Chinks In The Armor Are Starting To Show
It’s Friday desk clearing time for this blogger. “How should we define a housing bubble? The classic housing 2004 housing bubble paper by Karl Case and Robert Schiller explains it this way: ‘We believe that in its widespread use the term refers to a situation in which excessive public expectations of future price increases cause prices to be temporarily elevated. During a housing price bubble, homebuyers think that a home that they would normally consider too expensive for them is now an acceptable purchase because they will be compensated by significant further price increases.’”
“So where do we stand today? Well people buying homes are cite future price increases as one of the ‘key factors’ motivating them to buy. The most recent survey by the real-estate company Redfin found that almost one third of buyers are motivated by rising prices.”
“Fully 70% of the psychology for buying houses is now driven by low rates – low mortgage rates at 37% and rising prices at 33%. John Carney tells us that not only are homes now growing increasingly less affordable, but the psychology of the US housing market is changing to one of the fear of being priced out. People are now falling all over themselves to buy houses because they think prices are running away from them. And literally a year or two ago, the psychology was almost exactly the opposite. Wow. Frankly, I can’t believe we are here again, but we are.”
“A guy we’ll just call Frank is having a tough time in the current Toronto real estate market. He figures he’ll have to borrow upward of half a million dollars, and he’s freaking out. Frank and his wife make good money, they’ve got no debt other than their condo mortgage and they’ve put together a down payment of $125,000. The bank says buying a $700,000 house is no problem for them, but Frank is squeamish about spending that much money. For the past three years, he’s been saving with a goal of spending $500,000 on a starter home.”
“‘The problem is that over the past two or three years, while we’ve been saving our down payment, the half-million-dollar starter home became a three-quarters-of-a-million-dollar starter home,’ he said. ‘Inevitably, you’re at the will of the masses. And if the masses are going to jump and make a horrible mistake, you’re almost forced to do it as well.’”
“‘If you’re going to own real estate in Toronto for the next 20 or 30 years, then we’re not at the high end of the market now,’ said Rona Birenbaum, a financial planner.”
“The Lubbock economy has remained stable and — if the local housing market is any indicator — it is now stronger than ever. This year’s Parade of Homes featured 26 houses valued at $300,000 or more, and all except one sold by the conclusion of the event. ‘One of the main focuses of this market has been anticipation of good economic times,’ said Coby Crump, president of the Lubbock Association of Realtors. Houses between $70,000 and $150,000 and those priced above $300,000 have become the fastest selling price range of homes, which Crump called ‘unusual,’ as more and more people are investing in Lubbock real estate.”
“‘Inventory is low on the homes in the $100,000 to $150,000 range, and they tend to get snatched up before you can even get a sign in the yard,’ said Robin Long, a realtor for Century 21. ‘People are buying them for kids going to school, and just as an investment. They can’t make very much in the stock market or with CDs, so they figure, ‘We have the money,’ so they are buying real estate.’”
“Year over year, finished lot values were up 87% in San Francisco and Oakland, 75% in Atlanta and 70% in Las Vegas. Builders expect future home prices will cover their higher lot costs. ‘We’re betting on things two years from now,’ says Dennis Webb, vice president of operations for Fulton Homes, a Phoenix-area home builder.”
“Bigger homes are coming along with higher land and lot prices. The average size of a new home hit a record 2,642-square-feet in the second quarter, the Census Bureau says. Later this year, Fulton plans to start selling luxury homes in a Phoenix suburb ranging from 3,800 to 6,800 square feet. They will be the biggest homes Fulton has built in Phoenix since 2005.”
“Workers in many of Southwest Florida’s most prominent occupations are now dedicating more of their paychecks toward housing than they can financially afford, a new study concludes. ‘We have seen rapidly increasing housing costs again, but the people in Florida can’t afford it because we rely on so many tourism and service-related jobs,’ said Jack McCabe, a real estate consultant in Deerfield Beach. ‘These positions just don’t support the cost of housing.’”
“Fueled by the recovering housing market, the assessed value of all taxable properties in Los Angeles County rose 4.7 percent, according to the latest annual report from the Los Angeles County Office of the Assessor. Robert Smith, a Realtor with Keller Williams Realty AV in the Antelope Valley, said ‘chinks in the armor’ are now starting to show. ‘Homeowners are placing more properties on the market, but on the other side interest rates are rising,’ he said. ‘We’re seeing less of the bidding wars. Buyers are asking for more concessions, but sellers are standing their ground. It’s kind of a standoff.’”
