You Never Hear About The Houses That Don’t Sell
It’s Friday desk clearing time for this blogger. “Casey Bui, managing broker at Rockwell Realty said the inventory is so tight in some areas that he’s seen houses sell for $100,000 over their list price in close-in Seattle neighborhoods like Capitol Hill and Madison Valley. Brokers are supposed to list property at fair-market value, he said, so it’s hard to see how lenders would approve financing deals so far above list price. ‘Just on the face of it,’ he said, ‘it makes you think, ‘Bubble.’”
“Sales of single-family homes in Salt Lake County fell 4 percent in the first quarter, the first decline in five years in year-over-year quarter listings. But a surge in home building shows a market in good health. The improvement in the market was the main reason Sandy resident Kim Crook, chose to put her family’s home up for sale. ‘We bought this home nine years ago when the market was at its peak, (then) the market definitely took a turn for the worse,’ Crook said. They have had plenty of interest in the two weeks it has been on the market, she said, but no offers yet. ‘We’ve had a ton of traffic come through,’ Crook said. ‘So (we’re) just waiting for an offer.’”
“Halfway through the traditionally booming spring selling season, home sales here have disappointed, dropping for the fourth month in a row, year-over-year listing data for April show. With investor activity slowing and short-sale bargains drying up, real estate agents said Tampa Bay housing’s weaknesses are beginning to show through. Some sellers also have unrealistic expectations of what their homes are worth, due in part to last year’s run up in prices thanks to so much investor activity. But with fewer cash deals, more sellers must rely on traditional buyers, whose lender influences how much the buyer can spend and can easily spike a deal. ‘Sellers are starting (their prices) a little high because the market climbed and they’re trying to continue that trend,’ Charles Rutenberg agent Michele Brigandi said.”
“Nashville-area home closings fell slightly in April for the second straight month, but the Greater Nashville Association of Realtors says it’s not time to hit the panic button yet. ‘Inventory is at its highest point since November of last year and is in the fourth month of an increase,’ said GNAR’s President Hagan Stone.”
“Many local realtors will join others from across the country in Washington next week in meetings with Congress to urge that body to make decisions to support and protect home ownership. ‘Even with an improving market, there’s still significant concern about potential legislative decisions impacting the housing market,’ said Stone. ‘The wrong decisions could easily have a major negative impact on the overall market in a very short time.’”
“Realtors rallied at the State House yesterday to bring attention to five pieces of proposed legislation they say would reverse gains in the housing market and could result in the loss of 2,000 jobs. ‘Right now we’re in the midst of a nice up tick in homes,’ said Susan Arnold, chief executive officer of the Rhode Island Association of Realtors. ‘We don’t want to cripple anything.’”
“Bruce Lane, broker owner of Williams & Stuart Real Estate with offices in Warwick, Cranston and Pawtuxet Village, is especially concerned by Senate bill 2409, which would change the status of independent contractors. If enacted, the bill would define brokers as employees subject to payroll taxes, disability insurance and Workers Compensation. Lane estimated of the state’s 4,000 real estate brokers about half would lose their jobs. ‘This is such a scary bill on such a fragile economy,’ he said.”
“Two weeks from now, Bryce and Ashlee Collins are likely to be the terrified owners of two homes. One is the three-bedroom Etobicoke backsplit they bought last month and where they plan to raise their six-month-old son. The other is the detached house they’ve renovated over the last four years in up-and-coming Little Portugal. It’s been on the market for a month now without an offer. The Collins are panicked, living proof of the vagaries of the Toronto real estate market. ‘My wife and I consider ourselves somewhat knowledgeable about the real estate market, but we were not mentally prepared for this,’ says Bryce. ‘All you hear about are the bidding wars but, as two agents have said to us: ‘You never hear about the houses that do not sell.’”
“Consumers are being warned to avoid risky home loans that could see them or their families left homeless. Family guarantees, which allow a borrower to use a family member’s home as collateral, could see both the borrower and their relative lose their homes if repayments are not met. ‘We’re only six years from when poor lending practices dropped us into the global financial crisis and now these loans seem to have found their way back into the mix,’ said Consumer group Choice spokesman Tom Godfrey.”
“The Australian Prudential Regulation Authority has previously expressed concern about relaxed lending practices. But Mr Godfrey said risky products were still being seen across the market, particularly among second-tier lenders. Principal solicitor at the Consumer Credit Legal Centre Katherine Lane said borrowers could face bankruptcy if they could not meet their repayments, while family members who act as guarantors could lose their house, too. ‘The lenders can sell whichever house they want to, so if one house is hard to sell, they’ll want to sell the other and it’s possible the guarantor could lose their home first,’ she said.”
“Most Swedes with a home mortgage are doomed to die before repaying their debt, according to a study published by Sweden’s central bank. The study revealed that the debt of 25% of them grows every year, while for 15%, their debt stays the same year after year. The remaining 60% pay back their mortgages at a very slow pace. ‘If the borrowers who have reduced their debts over this period continue to reduce these debts at the same rate, on average they will be free of debt in about 100 years,’ according to the calculations of central bank economists Jakob Windstrand and Dilan Oelcer.”
