A Real Estate Bacchanalia And An Awkward Silence
A report from Bloomberg on Australia. “Prices Australia-wide have fallen for nine straight months as the housing boom goes into reverse. Sydney, where affordability is most stretched and investors had the biggest influence, is being hit hardes. ‘Sydney is at the epicentre of the housing market downturn,’ said Stephen Roberts, an economist at Laminar Capital. ‘Much of the decline in house prices seems to be related to housing investors and the tightening of lending standards.’”
“The biggest single factor weighing on house prices is credit availability, according to the survey. Regulators have gradually tightened curbs on riskier loans, such as interest-only mortgages, while also enforcing stricter expense and debt verification for borrowers. It is not the only factor, with weak wage growth, higher utilities prices and an already high debt burden also affecting prices, says NAB’s chief economist Alan Oster.”
“The ongoing banking royal commission could put further pressure on the market, with Oxford Economics’ Sarah Hunter says if new regulations are introduced, it could lead to a ‘larger correction.’ The key takeaway from economists: the ‘fear of missing out’ is now over.”
From Reuters. “It’s a winter weekend in Sydney’s bustling northern suburb of Chatswood and a three-bedroom family house sporting an endless garden is up for auction. It’s priced to sell at A$1.88 million ($1.4 million) but no buyers bite and the sale is abandoned. On the same day, in the heart of the harbor-hugging city a two-bedroom apartment with panoramic views fails to sell as no bidders turn up.”
“Auctions are a bellwether of demand in property-obsessed Australia, where attending sales is almost a national pastime. It is therefore telling that only just over half were successful the weekend last month a Reuters reporter visited some of Sydney’s auctions, compared to more than two-thirds for all of last year. And while that week was the worst since 2012, it wasn’t a one off. Auction clearance rates have averaged in the mid-to-low 50 percent range for each of the past nine weeks.”
“The recent weakness in the Australian housing market, which has been one of the drivers of an economy that has now grown for 27 years without a downturn, has some economists warning of heightened risks of a recession and even a financial crisis. With prices now in decline, the wealth effect could easily turn into a headwind. Already, households suffered the largest loss on land and dwellings in six years in the first quarter. ‘The consumer was already the weak link in Australia’s growth story,’ says Westpac senior economist Matthew Hassan. ‘The housing correction represents additional downside risk to the outlook.’”
The New York Times. “A real estate bacchanalia in recent years in Sydney and Melbourne turned some home owners into millionaires and left many millennials believing they would never be able to afford homes, sometimes leading to rifts between the two groups. Now the market’s party is taking a pause. The decline has a number of causes, including new restrictions on foreign buyers, which hindered wealthy émigrés and investors from China. But a major factor is that Australians probably could not take much more. Prices, many experts say, simply rose too high too quickly.”
“‘We are on the edge of a precipice,’ said Martin North, principal analyst for Digital Finance Analytics, an independent research and advisory firm. ‘All of the forces that have driven the home sector and the debt sector higher in the last 20 years are all coming to a critical inflection point.’”
“All of this has taken some air out of what some experts describe as a bubble, as a recent Saturday-morning auction in the Sydney suburb of Ryde showed. The owners of a three-bedroom villa there were hoping it would fetch $1.25 million. In June 2017, as many as 90 per cent of homes put up for auction each week were sold. These days, less than half are selling. When the auctioneer asked for an opening bid, he received only tight-lipped smiles and an awkward silence. A kookaburra cackled. No sale was made that day.”
“‘It’s a bit nerve-racking’ said Chris Jabbour, a young real estate agent who welcomed people through the door before the auction. ‘You don’t really know what’ll happen next.’”
“Like many young Australians, Georgia Blackie felt she needed to buy it or rent for the rest of her life. She lives in Melbourne, one of the world’s wildest and most expensive real estate markets. The values of dwellings there have risen by more than 50 per cent in the past six years alone. Lately it has cooled off, though, and people like Ms Blackie may pay the price.”
“She and her partner closed on the townhouse in August for $720,000. But since the market’s peak in November, neighbourhood home values have slipped about 6 per cent. ‘If property prices do go backward,’ said Ms Blackie, a 31-year-old lawyer, ‘where does that leave you?’”
