August 12, 2018

Local Market Observations

What do you see in your local housing market? Falling prices? “Portland-area real estate: 10 places where home prices are falling.”

Or overbuilding? “Walking down Brand Avenue in downtown Glendale, one can’t help but notice the sudden glut of luxury apartments all cheerfully advertising vacancies. Over the last three years, dozens of these developments have been greenlit and built adding thousands of units to the city.”

In you local law enforcement? “To conceal earnings made by allegedly exploiting undocumented workers, suspects in a large-scale racket busted by federal agents this week purchased at least four houses in the Las Vegas Valley, according to a federal complaint unsealed Thursday.”

“The documents spotlight an elaborate conspiracy allegedly perpetrated by a syndicate that mostly operated in Nebraska and Minnesota, which was described by a federal official as ‘one of the largest’ for the investigative arm of U.S. Immigration and Customs Enforcement.”

“Federal prosecutors in Nebraska allege various workers were exploited through force, coercion and the threat of deportation, according to ICE. The alleged crimes took place between 2015 to July this year. Three suspects, immigrants themselves — one who’d been previously deported — would cash some of the illicitly earned checks. One of them, Anayancy Castro Hernandez, a Deferred Action for Childhood Arrivals (DACA) recipient, allegedly did this through employment with a bank.”

“Authorities identified more than $8 million in transactions made by the suspects from the financial institution that employed Hernandez. At least one of the suspects, Sanchez Delgado, would withhold money from the workers’ paychecks, telling them that he would pay their federal taxes. Instead, that money was pocketed.”

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Comment by Boo Randy
2018-08-11 06:47:13

The biggest exploiters of cheap foreign labor are the agribusinesses that are crushing the American family farmer. But they are major donors for the Republicrat duopoly, so both parties are united in backing open borders and the importation of millions of wage slaves.

Comment by Ben Jones
2018-08-11 06:53:52

Lots of farms in Las Vegas. BTW your “Republicrat duopoly” regarding illegal immigration is a couple of years out of date.

Comment by Boo Randy
2018-08-11 07:09:09

I don’t think so. The Establishment GOP and the Dims are both united in their support of open borders. GOP moneybags like Sheldon Adelson and the Koch bros are all about globalism and open borders. Wall Street stooges Paul Ryan and Mitch McConnell never miss an opportunity to throw American workers under the bus by importing foreign wage slaves or off-shoring our manufacturing base.

Comment by Ben Jones
2018-08-11 07:35:08

Ryan’s packing his bags. As is Flake. We are having an election here in Arizona, and in the radio ads candidates are fighting each other over who’s gonna be tougher on illegals.

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Comment by azdude
2018-08-12 06:42:15

sheriff joe!

Comment by Mr. Banker
2018-08-11 07:11:05

I ran across this …

4 Labor-Intensive Crops Farmers Wish They Had Robots To Harvest : The Salt : NPR


“But as immigration policy and enforcement have gotten stricter and migration from Mexico and Central America to the U.S. has slowed since 2008, the farm labor supply has gotten tight. Though wages have risen and some farmers have expanded their acreage, some have been forced to leave thousands of dollars worth of fruit or vegetables rotting in their fields because they can’t find anyone to pick it. The work is often back-breaking and risky — workers who have to climb ladders to reach cherries, for example, may fall and injure themselves. And so some workers have found better opportunities elsewhere.”

This type of farm work is tough to do so it is tough to find anyone hungry enough willingly to do it. Your average wimpy-assed American snowflake certainly isn’t going to do it, hence the work falls upon the immigrants.

Comment by Albuquerquedan
2018-08-11 08:00:32

The article explains the problem. The cheap labor which isn’t really cheap in the long run has slowed the development of robots. Now there is a real incentive The cheap labor of slavery led to the civil war and problems continue today. The wage that needs to be paid should be set by the free market without open borders. Americans can learn to work again. As a bonus, many of these people are on government programs and will be turned into a net taxpayer. Higher food prices but lower taxes and crime is a great trade off

Comment by OneAgainstMany
2018-08-11 09:06:10

This highlights a debate between competing schools of economists. I’m simplifying a bit, but one side basically believes that technological innovation occurs because it allows the marginal worker to be more productive and therefore eek out more goods per unit labor expended. The other camp believes that high wages is the impetus for technological innovation. In other words, when wages get too high, there is a strong incentive to implement new technology. It’s sort of the reverse argument that many classical economists make. I tend to agree though with this emerging thought. When labor is abundantly cheap, there is very little incentive to invest in new technology, a.k.a., the fruit-picking robots of the future.

