What We’re Seeing Is More Of A Market Correction
A report from the Los Angeles Times in California. “It’s been on again, off again, on again and now it’s sold. Grammy-winning music star Marc Anthony and his wife have parted ways with a second home they own in Tarzana. The closing price was $3.2 million. The East Coast-inspired Traditional, built in 2014, has been on and off the market for the better part of two years, listing for as much as $4.35 million and as little as $3.35 million. Anthony bought the place in 2015 for $4.125 million, records show.”
The La Jolla Light in California. “Razor House listed for $30 million. One of the most stunning (and stunningly expensive) houses in La Jolla is back on the market. The Razor House at 9826 La Jolla Farms Road. Sitting on three-quarters of an acre above Black’s Beach, the clifftop valhalla has six bedrooms and bathrooms in 11,954 square feet of living space and was featured in commercials for Calvin Klein and Visa. Believe it or not, the asking price is less than its 2007 construction cost ($34 million) and 2008 asking price ($39 million), but considerably more than it last sold for in 2011 ($14 million).”
From KRON 4 in California. “By most measures, the local residential real estate market is still going strong. But there are signs that the market is cooling down some, at least for now. You may have noticed a few more ‘for sale’ signs in your neighborhood of late, suggesting that inventories are up. Homes are still selling but there are also signs some of those homes are selling for a little less right now, says Climb Real Estate’s David Contreras.”
“‘There is talk of it cooling off a little bit, but what we’re seeing is more of a market correction,’ Contreras said.”
“In San Jose, for example, Zillow reports prices were dropped on 9.5 percent of listings in June, up from 7.2 percent one year ago. ‘What’s happening is we’re seeing prices not going up $100,000 or $200,000 over the asking price,’ Contreras said. ‘Things are getting a little more tamer.’ Don’t expect home prices to fall too far, Contreras said.”
The Idaho Business Review. “Jack Harty, principal of Harty Mortgage Advisors in Boise, has a mixed message for clients who approach him about building revenue-generating properties. Harty sees signs that the economy has reached a peak, and he advises clients they may be better off selling some of their existing properties at existing high prices rather than risking construction of too many more properties. ‘There are pressures at work that over time, if unabated, will tend to reduce the value of income-producing properties,’ Harty said. ‘Right now we’re on the crest of a wave. When will the wave break?’”
“His message of caution is shared by several others involved in Idaho real estate loans, who believe it’s time for borrowers to factor in the possibility that a market correction may be on the horizon when they plan their projects. Jeff Newgard, CEO of Idaho Falls-based Bank of Idaho, said he’s heard a lot of talk lately about a market correction. ‘(Before the Great Recession) there was so much money to be made for a bank on development lending, and when things fell apart, everything came down like a house of cards,’ Newgard said. ‘Just because (the economy) has been going this way for a few years doesn’t mean it will continue the same way.’”
‘The closing price was $3.2 million…Anthony bought the place in 2015 for $4.125 million’
Aw, Marc, you went and screwed up the comps! Well. it was cheaper than renting, maybe.
Thanks to the reader who posted the Idaho report.
(3.2/4.125-1)*100% = -22.4% gain. Good thing he’s a celebrity millionaire who can afford to lose money.
That assumes he paid all cash. If he put down less than 29%, he lost more than 100%. Reverse leverage is what collapsed all the investors only 10 years ago.
I realize I may be slightly unfair in that I didn’t back out rent savings, but he probably kept more than one house in any event.
I wonder what the rent would be on a house like that.
Right. Leverage has a way of amplifying losses. So do real estate sales commissions, which also were not included in my back-of-the-envelope loss calculation.
Imagine losing more than a $1M dollars in a single real estate deal in a few short years.
Theres one thing you can count on with housing…… A guaranteed loss.
Considering that folks like him make tens of millions in a few short years, I don’t have a lot of sympathy.
Marc Anthony net worth: Marc Anthony is an American actor, singer, entrepreneur and producer who has a net worth of $80 million dollars.
https://www.celebritynetworth.com/richest-celebrities/actors/mar-anthony-net-worth/
‘There is talk of it cooling off a little bit, but what we’re seeing is more of a market correction’
It’s the Mercury News that’s talking about cooling David. Thanks for setting the record straight.
Nobody expected prices to fall too far in 2006-2008 either. Huh.
i buy houses with other peoples money.