“Needing cash after his divorce, longtime Mariners Harbor resident Tony Wong decided to refinance his home. But instead of boosting Wong’s financial bottom line, the move ended up draining his bank account and burying the school safety officer in debts exceeding $660,000. Wong is fighting back with a federal lawsuit. ‘I was tricked. Honestly, that’s how I feel,’ Wong told the Advance. ‘It was a nightmare.’”
“The interest rate was 11.075 percent, with monthly payments of about $3,750, including principal, interest, tax and insurance, said Wong’s court filings. He believed he could pay the higher rate by tightening his belt and dipping into his savings, then refinance again in a year. Despite a shaky credit rating, Wong said he was told he wouldn’t have a problem. Wong paid the new rate for the first six or seven months, before he depleted his savings and the bottom fell out, his filings contend.”
“Elizabeth M. Lynch, a lawyer for the Manhattan-based nonprofit MFY Legal Services, which is representing Wong, said he sought a loan modification without success. He now owes more than $663,000 and his home’s current market value is only $345,000, according to court filings and online city Finance Department records. ‘There’s no way he can refinance now because the debt he owes is so high,’ said Ms. Lynch.”
“There are those on Wall Street and in the plutocracy who feel that Timothy Geithner is a hero who deftly steered the country from economic ruin. To many ordinary Americans, however, he is considered a Wall Street puppet. ‘I did not view Wall Street as a cabal of idiots or crooks,’ he writes in ‘Stress Test.’ ‘My jobs mostly exposed me to talented senior bankers, and selection bias probably gave me an impression that the U.S. financial sector was more capable and ethical than it really was.’”
“For much of the past five years, Geithner has publicly been fighting with the idea of too-big-to-fail. Geithner and Obama marketed the Dodd-Frank bill as a way to end future bailouts. In 2010, right before the bill passed, Geithner said, ‘The reforms will end too-big-to-fail.’ Obama went further: ‘Because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more tax-funded bailouts, period.’”
“But it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away. During his lecture, one student asked a question about a provision of the reform laws that is supposed to let the government wind down a complex financial institution without creating a domino effect. The question prompted Geithner onto a tangent about too-big-to-fail. ‘Does it still exist?’ he said. ‘Yeah, of course it does.’ Ending too-big-to-fail was ‘like Moby-Dick for economists or regulators. It’s not just quixotic, it’s misguided.’”
“Geithner paused for a moment. ‘Can you design a system ever that allows you to be indifferent to the failure of any institution, in any state of the world?’ he asked aloud before answering his own question. ‘You can design a system, and I think we have, that allows you to be indifferent in most states of the world: the five-year flood, the 15-year flood, the 30-year flood, maybe even the 50-year flood,’ he said. ‘But there are constellations of storms, of panics, of fires that are so bad that it’s very hard to imagine that you could be indifferent to the failure of the financial system.’”
Encinitas, CA Housing Prices Plunge 12% As Demand Craters
http://www.movoto.com/encinitas-ca/market-trends/
San Leandro, CA(SF Bay area) Housing Demand Craters 22% YoY; Near 6 Year Lows
http://www.zillow.com/local-info/CA-San-Leandro-home-value/r_13698/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D13698%26el%3D0
While I will agree there is a housing bubble forming, your posted link about cratering housing demand in San Leandro is misleading. I am a local appraiser and can tell you that the drop in sales volume is due to a lack of available inventory, not a drop in demand.
‘the drop in sales volume is due to a lack of available inventory’
Two things; mortgage origination is really low. Every month thousands go from owning to renting, on a net basis. And that’s been the case for years.
The second is, what is the meaning of this “no inventory” stuff, in every little town or big city, all across the US at the same time? I’ve posted stories of it in Omaha Nebraska, (multiple offer, bidding wars, etc, etc), to Iowa, Oregon, any place you can name. In the space of a few years, we’ve gone from glut to shortage. How come the media doesn’t ask, how can this be at the same time, all over the country? And especially considering that people are leaving the owning thing in droves.
The second is, what is the meaning of this “no inventory” stuff, in every little town or big city, all across the US at the same time?
That’s easy, Ben. Potential sellers fall into many categories; a few of the buckets that might have sold in the past currently aren’t selling:
- People who are underwater can’t sell. When they were deeply underwater, they would walk. Now that they are much less underwater, and see the recent (manipulated) trend-line, they choose not to sell. After all, they think they’ll be above-water soon, right?
- People who have seen their valuations go up at astronomical rates don’t want to sell; from their POV, if the trend-line continues, it would look like they would be better off waiting another year, right?
And the disposition of the 25 MILLION excess empty houses?
“I am a local appraiser”
…speaking of misleading.
I’ve heard this lack of inventory tripe more than I can hardly stand. I can drive people up and down almost every street in town and point out vacant homes which sit and rot. There is a concerted effort to hide a rotting elephant carcass under a rug. Nothing more.
