The Go-To Place For Real Estate Speculation
A report from the Sacramento Bee in California. “A Carmichael resident landed in the national spotlight in March, when she put her family home up for sale. She had one special instruction for her real estate agent: Do not sell to a Donald Trump supporter. After being taken off the market temporarily, that home’s sale is now just about a done deal — with a six-figure cut to its original asking price.”
“Listed for $625,000 in March, the two-bedroom, two-bathroom home is pending sale at a price of $495,000, according to documents and listings available on multiple real estate websites this week. The homeowner used a different real estate agent this time. The current listing agent said Friday she was not aware of any restrictions or special instructions.”
“Ryan Lundquist, a certified residential appraiser and active real estate blogger in the Sacramento area, noted the pending sale Thursday on Twitter. Lundquist told The Bee on Friday the $130,000 price difference was most likely due to of the home being overpriced in the first place, with reasons related to politics or media attention playing less of a factor. ‘Part of the problem was, it looks like it was priced like it was remodeled, when it really wasn’t,’ he said.”
From Bloomberg. “Warren Buffett can’t seem to close this deal. Now, he’s lowering the price of a vacation home in California by US$3.1 million to attract potential buyers and finish the sale. The price for the Laguna Beach house, earlier set at US$11 million, was cut to US$7.9 million, according to Allison Olmstead, a spokeswoman for listing agent Bill Dolby.”
“Buffet put the home up for sale last year after more than four decades of owning the California vacation property. Luxury real estate can often sit on the market for longer due to a smaller pool of buyers, with some properties listed for US$4 million or more in Orange County, California, expected to spend over a year on the market, according to data-provider Reports on Housing.”
From KTNV in Nevada. “Luxury real estate agents in Las Vegas say nearly a majority of their clients are people from California moving here drawn to no state income tax and less congestion. While that’s good news for Las Vegans who already own homes, but for those trying to get into the market, it’s making things more difficult.”
“But there may be some good news on the horizon - with more homes being built, former GLVAR president Dave Tina, says according to economists, Las Vegas’ market may soon level off more. ‘It’s not going from a sellers market to a buyers market, but it’s going from a crazy seller’s market where maybe you have 10 offers to just 5, so that’s healthy for us,’ Tina says.”
The Seattle Times. “Wenatchee, a city of barely 35,000 people, now has a rush hour. Its housing market is startlingly Seattle-like in its velocity: That ‘low’ median home price is actually 13 percent higher than a year ago, and already out of reach for many in a town with a median household income below $49,000. Rents have risen even faster: the average two-bedroom apartment goes for $1,534, up 23 percent from a year ago, according to Rent Jungle.”
“The Wenatchee Valley has been officially discovered by the outside world as the go-to place for everything from wine tourism and real estate speculation to cannabis farming and bitcoin mining. (It’s telling that Pangborn Memorial Airport in nearby Douglas County may soon offer daily air service to the San Francisco Bay Area.) And, critically, Wenatchee’s housing sector, still recovering from the recession, has fallen behind in adding new supply.”
“Wenatchee realtors say a growing share of their clients are now Westsiders, who often have a significant economic advantage over locals. When they sell a Seattle-area home, they can ‘come over here and pay cash and still have a chunk of change left in the bank,’ says Steve Bishop, a longtime Wenatchee real estate broker.”
“Worse, even as these low wages make it hard for many North Central Washington residents to pay rent and mortgages, the supply of locally affordable housing is dwindling under pressure from wealthy Westsiders and other outsiders. Outside demand for higher-end residences has become so steady that local contractors have ‘a disincentive to build houses at the lower end,’ says Tim Hollingsworth, a Chelan city councilmember who is active in affordable housing efforts.”
“‘Why would you go around and build little 1,200-square-foot houses for ‘normal’ people when you could build a luxury house for way higher margins and make more money?’ he adds.”
“In Chelan County, officials estimate that the number of vacation rentals has grown over the last 15 years from a few hundred to at least 2,400, most of them in tourist areas. In a county with barely 36,000 total residential units, according to the most recent survey in 2015, and less than 9,300 full-time rentals, the sharp increase in vacation rentals represents a significant loss of permanent housing. Meanwhile the number of full-time rentals in Chelan County fell 8 percent between 2010 and 2015, according to county records.”
“When employers go scouting to find rentals for prospective hires, Doug England, a Chelan County commissioner says, ‘repeatedly they are told ‘no, that’s been converted to a vacation rental’ or ‘yeah, they can stay there until the first of June but then can’t get back in until the first of October’ when the tourism season ends.”
“Some North Central Washington realtors explicitly pitch the vacation-rental concept to Westside buyers as a way to talk them into a bigger second home: a buyer with a $400,000 budget for a vacation home can afford to upgrade to a $500,000-plus home if he or she is willing to ‘Airbnb it,’ realtors say.”