Have you and Mr. Banker got together? I still have an outstanding question trying to find out how many Bankers can fit in a VW.
I’ve been periodically reading this blog since at least 2005, and I have learned a lot. I bought and sold and made money in large part because of what I learned here.
What was so impressive last time around was the reporting that was being done here, but not in the MSM.
It was the ARM reset charts that I saw here that convinced me you were all onto something.
What is the proof that the bubble we are in is now bursting? Is there anything super obvious like the ARM charts resetting?
Does this ring any bells?
“The most immediate risks to the housing market now come from the rise in interest rates, the erosion of affordability after years of strong house price appreciation, and the growing inventory of both new and existing homes for sale. But unless the broader economy stumbles and job losses mount, home sales and construction activity will likely dip only modestly.”
Notice any difference between the number of housing starts (when you hit the max button) between now and then, thus the smaller percentage of the GDP housing is now? We are talking about a million fewer housing starts per year now.
https://tradingeconomics.com/united-states/housing-starts
That’s still on top of what was there already. I’m thinking you haven’t had enough crow.
the economic boom is even getting gold bugs to capitulate and buy stock.
A sphincter says what?
The central bankers in China have lost control. They tried mightily to keep the Shanghai Composite levitated above the critical 3,000 resistance line, and failed. It’s been dropping ever since despite more PBOC crack cocaine liquidity injections. The next central bank to lose control will be the ECB, as it becomes clear Italy’s new nationalist government, unlike the globalist stooges they replaced, is not going to be licking the ECB’s boots and are going to demand a better deal from the banksters - or else. Last but not least, as the U.S. housing bubble bust accelerates, the Keynesian fraudsters at the Fed will not have nearly the leeway they did in 2008 to print away the banksters’ debts and liabilities and shaft taxpayers with another bailout. Enough people have become awake and aware that they are not about to meekly bend over for another deep-dicking from the Wall Street-Federal Reserve Looting Syndicate. So now it’s going to be crunch time.
“Last but not least, as the U.S. housing bubble bust accelerates, the Keynesian fraudsters at the Fed will not have nearly the leeway they did in 2008 to print away the banksters’ debts and liabilities and shaft taxpayers with another bailout. Enough people have become awake and aware that they are not about to meekly bend over for another deep-dicking from the Wall Street-Federal Reserve Looting Syndicate. So now it’s going to be crunch time.”
Riiiiiiight. As I recall, the people were not on board with the last bailout, either. That’s why CONgress voted against it before they voted for it. They’re not going to do a damn thing different this time. The only difference is the Fed is starting off in a weaker position because of the lower rates.
I posted a fact. People can draw their own conclusions.
Dan, you read like a malignant narcissist. You have never one time admitted you were wrong, yet you’ve been so wrong it’s comical.
AlbuquerqueDumb, at it again.
The big problem going forward may be due to a curtailment of Chinese investment in US residential. I’m sure you have read Ben’s numerous posts about the effects this had in Canada and Australia. Do you think it can’t happen here, because this is ‘Murika?
Stay tuned!
The other really big question in my mind regards the number of US homes currently occupied by speculators planning to cash out within the next few years, before the next real estate bust, in order to lock in those sweet Fed-funded post-2011 home equity wealth gains. My sense is that between recent speculative investment purchases and long-term owner-occupants who postponed the timing of sale to capture historically high rates of home price appreciation, we may have a record number of owners ready to dump inventory when the market turns.
I don’t know if anyone bothers to track this sort of information.
The last collapse began when the 10 years was significantly higher than 4%. Now it is less than 3%. In addition, the republicans just cut a tax break for the rich while unemployment was at a low point. Further, tax form is unlikely. The options for stimulus to re-inflate the bubble are far less this time around.
10 years = 10 year treasury
they will keep screwing over people who dont believe in the rigged recovery. Once they believe look out below. U still have a lot of haters out there. They have gotten hosed for 10 years now.
They keep putting out bad news to suck people in to go short. These people r pure genius.
“These people r pure genius.”
Thank you.
I thought the stock market was going to crater at 15,000. Boy was I wrong.
I know. I punched out at 17,500 and was convinced a lot of people were going to get trampled going for the door. Boy was I wrong.
“Boy was I wrong.”
Get shorty!
