Pushing The Sell Button
It’s Friday desk clearing time for this blogger. “There were 2,411 foreclosure notices filed in a 13-county metro Atlanta area in February, according to data from Kennesaw-based Equity Depot. That’s about even with January’s number, which was the lowest seen since June 2003. Barry Bramlett, whose firm compiles the numbers, said the improvement is ‘just an illusion.’ The default rate is still high, he said. ‘It looks like a strong economy,’ he said. ‘It’s not.’”
“Home foreclosure activity in Connecticut showed no signs of improvement in January, as the number of properties with a foreclosure filing surged by nearly 90 percent compared with a year ago. ‘We expected to see this rebound ever since the foreclosure numbers dropped artificially after the robo-signing controversy hit in late 2010,’ said Daren Blomquist, VP at RealtyTrac. ‘This means the housing market in Connecticut might have looked better than it actually was in 2011 and 2012 because of artificially low foreclosure activity.’”
“In the Baltimore-Towson area, about 2,300 properties had foreclosure filings in January, up almost 120 percent from last year, according to RealtyTrac. Experts said the gains reflected banks starting to move more aggressively through a backlog of loans. ‘We’re not seeing a new wave of people who are unable to afford it suddenly. This is a backlog issue,’ said Jonathan Benya, an Annapolis-based real estate agent for Keller Williams Realty.”
“Banks would be forced to more quickly address the upkeep of homes in foreclosure in New York under a measure proposed by Attorney General Eric Schneiderman. Buffalo has about 7,000 vacant homes, and Rochester has roughly 2,200. In Newburgh, 10 percent of its housing stock is vacant, about 600 homes in a four-square-mile area. ‘The big issue really is that nobody seems to have any responsibility for them,’ said Newburgh Mayor Judy Kennedy. ‘So then what happens is you have the squatters, you have the people who come and strip them out of copper—and it just breeds crime.’”
“Lord Turner has warned that the UK has failed to rebalance its economy and is simply repeating the errors made in the run-up to the 2007/8 financial crisis. The self-styled technocrat, who was chairman of the City regulator until last April, likened the domestic economy over the last five years to Japan in the 1990s. ‘The concerning thing about the UK economy is that from 2009 until early last year, a lot of the debate was around the need to rebalance, from being over focused on financial services and the housing market,’ Lord Turner told The Telegraph. ‘In the last year we’ve started to grow again, but it’s all down to consumer expenditure and real estate again.’”
“Hong Kong’s housing market faces a key test of price sustainability and the strength of demand as a flood of new units are set to be launched by developers. ‘A falling trend in prices can now be expected,’ said Simon Lo Wing-fai, an executive director at property consultancy Colliers International. The latest prices are far below the average price of HK$12,268 per sq ft achieved by the Riva project last March. ‘The pricing is lower than expected, aimed at luring potential buyers into the market,’ said Lo.”
“The number of properties sold across New Zealand fell by 17 per cent last month, with prices also falling from December. Auckland sales volumes plunged 21 per cent from December, with prices down 5.2 per cent. Auckland wasn’t the only city to see double digit falls in the number of properties sold, with the number down 24 per cent in Wellington and 25 per cent in Christchurch when compared to December sales. ‘The evidence suggests that annual price gains in Auckland peaked in late 2013,’ said ASB economist Daniel Smith. Smith said that with growth and inflation picking up, an OCR hike in March looked ‘a near certainty.’ ‘The question is how rapidly rates will rise from there.’”
“After the housing market bubble burst in the city of Ordos in Inner Mongolia, which led to the liquidation of many of the city’s residents’ financial assets, people who funded the construction of the city have begun demanding a refund for their money from fundraisers, the Chinese-language Securities Times reports. ‘The fundraisers invested the capital in the real-estate market and now the houses are unsellable. We bought a house at 6,000 yuan (US$990) per square meter but now its selling price is 4,300 yuan (US$709) per square meter,’ said a resident surnamed Wu.”