From ABC News. “Sydney renters have the greatest choice in at least 13 years, with vacancy rates at the highest level on records that go back to 2005. SQM’s managing director Louis Christopher said there is a typical seasonal rise in rental vacancies early in winter, but these figures were much worse than usual. ‘I think this is the only time in my career that I can say with certainty that Sydney is now a buyer’s and a renter’s market, simultaneously,’ he noted.”
“Mr Christopher said the city had been flooded with a large supply of new apartments at the same time as population growth was easing slightly as many people moved to cheaper cities and regions. ‘Sydney rents are now down for the year and it is likely rents will continue to slip as there is still a lot of supply coming in the pipeline,’ he observed in the report. ‘I believe Sydney will shortly record a fall in its population growth rate due to a relatively recent steep rise in interstate migration towards Queensland.’”
The Daily Telegraph. “A record glut of vacant apartments across Sydney suburbs is creating ‘zombie blocks’ where one-in-four flats are now empty. Figures released yesterday showed there are 19,572 properties sitting vacant — with Kellyville in the Hills region the worst hit area. But even the eastern suburbs has more homes up for rent than ever before. And housing experts said the oversupply was only going to get worse as high-rise projects committed to during the housing boom still only halfway through construction are finished.”
“The Daily Telegraph found ‘For Lease’ signs erected all over apartment blocks across Kellyville yesterday. Analysis of CoreLogic records shows many buildings in Kellyville had more than 10 properties advertised for rent. At one 90-home block in Hezlett Road, 20 places were for rent. At a block in nearby Rouse Hill, 12 apartments were for rent. Windows on empty flats were so dusty they couldn’t be seen through, and landscaped gardens were empty and overgrown.”
“SQM Research director Louis Christopher said the vacancy rates were no seasonal blip, and landlords would have to get used to the idea that renters now have the upper hand in negotiations. ‘Its likely rents will continue to slip as there is still a lot of supply coming in the pipeline,’ he said. ‘Renters are in a good position now. They should consider haggling.’”
“Realestate.com.au chief economist Nerida Conisbee said the drop in demand may signal a larger slowdown. ‘Rental demand typically declines when there is job loss. It may start to show up in employment numbers soon,’ she said.”
“Rouse Hill mother-of-three Tanya, 45, said apartment living was ideal for her family but was surprised so many units in her block were empty. ‘No one wants them sitting there abandoned,’ she said. ‘If there’s no one to live in them, why do they keep building them?’”
Now that the NYT has parachuted in, it looks like it will be politically correct to say the bubble in Sydney has popped. Of course, readers here knew that long ago, but we’ll not lambast the MSM too much.
Nah! You flunkies can only see a bubble when your corporate masters allow it.
It’s a real shame what’s become of the media in this country. There’s no reporting anymore, just canned news which is fed to all the outlets. How scummy must one feel peddling those lies? I guess they have no shame as they could quit and do something respectable, but they don’t care to.
“It’s a real shame what’s become of the media in this country.”
The media creates the best news that money can buy.
“I guess they have no shame as they could quit and do something respectable, but they don’t care to.”
Like, maybe, become bankers?
“There’s no reporting anymore, just canned news which is fed to all the outlets.”
Traditional legwork to support honest reporting is too expensive compared to extending the MSM echo chamber one node further. The results are a cascading disaster when the original story is fake news.
“You flunkies can only see a bubble when your corporate masters allow it.”
Don’t forget the NAR octopus has very long tentacles. They are even freaking NPR contributors with paid advertising in a supposedly ad-free format.
Fawking used home sellers…
‘She and her partner closed on the townhouse in August for $720,000. But since the market’s peak in November, neighbourhood home values have slipped about 6 per cent. ‘If property prices do go backward,’ said Ms Blackie, a 31-year-old lawyer, ‘where does that leave you?’
Well Ms Blackie, why don’t you ask our property guru Jingle? He has all the answers about how to get rich off of other peoples money? Where does that leave her Jingle?
Jingle? Jingle?
Bueller?
I think Jingles out of RE ? My friend rents his place out and is not happy, the renters are breaking things. they also want to buy so I THINK they are trying to wear down my friend ? Chinese realtor style.
I was a landlord once, never again.
My understanding too. He saw the bust coming and got out. Something about moving to San Diego.
