by their inability to sell existing homes and the effect higher prices and interest rates are having on overall affordability,’ Dugas said.”

“Meritage Homes today announced second-quarter results for the period ended June 30, 2006. ‘Demand from investors and speculative buyers has decreased dramatically; inventories are up; and price concessions have increased. These conditions make it more difficult for our buyers to sell their existing homes, resulting in higher order cancellations. While gross orders for the second quarter of 2006 were down 17% compared to the previous year’s quarter, higher cancellation rates reduced net orders by 28% for the same period,’ said CEO Steven Hilton.”

“For the first time in more than a decade, home prices could start to fall around the country in coming months, the NAR said Tuesday. David Lereah, NAR’s chief economist, said he expects ‘price numbers to start deteriorating.’”

“On Thursday, the Commerce Department will report new-home sales for June, and economists such as Phillip Neuhart of Wachovia expect those figures, too, to show continuing weakness. ‘The numbers are not fully counting cancellations, which builders are reporting at a very high level,’ Neuhart said.”

From Bloomberg. “The National Association of Homebuilders ‘believes that the Federal Reserve has been relying on deficient inflation measures to rationalize the interest rate hikes that have been taking a serious toll on the housing sector,’ Joseph M. Stanton, the association’s chief lobbyist, wrote.”

“‘Ironically, much of the recent increase in `core’ consumer price inflation that the Federal Reserve is trying to control with higher interest rates is coming from a weakening housing market, which is increasing the demand for rental units. That translates into a sizeable increase in the large `owners’ equivalent rent’ components of the core inflation measures,’ Stanton said.”

“‘Fighting an increase in core inflation stemming from this component is an inappropriate use of monetary policy, since tighter policy will cause rents to rise further and put additional upward pressure on the core inflation measures,’ he argued.”

“Tens of thousands of new and existing condo units are on the market, and thousands more are under construction. In other instances, some older apartment complexes, which were to be converted to condos, will be renovated and remain on the rental market.”

“The Commerce Department reported yesterday that the number of unsold homes on the market rose to 3.725 million units, almost 40 percent more than a year earlier. ‘This implies that we are only at an early stage of home sale problems,’ economist Ken Mayland told his clients. ‘At some point along the way, prices could crack big time.’”

http://thehousingbubbleblog.com/?p=1134

Comment by Ben Jones
2018-07-03 10:31:43

From the comments to that post:

Comment by Casa$Loco
2006-07-26

“The Phoenix housing market is in the toilet, truth is there is no market. Housing in my neighborhood have sitting for 5+ months. They have just begun to lower prices, measly 5% drops, which are doing NOTHING to bring any traffic to the homes. There are perpetual open houses that go on 7 days a week and I haven’t even seen any potential buyers parked on any of the streets. ZipRealty.com has ~52,300 homes on the market in Maricopa County today, whereas last year at this time they had ~4500. I can confidently report that we have run out of idiots in Phoenix!”

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Comment by Jim Brutoski
2018-07-03 10:45:55

another lie by a liar. I count 19,615 total on the market and 12k single family homes. exclude pending and new contruction its only 7k.

52k? LOL can i have what you are smoking

 
Comment by Ben Jones
2018-07-03 11:40:06

‘another lie by a liar’

Did you notice the date on the comment? I posted it to show how quickly speculative inventory can be exposed.

 
Comment by butters
2018-07-03 12:51:58

show how quickly speculative inventory can be exposed.

They have gotten lot better at hiding data this time around though.

 
Comment by BlackSwandive
2018-07-03 14:05:26

LMAO. C’mon, Jim, try to pay attention.

 
Comment by BlackSwandive
2018-07-03 14:07:54

From 4,500 to 52,300 listings in a year’s time. That’s what you call an INVENTORY EXPLOSION. Will be interesting to see what happens this time around, but with almost 20k listings already (if Angry Jim’s numbers are accurate), it’s not looking pretty.

 
Comment by Professor 🐻
2018-07-04 01:13:58

“‘I’ve never seen a soft-landing in 53 years, so we have a ways to go before this levels out,’ Countrywide CEO Angelo Mozilo said on a Tuesday conference call. ‘I have to prepare the company for the worst that can happen.’”

What excellent and prophetic insights the Tan Man had to offer back in the day!