Irvine, CA Rental Rates Crater 10% YoY; Rental Inventory Balloons
http://www.zillow.com/local-info/CA-Irvine-home-value/r_52650/#metric=mt%3D46%26dt%3D1%26tp%3D4%26rt%3D8%26r%3D52650%26el%3D0
Torrance, CA Housing Prices Sink 5% YoY; Inventory Skyrockets 47%
http://www.movoto.com/torrance-ca/market-trends/
Moorpark, CA Housing Prices Collapse 33%; Inventory Climbs
http://www.movoto.com/moorpark-ca/market-trends/
Seal Beach, CA Housing Prices Collapse 23% YoY As Inventory Explodes 83%
http://www.movoto.com/seal-beach-ca/market-trends/
“Most Swedes with a home mortgage are doomed to die before repaying their debt, according to a study published by Sweden’s central bank. The study revealed that the debt of 25% of them grows every year, while for 15%, their debt stays the same year after year. The remaining 60% pay back their mortgages at a very slow pace. ‘If the borrowers who have reduced their debts over this period continue to reduce these debts at the same rate, on average they will be free of debt in about 100 years,’ according to the calculations of central bank economists Jakob Windstrand and Dilan Oelcer.”
Bahahahahahahahahahaha. You can’t lose with the stuff I use.
They work, I reap. And for how long can this go on? A hundred years, maybe?
Bahahahahahahahahahahahaha.
People are smart.
Bahahahahahahahahahahahahahahahahahahahhahaha …
The remaining 60% pay back their mortgages at a very slow pace. ‘If the borrowers who have reduced their debts over this period continue to reduce these debts at the same rate, on average they will be free of debt in about 100 years,’
Game, set, match—to the banksters.
People are smart.
“But it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away.”
Gotcha!
Once again, you can’t lose with the stuff I use.
thank you for allowing me to refi my used car !
“But it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away.”
The very constitution of the Fed seems predicated on the notion that the banking system will somehow function better if you have a bailout agency with waiting in the wings with rescue authority to externalize the cost of rescuing the banking system across the entire monetary base, thereby relieving the banking industry of self-insuring against financial panics.
Geithner has a book coming out, I see. And yesterday I read a report that Bernanke will receive a $1 million advance for what no doubt will be his own self-serving epic.
His job gave him exposure to “talented senior bankers”? Jesus, enough already with the sycophancy. Why does Geithner still feel the need to ingratiate himself with these individuals? He was exposed to people who operate large-scale criminal enterprises, and he acted in their interests and not in the interest of the country. That’s all.
He and his peers were, and still are, enormously indifferent to the failure of every civil and social institution other than the banks that make up his constituency. Disgusting.
RE taxes up 7.2% to kill off recovery in fx area of VA.
Taxes rise RE market dies”
No dollar shall be allowed to escape.
There are many that have an interest in high RE prices and few that have an interest in low RE prices so high RE prices is what you end up with.
Even some of the ones who should have an interest in keeping RE prices low - the home owners and the home buyers - are rooting for high prices even though the high RE taxes they have to pay are based on these high prices.
It doesn’t much matter who you’re “rooting” for. Stick with the fundamentals
-massively inflated yet falling housing prices
-massive housing inventory and growing
-collapsing demand as a result of grossly inflated asking prices
-substitution cost(rent) a small fraction of the cost
Even some of the ones who should have an interest in keeping RE prices low - the home owners and the home buyers - are rooting for high prices even though the high RE taxes they have to pay are based on these high prices.
Limousine lieberals swill Chardonnay at cocktail parties while lauding themselves for their progressive efforts to help the poor and downtrodden. Then they go back to their million dollar homes and do everything in their power to make sure housing prices stay high.
Crony capitalist conservatives do the same, they just skip the hypocrisy about the poor and instead discuss ways to get sweetheart deals from Govt while drinking scotch and meeting at the club.
Limo$hitLibs and CronyCONservatives…. two cancerous communist hemmroids on the same dying carcass.
“Bruce Lane, broker owner of Williams & Stuart Real Estate with offices in Warwick, Cranston and Pawtuxet Village, is especially concerned by Senate bill 2409, which would change the status of independent contractors. If enacted, the bill would define brokers as employees subject to payroll taxes, disability insurance and Workers Compensation. Lane estimated of the state’s 4,000 real estate brokers about half would lose their jobs. ‘This is such a scary bill on such a fragile economy,’ he said.”
Bottom line:
If these “independent contractors” become “employees” then this Bruce Lane guy will have to spend money on them, but if they remain as independent contractors he won’t; Instead all he will have to do is continue to wait around and get a cut of what commissions they earn.
Which, in a way, is what I do.
“Sales of single-family homes in Salt Lake County fell 4 percent in the first quarter, the first decline in five years in year-over-year quarter listings.”
I mentioned earlier this year that three households from among our family’s close relatives (siblings / first cousins) had homes on the market. If any of those sold, the news has somehow remained secret.
As of the past month, a fourth data point was added to the sample, as my inlaws, who live just to the north of SLC, put their home on the market with a plan to sell the place they have lived in for the past decade and downsize to a smaller place ten miles north where they would be closer to their kids.