“Recent research by a Japanese scholar shows that China’s urban land is now valued at a combined 265 trillion yuan ($43.3 trillion), roughly six times the country’s GDP last year. Under normal circumstances, land prices should not exceed GDP by more than a factor of two. And when Japan got hit by its own financial crisis, its land was worth four times GDP. Many have warned of the threat lurking just under the surface of China’s housing market. But none of the warnings have been taken seriously. By and large, Chinese ‘experts’ deny the existence of a bubble altogether, saying the market has plenty of room to expand further. ”
“Explaining the reasons behind the poor sales, Pankaj Kapoor, managing director of Liases Foras said, ‘It is due to the high prices. In most of the markets, prices have almost doubled from 2009, while the incomes have not risen. High prices have made the housing unaffordable; therefore sales have been slow over the last 2-3 years. Since, other avenues of raising funds are also limited, the developers are faced with liquidity crunch.’”
“Anand Gupta, ex-president of the Builders’ Association of India said, ‘It would be improper to say that these 1.35 lakh flats are ‘unsold’. Rather, it should be termed as ‘unused’ flats because builders have already sold most of these flats to the investors, who are looking for the right time to sell it.’ However, Mr Gupta also admitted that, ‘Builders are likely to face liquidity crunch in the near future, if they do not unlock the sale by reducing the prices.’”
“Several areas in Bangkok and provincial towns are already experiencing a glut housing due to rapid growth during the past few years. Making matters worse is the surge in speculation, seldom reported, but constantly active beneath the surface. Clearly the sense of a saturated market and intense competition bodes ill for speculators who had bought in the hope of making a quick profit. Sales have been sluggish for months. To make matters worse, many punters have raised their prices. A studio now sells for almost Bt3.5 million, equal to that of downtown projects. Banks are also cautious, if not nervous, about giving Bt3 million plus to buyers of studio units.”
“Why does a property crash take a long time? Like the seven stages of death, punters go through a number of stages before they capitulate. The stages are shock, denial, anger, bargaining, guilt, depression and finally, acceptance. We are somewhere in the middle. Denial seems to run the longest course with punters rejecting there is a bubble. Ultimately the cost of paying for a condo they can ill afford and the probability they would be stuck with it forever sinks in.”
“Beyond the fear of a property bubble, Malaysians are asking themselves one question - is it really important to own a house and at what cost? ‘The younger generation is unfortunately enslaved by the powers-to-be,’ veteran property consultant Dr Ernest Cheong told The Malaysian Insider in Kuala Lumpur. During the two decades after Merdeka, the government encouraged house ownership to secure the loyalty of immigrants. However, since the 80s, it has cynically been seen as a way for the government and industry to pursue profits instead of offering a roof over citizens’ heads, said Cheong.”
“Cheong said young working adults aged 25-35 and holding their first jobs earn between RM3,000 and RM5,000 a month and would not be able to afford anything beyond RM100,000. ‘They actually cannot afford to buy anything without the help of their parents,’ he said. ‘Sadly, this generation must come to terms that they may never own a house as long as prices continue to rise.’”
“Ferdinand Pereira is one who has opted to rent. He added that he sees it as an option rather than a problem, and that people should not be so preoccupied with owning a property that life passes them by. ‘It is ingrained in us that home ownership equals security, but no one speaks about the burden of a 30-year loan over your head, which also ties you down to a fixed place.’”
Same as it ever was, and always will be. Some types of people always choose to re-learn the difficult and painful realities of life through bitter experience. This one is dedicated to them…
“…Although only a few observers have noted the vested interest in error that accompanies speculative euphoria, it is, nonetheless, an extremely plausible phenomenon. Those involved with the speculation are experiencing an increase in wealth–getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. The very increase in values thus captures the thoughts and minds of those being rewarded. Speculation buys up, in a very practical way, the intelligence of those involved.
