Only Four Years Later, New Signs Of Excess
It’s Friday desk clearing time for this blogger. “A London resident on a typical salary can expect to spend 50 years saving for a house – just to afford the deposit on a mortgage. In London, the average house costs £458,000 , while the average salary stands at £34,000. The ratio between the two, at 13.5, is far higher than levels considered ‘affordable’ by independent researchers (three and less). ‘There are not sufficient houses built in the UK,’ said Bank of England Governor Mark Carney an interview with Sky TV. Comparing the situation to his home country of Canada, he added: ‘There are half as many people in Canada as in the UK, [yet] twice as many houses are built every year in Canada as in the UK.’”
“The most expensive housing market in North America is not New York City or Orange County, California, but Vancouver, British Columbia. Single-family houses now sell for close to a million dollars apiece and ordinary condos go for five or six hundred thousand dollars. ‘If you look at per-capita incomes, we look like Reno or Nashville,’ Andy Yan, an urban planner at the Vancouver-based firm Bing Thom Architects, told me. ‘But our housing prices easily compete with San Francisco’s. If the choice is between losing ten to twenty per cent in Vancouver versus potentially losing a hundred per cent in Beijing or Tehran, then people are still going to be buying in Vancouver.’”
“And the tendency of foreign buyers not to inhabit investment properties raises the spectre of what Yan has called ‘zombie neighborhoods.’ A recent study he did found that a quarter of the condos in a luxury neighborhood called Coal Harbour were vacant on census day.”
“Helen O’Sullivan, CEO of the Real Estate Institute of New Zealand, says it’s not investors and foreign buyers pushing up prices – it’s ‘nutters’ desperate to get on the property ladder. Ms O’Sullivan said investors don’t drive up prices because they are ‘rational’ about how much they’re prepared to pay, unlike people buying a home to live in. ‘If the maths doesn’t stack up, then they’ll stop… where perhaps people who have fallen in love with a property, or who become what we call ‘the nutter in the room’ because they’ve been outbid for so many properties. A housing crisis would suggest we had people camping in tents in the Domain,’ says Ms O’Sullivan.”
“Prime Minister John Key is playing down findings of an OECD report which rates New Zealand houses among the most expensive in the world. Mr Key said Auckland prices were still well below those in cities such as London and Sydney. But Labour’s housing spokesman Phil Twyford says Mr Key is in denial about the housing crisis. ‘We’ve got falling rates of home ownership, a generation of young New Zealanders who cannot get a home of their own. At the bottom end of the market there are people living in garages,’ he said.”
“Homes for sale in Cambridge now last only about eight days on the market before they’re snapped up by buyers, according to CoStar. Even at the very peak of last decade’s housing frenzy, Cambridge homes still took more than a month to sell on average. ‘It’s been crazy,’ said Jessica Ye, a broker at Keller Williams Realty in Cambridge, where bidding wars and all-cash offers are common when homes come on the market. ‘Both local and overseas buyers really want to be in Cambridge.’”
“Jan Kuypers and his wife bought a two-bedroom condo in Cambridgeport four years ago for $410,000, and were content to just get their investment back when they decided to sell. But their real estate agent advised they ask for $525,000. Within a week of the condo going on the market this month, Kuypers took the highest of four bids at just over $575,000. ‘It’s beyond anything we ever imagined,’ said Kuypers, who is moving with his wife to California. ‘It’s just incredible.’”
“Billy Gasparino and Jenna Dillon-Gasparino were savvy enough to wait out the housing boom of a decade ago as renters. Not until 2010, well into the bust, did they buy a house in the Venice neighborhood of Los Angeles, less than a mile from the beach, for $810,000. Only four years later, the couple see new signs of excess in the housing market and have decided to go back to renting. They are close to a deal to sell their house – for $1.35 million, a cool 67 percent gain.”