“Economists and housing experts are concerned. In a survey of these experts, Zillow found that 79 percent believe that if investors pulled out of the housing market this year, then there would be a ’significant’ or ’somewhat significant’ impact on the markets where that demand had been highest. Investor purchases already have slowed in markets like Phoenix and Las Vegas. That has pushed sales down and inventories up dramatically.”
“‘If I were a Phoenix real estate ‘investor’ sitting on a lot of house-price upside—or in the long process of readying dozens, hundreds, or thousands of houses for rent into a market about to get pounded for years with single-family rental and for-sale supply coming to market—I would push the ’sell button’ on everything I could, immediately, on data such as these,’ housing analyst Mark Hanson said in a note to clients.”
“Sales of existing single family homes across the nine-county Bay Area fell 28.5 percent from December and were off by 16.1 percent from January 2013, DataQuick reported. While the inventory of homes listed for sale is down from December in all parts of the Bay Area, it’s up 13.5 percent from a year ago in Alameda County and up 34.8 percent in Contra Costa County. That might have helped Greyson Mitchem and Raul Monares find a home to buy in Pleasant Hill. They snared a 4 bedroom, 2 and 1/2 bath single family home for $825,000 that had been on the market for 45 days. They’re paying less than the asking price for it.”
“‘It’s a flip,’ Mitchem said. ‘The investors want to get the most out of it they can, but I think they overpriced it.’”
“Mitchem’s agent, Sherie Corsello of Redfin, said her clients made the only offer. ‘Before, everyone was experiencing multiple offers, and it was scaring buyers off. That’s not so much the case any more,’ Corsello said, except in the market for homes over $1 million. ‘Maybe that’s staying crazy,’ she said.”
“Phoenix real estate…about to get pounded for years…”
It will take decades to clean up that mess.
Oof. PHX is a little bit ahead of other markets from what I can tell from articles here. I think investors drove it up and then fled earlier once the prices didn’t pencil out for any decent attempt at rental cash flow. If it is finally hitting the papers and being called out by REIC shills, they are already long since toast.
Should be a nice Spring.
It’s hard to say how low it will go this time. Because Phx prices got really, really low during the first crash, I think there might be a solid bottom on the market in this city. If a person bought a house for $35k (including rehab), and is now renting that house out for $725/month to stable tenants who do their own repairs, then that person may not sell into the crash. Totally different from those who had to sell or be foreclosed in the first crash.
The Blackstones who overpaid will definitely sell, so prices will go down from here. Also, we now have the previously underwater people selling at higher prices, and they will sell to new people who will become newly underwater, thereby possibly (probably) passing the cards from “stronger hands” into “weaker hands”.
It’s really kind of hard to say how it will end, but prices will surely drop from here.
“Banks would be forced to more quickly address the upkeep of homes in foreclosure in New York under a measure proposed by Attorney General Eric Schneidernam.”
All the more reason not to foreclose. Allow the homebuyers (notice I did not use the incorrect term “homeowners”) to believe that they are pulling a fast one on the banks by living in the houses for free while in fact they are doing just what the banks want them to do.
“….Buffalo has about 7,000 vacant homes, and Rochester has roughly 2,200. In Newburgh, 10 percent of its housing stock is vacant, about 600 homes in a four-square-mile area….”
Actually, it is just time for bulldozer races to begin. No one wants to live in these houses. The population in Rochester peaked at 332,000 in 1950. It is down to 210,000 today.
Now I see why HA thinks all the “25,000,000″ soon to be foreclosed houses are empty and vacant. They probably are empty where he lives.
In the market where I play, there have never been vacant houses. People lived in them until the day they were paid “key money” to vacate. There is a big difference in those two situations.
There have never been any vacant houses where you live?
Of course there is. Remember, there are 4.4 million excess, empty and defaulted houses in CA.
“Actually, it is just time for bulldozer races to begin. No one wants to live in these houses.”