Given the way some posters here are demonized, I can’t blame them for leaving. I’m amazed that oxide still visits, given all the cr@p and scorn you heap on her.
Check out this narrative:
http://www.latimes.com/local/lanow/la-me-ln-homeless-older-adults-20180719-story.html
“At the age of 67, she had decided to finally transition as a transgender woman. Her insurer balked at paying her surgeon’s bills, so she put them on credit cards.
Then her post-surgery housing plans fell through. A hospital put her out on the sidewalk in a paper gown.
…Growing up in the San Gabriel Valley, “playing the role of a man” was tough, she said, but added that the stigma of homelessness is worse. ”
Maybe the LGBQT activists will help him/her out?
“At the age of 67, she had decided to finally transition as a transgender woman. Her insurer balked at paying her surgeon’s bills, so she put them on credit cards.”
You just can’t make-up stuff this good.
Almost missed this caption: “Andrea Colucci, 70, lives in a van with her emotional support dog, Beau.”
LMFAO!
It’s a van down by the river.
‘given all the cr@p and scorn you heap on her’
hy·per·bo·le
hīˈpərbəlē/
noun: hyperbole; plural noun: hyperboles
-exaggerated statements or claims not meant to be taken literally.
- synonyms: exaggeration, overstatement, magnification, embroidery, embellishment, excess, overkill, rhetoric;
‘He saw the bust coming and got out’
For years:
It’s not a bubble.
It’s not a bubble.
It’s not a bubble.
Then:
This is my third bubble!
Oh please. Mafia routinely insults her, and you say nothing.
Yeah, I get it, your sandbox, your rules.
He…her???
Jingle…Oxide.
Yeah, it’s pretty much hyperbole. But wow did I ever get it in the shorts when I revealed that I had bought my house. I remember Ben predicting that I would be underwater and walk within six months, lol.
Mafia/ha meh he’s easy. Coupla Cheetos and he’s down for the night.
“I was a landlord once, never again.”
Got tired of the Lamborghini and free chicks?
Had dinner with a friend on Tuesday. He told me he’s renting out his condo in Oxnard, CA and going to rent a room. He’s tired of paying the mortgage for 2 years and not being able to save any money or travel or be financially comfortable.
I asked him why he doesn’t just sell it now, take the money and he’ll have a nice cushion.
He says he’ll rent it out for a year and then “see how the market is.”
It will be interesting to see how he makes out as a landlord. Yikes.
Yikes. Just did the research.
Bought May 2016 for 185k
“Zestimate” = $219k
Mortgage payment (assuming 20% down and 4%) = $707 + 418 HOA = $1125
1125 x 24 months = $27k
Even if he gets the “Zestimate” he’s underwater after selling fees.
OOOF.
For that kind of $ the neighborhood has to be sketch-y. HOA fees seem pretty high too.
Oxnard is a 3rd world sh!thole…there is even a TB outbreak currently to make it official:
http://www.kvta.com/news/update-on-oxnard-tb-cases/
‘If property prices do go backward,’ said Ms Blackie, a 31-year-old lawyer, ‘where does that leave you?’
Taking a bath — and not the type you take in your condo or the Pacific Ocean. Evidently she never studied economics during her undergrad or her free time. Maybe, if she has a victim mentality, she’ll try to sue the bank/builder/seller who got her into the condo.
Cedar Mill, OR Housing Prices Crater 13% YOY As Portland Housing Bust Expands
https://www.zillow.com/cedar-mill-or/home-values/
*Select price from dropdown menu on first chart
‘economist Nerida Conisbee said the drop in demand may signal a larger slowdown. ‘Rental demand typically declines when there is job loss. It may start to show up in employment numbers soon’
May? This cutting edge forecasting is why you make the big bucks Nerdia.
Check the water-fall chart at this link out:
‘Lending to fund home renovations plunged to a 17-year low of $310.8 million in May as attitudes toward the strength of Australia’s property markets continue to darken. The latest Bureau of Statistics data represents a 22.6 per cent slump from the most recent peak of $401.3 million in September last year, in trend terms.’
‘A recent decline in property prices, led by Sydney, tighter lending restrictions and stagnant wages growth have Australians shying away from committing to expensive home improvements, according to senior CommSec economist Ryan Felsman.’
