Investors Don’t Want To Catch A Falling Knife
A Saturday desk clearing post on international markets. “A proposal for a downtown Vancouver luxury condo tower that was scheduled to go to a public hearing next week has been abruptly cancelled by the owner. It’s a sign of what some see as a shift in Vancouver’s hot real estate market, as the demand for high-end property has weakened. Realtors and real-estate analysts say it is not surprising to see a luxury project stalled, given the current conditions. ‘Everything’s corrected and the luxury market is gone,’ said Ian Watt, a realtor who specializes in higher-end housing. ‘Anything under $2-million will sell, but in the last two months, there’s been only one sale over $3.5-million.’”
“Realtor Karel Palla echoed those numbers, saying that ‘at this point, there’s a very small percentage of people that can afford that type of product.’ And Michael Ferreira, whose company closely tracks pre-sales, said a year ago, ‘you would see 85 per cent sold within the first three months. Now it’s 50 to 60 per cent. You’re now seeing more incentives to attract buyers.’”
“Located in Calgary’s exclusive Southwest side, Aspen Woods is one of the newer, hipper neighborhoods in this section of Alberta, Canada. Its affluence matches that of Calgary, which, according to a report by Calgary Economic Development, in 2015 had the distinction of being home to the most millionaires per capita of any major city in the country. ‘We are seeing a huge decline in the prices of luxury homes over C$2 million in Calgary and surrounding areas and feel we are at the bottom of the valley,’ said Rachelle Starnes, CEO of The Starnes Group. ‘We are seeing some of the luxury homes listed over C$2 million selling for 15%-25% less since the peak of 2008.’”
“The British housing market is oversaturated by new homes offered for sale this month. However, indicating that previous sellers have given their properties too high, a third of the advertised offers have gone through at least one price drop – the highest share for that period of the year since 2011. The slowdown is mostly seen in London and neighboring regions where demand has been hit by higher taxes on expensive properties and shrinking demand from foreign investors. According to Rightmove, vendors in oversupply areas will have to compete more actively with prices, presentation and advertising of their property to attract buyers.”
“‘Although the growth in the number of vendors is a desirable signal for more liquidity on a generally devoid of market deals, unfortunately, this is happening in a quieter time of year,’ said Rightmove director, Miles Shipside.”
“As safe as investing in gold, real estate was the next go-to choice for Keralites. Things have changed in recent times, according to industry sources, the return on investment (ROI) seems fastly diminishing with a mismatch of demand vs supply being reported across the city. As strange as that sounds in a metropolitan city like Kochi, industry experts say 80 per cent of the investments in apartments were done for speculative reasons, the price slump and tougher laws have resulted in many of them being left unoccupied as renting it out was never owners motive to begin with.”
“Geojit Investment Strategist V K Vijayakumar says the occupancy rate of relatively newer apartments is just over 20 per cent, owing to an average yield rate of just 2 per cent for apartment rentals in Kerala. He says real estate goes through veritable boom cycle for about eight years, with that period ending in 2012, resulting in an inevitable price slump. ‘Add to it, demonetization and the Benami Transaction Amendment Act of 2016, transactions have come down by 80 per cent,’ says Vijayakumar.”
“When the northern city of Tianjin relaxed residency requirements earlier this year, such was the demand that applicants slept outside police stations and officials fielded 300,000 applications in 24 hours. But the biggest attraction is getting a slice of real estate. ‘The direct reason for getting a hukou [residency permit] is to buy a house,’ said graduate Wang Zhuohang, 24.”
“Liberal Chinese economists argue that Beijing should abolish the system of residency permits, allowing talent and investment to flow according to market forces. They say, for example, that if unsold housing stock is offloaded in second-tier cities it will simply leave a glut of housing in smaller cities. ‘The measures competing for talent in second- and third-tier cities are not sustainable and are causing resource mismatches. It will lead to inefficient investments,’ said Zhang Jun, an economics professor at Fudan University in Shanghai. ‘Original inventories [of housing stock] are large, and now there will be a new round of investment.’”
“Yang Xiaodao, a 26-year-old civil servant in the Chinese city of Xiamen, says taking out a 30-year-mortgage on a two-bedroom apartment with her husband was the most regrettable decision of her life. Although their parents covered the 1.5 million yuan (£172,285) down payment on the 2.9 million yuan flat, mortgage payments eat up more than 70 percent of the couple’s combined income of about 10,000 yuan a month - average for the city.”
“‘Our spending power has plummeted,’ Yang said. ‘We do not dare to have a kid. We do not dare to buy a car. We do not dare to travel.’”
“Throughout China, home prices that are among the highest in the world relative to incomes have pushed millions of households to debt levels similar to those seen in the United States just before its housing crisis.”
“The number of unsold private residential units reached a three-year high in the second quarter, based on data released by the Urban Redevelopment Authority. This is despite the URA noting that a ’significant number’ of new housing units are set to come onto the market due to the large number of properties sold en-bloc and the redevelopment of these plots over the past two years.”
“As at the end of June, there was a total supply of 45,003 uncompleted private residential units with planning approvals, compared with 40,330 in the first three months of the year. Of these, 26,943 units remained unsold as at the end of June — up from 23,514 units in the previous quarter, and the highest since the first quarter of 2015 when there were 27,061 homes unsold.”
“Tricia Song, head of research for Singapore at real estate services firm Colliers International, said: ‘We believe developers will likely pace out the launches of new projects and thereby reduce the risk of an oversupply of units in the market. Even if those units with no planning approvals were included to bring the number to 37,263, that will take at most 4.4 years to absorb, which ‘is not excessive in our opinion,’ she added.”
“It is now cheaper to rent a three-bedroom house than a two-bedroom unit in Brisbane, new research reveals. More than 9800 residential properties remain vacant in the city. SQM Research managing director Louis Christopher said he was confident the worst was over for Brisbane landlords and the city was set to benefit from Sydney’s housing downturn.”
“Median Sydney house prices fell 4.5 per cent last financial year, the biggest 12-month fall since 2008, according to Domain. The pain seems to have been worse in higher-income areas including the east, the upper north shore and the inner west where prices fell as much as 12 per cent. Anyone who banked that prices would keep rising like a skyrocket and bought expecting to sell quickly probably will now be learning a harsh lesson. On the other hand, some people are being forced to sell now because of divorce or sickness or change of job. They are the ones doing it tough especially if they bought in the last 12 to 18 months.”
“Albany property owners are being forced to drop weekly rents to attract tenants, according to Real Estate Institute of WA figures. Wellington and Reeves rentals manager Tam Emin confirmed rental prices were beginning to drop over town, which was good for tenants but bad for investors. ‘We’ve got a lot of rental properties on the market — it’s probably been more than what I’ve seen for a long time,’ she said. ‘Vacancy rates are starting to go up, so we’re catching up with Perth now. We’re still getting a lot of inquiries, but the market is quite flooded.’”
“Tens of thousands of Australian home owners are opting to sell their property as the national housing market trends downwards. Melbourne led the nation with 6,821 new properties for sale over the past 28 days, with total listings riding at a high of 10.5 percent. In second place was Sydney, which despite dropping 4.5 percent in value over the past year had 5,601 new properties listed in the past 28 days. Total listings in Sydney – which include properties that have previously been advertised – were up 21.7 percent on this time last year, with the most properties for sale on record since 2012.”