The Industrial Revolution could shed light on modern productivity

Researchers differ on whether rising wages gave the impetus to industrialise

The Economist
August 2nd, 2018

Over the past two decades Mr Allen has argued that the key to Britain’s industrialisation lies in the expansion of commerce and trade that preceded it. That had pushed up wages for British workers, while pay elsewhere in Europe stayed flat. On the eve of the Industrial Revolution, British firms operated in a market where coal was cheap but labour was dear. It thus made sense for firms to seek ways to use coal-fired machines to wring more out of their workers. At British wage rates, tinkering with new spinning or weaving equipment made sense, Mr Allen writes, whereas in France, say, new modes of production were less likely to pay off. Not until decades of mechanisation and innovation in Britain had boosted the efficiency of new equipment was it worth adopting on the continent.

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Comment by Albuquerquedan
2018-08-11 12:07:30

I am in the necessity is the mother of invention camp

Comment by OneAgainstMany
2018-08-11 17:49:22

If labor is a substitute for machinery, labor will be treated similar to machinery (e.g. they will be dehumanized and pushed to eek out every last drop of productivity).

Comment by BlueSkye
2018-08-12 06:24:34

they will be dehumanized

This has nothing to do with machinery. It only happens when evil men are allowed to rule others. A story as old as civilization.

Comment by Albuquerquedan
2018-08-12 06:26:54

Isn’t that we see everyday. A large portion of Fortune 500 companies are run by sociopaths who will treat people as badly as possible. Only in a tight labor market are decent employers rewarded. Tight labor markets do not exist in this country with open borders. The sociopaths know it, unless the average worker starts to realize it and vote according he or she will be nothing but a disposable piece of machinery to the elites. MAGA

Comment by rms
2018-08-11 09:15:39

“Americans can learn to work again.”

Nobody can outwork a Mexican. They’re really tough and able to work the long hot days all the way through harvest.

I don’t know anything about the mid-west slaughter houses, but I’ve read it’s largely performed by Mexicans.

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Comment by Albuquerquedan
2018-08-11 09:37:26

Maybe first generation who are use to third world conditions second generation particularly US citizens like the welfare state or crime if all they are facing is low wage field work hence the reason that importing cheap labor is not the answer it just shifts costs from agribusiness to the taxpayers.

Comment by Maldonash
2018-08-11 09:37:39

Silly … I can. They work hard because they have to, not due to their birthplace or DNA. Americans do not have to with out wealth and nanny govt.

Comment by GuillotineRenovator
2018-08-11 10:24:17

“Nobody can outwork a Mexican.”

This is a fallacy, no different than “they’re doing the jobs Americans won’t do.”

Comment by Montana
2018-08-12 15:40:28

When I was abt 12 my parent suggested I could go pick crops for Uncle Joe in the Imperial Valley like she and her brother did in the depression. I thought it sounded like great fun. Lol.

I would have died doing stoop labor in that heat. And I think she had just mainly posed in her sun suit around the farm for Uncle Joe’s camera.

Comment by Anonymous
2018-08-12 12:05:39

I could be wrong, but AFAIK most farm labor isn’t a steady job in one place.

Comment by Jessica
2018-08-11 07:40:23


Comment by MWR
2018-08-11 07:19:03

What do you see in your local housing market?

I hear the train a coming but don’t see it yet.
I worked in Houston in the Oil fields in 1980. It was absolutely insane, you’d get done with one job and start getting call immediately. I was not part of the 14 days on 14 days off crowd and worked 90-100 hours a week for months. Insane!! I did not know what a bubble was and proceeded to get my azz pounded for years. Including by a guy who, during an interview for a job looking for impurities in ceramics, tells me he hopes we (geologists) all starve, after berating me the entire interview over the price of gas. By the way, he almost got his wish!

In 1999-2000 (now in the mortgage industry) It sure felt like a bubble but the I knew for sure when 2 accountants left what was, in my opinion, a very cushy job. One left, a CPA, to trade stocks and the other left to sell things on EBAY, including my baseball cards from the 1960’s. Those of you not familiar with accountants, they are not known for being “Wild and Crazy” guy. Sold all my tech stock and my tech mutual funds, unfortunately keep the S&P 500 funds so still took a hit but not too bad. Getting your AZZ pounded for a decade teaches you a few things, no matter how stubborn you are!

In 2004 I was in SEFL in the mortgage business. Ground zero for HB 1.0. All the Loan Officers had condos, many in S. Beach along with homes. But the defining moment was when temp employees, standing outside my office, would constantly be on the phone with their RE agents buying or trying to buy land and housing in Port St. Lucie. It was an almost every day occurrence. Keep in mind these were temps. I Left in late 2004 and got into a bank in the Carolinas as I just knew the mortgage/housing world was going to get killed. Again, taking an AZZ pounding for a decade teaches you a few things!