“‘It just seems like the housing market came back so strongly, so fast, that maybe there’s a little bit of a bubble there,’ said Mr. Gasparino. ‘When we bought four years ago after the crash, the market was dead, and it felt like everybody learned their lesson. It just went back so fast.’”
“Collin County is one of the hottest areas in the country for job creation, as evidenced by Toyota’s recent announcement it was moving its North American headquarters and 4,000 jobs to Plano. Another sign of the healthy real estate market in Plano is that foreclosures have decreased dramatically over the past three years. George Roddy, a local real estate analyst, said it is impossible to tell why the number of foreclosures dropped 50.4 percent from 2012 to 2013, but he thinks lenders may be giving people a longer leash.”
“‘In my estimation, they are keeping properties off the market for one reason or another,’ said Roddy, who began his real estate analysis business in 1970. ‘I don’t have the exact answer, but I think the federal government has told the lenders to slow it down. … They have just quit foreclosing, and there are many people who have lived in their house for a year or 18 months without paying a nickel.’”
“Two books published this month each tell a very different story about the housing bubble, the 2008 financial crisis and the weak recovery that has followed. The first book is ‘Stress Test,’ former Treasury Secretary Timothy Geithner’s memoir. The second is ‘House of Debt,’ by Atif Mian and Amir Sufi, economists at Princeton and the University of Chicago, respectively.”
“Housing, is the central focus of ‘House of Debt.’ The authors’ groundbreaking work on the relationship among indebtedness, falling consumption and high unemployment puts the real economy, families and a collapsed housing market, rather than the financial sector, at the center of the story. They make a convincing case that restructuring housing debt is as important as fiscal and monetary policy for economic recovery from severe recession.”
“‘The financial crisis left tragic pain and suffering in its wake,’ Geithner tellingly says. ‘Financial crises always do.’ Why would that be? Because of the ‘healing process’ of deleveraging. For ‘House of Debt,’ on the other hand, financial crises leave pain because they are associated with high debt levels, and with political efforts by creditors to make sure those debts are never reduced or eliminated.”
“Although Geithner’s ‘Stress Test’ is an entertaining story, the result of reading it alongside ‘House of Debt’ is damning. The worst thing about taking in the two books together isn’t that bailouts are tragic, necessary even when they feel unjust. Nor is it that nobody appreciates the good that was accomplished. Rather, it’s that the bailouts — Geithner’s magnum opus —were ultimately less important than the serious work of trying to deleverage household balance sheets, fix the housing crisis and focus on full employment.”
“‘A number of participants pointed to possible sources of downside risk to growth, including a persistent slowdown in the housing sector,’ according to minutes of the April 29-30 meeting of the Federal Open Market Committee. Fed Chair Janet Yellen cited the housing slowdown as a risk in her May 7 testimony to the Joint Economic Committee of Congress, saying it’s part of the reason ‘a high degree of monetary accommodation’ remains necessary.”
“Residents of the U.S. states that suffered the steepest home price declines and record foreclosures face labor markets that remain impaired five years after the most severe recession since the 1930s ended. Underemployment, including those in part-time jobs who want full-time work, remained highest in 2013 in Nevada, Arizona, California and Florida, with those states also seeing some of the steepest increases since 2007, an analysis of data from the U.S. Bureau of Labor Statistics shows.”
“The broadest measure of unemployment — which includes part-time workers who can’t find full time jobs, discouraged laborers, and those marginally attached, who want a job but are not actively looking — averaged 18.1 percent in Nevada last year, 17.3 percent in California, 16 percent in Arizona and 14.3 percent in Florida. The U.S. rate was 13.8 percent.”
“Housing prices rose 44 percent in Las Vegas in the last two years, 38 percent in Phoenix, 35 percent in Los Angeles and 28 percent in Miami.”