Two weeks later, the plan was scrapped, when they learned the home would not appraise for anywhere near the sale price they had in mind.
I was out there last year for the first time and was dismayed by the suburban sprawl, although Salt Lake City itself was surprisingly hip. I also was told never to give directions using “the temple” as a reference point, because there are so many.
It’s one of the few places where I will excuse larger houses, because many families are large. It was not uncommon to see a couple that appeared to be in their thirties with five or six kids in tow.
“Family guarantees, which allow a borrower to use a family member’s home as collateral, could see both the borrower and their relative lose their homes if repayments are not met.”
Double bonus for Mr. Banker!
“Double bonus for Mr. Banker!”
There it is!
You can’t lose with the stuff I use.
“‘You can design a system, and I think we have, that allows you to be indifferent in most states of the world: the five-year flood, the 15-year flood, the 30-year flood, maybe even the 50-year flood,’ he said. ‘But there are constellations of storms, of panics, of fires that are so bad that it’s very hard to imagine that you could be indifferent to the failure of the financial system.’”
The way the Fed has operated in recent decades, 50-year-floods have occurred at 5-year frequency.
And the next flood is likely to be Biblical. There won’t be any room on the Fed’s ark for us.
‘All you hear about are the bidding wars but, as two agents have said to us: ‘You never hear about the houses that do not sell.’”
FOOLS !! Strip them of their company blazers and show them the door !!
I can point to several in this very neighborhood. And why did these houses fail to sell? Because they were overpriced, that’s why.
“Needing cash after his divorce, longtime Mariners Harbor resident Tony Wong decided to refinance his home. But instead of boosting Wong’s financial bottom line, the move ended up draining his bank account and burying the school safety officer in debts exceeding $660,000. Wong is fighting back with a federal lawsuit. ‘I was tricked. Honestly, that’s how I feel,’ Wong told the Advance. ‘It was a nightmare.’”
“The interest rate was 11.075 percent, with monthly payments of about $3,750, including principal, interest, tax and insurance, said Wong’s court filings. He believed he could pay the higher rate by tightening his belt and dipping into his savings, then refinance again in a year. Despite a shaky credit rating, Wong said he was told he wouldn’t have a problem. Wong paid the new rate for the first six or seven months, before he depleted his savings and the bottom fell out, his filings contend.”
I suppose there are some folks on this message board who will try to blame honest folks such as myself for Tony Wong’s pain and agony but ask yourself this question:
“Just who was it that came through the door and sat down in front of the banker’s desk and chose to place his binding signature on every sheet of paper the banker set before him?”
“He believed he could pay the higher rate by tightening his belt and dipping into his savings, then refinance again in a year. Despite a shaky credit rating, Wong said he was told he wouldn’t have a problem.”
Did any of these “I’ll be able to refi later” geniuses ever think to get the promise in WRITING? Seriously, I thought that was one of the things that non-lawyers knew about the law - that a smile and a verbal promise are worth what they cost you (nothing), but you always ask for a promise in writing and if the other guy says no, then you run in the other direction without signing on the dotted line.
We have messed with the primal forces of nature… One such primal force is the value of written promises also.
‘Having just returned from a trip to China with the Greater Concord Chamber of Commerce I am still trying to digest it all. One night we came out of a show in Shanghai, and I saw a convoy of 24 cement trucks rolling down the street. It dawned on me that I had not seen any during the day. Nor had we seen garbage trucks. So many Chinese are getting cars, and despite massive road-building projects, much of the commercial traffic is mandated to travel at night.’
‘We saw so much construction – not only housing, but roads and all kinds of infrastructures. Some Australian businessmen told us that construction is between 20 and 22 percent of the economy, and it is in a serious bubble, but if China cut public and private construction back 50 percent, it would throw 20 million out of work and put the country in recession. (The Chinese hold $1.3 to $1.4 trillion of our treasuries, so if they were forced to liquidate those to raise cash, it would not be pretty.)’
‘Beyond construction, which was going around the clock, the general pace of business activity was impressive. The Maglev train cost $10 billion and goes 18 miles from downtown Shanghai to the airport. It can’t reach maximum speed because there is not enough track to slow down. It is German engineering, but not even Germany can afford it. We were told it requires $6,000 in electricity per hour to run it.’
‘We brought paper masks, but we did not use them. We encountered yellow “fog” almost every day. I do not suffer allergies typically, but my eyes watered and my throat was scratchy. Others experienced more distress.’
‘On our last night in Shanghai, it rained, and the winds blew. The next morning, my son and I got up, opened the draperies in our eighth-floor room and about 10 to 12 miles out we could see hundreds of factories and smokestacks. They were the first ones we really saw. They burn a lot of soft “brown” coal, and thus the U.S. Chamber of Commerce only does its trips in April and October because it is too hot in the summer and too cold in the winter.’
‘Chinese iron ore futures fell for a second day to a six-week low on Thursday on reduced buying interest from steel mills in top consumer China due to tight credit and high port stockpiles.’
‘Chinese banks have slashed credit to the steel sector on concerns about increasing default risks and record-level port stockpiles.’
