Learning That We Don’t Learn From History
It’s Friday desk clearing time for this blogger. “For the last few years, there has been little movement in Florida’s foreclosures. The result is more than 300,000 homes in some state of foreclosure – homes and families in limbo. It’s called a shadow inventory, and Florida has the highest amount in the country. ‘They’re saying right now that I owe $32,852… for being late for the last 13 months and not paying my mortgage,’ said Florida homeowner Linda Powell. She spent the last 13 months trying to renegotiate her adjustable rate mortgage, without results. Two weeks ago she was served her foreclosure papers. Foreclosure attorney Greg Nordt says it’s just beginning of a long and arduous process in Florida.”
“‘Typically with a foreclosure you get served with a complaint, and you have 20 days to answer. Problem is, you can file a motion and it’s not set for 8 months,’ he said. And the courts are overwhelmed and backlogged with cases. ‘There might be 50 lawyers sitting there from 8:30 a.m. to noon – you’ll probably get a minute and a half before the judge,’ said Nordt.”
“Shoddy paperwork, erroneous fees and wrongful evictions are now cropping up among the companies are known as servicers that collect mortgage payments. Some homeowners are mired in delays and confronting the same heartaches, like the peculiar frustration of being asked for the same documents over and over again as the rights to their mortgage changes hands. A Montana couple, Guy and Michelle Herman, thought they had finally won an agreement with their lender to reduce their mortgage bill and save their home after more than three years of fighting foreclosure.”
“A few months later, however, their mortgage modification appeared to have vanished. ‘I feel like we got so close to the dream of keeping our house and suddenly it’s gone,’ Michelle Herman said.”
“The housing bailout is a mismanaged program that has resulted in greater foreclosure rates and increased uncertainty among lenders, according to Avison Young broker Jason Meister. ‘It’s been a colossal failure,’ Meister said of the Obama administration’s home affordable modification program. By forcing banks to modify loans and lower monthly mortgage payments, the government ‘artificially propped up’ the market, a condition that is not sustainable and in reality has led to more foreclosures, Meister added.”
“Ivanhoé Cambridge is dipping its toes in the Canadian condo business for the first time. And it’s doing so in Quebec City, a condo market that economists already believe is oversupplied. ‘Markets in Montreal, Quebec City and Ottawa have been flooded with an overhang of inventory of unsold condos,’ Toronto-Dominion Bank economist Diana Petramala stated in a recent research note.”
“The cost of residential apartments in Kenya appears to have reached the upper turning point as prices of the houses begin to fall. The value of the houses has been on downward spiral in the past months as property developers seek to find market for the apartments that have been costing as high as 176,470 U.S. dollars for three-bedroom homes in high-end estates. Overall prices of apartments since 2001 in Kenya have risen by 2.35 times as at the end of 2013.”
“‘The property market is awash with ready-to-sell apartments, but there are no buyers. Developers are now bringing down the cost as they try to seek buyers and avoid going losses, said real estate consultant Antony Kuyo. Kuyo pointed out a housing development in Nairobi where the developer has built tens of two and three-bedroom apartments, but he has hardly sold even a quarter of them. ‘The developer has put tens of adverts in newspapers and on billboards, but the houses are not going because of the high prices.’”
“Malaysian property prices are beginning to cool as Putrajaya’s moves to curb speculation start to work, according to industry experts. ‘The days of being able to buy a property without putting any money down and, in two years, selling it for a 30 per cent profit - those days are absolutely over,’ Malaysian Institute of Estate Agents president Siva Shanker said. ‘Literally without taking your wallet out, you bought a property, paid nothing until completion and - because the market was rising so fast - as soon as it was completed, you could flip it for a 20 to 30 per cent deal and walk away with money you made out of thin air. The fundamentals cannot hold that sort of growth.’”
“The media reports in cities such as Hangzhou, Suzhou and Xiangyang underscored trouble for a domestic pillar of the Chinese economy — real estate. Real estate demand and prices have been contracting in cities beyond the nation’s relatively wealthy ‘first-tier’ metropolises such as Shanghai and Beijing. In Hangzhou, according to the Securities Times newspaper, housing developers this week cut prices an average 19% in a scramble to sell about 120,000 newly built apartments. The current inventory of new, unsold units exceeds the total number sold last year in Hangzhou.”