“Brisbane had 3,789 new properties listed in the past 28 days, and an increase of 1.2 percent in total listings compared to this time last year. There are more properties listed for sale in Brisbane at this time of year than at any time since 2012. Adelaide had 1,646 new listings over the past 28 days, while Perth had a whopping 3,007 newly listed properties in the last month. Despite rapidly dropping property prices, Perth’s total property listings are up 1.7 percent on last year and are higher than every other year since 2012.”
“Sydney’s falling apartment prices look set to continue into the next decade. An estimated 20,000 apartments are lying vacant in NSW, with the empty homes labelled ‘zombie blocks’ in the industry. The falls are being driven in-part by continued apartment construction in NSW, with Australian Bureau of Statistics figures released earlier this month showing more than 66,000 apartments are under construction across the state.”
“SQM Research director Louis Christopher said the city’s apartment prices were ‘nowhere near the bottom. To what magnitude, we don’t know yet,’ he said. ‘But they’ll continue to fall.’”
“The Domain figures show Sydney’s median house now sitting at $1.144 million, down from its peak of $1.198 million in June 2017. Mr Christopher said two likely scenarios would play out in the Sydney market — either a ’sharp fall’ or a longer ’stagnant period’ similar to what was seen in the Sydney market from 2004 to 2012. ‘This downturn is more than a restriction of credit,’ he said. ‘It’s more becoming demand-related. Investors don’t want to catch a falling knife.’”
‘Everything’s corrected and the luxury market is gone,’ said Ian Watt, a realtor who specializes in higher-end housing. ‘Anything under $2-million will sell, but in the last two months, there’s been only one sale over $3.5-million.’
You can still find reports on Vancouver saying “it’s to the moon Alice!”
‘Realtor Karel Palla echoed those numbers, saying that ‘at this point, there’s a very small percentage of people that can afford that type of product.’
Wa? I thought you guys had Chinese teenagers driving around in Masserati’s buying shacks to party for an afternoon?
‘Everything’s corrected and the luxury market is gone,’ said Ian Watt, a realtor who specializes in higher-end housing.
Point of correction, Ian: Everything is correcting - present tense. As in ongoing. The real carnage hasn’t even started yet, but it’s coming.
But since Ian specializes in “higher-end housing,” surely he saw this coming and performed his fudiciary duty by advising his clients against buying into an unsustainable housing bubble that would lead to their financial ruin.
“Everything is correcting - present tense. As in ongoing. The real carnage hasn’t even started yet, but it’s coming”
“When sorrows come, they come not single spies. But in battalions!”
― William Shakespeare, Hamlet
👍
“Something is rotten in the state of Denmark…” - Hamlet
OneAgainst…do you ever attend the Cedar City Shakespeare productions? I have a home town bias in favor of San Diego’s Old Globe, but Cedar City has a great program, especially given its isolated location.
Yeah, we do get to the Shakesperean festival. Lately we’ve been doing the Hale Center theater in Sandy, UT though. They put in a massively impressive downtown theater that is truly a one-of-a-kind experience.
Theater is expensive though, so more often than not we whip out the MoviePass. I’m rooting for the company because I sure get a good value out of it, but they might have priced themselves too low!
<b South Miami FL Housing Prices Crater 15% YOY As Florida Vacation/Retirement Market Collapses
https://www.movoto.com/south-miami-fl/market-trends/
Your first accurate posting
Housing
Centreville VA Housing Prices Crater 9% YOY As Federal Layoffs Ravage Fairfax County
https://www.movoto.com/centreville-va/market-trends/
‘Located in Calgary’s exclusive Southwest side, Aspen Woods is one of the newer, hipper neighborhoods in this section of Alberta, Canada. Its affluence matches that of Calgary, which, according to a report by Calgary Economic Development, in 2015 had the distinction of being home to the most millionaires per capita of any major city in the country. ‘We are seeing a huge decline in the prices of luxury homes over C$2 million in Calgary’
Ah yes, how forgotten are the old bubble areas. Before Toronto, before Vancouver, Calgary was THE hot spot for getting rich quick.
‘We are seeing some of the luxury homes listed over C$2 million selling for 15%-25% less since the peak of 2008′
I bet you thought you’d slip this one by huh Rachelle? The 2008 peak means we’ve blown past the 2014 peak, right?
‘Christopher said two likely scenarios would play out in the Sydney market — either a ’sharp fall’ or a longer ’stagnant period’ similar to what was seen in the Sydney market from 2004 to 2012. ‘This downturn is more than a restriction of credit,’ he said. ‘It’s more becoming demand-related.’
Yeah, it’s a bubble Louis. The sharp fall is already here. We know some pricey Sydney shacks are down 20-30% or more.
Back when Housing Bubble 1.0 was just starting to burst, I remember the supposed real estate “experts” of the NAR claiming housing was a souffle that would experience a gentle fall as some of the speculative excess leaked out. Not how things played out, if memory serves.
This time around will be much worse, since the central bankers have already blown their QE wad and taxpayers are unlikely to bend over for banker bailouts with the same docility they showed in 2008.
Real estate bubble? More like a souffle
August 21, 2005|From Chicago Tribune
Just can’t stand any more bubble talk? Perhaps you’d consider a semantic alternative.
Sean Snaith, director of the Business Forecasting Center at the University of the Pacific in Stockton, maintains that the imagery of a bubble is all wrong. He suggests, instead, a souffle.
“There is a unique set of ingredients that have combined in just the right way at just the right time to allow a large run-up in housing prices,” Snaith told the Contra Costa Times.
“Like the souffle, once any ingredient goes away, the souffle deflates.
“It might not completely collapse, but it might deflate.”
So, by his reasoning, we’re less likely to hear a “pop” than a “ssssss.”
…
Classic! Thanks for digging this up, GS.
While we’re taking a trip down memory lane, here’s the infamous Century 21 “The Debate” commercial. Of course there’s no “debate”; rather, a hectoring wife armed with realtor Suzanne’s “research” browbeats her henpecked hubby into buying more house than they can prudently afford - and this was in 2006, before the bottom dropped out of the market.
https://www.youtube.com/watch?v=20n-cD8ERgs
Sean Snaith has kept an extremely low profile this time. Wasn’t there a stretch around 2004-06 when he was perceived to be responding directly to this blog?
Not that I’m complaining, but another Florida captive economist from that era who has been MIA is Hank Fishkind. I used to compare him to a trained seal.
Whatever happened to David Lereah? Maybe he made enough loot off Housing Bubble 1.0 so that he doesn’t have to work any more.
Isn’t it Dave “Liarrhea?” The inexhaustible diarrhea of lies which spewed forth from his lips was something to behold.
http://www.reeconadvisors.com/
It’s a sparse website. Looks like a one-man band of “Call me if you want to consult” and that’s about it. He appears to be snowbirding between out burbs of Northern Virginia and Vero Beach.
My guess is he’s sitting on the sand sipping mai tais out of thigh gaps.