“Aussies had found it incredibly difficult to find a local tradie in recent years as the housing market was going gangbusters,” Mr Felsman said, adding that attitudes have now changed and purse strings are being tightened. “Homeowners appear to be less enthused about taking out a loan to renovate their abodes. More people are shelving immediate plans to add extra rooms or revamp kitchens and bathrooms as the housing market slows in some cities and regions.”
“Weaker sentiment was evident in all states,” NAB chief economist Alan Oster said. “Overall confidence levels fell to a new survey low, driven down mainly by NSW and Victoria where capital city house prices declined,” he said.’
Nobody could have seen it coming!
Except perhaps for us stopped-clock predictors who knew that the central bankers’ extraordinary accommodation was merely a temporary band-aid which would eventually have to be ripped off.
‘‘I think this is the only time in my career that I can say with certainty that Sydney is now a buyer’s and a renter’s market, simultaneously’…Mr Christopher said the city had been flooded with a large supply of new apartments at the same time as population growth was easing slightly as many people moved to cheaper cities and regions…‘I believe Sydney will shortly record a fall in its population growth rate due to a relatively recent steep rise in interstate migration’
Wow Louis, people leaving just as a flood of supply shows up. If they had only listened to your repeated words of caution.
Oh, right, you didn’t have any words of caution. Never mind.
(yawn)
https://goo.gl/images/z7gq2n
(From the article associated with that pic)
“Adani, a firm based in the Indian state of Gujarat, wants to build what could be Australia’s biggest coal mine… The state and federal governments support the scheme because of the jobs it would bring.”
But…but… Greenhouse gases from burning coal ?!
Arlington, VA Housing Prices Crater 13% YOY As Housing Bust Ravages Nations Capital
https://www.movoto.com/arlington-va/market-trends/
“‘It’s a bit nerve-racking’ said Chris Jabbour, a young real estate agent who welcomed people through the door before the auction. ‘You don’t really know what’ll happen next.’”
Oh yes we do.
“The key takeaway from economists: the ‘fear of missing out’ is now over.”
Say what? “Buy now or be priced out forever” is, what?, it is kaput?
Say it isn’t so. Now one should probably expect such horrors as fundamentals to raise its ugly head.
Oh, the pain!
Chinese air boxes, for use after China runs outta land.
“Floating “Ghost City” Appears AGAIN Over China Skies?”
https://youtu.be/aU_bLqWyqtc
(yawn) an article from 2015 wondering what will happen to all of those Chineese ghost cities …
https://www.forbes.com/sites/kenrapoza/2015/07/20/what-will-become-of-chinas-ghost-cities/#34dbf7952e7b
Zombies aren’t supposed to stumble and fall down dead, but this zombie company in China just did, leaving creditors holding the bag on $11B in bad loans.
Oh dear…but surely this is an isolated event that China’s scrupulously diligent central planners and regulators somehow overlooked.
https://www.scmp.com/business/commodities/article/2155920/china-borrowers-us11-billion-debt-pile-comes-crashing-down
The rocket scientists in Washington are working on a new Form 1040, and as promised it is the size of a post card. A large one, about half a piece of paper.
There are 9 new schedules though, and since tax returns tend to include things like social security numbers, it isn’t really practical to mail it in.
But hey, it is the size of a post card as promised…
https://www.wsj.com/articles/the-new-1040-tax-form-its-shorter-but-there-are-more-forms-to-fill-out-1530178201
Talk about form over substance.
since tax returns tend to include things like social security numbers
My tax returns have included my SSN since 1961 and they were mailed up until tax year 2010. What has changed to make mailing impractical?
Well yeah, you put it in an envelope and mail it. The notion that people will fill out their post card sized tax forms and mail it in like a post card is funny.
Kirkland, WA Housing Prices Crater 5% YOY As Global Housing Correction Barbecues Seattle Area
https://www.movoto.com/kirkland-wa/market-trends/
while the housing markets are starting downwards ….
Population trends in the western world are going to kick in the arse 1) tax revenue vs govt obligations and 2) demand for housing.