“By contrast, the report said, real estate agents were offering a combined 63,000 new homes in Shanghai and 57,000 in Beijing. A recent study sponsored by Shanghai’s Tongji University said real estate markets have been especially shaky in the northeastern city of Harbin, the eastern commercial center of Wenzhou, and the resort town Sanya. New-home prices in Wenzhou have fallen monthly for more than two years.”
“First-home buyers will benefit from a catastrophic collapse in New Zealand’s property market that could see house prices fall by more than 30 per cent in the next few years, American economist Harry Dent has predicted. He said the bubble was being propped up by baby boomers, immigration and foreign buyers, especially from China. ‘China is holding up real estate, especially in Australia and New Zealand, and one of the reasons is the rich Chinese are getting out of the country. I think the world is going to have to go into a crisis to realise that real estate can’t go up forever.’”
“The Reserve Bank of Australia released its Statement on Monetary Policy last week, and it is notably sanguine about both asset prices and private debt. You’d think that there’d be at least some discussion of points that the authorities there now concede are important -such as asset bubbles and private debt growth. But no. The Reserve Bank doesn’t seem to worry about household debt growing from this already record level. Australia didn’t learn from what went wrong in the rest of the world.”
“But then again, neither, it seems, has the rest of the world. As Martin Wolf observed last week: ‘Indeed, it is astonishing how little this crisis has shaken conventional wisdom.’ Indeed. Yet again, we are learning from history that we don’t learn from history.”
“Wells Fargo Bank, the largest mortgage lender in the country, is getting back into the subprime home loan business again. Homebuyers can now get a home loan with a lower credit score. 8 News NOW has learned other lenders in Nevada are also edging back into subprime market. The housing crisis taught us a lot of lessons. Reforms have been made, and new laws are in place. People who don’t have the best credit history will still need a roof to live under, but this time, it will be different.”
“Michele Johnson with the Financial Guidance Center helps people with their housing headaches that began years ago. ‘We see folks who are still trying to deal with it,’ Johnson said, ‘We sort of created this frenzy. Everybody thought they need a home. Prices were appreciating dramatically. And people had the attitude, ‘if I don’t do it today, I won’t ever be able to do it.’”
“The result is more than 300,000 homes in some state of foreclosure – homes and families in limbo.”
If you think of those limbo homes as future Chinese real estate investments, then it won’t seem so bad.
how does 300k homes relate to 1 year of sales in FL ?
If you think of the 300,000 families who haven’t had a house payment in three years, then it seems like a windfall.
My neighborhood (north Orlando) has only two foreclosures (30 homes total). One is on the market, another is vacant but well kept.
Amazingly this is pretty good - most of the neighborhoods have 3-4 homes that are empty, some in major disrepair, some for rest, some for sale. It seems like inventory is slowly building up on the market here, while asking prices are falling back to earth. Both, good things IMO.
300k = one year of sfh sales in FL
http://media.floridarealtors.org/wp-content/uploads/2014/02/Yr-End-2013-Fla-single-family-summary.pdf
“But then again, neither, it seems, has the rest of the world. As Martin Wolf observed last week: ‘Indeed, it is astonishing how little this crisis has shaken conventional wisdom.’ Indeed. Yet again, we are learning from history that we don’t learn from history.”
Best post-fall 2008 financial collapse comment, EVER!
Yes I agree…Last sentence says much…
You couldn’t have a worse indictment of political leadership than that. Australia will pay dearly and so will we.
when looking s from the tr4 bypass the big box homes look like a mirage- no trees
“The result is more than 300,000 homes in some state of foreclosure – homes and families in limbo.”
That’s a drop in the bucket compared to CA that has millions of excess, empty, defaulted and underwater houses. Once the debacle in FL is finally clearrf, attention and work will begin in California on their disastrous state of conditions and massive foreclosure inventory.
Why can’t we ever see these millions of empty CA homes? Where do they hide them all? In plain sight?
They’re all around you filled with squatters.
The only place you will see “….millions of excess, empty, defaulted and underwater CA houses…” is in the empty space of HA’s head.
Foreclosure report:
California (1.25% down from 1.42%) and Arizona (1.12% down from 1.26%) are now far below the national average by every measure.