‘Wenatchee, a city of barely 35,000 people, now has a rush hour. Its housing market is startlingly Seattle-like in its velocity’
I guess if reporting on your own crater is depressing, turn to where the next hole in the ground is.
I would think the same story is playing out in a lot of small towns all over the country.
Everyone acting in the own best interests makes for interesting systems crashes.
‘Prices for newly built homes fell in July’
‘Sales of new U.S. homes slumped 1.7 percent in July, the second straight monthly decline as the broader housing market appears to have lost some of its momentum despite an otherwise solid economy. The Commerce Department said August 23 that newly built homes sold at a seasonally adjusted annual rate of 627,000 last month, down from 638,000 in June and 654,000 in May. ‘
‘The Northeast suffered a steep 52.3 percent plunge in sales.’
“Existing home sales have also slipped over the past four months, the National Association of Realtors said in a separate report Wednesday. Existing homes — a larger share of the real estate market than new construction — sold at an annual pace of 5.34 million in July, a decline of 0.7 percent from June.’
‘Buyers looking at properties worth more than $500,000 have plenty of options, and sales at that price point and above are rising, the Realtors said. But sales of homes worth less than $250,000 are flat or falling.’
‘Listed for $625,000 in March, the two-bedroom, two-bathroom home is pending sale at a price of $495,000′
I’ll give you the Bernie Sanders special: three fifty.
have u ever been to carmichael? Talk about a city that has chaotic zoning. Is is total chaos out there.There is nothing worth > 400k out there.
did u know queen creek is gonna be the next gilbert? Cant wait for the tour buses from CA to come out and sign contracts on new homes.
Sure. I went out there and made a video of the crater. I’m never going back.
“Do not sell to a Donald Trump supporter. After being taken off the market temporarily, that home’s sale is now just about a done deal — with a six-figure cut to its original asking price.”
Rule number one of selling anything: Never eliminate potential buyers by limiting the categories of people to whom you would sell. You might inadvertently exclude your highest potential offer.
“The current listing agent said Friday she was not aware of any restrictions or special instructions.”
Too late, as even Jingle Male most likely will acknowledge that the Sacramento segment of Housing Bubble 2.0 has popped.
everything is going up in price and there is no inflation? so you can keep rates low to justify the no inflation bs?
“Do not sell to a Donald Trump supporter. After being taken off the market temporarily, that home’s sale is now just about a done deal — with a six-figure cut to its original asking price.”
Hehehehe….
https://twitter.com/OneNastyWoman/status/977538295008845824
looks like the FED has eliminated recessions and you are safe to buy risk assets with no risk to downside? Thats the message being presented. They can control everything with QE and interest rates.
Jackson hole b@tchez! Looks like trump might get his low interest rates.
Why did we ever have high interest rates anyway?
Trump is just asking for what is prudent. A slow increase in interest rates as long as inflation is low in order to give the economy time to adjust to a normalized rate environment. As I said before it is like a diver slowly ascending from the deep water. Artificially, low interest rates have “borrowed” growth from the future.
he just wants the bubble to continue till the next election.
inflation has been running out of control for years.
The economy will rest if rates go too high.
The two main engines of growth in this economy are oil & gas production and impacts from overseas money pouring into the country due in large part to the Trump tax cuts. The GDP deflator is running around 2% and wage growth is running around 3% as is the CPI. I will grant anyone that the numbers understate inflation but there is no emergency to raise interest rates now. Under Obama people bought vehicles, houses etc. prematurely due to low interest rates incentivizing the purchase. There is no need to crater the economy while we normalize rates. The anti-Trump people would love a recession and some actually admit it, but growth is good for people and is particularly good for minorities as their job numbers are showing. The difference between 3% growth and 2% growth is an economy that double in around 23 years vs an economy that double in 35 years. It makes a huge difference in the standard of living. MAGA
so if inflation is really running hot and u say its not you can keep rates low by rewarding more debt?
The recovery is another debt based cycle.
Denial is not a reliable economic strategy.
Trump is trying to negotiate the difficult path of reducing the massively inflated fed balance sheet and to raise the artificially low interest rates. Both created during the Obama administration not his. Neither he nor I want to end the normalization, we just think it should be done slowly. The best test is to look at the interest rate market itself. If long term interest rates are rising it means the market sees inflation accelerating. We do not see that so there is no rational reason to purposely invert the curve. I want a December rise unless the market dictates that a quicker pace is warranted. Debt is not rising as a percentage of the GDP under Trump so he is already more prudent than Obama.
“Trump is trying to negotiate the difficult path of reducing the massively inflated fed balance sheet and to raise the artificially low interest rates.”
Isn’t that the feds job? Seems like the Donald and Melania should be out shopping for an extra dark negro baby to adopt to “one-up” Harry and Meghan. You know, one big global family!