“Cliff Powell lost his job as a mechanical engineer in 2008 as Florida’s construction industry slumped. He hasn’t landed a lasting permanent position since. ‘I’ve been a roller coaster ride since 2008,’ said Powell, a fire protection specialist with more than 25 years of experience. He says reports of improving job prospects and lower unemployment rates are hard to believe in construction. ‘Most people I deal with in the industry say it’s a joke,’ he said. ‘Unemployment isn’t dropping, people are giving up.’”
“Barbara Spaulding of New Tampa, Florida, spent the past nine years looking for full-time, permanent work before landing a job. ‘There are more jobs, but there are also a lot of very well-qualified people applying for them,’ she said. ‘I think of all of these talented people not working. It is a crime.’”
“Only Four Years Later, New Signs of Excess”
Four years ago was May of 2010. I saw no signs of excess then.
Perhaps it should read “Eight Years Later…..”
May 2010 housing was still priced 200%-250% higher than long term trend.
Jingle Fraud are you guys selling too?
“A few years ago the investor was the buyer,” said Beverly Parys, a property manager with Rossman Realty Property Management in Cape Coral. But now, she said, “We’re experiencing an increased volume of investment homes being put up for sale. The market is improving and investors are looking to recoup.”
Same as always at this time, sleeping it off.
JingleFail won’t admit to putting houses on the market until after they’re sold. Then he’ll show up boasting of huge profits and other BS that we’ve heard ad nauseum.
No, I am not selling. I like the cash flow. BTW, there are no guys. It is only I. I did sell one house in mid 2013 for a 100% return on my invested cash after 3 years, but that was only for convenience.
You’ve been BSing everyone here for so long you can’t keep your stories straight.
It is all true and I showed you the house a few months ago. It’s all there HA.
There is nothing there but BS my friend.
“Ms O’Sullivan said investors don’t drive up prices because they are ‘rational’ about how much they’re prepared to pay, unlike people buying a home to live in. ‘If the maths doesn’t stack up, then they’ll stop…”
Lol. Not if they are using other people’s money they won’t.
If the incentive is right investors who are deluged with large piles of OPM will push prices to the moon.
Such a common narrative of this bubble - “Investors don’t overpay” / “All-cash doesn’t walk away.”
Of course investors overpay, especially when they are using OPM to fund extremely flawed pricing and risk models that predict rents will rise 5% every year for the rest of eternity with 0% vacancy.
Flippers definitely overpay. And investors from NY or coastal CA and foreign investors usually overpay elsewhere because, compared to their home market, everything looks dirt cheap even at double the price.
A lot of hopes have been projected onto these “strong hand” investors…
These strong hands are exiting the market now in droves. Spentall Watch confirmed for the Bay Area or Sacramento. I see it here in PHX. I think the BLM is doing the same, trying to unload when they think prices they can get for land have reached the top.
“For ‘House of Debt,’ on the other hand, financial crises leave pain because they are associated with high debt levels, and with political efforts by creditors to make sure those debts are never reduced or eliminated.”
Yes! Debts that are never reduced or eliminated means monthly payments will forever - FOREVER! - flow from the pockets of the debtors to the pockets of the lenders.
FOREVER!
Denver, CO Housing Prices Turn South As Demand Falters
http://www.zillow.com/local-info/CO-Denver-home-value/r_11093/#metric=mt%3D19%26dt%3D1%26tp%3D4%26rt%3D8%26r%3D11093%26el%3D0
Not until 2010, well into the bust, did they buy a house in the Venice neighborhood of Los Angeles, less than a mile from the beach, for $810,000. Only four years later, the couple see new signs of excess in the housing market and have decided to go back to renting. They are close to a deal to sell their house – for $1.35 million, a cool 67 percent gain.
Hahaha 1.35 million for a house in Venice. Boy they really did convince some greater fool. This is in no way sustainable no matter what Mo Credik Mel does. back to bubble prices, yea! Ignore how much was caused by fraud last time, fog a mirror, appraiser fraud, it all has to come back to go back.