Foreclosure fact:
Foreclosure moratoriums in all 50 states, including CA have created a backlog of 25 million excess, empty and defaulted houses.
And the number is rising.
‘Perth’s median house price is forecast to hit $600,000 by the end of the year, WA’s peak real estate body predicts. It would give Perth the second-highest median house price for an Australian city – behind Sydney’s $655,000.’
‘UnitingCare West chief executive Sue Ash said 40 per cent of the community earned less than $50,000 a year. “It is absolutely obvious that people on those incomes or less can’t afford to buy a house,” she said. “They can’t even pay rent, let alone save money for a deposit.”
That might stop the flow of South Africans moving there, which gave rise to the saying “packing for Perth.”
‘It is rather amazing that a halving of the annualized growth of the dollar value in real estate sales from a full 19% to a still hefty growth rate of just below 10% is already seen as a sign of incipient trouble and manages to impact confidence. In any case, the astonishing extent of the growth rate late last year is probably indicative of a terminal bubble episode. More than a year ago studies already showed that about one third of Canadians had ‘trouble sleeping’ due to worrying over their personal debt loads. No wonder they are sensitive to the possible demise of the bubble (according to recent data, Canada’s houses are the most overvalued in the world relative to rents – with the overvaluation clocking in at an estimated 80%).’
‘It is of course contradictory to assert in one paragraph that people worry about ‘inflation being too low’ and to state in the next paragraph that they are worried about the ‘reduction in the loonie’s purchasing power’. Which is it? Only one of these statements makes sense, and it clearly has to be the second one. People are hardly worried that prices might not rise, if anything they are worried about the exact opposite: namely that the weaker exchange rate will make imports more expensive (as the Japanese have just found out, inflating oneself to prosperity isn’t all it was cracked up to be).’
‘Perhaps it is just a temporary slowdown, but with bubble conditions as extreme and advanced as is the case in Canada, one must always be alive to the possibility that something more serious is afoot.’
It’s Bigfoot. He moved to Austrailia to become a real-estate scammer. He got soooooo sick of living in caves in the United States. Wanted to be in a place where celebrities aren’t so noticed. Live the chill life. Turn over a new leaf.
‘How China Fooled the World - with Robert Peston’
‘Robert Peston travels to China to investigate how this mighty economic giant could actually be in serious trouble.’
hun-prot-poland stealing private savings accounts- even bigger
You think that isn’t going to happen in China? Why do you think China’s upper class is doing everything they can to get their money, families and selves out of the country? Why are they overpaying for houses in Sidney, Vancouver and the Bay Area. Why are they buying residency visas in those countries and moving their families there?
Because they know that it will be a lot worse than the government forcing private pension plans to buy government bonds. There could be 100% confiscations/expropriations and firing squads.
I agree Colorado…
it will happen here
ask folks what they think about Hungary- blue danube, democracy
,velvet revolution. The poor will vote to take your savings and the pols will appease them ……………unless
we have guns and the europeons don’t
That (savings confiscation) won’t happen here for one simple reason: the USD would instantly cease to be the world’s reserve currency. As long as we are the “safe haven” then we can print away and everyone will accept our paper money. Start confiscating and the capital will flee and the USD will become worthless (as in no one will accept it for payment). The PTB know this very well.
How do you explain the fact that this scenario has never actually played out in the United States? How do explain the disproportionately low tax rate on the wealthiest people here? Even if “the poor” did manage to vote in such a law, wouldn’t “the rich” sue the government and take it to the Supreme Court and win?
zactly
In my lifetime, the Chinese dictators confiscated all personal property, and then sold it back to them while lending them the money.
…. and another touchdown.
“China”? That begins with ‘C’ and that rhymes with ‘P,’ and that stands for Pool!
‘The latest “Chinese Major City Real Estate Market Intelligence report” Released on Feb.17 shows that trade volumes for Beijing’s commercial properties reached 6,908 in January, 2014 and the area turnover stood at 744.3 thousand square meters, with both shrinking by some 40 percent to 50 percent compared to last year. More than 90 percent of the commercial property turnover in 43 major cities in China including Beijing, Shanghai and Guangzhou decreased compared with either last month or the same period last year.’