With that said, I am not seeing either the Houston 1980 or SEFL 2004 extremes yet. But right now, in the middle of the Carolinas, I gotta tell ya, I just hear a train, I don’t see it.
Maybe if I was in Seattle or Portland I’d be staring at the Train. Also, if I owned a home I might be more worried but I rent. I don’t expect the carnage to really start, at least in the vacation areas where I am looking, until after people do their taxes in April, realize their tax benefits aren’t what they used to be, and then come the end of summer, FINALLY realize they hardly ever used the home/condo and finally put it up for sale. I give it at least 1 year maybe 1.5 years before I start seeing the “fear and price” cuts in a big way that I am waiting for. Hopefully taking an AZZ pounding for a decade will pay off again. Guess we will see.

Comment by Ol'Bubba
2018-08-11 19:22:55

Where in the Carolinas are you now located?

Comment by MWR
2018-08-12 04:33:15

Ol bubba:

suburb/exurb of Raleigh.

Comment by Ol'Bubba
2018-08-12 05:55:26

I’m in Charlotte, and I see a lot of multifamily coming out of the ground. It’s not just downtown, but also in the suburban rings 15 miles from downtown.

There has been a great deal of in-migration here over the past 15 years. It stopped in 2008-2009, but started again shortly thereafter and it continues. Sometimes I think everyone from the northeast or midwest is moving to the southeast. I’ve also met more than a few people from California.

As I said earlier, keep your eye on the bond market. If you currently have a low rate, fixed rate mortgage then it’s going to be more difficult to make a move when that sub 4% rate is no longer available.

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Comment by Albuquerquedan
2018-08-12 08:01:58

As I said earlier, keep your eye on the bond market. If you currently have a low rate, fixed rate mortgage then it’s going to be more difficult to make a move when that sub 4% rate is no longer available.

True, but a lot of people can move from their bubble areas and buy cash with their equity. It is why what I am seeing in the housing market right now looks more like a stock rotation, cashing out of the high fliers but staying in the market. We saw it in the housing market last time too and it was a few years before we saw a national decline. The equity locusts had driven up fly over before we saw a national correction. Whether or not we see a major fly over rotation is an open question, if not, this housing correction will be much more limited. It will probably be confined to the areas most driven up by the Chinese.

Comment by BlueSkye
2018-08-12 08:44:18

this housing correction will be much more limited

You could be entirely wrong about that.

Comment by Professor 🐻
2018-08-12 08:49:04

All real estate is not local when a mania is driving price dynamics.

Comment by Albuquerquedan
2018-08-12 08:53:57

Skye, you always refuse to read the qualifiers:

Whether or not we see a major fly over rotation is an open question, if not,

Thus, I am saying that unless the flyover locations first soar in price first then it will be much more limited. I stand by my predictions but only when the entire prediction is quoted not just a part of it.

Comment by Albuquerquedan
2018-08-12 09:05:06

Truism, but you are not showing the mania in flyover. Some of the cities on the list I posted are actually below historical norms and many of the rest are far below where they were at the beginning of the last bubble. Moreover, homes construction is less than half as an important part of the GDP as it was the last time around so if it dries up, it will not impact the GDP or housing similarly. Last time, we had both subprime mortgages and people working in the construction industry losing their jobs to act as gasoline on the housing correction fire. Without the construction jobs, workers lost their homes and started a downward cycle in price. Right now, many working construction could go work in the oil fields immediately. I am not saying Seattle, New York and San Francisco are not due for a world of hurt. In fact, I have been saying it for some time. However, it is the contagion part, I am having doubts about. I see it in Canada, Australia, China and Britain and many European countries but not in the US.

Comment by Professor 🐻
2018-08-12 09:14:12

“…unless the flyover locations first soar in price first then it will be much more limited.”

Unless pigs first sprout wings, they won’t fly.

Comment by Albuquerquedan
2018-08-12 09:19:45

Now personally, I would love to see major corrections virtually everywhere particularly in the no income tax states. I am getting close to retirement and God has been good to me and I will have a large enough retirement income that I want to live in a low tax state. So I would love an opportunity to pick up a place cheap anywhere so I would love to be wrong. However, the correction seems to be related to huge gains such as San Francisco, Seattle and Denver and/or to be connected to high tax states connected to tax reform. This correction seems much more limited to me.

Comment by Ben Jones
2018-08-12 09:25:55

And you didn’t see it coming at all until a few weeks ago. Like Jingle:

“No bubble”, for years, then:

“This is my third bubble!”