“We have found it difficult to sell this week, and there are even no inquiries right now,” said an iron ore trader in Beijing. “Steel mills are pushing to lower buying prices but we can’t sell too low…”
‘On April 30, the World Bank International Comparison Program (ICP) released its latest report. The ICP said that China may overtake the U.S. in 2014 as the world’s largest economy. However, Chinese Communist Party (CCP) knows the truth of its embarrassing financial situation. Scholars say that China has made its Gross Domestic Products (GDP) figures too high; The reality is that all industries are facing a difficult time, the economy is affected by inflation and housing bubble crisis.’
‘As the U.S. has consistently remained the world’s largest economy for 140 years, the CCP questioned itself whether its economy is as good as expected. On May 1, Xinhua News Agency published a brief comment warning that China’s economy should be alerted to “fake fat”.’
‘Xie Zuoshi, Professor at Zhejiang University of Finance and Economics: “Calculating the market exchange rate, China’s GDP is far behind the U.S., maybe 60%. To base information on Purchasing Power Parity, China’s GDP would be overestimated. China has cheap labor, and to overtake the U.S. this year is a bit exaggerated.”
‘The Wall Street Journal Chinese website cited Stephen Schwartz, formerly of the International Monetary Fund. He said that “You’d expect countries with more people to have bigger output. In per capita terms, China is still very poor.”
‘Xie Xuoshi: “Let alone per capita, the total amount of GDP in China is still far behind. The current Chinese economic difficulties were caused by its improper stimulation implemented earlier. Now facing the pressure of economic sliding, the more stimulation, the worse the outcome. I think the bubble will burst this year and China’s housing market certainly will be reduced. The bailout of the market cannot control the declining trend. If the GDP is reduced too much, the unemployment will increase, more social unrest will also take place.”
‘Netizen “helikanfeng” said: “To drain the pond to get all the fish, is not worth of showing off.” Netizen “Linlin L1982” questioned: “Do you know where China’s GDP come from? Cheap resources! Cheap labor! After they got foreign currency from these channels, they created the real estate bubble.”
‘Mr. Zheng, China-based investment expert: “We all know the figures are unreal. There are a lot of problems in reality, every industry faces bad situations. Per capita tax burden increases every year, per capita income is reducing every year, but the price index exceeds officials’ estimates each time. Real estate and other markets face problems of decline. Some people get rich, which created a huge wealth gap.”
‘Zhang Ping, China-based financial commentator wrote an article questioning “China GDP is said to be at the top of the world. Who feels embarrassed?” He said that because China’s current economy faces many difficulties, the economic reform has got into deep water,. Suddenly it was putting on inaccurate data and a crown, it is nonsense.’
‘Zhang Ping said that snce the CCP rejected taking the crown of the world’s largest economy, the international communities view is that the CCP doesn’t want to take international responsibility for the economy. He said when the CCP needs to obtain interests, it has a habit of sitting in the front row, requesting a large country’s seat; When it is time to take international responsibility, it hides in the back row. Then asking the international community to treat it as a developed country, and needing help and a favor.’
‘(The Chinese hold $1.3 to $1.4 trillion of our treasuries, so if they were forced to liquidate those to raise cash, it would not be pretty.)’
We’ve been worried about the great Asian liquidation sale of U.S. Treasurys for over two decades, already, and I expect the worries to continue for quite a while longer.
If information from the government in China is BS, then how do you know they have these US Treasuries? They might have sold them to the Fed and we wouldn’t know. They might have borrowed trillions from the Fed and we wouldn’t know.
‘They might have borrowed trillions from the Fed’
This is interesting:
‘Do you know where China’s GDP come from? Cheap resources! Cheap labor! After they got foreign currency from these channels…’
When the globalist handed currency convertibility to the chicoms, it allowed them to print a US dollar equivalent. Imagine how they must have been overjoyed! A bunch of thugs whose families raised pigs or worked in the fields, and now they could create trillions out of thin air. And they did; $15 trillion since 2008. And they don’t even hide the fact the upper echelons of the CCP are billionaires. We are told it’s from all those factories and the stuff at Walmart. Then why the bubble? Why the empty cities? IMO China is the biggest fraud in modern history. Like this article says, look at how they scurry away when someone says they are the leading economy. The people in China are thinking, how come I’m still sleeping on a pile of rags?
“China is the biggest fraud in modern history.”
+1 and amen.
When I was a young pup studying economics at the University of Michigan, I had a prof who was a world-renowned expert on the Chinese economy.
He told us that one of the biggest challenges of his field was teasing the real truth out of the data that the State Statistical Bureau supplied. And that was back in the 1970s.
I’m sure China has refined its ability to hide the truth since the 70s. Even if they have close to 7% growth as reported, when 20% of GDP is malinvestment (to fabricating a number HA style) the growth is not doing them any good
“The people in China are thinking, how come I’m still sleeping on a pile of rags?”
In all fairness, there are people across town from us in San Diego asking themselves the same question right about now.