You have no idea how beautiful some of these houses are. So sad…
/Nostalgia
California Foreclosure Starts Skyrocket 57% Year over Year
http://www.realtytrac.com/images/reportimages/california_foreclosure_starts.jpg
…And those that bought at the “bottom” 2011-12 thought they were getting a steal. Turns out they were duped!! It’s a race back down.
Puggs,
You’re right using Inductive Reasoning, depending on a lack of a job corridor, salary or hourly wages being weak, career options, or the weather. Depends on the region. Job clusters will hold up better,and of course certain areas just are more desirable.
Our DBA was in Newbury Park (So Ca) where Amgen’s campus is. Trust me, housing isn’t going to “bottom” there like other cities.
It won’t “bottom”. It will crater and it’s already begun.
“‘If I were a Phoenix real estate ‘investor’ sitting on a lot of house-price upside—or in the long process of readying dozens, hundreds, or thousands of houses for rent into a market about to get pounded for years with single-family rental and for-sale supply coming to market—I would push the ’sell button’
My good friend Mark Hanson understands. And as I’ve always said;
Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.
But-But-But what about my investment properties in Ordos!?!
“…We bought a house at 6,000 yuan (US$990) per square meter but now its selling price is 4,300 yuan (US$709) per square meter,’ said a resident surnamed Wu.”
They’re not making any more Ordos, you know! And everybody wants to live in Mongolia! I mean, just everybody!!
These people love Ordos!
http://www.redbull.com/us/en/skateboarding/stories/1331626641512/the-skateboarding-kingdom-in-inner-mongolia
Chanos may be right
That is awesome.
“Across hundreds of square miles, futuristically-designed museums compete with monuments dedicated to the glory of ancient Mongol warriors for the attention of no-one in particular.
In the heart of this half-lit urban mirage, we wayfared in search of skateboarding adventures.”
$US990 per square meter is $92 per square foot.
$US709 per square meter is $66 per square foot.
I hear they want Housing Analyst to come and build for $45 per square foot.
Please, take him…..HA.
^
Says the debtor who belabors “reproduction costs” but cannot identify what the cost is.
‘Maybe that’s staying crazy,’
Why would anyone want to buy under market conditions that even Realtor®s openly acknowledge are crazy?
That statement caught my eye and I interpret it as another realtor who just doesn’t have a clue so they short-circuit the discussion by calling it “crazy”.
Dumb realtors.
San Diego, CA Housing Prices Slide 11% Y-o-Y; Inventory Surges 76%
http://www.movoto.com/san-diego-ca/market-trends/
“The entire process of buying and selling homes is either flawed or wrought with fraud”
http://www.foxbusiness.com/technology/2014/01/22/7-markets-ripe-for-technology-disruption/
With resale housing priced 250% higher than long term trend, why is there any surprised of the widespread fraud?
You’re just sour grapes because you missed the recovery.
Have fun renting for life!
Don’t be a Debt Donkey
Excess inventory, foreclosure moratoriums and zombie properties is NOT a recovery. And I own my home so don’t play renter jibber jabber with me.
Are you kidding? I’m drunk with delight on the rental income that I receive each month, which I then use to pay my own rent.
Living like a donkey in a debt trap will never feel like running free.
“….will never feel like running free…”
It will feel pretty good with the loan is paid off.
Even if you would have spent less money by renting for your entire life? Even if you could have bought investment properties with cash for double-digit returns when/where houses were actually cheap, rather than strapping yourself to an overpriced cage? I would HATE to pay off a loan like that.
Freeeeedom. Woo hoo.
San Jose, CA Housing Prices Turn Lower On Surging Inventory
http://www.movoto.com/san-jose-ca/market-trends/
Psychological Phase Of Housing; Were We We Are At Now
http://imageshack.us/a/img266/8180/stagesbubble.png
I wish it was the same scale. What would it look like if someone made the axes correct for housing, which is far less liquid. How long from this dead cat bounce until we hit the trough, in your opinions?