Comment by Albuquerquedan
2018-08-12 09:26:34

Unless pigs first sprout wings, they won’t fly.

I think that is right. Last time we had 0% down, interest only loans, set low for the first few years which provided insane buying power and led to people living outside the area buying homes as “investment”. I do not see that, so I do not see the type of correction on a national basis as we had last time. Without the national correction, you do not have it triggering a severe recession which really caused most of the price correction. Thus, until we have a real mania, we do not have a similar correction. Right now the mania is contained so the correction will be contained.

Comment by Albuquerquedan
2018-08-12 09:29:19

Ben that is not true. I have been calling out Seattle, San Francisco, Canada, Australia etc. for some time. I have not and do not see the same dynamics for the country as whole this time as last time.

Comment by Albuquerquedan
2018-08-12 09:33:19

Honestly, I do not think I could be more consistent:

Comment by Albuquerquedan
2018-03-31 10:51:36
Much of the last bubble was caused by teaser rates, especially ones tied to interest only deals. Even a person with a middle class income can afford a million dollar house if he or she only has to pay on a 2% loan. The paradigm at the time was housing would only go up so you could easily refinance since in a few years you would have so much equity. When it did not happen and the rates readjusted people lost equity first and then the homes since their income did not cover the mortgage. Fast forward, how did the Fed get the housing market going, it dropped all rates to almost the level of teaser rates.
This is precisely why the Bay area is going to be ground zero for a housing correction. Sorry at normalized rates even most high tech workers cannot pay the mortgages on million dollar plus homes. Sure the ones that have fixed mortgages will be able to hang on but their homes prices will be determined by the comps and that will be determined by what people are willing and can pay at the higher rates.
First, will go the equity and some people will be literally borrowing the money to pay the mortgage as the prices fall and then people will begin to lose homes and these homes put on the market will depress prices further. The difference this time is the housing prices are less disconnected from economics in most areas. This can be seen in relationships between renting and owning a home. I do not think it is a national problem of the same scale because subprime loans, no doc loans were not made in neighborhoods and even states where the demographics and the economies were bad but the houses still shot up, due to the fact that anyone who could fog a mirror could get a loan. That type of lending exists in vehicle loans not homes loans this time around.

Comment by Ben Jones
2018-08-12 09:38:03

May 25, 2018

“In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”

Oh and Freddie Mac brought back no income-no geography restrictions in July. I have an article on that I may get to this afternoon. So much to cover!

Comment by Albuquerquedan
2018-08-12 09:57:11

Ben, this my exchange with azdude a number of months ago, did I really sound like a housing bull?:

Comment by azdude
2018-04-19 10:16:52
my signing was today and we record later today. I am a proud homeowner again. Cash will start rolling in via equity!
Reply to this comment

Comment by Albuquerquedan
2018-04-19 10:37:55
Similar to the timing of the people that bought tickets on the RMS Titanic. Seriously, I hope I am wrong and this is a good time to buy in your area. At least mortgage rates are still a bargain.

Comment by BlueSkye
2018-08-12 15:58:34

Without the national correction, you do not have it triggering a severe recession which really caused most of the price correction. Thus, until we have a real mania

Still not getting it ADan. Not one little bit. We’ve been in a real mania for at least a couple of decades, and it’s global.

For all the hundreds or thousands of predictions you’ve made here I can’t think of one that turned out to be correct.

Comment by Mafia Blocks
2018-08-12 12:13:47

I “see” $50/sqft for lot labor materials and profit irrespective of location…. which is what construction cost has been for nearly 20 years now.

Guess where used house prices are going to end up?

Comment by Montana
2018-08-12 15:55:25

Retired contractor with an active contractor son told us it’s $200/ft right now, here in missoula.

I wonder if a lot of construction workers got out in 2009 and never went back. The work on a house here in the nabe has been pretty sporadic.

Comment by BlueSkye
2018-08-12 16:06:16

If cost is $50 and you can sell it for $200 no wonder so much construction has been going on.

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Comment by Albuquerquedan
2018-08-12 18:59:32

Yes China collapsed five years ago and housing prices collapsed just like you said it would and oil is ten dollars a barrel just like you predicted. The truth is I have been right most of the time and you have been wrong most of the time.

Comment by taxpayers
2018-08-11 07:19:04

still perky in 22151, but that’s to 1.3 trillion budget

Comment by taxpayers
2018-08-11 07:22:18

REIC stocks got pounded yesterday
due to:
mort rates - 4.45 same as earlier

Comment by Boo Randy
2018-08-11 07:34:19

People with memories of the 2008 financial crash and the housing bubble crash that precipitated it are going to start seeing the writing on the wall and preemptively jettisoning bubble assets this time around, despite the cooing reassurances by the usual “analysts” and paid shills for the corporatocracy that Everything is Awesome!