Comment by MrsLolaSoros Hahaha 1.35 million for a house in Venice. Boy they really did convince some greater fool. This is in no way sustainable no matter what Mo Credik Mel does. back to bubble prices, yea! Ignore how much was caused by fraud last time, fog a mirror, appraiser fraud, it all has to come back to go back.
MRSLOLASOROS,Don’t let envy -jealousy ‘kill you’.
Envious of $3 million of debt versus $1 million in loose cash?
You have strange notions Fraudster.
No, what I meant is the vast majority of Venice is a hole. Gangbanger and homeless city within blocks of your house? Crazy.
What’s doubly fascinating about Venice is that you could own a 1.5 million dollar home but not dare send your kids to any of the local public schools.
I was back in LA a few weeks back and my buddy is now living with his future bride just off Lincoln. She paid 800 or so for a small 1930’s Spanish house. It’s a literal stone’s throw from Lincoln Blvd., which is one of the ugliest stretches of road in LA. Billboards, hookers, grime. Meanwhile, GOOGLE has decided to move into the hood, and a house across from them recently sold for 1.8 million. Again, can’t send your kids to the schools, hookers stroll past during the day. Bizarro even by LA standards.
Frankly it’s the same for Millionaires row in Pasadena. The local elementary gets like a 3/10 on greatschools or schooldigger.
‘A federal grand jury indicted longtime Portland housing developer Roger Pollock Friday on bank fraud charges. Federal prosecutors urged that Pollock remain in detention alleging he’s threatened multiple witnesses with “death or violence.”
‘In arguing for his continued detention, prosecutors argue Pollock doesn’t have a suitable living situation. He is currently living in a large home on the Willamette River. He’s not paid on the mortgage since 2009 and the structure is in foreclosure, according to court documents.’
‘They also said Pollock has made more than 40 trips abroad in the last two years, which they argue make him a flight risk.’
I wager he’s an associate of J._Fraud/R._Fraud.
‘According to The Eagle’s voluminous files, five of what are believed to be the 10 largest residential real estate deals in Berkshire County have taken place over the last two years. Four of those transactions have occurred since last September, and two have actually taken place already this year.’
‘While the market for Berkshire luxury homes may be booming, it’s actually gone down in some adjacent areas. The market for Multiple Listing Service (MLS) sales of luxury homes in the Hudson Valley, which includes Dutchess, Columbia and Ulster counties in nearby New York state, was down by as much as a third during the first quarter of 2014 compared to the same time period last year.’
‘There were no sales at the top of the market, homes in the $2 million plus range, compared to two here in the Berkshires. The lousy weather we had at the beginning of the year is considered to be the main culprit in the Hudson Valley market.’
‘The number of foreclosure petitions filed in the Berkshires soared from three in March 2013 to 14 this March, an increase of over 350 percent, according to the Warren Group of Boston.’
‘A Safeway grocery clerk says a bank promised to help her on past-due mortgage payments, but ultimately foreclosed on her home so a developer could tear it down. Seattle police ultimately arrested Dana Ventura as she joined housing activists in a last-ditch effort to save her home.’
“I feel like I have to make a stand, because this is not just happening to me,” Ventura said. “This is not some isolated incident.”
‘As officers led her away, activists say unethical lending practices are destroying neighborhoods and forcing people like Ventura onto the streets. “Everybody who I talk to say things like, ‘You’ll get over it.’ It’s like, I’ll get over it on my deathbed.”
I sure hope Dana Ventura never gets over it. Her lifelong bitterness should exist as a warning to others to not try the same sh!t again.
How many people need to get burned by bankers before it becomes acculturated to never ever let bankers burn you again?
‘Maryland Gov. Martin O’Malley signed a bill into law Thursday that reduces the time within which debt collectors can pursue homeowners in court for old foreclosure debt from 12 years to three. White said the law does not address the interest that accumulates on that debt after foreclosure. In some cases, it can add up to tens of thousands of dollars.’