I’m still waiting for AlbuquerqueDan’s link to an article explaining Trump’s nuanced views on monetary policy. But not holding my breath.
“A slow increase in interest rates as long as inflation is low in order to give the economy time to adjust to a normalized rate environment.”
Now there’s an interesting statement. Modern Economic Theory has it that interest rates should be increased when inflation is high, not when it is low.
To clarify, if inflation is low, you can normalize slowly. If inflation becomes heated the pace needs to accelerate and of course the rates would be higher if the inflation rate is higher. But with the exception of oil and steel, where is the inflation in the economy? The board is saying and I agree that housing prices are at least stabilizing which is even less inflationary pressure. Under the same inflation picture under Obama, it called for one increase per year of one quarter percent, now we need four?
how do u define inflation?
There is, and has been, massive asset price inflation. Part of the reason housing has been correcting is because interest rates are normalizing. If the Fed walks back their interest rate normalization, it just prolongs the misery. We had ZIRP for essentially 8 years, it’s not like the Fed is doing what Argentina or Turkey have had to do. There is no need to delay rate increases any longer.
Inverting the yield curve is not normalizing. In Argentina and Turkey you have high double digit inflation, is comparing apples to oranges.
The yield curve has been flattening, not inverting. The Fed cannot, by itself, invert the yield curve. Only investors and private economic actors can invert the yield curve if they decide that the long-term economic prospects of investing are not good in the current political-economic climate.
The 10-year and the 30-year will follow interest rate rises up if the economy if fundamentally healthy. If, however, we have a bubble economy that can only be sustained on artificially low and suppressed interest rates, then I guess it might be scary to raise rates. It’s Hayek’s “tiger by the tail” analogy where we can’t raise rates because of fear of what will happen, but the longer we keep holding on to the tail, the faster the tiger runs and the greater the risk of future damage. Better to normalize rates now and take the strong medicine.
Yes, we are not Argentina or Turkey. The point is that we need to raise rates now until we get to the point where doing so is actually painful. You let a small wound fester and it becomes a bedsore. Eventually have to go to surgery and debride it or amputate. Kicking the can down the road may be politically expedient, but it’s wrongheaded.
Why can we not wait until the December meeting to raise rates? We are not kicking the can down the road, we continue to reduce the balance sheet of the Fed. The developing countries of the world are already hurting badly from the rising dollar due to higher interest rates in large part. No, I am sorry the economists that are screaming for the immediate interest rate hikes want Trump to fail and the Republicans to do badly in November, it has nothing to do with a prudent course for the economy.
Nice medical metaphor, OneAgainst!
Still waiting for AlbuquerqueDan’s link to an article that explains Trump’s nuanced views on the pace of normalization…
Actually, waiting until December to raise rates probably won’t be the end of the world, provided they do continue to raise. But I still view this as kicking the can. Rates were held down for too long already and most of the inflation is already baked into inflated asset prices and distortions in the economy in ways that will only be truly apparent as rates normalize.
I’m okay at moderating the pace of increase. To use another medical analogy, if you have a DKA patient, you have to reduce blood sugar at a gradual clip so as not to swing too far the other direction into hypoglycemia. Steady does it is fine. My main point is that it’s not like we are rapidly increasing with the current trajectory. The rate increase is already painfully slow. We are probably doing increasing damage by not continuing the already slow rate increase path. Going slower may only do a bit more damage to an already damaged economy. We’ll amputate 4 toes instead of 3.
Still waiting…
Please cite a (non fake news) link to corroborate, or we will suspect you are making things up again.
No I am not you. Cite one time you have been right. Just live with the fact that Trump is succeeding while Obama failed. BTW, I noticed you have stopped giving daily updates of oil prices, now why could that be?
Unlike yourself, I have never been a political sycophant towards a president of either party.
Regarding oil, it’s true that you I have paid little attention as of late. Is the price perhaps finally nearing the $80 level you predicted would be surpassed many years ago?
“Unlike yourself, I have never been a political sycophant towards a president of either party.”
Obama could do no wrong when he was in office. You refused to even admit during his administration that he should take any blame for the actions of his hand picked appointees to the Fed. Such bs for you to make that statement.
You are certainly the resident expert in the bs department.
Dan, I don’t think that is an accurate statement about the professor. Just yesterday he was pointing out the folly of the Obama-era HAMP program. He does seem to be an equal-opportunity critic, not a partisan.
Obama had been out of office two years. You were not around when Obama was in office. He spent the whole time trying to deny that Obama had any role. Just kept repeating that the Fed was an independent agency and ignoring that Obama had appointed virtually all the members.
True, I wasn’t around then. But from the comments I’ve seen from the professor lately, he doesn’t strike me as overtly partisan.