“For the high income countries, peak annual growth in the child bearing population took place as of 1963, but the total child bearing population didn’t peak until 2009. The population capable of child birth will continue falling through at least 2030 and likely far longer”
“The upper middle income countries peak annual growth took place as of 1985 and the total child bearing population also turned negative in 2009…and again will continue declining indefinitely.”
https://www.zerohedge.com/news/2018-07-19/global-population-growth-ceased-1988population-has-only-grown-older-then
I’m more than a little concerned with the countries that have leadership which thinks they can solve their demographic problems by letting in any and every “immigrant ” that isn’t interested in assimilation or adds more than they take.
Of course said leadership doesn’t ever have to deal with the consequences.
Gah.. we need an edit option..
Meant to say ‘takes more than they add’
Nothing some liberal immigration policies can’t “fix”. Even if other countries stop growing, their best and brightest will still try to grab the H1-B/Green Card brass ring if they can.
if we/Canada/UK/Germany etc. let in clever people with real skills that is good. The will get in the work force, start companies etc, get married have kids and pay taxes.
If we let in people that end up in roles that are lower paying or on welfare (see some of the refugees and asylum seekers), we are in a load of trouble. Speaking from the Seattle POV, about half the Somali refugees from 10 years ago are hard working. The other half are still collecting welfare and getting child support.
(see MOST of the refugees and asylum seekers)
there, fixed that for ya! If you are in Europe (sans an Eastern Euoropean country that didn’t drink the EU/Merkel Kool-Aid), you are ALREADY IN TROUBLE!
‘The recent weakness in the Australian housing market, which has been one of the drivers of an economy that has now grown for 27 years without a downturn’
I proved this is hogwash the other day. In fact the way I remember it, the UK headed down first, then Australia, then the US.
‘The decline has a number of causes, including new restrictions on foreign buyers, which hindered wealthy émigrés and investors from China. But a major factor is that Australians probably could not take much more. Prices, many experts say, simply rose too high too quickly.’
Yes, it’s the oil, the hurricanes, the interest rates, the jobs. Suddenly, it’s the prices!
‘We are on the edge of a precipice,’ said Martin North ‘All of the forces that have driven the home sector and the debt sector higher in the last 20 years are all coming to a critical inflection point.’
All these forces. An accident? Isn’t this exactly what Bernanke wanted?
September 12, 2008
“Mervyn King…the Bank of England governor, acknowledged the City was in its worst state since the 1930s, but that pouring public money into the mortgage market was fraught with risks. Mr King said the notion that there was a ‘magic solution’ to this credit collapse was ‘an illusion.’ Heavy government intervention is a risky path to take, he warned. ‘What that would do is totally undercut the incentive of private sector banks to get their own balance sheets back in order,’ he said.”
“There are opportunities for good buys in Burleigh Waters and Varsity Lakes, as booming property prices settle down, according to PRD Nationwide Burleigh principal Mark Smith.”
“‘Since November, prices have come down 10-15 per cent and market activity has come down 50 per cent,’ said Mr Smith. ‘It hasn’t just happened in our patch. It has happened across Australia and across the world.’”
http://thehousingbubbleblog.com/?p=4931
“Yes, it’s the oil, the hurricanes, the interest rates, the jobs. Suddenly, it’s the prices!”
You mean it was never labor or materials? I knew it was never “the land!” as there is a globe full of it where 95% of it goes undeveloped.
an economy that has now grown for 27 years without a downturn
Given that employment, inflation and GDP numbers around the globe are essentially meaningless, so is the quote phrase.
Realtors are liars.
Q: How can you tell that a salesman is lying?
A: His lips are moving.
I have come to the conclusion that most people, whether they are in sales or not, are chronic liars.
Almost 70% of millennials regret buying their homes.
‘Here are the biggest areas of remorse.’
‘In fact, about two-thirds of home buyers reported compromising on some sort of home characteristic, according to a survey from the National Association of Realtors.’
Wait a minute. Aren’t used shack salespeople constantly telling us, “you’ve got to compromise, get on the ladder, etc”?
“When you’re a homeowner, you can’t call your landlord to fix things, so you want to make sure you have a little extra cash in the bank,” Hale says.
Like when the R22 HVAC dies, and you need $10k for the R-410A upgrade?
Now wait a minute…I thought getting rid of r12 ended all those problems…surely you don’t mean I have to upgrade again. And again?
To be fair the newer variable speed Trane XV20i with R-410A is much cheaper to operate, but you still need $10k to start saving. Hehe.