Comment by Tim
2018-08-11 07:22:23

Hello again. I used to post before the last crisis but left around 2010 as I thought we had bottomed in my area. Since that time housing prices have gone up over 100%. In the last 2 months, however, inventory in Denver has sky-rocketed (up around 40% in just two months) and prices have finally hit a wall. Since June, prices have been flat or falling (although only about 1% down right now from a June peak). I think things are about to get really bad for recent purchasers. Denver went up more than most other cities due to the Green rush. Those with checkered pasts and little education could get rich fast, at least that was the hope. Traffic became insane, our crime ridden and/or environmentally contaminated areas became the hottest areas for shady developers to build crap boxers for hipsters, and our parks have become filthy tent cities. Now that pricing no longer makes us look much cheaper than Cali, Cali and other areas have legalized weed, interest rates have nudged up, we over-shot “luxury” apartment construction by a mile, and we have ruined our best neighborhoods by tearing down quaint bungalows and replacing them hideous cheaply constructed multifamily housing, I think we are about to go the way of Seattle and Portland. Just another example of the boom and bust cycle, and inability of the average person to understand economics or history, or at least not learn any valuable lessons therefrom. I have no doubt this site will begin to blow up over the next 3 years, as we move into the Greater Depression.

Comment by Mr. Banker
2018-08-11 07:40:34

Here’s a chart that shows the closing prices of houses in Denver as compared to the listed prices up to March of 2018 …

Comment by Tim
2018-08-11 08:02:32

Thank you. That confirms what I have noticed. Last summer was dominated by bidding wars in which the average seller got more than asking. This year is the summer of price reductions. Albeit no “real” bargains yet as the starting list price this summer is still higher than last year’s. No one wants to have to sell for less than neighbor. They would be ostracized in the break room, and have to sit with the renters, or, rather than face the “I told you so’s” from the angry renter crowd, eat quietly at their desk alone with the door closed and think about their shame.

Comment by Taxpayers
2018-08-11 07:57:55

Greater depression
Gonna suck ,but I don’t think as bad as 08-10

Comment by Tim
2018-08-11 08:19:44

Denver wasn’t impacted as much as the coasts during the Great Recession. Prices went down less than 20% from peak. I think we could pass that in Denver this second time around. Historical economic data would suggest we need to fall 40% to fall within normal cap rate/income/asset ratios based on a variety of criteria. Prices went up about 120% during the last 8 years with little change in household incomes. This was due to insane migration in. Now that is slowing, and I hear stories about ppl wanting to leave daily since they basically just turned us into a suburb of California with no water views or real culture.

Comment by Albuquerquedan
2018-08-12 06:42:31

Yes, reverting to the mean is a better way to determine how much we are going to correct. Thus, based on income and rent ratios the country as a whole will not correct as much this time. Nor will San Diego be the one of the epicenters of the crash, however Denver will probably correct more:

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Comment by Professor 🐻
2018-08-12 07:13:04

What makes you think San Diego rents won’t correct considerably once this longer-than-average expansion ends?

Comment by Albuquerquedan
2018-08-12 07:37:01

You are a sanctuary state protecting illegals, they have to live somewhere. Also, we are at 4% growth and Trump is using our greatest strength, fossil fuels. China made a deal with Obama to cutback on the use of fossil fuels but by that time it was importing vast amounts of them. Obama was an idiot to take away our greatest advantage; cheap, abundant fossil fuels at least compared to the rest of the world. China’s reserves of coal are about thirty years we have hundreds of years. It is stupid not to exploit that advantage particularly since eventually solar, wind and new nuclear will be cheaper. Right now, oil drilling is going gang busters, NG drilling is about to soar and coal exports are just taking off. This imminent recession is a hope but the Democrats and their economists but eight years of pathetic economic policy has left a lot of slack.

Comment by Albuquerquedan
2018-08-12 07:52:39

a hope “by” the Democrats and their economists.

Comment by Albuquerquedan
2018-08-12 08:37:31

This article shows that China is importing record amount of coal despite its efforts to cut back on coal. Look at the price of coal, how our miners would love to be getting that price. Remember about 7 Yuan to the dollar, it is like the discussion with One, where Britain was substituting coal for labor, in the US our energy advantage if we exploit it would allow us to dominate in an environment with no tariffs which is exactly what Trump is trying to accomplish:

Comment by OneAgainstMany
2018-08-13 21:40:32

“if we exploit it would allow us to dominate in an environment”

I don’t disagree, but given the right “environment” for coal domination will be a tragedy for The Environment.