Just because Trump is for something, doesn’t mean it’s right. Also, just because Trump is for something, doesn’t mean it’s not wrong. Critical thinking is necessary and being willing to be emotionally detached from partisanship can help evaluate an argument or policy for it’s merits. Whether it comes from DJT, Obama, or Elizabeth Warren.
I meant to say, just because Trump is for something, doesn’t mean it’s wrong.
I agree and I explained why I think Trump is right. I do not agree with Trump on eliminating the estate tax, I am concerned about the concentration of wealth in the hands of billionaires. But that is not the present discussion. I disagree with Trump when I think he is wrong. However, I have been an anti-globalists for over three decades so I find very little wrong in his anti-globalist policies and I sense desperation in the globalists they want a misstep which causes a recession so they can blame it on his trade and immigration policies which it will not be, it will be trying to do the terrible policies of Obama too quickly.
“He spent the whole time trying to deny that Obama had any role.”
Lawyers will lie to win an argument. It’s SOP in their profession, as evidenced by many news stories from the past few days.
What you are doing is lying. Omission of material facts is lying. You know you said over and over that Obama was not responsible for the actions of the Fed, You said this as I said at the very beginning of the Obama administration that he was overseeing the biggest transfer of wealth to the .01 percent US history. You are not showing that I am lying you are just evading the truth.
“What you are doing is lying. Omission of material facts is lying.”
Making stuff up about others that they didn’t say or do is slander, and you do it regularly, when not preoccupied with ramming far-fetched economic predictions down the throat of anyone who reads here.
Just to refresh your memory, you obsessively hated Obama, just as you now fawn over Trump to a sycophantish degree. Anyone who disagreed with your unsupported assertion that the Bernanke Fed marched under Obama’s orders, instead of acting independently, was called out by you as an Obama lover.
I will continue pointing out your lies and misrepresentations whenever I see them posted here.
Sounds to me like Trump’s hand-picked Fed chair has reiterated the plan to stay the course on gradual rate normalization (aka punchbowl removal operations), while Trump has signaled that he doesn’t want normalization to proceed.
I look forward to AlbuquerqueDan’s link to information that supports his opinion.
Federal Reserve chief defends raising interest rates, signaling Trump can’t pressure him
By Jim Puzzanghera
Aug 24, 2018 | 8:40 AM
Washington
Federal Reserve chief defends raising interest rates, signaling Trump can’t pressure him
From left, Esther George, president of the Federal Reserve Bank of Kansas City, John Williams, president of the Federal Reserve Bank of New York, and Jerome H. Powell, chairman of the Federal Reserve, walk together at a central bankers conference in Wyoming on Friday. (Jonathan Crosby / Associated Press)
Federal Reserve Chairman Jerome H. Powell on Friday defended the central bank’s policy of gradually increasing a key interest rate and signaled that the hikes will continue, brushing off President Trump’s recent public criticisms.
Powell did not mention Trump in a speech at a central bankers conference in Jackson Hole, Wyo. But speaking publicly for the first time since Trump said last month that he was “not thrilled” with recent rate hikes, Powell indicated the Fed plans to continue its efforts to normalize interest rates that had been kept historically low to fight the Great Recession.
…
this stuff is great comedy.
4.6% growth sure brings a smile to my face. Particularly since the Atlanta fed report that I posted in yesterday’s thread shows that it is occurring despite weak housing data. We have half the housing starts as we do just prior to the last recession, common sense will tell you that housing is less than half as important to the economy as the last recession since the economy is significantly larger and the starts are half as many.
GDP growth is a poor proxy for prosperity. What does GDP growth say about the environment, distribution of growth, the quality of goods and services, or the diversity of said goods and services?
Planet Money did a good primer on this a few days ago:
https://www.npr.org/templates/transcript/transcript.php?storyId=641269301
Bottom line it is much better to live in a country with a high per capita income and with one rising than the sh*t holes with low GDP and contraction. It takes money to address all the issues you are talking about, and I find most of this recent talk about GDP related to the fact that Obama had the worse recovery in the post world war II era and Trump is knocking it out of the park.
where is the 4.6% growth? The atlanta fed always comes out with bogus gdp numbers every qtr and then constantly revises down. They are the hype machine.
OneAgainst, I admire your patience in countering AlbuquerqueDan’s partisan hackery with principled discussion, and wish you all the luck in the world in this yeoman’s endeavor.
where is the 4.6% growth? The atlanta fed always comes out with bogus gdp numbers every qtr and then constantly revises down. They are the hype machine.
I said that in my very first post that I thought it was too high for the quarter. Also, the Atlanta Fed gives a snap shot so the numbers change as the economy changes and it is not unusual for numbers to revert to the mean over the quarter. But with two months of actual data to use even assuming the number is too hot, it is becoming reasonable to project growth around 4% compared to Obama’s 1.9% growth rate average over his presidency. Should not have happened since it is easier to grow from the bottom than from the top of the cycle. Most of liberal economists were predicting a recession occurring during Trump’s first two years not 4% growth.