‘Specifically, according to the data from CRIC research center, trade volumes in the city of Shenzheng sharply declined by as much as 72 percent, followed by Guangzhou, Beijing and Shanghai, which went down by 54 percent, 49 percent and 31 percent respectively, compared with the same period last year. The major cities also suffered serious decline on a month-to-month basis, with sales in Shenzheng dropping most significantly by 51 percent, while trade was also down in Guangzhou by 30 percent, and in Beijing and Shanghai by 16 percent and 28 percent respectively.’
‘The downtrend of the trade volumes of the property market have sparked a heated debate on expectations for housing prices in major cites in China in 2014.’
‘Wang Shi, the Chairman of the Board of Vanke–a giant real estate developer in China– assessed that “the situation is very bad” for housing prices in China in 2014 on his personal account on Weibo, China’s twitter-like social media. Previously, He also warned on his Weibo account to”be careful, this is a signal” in response to the news that Ka-shing Li, Chairman of the Board of Hutchison Whampoa Limited (HWL) had sold all his privacies in Shanghai and Guangzhou.’
‘Li Yang, the Vice President of the Chinese Academy of Social Sciences, has claimed amid the negative predictions for housing prices in 2014 that the relevant financial department has already prepared for the decline of housing prices in the future.’
The Chinese government will control it all, so it will remain perfect!
‘Philippine President Benigno Aquino said there is no danger of the economy overheating, downplaying the risk of asset bubbles forming even as annual growth exceeds 7 percent. The central bank is on guard to contain inflation and asset prices, Aquino said.’
“There’s so much to be done in this country,” Aquino said. “There is demand that still has to be met as opposed to availability of supply,” he said, referring to a backlog of 4 million low-cost houses.’
‘Analysts including Michael Wan at Credit Suisse Group AG are starting to warn of pressures in the economy. The Philippines risks going down the same path as Indonesia two years ago as it delays tightening monetary policy amid surging liquidity growth and rising property prices, Wan said.’
“The Philippines is certainly warming up,” Singapore-based economist Wan said. “If policy makers are not careful, they may run into the same mistakes Indonesia made: keeping policy settings too loose for too long and risk a return to the boom-bust cycles the nation has been known for.”
‘Money-supply growth in the Southeast Asian nation was more than three times that in Malaysia and Thailand, data compiled by Bloomberg show. The surge is not worrisome, and the rate will return to its normal pace of 12 percent to 14 percent this year, central bank Governor Amando Tetangco said this week.’
“We are very proactive; we’re trying to control any speculative activity,” Aquino said yesterday.
‘According to a recent study by Sime Darby Property Bhd and the Faculty of Built Environment of Universiti Malaya, certain groups of buyers interested in strategic areas of Kuala Lumpur, Selangor and Nilai, Negeri Sembilan can have access to houses that are priced at 56 times their household income, and they can afford to spend up to 26% of their monthly household income to service a mortgage.’
‘It must be pointed out that it is only a partial study while the respondents seem to belong to urban middle class families earning relatively high income. Therefore, it could only serve as a reference for certain areas instead of reflecting the whole situation in the country, as the average monthly household income of the vast majority families in the country is unable to reach the level of the survey.’
‘The rising house prices are currently a nightmare for many urban residents. It is understood that it is almost impossible to find houses below RM250,000 in some strategic areas in Kuala Lumpur and Selangor. In Johor Bahru, a single-storey terrace house within 20km of the city centre is priced from RM200,000 to RM350,000, or even higher. The indisputable fact shows that it has become increasingly difficult for average families to buy a house in urban areas.’
‘There are many factors causing house prices continue to rise, including the speculative property bulk buying. According to some in the property industry, some real estate investment clubs have bought the entire apartment or an entire row of residential units while housing developers are happy to offer them up to 20% of discount. Together, they created a false demand to push up prices and mutually benefit from it.’
‘In fact, property in some metropolitan areas might face oversupply in the next two years, together with a series of measures taken by the government to cope with high prices, the domestic real estate market has actually been in worry. Meanwhile, there are different views over whether there will be another wave of bubble in the property market. In any case, we must bear in mind the lessons learned and carefully analyse before making investment to avoid ending up a slave of property!’