This is particularly true of the first group noted above–those who are convinced that values are going up permanently and indefinitely. But the errors of vanity of those who think they will beat the speculative game are also thus reinforced. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. ..Strongly reinforcing the vested interest in euphoria is the condemnation that the reputable public and financial opinion directs at those who express doubt or dissent. It is said that they are unable, because of defective imagination or other mental inadequacy, to grasp the new and rewarding circumstances that sustain and secure the increase in values…”
-John Kenneth Galbraith
A Short History of Financial Euphoria
I know some people who repeat the same mistakes over and over again. Just like what we are seeing on a local, national, and international scale with respect to finance and the housing bubble. Perhaps there are fractal relationships at play here, where the existence of enough people who won’t learn produces a government and a society that won’t learn either.
I suspect it’s more attributable to laziness and political opportunism. I had a bad feeling when, during the 2008 presidential elections, the foreclosure “crisis” became a political football. It didn’t take a week for politicians to start telling the FB’s, “it wasn’t your fault. It was that loan that messed you up. And we have a duty to put things right!”
So with the foolishness of get rich quick absolved, it wasn’t much of a stretch to say, let’s get rich with houses again! TV shows, $35,000 flipping seminars, Trump University, it all came right back with ease. Even Bernanke got in on it telling us house prices would solve the unemployment problem. 3 trillion bucks later and we’ve started building mcmansions again, but the number unemployed is near all time highs.
But the idea that we don’t have to change is powerful. We don’t have to make something to earn a living. Just buy stocks or speculate in lots or houses. Pretty soon it translates into: Getting up and going to a job is for suckers. I’m gonna lay here in bed and real estate will make me rich!
“Even Bernanke got in on it telling us house prices would solve the unemployment problem. 3 trillion bucks later and we’ve started building mcmansions again, but the number unemployed is near all time highs.”
But just imagine how much worse it all would be if a different course of action had been taken!
Unfalsifiable claims are the best kind of claims
“more attributable to laziness and political opportunism…”
Another possible explanation is cowardice. One thing about mania is that if you confront the manic with reality, called a “reality check” sometimes, the manic will become energetically angry and quite possibly harmfully aggressive.
You can see it on this blog almost every day.
The easy way out is to walk on eggshells, so as to avoid the anger. In the long run this does not work, as eventually either the manic or the bystander are destroyed, or both. In the short run, no politician survives telling people they are wrong.
^
Uncommon truth and vision.
“We don’t have to make something to earn a living. Just buy stocks or speculate in lots or houses.”
I think it also makes it okay for people to spend more and save less. Go ahead and lease that BMW, take that vacation. Why worry about saving when your “house appreciation” will do it for you.
“Inevitably you are at the will of the masses. And if the masses are going to jump and make a horrible mistake, you’re almost forced to do it as well.”
Typical lemming mentality.
Consider: If the masses are going to jump and make horrible mistakes, as he says, then after the dust settles the field will be clear of everyone who jumped into making these horrible mistakes because everyone who made these horrible mistake will be broke.
And if everyone else is broke except you then you get to pick and choose among the wreckage because you will be the only one left that has any money.
Or, you can choose to do what this guy will probably will do which is jump over the cliff with the rest of the lemmings because (even though he apparantly knows better) he feels “you’re almost forced to do it as well”.
If the masses are going to jump and make horrible mistakes,
And lets be frank. Buying a house 1998-current is a horribly tragic mistake.
Who wants to buy a home that sits on a lot covered in lemming blood?
“Inevitably you are at the will of the masses. And if the masses are going to jump and make a horrible mistake, you’re almost forced to do it as well.”
Yeah. People need to think hard about whether that’s actually true. And if they feel it is, think about why they feel that way. Nobody is “almost” forcing you to do anything…except your own fear of being left behind while everyone else makes their nest egg and you don’t. You need to think hard about whether that fear is leading you in the right direction or not.
Or just acknowledge that unfounded fear is hazardous to your health.
If the lemmings get to reincarnate, the dust will never clear.
If you’re paying attention(very few of us are), you’ll realize these articles are akin to looking in the rear view mirror. The resumption of the correction already began. The current pain is masked by greed laced koolade….. ….
the tab for the taxpayers continues to grow exponentially.
A debt slave in the making.
And Canadian Banks already have a built in TARP.
Hey Frank - do you have a government backed golden parachute if your investments go bad?
Didn’t think so.