There isn’t a problem with x or y. Massive government price supports and interference and foreclosure moratoriums distort the blowoff phase.
Ventura, CA Housing Prices Slide 20% Y-o-Y
http://www.movoto.com/ventura-ca/market-trends/
‘Cindy Flaherty, director of home ownership for the Ohio Housing Finance Agency, said Save The Dream assisted 145 Licking County residents between January 2011 and September. “Foreclosures are declining almost everywhere. That is a good sign we are coming out of the housing crisis. More people are able to keep up their mortgage payments because the economy is better and unemployment is down.”
‘Dennis Harrington, director of Southeastern Ohio Legal Services, does not see a reduction in foreclosure filings as proof of an improved economy. Civil filings, in general, declined in 2013, though not by as much as foreclosures decreased.’
“People don’t want to spend the money for litigation,” he said. “I don’t think the foreclosure problem has been fixed at all. We’re still seeing the same baloney over and over. The gigantic banks — the right hand doesn’t know what the left hand is doing.”
“I think it’s a combination of a slight improvement in the economy and people getting help before a case is filed,” said Bob Handelman, an attorney. “Mortgage companies are not being as quick to file because they don’t want any more properties in their inventory.”
bologna
‘The $7 million house that Grammy Award-winning music producer, Jimmy Jam Harris, built on Lake Minnetonka was sold for $2.6 million to a anonymous couple during a live auction at the 22,000 square-foot house on Thursday afternoon. The winning bid, which is pending approval by the owner of the house, JP Morgan/Chase, is close to what real estate agents say the land alone is worth.’
‘Christopher and Sandra Hintz bought the property from Harris on June 26 2007 for $7 million, but stopped making payments and the house went into foreclosure.’
‘The winning bid, which is pending approval by the owner of the house, JP Morgan/Chase, is close to what real estate agents say the land alone is worth.’
Sweet! Sounds like that market is bottoming out, if the value of the structure doesn’t add anything to the value of the dirt.
“close to what real estate agents say the land alone is worth.’”
Asking a stealtor what a depreciating house is worth is like getting in an airplane designed by the mentally handicapped.
I just love it when the “seller” reserves the right to decline the highest bid garnered at auction, don’t you? Makes the whole auction processs worthwhile for buyers (not).
“There are home prices in the State of Israel and there are home prices in the State of Tel Aviv. In Tel Aviv, prices are no longer at the economic equilibrium, so in my opinion, there is a bubble there,” said Hanan Mor Group - Holdings Ltd. CEO Hanan Mor. “Elsewhere in the country, such as Haifa, Jerusalem, and Beersheva, we’re at equilibrium. Homebuyers’ purchasing power is falling and people are now struggling to buy a home. The meeting point of the supply and demand price is not at a normal level.”
‘Mor was the only forum participant who believes that there is a real estate bubble in Tel Aviv.’
“There is no bubble anywhere in Israel, not even in Tel Aviv,” said ZMH Hammerman Ltd. CEO Haim Feiglin. If we compare prices in Tel Aviv with prices in the West, Tel Aviv still has room to rise toward Paris and London.’
Ya gotta love it. Here is a country that is surrounded by enemies that want to destroy it. Where terrorist attacks are common place. And they think their prices should be comparable to London or Paris. And much higher than in the much more stable, safe and prosperous USA.
Like I say, people around the globe have been brainwashed into believing that housing is supposed to be utterly unaffordable.
Valid point on housing but this notion they’re oppressed victims nearing annihilation is a hoot.
They’re well armed and should be able to fend off any attack, but really, how can living in a place like that be desirable?
I’d much rather live in Israel than the bombed out countries surrounding it.
I’d much rather live in Israel than the bombed out countries surrounding it.
Isn’t that like saying that a Pinto is better than a Yugo? (Or vice versa?)
True but it’s an important distinction.