Comment by Albuquerquedan
2018-08-12 06:51:07

Key part of previously posted link:

National and city price-to-rent ratios have risen and fallen over the years depending on the state of the housing market. In the years before the housing crisis, as the housing market heated up, the national ratio rose from 22.73 (in 2005) to 24.50 (in 2007). Then, however, after the real estate market turned, as home prices fell and rentals grew more expensive, the ratio began to fall, dipping below 20 in 2011, down to the current rate of 19.21.

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Comment by BlueSkye
2018-08-12 08:41:04

I don’t think as bad as 08-10

The potential for harm is much greater than last time. Nothing was fixed, there was no reform. Very concerning is the huge disaster of cascading defaults that is waiting to happen in China.

Comment by Marco
2018-08-11 07:24:20

I’m in Corvallis, Oregon and I get the feeling things are slowing a little. Met a friend the other night at a pub and his wife is a realtor. I asked about the local market and she was all ” things are hot and selling fast” and then she was outside on her phone trying to make some crazy three way house sale go thought. Later that evening she stated she doubted that this deal would work out. She was saying it is coming down to if the people are buying a extra pizza a month would affect their loan from the bank. I think everyone who wanted to buy have and sales must slow down, and raising rates can’t help.

Comment by aNYCdj
2018-08-11 07:28:23

Old 2 story factory with hundreds of employees in the past now this they moved their operation to Westbury out in Nassau County, and sold their building for $12,070,000 in December 2015

Comment by aNYCdj
2018-08-11 07:52:44

any old school radio broadcasters here? rek-o-cut turntables were made there too.

Comment by Boo Randy
2018-08-11 07:30:28

Even the fake CPI inflation data can’t conceal the rapid rise in the cost of living.

Heckova job, Ben and Janet. But your oligarch pals are sure living large.

Comment by Mr. Banker
2018-08-11 08:03:27

“‘Rising rents remain the source of inflation. This is driven by shortages of housing in desirable markets,’ Dean Baker, senior economist at the Center for Economic and Policy Research, told CBS News.”

Let’s see how long this rising-rent-remains-the-source-of-inflation thingy lasts.

Comment by Albuquerquedan
2018-08-11 08:04:25

But if the blog is correct and rents are dropping then the problem is being solved since it has been rents that have raised the core rate

Comment by Mafia Blocks
2018-08-11 07:37:22


Call your attorney before states attorney comes knocking.

Comment by Mortgage Watch
2018-08-11 07:48:37

Camarillo, CA Housing Prices Crater 8% YOY As Imploding China Economy Scorches California Housing Market

Comment by Patrick
2018-08-11 08:25:05

In Salt Lake City inventory is rising quickly, up just over 30% in the past 3 months. Prices went over HB 1.0 peak even if you factor in inflation.

For some reason in Salt Lake County people can borrow $600k for a house for a conventional mortgage which is among the highest in the nation despite having zero Fortune 500 corportations headquartered here and a smaller population. Most areas have a $453k loan limit. Bay area is $670k.

So lots of over leveraged borrowers. Not a large economy with a large population.

Comment by ibbots
2018-08-11 08:35:33

The sub $300k market in Dallas proper is still pretty nonexistent unless you go the sketchy areas. Tons of stuff in the 400 to 500k range with reductions. Wishing prices I guess. a guy in my area listed his sfr on 2 lots for $2M. Ya….

A rezoning proposal go shot down for a 6 acre parcel down the street. Currently zoned for 28 sfrs. Developer first wanted to do 48, then reduced to 35, still got rrejected. He was gonna build those row homes with ‘pocket parks’ and list for 500k. A lot of the dialogue took place on Next Door. Geez, the pro development people were so full of it. Using fear and baseless claims to intimidate people. Nice to see them get the big denial from city council.

Had a bumper peach crop despite the plum curculio beetle, the squirrels and the bees. I peel them and freeze them, the peaches not the squirrels. Peach trees are a fair amount of maintenance. It’s fun though. My 2.5 year old daughter helped me pick them in the mornings before breakfast.

Comment by OneAgainstMany
2018-08-11 09:16:56

I peel them and freeze them, the peaches not the squirrels.


Comment by MGSpiffy
2018-08-11 08:59:33

What do you see in your local housing market?

No crash yet, that train’s not here (yet)… but a rapid cooling off that’s getting everyone’s attention. Someone turned off the furnace.

Sellers are jumping off the fences hoping to be among the last ones to catch the bidding war/no inspection madness, but for most it’s looking too late to enjoy the boom. The less expensive and properly priced properties in good condition are still moving quickly, but the stuff that needs work or is overpriced is getting passed over.