If the Chinese were to sell the U.S. Treasurys they hold the value of the Yuan would skyrocket, and the Chinese economy would collapse. They don’t have a choice but to keep buying Treasurys because that’s how they maintain their trade surplus. Once they stop the whole house of cards collapses. Even Toyota can barely make it unless the Yen is kept weak, and Japan does that by buying U.S. bonds as well. China and Japan and Korea would do the U.S., and American businesses, a favor by selling, but they can’t compete unless they have the advantage of a cheaper currency.
‘the value of the Yuan would skyrocket’
I’m not buying it. This is part of the “story” that I am seeing holes in more every day. Look at what happened when China recently loosened control over currency rates; crater. What is the strength of this Yuan? A bunch of colored paper with pudgy party bosses on it? What is the trade secret of China? Working poor people like dogs and stealing their land? Polluting the planet to where they can’t even see the factories belching smoke?
How smart do we think a US businessman is who builds a condo tower that sits empty? These clowns build entire cities, with roads and malls, and end up with a few cats walking around. It’s obviously done to enrich the government henchmen, not because there is a profit to be made selling houses.
Yet how are they portrayed in our own media? Man, look at that snazzy suit! These crafty Chinese have so much money, they’re gonna own us all before long. Better put up houses in Orange County so they can’t see the front door from the kitchen, or some baloney like that. Oh, please buy my crap shack Mr Wong, we too poor in the US, save us!
It’s the globalist that want us to believe this crap.
“They don’t have a choice but to keep buying Treasurys because that’s how they maintain their trade surplus.”
The symbiosis rules them!
but if China cut public and private construction back 50 percent, it would throw 20 million out of work and put the country in recession.”
I read Chinese construction companies are building all over the world.
One company bored the tunnels in Israel, they are building infrastructure in Africa. How long before they build factories in San Jose CA? Freeways in Washington DC ?
The US did the same thing with Dams back when we were a world power.
“How long before they build factories in San Jose CA? Freeways in Washington DC?”
California Turns To China For New Bay Bridge
http://www.npr.org/2011/09/16/140515737/california-turns-to-china-for-new-bay-bridge
‘It’s one of the dirty little secrets of the now fast fading foreclosure crisis. Some homeowners have managed to hang on, sometimes for years, despite having fallen behind on their mortgage payments or frankly having stopped paying altogether.’
‘Zuddenly banks in Massachusetts are lowering the boom on homeowners who have fallen behind on their mortgage payments, a new report out this morning shows.’
‘Lenders ramped up foreclosure activity in March, filing 660 court petitions to repossess homes across the state, The Warren Group, publisher of Banker & Tradesman and a real estate and mortgage data firm, reports this morning. That represents a more than 133 percent increase over March of 2013.’
“With much of the foreclosure crisis behind us and foreclosure procedures well documented, lenders may be getting more aggressive with delinquent borrowers,” said Warren Group Chief Executive Tim Warren in a statement. “The number of foreclosure starts in March may seem as though the floodgates were opened, but the number is nowhere near the levels reported during the recession.”
“Some homeowners have managed to hang on, sometimes for years, despite having fallen behind on their mortgage payments or frankly having stopped paying altogether.’”
I like to think of this as a holding action. They hold the property and maintain the property until such a time I choose to repossess.
BTW, I am especially amused by the term “homeowners” as it is used here.
(chuckle)
One has to wonder whether the foreclosure backlog in many states will spill over into the next recession, whenever that happens.
It’s all happening …. Now.
I think banks see sputtering price appreciation as a cue to dump the rest of the inventory before it’s too late. They’ve done a masterful job thus far trickling these houses out piecemeal for a few years. Just slow enough to not be a drag on prices and allow cash buying investors to take on the risk.
‘Metro Manila’s high-rise residential property market is showing signs of a slowdown, due mainly to the massive supply of affordable residential units, said experts from property consulting firm Colliers International.’
‘The high-end residential sub-segment, however, remains robust as new supply was just matching demand, Julius Guevara, director for research and advisory at Colliers International Philippines, said in a briefing.’
‘For the first quarter, Guevara reported that sales takeup at the primary market for high-rise residential units slowed down by 12 percent year-on-year. The overall picture, Colliers Philippines managing director David Young said, was that the Philippine real estate market was well into the second decade of a “prolonged” expansion.’
‘In the commercial sector, he said growth had been sustained in the last three to four years but developers were still not building enough commercial space to accommodate demand from the office sector.’
“This contrasts with the emerging situation in residential sector,” Young said, noting that developers have tempered new launches after realizing they had ramped up inventory too quickly.’
Who is buying luxury high-rises there? Chinese “businessmen”? I had a friend who worked in Manila about 15 years ago; at the time he reported that the kidnapping and ransom of wealthy Chinese was a cottage industry.
http://www.nytimes.com/2003/01/28/business/in-manila-kidnapping-as-a-business-expense.html
“For this city’s affluent ethnic Chinese business executives, kidnapping has been a fact of life — an almost ritual form of extortion.”
‘Real Estate Research firm, Housing Data Centre is questioning government’s definition of affordable housing after its new survey revealed about 85 percent of Ghanaians cannot afford to buy a house.’