You would think that obvious existential danger would depress real estate prices, but apparently not. I’ve said that with respect to my time in Bogotá. How can prices be this high when the country has active guerrilla movements and government control doesn’t even extend sixty miles from here? For a long period of time, you couldn’t even drive between major Colombian cities. But Ben’s posted recently about a bubble in Kabul, Afghanistan, and I think I’ve seen posts about Beirut.
I’d be curious about housing prices in Greece, to see whether a housing bubble can coexist with economic disintegration and mass unemployment.
“CCTV” financial commentator, financial columnist “Chopper”:”it should be this year or next that housing prices suddenly crash taking everyone by surprise. It’s like Japan’s bubble bursting without any other alternative.”
‘The 2000-2006 best Asian economist Dr. Xie Guozhong; voted by U.S. financial magazine “Institutional Investor”, also believes that China’s real estate bubble is bursting; prices will fall by 50% in 2014.’
“Chopper” writing in an article said the Japanese real estate bubble bursting was the ultimate bubble and is still in the doldrums 20 years after bursting. The signals before the Japaese burst: one was the Japanese Yen stopped rising which is very similar to the current RMB; another was the bubble into the country, like the current Chinese of migrant workers, and their hard earned money slashed ; the other was the flight of capital.”
“But “Chopper” also said that there are two differences in the “ultimate bubble” between China and Japan: one is that the Chinese bubble is due to China central bank issuing money; the other is that the Chinese bubble is typically plunder of the national wealth by Business-Government Collusion. “Chopper” believes that the serious consequence of the China bubble bursting is that people’s lives will plunge into crisis.”
“Economics Professor of the University of South Carolina, China expert, Xie Tian said: “the China real estate bubble is the biggest bubble in human history, perpetrated and manufactured by the State machinery, and systematically accumulated over 20 years..When the bubble bursts, the Chinese local debt problems, bank problems, shadow banking problems, triangular debts and the RMB exchange rate issue will all burst out.”
“Economics Professor of University of South Carolina, Xie Tian: “the bursting bubble is the greatest blow to the Chinese economy, accompanied by the fall of the last, biggest, human authoritarian regime. This will be a huge breathtaking event in human history.”
“Chopper” believes that China’s finances is like an avalanche coming down the snow mountain. It’s invisible these years because the Chinese authorities try to cover up all contradictions of Government using their powers. “Chopper” pointed out that these crises will begin to erupt in 2014. When the avalanche begins, who can stand against it?”
‘Chinese banks‘ bad loans increased for the ninth straight quarter to the highest level since the2008 financial crisis, highlighting pressures on asset quality and profit growth as the world’s second-largest economy slows.’
‘Non-performing loans rose by 28.5 billion yuan ($4.7billion) in the last quarter of 2013 to 592.1 billion yuan, thehighest since September 2008, the China Banking RegulatoryCommission said in a statement on its website.’
‘Chinese banks added 89 trillion yuan of assets, mostlythrough loans, in the past five years, equivalent to the entireU.S. banking industry’s, CBRC data show. Investors are increasingly concerned that China’s investment through borrowing since 2008 may trigger a financial crisis, Haitong Securities Co. said in December. Liabilities at non-financial companies may increase to more than 150 percent of gross domestic product in 2014, raising default risks, the brokerage said. The ratio of 139 percent at the end of 2012 was already the highest among the world’s 10 biggest economies.’
‘Chinese’s biggest banks already tripled the amount of badloans written off in the first half, cleaning up their books ahead of a potential fresh wave of defaults. The government has spent more than $650 billion bailing outbanks by carving out bad loans and injecting capital since thelate 1990s, after years of government-directed lending caused default risk to balloon.’
China “IS” the elephant in the room…
My guess is still that China IS the USA in 1920s. And luckily there are still farms for the factory workers to go back to. Meanwhile times will get rough for the city folk when the rest of the world isn’t buying everything that can be made there.
Was the USA under a communist dictatorship in the 1920s? That’s not what I remember learning in elementary school.
Was the USA under a communist dictatorship in the 1920s? That’s not what I remember learning in elementary school.