As described the other day, most new construction is on recent teardowns and shooting for max price, and thus getting pretty hard to move.

Low-end/starter home supply is still almost non-existent without going way out.

Buyers would still like to find something, but are very fatigued and rising rates have them rethinking their price points and strategies. They’re getting picky and bolder. Some are already turning away to sit this one out.

The local media has woken up, can’t shut up about it, and are trying to put lipstick on a pig.

Comment by Professor 🐻
2018-08-11 09:28:52

Visiting an old friend in the BayArea. Divorced mom, three adult children living elsewhere with their families, and she’s owner-occupying a 3000 square foot two level empty nest 4br home within walking distance of a high school.

This is an example of what I call “hidden shadow inventory”. Aside from the ever-growing pile of home equity which is doubtless priced into this place, there is little economic rationale for her to not sell this place to a young family who can fully utilize it and move on to something more lifestyle-appropriate.

Bubble prices distort the normal life cycle forces that drive housing choice.

Comment by hwy50ina49dodge
2018-08-11 23:53:11

There’s a $ale gimmick being created whereby the new buyer$ can purcha$e & abscond the prop 13 tax ba$e … Google it

Comment by Professor 🐻
2018-08-12 06:33:59

Is it legal?

Comment by OneAgainstMany
2018-08-11 09:50:10

I was out with my little boy yesterday. Went to a restaurant that said “hiring cooks at $14/hr”. Del Taco was hiring at $13/hr. We do not live in a big city. Wage pressure has definitely been heating up on the lower end. You can’t make enough to live and afford housing around here (many of the nice houses are owned by are CA, NV, and northern UT cash-outs retiring or buying a 2nd house), but I do see wage pressure for the core businesses in town that supply the lifestyle that these wealthier individuals are accustomed to.

Comment by azdude
2018-08-12 07:15:42

who wants to work for nothing? Its poor monetary policy creating inflation.

Comment by Mortgage Watch
2018-08-11 10:13:51

Mukilteo, WA Housing Prices Crater 7% YOY As Seattle Area Tech Layoffs Accelerate

Comment by Tarara Boomdea
2018-08-11 13:47:50

Some ride.

Animated house price charts, the gif that keeps on giffing.
House price trends Seattle Las Vegas and 20 city composite

Comment by Professor 🐻
2018-08-11 17:25:01

Looks like the roller coaster is at the top of the second hill, and about to plunge to the bottom for the second and final time.

Comment by BlueSkye
2018-08-12 06:29:51

We can’t know it’s over until after the crash and burn.

Comment by Professor 🐻
2018-08-12 06:35:14

We can’t know if it was a bubble until after the crash and burn.

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Comment by azdude
2018-08-12 06:40:53

silly u

Comment by BlueSkye
2018-08-12 08:48:47

not “if it was a bubble”. If it’s the last of serial bounces.

I think it would take another of ADan’s China Miracles though and where would that come from?

Comment by Albuquerquedan
2018-08-12 19:06:53

China still has not collapsed and that is why you have been so wrong for so long. Now Trump May make it collapse but right now it is still growing consuming more and more natural resources and enriching enough people to be potential buyers outside of China if they can get their money outside the country

Comment by Mafia Blocks
2018-08-13 12:49:40

Get your stories straight Albuquerquedan.

Monterey, CA Housing Prices Crater 11% YOY As California Housing Glut Expands

Comment by MGSpiffy
2018-08-11 20:47:24

Interesting graphs! Thanks.

Comment by Professor 🐻
2018-08-12 06:39:11

Is Seattle the new Las Vegas?

Comment by rms
2018-08-12 19:43:50

Seattle has plenty of high-skill set jobs for the educated workforce whereas Las Vegas seems to cater to the $30k millionaires.

Comment by Anonymous
2018-08-12 13:07:55

Personally, I’m hoping LV again drops like a rock.

Comment by Tarara Boomdea
2018-08-14 14:03:29

These are not great properties, but that didn’t stop them from being listed at “aspirational” prices, then quickly reduced:

Price History for 3530 Sandcliff Lane ($440K to $394K)
07/30/18 Price Change: -$46,000 $394,000 GLVAR
07/20/18 New Listing $440,000 GLVAR
08/09/94 Sale $177,500 Public Records
07/15/92 Sale $85,500 Public Records

Price History for 2565 Rochelle Avenue ($449K to $319K)
08/06/18 Price Change: -$51,000 $319,000 GLVAR
07/31/18 Price Change: -$7,000 $370,000 GLVAR
07/23/18 Price Change: -$1,000 $377,000 GLVAR
07/11/18 Price Change: -$10,000 $378,000 GLVAR
07/08/18 Price Change: -$1,000 $388,000 GLVAR
07/03/18 Price Change: -$10,000 $389,000 GLVAR
06/30/18 Price Change: -$20,000 $399,000 GLVAR
06/28/18 Price Change: -$10,000 $419,000 GLVAR
06/25/18 Price Change: -$10,000 $429,000 GLVAR
06/20/18 Price Change: -$10,000 $439,000 GLVAR
06/14/18 New Listing $449,000 GLVAR
01/03/90 Sale $175,000 Public Records

Comment by DirtyLawyer
2018-08-12 07:35:17

What do you see in your local housing market?