Wait. This article is saying that city dwellers can borrow >50x their household incomes to buy a house, but they should “avoid ending up a slave of property”? You can’t avoid something after it has already happened.
‘In Bryan, Effingham and Chatham counties, there were 192 active foreclosure listings in January, its lowest point since September 2008, according to data from the Savannah Multi-List Corporation. However, these figures do not track distressed properties outside the MLS system or shadow listings, i.e. unlisted bank-owned properties.’
‘Industry experts say the inventory has gotten lower, but there’s still a pretty consistent flow.
Joe Drescher, broker-owner of Crossroads Realty said one reason may be that banks are holding onto their distressed properties now that the housing market is rebounding. In other words, they don’t need to get rid of them as fast as before.’
‘Ben Bluemle, owner of Seaport Real Estate Group, said he’d seen a decrease until the last two months, when it spiked back up. He said this could be for a number of reasons, including that banks may not wish to foreclose on properties during the holidays.’
‘He said a reason for the overall decline, especially in bigger markets like Atlanta, Las Vegas and Phoenix, is that hedge fund groups and other private investors swooped in to buy up all the foreclosures and hold them for investment.’
“We never had the really big players like Blackstone come into our market. A lot of our properties are near water, which requires flood insurance,” said Bluemle.’
‘In Savannah, homebuyers can still expect to see foreclosures in the mix. “From what I’m hearing from the banks and investors, it should stay at this consistent flow,” Bluemle said. “The inventory that’s out there is still filtering through.”
‘Drescher said even though buyers are still asking about foreclosures, he always preaches caution. “Just because it’s a short sale or foreclosure, the buyer still needs to do their homework,” said Drescher. “Because it may not be a good deal — it still may be overpriced.”
‘A nationwide analysis from RealtyTrac found that Clark County residents who purchased a three-bedroom home in the final quarter of last year face monthly housing payments roughly 43 percent higher than the same period in 2012.’
‘In a report released Wednesday night, the real estate analytics company from Irvine, Calif., said the increase in Clark County was one of the nation’s highest among 325 counties surveyed. The average increase nationally was 21 percent.’
“A potent combination of rapidly rising home prices and the often-overlooked but significant uptick in interest rates in the second half of 2013 caused the monthly cost of owning a home using traditional financing to jump substantially in many markets over the last year,” RealtyTrac vice president Daren Blomquist said. “The monthly cost of owning a home is still less than renting in the majority of markets, but the cost of financed homeownership is becoming dangerously disconnected with still-stagnant median incomes, driven not by shoddy underwriting practices this time around but by investors and other cash buyers who are not tethered to the typical affordability constraints.”
If an investor or cash buyer feels that he or she is not tethered by affordability constraints, then said fool will soon be parted from said money!
‘During the seven-year stretch from 2006 through 2012, there were 7,767 foreclosure filings at Licking County Common Pleas Court — an average of 1,109 per year. In 2013, foreclosure filings dropped to 662, a 31 percent decrease from 2012 and a 44 percent drop from the peak year of 2008.’
‘The reason for the drop in foreclosures varies widely from one expert to another. Some point to an improved economy, but others claim it’s increased assistance for homeowners on the verge of foreclosure or greater awareness of their options.’
‘New regulations, lenders more willing to modify loan agreements and reliance on short sales are other explanations.’
“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.”
‘Thompson said First Federal and Park National Bank combine for about 60 to 70 percent of the local loan business but only 4 percent to 5 percent of foreclosures. “The last thing we want to do is file a foreclosure action,” he said. “We want to help the borrower resolve the problem. The larger institutions have the lion’s share.”
‘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.”
‘Oregon received a “D” grade for its housing market, according to the Corporation for Enterprise Development. The State’s foreclosure rate is higher than the national average, and is considered to be sluggishly pulling out of the mortgage crisis.’
‘Advocates for at-risk homeowners aren’t surprised by the grade, and they say they will soon be asking the Legislature for more funding on foreclosure mediation. Emily Reiman is with Opportunity Works in Eugene. She says homeowners have been lining up since the counseling program launched in August.’
‘Reiman says some large lenders haven’t even started filing mediation classes yet. Reiman: “Through November and December, counseling agencies started seeing more and more clients, and in January, we’re actually on pace to see as many clients statewide just in this month, as we saw in the entire last quarter of 2013.”