I think the context of the reference was that back then the USA was “the world’s factory” and was very dependent on net exports. When the global economy tanked back then, we felt it more than anyone else.
Was the USA under a communist dictatorship in the 1920s?
Is China under one now? If so, it’s a really funny looking one that people might actually forget is one.
Yes, Carl, it is. They even have an official website with an English version that will explain it to you.
One-party system, CHECK.
No private ownership of land, corporations, or personal bodies, CHECK.
No freedom of the press, CHECK.
No freedom of speech, CHECK.
Dictator, CHECK.
So no, a country that is thousands of years old, ruled by a “peoples’ communist dictator”, is not like a country that was less than two hundred years old, ruled under a democratic republic.
You and I both know what that means to us. But I don’t think the average Chinese person actually feels that different from us. And I think whether you act like you are oppressed or not depends on lot on whether you think you are.
How does that tie in to you thinking that China in 2014 is just like the United States in the 1920s? The economic ramifications of actions taken by dictators under communism will not be similar to those from any action ever taken by a Congress under capitalism.
“China’s real estate bubble is bursting; prices will fall by 50% in 2014.”
It’s never going to happen…until it DOES…
‘Ratings agency, Standard & Poors (S&P), has again warned that New Zealand’s housing market is vulnerable to a sharp correction, especially if there is an external economic shock.”
‘While S&P does not expect a big increase in credit losses, it does “consider the stand-alone credit profiles of all banks and credit unions in New Zealand as remaining subject to negative pressures”.
‘Of particular concern to S&P is a potential “hard landing” in China, which “could potentially have a material impact on the New Zealand banking system”, although it does “consider the probability of a hard landing to be low”. According to S&P, a hard landing in China would manifest in New Zealand via “soft commodity prices which could fall sharply in a hard landing scenario”.
‘S&P also notes New Zealand banks’ ongoing reliance on offshore financing, which it claims is a “key weakness of the New Zealand banking system, with net banking sector external debt funding about 32% of system-wide domestic loans”
‘As Finance Minister, Bill English, noted earlier this week: “We’re a suburb of Australia and Australia is a province of China, and we are dependent on the economic management in both those economies. China has demonstrated an ability to deal with really complex issues, but they are still a command and control economy and there’s always the risk they could get it wrong.”
“…especially if there is an external economic shock.”
High-flying NZ dollar causes jitters
By Jamie Gray
5:30 AM Wednesday Jan 29, 2014
Exchange rate becoming a headache for exporters and Australia-originated inbound tourism, says economist
Currency strategists are not ruling out further gains in the cross rate as interest rates look increasingly likely to go their separate ways. Photo / Thinkstock
The New Zealand dollar continues to trade at around eight-year highs against the Australian dollar but foreign exchange strategists doubt the currency will hit parity with its transtasman counterpart any time soon.
Even so, at yesterday’s high of A94.45c the cross rate was fast becoming a headache for exporters to Australia - New Zealand’s second biggest trading partner after China - and for Australia-originated inbound tourism, Deutsche Bank economist Darren Gibbs said.
But for those entities seeking to invest in Australian assets, the high rate offered a rare opportunity to gain exposure to Australian assets at a highly favourable rate by historical standards, said Sam Tuck, senior manager of foreign exchange at ANZ New Zealand.
At present levels, the kiwi is still shy of its post-float high of A95.84¢, set in early December 2005. The currencies were last at parity in 1973, when they were both fixed.
Currency strategists did not rule out further gains in the cross rate as economic conditions in the countries diverged and official interest rates look increasingly likely to go their separate ways, but one said parity between the kiwi and the aussie was “a bridge too far”.
…
‘Nordea Bank AB Chief Executive Officer Christian Clausen said Swedes can withstand a 10 percent drop in house prices after building up savings that far exceed record mortgage debts. Homeowners in the Nordic region’s largest economy “can easily take a pretty substantial correction,” Clausen said.’