 
 
Comment by Taxpayers
2018-07-03 11:24:11

Office buildings?
Here they are distressed
15 years of 15% vacancy rates

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Comment by oxide
2018-07-03 19:30:42

Got any intel on strip malls
sick of nails and China Garden take-out

 
 
 
 
 
Comment by 2banana
2018-07-03 08:50:51

(2nd Try…)

Even the liberals/progressives see the evil symptoms of obama’s QE1. QE2, QE3, QE4, Operation Twist, ZIRP, HARP, TARP, adding more to the deficit than all other administrations combined and accounting for inflation, bank bailout after bailout, nationalizing the mortgage industry, not one banker in jail, etc., etc. , etc.

So, of course, the ONLY solution is bigger and bigger government, higher and higher taxes and more and more regulations.

Long article – worth a read, especially between the lines.

+++++

The Death of a Once Great City - The fall of New York and the urban crisis of affluence
Kevin Baker – Harper’s – 7/2/2018

Comment by Ben Jones
2018-07-03 09:09:12

I’m not going to let anyone post entire articles.

Comment by 2banana
2018-07-03 09:17:02

I posted only about 10% of the article. It is a very long article.

https://harpers.org/archive/2018/07/the-death-of-new-york-city-gentrification/

Comment by rms
2018-07-03 10:16:07

401 posted it yesterday… a huge change is underway on the scale of analog to digital magnitude.

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Comment by Anonymous
2018-07-03 11:25:06

Every time I read about delays on NY’s trains/subways, I think of the observation about Mussolini making the trains run on time.

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Comment by butters
2018-07-03 12:48:14

Obama QE’s done by the republican BernaQE.
You live in your dreams.

Comment by aNYCdj
2018-07-03 14:23:54

This is what I have been saying for years……

“Not long ago a rent-stabilized building would sell for ten or at most twelve times its rent roll—the amount of money, before expenses, that it generates in a year,” wrote journalist Michael Greenberg in a meticulous analysis that appeared in last August’s New York Review of Books. “Today it sells for perhaps thirty or forty times that amount, or ten times what the rent roll would be after regulated tenants have been dislodged.”

So the incentive is to make things miserable for low rent people and leave or Heavens forbid BUY them out of their lease..

Comment by oxide
2018-07-03 19:35:13

IMO rent control folks should have to submit some kind of proof-of-employment form that they work a low-pay necessary job to warrant controlled rent. Teacher, firefighter, works at a deli, something anything. And renew every six months, or the apt goes to market rate.

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Comment by brazendetre
2018-07-03 16:27:42

New Yawk power playbook 2018

1) Attend Boston U at a cool 60K/year
2) End up a bartender
3) Become a devotee of Marx, blame capitalism for (1) and (2)
4) Get elected to lord over the peons <- you are here
5) Profit

Comment by OneAgainstMany
2018-07-04 13:56:09

Question:

1) What are you majoring in?
2) Who is loaning you the 60k a year?
3) If Mr. Banker’s dumbed down, idiotic populace takes money for a a degree that will not lead to any meaningful earning potential, does the lender bear some of the responsibility for making the load?

What’s wrong with allowing student loans to be discharged in bankruptcy? It would get rid of a lot of flim flam degrees pretty quickly as lenders aren’t going to be keen on making loans to university students whose career path is to a Starbucks barrista.

Comment by OneAgainstMany
2018-07-04 13:57:23

*making the loan

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Comment by tresho
2018-07-04 15:09:41

What’s wrong with allowing student loans to be discharged in bankruptcy?
IIRC, this was discussed when the law was amended to make such loans not dischargeable in bankruptcy. IMHO if they were, - they wouldn’t be made at all.

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Comment by OneAgainstMany
2018-07-07 08:29:45

I think they would be made, but they would be for much less and the criteria would be much more judicious. We have unsecure consumer loans now that can be completely discharged in bankruptcy and that hasn’t derailed lending, despite the ability for people to rack up credit card debt on shopping sprees.

 
 
 
 
 
Comment by jeff
2018-07-03 09:20:32

Brian Ross’ career at ABC News comes to a quiet end

Erik Wemple,
The Washington Post
Published 10:50 pm, Monday, July 2, 2018

“Hey now you and @DanRather can get together and fabricate more lies and spread them as news,” one person wrote.