Dan, GDP per capita is a very crude metric, and almost useless in my opinion. A much better metric would be to look at the income, wealth, and life expectancy of the bottom 20% of each countries’ population.
Longe$t $tock market$ Bull Run$ in Hi$tory is 10 year$ old + …
d$Trump is $trokin’ his$elf for the $tunning … x16 … month$ added bye his geniu$ contribution$
Remember$ kiddie$:
“Trillion$ $$$$ Deficit$ don’t matter$!”
‘according to economists, Las Vegas’ market may soon level off more. ‘It’s not going from a sellers market to a buyers market, but it’s going from a crazy seller’s market where maybe you have 10 offers to just 5, so that’s healthy for us’
Eeee-bola!
how much of a drop in your shack price would make u walk?
‘Some North Central Washington realtors explicitly pitch the vacation-rental concept to Westside buyers as a way to talk them into a bigger second home: a buyer with a $400,000 budget for a vacation home can afford to upgrade to a $500,000-plus home if he or she is willing to ‘Airbnb it,’ realtors say.’
‘talk them into a bigger second home’
With airbnb, they get these suckers for another hundred grand? A second shack is gambling enough, but this is layered gambling. Do you only bed and breakfast to favored political affiliations?
why have high interest rates? Seems like rates were a lot higher for most of modern history.
Seems like it can never happen again cause the debt is so high.
Why do they keep talking about higher rates?
I don’t know, I don’t watch TV.
Watching lots of TV ‘makes you stupid’, say researchers Universities of …
https://www.independent.co.uk › News › Science
Dec 3, 2015 - Watching TV for hours impairs your mental ability, according to study. … more TV people watched, the worse they performed in a series of intelligence tests. … If it’s true that men are less attracted to clever women, what now?
Watching TV ‘makes toddlers less intelligent’ | The Independent
https://www.independent.co.uk › News › Education › Education News
May 3, 2010 - Parents, beware CBeebies: watching television makes toddlers fatter and stupider at primary school, according to new research. Scientists who …
Does watching TV make us stupid? | Psychology Today
https://www.psychologytoday.com/us/blog/the…/does-watching-tv-make-us-stupid
How would Einstein have turned out had he watched TV? … But does it live up to the rap of sapping their intelligence? … Observational research has shown that parents on welfare spend far less time talking to their children than working class, …
Why do intelligent people find it taxing to watch things like …
https://www.quora.com/Why-do-intelligent-people-find-it-taxing-to-watch-things-like...
Jul 22, 2015 - Small minds gossip about people. Mediocre minds talk about events. Great minds contemplate ideas. “Reality” TV shows, along with most other mass-market …
Does watching television reduce intelligence? | Debate.org
http://www.debate.org › Opinions › Entertainment
In a recent study by UCLA, children who watch more that 3 hours of television a day have been shown to have decreased focus, and less intelligence.
https://www.bankrate.com/banking/federal-reserve/7-surprising-benefits-of-higher-interest-rates-from-the-federal-reserve/
If you keep saying there isnt any inflation you dont have to raise rates.
debt = money how much debt was added to the economy over past 10 years? That is inflation.
How many trillion did the FED create to buy assets? That is inflation.
And now prices are falling so remember…. Nothing accelerates the economy like falling prices to dramatically lower and more affordable levels. Nothing.
Arlington, VA Housing Prices Crater 7% YOY As Housing Glut Anchors Homeowners To Losses
https://www.movoto.com/arlington-va/market-trends/
I move that every room (including the bathroom) in every house be equipped with a TV. Write it into law.
In this way my present and future client base will always and forever be properly prepped to gratefully receive and gratefully accept my Dotted Line Specials that I now and then benevolently present to them.
Keep ‘em dumbed-down and keep on profiting.
Forever.
Be sure to include Suzanne Researched It commercials during every station break!
I’m hoping to bring back the “People are Smart” slogan.
Some of my most profitable (and dumbest) clients are the ones who bought into that slogan.
Here’s a fun article …
“Why are so many TV commercials stupid?”
“2 reasons:
1. So more people will understand the commercial. Smart people will understand it, but dumb people wouldn’t understand it if commercials were so “smart” and intricate.
2. To sell more. Smart people with strong minds see right through commercials and they are less effective. Not saying commercials don’t work for smart people, just saying that dumber people are easier to manipulate.”
https://www.quora.com/Why-are-so-many-TV-commercials-stupid
Smart people …
Pause the x1 hour long show for 30 mins, then use the … >> x5 button to watch it muted commercial free!
‘The price for the Laguna Beach house, earlier set at US$11 million, was cut to US$7.9 million…Luxury real estate can often sit on the market for longer due to a smaller pool of buyers, with some properties listed for US$4 million or more in Orange County, California, expected to spend over a year on the market’
Oh dear…
How can you assess the market value of homes that are listed at prices for which they never sell for years on end?