Millennials are the worst.
Now give up the avocado toast, get a second job, and pay your mortgage, slaves.
A primary residence is almost always an expense (i.e. cashflow negative), unless you’ve got renters in your primary residence, or as was noted here recently, you’re running a brothel.
In my experience, Baby Boomers saw their houses go from 30K to 600K. Gen X’ers saw their houses go from 300K to 600K. This provided a significant salve against the carrying costs. Still cashflow negative but, wealth effect.
We’ve reached peak debt. Real estate and debt are inextricably linked. When we surpassed peak debt in 2008, the central bank did all it could to bring it back down to peak debt. Debt went back up (no “beautiful deleveraging” for the citizenry - their choice). So the price upside seems to be limited.
Net result, what the Millenials will discover, that unless you’re flipping houses or making mortgages or selling houses, you’re unlikely to profit from the bubble. They’re probably not going to get that dramatic price increase that the Boomers or Gen X’ers saw.
Lone Tree, CO Housing Prices Crater 19% YOY As Denver Housing Correction Expands
https://www.movoto.com/lone-tree-co/market-trends/
‘The ongoing banking royal commission could put further pressure on the market, with Oxford Economics’ Sarah Hunter says if new regulations are introduced, it could lead to a ‘larger correction.’
In one of these articles they talk about how this commission is finding incredible amounts of fraud. Oh don’t reign that in. We’d have a larger correction! You know what that reminds me of? Back in the day fraud came up in Phoenix and the local UHS and brokers shrugged it off and said “it’s just helping prices get to where they are going faster.”
Trump Blasts Powell’s Rate Hikes, Trespassing on Fed’s Independence
President Donald Trump criticized the Federal Reserve’s interest-rate increases, breaking with more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the U.S. central bank.
“I’m not thrilled” the Fed is raising borrowing costs and potentially slowing the economy, he said in an interview with CNBC broadcast Thursday. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time I’m letting them do what they feel is best.”
“But I don’t like all of this work that goes into doing what we’re doing,” he said, according to CNBC.
The Fed has raised interest rates five times since Trump took office in January 2017, with two of those coming this year under Chairman Jerome Powell, the president’s pick to replace Janet Yellen. In the interview, Trump called Powell a “very good man.”
https://www.bloomberg.com/news/articles/2018-07-19/trump-trespasses-on-fed-independence-blasting-powell-rate-hikes
two decades of White House tradition of avoiding comments
What about the other 85 years of the Fed’s existence?
It’s funny that Bloomberg thinks that Trump is “trespassing” on the fed’s independence when he criticizes rate hikes, but it’s ok for Powell to criticize Trump’s policies when he says a more protectionist world would be bad for the economy. Of course, Powell is really talking about the banks, which make big profits as the middlemen for trade deficits.
‘If property prices do go backward,’ said Ms Blackie, a 31-year-old lawyer, ‘where does that leave you?’”
In a word, schlonged.
It leaves you wishing you had not employed a level 2 home purchase strategy, instead of being a dumbass level 0 (nonstrategic) buyer or a level 1 Keynesian beauty contest buyer who is destined to get schlonged when the market tanks.
https://en.m.wikipedia.org/wiki/Cognitive_hierarchy_theory
The Real Journalists at the UK Guardian blame the housing slump there on a “surge of sellers.” Hmm. I’m a bit hazy on the finer points of supply and demand, but I believe the real issue here is that the supply of Greater Fools just dried up.
https://www.theguardian.com/money/2018/jul/16/uk-house-price-slump-blamed-on-surge-in-sellers
‘a three-bedroom family house sporting an endless garden is up for auction. It’s priced to sell at A$1.88 million ($1.4 million) but no buyers bite and the sale is abandoned. On the same day, in the heart of the harbor-hugging city a two-bedroom apartment with panoramic views fails to sell as no bidders turn up’
IMO we aere witnessing something historic as bubbles go. This isn’t an exaggeration:
‘Auctions are a bellwether of demand in property-obsessed Australia, where attending sales is almost a national pastime’
Or wasn’t. I would guess that 3 to 6 months ago I was reading reports of a dozen people out-bidding each other for a $1.5 million “derelict shack” in Sydney. And now no one even shows up? This is as sharp a turn around as I’ve seen. Well maybe Toronto and Vancouver swung as fast.