—————-
“A guy we’ll just call Frank is having a tough time in the current Toronto real estate market. He figures he’ll have to borrow upward of half a million dollars, and he’s freaking out. Frank and his wife make good money, they’ve got no debt other than their condo mortgage and they’ve put together a down payment of $125,000. The bank says buying a $700,000 house is no problem for them, but Frank is squeamish about spending that much money. For the past three years, he’s been saving with a goal of spending $500,000 on a starter home.”
Has anyone asked Frank what’s wrong with renting?
From the article:
‘That leaves renting, which Frank is open to. But he recognizes that finding a suitable property will be hard in Toronto’s tight rental market, and he doesn’t want to be locked into a lease in case there’s a big downturn in house prices.’
Of course. Because when the big one hits you’ll need to move within a month or two or you’ll miss the boat. Better to just buy right away.
Because when the big one hits you’ll need to
enslave yourself to an impossible debt burdenmove within an hourmonth or two or you’llbe priced out forevermiss the boat. Better to just buytwo, three or more homesright away.If you haven’t already done that, you’re a LOOSER!‘That leaves renting, which Frank is open to. But he recognizes that finding a suitable property will be hard in Toronto’s tight rental market, and he doesn’t want to be locked into a lease in case there’s a big downturn in house prices.’
Hay-soos creese-toe, I missed that. This guy is stupid beyond words.
I suppose he’d rather be locked into a mortgage when there is a big downturn. It is amazing that some people actually survive.
‘We believe that in its widespread use the term refers to a situation in which excessive public expectations of future price increases cause prices to be temporarily elevated.’
Check.
‘During a housing price bubble, homebuyers think that a home that they would normally consider too expensive for them is now an acceptable purchase because they will be compensated by significant further price increases.’
Check.
It inflates like a bubble, shimmers like a bubble, and jiggles like a bubble.
Folks, it’s a bubble!
‘Year over year, finished lot values were up 87% in San Francisco and Oakland, 75% in Atlanta and 70% in Las Vegas. Builders expect future home prices will cover their higher lot costs. ‘We’re betting on things two years from now,’
‘Bigger homes are coming along with higher land and lot prices. The average size of a new home hit a record 2,642-square-feet in the second quarter’
‘The average size of a new home hit a record 2,642-square-feet in the second quarter’
Who could have guessed the Fed’s showering billions and billions of QE3 dollars on the real estate sector could have such an effect?
Pimco Sees Taper in Worst MBS Slump Since 1999: Credit Markets
By Jody Shenn - Aug 30, 2013 8:55 AM PT
U.S. government-backed mortgage bonds are heading toward their longest monthly slump since 1999 as concern mounts that the Federal Reserve will begin paring its debt purchases even as the steepest rise in home-loan rates in at least 40 years slows the housing rebound.
An attendee views a 1,700 square foot “empty nester” one bedroom called the Idea Home at the Minneapolis Home & Garden Show in Minnesota on March 1, 2013. Photographer: Ariana Lindquist/Bloomberg
Securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae lost 0.33 percent through yesterday, heading for their fourth month of declines and bringing losses since April to 2.78 percent, according to Bank of America Merrill Lynch index data. For almost a year, the Fed has been adding $40 billion of bonds to its balance sheet each month from the more than $5 trillion market. It expanded the purchases in January to include $45 billion of Treasuries.
Investors led by Pacific Investment Management Co., manager of the world’s biggest bond fund, are bracing for the Fed to scale back its stimulus when policy makers meet next month, even after data the past week showed falling home sales and a slowdown in property appreciation. Average rates for 30-year mortgages reached a two-year high of 4.58 percent last week.
“We still believe that tapering is going to happen,” said Michael Cudzil, an executive vice president who specializes in mortgages at Newport Beach, California-based Pimco. “The Fed is looking at the progress seen in the data over a long-term period of time, rather than any one given month.”
…
Yep, just another massive dollar devaluation?
Will wages eventually follow, nominally? CA’s ill advised leadership thinks so, in light of an increase in the minimum wage.
As long as .gov puts a floor under rents through Section 8 programs, and it offers ownership tax incentives, and the Fed provides liquidity, R/E will maintain “value.”
If/when those support mechanisms fail, all bets are off. ‘Till then, party on.
“China’s urban land is now valued at a combined 265 trillion yuan ($43.3 trillion), roughly six times the country’s GDP last year. Under normal circumstances, land prices should not exceed GDP by more than a factor of two. And when Japan got hit by its own financial crisis, its land was worth four times GDP.”