Production cost…. The method used for a legal and proper appraisal.
Maybee Uncle Warren should to$$ in a free lunch.with.me @ his favorite $teakhou$e in Omahaha …
or in$tall an outdoor pizza oven!
‘Is Seattle’s housing market taking a turn? The boom isn’t ending, but new data shows big slowdown’
‘New data and expert opinions suggest Seattle’s booming real estate market could be slowing significantly’
‘The boom isn’t ending’
It’s already ended.
“It’s already ended.”
Once again …
https://youtu.be/2Ko9TpduOhE
“The Ink Spots - It’s All Over But The Crying” 👍
… Boots up Fallout 4…
Camarillo, CA Housing Prices Crater 10% YOY As Plunging China Economy Batters California
https://www.movoto.com/camarillo-ca/market-trends/
“Listed for $625,000 in March, the two-bedroom, two-bathroom home is pending sale at a price of $495,000, according to documents and listings available on multiple real estate websites this week. The homeowner used a different real estate agent this time. The current listing agent said Friday she was not aware of any restrictions or special instructions.”
Around a twenty per cent cut in price and she has lost her political convictions. Now she probably was willing to wear a MAGA hat to get the sale done. That has to hurt. MAGA
the shack was overpriced from the start.I have a feeling a lot of people are gonna walk away again if prices go down. No skin in the game again.
Arcadia, CA Housing Prices Crater 10% YOY As Sellers Panic On Evaporating Demand
https://www.zillow.com/arcadia-ca/home-values/
*Select price from dropdown menu on first chart
how much of the market do u folks think is real home demand vs speculative demand?
Can trump keep this bubble going for another term if he gets re-elected?
He says we have a goldilocks economy thanks to him.
Wasn’t Goldilocks a burgular?
Generally, it seems like the coast is toast, thanks to a historically high influx of short-term speculators, financed by easy money at the lowest interest rates in the history of human civilization, who will dump as soon as possible in a downturn.
I’d further guess that in this cycle, speculation has penetrated the heartland to a degree not previously attained. I base this in part on the experience of helping to sell my parents’ house near Ferguson, MO a few years ago. I was shocked to have real estate scavengers sniffing around my parents’ modest fifty-year-old house in an economically blighted area.
Does every stupid thought that runs through your pea brain have to get posted here?
Be nice when you and bear finally pass puberty.
Sorry if speculators bailing out have left you holding the bag. It happens during every leg down of bubble deflation.
Trump seems to be under the delusion that he can use his office to compel the Deep State-controlled Justice Department, FBI, judiciary, etc. to do their jobs. I don’t think he grasps that the .1% grifters and their political accomplices and enablers are literally above the law, and the whole system is set up to facilitate their crimes and swindles.
https://www.zerohedge.com/news/2018-08-25/trump-i-may-have-get-involved-jeff-sessions-doesnt-understand-what-happening
It is not easy. Trump is the real one against many. However, he is showing over and over again how the system is rigged for the globalists and their allies.
“Trump is the real one against many.”
Owned a Ca$ino’$, where the odd$ $upport the Hou$e$ winning, $till he manage$ to go bankrupt!
heheeheeheeheee
I’m still trying to decide where Trump stands in relation to the .1%… Isn’t he part of it? Can we really expect him to do anything that would hurt the .1%?
He is part of the .1 percent but he is not a globalist. It is hard for him to see the problem with too much wealth being passed from generation to generation due to his background but that is a backburner problem right now, fighting globalism which hollows out our industrial base and open borders which crushes our middle class is our current problem. He stands with the middle class on that issue. He is far from a perfect man or president but he is far better than any president which we have had since Reagan since he is at least on the right side of the issue.
It is not easy. Trump is the real one against many.
I guess that means I’m a closet Trump supporter? Or maybe I should start posting as “TrumpAgainstMany”.
AlbuquerqueDan’s world is black and white.
The deep state may win this battle against Trump and oust him. An impeachment, with him going down swinging, could very likely be the catalyst which lights the match on this powder keg country.
Uncle Warren$ has a x120 Billion$$$$$$ in Ca$h to bet …
America.will.knot.$uccumb.to.$uch.hogwa$h.theorie$
Winter Park, FL Housing Prices Crater 10% YOY As Lending Rates Continue Climbing To The Historic 10%-12% Range
https://www.zillow.com/winter-park-fl/home-values/
*Select price from dropdown menu on first chart
its all going to pot.
i can build for 40 / ft
As the case in last housing bubble, downtown Miami condo speculation is at the root of one of the major epicenters for burst number 2. It has all the drama you can imagine: political corruption, banking corruption, unfathomable amounts of greed and ignorance, natural disasters and rising sea levels, failure to learn from past mistakes, developers that keep building and building while existing units sit vacant and values are plummeting, and on and on. I can’t help but follow their market in morbid fascination. Attached are two links on Zillow I saw this morning that I found interesting.