‘Low interest rates and a lack of supply have fueled a surge in Swedish house prices, driving the nation’s private debt burden to more than 170 percent of disposable incomes. All three Scandinavian nations have grappled with overheated housing markets since the global financial crisis started more than half a decade ago. In Denmark, a property boom that peaked in 2007 burst a year later. In Norway, the housing market is showing signs of deflating after prices doubled over the past decade. In Sweden, apartment prices have almost tripled nationwide since 2002, while house prices have more than doubled and are still rising.’
“We may at any time get an adjustment of the price level, which seems to be happening in Norway right now, and that may happen in Sweden as well of course,” he said. “That’s always the case in a market that goes up — that sooner or later it will stabilize or go down. But in order for it to be a real risk, you need different drivers in place such as an economic downturn, unemployment and other things.”
It’s interesting how common this is all over teh world:
‘All three Scandinavian nations have grappled with overheated housing markets since the global financial crisis started more than half a decade ago’
How could so many bubbles come out of a “crisis”? Could it be all that money the central bankers created?
How could so many bubbles come out of a “crisis”? Could it be all that money the central bankers created?’
Yep.
Remember… The value of a house is entirely founded on input costs. And current asking prices of resale housing are 200%+ higher than input costs(lot, labor, materials and profit).
I’m surprised the reporter could find a “resident” of Ordos, which has been featured in photo spreads several times as one of China’s ghost cities. Here’s one such instance:
“The Kangbashi district began as a public-works project in Ordos, a wealthy coal-mining town in Inner Mongolia. The area is filled with office towers, administrative centers, government buildings, museums, theaters and sports fields—not to mention acre on acre of subdivisions overflowing with middle-class duplexes and bungalows. The only problem: the district was originally designed to house, support and entertain 1 million people, yet hardly anyone lives there.”
Look at the pictures; I bet that’s an easy commute for “Wu.”
http://tinyurl.com/pajowdh
‘The fundraisers invested the capital in the real-estate market and now the houses are unsellable. We bought a house at 6,000 yuan (US$990) per square meter but now its selling price is 4,300 yuan (US$709) per square meter’
$709 per square meter is still a little high there Wu. Have you tried lowering the price?
The architecture of the museum is supposed to represent a cloud of smog.
“Even in the absence of the excess empty housing inventory estimated in the tens of millions, historically housing prices fall. Why? Because houses depreciate. ALWAYS.”
You better believe it mister.
‘Blackstone Group’s Jonathan Gray took time to give more insight into Blackstone’s big push into the U.S. real estate market, saying the firm’s strategy was to buy assets at a discount to their replacement costs. Blackstone focused exclusively on foreclosed and bank-owned homes, generally in areas hit worst by the housing downturn.’
‘The investment has taken longer than Blackstone expected and at higher costs, however, a 20% rise in housing markets that the firm entered was far higher than the 4% increase Blackstone had modeled.’
‘Gray also defended Blackstone’s emerging financing mechanism for its real estate investments: rental residential mortgage backed securities. Initially, Blackstone used costly bank financing to make its real estate purchases, however, the creation of rental-backed bonds has provided a cheaper and more effective mechanism. Gray said rental securities combine the diversification of traditional RMBS and the income streams of CMBS.’
“I have a hard time understanding why this is bad for bondholders,” Gray said.’
Have you tried polishing it Jonathan?
“…a 20% rise in housing markets that the firm entered was far higher than the 4% increase Blackstone had modeled.”
800 lb gorillas have a way of creating a big splash when they do a belly flop off the high diving board.
‘The investment has taken longer than Blackstone expected and at higher costs…Initially, Blackstone used costly bank financing’
Took too long, paid too much, borrowing was expensive. Lower rental returns!
‘a 20% rise in housing markets that the firm entered was far higher than the 4% increase Blackstone had modeled’
So the big saving grace was prices have gone up. Wait a minute; I thought these bonds you’re flogging were based on rents? What does that have to do with prices going up? Anyway, didn’t you basically bid up what you were buying? So exactly what part of this thing did you do well?