Me too. $17,500. I took a lot off the table. Add $7,500 and here we are at $25,000. I may need a 42% run up. It’s a good thing I owned some real estate.
Monterey, CA Housing Prices Crater 11% YOY As Mortgage Fraud Reaches Unprecedented Level
https://www.movoto.com/monterey-ca/market-trends/
“But there are other factors to consider.
“People are a little concerned about interest rates going up, but this time of year, July through August, you’re seeing more people on vacation, so there are simply fewer buyers during that time frame.”
Zillow expects the market to slow down next year, but a strong economy means demand for housing will also remain strong.
Don’t expect home prices to fall too far, Contreras said.”
David, are you in denial or just a glass is half full even when it’s empty kind of guy? Guess the statistics about summer being the peak of RE purchasing have no creditably this year as for the first time ever, people are taking vacations…
“People are a little concerned about interest rates going up, but this time of year, July through August, you’re seeing more people on vacation, so there are simply fewer buyers during that time frame.”
And how many articles are we seeing about Summer this year, fewer buyers, blah blah, like it’s never happened before. Anything but the sound of air beginning to hiss from the balloon.
Oh so this year, unlike any previous year on record, families with kids weren’t concerned about getting moved into the new shack before the school year started. Instead, they just went on vacation. We just just ease the kiddos into the new school any old time - not like they’re missing out on a quality education.
Considering how much dissembling realtors do, they’re not very good at it.
downtrends always start off as correction. then the talking heads say to btfd to keep demand from free falling as it eventually does as speculative demand crashes.
Since when did people prioritize “vacation” over selling their houses?
Sun Valley, ID Housing Prices Crater 19% YOY As Boise Housing Correction Barbecues Homeowners
https://www.movoto.com/sun-valley-id/market-trends/
I think I might move to Boise, not sure. It seems like a pretty nice place. I’ve never been there though.
I have been going about once a year on business travel for many years now. I always enjoy my time there. Lots of nice bars and restaurants to hang out in near the capitol area…
My RN buddy really wants to move to Montana. He’s never been there, but he likes the idea of Montana.
He’s never been there
He ought to set out in the dead of winter, when MT airports have shut down. And then camp in a tent.
I think I will plan a visit there soon.
The Razor House at 9826 La Jolla Farms Road. Sitting on three-quarters of an acre above Black’s Beach, the clifftop valhalla has six bedrooms and bathrooms in 11,954 square feet of living space and was featured in commercials for Calvin Klein and Visa.
Wonder how many Yellen Bux will ascend to Valhalla in this transaction (or whatever afterlife awaits debauched currencies).
you cant make it through a day without a dollar. u r a junkie. Addicted to fiat.
It’s a pretty interesting price history, most of it listed on the market at wishing prices no buyer was willing to pay. Aside from record amounts of money printing by the Fed, you have to wonder what happened since 1998 to convince the owners that the value has gone up by a multiple of 25.
I can say that many high end homes in La Jolla have been turned into never-ending home improvement projects, presumably to capture a luxury premium over neighboring homes. I expect the investors pursuing these projects to lose boatloads of money when they put these places on the market just in time for the next crash.
Price & Tax History
Price History
Date Event Price
08/03/18 Listed for sale $30,000,000
12/20/11 Sold $14,097,000
02/08/11 Listed for sale $25,000,000
09/23/10 Listing removed $25,000,000
06/30/10 Listed for sale $25,000,000
07/13/08 Listing removed $39,000,000
05/14/08 Listed for sale $39,000,000
06/19/98 Sold $1,200,000
“‘There is talk of it cooling off a little bit, but what we’re seeing is more of a market correction,’ Contreras said.”
No, Contreras, what we’re seeing is the incipient phase of a bursting housing bubble.
At least he’s talking correction and not “souffles” and sh!t.
Central bankers are gathering to plot out the next escalation of their financial warfare against the 99%.
https://www.scmp.com/business/global-economy/article/2160330/week-stay-close-phone-global-central-bankers-gather-find
FBs in Canada are well and truly buggered.
https://wolfstreet.com/2018/08/18/inflation-interest-rate-mortgage-types-in-canada-house-price-bubble-variable-adjustable-fixed-rate/
is the stock market really up after inflation?
‘Harty sees signs that the economy has reached a peak, and he advises clients they may be better off selling some of their existing properties at existing high prices rather than risking construction of too many more properties’
Boise? Eeee-bola!