Anyhoo, they gotta be worried down under. Unemployment is going to skyrocket and borrowers will be missing payments.
If you get up on the net and type in “stupid people” chances are good you will be presented with this video from 2008 …
https://youtu.be/b-uPoX-1tKU
Cursory observation: Obese, uses tobacco, zero down home purchase, porcelain trinkets clutter every countertop, add a second mortgage, a car payment, dad dies… go shopping, buy handbag for $69… sell on eBay for $29 to keep the lights on, homie son wears hat backwards, foreclosure looming, now unemployed and more credit card offers in the mailbox.
Future so bright… gotta wear shades!
Sometimes I wear my hat backwards.
So does Musk.
Sometimes I wear my Tilley hat backwards.
Sometimes I wear my ghillie suit backwards. It’s hard to tell, except for the smell.
Did anyone catch this article in the Washington Post yesterday?
Housing values may fall as baby boomers die off or sell off, two studies say
Kenneth R. Harney
July 18, 2018
The Washington Post
“Will baby boomers turn into party poopers when they unload their homes in large numbers starting in the next decade? Could they create an indigestible oversupply in the market that lowers home prices and frustrates sales?”
“That’s a sobering scenario outlined by two new, provocative studies.”
“One, from Fannie Mae’s Economic and Strategic Research group, warns that the “beginning of a mass exodus looms on the horizon,” where “homeownership demand from younger generations is insufficient to fill the void left by multitudes of departing older owners.” The net result: gluts in some local markets with potentially negative impacts.”
“A second study, from the Stephen S. Fuller Institute at George Mason University, focuses on the Washington market and sees a similar problem ahead. “The significant number of older owners in relatively large homes may portend a ‘baby boomer sell-off’” in the D.C. region and elsewhere in the United States, it reports. Some longtime owners “may have difficulty attaining the price gains they witnessed in their neighborhoods during recent years,” according to author Jeannette Chapman, the Fuller Institute’s deputy director.”
https://www.washingtonpost.com/realestate/housing-values-may-fall-as-baby-boomers-die-off-or-sell-off-two-studies-say/2018/07/17/35b0dbf0-890c-11e8-8aea-86e88ae760d8_story.html?utm_term=.5b27d167d345
Geez… Harvey must have mined the HBB archives. We covered this at length years ago.
In related news:
https://www.cnbc.com/2018/07/18/most-millennials-regret-buying-home.html
Foreclosure, divorce, bankruptcy, suicide, this is the millennial homeowner future.
“An economy that has now grown for 27 years without a downturn”
Allegedly 27 years of continuous growth (a much-feted record for a developed country) and what have they got to show for it? “Weak wage growth, higher utilities prices and an already high debt burden.”
Maybe what economists call “growth” isn’t so great for average people.
“If you can’t measure what’s important, what you can measure becomes important.” — Vietnam War planner
I guess it comes from Peter Drucker’s quotes: “If you can’t measure it, you can’t manage it” and “If you can measure it, you can improve it.”
this Aussie has a YT channel covering the RE bust in Australia:
https://www.youtube.com/watch?v=P4sJnb76_OM
I’ve posted this channel here a few times. I found this in the comments to that video:
June 23, 2018
‘The auction of the ‘meticulously renovated’ designer home in North Sydney was expected to be hot. This morning five groups registered to bid — but no-one raised their card. “It’s frustrating,” was all Belle Property Mosman’s Vanessa Coles, who shares the listing of 52 West St with her colleague, Brad Rogan, could say.’
‘The property passed in with no bids and agents are now negotiating with the multiple parties keen on the stunning four-bedroom, two-bathroom home. The price guide of $2.5 million is the same as it had been in the lead up to the auction.’
‘With the auction clearance rate now in the mid-50s each week, it’s a similar story across Sydney. There’d been high hopes for another beautiful three-bedroom home at 11 View Lane, Chatswood. Known as “The Wave House” — and described as “an architectural celebration blending contemporary design with elegant 1930s charm” — it was on the market for the first time in over a decade.’