In today’s world, there’s a media critic everywhere there’s an Internet connection - and people haven’t forgotten about Ross’ fateful error last December. The one, that is, where Ross, the chief investigative correspondent for ABC News, reported that fired national security adviser Michael Flynn was ready to testify that Trump told him to contact the Russians during the campaign.

Such a revelation, if true, would have been a slap in the face to the whole no-evidence-of-collusion crowd. As it turned out, ABC News was forced to concede that no such directive took place during the presidential transition.

https://www.washingtonpost.com/blogs/erik-wemple/wp/2018/07/02/brian-rosss-career-at-abc-news-comes-to-a-quiet-end/

Comment by Mr. Banker
2018-07-03 10:12:42

“’Hey now you and @DanRather can get together and fabricate more lies and spread them as news’, one person wrote.”

Lol. Here’s Dan Rather describing the Zupruder film …

https://youtu.be/bI50fgzwaKc

 
 
Comment by Mortgage Watch
2018-07-03 09:23:54

Hammond, OR Housing Prices Crater 9% YOY

https://www.movoto.com/hammond-or/market-trends/

 
Comment by Apartment 401
2018-07-03 09:40:54

Realtors are liars.

 
Comment by Ben Jones
2018-07-03 09:55:06

‘While this week’s report by the B.C. government – bluntly titled Dirty Money — links money laundering to B.C.’s opioid overdose and real estate crises, it doesn’t explain why the previous government, under BC Liberal leader Christy Clark, wasn’t able to stop it. ‘The BC Liberals and Christy Clark hid under the guise that it was good for the economy, when in fact unless something happens — and happens soon – it’s going to destroy the economy and may destroy the city.’

‘The BC Liberals and Christy Clark hid under the guise that it was good for the economy’

Just who comes to mind with Christy?

What if it’s not a bubble? - Real Estate Marketer Bob Rennie addresses UDI - Part 1

https://www.youtube.com/watch?v=NCSIg51DLDk

‘2016: The Scam Reviewed’

‘In addition to perennial favourites “f— bob rennie” and/or “bob rennie asshole,” some of the more interesting search terms that drove traffic to this blog over the past year included the following:

“vancouver real estate rise in the early 70s and fraudulent real estate schemes”
“the worst one on the real housewives of vancouver”
“1960s cates park hippie faire north vancouver”
“what happen to vancouver its a sh#thole”
“douchebag hipster yoga bc resident”
“vancouver is f—ed”

Comment by Ben Jones
2018-07-03 09:58:30

May 5, 2018

A report from Macleans in Canada. “When Toronto-area home prices began their slide, the market served up painful lessons for buyers and sellers alike — and revealed shady behaviour that helped inflate prices in the first place. John, who asked that his name not be used for reasons that will become obvious, knew he had to make an offer. He figured he could rent it out, and if the payments didn’t cover the mortgage costs, no matter. Back in early 2017, home prices in Toronto were on an unstoppable tear, surging double-digits every month. The house would surely be worth more in no time. The home was on the market for only a few days when John’s offer was accepted. He bid nearly $1.9 million, about $360,000 more than the list price. Then everything fell apart.”

“During the closing period, the Ontario government introduced the Fair Housing Plan, which included a 15 per cent tax on non-resident buyers. The plan released the air from the housing market, and prices took a nosedive. John’s investment property sat on the market for 27 agonizing days before a buyer could be found. The home sold for 25 per cent less than what John had paid just five months earlier, leading to hundreds of thousands of dollars in losses. ‘I was so greedy,’ he says now. ‘I will not play the game like that again.’”

“John’s tale of misfortune isn’t exactly unique. Hundreds of Greater Toronto Area residents were caught when the housing market took an abrupt dive last year after a long run of booming activity. For the first time in a generation, it was possible to lose money in the Toronto real estate market. A detached house in Richmond Hill, Ont., was purchased by a real estate agent and a business partner for $2.1 million in February as an investment property. They sold it again in November for $1.7 million—a 19 per cent loss. Similarly, a would-be real estate investor spent $1 million on another home in Richmond Hill, intending to renovate, according to the agent involved. The purchaser hit financial trouble in a matter of months and had to offload the property. The home eventually sold for 15 per cent less than the previous purchase price.”