The first one shows that the seller bought in 2011 for 556k. He listed for $1.187m, or would be willing to lease it to you for only $6,500 a month, in 2014. It has been sitting on the market ever since, after reduction and reduction. It is now listed as $680k, and the listing says the seller is very motivated. There was an odd transfer last year for $41k, which is probably a divorce payoff situation. Under home value, you can find a value chart that shows that prices having been falling in downtown Miami for over a year and a half. The actual decline is probably much greater due to the high number of new luxury condos that have been hitting the market (i.e. averages are falling even when the average home sold is newer and more luxurious than prior sales).
The second link shows a unit that developer has been trying to sell for 5 years. He dropped the price from 1.2 million to $829k but still no one wants it. Listing after listing shows that developers are slashing prices, which has to be a kick in the gut for those that actually closed on their presales.
I think Seattle and Denver are going to be two other major epicenters for disaster. It is finally starting to get interesting.
https://www.zillow.com/homes/for_sale/pmf,pf_pt/_type/92439452_zpid/600000-900000_price/2390-3586_mp/globalrelevanceex_sort/25.777112,-80.156744,25.74569,-80.198243_rect/14_zm/17_p/?
https://www.zillow.com/homes/for_sale/pmf,pf_pt/_type/113379474_zpid/600000-900000_price/2391-3587_mp/globalrelevanceex_sort/25.774542,-80.169426,25.745902,-80.210925_rect/14_zm/3_p/?
From an economic perspective, I thought it was interesting in 2016 when I documented near 50% losses on a Manhattan and Miami Beach condo, to the tune of millions of dollars. Not price cuts, losses. It’s only gone down since.
if condo owners stop paying the mortgage, does the bank start paying the HOA fee automatically.
Or does that HOA have to sue the bank to get HOA payments.
in the later case, HOAs will start to have some cash flow problems
The unpaid HOA fees get wiped out when the bank forecloses and takes title. Then the bank has to start paying the HOA fees again. It is part of the reason why the banks don’t foreclose right away.
The Keynesian fraudsters at the Fed and central banks, and their touts and shills like Nobel Prize winning economist Paul Krugman, assured us that debt-fueled “growth” was the key to prosperity, resulting in speculative bubbles unmatched in human history. But this “economic recovery” has foundations of sand. After ten years of central bank “emergency measures,” i.e. trillions in fake money lavished on investment banks, the stage is now set for a new global financial crisis that will dwarf the 2008 crash.
https://www.theguardian.com/cities/2018/aug/23/how-turkeys-lira-crisis-was-written-in-istanbuls-skyline
Those observing Istanbul’s construction boom will not have been surprised by last week’s currency collapse – it’s all based on debt.
From a distance, Esenyurt, a newly built up neighbourhood on the edges of Istanbul, looks a bit like Hong Kong or Dubai, with a bustling downtown of shiny skyscrapers. Upon closer examination, however, you notice that tower after tower stands incomplete, lacking windows or furnishings; others are only half-occupied, their windows dark after nightfall.
“In the residential areas, 100% of the construction has stopped,” says Mohamed Karman, a local estate agent, from his small office in the central square of Esenyurt. “Do you know why? The materials. Everything is in dollars, you pay in dollars.”
The crash of the Turkish lira last week after two years of steady decline spooked global markets – but anyone looking at Istanbul’s skyline would have been far from surprised. Everywhere you look in the city, evidence of a debt-fuelled construction boom abounds: new skyscrapers frame the horizon, huge shopping malls dot the streets and among several megaprojects is a new airport, set to be the world’s largest.
Why does Turkey need the world’s largest airport?!
” A €5.7bn loan for the airport taken out in 2015 was worth 18bn lira then, and 40bn lira now.”
Mr. Banker would love these guys!
And the building continues! It is beyond mind blowing. I really would love to create a documentary about it. Whatever happened to the documentary that they consulted you on during the last burst. Was that ever released. I would love to see it.
Which building do you find so astonishing?
I meant to reply to Ben two boxes up. Re Miami condo construction.
Downtown Miami has a six-year backlog of “luxury condos.” Which implies greedhead sellers will soon be forced to slash prices, then slash them some more.
The trend is not your friend, Miami speculators and FBs.
https://www.miaminewtimes.com/news/downtown-miami-has-six-year-luxury-condo-backlog-study-warns-10613118
good grief a 6 year back log of condos — with new pre-construction averaging $2M.