And escalating prices only matter if you sell and capture the delta between them and what you paid. Are they planning to sell? If not, then someone should remind this financial genius that, “Past performance is not necessarily indicative of future results”
Yeah, the only problem is that Blackstone didn’t put their “offering” into a basket, tied up with a pretty bow.
- Blackstone was too stupid to predict that they would cause their own bubble by purchasing all the properties at one time, and offering more than the asking price, even when they were the only bidder.
- Blackstone was too stupid to set aside a realistic amount for maintenance and vacancies.
- Blackstone is too stupid to realize that no one wants to buy bonds that are backed by a NEGATIVE (or extremely low) rental cash flow.
“- Blackstone was too stupid to set aside a realistic amount for maintenance and vacancies.”
Just like a DebtDonkey…. and the personal and financial costs for a Donkey is much higher.
BOO HOO. Now there is nobody to mop up the thousands of blue little houses littering So. Cal. Zillow.
No… it’s Boo hoo hoo!
Temecula, CA Housing Prices Crater 18%; Inventory Skyrockets 101%
http://www.movoto.com/temecula-ca/market-trends/
You might want to liquidate any housing that’s strapped around your neck. That is if you can find a buyer. Short sale is always an option too.
‘The federal government’s scrapping on Tuesday of a 28-year-old “cash-for-visas” scheme for wealthy foreign investors doesn’t scare “Condo King” Bob Rennie, nor luxury West Vancouver realtor Clarence Debelle.’
‘Debelle, who says 90 per cent of his clients are wealthy Chinese immigrants, disagrees with the Tories’ decision to end the program because he believes they bring important economic stimulus, but told Metro he isn’t worried.
“I don’t think anyone has a crystal ball, but I don’t see prices dropping at all. I’m swamped,” he told Metro on Wednesday.’
‘He did admit he could see developers opting to build fewer new, ultra-high-end homes. “How many local Canadians have $6-, $7 million to spend on a home? There’s very few of us who have that kind of capital,” he said.’
‘Vancouver’s “Condo King” Bob Rennie, who does not market his homes to offshore buyers, said there is always going to be strong pent-up demand in China for Canadian visas. He suspects that under the new rules the feds will simply tighten residency requirements for foreign investors who want them.’
‘Rennie suggested that the end of the program will only impact the top 20 per cent of local real estate sales. Of the 20 per cent of homes that sell for more than $2.1 million, he suspects about 35 per cent are currently snapped up by foreign investors, but readily admits there is no way to know for sure because of the lack of federal data keeping.’
“The statistic that you should know is from 2006 to 2012, 69 per cent of all home sales in Greater Vancouver have been to people that already own a home,” he said. “Only 31 per cent of sales have been to first-time buyers, or new immigrants from offshore, so 69 per cent of the market is pretty stable.”
I’ll just let this one hang out there:
’so 69 per cent of the market is pretty stable’
Inner. Mongolia.
‘Cindy Flaherty, director of home ownership for the Ohio Housing Finance Agency,
gov work for everyone
For those folks who have “snared” Bay Area houses like the couple mentioned ($825K in Contra Costa County)….”Silicon Valley and parts of the East Bay — particularly residents of Livermore, Pleasanton and Dublin, who receive 80 percent of their water each year from the State Water Project — will feel the impact the most in the Bay Area.”
http://www.mercurynews.com/science/ci_25036886/california-drought-state-water-project-will-deliver-no
Good luck with that. Not much use in 2.5 bathrooms, soaking tubs, etc once 80% of the water supply goes poof.
My parents live in Cambria (Central Coast), and their rationing is now 50 gallons/person/day….which would be fully used with a 10 minute shower. And massive penalties for going over the water allowance.
A bay area realtor ensnared another pair of suckers?
Quite a few suckers…the local RE market was “on fire” last year. Bidding wars, etc.
Lots of the new money is tech. I’m sure it’s different this time around -);