And people say that crime does not pay. It pays pretty well in this life. I think it does not pay in the next life but most people engaged in crime do not believe in the next life. I think they are in for quite a surprise but that cannot be proved in this life.
“This time around will be much worse, since the central bankers have already blown their QE wad and taxpayers are unlikely to bend over for banker bailouts with the same docility they showed in 2008.”
Is it really going to be worse than last time for the banks? I don’t think so. They’re more sheltered from the fallout. The taxpayers, on the other hand, will suffer all the financial carnage once again.
Yes, and the bailouts that ensue out of the next crash will ensure a reversion to currently astronomical home prices, dooming the Millennials to a lifetime of overpaying for basic shelter.
Millennials = Generation Screwed
They voted for it, they elected Obama and tried to elect Clinton and they are still but hurt over it.
Here’s a video:
‘Housing Price Drop, Good News For Buyers’
Air Date:Thu 26 Jul 2018 Expires:in 4 weeks
‘The Sydney housing boom has been over for a while but there was news today that will make home owners shiver - house prices are going backwards and it hasn’t been this bad since the global meltdown a decade ago’
Statements like this just keep popping up!
‘hasn’t been this bad since the global meltdown a decade ago’
“Statements like this just keep popping up!”
Rather ominous, given a business cycle upswing that is very long in the teeth, booming US GDP, rock bottom unemployment, and interest rates that have barely climbed off historic lows.
Makes you wonder how this situation might evolve if economic fundamentals eventually normalize.
Knot to mention the million$ of worker$ who are bli$$fully $atisfied with their current wage$!
It’s going to be tough for a lot of folks when the third income stream provided by the rising value of their houses stops.
A two-decade-long housing bubble is over 25% of the life of a human being, and it’s still not over.
Stein never said that things which must eventually stop can’t continue for a very long time.
Unfortunately, that includes one’s biological lifespan. People have died that use to post on this blog and were waiting for the housing correction. The power of the manipulators should not be underestimated.
In other news, this is the mortgage data from China:
http://www.xinhuanet.com/english/2018-07/28/c_137354304.htm
“Unfortunately, that includes one’s biological lifespan.”
The market may stay irrational for longer than you can remain alive.
The market turns and most people don’t realize it.
Winter Park FL Housing Prices Crater 9% YOY As Housing Meltdown Accelerates
https://www.movoto.com/winter-park-fl/market-trends/
“…rock bottom unemployment…”
Somehow I don’t think the 50,000+ homeless horde ambling around Anaheim is counted in that number…
Nope. Discouraged (non)workers are ignored.
I’m guessing that homeless people don’t vote much or make many campaign contributions.
“Makes you wonder how this situation might evolve if economic fundamentals eventually normalize.”
How?
Like this
Broomfield, CO Housing Prices Crater 5% YOY As Housing Bust Ravages Denver Area
https://www.movoto.com/broomfield-co/market-trends/
Austin TX Housing Prices Crater 7% YOY As Speculators Stuck With Properties As Market Tanks
https://www.movoto.com/austin-tx/market-trends/
‘Although their parents covered the 1.5 million yuan (£172,285) down payment on the 2.9 million yuan flat, mortgage payments eat up more than 70 percent of the couple’s combined income of about 10,000 yuan a month - average for the city.’ ‘Our spending power has plummeted,’ Yang said. ‘We do not dare to have a kid. We do not dare to buy a car. We do not dare to travel.’
Look on the bright side Yang, it’s cheaper than renting.
70% of their combined income? Lol what??
Maybe it’s a good thing that debt donkey Yang won’t be breeding.
300 x income!
No wonder ADan has told us countless times the Chinese are the smartest peoples on the planet, and they save 50% of their income too!
Meanwhile, the over-leveraged Chinese dominoes keep falling.
https://www.scmp.com/sport/article/2157244/china-owners-struggling-agency-mp-silva-desperate-bid-avoid-one-biggest
‘Although their parents covered the 1.5 million yuan (£172,285) down payment on the 2.9 million yuan flat, mortgage payments eat up more than 70 percent of the couple’s combined income of about 10,000 yuan a month - average for the city’
‘Our spending power has plummeted’
And they put more than half down.
‘Our spending power has plummeted’
Wait’ll your home value plummets too, Yang. Then you and wifey are well and truly buggered. But hey, at least you weren’t throwing away money on rent.
How do you get three hundred times income? The combined income is 120,000 yuan per year. BTW, notice the down payment was more than one half the cost of the flat. As far as the IQ the Chinese do have one of the highest IQ in the world, that is not opinion that is fact just google it. Unfortunately, due to immigration we have dropped from 100 to 98.
Youre being kind. This country is probably 20 points lower on average over the last 30 years. Bad schools, bad media, bad diets and a smorgasbord of mind altering (and not for the better) drugs and alcohol available to anyone over the age of 10-12.
“How do you get three hundred times income?”
3,000,000 / 10,000
You want yearly? OK, 30 x. Insane, not high IQ. Too much Koolaid ADan.
Why can you not just admit you are wrong? Chinese use their monthly income when asked, Americans yearly it seems to be a cultural thing. Yes, 30 times income is insane but it is not 300. Are they idiots, well you have parents that can make that kind of down payment, I doubt they have a low IQ. Greedy? Probably. Low IQ doubtful.
And it is less than 30 since there are 12 months. Finally increase the population in the US by four times and a lot of areas will have housing costs 30 times income.
Some pretty high IQ individuals routinely end up making some pretty poor decisions. When you get outside of your bailiwick, often times you get snookered.
No one’s sure whether those high IQs represent all PRC or just the major cities.
“lot of areas will have housing costs 30 times income.”
No, because it is unsustainable. It is rock hard stupid. It is ultra mania. Even with multi-generational debt as mentioned it cannot be paid off in a lifetime.
It does not have to be paid off in this life, it just means more and more people would die owning a mortgage.
It’s a long slow horrible death. Chinese water torture replaced by debt slavery.
I prefer to live free and die free. But then I guess my IQ score is not that high.
No one’s sure whether those high IQs represent all PRC or just the major cities.
That’s an important point. There are a billion people out there in the hinterlands toiling away in obscurity…nobody is bothering to measure their IQ but it’s doubtful the average exceeds 100 by much, if at all.
Blueskye, you are entitled to your own opinions not your own facts. It is not too smart to argue a point which is so easily verifiable:
https://iq-research.info/en/average-iq-by-country
“so easily verifiable”
LOL. Self report why don’t you.
Yes that is why they are so underrepresented at Ivy League schools and whites are actually being given preference over them. (Sarcasm)
You can’t infer IQ from Ivy League admissions. The Chinese Tiger moms schedule their kids’ summer attendance at standardized testing prep classes to give them a leg up on the American kids who hang out with friends or play video games all summer. I’m not knocking the hard work they put in to get into good colleges, but IQ is supposedly a measure of intelligence, not diligence.
It does not explain all the difference but the correlation between IQ and admittance is very strong. Just like the correlation between El Salvador having an average IQ of 80 and fostering gangs like MS-13 is very strong.
Fair enough. But the sample of Chinese kids who attend US universities cannot be assumed to be representative of the overall population of China, any more than the US kids attending Cambridge can be assumed representative of our population.