Oregon is a stubborn poverty state. Lots of “left behind” laborers who must rely on the state and feds for their subsistence. Babies come with the scenery.
‘Federally subsidized properties have become a hot acquisition target for investment-minded buyers of Indianapolis homes. One problem: The investor-landlords are increasingly running afoul of the Section 8 program’s strict rules.’
‘The surge in Indianapolis home sales last year to institutional investors — many from out of state and some from abroad — has helped lead to record recoveries of money in fraud cases in a program intended to help low-income families.’
‘In the past 18 months, cash-paying investment groups have bought several thousand homes in the Indianapolis area, trying to create portfolios of rental homes that will generate profits for their investors. Indianapolis is among the U.S. cities where some of the largest home-buying investors in the nation have been most active.’
‘Especially desirable to some of those investors are the 7,000 rental homes in the city with so-called Section 8 tenants. The IHA’s Office of Special Investigations said some of its Section 8 homes are changing hands so fast that it’s having difficulty tracking the owners, especially foreign ones.’
“OSI audits of many Section 8 homes have to date identified many of the concealed owners living in Australia, Canada, Israel, Germany, Hong Kong and Singapore to name just a few,” the report says. “The reality of the situation is the IHA has no way to determine if the alleged overseas investors even exist.”
‘The report also says that “in the past year thousands of single family homes have been packaged and bundled into investment vehicles in much the same way the prior hedge fund properties of the 2001-2007 mortgage fraud crises were created.”
But Section 8 is supposed to help disabled Americans, not wealthy foreigners investing in hedge funds!
‘The prevalence of house flippers has helped drive home sales and is another sign of renewed confidence in the state’s economy and housing market. The Twin Cities metro area, in particular, has been a favorite among investors due to the resilience of the market and the stability of so many neighborhoods.’
‘While there still are plenty of investors prowling the cities and suburbs in search of their next deal, it’s become “extremely hard to get houses and still maintain a modest profit margin,” said David Holm, who flips homes mostly in St. Paul. “We’re just two guys and two hammers.”
‘Instead of spending his time shopping for decent prospects, Holm and his business partner are now working with wholesalers who have access to listings that have never hit the market.’
“This assures us that we can get a house at a fairly decent price,” he said.
‘The demand for rental units peaked nationally in 2012, according to an analysis that will be released Thursday by Canadian Imperial Bank of Commerce economist Benjamin Tal. Toronto hit its pinnacle in 2012, while Vancouver did so last year.’
‘The large number of condos that are still being built in both of those cities will lead to an excess supply of rental units in the coming years…Economists and policy makers have worried that an “increased supply of rental units will flood the market and will lead to a wave of sales by disappointed investors with no bargaining power,” Mr. Tal writes in the report. The Bank of Canada highlighted concerns about the condo market in December when it outlined the key risks to the economy.’
“A sharp correction in the condominium market could spread to other segments of the housing market with stretched valuations, as buyers and sellers adjust their expectations of the future path of house prices,” the central bank warned. “Such a correction could also have significant repercussions on the real economy, since the construction sector is an important component of economic activity.”
‘As housing prices continue to rise in large Canadian cities, nearly a quarter of Canadians plan to use their homes as their primary source of income after they leave the workforce, according to the 2014 Sun Life Canadian Unretirement™ Index. This survey also revealed that 17 per cent do not know if their investment in their home will serve as their primary source of income during retirement.’
‘At the same time, 28 per cent of Canadians expect to be retired at 66. Twice that many (56 per cent) are expecting to work past the traditional retirement age, with 65 per cent citing that they will need to. The average expected retirement age is 66. But among Canadians closest to retirement, those aged 55-65, the average expected retirement age is 67.’
I didn’t realize that a condominium was a rental unit.
‘Speculators in China’s housing market have found a way to go around house purchase restrictions imposed by the government by buying foreclosed properties, the Chinese-language Beijing Daily reports.’
“The government will not check if you are qualified to buy a house in Beijing. As long as you have the document confirming the sales, you can apply for a transfer of the property,” said a woman surnamed Zhang, who told the newspaper that she had discovered this approach five years ago. A local government official confirmed Zhang’s statement, stating that the transfer of inherited or foreclosed properties is not regulated by the purchase restrictions, and that this has become a loophole.’