‘The survey found that worsening economic conditions have shot up prices of homes with workers earning salaries below four thousand cedis unable to buy a one bedroom house on the outskirts of Accra.’
‘According to the report, during the first quarter of 2014, housing prices experienced an overall hike of between 18.5% and 25%.’
‘A year ago in the Dawhenya District of Tema, a two bedroom semi-detached and three bedroom-detached houses were sold for USD 66,500 and USD 87,000 as compared with the first quarter of 2014, selling at USD85, 000 and USD 105,000.00 – an increase of 23.5% and 19% respectively.’
‘Again, in the Kasoa area of the Central Region, a two bedroom semi-detached and a three bedroom detached houses which went for USD35,000 and USD 55,000 during the first quarter of 2013, were being sold for USD 42,000 and USD 66,000 respectively in the first quarter of 2014.’
‘Clearly, access to a decent residential housing property in Ghana is gradually and on daily basis becoming more and more difficult for the average Ghanaian worker.’
‘A year ago in the Dawhenya District of Tema, a two bedroom semi-detached and three bedroom-detached houses were sold for USD 66,500 and USD 87,000 as compared with the first quarter of 2014, selling at USD85, 000 and USD 105,000.00 – an increase of 23.5% and 19% respectively.’
How much does the average Ghanaian worker make? $300 a month? I’ll bet this houses are out of reach of even white collar Ghanaians. 100K would be reasonable for the average US wage, I’m sure Ghanaians are paid far less.
It’s a bubbly world after all!
It’s a bubbly world after all!”
Look’s like Thomas Piketty nailed it, Capital is king and labor falls behind.
look at the different ways we tax capital and labor here in the states.
Most of us here probably don’t need a hit book to tell us this though.
‘For institutional investors, Chicago’s housing market just isn’t as desirable as it was a year ago. Rising home prices, along with a decline in foreclosure activity, is shrinking the number of local homes purchased by deep-pocketed institutional investors that turn the properties into rentals.’
‘That slowdown may be welcome to homeowners and local governments, which have fretted about the arrival of absentee owners, but the purchases have helped push up local home prices. In August, President Obama praised the idea of investors rehabbing homes and putting them up for rent as a way to increase neighborhood property values.’
“Investors made up a big part of the demand for housing in 2013,” said Geoff Smith, executive director of the Institute for Housing Studies at DePaul University. “That’s a big reason why prices jumped as much as they did. If they exit the market and no one comes back, that would mean the price growth would not be as dramatic as it was in 2013.”
‘A report released today by the Haas Institute for a Fair and Inclusive Society confirms something that won’t surprise many of us: the housing crisis is far from over in Milwaukee…This issue is a very personal one for me. After losing nearly everything in the economic collapse, my husband and I struggled over the last several years to stay in our home. Though we’ve been able to modify our loan, our home is still significantly underwater. Sadly, in the post-collapse economy home ownership is no longer an asset builder for millions of Americans.’
‘I was drawn to the report because of my own struggle, but I was shocked to see that the 53218 zip code where I grew up and where my parents have lived for nearly 25 years has the highest percentage of homes underwater. In 53218, 54 percent of homes were underwater at the end of 2013. This is heartbreaking!’
‘We don’t have to continue to sit back and watch our community’s ability to build generational wealth completely disappear. The Wisconsin Idea demands that our elected officials explore all options at their disposal to more effectively address Milwaukee’s housing crisis. In the end, we cannot begin to address the impacts of segregation and poverty, without addressing the nearly 40 percent of homeowners that are underwater in Milwaukee.’
‘Rob Thomas spokesperson for haart estate agent added: “Only London-centric commentators believe there may be a housing bubble expanding in the UK. But what’s the true story away from this Monte Carlo-on-Thames of prime Central London? According to our own national data, prices are still not recovered to their peak 2007 levels. The national average property price released by Halifax today is still well below 2007 levels.”
“While London’s strong recovery has brought prices to within a whisker of the previous peak, the idea of a bubble must seem like a bizarre joke to anyone who bought a house in 2007 in much of the rest of the country. House prices are 18 per cent off their peak in the North and a massive 53 per cent lower in Northern Ireland.”
‘Oliver Atkinson, director of online estate agents said: “There was a time not long ago when two successive month-on-month falls in house prices might have caused the market to pause for thought. Not now. This modest dip will have as much impact as the addition of a pair of furry dice to a Saturn V rocket. A mild encumbrance but nothing that will halt levels of confidence that are fast approaching the stratospheric.”
‘Peter Rollings, CEO at Marsh & Parsons, said: “There has been much talk of whether or not there’s a bubble in London. It’s true that prices rose more rapidly than I’ve ever seen in the first three months of this year. Prices rises are slowing now, thank goodness, but bubbles by definition pop and with the supply/demand ratio still out of kilter I don’t see that happening here. At long last, there is more property coming onto the market, but there are still almost 50 per cent fewer properties available than in 2007, so there is still plenty of slack to be taken up.”
“Thanks to a greater supply of property coming onto the market, the ratio of buyers per property has shrunk from around 24 buyers per property in January, to around 18 at the end of April. This is partly due to some portfolio and accidental landlords deciding to cash in by selling their properties, following several years of excellent capital growth.”