The prevailing theory used to be that IQ was static and set at birth. The newer theory is that IQ is actually malleable and has a lot to do with high socioeconomic status, positive cultural drivers, good health and nutrition, etc. Any country can improve their IQ by implementing good policies that create better conditions for the human mind to blossom.
Any country can improve their IQ scores by teaching to the test and self reporting.
The Chinese Tiger moms schedule their kids’ summer attendance at standardized testing prep classes to give them a leg up on the American kids who hang out with friends or play video games all summer.
We’re living that in my house right now. It drives my wife crazy that I let my son relax when we’re on vacation. My stepdaughter brought a small suitcase from China just for self-imposed homework. And stepdaughter notices that it doesn’t seem fair, she’d like to relax too…and the friction begins.
Actually slightly less than 50 percent now it has been dropping CIA numbers you can Google that too. No, you would not want to get in the way of your prejudices. How do you think such a down payment was made? Which is why a 20 percent drop in housing prices would have a negligible impact on banks in China and the same drop here would bankrupt many banks. One note the the US saving rate is in the teens when calculated by the CIA method.
‘‘We’ve got a lot of rental properties on the market — it’s probably been more than what I’ve seen for a long time,’ she said. ‘Vacancy rates are starting to go up, so we’re catching up with Perth now.’
When you are comparing your market to Perth, you are well and truly fooked.
From the Nine article:
Darwin -11.8 percent $516,040
You could find dozens of article a year ago talking about how Darwin (or insert mining town craterville) was the new hot place to strike it rich! 5 hundred thousand Australian pesos in Darwin?
Where is the world’s most remote city?
http://www.theguardian.com/cities/2015/aug/19/where-worlds-most-remote-city
“…in Australia, most large cities can be found along the east and south coasts, away from the interior, the bush, which dominates the majority of the country. Then there is Perth, with a metropolitan area of more than two million people, way on the other side of the outback from Sydney, 2,045 miles away. Geographically it’s actually closer to East Timor (1,731 miles) and Jakarta, Indonesia (1,865 miles). There’s no city of comparable size anywhere in the world that’s so remote.
“The city’s population exploded during a late 19th century gold rush, then surged again after the second world war following an influx of European immigration and increased mining activity. Yet development was restricted to just that corner of the country. The nearest city of at least 100,000 people is Adelaide, a distance of more than 1,300 miles.”
While it takes forever and a day to get there, like most of Australia, it’s a fun place to visit. I recommend Rottnest Island and Cottesloe Beach and grabbing a beer in Fremantle.
“While it takes forever and a day to get there…”
Is there a train? Do they serve beer? How’s the leg room?
I’ve never been to Australia, but you might find this entertaining:
https://www.greatsouthernrail.com.au/trains/the-indian-pacific
According to the website, Sydney to Perth takes 4 days and 3 nights by train and covers 2700 miles.
Thanks, the Sail & Rail fare$ $eem reasonable … Looks like an awesome journey!
And trust me on this, Australians can turn any setting into a raucous party. I remember before my first visit, my guidebook described it as “not an abstemious country” when it came to alcohol consumption. I bet that train has to stop to take on cases of beer.
How much time does it take to fly to Australia?
There aren’t enough meds for me to venture on such a flight…
Anecdotally, people have told me it takes 24 to 30 hours from the east coast of the U.S. It’s a long-ass flight.
about 15.5hrs from West Coast… I did it back in 2010. OZ and NZ were cool, but not sure I’d go back. In 2010 the USD was in the toilet and everything was crazy expensive: very basic breakfast was $20 USD, 6pk of very mediocre beer was $24 USD.
Thinkin’ eye begin Aussie departure from Hawaii …
How long does it take to fly from New York to Australia?
According to Qantas it takes 23 hours. If you’re flying from other cities in the East Coast, you can also fly AA connecting to Qantas in DFW. It will probably take 23-25 hours including transit time, with the baggage checked-through all the way to Australia from your first departure airport.
Less than 14 hours, LAX to Brisbane.
For flying time alone, 5 hours from Florida to LAX. Then 13.5 hours to Sydney (and one time I had a middle seat, which I don’t recommend). Then another 5 hours to Perth. I gave up on trying to figure out a plan to adjust to the time change.
Less than 14 hours, LAX to Brisbane.
For some reason you are cherry picking a single itinerary. Try Tampa to Perth which our company used several times. Best time about 28 hours with 2 stops.
I was in Darwin just a few weeks ago. Even though it was Winter, it was still getting up to 90°. And it was very humid. There was smoke blowing in from bushfires. I love Australia but I won’t be going back up there, LOL.
Holy crap, Ben. The trickle of reporting on bursting housing bubbles has turned into a veritable deluge.
“Après moi le déluge”….
‘Everything’s corrected and the luxury market is gone’
Now happening in California.
I’ve been saying for weeks now there’s more crater out there than I can keep up with.
Looking forward to a crater here. matter of fact, hope it’s the biggest one yet!
You’ve been saying it for weeks, indeed, but the Usual Suspects - the MSM, the NAR, and all the various “experts” trotted out on CNBC, etc. have studiously avoided calling it what it is: a bursting bubble. Instead they tout the “it’s different here” or “it’s different this time” dogma their REIC advertisers insist on.
Let’s be fair. They are at least trying to get out in front of it:
Diana Olick
Thu, 12 July 2018
‘The housing shortage may be turning, warning of a price bubble’
‘The supply of homes for sale in the second quarter of this year, the all-important spring market, rose at three times the rate of last year, according to Trulia’
‘Historically, prices lag sales by a few months, and sales have been slowing this year in most major markets.’
https://www.cnbc.com/2018/07/12/the-housing-shortage-may-be-turning-warning-of-a-price-bubble.html
‘Southern California home sales crash, a warning sign to the nation’
Diana Olick
Tue, 24 July 2018
https://www.cnbc.com/2018/07/24/southern-california-home-sales-crash-a-warning-sign-to-the-nation.html
‘Existing-home sales dropped in June for a third straight month. Purchases of new homes are at their slowest pace in eight months. Inventory, which plunged for years, has begun to grow again as buyers move to the sidelines, sapping the fuel for surging home values. Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency. Shares of PulteGroup Inc. fell as much as 4.9 percent Thursday morning after the national homebuilder reported that orders had declined 1 percent from a year earlier, blaming rising mortgage rates.’
“Home prices are plateauing,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London. “People are saying: Let’s just bide our time, there’s no great rush. If we wait six or nine months we’re not going to lose out on getting a foot on the ladder….we’re now looking at a period in which prices move more or less sideways, or increase no more quickly than growth in incomes, over the next few years.”
The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years [Prashant Gopal and Sho Chandra/Bloomberg]
https://www.bloomberg.com/news/articles/2018-07-26/american-housing-market-is-showing-signs-of-running-out-of-steam
I’ll concede the point. This Diana Olick chica has been stellar when it comes to calling a spade a spade and sounding the klaxon.
Anecdotally, I’m wondering if traffic to the HBB is picking up as awareness grows that a) we are in a housing bubble; and b) it’s bursting. Also wondering if you’re being sought out for comment & insights by media outlets like you were the last time around.