‘The common thread is buyers struggling to get finance at the last minute, with banks not offering as much as expected — or rejecting the loan outright. At another north shore auction, an interested party was just back from travelling overseas, starting a full-time job next month, but the bank wasn’t convinced.’
There are photos at the link.
Wow…almost 2M USD for that. So if it was a real auction why didn’t they lower the price?
https://www.zillow.com/homedetails/272-Goss-Ave-Santa-Cruz-CA-95065/16109462_zpid/
Well the stupidity runs rapid here in California. This home was a complete dump 3 months ago, went for auction at 550k sold for 656k half ass flip and it’s back on the market at 979k. Will be curious to see if they get what they are asking as I put a low ball offeron the auction a few months ago. Oh and you got to love the “accepting offers in “HHMM” tagline. Count down to the worst decision of your life!
Wow… and less than a block from the highway, and there’s serious traffic backed-up there 5-days/wk. I liked visiting Santa Cruz when I was coming up, but it never had real family supporting jobs. Debt slaves must drive the #17 north to silly valley for the real checks.
The marketing team failed to mention the amenities such as “soothing sounds of freeway traffic and gridlock traffic right behind your move in ready Home”
Driving the #17 north is treacherous with few safe areas to change a flat or park an overheated vehicle. In addition there’s slow moving vehicles entering or exiting from side roads due to inadequate (short) merging lanes. It’s a poorly designed highway never meant to handle the volume of traffic seen today.
https://www.redfin.com/CA/Santa-Cruz/272-Goss-Ave-95065/home/2171034
Is the “deadline” for offers a Redfin scheme to pump the hype? First time I’ve seen this… better overbid or you’ll lose out!
So it looks like who replaces Mel Watt becomes less consequential, as the FHFA’s leadership structure was just found unconstitutional. So it looks like it’ll be led by a committee?
FHFA leadership structure is unconstitutional: Judges
By Hannah Lang
July 17 2018
WASHINGTON — A federal appeals court in Texas has ruled that the single-director structure of the Federal Housing Finance Agency is unconstitutional but validated a dividend agreement requiring the government-sponsored enterprises to deliver nearly all of their profit to the Treasury Department.
The U.S. Court of Appeals for the Fifth Circuit in Texas reversed the previous court’s decision and agreed with the shareholders that the FHFA was “unconstitutionally insulated from executive control” since its single director — as opposed to a board or commission — cannot be fired by a sitting president without cause. If upheld, the decision could render the agency’s actions void.
https://www.americanbanker.com/news/fhfa-leadership-structure-is-unconstitutional-judges
Things are looking up in the US housing policy arena.
Wow… is this real news?
Santa Rosa Beach, FL Housing Prices Crater 8% YOY
https://www.movoto.com/santa-rosa-beach-fl/market-trends/
In France migrant gangs have found a new way to rob bus passengers
Published on Jul 18, 2018
https://www.youtube.com/watch?v=bO97h4dL1dI
try that in VA
EU/lefties care
….we carry !
“Non-Binary” Thug Attacks and Spits on Teen Trump Supporter in MAGA Hat (VIDEO)
Cristina Laila by Cristina Laila July 20, 2018
https://www.thegatewaypundit.com/2018/07/non-binary-thug-attacks-and-spits-on-teen-trump-supporter-in-seattle-video/
Imagine the disappointment raising a “Non-Binary” son.
It’s interesting how Sydney is the “Epicenter of the Downturn” while San Diego is greatly lagging the correction, given that we were a housing collapse “ground zero” and first mover in the 2007-2009 housing market panic.
What gives?
The media is still pumping the “lack of housing”. May not be true but the sheeple believe it because it’s fed to them daily. Get in before your prices out!
“…while San Diego is greatly lagging the correction…”
Seems like the desirable climate area’s correction is somewhat dampened. I expect the rainy and snowy area bubbles to have a much steeper descent toward the mean line. The Seattle and Denver metro areas are overdue for a reckoning, IMHO.
Airbnb exists now. But the sidewalks covered with sh@t might eliminate that impact.
credit is still readily available.
Debt=money
as long as u can service the debt your still in business.
“credit is still readily available.”
It’s going to be hell on earth if credit dries-up.
North Bethesda MD Housing Prices Crater 20% YOY As NoVA/DC Housing Market Caves
https://www.movoto.com/north-bethesda-md/market-trends/