….with fenders flappin’ and roof deck collapsin’
“Chinese Developers Pullback As Property Downturn Hits Economy”
http://finance.yahoo.com/news/chinese-developers-pull-back-property-downturn-hits-economy-210416240–sector.html
‘Gloom deepens for China property developers’
http://blogs.ft.com/beyond-brics/2014/05/09/gloom-deepens-for-china-property-developers/
Hearing a reverse mortgage ad on the local public radio station. Yes, I know. It’s not an ad. It’s underwriting.
Any-hoo, they haven’t promoted such a thing since I don’t know when.
so it’s hard to see how lenders would approve financing deals so far above list price.
It’s not hard to see when you know who has the lenders’ back. If the lenders’ backs are had, they’ll continue to make these transactions.
Seattle, you will “soon” have a train link to China:
http://bastiat.mises.org/2014/05/chinas-infrastructure-bubble-looks-to-expand-abroad/
“….that Timothy Geithner is a hero who deftly steered the country from economic ruin.”
Sure. Just like the lady who’s been using one credit card to pay of the other one “steered herself from economic ruin” by getting an increase in her credit limit.
Printing money and handing it out to your cronies to cover their (intentionally) bad bets is a move more worthy of Zimbabwe, Argentina, and the Wiemar republic.
Stay classy America.
“Bryce and Ashlee Collins thought it would be smart to buy their next house before selling their current one”
‘My wife and I consider ourselves somewhat knowledgeable about the real estate market, but we were not mentally prepared for this,’
Do Canadians consume a lot of Monsanto GMO crops (and thus weed killer) like Americans? It causes brain damage.
Janet Yellen, head of the Federal Reserve, told the Joint Economic Committee of Congress that the economy is picking up headwinds from a weakening housing market and global political worries. Therefore, continued support from the Fed is necessary, especially given “considerable slack” in the employment picture, she said. “The recent flattening-out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery,” she said.
Yellen is much easier to understand than Greenspan. Economic headwinds are Putin’s fault, so the proletariat must pull harder on those oars, ramming speed! The unemployed are slackers. The protracted housing recovery may require fifty or sixty year mortgages. Fed support? Yeomen, refill the print ink reservoirs, quickly!
Hello this is Housing Wizard from the past . Hope everyone is doing fine . I will post sometime later .
‘this is Housing Wizard from the past’
Are you driving a DeLorean?
Ha ha . Nope .I’m on a mission ,as usual . Got side-tracked by battles and truth seeking . Miss my favorite blog .
realtors are liars
You know that old boxer I had that I talked about in 2005, the old dog is still alive,and so am I .
That’s good to know, HW. Every day above ground is a good day.
I often return to this chilling poem by Edna St. Vincent Millay to remind myself of how good it is to be above ground:
Is Professor Bear still around ,or did he change his name again ? Remember back in 2005 ,before the great housing boom crash ,we use to speculate on what was going to happen when TSHTF ? Back in those days it was hard to even imagine what was destined to happen .
Yeah, he still posts using that name sometimes. Mostly it’s Whac-a-bubble though.
Cheers, Wizard! Having us both post must be a sign the bubble is ready to soon enter its final death throes.
Cheers, Professor Bear . Yep , I agree with you .
Hope your doing good Ben Jones . I’m looking over the posts and seeing how the winds blowing .
I can tell you for a fact that depending on which area you’re talking about, inventory is VERY low.
That and a dollar gets you a cup of coffee.
You’re doomed.
“Needing cash after his divorce, longtime Mariners Harbor resident Tony Wong decided to refinance his home. But instead of boosting Wong’s financial bottom line, the move ended up draining his bank account and burying the school safety officer in debts exceeding $660,000. Wong is fighting back with a federal lawsuit. ‘I was tricked. Honestly, that’s how I feel,’ Wong told the Advance. ‘It was a nightmare.’”
[...]
Wong paid the new rate for the first six or seven months, before he depleted his savings and the bottom fell out, his filings contend.”
And conveniently left out of this story: Wong, who refinanced in 2007, hasn’t made a payment since early 2008.
He has been living rent-free and mortgage-payment-free for 6 years now.
Yet he is a victim?
What a windfall.
In the SF Bay Area, specifically East Bay, every house I’ve seen in the past 8 months has gone for $100,000- 500,000 over the asking price.
I thought I understood bidding wars, but how do you explain this: a 3/1 house on a busy street in an OK neighborhood. Of 7 interested parties, 2 actually bid. Selling price was 125K over asking price.
Flippers bought a 4/3 house on a major thru street in Oct. for about 550K. Put on market in April for 700K. Sold after 2 weeks for almost 1.1 million.
I just saw a listing for a stunning house (4/3) in the hills with incredible Bay views w/ asking price a bit over 900K. I can’t believe that amybody expects it to sell that low unless there’s some massive construction problem like it is sitting on the Hayward Fault.
Shouldn’t real estate agents be required to set asking prices that reflect current market conditions?