Diana was shaking those pom-poms not that long ago. Southern California headed down a while back. I’ve found reports of price reductions/oversupply in northern California for over a year.
The media is a different animal these days. Look at how the Canadian and Australian press never say bubble. We’ve seen huge amounts of money go poof in NYC and Miami, where’s the media? They still don’t even use the words bubble or mania.
Now Bloomberg will say the bubble has burst in Australia (a couple of months ago). And the WSJ will say there’s a bubble in China. We talked about it here years ago: plenty of people can see a mania somewhere else, but will deny there’s one in their backyard to their last breath.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
― Upton Sinclair
Soon all of the MSM financial reporters will be crawling all over each other to drown their readers in gloom and room stories about the latest housing bust, including assurances that “nobody could have seen it coming.”
Doom not room
Ah, but “doom and room” is a thing now, too. Just go on Craigslist and see how many people are looking for a room to rent in someone else’s house because they can’t afford to put a roof over their heads otherwise.
Guess they didn’t get the word our economy is humming along on all cylinders.
“Soon all of the MSM financial reporters will be …”
Saying exactly what Jay Leno said to Hugh Grant:
” … what were you thinking?”
I’m waiting for the auto bubble to pop.
P/u trucks ,when that stops look out below. Car makers lose money on regular cars
“Just go on Craigslist and see how many people are looking for a room to rent in someone else’s house because they can’t afford to put a roof over their heads otherwise.”
The greed - or desperation - is astounding. Yeah, somebody’s going to pay $800 per month for a bedroom while sharing a bathroom with 2 other people.
US Housing Crash: You Better Trade That Depreciating House For Cash While It’s Still Worth Something
https://therealdeal.com/la/2018/07/25/across-us-new-home-sales-and-prices-drop/
some day your doom and gloom prophecies will happen. That could be 10 more years.
GDP is > 4% now folks.
We are hitting on all cylinders. Why sit around for another 10 years and talk down the markets?
Sure, and the engine of this “growth” is a debt-fueled spending binge by the bottom 60%. Hitting on all cylinders? If I max out all my credit cards I can maintain quite the facade of prosperity, until the repo guy shows up.
Try to keep up. It’s already in progress.
Housing Bubble 2.0 collapse is already underway. Try to read some of the articles that Ben posts and you’ll catch on.
I’m calling 4th qtr 2019
$ounds rea$onable to ‘ol hwy50 …
( what doe$ the quarter$ in between … now & then … hold for improving on this National Economic $tati$tic:
Per$onal $aving$?)
what % drop are you calling txp? back to 2010 prices?
Certainly, I believe that the bubbly areas will correct and it has already began. However,at this point it would take as big as drop as the 2006-2010 correction to get us back to 2010 prices. Hard to see that with millennials starting to buy and the chance of a severe recession much less than last time. Housing starts last time were twice what they are now. The price of housing to rents was much more elevated last time as was the price of housing to income. Finally and probably most importantly housing starts last time were twice what they are now. Thus, when housing started to correct it threw much more people out of work feeding the recession and consequently reinforcing the pressure on housing prices.
Housing starts history:
https://tradingeconomics.com/united-states/housing-starts
“Hard to see that with millennials starting to buy”
They can only buy at current prices due to massive injections of federally guaranteed GSE lending. Maybe the situation is sustainable, maybe not.
“and the chance of a severe recession much less than last time.”
Having never normalized policy after a protracted period of extraordinary accommodation, the Fed is nearly out of bullets. A lack of water available to the Fed fire brigade could make the next recessionary conflagration harder to fight, as ultralow rates are already priced in.
what % drop are you calling txp? back to 2010 prices?
If the Fed were to stay out of it (which I no longer expect) I would be looking for late 90s prices. Inflation would try to adjust that up, but overshoot would compensate.
However in the age of plunge protection all you can do is watch the Fed. They will do their best to set the % drop. As long as Trump is president I think more drop will be allowed than they would otherwise allow.
“GDP is > 4% now folks.”
Awe$ome! … x1 qtr 2 GDP … doesnoth maketh GDP effect$ of Canada, Mexico, Europe, China … di$appear …
Fri, Jul 27th, 2018 By Jason Easley
Obama Had GDP Growth Higher Than The One Trump Is Celebrating On 4 Separate Occasions:
5.1 qtr 2 2014
4.9 qtr 2 2014
4.7 qtr 4 2011
4.5 qtr 4 2009
Compare those to Reagan when recovering from a deep recession, you will see Obama’s quarters were pretty Anemic. Bottom line Obama never hit 3 percent growth on a yearly basis over two terms pretty unprecedented. Democrats said Trump would have a recession his first year instead Trump is on track to have the best year of the recovery and producing on average almost twice the jobs as Obama averaged.
Raygun had i$$ues, extra, extra, read$ about it!
Interest rate cycle
Another really big difference is the interest rate cycle. When Reagan assumed power 10 year Treasury yields were already above 10% and they would top out at almost 16% in September 1981.
Yields would fall to half that level during Reagan’s two terms, and the decline in the Fed funds rate has been even more marked. This decline in interest rates provided a powerful stimulus to the economy, and stands in marked contrast to what is awaiting Donald Trump.
Trump’s presidency is facing the opposite, record low rates (both Fed funds and Treasury yields) which will climb upwards, the only question being how fast.
https://seekingalpha.com/article/4065909-will-trump-next-ronald-reagan
Reagan had rising rates during the first part of his Presidency which actually reduced the overall growth rate during his Presidency and the high interest rates through most of the presidency on the debt actually increased the deficits. That is why it is so amazing Obama could run up massive deficits while paying next to nothing for interest rates on the government debt. In fact, since the Fed was buying the debt and sending massive money to the treasury, Obama was making money on the national debt. He was also allowed to treat the repayment of borrowing by the banks as income which artificially reduced the deficits. I cannot see what we received for nine trillion dollars of debt a vastly improved infrastructure? No, not so much.
Credit used to be difficult to obtain before Ronald (mommy?!) Reagan liberalized the industry with legislative changes that ended New Deal restrictions on mortgage lending… restrictions that limited the ability of families to buy homes without putting a significant amount of money down.
IIRC, I was into the second enlistment of my Air Force career before I was finally able to get my first credit card. Which prob had a limit of $500 or so. This was in the late 80’s.
10-12 years later, I could hardly open my mailbox without finding a pre-approved credit card offer.
IIRC, I was into the second enlistment of my Air Force career before I was finally able to get my first credit card.
I had a very good relationship with a hometown credit union before enlisting in 87 so I actually had a $1k limit card going into the military but was very unusual compared to my peers. When I got to college in 91 they were already starting to push higher limit cards to any student who could fog a mirror.
“When I got to college in 91 they were already starting to push higher limit cards to any student who could fog a mirror.”
The foyer area at the student union at CalPoly SLO frequently had attractive shills behind portable tables pimping credit cards to students many who likely never had any employment history. By the time “mom-n-dad” bailed ‘em out the student’s credit history was tainted.
Trump better hurry up and get his recession out of the way, or he will face the prospect of finding the economy in the middle of a downturn during the 2020 re-election campaign.