83702… Boise, ID

Well, this city has been the subject of countless “best places” to live articles over the past 10 years or so. Population has surged and the future projections are more of the same. While the population and prices have exploded in the past 10ish years (and really in the past five years), more local articles on housing unaffordability and how to manage the extreme growth. Lots of resentment towards out of state transplants bringing in equity and driving up costs.

We had put in offers on three houses in the Spring, but thankfully all went for over asking and we did not play the bidding war game. Open houses were full of out of town “investors”, and people were flipping houses for stupid money. The mania was palpable. I have since convinced my Wife to continue renting.

Now, I have noticed houses sitting on market longer, and more price reductions. Lots of wishing prices. Sellers are definitely “not going to give it away”, and do minuscule price reductions - they have enjoyed multiple offer bidding wars, selling within 48 hours, and all the other favorable contract terms for so long, so the sellers remain stubborn. Contractors seem to still be busy, lots of houses being renovated.

In our neighborhood (North End), most everything is $400k-800k, below $400k are generally to-the-studs remodels or teardowns. These houses are old, usually built 1900-1950 - and most need a ton of work. In the Spring, one teardown sold and was put back on the market a month later for about $100k more. Complete speculation. There is also $1mil+ stuff, but I don’t monitor that price point.

A house a few blocks away just went on market for $739k:,pf_pt/79684755_zpid/3737_rid/1_open/globalrelevanceex_sort/43.648529,-116.175056,43.616846,-116.229987_rect/13_zm/

We are renting. We have lots of cash, and will continue to save for the next downturn. And I can tell you, people will not/do not see it coming.

Comment by MGSpiffy
2018-08-13 00:20:55

A house a few blocks away just went on market for $739k:

holy heck, I’d expect to see that in King County, not Boise, ID. How does the local job market compare? lots of dual 6-figure income couples around?

Comment by DirtyLawyer
2018-08-13 05:19:27

No, in fact avg HOUSEHOLD income is about $55k. Local job market is one of the lowest paid (I think top bottom 5) in the country. I am pulling from what is generally the most expensive neighborhood in Boise, but it gives you an idea - and I’m not cherry picking one or two houses - there are currently 988 active listings in the city, and 122 of them are priced at $600k+.

The house next to use finally sold after a few price reductions, the last asking price was $870k.

Comment by Mafia Blocks
2018-08-13 07:09:36

Hmm. Bought by a mortgage outfit.

Imagine that.

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Comment by DirtyLawyer
2018-08-13 07:56:54

No, bought by couple who sold a massive house on 5 acres about 25min away to be closer to Boise State (where their two kids go to college). This one is owner occupied.

Comment by Mafia Blocks
2018-08-13 08:34:12

That’s not what the records say.

Comment by DirtyLawyer
2018-08-13 12:30:49

Where do you see that?

Comment by Mafia Blocks
2018-08-13 12:54:00

On my computer screen.

Comment by DirtyLawyer
2018-08-13 13:58:41

Right. I should have known that would be your answer. Par for the course.

Comment by Mafia Blocks
2018-08-13 14:03:48

Housing my friend.

Logan, UT Housing Prices Crater 6% YOY

Comment by GuillotineRenovator
2018-08-12 10:05:53

I’m seeing large price drops on houses on acreage in podunk western WA, while raw land is still at wishing prices. So, you’ll see a 3/2/2 on 5 acres where they’ve dropped the price to $225,000, but a raw 5 acres without well, septic or power is priced at $150k. See the disconnect?

Comment by SENM
Comment by Anonymous
2018-08-12 12:52:23

I stopped by Cooper Parks’ “Hotel California” in June, while I was driving the Strzelecki Track to Innimincka, South Australia. The place in your link is a dump compared to what I saw at Cooper Parks! Unfortunately, they’re not licensed to serve the public. I had to settle for a visit to the ladies room. :D

Cooper Parks pics

Comment by Mortgage Watch
2018-08-12 15:28:03

Brambleton, VA Housing Prices Crater 12% YOY As Housing Correction Barbecues Louden County, VA Homeowners

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