This is going to end so badly that I almost would rather live in blissful bubble denial than contemplate the dire fallout.
And China’s urban land is spectacularly degraded. I comment on this often, but without clean air and water, rising real estate prices are ephemeral.
Spectacularly degraded and enormously overvalued…sounds like a very bad combination of factors!
It makes on wonder what the tipping point is.
I suspect it is when the credit expansion in the US and Europe ends. That in turn makes me wonder what will end the credit expansion here. I suspect that with 15 million people in the US sinking into poverty in the past decade, and tens of million more earning less than they did, it is already over.
Buckle up.
The only reason mortgage and student loans are made at all is because of the expectation that the taxpayer will pay them back if the borrower can’t.
I’ve got to undo my buckle and walk around for a while.
Real Estate Agent Arrested On Drug Charges
http://www.foxcarolina.com/story/21550065/police-asheville-real-estate-agent-arrested-on-drug-charges
Remember that Goldman Sachs economist who theorized the BRICs had decoupled from the rest of the world’s economy and were headed off into the economic stratosphere?
How’d that work out for him?
BREAKING NEWS
BRIC Markets Sink to Worst Place for Investors in Poll
By Shamim Adam - Sep 12, 2013 4:01 PM PT
The largest developing nations for the first time have the worst market opportunities as optimism for stronger growth shifts to the U.S. and Europe, according to a Bloomberg Global Poll.
India fared the poorest, followed by Brazil, Russia and China, a worldwide poll of investors, analysts and traders who are Bloomberg subscribers showed this week. The number of respondents who see the European Union as one of the two best opportunities rose to 34 percent, its best showing in the poll dating to 2009, with the U.S. at 51 percent.
Prospects of diminished global liquidity from cuts in U.S. Federal Reserve bond buying have sparked the biggest emerging-market currency selloff in five years, with the Indian rupee and Turkish lira hitting record lows. The rout spotlights challenges including credit overreliance in China and low investment in Brazil, part of the BRIC group with India and Russia.
“The BRICs will always be playing second fiddle to the developed economies,” said survey respondent Ben Kelly, an analyst at Louis Capital Markets in London. “The pro-growth monetary policy of the U.S. allowed emerging countries to thrive due to very low or negative real rates,” he said, referring to borrowing costs adjusted for inflation.
Now that the U.S. and “to a certain extent Europe are beginning to stabilize, maybe part of this trade may unwind and we have seen that already in the bond markets,” Kelly said.
…
Yesterday’s BRICs are today’s rubble.
When the consumer of last resort sneezes, net exporters catch pneumonia.
What happens when the Great Consumer takes a dump?
It gets put on the container ship back to China and recycled into new products, coming soon to a Wal-Mart near you.
I propose the BRIC-a-BRAC theory instead.
Now it’s the turn of the BRAC countries: Britain, Romania, Australia, Canada. All developed countries with great fossil fuel deposits to exploit.
“If you bought a house in the last few years predicated on the false notion that prices bottomed or that houses don’t depreciate, you’re in for a painful shock of your life over the coming years.”
You can say that again.
You have to click through to see each city:
‘Top 10 Housing Markets Where Homeowners Wish They’d Listed in April” includes the markets with largest increases in inventory from April 2013 to August 2013.’
http://realestate.aol.com/blog/2013/09/12/housing-markets-where-home-listings-spiked-this-summer/#!slide=998899
Nearly all in California…
Now 25K houses in Riverside/San Berdo? That sounds like a huge backlog to me.
That piece has a link to an article with this exciting news:
Florida Downpayments
JPMorgan decreased the minimum downpayment on mortgages made in Florida for primary residences to 5 percent from 10 percent and down to 10 percent from 20 percent for second homes, according to Bonitatibus.
“Those restrictions have handcuffed Florida buyers,” Nunziata said, also referring to mortgage insurers and banks. “When you had restrictions telling buyers they had to put down an extra 5 to 15 percent in some cases, that eliminated a lot of potential buyers from qualifying.”
_______________________________/
We are a foolish people and we are going to get what we deserve.
Some serious exploding inventory going on.