‘For example, in 2013, a Montgomery County homeowner was ordered to pay $115,000 plus nearly $23,000 in interest on a foreclosure that occurred years earlier.’
md is a peoples republic- makes VA the place to be
‘Tight financing and little disposable income have generally slowed the progress of the local housing market, Orangeburg Realtors say. Rhonda Robinson, owner and broker-in-charge of Robinson Real Estate, who primarily works in the home foreclosure market, says, “It (the housing market) is not getting any better.”
“The market is being driven by bank-owned properties,” she said, noting on average she receives about 10 foreclosures to 15 foreclosures a month. She said currently there are about 30 foreclosures on the market out of her office alone.’
‘Last year, of the 114 home sales, 80 were foreclosures. “Foreclosures have not stopped,” she said. “That is not good.”
‘Robinson said homes are staying on the market longer and people wanting to sell their homes end up owing more than the market value on them. “Until the market changes and these foreclosures stop coming in,, they can’t get what the property is worth,” she said.’
‘Robinson said she does not accept all the talk about an improving economy. “I don’t see the jobs,” she said, noting that in Orangeburg in particular the challenge is low credit scores and people having difficulty paying adjustable-mortgage rates.’
‘She said 100 percent financing loans for those with a credit score of more than 640 have also proven to be a problem. “The buyer gets in the house with no money down,” she said. “People that get houses with no money down and payments whenever they feel like it … are more likely to walk away from the house.”
‘Foreign buyers invested 285 million euros in Greek properties in the 2012-13 period, confirming the view expressed recently by a number of analysts that the housing market recovery will start in the holiday home sector. For now, the majority of buyers are from Northern Europe, and especially France, the UK, Germany and Scandinavia, but there is also increasing buying interest from Russians and Chinese.’
“Homes now last only about eight days on the market… Even at the very peak of last decade’s housing frenzy, Cambridge homes still took more than a month to sell on average.”
Totally amazing. We’re getting to the point where comparisons to the last bubble are almost irrelevant, because now it is so much worse - higher prices, faster gains, overnight sales.
I really want to ask these buyers: if they didn’t want it in 2012, why do they suddenly have to have it now? There’s an apt near me that lingered on the market all of 2012 at $950k before finally selling, and this week it went into contract after less than 2 weeks on the market for $1.7 million!
It seems to have gone full tulip-bulb insane at this point. Though ever since last summer I’ve thought “surely this is the blow-off top,” only to have the mania get worse.
I really want to ask these buyers: if they didn’t want it in 2012, why do they suddenly have to have it now?
Because the chumps think it will continue to appreciate and not be a falling knife like it was in 2012.
Westchester Co NY Housing Prices Plunge 18% YoY As Rental Rates Dive 26% YoY
http://www.zillow.com/local-info/NY-Westchester-County-home-value/r_3148/#metric=mt%3D18%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3148%26el%3D0
The average property taxes on a nothing special four bedroom house is approaching $20,000/year anywhere in the county.
These taxes will never go down.
BINGO
“is approaching $20,000/year anywhere in the county.”
You shouldn’t generalize like that.
If you buy a house for 200K in California, your yearly property tax will start at $2000. The year after that it can go up to $2040, etc. etc. In other words, you would need to buy a 2 million dollar home to pay 20K/yr in property tax.
Westchester County
Yeah Banana…. you should cherry pick like our resident housing hookers.
“Westchester County”
Got it, I did misread your post as “country”, my bad.
‘The typical single-family home in southern New Jersey sold for $14,500 less in the first quarter of 2014 than a year ago, according to National Association of Realtors data. Median sales prices fell about 7 percent in a metropolitan area encompassing Atlantic, Cape May and Cumberland counties.’
‘In Somers Point, Joan Kadlecik found a buyer for her five-bedroom home with a swimming pool after several months on the market. “I think it does mean taking a lower price now from what we could have gotten a few years ago,” she added.’