I keep hear about the booming economy on the news.
I’ve noticed a huge influx of new upscale condo construction in downtown Boise during recent visits…
‘Razor House listed for $30 million. One of the most stunning (and stunningly expensive) houses in La Jolla is back on the market. The Razor House at 9826 La Jolla Farms Road. Believe it or not, the asking price is less than its 2007 construction cost ($34 million) and 2008 asking price ($39 million), but considerably more than it last sold for in 2011 ($14 million)’
So it sold for $20 million less than construction costs 4 years after it was built. That could probably never happen again.
gold standard = golden handcuffs
I used to work just down the street from where that razor house in La Jolla is but moved out of Clownifornia before it was built thankfully. House looks kinda cold, like the Salk Institute up the street where they experiment on monkeys, not exactly a homey vibe. Maybe a james bond villain type like Elon Musk would buy it, if he doesnt end up in jail first.
The hills around there are notoriously unstable - I remember surfing blacks beach below all to myself because the main trail was closed due to a collapse that killed someone. Another time when I went to a collegues office at the old southwest fisheries building (which had to be destroyed due to erosion and rebuilt further uphill), there had been a collapse that had taken away half of one house’s backyard - sprinkler pipes broken off and sticking out. We were amused but at least in the back of my mind I wondered how long before the building he was in (and I had to visit at times) ended up toppling down the cliffs.
Interesting to note from the La Jolla Light newspaper that a large shark devoured a seal in an area where swimmers frequent. Progtards and their nihilism in action, letting the seals take over the childrens pool that was built - yep, you guessed it - for children. Not for seals.
Also just read on another message board high end real estate on Oahu isnt moving. Part of the deal is the traffic is so bad from tourism in some areas it takes 45 minutes to an hour to drive just a few miles. What tripped me out is that some people said many homes were being Airbnb’d, but some were rented long term to military officers for up to 4500/mo. Thats some serious scratch.
Up the coast from LA Jolla you will find Palos Verdes and …
(drum roll)
DONALD TRUMP’S GOLF COURSE!
Which, er, is struggling to keep from sliding into the PACIFIC OCEAN!
No big surprise here since this is what that particular stretch of PV has been widely - WIDELY - known to be doing FOR DECADES!
But, hey, It’s The Donald.
https://www.npr.org/2017/10/12/557171757/insults-lawsuits-and-broken-rules-how-trump-built-a-california-golf-course
https://www.npr.org/2017/10/12/557171757/insults-lawsuits-and-broken-rules-how-trump-built-a-california-golf-course
can u define debt serf in laymens terms?
That’s easy - look in the mirror.
az your schtick is lousy
txprs is better
The house looks like a cross between an abandoned hospital and Dulles Airport. I bet even the beds are made of concrete.
La Jolla cove was not built. It’s a cove. Seals have become more frequent there because of overfishing. Human children have plenty of places to be other than the cove in La Jolla.
“Seals have become more frequent there because of overfishing.”
Have you ever heard of the Marine Mammal Protection Act? Maybe GreenEggsAndSpam could weigh in on this point.
Yes, I believe that’s the law that provides justification for the signs at La Jolla cove notifying the public that it’s illegal to harass the seals.
Yes.. buddy who works in mortgages in Honolulu is worried for his job - business dried up a couple months ago.
Vashon Island, WA Housing Prices Crater 16% YOY As Seattle Area Housing Inventory Reaches Record High
https://www.movoto.com/vashon-wa/market-trends/
I got a fax today saying to buy a penny stock cause warren buffet was buying it. WTF?
FNHI is a greatlittle canadian company, zero debt, revenues, uplisting to OTCQB and CSE by eoy. Low float, growing global sales, is a major player in the truck bed cover market, possible buyout.
That Boise broker sounds like a reasonable fellow.
Also, advice from brokers like the Boise guy may be a contributor to the sharp rise in inventory nationwide. I wonder how many real estate advisors or time investors to cash out some of their chips.
Goleta, CA Housing Prices Crater 13% YOY As Crushing Housing Losses And Mortgage Fraud Scorches Southern California
https://www.movoto.com/goleta-ca/market-trends/
https://wolfstreet.com/2018/08/13/housing-market-inflection-point-bay-area-sonoma-county-supply-volume-price/