The wishing in California will get far more intense once the cross subsidy program which requires American Gothic Farmer Joe and his wife Mabel in Flyover Country to cross subsidize California home loans in excess of $500,000 is finally brought to an end.
“…up to $625,500 in expensive housing markets, including parts of California and New York, and as much as $721,050 in Hawaii.”
Are homes costing north of $625,500 considered ‘affordable housing’ in DC land?
‘”It would be counterproductive to make changes to the loan limits before private capital is fully engaged,” said Gary Thomas, president of the National Association of Realtors.’
How can private capital possibly ever get engaged when highly subsidized government lending is perpetually crowding them out of business?!
POLITICS
September 8, 2013, 7:32 p.m. ET
Loan Size to Be Cut for Fannie, Freddie
By NICK TIMIRAOS
CONNECT
Federal officials are preparing to reduce the maximum size of home-mortgage loans eligible for backing by Fannie Mae (FNMA +7.41%) and Freddie Mac, (FMCC +9.00%) a move that is likely to face resistance from some lawmakers in Congress and the real estate industry.
The proposed move is designed to wean the mortgage market off government support and allow the market for non-government-guaranteed mortgages to take a bigger role. But critics argue that any such move will shrink the pool of eligible home buyers, stunting the nation’s housing recovery.
“It would be counterproductive to make changes to the loan limits before private capital is fully engaged,” said Gary Thomas, president of the National Association of Realtors.
Currently, Fannie and Freddie Mac can back mortgages that have balances as high as $417,000 in most parts of the country and up to $625,500 in expensive housing markets, including parts of California and New York, and as much as $721,050 in Hawaii. Mortgages within the limits are called “conforming” loans; mortgages that exceed them are called “jumbo” mortgages.
The Federal Housing Finance Agency, which regulates Fannie and Freddie, hasn’t announced how far it will drop the loan limits, which would take effect Jan. 1, 2014, and a spokeswoman declined to elaborate on specifics. But in a statement, the agency said a “gradual reduction in loan limits is an appropriate and effective approach to reducing taxpayers’ mortgage-risk exposure…and expanding the role of private capital in mortgage finance.”
The FHFA says it doesn’t need congressional approval given broad powers it enjoys, so long as Fannie and Freddie remain under government control. The policy change illustrates a key challenge facing federal housing officials, who have taken extraordinary steps to keep mortgage credit flowing since the housing market crashed six years ago.
Home prices have rebounded due partly to record low interest rates. But with nine in 10 new loans receiving some form of government backing, officials are trying now to engineer a retreat without upending the recovery.
Any fight over loan limits “shows why it is going to be hard” to reduce the government’s role in the mortgage market, said Paul Miller, a banking analyst at FBR Capital Markets. “A lot of people who talk about having more private capital, they’re not ready to walk the walk,” he said.
Lenders say they are eager to fill any gap left by a decline in the loan limits. Already, banks have been competing to make loans to the most creditworthy jumbo borrowers by offering rates that are in some cases lower than conforming-loan rates. Before the crisis, jumbo rates were at least a quarter of a percentage point above conforming loans, and until last year, jumbo loans were more than 0.5 percentage points higher.
“Given where banks are pricing jumbo mortgages, it seems like a relatively small risk on the part of the government to take the next step,” said Michael McMahon, managing director at Redwood Trust Inc., a Mill Valley, Calif., investment firm that securitizes jumbo mortgages.
During the second quarter, banks made nearly $59 billion in jumbo mortgages, up 20% from the previous-year period to a six-year high, according to Inside Mortgage Finance. “There’s plenty of liquidity in the market to handle a drop in the conforming limit,” said Brad Blackwell, executive vice president at Wells Fargo Home Mortgage, the nation’s largest mortgage lender.
…
“It would be counterproductive to make changes to the loan limits before private capital is fully engaged,” said Gary Thomas, president of the National Association of Realtors.
Hah hah…and why would they want to get involved in that charade? Maybe a nice government backstop is in order…some sweet guaranteed profits. That should pull them in.
Half million dollar “starter home” = definition of insanity.
The gal in the office next door was telling me they are going to build a new house west of KC, to relocate away from the JoCo/I-35 Charlie-Foxtrot, out in northwest Johnson County, north of the K-7/K-10 interchange.