‘Anthony D’Alicandro, the owner of Coldwell Banker Casa Bella Realtors in Linwood, said the mainland Atlantic County market still faces a high number of distressed properties, which is impacting price categories.’
‘For non-distressed properties in move-in condition, homes priced slightly below the median are getting multiple offers in a week, he said. “Once you get into the next segment — median plus 20 percent — it’s where the market thins out in the number of buyers in the market,” he said.’
‘The rental market caught fire several years ago with the influx of Haynesville Shale, movie industry and military jobs, said Scott Hughes, Northwest Louisiana Association of Realtors association executive.’
‘Since those industries scaled back, the employees that once rented homes have departed leaving available property. “Those are a lot of the houses we believe now you’re seeing being put back on the for rent market,” he said.’
‘Some homeowners keep their home so they can come back to retire, said Sarah Yates, a real estate agent with Coldwell Banker Gosslee. But also there is an increasing number of residents choosing to rent because they can’t afford to sell their home, she said.’
‘Military families with Veterans Affairs home loans have the option to finance 100 percent of a home purchase, she said. That means those transferred after living in a house a few years may have financed more than the house is worth.’
“They may not have enough equity to pay a realtor or to even break even on what they owe on the mortgage,” she said. “That’s why a lot opt to rent.”
‘The abundance of homes for sale in the region has prevented increases in home values. And many of those unwilling to lower the price, rent their homes instead. April home sales — though improved from March — are down compared to last year. There were about 40 less houses sold year-to-date this year than last, Goslee said.’
“It’s not off horribly but if you look at it on an annualized basis we’re tracking for it to be one of the slowest years we’ve seen in the last 14 years,” he said.’
‘Living in Florida, it’s easy to develop an eye for the varieties of distressed property you see around town. Rolling along my usual routes, I’ll drive past a just-filed-for-foreclosure property. It’s been in the courts for a while, the owner stopped paying, but somebody’s living there. A normal-looking house, just with a bigger pile of stuff on trash days.’
‘I’ll go by the bleak house that has been in litigation so long nobody can tell for sure who owns it or which court in which state has jurisdiction. Nobody’s lived there for ages. It appears haunted.’
‘Last week, I was at Citizens for Ormond Beach’s presentation on problem properties, and it was eye-opening. They showed places I see almost every day.’
‘Ormond Beach doesn’t come close to having the area’s worst abandoned home hassles, but the fact that even a prosperous and well-run city has so many vacant homes — close to 300 — indicates the scope of the problem. A problem that has broken the usual code-enforcement mechanisms of cities around the country.’
‘Attorney General Eric T. Schneiderman has launched a statewide effort to encourage the State legislature to pass the Abandoned Property Neighborhood Relief Act he proposed earlier this year. “Zombie properties threaten neighborhoods across New York State, from big cities to small towns,” said Attorney General Schneiderman. “Abandoned homes become magnets for crime, drag down property values and drain municipal coffers. Our bill will keep communities safer and lessen the burden of municipalities still struggling to recover from the housing crisis.”
‘The number of York County properties listed for sheriff’s sale in June is the lowest in two years, but it’s an anomaly. “It’s a drop, but then we have 14 tubs of filings to go through for August’s sales. August will be high again,” said Kathy Holes, who handles the listings in the county sheriff’s office.’
“I think it shows how many bad mortgages were written in 2008 and 2009,” said Pam Lee, county prothonotary. “It looks comparable to last year, and they’re staying high. You start to wonder if it’s going to stay like this forever,” she said. The triple-digit filings aren’t as high as the number filed in 2009. But after a drop-off in 2011 and late 2012, the filings increased.’
“They seem to be stabilizing at this high level,” Lee said. “Until the economy picks up and more people get jobs, it may keep going this way.”
‘The state department doesn’t track why people drop out of the workforce, but it knows thousands of York County residents have chosen to do that, said William Sholly, an analyst with the state department. “When people aren’t working, they can’t pay their mortgage,” Lee said.’