“Another house east of the city sold for $75,000 over the asking price at the end of March. The purchasers, who lived in the home, couldn’t find a cheaper mortgage. ‘The monthly payments were just insane, so the only option was to lose a hundred grand and sell the property,’ says Paul Jaypour, the real estate agent who sold the house the second time. The original purchasers took an 18 per cent loss. ‘The worst is still to come,’ he predicts.”

“All Lisa Mastrangelo wanted to do was sell her house. ‘It turned into the biggest nightmare of my life,’ she says. Mastrangelo was going through a divorce, and decided to sell her home in Oshawa, Ont., where she lived with her two teenage daughters, and move to a smaller place. At this point, Mastrangelo was carrying two properties and a bridge loan, and facing a lawsuit and escalating legal fees. ‘I couldn’t even talk about the situation without bawling my eyes out,’ she says. ‘Financially, I’m not ahead,” she says. “We’re only just starting to get back to normal and have a life again.’ Mastrangelo filed a lawsuit against the first buyers and hopes to recover the difference in purchase prices.”

“A falling real estate market can also reveal shady behaviour that helped inflate prices in the first place. Monica Peters, a lawyer in Toronto, cites cases where transactions involve straw buyers or fake names in order to conceal the ultimate purchaser. The real buyer can then speculate on the market with little fear of consequences if the transaction fails. Similarly, pursuing a non-resident buyer in court can be both pricey and onerous. ‘I’ve had cases where this person exists, but they’ve gone back to China,’ Peters says. ‘I can sometimes spend five to 10 thousand dollars trying to track that person down.’”

http://thehousingbubbleblog.com/?p=10423

“bob rennie: current title holder of the biggest asshole in canada”

https://twitter.com/torquilcampbell/status/744880110449332224

“Chimera” (an imaginary monster comprised of grotesquely disparate parts; a fanciful mental illusion or fabrication) was the most popular search term driving traffic to the blog. Some others:

-arthur erickson graham house
-arthur erickson house and garden
-blandcouver almost afraid
-bob rennie is an asshole

https://scamcouver.blog/2013/12/31/2013-the-scam-reviewed/

Comment by Ben Jones
2018-07-03 10:00:56

‘Another house east of the city sold for $75,000 over the asking price at the end of March. The purchasers, who lived in the home, couldn’t find a cheaper mortgage. ‘The monthly payments were just insane, so the only option was to lose a hundred grand and sell the property,’ says Paul Jaypour, the real estate agent who sold the house the second time. The original purchasers took an 18 per cent loss. ‘The worst is still to come,’ he predicts.’

Has the US media told you this is going on up north?

 
Comment by b
2018-07-03 11:36:55

the original post had the 2 para’s below

if only Canadians had found a way to push the money into something useful. I am from the Toronto suburbs - the amount of Chinese and other money that went into downtown condos and in houses in the suburbs like Markham and Richmond hill is incredibly huge. So the real estate folks, the mortgage brokers, and car sales men got their commissions - now what.

—————————–

“It is hard for anyone from the political right or left to ignore the declarations of, for instance, The National Bank of Canada, which said ‘almost $13 billion was spent by Chinese investors in Vancouver’ in one recent year alone. Significantly, the ‘gasoline’ metaphor adopted by the Royal Bank’s McKay is much like the one Vancouver activist Justin Fung, of HALT (Housing Action for Local Taxpayers), has been trying to get out for years.”

“‘I have always made the analogy that local speculators are the firewood and the foreign investors, money launderers and fraudsters are the fire starter. The fire would have burned either way, but with the fire starter added, it creates a fireball,’ Fung said.”

Comment by 2banana
2018-07-03 12:00:32

How not to have a fireball.

20% down-payments
Full verification of income/savings
Banks EAT THEIR BAD LOANS
Not one mortgage guaranteed by the taxpayer
Bankers get fired for a few bad loans loans and go to jail for fraud

So simple - even a caveman could so it.

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Comment by Anonymous
2018-07-03 12:52:58

Cavemen were far smarter than our “leaders.”

 
Comment by Professor 🐻
2018-07-04 06:36:46

2banana for Mel Watt’s replacement as FHFA Director!

 
 
Comment by Ben Jones
2018-07-03 12:09:31

‘almost $13 billion was spent by Chinese investors in Vancouver’ in one recent year alone’

The REIC would have you believe they own 1 or 2% of the shacks.