It is a possibility but right now I think he is just happy to have a strong economy going into the midterms. All the liberal leaning economists had been predicting a recession by now. If Australia can go almost three decades without a recession due to China demanding more and more resources, it is not impossible for the US to keep growing until after the 2020 elections especially since the Obama recovery was so weak.
Arcadia CA Housing Prices Crater 20% YOY As Trust In Housing Industry
Sinks To New Low
https://www.movoto.com/arcadia-ca/market-trends/
Median listing is down 18% Yes….But median sized house is also down 16% which does not appear to be factored in to your 20% calculation. The most telling figure is average per square foot which is exactly the same YOY.
Did the lot size double? Triple? Are the houses 3 years old instead of 30? What additional features is the buyer gaining at no additional cost?
Details my friend…. Details.
Portland, OR Housing Prices Crater 14% YOY As Price Declines And Rapid Depreciation Ravage Homeowners
https://www.zillow.com/portland-or-97209/home-values/
When the median house size goes down, that’s a givaway that the mix of homes is shifting toward condos. Doesn’t take much to skew data if the n is low enough.
I once dug deeper into on of MW/HA’s cr8er posts and found that the entire price drop/increase in sq ft was caused by a new complex of <10 condos going onto market.
When the median size goes down, the median house size goes down.
When the price falls, the price falls.
Potomac Falls, VA Housing Prices Cratger 31% YOY As NoVA/DC Housing Market Correction Deepens
https://www.movoto.com/potomac-falls-va/market-trends/
An opposing point of view …
“Housing’s Drivers Are All Positive, So Be Optimistic”
https://www.forbes.com/sites/johntobey/2018/07/28/housings-drivers-are-all-positive-so-be-optimistic/#6a9e5f304f80
Good points made here but seems to be lacking of other pertinent facts such as a drop in local and foreign investors and more supply / less demand. Recipe for price drops
“Following a recession, the weak drivers begin to improve. Housing supply tightens with fewer distressed sales, and demand increases as potential buyers gain confidence and financial strength. The proof is in the price trend.”
How is borrowing more than you can afford to pay for overpriced housing “financial strength” ?
“How is borrowing more than you can afford to pay for overpriced housing “financial strength” ?”
A wise man once said, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable”.
He’s right.
Albany OR Housing Prices Crater 6% YOY
https://www.movoto.com/albany-or/market-trends/
how much do u owe on the mort maf
That same wise man eloquently stated;
“I can ask $50k for my 10 year old run down Honda CRV but where is the buyer at that price?”
He’s right.
North Bethesda, MD Housing Prices Crater 20% YOY As Double Digit Price Declines Envelop DC/NoVA
https://www.movoto.com/north-bethesda-md/market-trends/
Yeah, reading the mental gymnastics these “experts” use to validate their points makes my hair hurt. They also show a tenuous grasp of cause and effect, i.e. the trees waving make the wind blow….
Roosters crowing cause the sun to rise.
How often in history has housing begun to crater at the height of an economic boom? I’m thinking the current bust will be long and painful in part due to this reason.
Hou$ing Bubblette$ 1.0 … Wa$ a 21$t century QE “Trail$ & Error$” #1
Hou$ing Bubblette$ 2.0 … well, there’$ near univer$al agreement$ from the diver$e contributer$ on the HBB … about what’$ $oon to tran$pire in America, … Lo$er’$…$ure, … Winner$ … ab$olutely! … Quantitie$? TBD
What’$ in your ca$h box?
(& iffin’ your ca$h box is yer hou$e$, kindly forget$ eye asked you that que$tion.)
Started last time prior to the recession.
Last time was atypical, as it was the first wave of correction to the greatest housing bubble in history. With an undiversified real-estate dependent economy, it’s completely natural for a housing bust to lead a downturn.
So why did you ask the question above and why should it be longer and more painful than last time when we are less dependent on housing?
1. Most questions I ask here are rhetorical, to stimulate discussion and question my own assumptions. I already have my own opinions about most questions I raise.
2. Whether the current downturn is worse depends in part on how confident the bulls are that “it can’t happen again, because this time is different.” The bulls seem extremely overconfident at the moment.
Optimism that housing will continue to be unaffordable and that people will continue to leverage themselves with massive amounts of debt?
Optimism that we continue economic policies that will only make the next crash move devastating?
Hmmm, that does not sound like much to optimistic about… Although, Mr. Banker would certainly disagree.
https://www.google.com/amp/s/www.yahoo.com/amphtml/finance/news/housing-market-slowing-thats-bad-sign-economy-103833729.html
Wait a minute, so a slow down in the real estate market affects our economy. 🤔 interesting, here I’ve been told by numerous realtors we are safe from another crash in the economy and the reason for the slow down in real estate is the shortage of availability. What’s the prerequisite to become a realtor again, a degree in economics, finances, science, or statistics? Oh wait that’s right no degree required, nor a high school diploma. How about a online crash course, a couple hundred bucks, and a printer to pop out that certificate. Moral here is be careful where you get your information, it steer you into the worst decision of your life
All these gathering storm clouds should worry me, but I have it on good authority - from that most peerless prognosticator, Janet Yellen - that there will be no more financial crisis “in our lifetimes.” And she would know, because central bankers have economic models and stuff.
https://www.reuters.com/article/us-usa-fed-yellen/feds-yellen-expects-no-new-financial-crisis-in-our-lifetimes-idUSKBN19I2I5
That is comedy gold there.
She’s almost dead, so she may be right.
Moral here is be careful where you get your information, it steer you into the worst decision of your life.
True, dat. The readiness of sheeple to trust “experts” who have a vested interest in closing a sale is mind boggling. Cue the infamous Century 21 “Suzanne researched this” ad of 2008, perhaps the most unintentionally honest REIC ad ever and the source of much subsequent hilarity by HBB posters.
“Wait a minute, so a slow down in the real estate market affects our economy.”
Canada: “Our economy actually relies more on the fees associated with buying and selling houses than it does on agriculture, fishing, forestry and hunting combined.”
Brings to mind the period before the 2007-2009 global financial collapse when Iceland temporarily became a banking capital. After the collapse, many former banking industry employees resumed fishing for sustenance.
They should’ve fed the bankers to the fishes.
Iceland was the only country to send its bankers to prison for their role in causing the 2008 financial crash, while Holder and Lynch at our misnamed Department of Justice ensured none of the Wall Street sociopaths who committed massive, systemic fraud were ever held accountable.
But after the next crash, Jeff Sessions will perhaps stop focusing on kids selling dime bags of pot and start putting the really big criminals behind bars.
No really, he just might. Have a little faith, people.
“Have a little faith, people.”
A little faith is all I have left.
“……while Holder and Lynch at our misnamed Department of Justice ensured none of the Wall Street sociopaths who committed massive, systemic fraud were ever held accountable.”
……while stirring up racial unrest to divert away attention
‘industry experts say 80 per cent of the investments in apartments were done for speculative reasons, the price slump and tougher laws have resulted in many of them being left unoccupied as renting it out was never owners motive to begin with.’