‘Realtors also notice the high number of foreclosures in the county. “We see them every day. There are still a ton out there, and it’s countywide,” said John LeCates, past president of the Realtors Association of York & Adams Counties.’
‘Of the 215 homes sold in April, 51 of the homes were foreclosures, according to a Fort Hood Area Association of Realtors report. Investors are purchasing homes that range between $40,000 and $60,000, renovating them and then renting them out, Segarra said. “Last year we did 326 cash offers,” Segarra said. “This year it is 510, and that is for a 12-month period ending in April. Two years ago the number was 265. Cash purchases have gone up 92 percent.”
‘Banks have placed foreclosed homes on the market at aggressive prices, which generate more bids, Nash said. The number of homes going into foreclosure also decreased, according to the report, which Segarra said is a sign of more responsible home buyers.’
‘Increased sales in foreclosures is one factor contributing to a lowering median home sales price, he said.’
‘Investigators looking into abuses tied to mortgage bonds are finding that misconduct was almost universal, and they still have more than a dozen ongoing investigations, a U.S. official said Wednesday.’
“Not only occasionally, but in the end, with almost every” deal, investigators uncovered evidence of improper actions, said Michael P. Stephens, the acting inspector general for the Federal Housing Finance Agency, while speaking at the Mortgage Bankers Association in New York.’
‘Stephens’ task force, which was set up in 2012 to investigate mortgage practices, has found that lenders and bond issuers intensified their efforts to cover up the poor quality of the underlying assets they were dealing in as markets started to crash, reported Bloomberg News.’
“They were more concerned about their bonuses than what was going on in these pools,” he said. “At the core of it is greed.”
‘In a previous column I wrote about Attorney General Eric Holder’s recurring decisions to protect the Wall Street officers and directors of errant, and often times criminal, enterprises – choosing instead to impose the entirety of the burden on shareholders who neither knew of or participated in the offending conduct. I noted that these actions had little deterrent effect because the miscreants suffered nothing while the innocent bore the full brunt of the offenses.’
‘And now, another former member of President Barack Obama’s administration feigns deep concern over the very people he failed to protect in deference to his friends and business associates on Wall Street. Former Treasury Secretary Timothy Geithner has released his version of the economic collapse now appropriately labeled the Bush/Obama recession. Mr. Geithner was one of the principals in the government’s response to the economic collapse. While Lawrence Summers and Federal Reserve Chairman Ben Bernanke shared responsibility in crafting solutions, in the end the levers to pull belonged almost exclusively to Mr. Geithner as Secretary.’
‘It was Mr. Geithner who argued for rescuing the major trading houses from certain bankruptcy. He even opposed the decision to force Lehman Brothers into bankruptcy as a “lesson” for others. He defended the decision of his hand picked executive, Edward Liddy, at AIG to provide multi-million dollar bonuses to the very people who were instrumental in creating the instruments that led to AIG’s near collapse.’
‘So please, Mr. Geithner, be satisfied with the riches you have and will accumulated as a privileged insider and quit trying to portray yourself as caring for a public that you have rarely encountered.’
Here’s Jon Stewart’s interview of Geithner:
http://thedailyshow.cc.com/guests/timothy-geithner
Geithner would be comical if not the massive damage he has caused average citizens in order to make the bankster class whole and bloated once more.
He has the ears of some kind diseased elf.
John Stewart didn’t go nearly far enough, but better then we usually get from our yellow bellied 4th estate.
There’s a joke among liberals that they go to Fox News for comedy and Comedy Central for news.
Mo Credik, Mo Credik, Mo Credik…
What’s wrong with this picture?
‘But our housing prices easily compete with San Francisco’s. If the choice is between losing ten to twenty per cent in Vancouver versus potentially losing a hundred per cent in Beijing or Tehran, then people are still going to be buying in Vancouver.’