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Comment by Ol'Bubba
2018-07-03 19:39:32

$13 billion at $1 million/shack pencils out to 1300 units. How many units comprise the Vancouver single family real estate market?

 
Comment by Ben Jones
2018-07-03 19:48:42

$13 billions in one year. In one city. And this is the amount the crooked as heck Vancouver REIC admits.

 
Comment by Mafia Blocks
2018-07-03 20:11:06

That’s 13 THOUSAND new houses….in a single year.

Now that’s a stunning amount of crime these UHS are on the hook for.

 
Comment by Albuquerquedan
2018-07-04 07:37:58

Canada’s GDP is less than one tenth of our GDP so that is a similar impact as adding more than $130 billion in sales to our economy and that is one city. We better hurry up and build the Mexican wall because we might need one with Canada soon

 
 
 
Comment by Professor 🐻
2018-07-04 06:32:07

“During the closing period, the Ontario government introduced the Fair Housing Plan, which included a 15 per cent tax on non-resident buyers.”

Could a similar plan work to restore affordability to California’s residential real estate, by cutting out the foreign money launderers, the Zilldo specuvestors, and the Wall Street greed pigs who drive prices skyward?

Residential housing’s primary purpose should be to house residents. Let the moneyed gamblers play with traditional risk assets like stocks, bonds, and cryptocurrency startups. Keep real estate built to house families who just want a place to raise their kids out of the casino.

Comment by OneAgainstMany
2018-07-04 14:02:13

“Keep real estate built to house families who just want a place to raise their kids out of the casino.”

That’s the most sensible thing I’ve heard all week. Happy 4th of July to all HBB posters!

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Comment by hwy50ina49dodge
2018-07-03 10:29:02

“New York, New York!”

“I think the market is just moving $ideway$,” he said.

(Bugs: “eh, could bee …)

Manhattan real estate had its worst second quarter since the financial crisis, with prices and sales dropping and inventory rising, according to a new report.

Total sales in Manhattan fell 17 percent in the second quarter from a year ago, according a report from Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants. The average sales price fell 5 percent to $2.1 million.

Brokers blamed the decline partly on bad weather and other temporary factors.

“The market is resetting to a lower, more long-term level of activity,” said Jonathan Miller, CEO of the appraisal firm Miller Samuel.

One of the biggest problems is the glut of new condos under construction, especially in the luxury segment. The inventory of luxury apartments for sale jumped 10 percent to its highest level for a second quarter in seven years. There is now a 16-month supply of luxury units, according to the report, and luxury apartments

 
Comment by butters
2018-07-03 11:06:28

Thought everyone wants to live there. Supply and Demand?

 
Comment by b
2018-07-03 11:47:50

i would look at the ‘burbs first for the impact of the price declines

Example: in the big money center banks and investment houses (Chase, Citi, GS, MS etc) the business types are housed in Manhattan. Their tech workers are housed in places like Jersey City (right across the river), Queens etc. Many of those workers making good $s started buying condos and townhouses — counting on their annual bonuses to help with expenses.

In a financial downturn (that will probably come with the housing downturn), please watch out.

I have a business acquittance who bought an almost $1.3M Condo on the Jersey waterfront in the spring of ‘17. He is complaining about the condo fees now - imagine if the prices drop 20 or more 5

Comment by 2banana
2018-07-03 11:54:57

The alligator + taxes + condo fees + no sweet equity = FB

Comment by Mafia Blocks
2018-07-03 12:20:53

…. and depreciation…. which makes donkey very angry.

https://bit.ly/2MMhixw

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Comment by Mortgage Watch
2018-07-03 11:02:26

Miami Beach, Florida Housing Prices Crater 5% YOY

https://www.movoto.com/miami-beach-fl/market-trends/

 
Comment by Anonymous
2018-07-03 12:55:32

Easy come, easy go…

- Over 800 cryptocurrencies are now dead and worth less than one cent.
- New digital tokens are created through initial coin offerings but some of these projects have been scams and many have not materialized into real products.
- Bitcoin has fallen roughly 70 percent since its record high near $20,000 last year, adding to bearish sentiment around cryptocurrencies.

https://www.cnbc.com/2018/07/02/over-800-cryptocurrencies-are-now-dead-as-bitcoin-feels-pressure.html?recirc=taboolainternal

Comment by BlackSwandive
2018-07-03 14:16:59

This whole crypto scam can’t end soon enough. When looking back on this period of time in history, crypto will stand out as the most outrageous bubble of all.