‘Vijayakumar says the occupancy rate of relatively newer apartments is just over 20 per cent, owing to an average yield rate of just 2 per cent for apartment rentals in Kerala. He says real estate goes through veritable boom cycle for about eight years, with that period ending in 2012, resulting in an inevitable price slump. ‘Add to it, demonetization and the Benami Transaction Amendment Act of 2016, transactions have come down by 80 per cent’
There were parts of India that were way down before 2012. But this situation shows how distress can persist. I don’t know a lot about India, but from what I’ve read part of the problem is the government shielded developers for a while. And overall, it appears to be a country with a great amount of corruption. I mean, how can you have 20% occupancy? Who is paying for the roads, etc?
“There were parts of India that were way down before 2012. But this situation shows how distress can persist.”
Case in point? You can hide 25 million excess, empty and defaulted houses for only so long.
“Investors don’t want to catch a falling knife.”
Try not to catch yourself a falling knife. Don’t get stucco.
“Realtor Karel Palla echoed those numbers, saying that ‘at this point, there’s a very small percentage of people that can afford that type of product.’
Well now, Karel, if truth be told, the percentage of people who could AFFORD the overpriced shacks you were peddling has always been infinitesimally small. However, you and your colleagues preyed on their greed, entitlement, and fears of being priced out forever by leading them down the primrose path of believing their “investment” was in their best long-term interest. And now that the market has clearly turned, I doubt that you or your fellow realtors have the slightest twinge of conscience for the role you played in putting buyers into insanely overpriced houses that are going to be their financial Waterloo.
‘We are seeing a huge decline in the prices of luxury homes over C$2 million in Calgary and surrounding areas and feel we are at the bottom of the valley,’ said Rachelle Starnes, CEO of The Starnes Group.
Well, Rachelle, regardless of what you “feel,” this isn’t a valley, it’s a cliff, and we’re nowhere near the bottom. But I assume you’re telling the last of the Greater Fools that prices have bottomed out (your feelings, vice market fundamentals, assure you of this) and there’s never been a better time to buy! you chirp while giving them your brightest botox perma-grin….
Realtwhores are always saying the bottom is in, otherwise they couldn’t lure more suckers into the market.
https://carringtonhomeloans.com/non-prime-loans.aspx
Carrington’s non-prime loan product is an ideal solution for consumers with lower credit scores, high debt-to-income ratios, who are self-employed or who have had a recent credit event – such as foreclosure, bankruptcy, short sale, missed credit card or late mortgage payments – and may not be eligible for conventional or government loan products.
Highlights of Carrington’s non-prime* loans for purchase or refinance programs for prospective borrowers include:
-Purchase, Refinance and Cash Out Loan Programs
-Credit scores down to 500
-Loan amounts up to $1.5 million and cash-out up to $500,000**
-Recent credit events such as bankruptcy, short sale, foreclosure and history of late payments are acceptable***
-Single-family homes, town houses and condos are allowed
-Bank statements are acceptable to verify income in place of IRS tax documents for self-employed borrowers
-Cash-out refinance allows you to refinance higher interest rate loans, consolidate debt, pay for home improvements or college, and possibly lower their overall monthly payments.
-Fixed and Adjustable Rate Programs available
https://www.mpamag.com/news/non-prime/carrington-mortgage-introduces-new-nonprime-products-96985.aspx
“We’d like to be the lender of choice for otherwise qualified borrowers who have less-than-perfect credit scores, and for the real estate agents and mortgage brokers who work with them,” Carrington President Ray Brousseau said. “We believe there are millions of Americans who historically would have been able to qualify for a loan, but simply haven’t been able to get one since the Great Recession. And we believe they deserve a chance to achieve the dream of homeownership.”
You’re a swell guy Ray.
Have to make sure that as many proles as possible anchor themselves to the chopping block of future household financial ruin before the onset of the next recession.
As long as the subprime lender knows that he will be able to keep the house AND whatever payments were made, then he is fine, and he is a landlord.
As long as the subprime lender knows that he will be able to keep the house AND whatever payments were made, then he is fine, and he is a landlord.
+1 Big V
We’ve seen Carrington Mortgage before, Ben. They usually demand down payments so high that they can take the down payment and sell the house and still make money. They could lend to someone with no income and zero FICO and still recoup a profit. So big whoop.
It is like the banks in China getting a 50 per cent down payment, it sure does reduce the risk to the lender.
A few home builders reported earnings this past week. Both PulteGroup and Beazer Homes reported double digits decline in orders. Also an uptick in cancelation rates.
Most home builders stocks are down 20%-30% this year already.
It is a travesty that home builders have fewer orders in this environment, since we have all been told that there is a shortage of homes available to buy.
Up, Up and Away…
10-year U.S. government bond yield logs biggest weekly jump in more than 2 months
By Sunny Oh
Published: July 27, 2018 4:37 p.m. ET
Second-quarter GDP came in at 4.1%, but PCE inflation only rose by 1.8%
…
Financial world doomed to repeat bad behaviour
Financial Times - 8 hours ago
Seven sins of finance have been repeated for centuries, as fraudsters carry out the same tricks to rip off …
Link …
https://www.ft.com/content/db4d9d6e-919a-11e8-bb8f-a6a2f7bca546
Hmmmm … link doesn’t work.
The URL works fine.
If you drop your keys anywhere around that guy on the left you’d be wise to kick ‘em around the corner before reaching for them.
Ft links work fine for people with subscriptions…
Bypass Paywalls v1.3.7
Thanks. I’ll check out. (I used to be able to bypass the FT paywall but they tightened up security.)
Let’s see how the NAR spins this.
https://www.zerohedge.com/news/2018-07-28/housing-market-could-be-headed-broadest-slowdown-years-bloomberg
From the Bloomberg article:
“The rate of home sales, new and existing, has probably peaked,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “But it’s not going to roll over. It will gently decline.”
Yet another “chief economist” whose paycheck depends on not spooking the herd.
Bay Area shack prices flat since May, but still up 12.9% YOY.
https://www.sfchronicle.com/business/networth/article/Bay-Area-home-prices-flat-since-May-but-up-a-13104713.php
Ask any Realtor about the Luxury Glut and they will lie to you.
got a call from the banker today. Wanted to loan me some more money.
I figured I could borrow at 2% and pay off some higher rate credit cards. If they are willing to loan it why not take it?
Don’t let that equity just sit there… liberate it!
Now you can turn around and max out those high-rate cards again.
We still have to go through that part of the cycle. Hopefully tax changes eliminating the deductibility of interest for home equity for all things except for home projects I think will reduce it. But many will still borrow that equity without a deduction. If banks are not making primary mortgages they will push Home equity loans. Remember in 2006, california was covered with billboards pushing home equity loans. Recession is very unlikely when people can still tap the housing ATM. It is when that shuts down that the recession begins and it is then when the housing prices really start to fall.
Slowing home price appreciation due to reaching a bubble peak can shut off the home equity loan spigot.
Takes more than just slowing appreciation to shut if off a combination of increasing prices and the old fashion equity caused by principal payments creates a hell of a lot of equity at these prices. A million dollar house appreciating at 3 percent creates more equity than a hundred thousand house at 100,000. Of course, it is not the house but the land that is appreciating. In flyover more of the total price is the structure. That tends to put more of a floor under housing. But houses priced more by the structure appreciate less in a bubble. Bottom line the housing crash is going to hit blue state’s more, some exceptions but in general.