Lot price? $120K +
Meanwhile, the apartment search continues. Part of the problem is that I’m picky, because I know what (and what doesn’t) work for me. For mo obvious reason, rents are up $100/month across the board from when I started looking last year.
It’s become obvious that rental prices are based on what houses are priced at, not any quaint notion of supply and demand.
“Why does a property crash take a long time? Like the seven stages of death, punters go through a number of stages before they capitulate. The stages are shock, denial, anger, bargaining, guilt, depression and finally, acceptance. We are somewhere in the middle. Denial seems to run the longest course with punters rejecting there is a bubble. Ultimately the cost of paying for a condo they can ill afford and the probability they would be stuck with it forever sinks in.”
The crash can be drawn out indefinitely, provided top economic authorities implement and maintain a hair-of-the-dog housing market stimulus cure each time a transition from shock-and-denial to anger seems imminent.
I suppose it is more pleasant to live on indefinitely in the shock-and-denial stage than to endure the terrifying intensity of the anger stage, anyway.
Many on this blog will be dead before this all shakes out.
Acceptance is the most healthy place. Understand where you are and which way the wind is blowing. Avoid the shoals if you can, but have a destination.
I assume a 36% loss on a home compared to the sellers’ wishing price is no big deal to a Hollywood couple?
Goldie Hawn and Kurt Russell bail out of their Malibu beach house
Actors Goldie Hawn and Kurt Russell sell their Balinese-inspired Malibu beach house, for sale or lease frequently since 1995, for $9.5 million.
The traditional-style house is reached by a brick walkway and surrounded by lawn and mature trees.
By Lauren Beale
July 26, 2013, 7:32 p.m.
After a couple of years and price cuts, actors Goldie Hawn and Kurt Russell have closed up their longtime Malibu beach house, selling it for $9.5 million.
Entered through a gated courtyard, the Balinese-inspired house backs up to sand dunes and the ocean. The 4,200-square-foot house, built in 1978, was redesigned and renovated in 2005. There is a screening room, an office and a detached guesthouse. The master suite features floor-to-ceiling windows and a beachfront balcony for a total of four bedrooms and 4.5 bathrooms.
Hawn, 67, was a hit with television viewers in the late 1960s for her role as a regular on “Rowan & Martin’s Laugh-In.” She won a supporting actress Oscar for “Cactus Flower” (1969) and was nominated for lead actress in “Private Benjamin” (1980).
Russell, 62, will star in the upcoming comedy “The Art of the Steal.” His raft of credits includes the 2006 version of “Poseidon,” “Stargate” (1994) and “Overboard” (1987), in which both he and Hawn starred.
The property, which has been for sale or lease frequently since 1995, was listed two years ago at a high of $14.749 million.
…
“Cheong said young working adults aged 25-35 and holding their first jobs earn between RM3,000 and RM5,000 a month and would not be able to afford anything beyond RM100,000. ‘They actually cannot afford to buy anything without the help of their parents,’ he said. ‘Sadly, this generation must come to terms that they may never own a house as long as prices continue to rise.’”
Malaysian young folks are equally screwed by unaffordable housing prices as are American young folks. ‘Eat the young’ economic policy is going to backfire royally when young couples don’t form households or families, depressing the birth rate.
Our family’s Younger Millenial just moved out to go off to college, and we are going broke keeping her housed away from home.
August 1, 2013
A Rising Share of Young Adults Live in Their Parents’ Home
A Record 21.6 Million In 2012
by Richard Fry
Overview
In 2012, 36% of the nation’s young adults ages 18 to 31—the so-called Millennial generation—were living in their parents’ home, according to a new Pew Research Center analysis of U.S. Census Bureau data. This is the highest share in at least four decades and represents a slow but steady increase over the 32% of their same-aged counterparts who were living at home prior to the Great Recession in 2007 and the 34% doing so when it officially ended in 2009.
A record total of 21.6 million Millennials lived in their parents’ home in 2012, up from 18.5 million of their same aged counterparts in 2007. Of these, at least a third and perhaps as many as half are college students. (In the census data used for this analysis, college students who live in dormitories during the academic year are counted as living with their parents).
Younger Millennials (ages 18 to 24) are much more likely than older ones (ages 25 to 31) to be living with their parents—56% versus 16%. Since the onset of the 2007-2009 recession, both age groups have experienced a rise in this living arrangement.
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