Other than actors and rich folks from S.America, who has that $
Bellevue, WA Housing Prices Crater 11% YOY As Seattle Foreclosure Epidemic Drives Market Off The Rails
https://www.movoto.com/bellevue-wa/market-trends/
Even some financial media writers are starting to get uneasy about the Fed’s Everything Bubble and the systemic risk it poses to the financial system. The “nobody saw it coming” mantras of 2008 might ring hollow in 2018, since the red flags are proliferating and the warning voices in the wilderness aren’t just confined to “fringe blogs” this time around.
https://www.forbes.com/sites/jessecolombo/2018/08/24/u-s-household-wealth-is-experiencing-an-unsustainable-bubble/#24a353206b93
Since the dark days of the Great Recession in 2009, America has experienced one of the most powerful household wealth booms in its history. Household wealth has ballooned by approximately $46 trillion or 83% to an all-time high of $100.8 trillion. While most people welcome and applaud a wealth boom like this, my research shows that it is actually another dangerous bubble that is similar to the U.S. housing bubble of the mid-2000s. In this piece, I will explain why America’s wealth boom is artificial and heading for a devastating bust.
So housing starts are half of what they were before the last recession, both income and rent ratios to housing prices are better this time around and the economy is presently growing a 4% + pace but the housing correction, which I do believe is occurring in many areas, is going to cause a worse recession than last time? The housing bubble was the entire two percent growth the last time around. This time we have petrochemical plants going up, we have more steel, sand etc. going to oil and gas wells, we have LNG plants being built, we have more pipelines being built etc. and we have all the positive impacts from the tax reform. Apple almost immediately brought back almost $40 billion and probably has brought back more since then. Whether the money is used for equipment, dividends or even stock buy backs it stimulates the economy. You only to be have to be watching something other than MSNBC to know this I will not bother posting links.
From your link:
While overall U.S. housing prices are not as inflated relative to rents and incomes as they were during the mid-2000s housing bubble, they are still rising at an alarming rate - especially in cities such as Boston, Seattle, Denver, Dallas, Atlanta, Portland, San Francisco, Los Angeles, and New York City (click here for charts).
debt fueled orgy
debt=money
u keep saying there is no inflation.
No, I am saying that inflation is no higher than it was under Obama so there is no reason to rush the rate moves. Yes, we need to keep undoing the damage but not at rate that endangers the economy. A doctor would not tell an obese patient to starve nor would a doctor tell an anorexic person
Cutoff:
Anorexic person to gain weight to quickly both can be deadly.
When you look at affordability in terms of rent prices to housing prices, it can give the illusion of better affordability this time around as opposed to the mid-2000’s. But that might is also another way of saying that, not only are housing prices over priced, but rent prices are also overpriced. If rent prices fall, even just a little (as looks to be happening in many areas), suddenly the rent-to-purchase ratios look just as bad as they did before the Great Recession.
The better way of looking at affordability is not rent prices to house purchase prices (used or new), but rather the percentage of income that has to be shelled out to pay rent or mortgage payments. And that metric paints a very dark picture of stressed households.
What would it take for me to believe we were not in a bubble? Well, we would need to see about 7 years of wage increases that are roughly double what the increase in housing prices are. Once I start to see evidence that wage gains are vastly outpacing housing appreciation, then I’ll change my view.
Dan,
Not to get too much in the weeds, but for most individuals who have an elevated BMI, the single most effective, and healthy, medical intervention is not diet and exercise, but rather bariatric surgery (e.g. sleeve gastrectomy, lap band, roux en y, vertical gastrectomy).
Those surgeries dramatically lowers caloric intake by surgically removing a portion the stomach and changing the hormonal balance. It would be the monetary policy equivalent of going from ZIRP to 5% interest rates overnight.
https://www.nytimes.com/2017/02/13/well/why-weight-loss-surgery-works-when-diets-dont.html
Austin, TX Housing Prices Crater 5% YOY
https://www.movoto.com/austin-tx/market-trends/
“Warren Buffett can’t seem to close this deal. Now, he’s lowering the price of a vacation home in California by US$3.1 million to attract potential buyers and finish the sale. The price for the Laguna Beach house, earlier set at US$11 million, was cut to US$7.9 million, according to Allison Olmstead, a spokeswoman for listing agent Bill Dolby.”
Poor Uncle Warren may have caught himself a falling knife this time around!
You’ve got to know when to hold ‘em,
Know when to fold ‘em,
Know when to walk away,
Know when to run…
Multiply this $3+ million loss across similar losses on thousands of other high end California investment properties, and you will see that Berkshire-Hathaway’s real estate investing arm may be sitting on a large pile of losses.
“The Wenatchee Valley has been officially discovered by the outside world as the go-to place for everything from wine tourism and real estate speculation to cannabis farming and bitcoin mining.”
Sounds like a real specuvestor Mecca.
“(It’s telling that Pangborn Memorial Airport in nearby Douglas County may soon offer daily air service to the San Francisco Bay Area.)”
Did they misspell Bangporn?