Comment by Professor 🐻
2018-07-04 06:43:54

It will also stand out as one of many speculative bubbles spawned on the back of QE, rather than a special case.

 
 
Comment by Professor 🐻
2018-07-04 06:49:48

Bitcoin Price Predictions: Take them With a Pinch of Salt, Says Peter Tchir
Bitcoin News
By Osato Avan-Nomayo
Last updated Jul 2, 2018
Image courtesy of Twitter (@TFMkts)

Not a day goes by without a self-proclaimed expert dropping a Bitcoin price prediction. The “cryptosphere” is filled with a multitude of forecasts ranging from going to zero or reaching a million dollars. Many of these predictions have no analytical backing. Even the ones that do are tenuous at best, trying to explain a market shrouded in the unknown.

 
 
Comment by BubblevilleCA
2018-07-03 16:24:17

Chinese investing declines and then the housing values follow. Any connection here? When I have brought up the theory that Chinese / foreign investors have driven up prices to realtors they laugh and say it has nothing to do with foreign investors and its all about a market that will only continue to shoot to the moon… get in while you still can!!!

Comment by BlackSwandive
2018-07-03 22:18:14

They’ve got bills to pay - it’s always a good time to buy OR sell.

 
 
Comment by Mortgage Watch
2018-07-03 20:14:06

North Palm Beach, FL Housing Prices Crater 11% YOY

https://www.movoto.com/north-palm-beach-fl/market-trends/

 
Comment by MGSpiffy
2018-07-03 20:17:36

An interesting sight here in the pricey Seattle suburbs today.

5 houses in my little corner of the neighborhood have come on to the market in the last ~5 weeks. About double the listing activity compared to last year.

The 3 lower priced ones ( ~$1.2 - $1.3M ) have gone pending within a week, even with some fairly high price per Sq Ft values (small mid-century/ranches). The midrange one ( ~$1.5M ) took about 3-4 weeks for the signs to go down (Zillows says it went pending quicker).

And the highest priced one? (~$1.8M) after going on 2 months (and despite being a good bit larger house than the 3 cheapest and with a much lower $/sq ft) we had a sighting of a something not seen around these parts in a few years…. A big old “PRICE REDUCED” Sign out front today.

Very interesting to see, as when I have watched a couple wishing priced houses in the area not sell at all, they never advertised the fact when they cur prices. This puts it all out for everyone to see (as the house is on the way to/from the main road that everyone takes). A few more sightings like that and panic will set in…

And it fits my other local observations. As the cheaper stuff pours online and finds the last of the pent up buyers, I expect the slowdowns to move down the price scale, and the expected summer heat turns into Seattle Grey for the Realtors(tm). We’ll see how I fare - I’m here for the long haul, and paid less than any of these listings for a lot more land/house.

In other news, we’ve had sightings of mama raccoons on the deck, bringing their little fuzz-ball babies out for the first time. And temperatures for July 4th are finally warming up and breaking into the 70s (and maybe more soon), so I can stop wearing thermal socks everyday. Have a great 4th everyone!

Comment by drumminj
2018-07-03 20:20:56

so I can stop wearing thermal socks everyday

Why would you want that??? Part of what I love about living around here is you can wear your warm, fuzzy clothes year-round! :)

Comment by rms
2018-07-03 21:26:04

I really love wearing unlined coarse wool from Filson. At home in the evening I frequently wear a Merino wool sweater.

 
Comment by MGSpiffy
2018-07-04 01:39:49

It’s a little dig for everyone else in the country - while they are getting fried in a heat wave, here I am struggling to stay warm :)

I Love my big fuzzy thermal socks - my wife refers to them as “Muppet socks”

Comment by Professor 🐻
2018-07-04 07:11:49

We’re suffering immensely here in San Diego with our sixty-degree nights and seventy-degree days.

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Comment by Albuquerquedan
2018-07-04 07:40:23

It is going to be 90 or above Friday so try not to brag too much

 
 
 
 
 
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