I meant to say a $100,000 house appreciating at 10%.
“Bottom line the housing crash is going to hit blue state’s more,…”
Yes, definitely, same as last time. One reason is that Blue State buyers face higher prices with less income than do Red State residences. Consequently they tend to overextend their home purchase budgets during the boom years to the breaking point of their purchase budgets, only to get wiped out in the next recession.
I see the devastation on TVeee regrading the fires in N Cali and when they say 500+ structures/homes destroyed with thousands threatened and I ask myself: How does the insurance industry absorb/stay afloat with these massive claims? And how many more of these disasters can we handle before the whole insurance biz collapses?
As a side note I also ask do those persons with flattened homes still have to pay the mortgage? And if they do rebuild what is that new home worth in a previously bombed out area?
“As a side note I also ask do those persons with flattened homes still have to pay the mortgage?”
Until the insurance company settles your claim… the payments are due.
“How does the insurance industry absorb/stay afloat with these massive claims?”
x1 example:
Here’s How Much Warren Buffett Lo$t From 2017’s Cata$trophic Hurricane$
Kenneth Rapoza /Contributor /Feb 24, 2018, / #BigBusiness
https://www.forbes.com/sites/kenrapoza/2018/02/24/heres-how-much-warren-buffett-lost-from-2017s-catastrophic-hurricanes/#576c4dd21c8d
I know of some boomerang buyers who recently purchased a new $400k town home way west of town where the gators were feeding back in 2013.
we a need a universal basic income! people need to be able to go to walmart and buy chinese goods!
We also need basic employment. Sorry if it seems hard hearted, but I don’t like to hand out money to beggars so they can afford their next bottle of booze.
There’s a cohort that is unemployable… can’t stay on schedule, poor workmanship, fake injuries, material theft, etc., basically ostracized themselves.
It’s a conundrum.
One of my patients today runs a volunteer soup kitchen. Salt of the earth people. We need more people like that to provide basic needs to the unemployable. Government or private, both are needed.
Forest Hills Queens Rental Rates Crater 18% YOY As Housing Inventory Floods National Market
https://www.zillow.com/forest-hills-new-york-ny/home-values/
*Select price from dropdown menu on rental chart
Chinese developers are buying up their own shares to keep share prices levitated. Bet they’re using borrowed money, too. That used to be illegal in the U.S., until the corporatocracy captured the Republicrat duopoly.
https://www.scmp.com/business/money/stock-talk/article/2157215/chinese-developers-buy-back-their-own-shares-prop-prices
Realtors are Liars.
Also, I think the bubble might be popping for realz this time. The stock market rebounded, but hopefully houses will go back to normal and stay there this time.
So were the past 6 years just a major bull-trap, and we fall even further down this time around? Or are we looking at prices returning to 2011 levels?
Call any Realtor
https://www.youtube.com/watch?v=XhDGiW-qZ2k
I heard somebody on the news say yesterday, ” if you arent in debt then there has to be something wrong with you.”
Oh, I totally agree with that statement.
For a remedy to this personal (and financial) shortcoming) that plagues you I suggest you visit your local bank and ask for Mr. Banker’s Dotted Line Special.
If you feel you are plagued by seemingly unsurmountable problems- financial or otherwise - then it is my pleasure to offer up to you my Dotted Line Special.
While my Dotted Line Special will not completely make all of your woes disappear it will make their importance become rather trivial in comparison.
Papa was a rolling stone
Wherever he laid his hat was his home
And when he died, all he left us was a loan
Triffins dilemma:
Testifying before the U.S. Congress in 1960, economist Robert Triffin exposed a fundamental problem in the international monetary system.
If the United States stopped running balance of payments deficits, the international community would lose its largest source of additions to reserves. The resulting shortage of liquidity could pull the world economy into a contractionary spiral, leading to instability. cartoon showing outflow of US currency and gold reserves
If U.S. deficits continued, a steady stream of dollars would continue to fuel world economic growth. However, excessive U.S. deficits (dollar glut) would erode confidence in the value of the U.S. dollar. Without confidence in the dollar, it would no longer be accepted as the world’s reserve currency. The fixed exchange rate system could break down, leading to instability.
https://www.imf.org/external/np/exr/center/mm/eng/mm_sc_03.htm
“If U.S. deficits continued, a steady stream of dollars would continue to fuel world economic growth. However, excessive U.S. deficits (dollar glut) would erode confidence in the value of the U.S. dollar. ”
I’m missing the dilemma. Either world economic growth and dollar growth move in lockstep, resulting in no dollar glut or drop in value of a dollar, or the dollar supply grows faster than world economic growth, leading to a dollar glut. It doesn’t seem like the first outcome would necessarily precipitate the second.
“Inequality happens when money is printed and given those who can get hold of the printed money, whether for free or on very low interest. It is the rich who gets the printed money and that enrich them further. It is not difficult to understand that. Whoever gets bail out is given unfair advantage and the rich gets the bail out and not the ordinary man on the street. Printed money and bail outs will enrich the rich many times over and at every recession, the 99% will lose heaps to the rich by selling at distressed value and the rich acquire them with printed money and later sell them back to the 99% at the high and wait for the next recession.”
Yes. And the cartoon shows an important difference, back then trade deficits were indeed settled by moving gold, Nixon ended that and thus allowed trade deficits to continue to get larger. The ultimate globalist Henry Kissinger, I bet had a role in that decision.
There it is.
Ready or not, here come more rate hikes. Unless the Fed decides to exhibit fealty to mean tweets.
“Fed to send clear message that…” Am I the only one who finds it odd to preannounce a future pronouncement?
Fed to send clear message that more rate hikes are coming
By Greg Robb
Published: July 29, 2018 9:17 a.m. ET
Discussion of strong growth, pickup in inflation will point to September move
Reuters
Federal Reserve Chairman Jerome Powell testifies before a House Financial Services Committee hearing in mid-July.
The Federal Reserve will issue a statement declaring strong growth and inflation moving to its 2% target, making clear more interest rate hikes are coming.
“All they need to do is to point to current growth and inflation numbers and it tees up the next rate hike in September,” said Diane Swonk, chief economist at Grant Thornton.
. .
Bothell, WA Housing Prices Crater 9% YOY
https://www.movoto.com/bothell-wa/market-trends/
If you have to buy something to own it, rather than accept it as payment for something you are selling, then there’s a good chance the thing you’re buying is a financial asset, not a currency.
More than two-thirds of people have ‘no interest in buying bitcoin,’ survey finds
By Aaron Hankin
Published: July 30, 2018 8:54 a.m. ET
AFP/Getty Images
Coming off back-to-back winning weeks, bitcoin is looking to consolidate the recent momentum that has seen the No. 1 digital currency rise by more than 40% since the start of July.
However, despite a recent rally, a survey by Gallup and Wells Fargo found that while bitcoin—which proponents argue could one day be the backbone of the global payments system—is gaining attention, it is still grappling with commensurately wider adoption, or usage.
https://www.marketwatch.com/story/more-than-two-thirds-of-people-have-no-interest-in-buying-bitcoin-survey-finds-2018-07-30