‘Moreover, foreclosed houses are usually sold at prices lower than the market rate, making them more popular among speculators, the newspaper pointed out. For instance, a three-room house in Beijing was set to be auctioned off for an asking price of nearly 10 million yuan (US$1.65 million) early last year, but the price was lowered to 8.5 million yuan (US$1.4 million) in July because no one bid for it.’
‘The house was eventually sold for 9.28 million yuan (US$1.53 million), and was up for sale a month later, this time with a price tag of 12.9 million yuan (US$2.1 million), the newspaper said.’
Gotta love it. 160K for an apartment, not a house, an apartment in a third world country where white collar college grads make about $1000 a month (if that much).
Compared to the inflated prices in the US, it’s not outlandish at all.
hope it’s on house haters intl !
“Vital Signs: Housing Inventory Remains Spacious”
http://blogs.wsj.com/economics/2013/11/06/vital-signs-housing-inventory-remains-spacious/
Millions of excess, empty and defaulted houses yet housing prices are still fraudulently priced.
Everything has to be a partisan political issue these days. On the one hand, we have people claiming that the housing bailout is a collosal failure because Obama forced banks to reduce principal and give out free houses. On the other hand, we have people saying that all of the bailout money just went to pay the banks’ expenses, making them whole on short sales.
Now which one is it? Did the banks get “forced” into making modifications, or did the banks just get a handout that was sold as a modification program to the general public? IIRC, the entire HAMP was voluntary to begin with. I distinctly remember people on this blog saying that no bank was going to voluntarily modify a loan like that.
I stopped studying the programs because I came to the conclusion that every single one of them was designed to help insolvent banks that should have been broken up or allowed to fail. Any benefit to anyone else was purely incidental.
‘Rental Income Falls 7.6% in Three Months in Blackstone’s First Home Lease Securtization’
‘One of the big risk elements in this deal is that it was sold before anyone in the market has reached “stabilized rentals,” where the portfolio is mature enough that enough of the units have been through a lease expiration or two so that investors have an informed idea of what renewal rates look like.’
‘Notice several things: when I first heard PE investors in this strategy describe their expectations two years ago, they were anticipating only one week of vacancy a year, which is less than 2%. They’ve clearly gotten more realistic. The transaction was marketed with a modeled vacancy rate of 8%, so the 8.3%, which included delinquencies, does not look bad relative to that.’
‘But what the 7.6% fall indicates is that Blackstone is having to cut rents to get renewals. We’d predicted that. Private equity investors were salivating over how tight rental markets were, and somehow failed to factor in that their very conversion of formerly owner-occupied homes into rentals would increase supply and lead to more competitive conditions for tenants, which would show up in higher vacancy rates and/or falling (or at least not rising) rents.’
Last paragraph is a excellent summary Ben…
“somehow failed to factor in”
Yeah, because they are apparently stupid.
Most euphoric greedy people are.
guess what the bama be goona make you pay for next?
http://finance.yahoo.com/blogs/daily-ticker/exploding-student-loan-debt-threatens-the-housing-recovery-132052213.html
And how is he going to raise taxes with a GOP controlled house?
boner will cry and collapse
It’s one thing to accept an increase in the debt ceiling, since the GOP also does borrow and spend. But raising taxes goes against their DNA.
wwwooooooowwwwww.
Santa Maria, CA Housing Prices Dive 14% Year over Year
http://www.movoto.com/santa-maria-ca/market-trends/
The indigenous population of Santa Maria has little economic power, and most would find it extremely difficult to honestly service an $80k mortgage. That these peeps are entering into $375k+ mortgages is fraudulent.
“By forcing banks to modify loans and lower monthly mortgage payments, the government ‘artificially propped up’ the market, a condition that is not sustainable and in reality has led to more foreclosures, Meister added.”
That’s devaluation for you when you just start giving things away all willie nillie.
When your life in CA. is reduced to a 5 X 3 screen you get what you deserve.
housing bubble history-please edit
1987 to 1990
2003 to summer 2005
2010 bama tax credit bump - 5 months?
2012 to spring 2014
Suppose the current bubble in most developed countries is all caused by the Chinese?