The choice is not between losing ten to twenty percent or losing a hundred percent.
The choice is between buying a house and losing money or not buying a house and not losing money. Can I make this explanation any simpler for those who don’t understand?
Complicating this simple question is deliberate.
New home sales rebound, inventories at 3-1/2 year high”
what’s wrong w this statement
Nothing, if new home sales were limited over the prior 3.5 years due to lack of development.
with 25 million excess empty and defaulted houses why would there be any need for more development?
‘A 4 On Your Side investigation found the Albuquerque metro still has more than 100,000 undeveloped residential lots. Like other southwest states, New Mexico is home to ‘zombie subdivisions’’
‘A recent study by the Lincoln Institute of Land Policy found millions of vacant lots across eight southwestern states — Arizona, Colorado, Idaho, Montana, Nevada, Utah, Wyoming, and New Mexico.’
http://thehousingbubbleblog.com/?p=8396
Here is a link to the PDF:
https://www.lincolninst.edu/pubs/dl/2339_1679_Arrested_Developments.pdf
Since people don’t live on vacant lots, I’m not sure how applicable it is…what it does mean is that you probably shouldn’t be investing in raw land in these areas…
Why don’t they build houses on them?
Crickets.
‘“We are invading Istanbul again,” the real estate agent said enthusiastically as she ticked off the selling points of Turkey’s most ambitious development extravaganza to date: Maslak 1453.’
‘Named for the year this bicontinental city passed from Christian to Muslim hands, Maslak 1453 has been planned as a vast complex of 24 towers, shopping malls galore and, not least, a 1,453-meter-long (4,767-foot) shopping promenade that celebrates the most consequential date in Turkish history.’
‘Upon completion in 2015, it will be the largest real estate development in all of Europe and perhaps the ultimate expression of the pell-mell construction boom that has underpinned Turkey’s decade of rapid growth under Recep Tayyip Erdogan, the nation’s Islamist prime minister.’
‘Mr. Erdogan’s timing was perfect, coinciding with the global liquidity glut unleashed by the world’s leading central banks to restore growth in the advanced industrial economies after the Great Recession. One result was a sharp increase in lending by Turkish banks, much of it directed toward property developers.’
‘But will wealthy foreigners or aspiring Turkish professionals snap up pricey apartments or flock to yet another opulent shopping mall? Especially one located in an industrial park at the intersection of two major highways more than 10 miles outside central Istanbul?’
‘Mr. Sonmez, the author and real estate expert, remains unconvinced. “All this is problematic,” he said, citing the project’s location. “The Mall of Istanbul could be the Titanic of shopping malls in Turkey.”
‘The city that now boasts the priciest housing in the planet isn’t London or New York—it’s Taipei. From Q4 2008 to Q1 2014, housing prices in Taiwan’s capital city leapt 91.6%, according to Bank of America Merrill Lynch. To buy a home, the average Taipei household must now save 15 years’ worth of wages—and that’s if they don’t plan to eat meanwhile.’
‘Taipei has two things to thank for its rocketing prices: quantitative easing by Western central banks (driving down yields on Western assets) and the deluge of bank loans out of its northern neighbor, mainland China. However, Taiwan’s regulators made things worse in 2009 by lowering taxes on real estate and gifting.’
‘Younger Taipei residents are fed up—and as in other countries in the region, at least some of that rancor is directed at China. There was a series of huge protests in March and April over a proposed trade pact with the mainland that people feared would flood the housing market even more.’
‘Joe Hockey’s first budget is promising Australia lower economic growth and higher unemployment over the next financial year. And he’s betting on housing prices continuing to surge – or it will be worse.’
‘Wednesday’s ABS wages index showed annual wages growth of just 2.6 per cent – the lowest since this ABS survey started in 1998. Wages are barely keeping pace with inflation, depending on how you want to measure that. It’s not a formula for increased housed consumption.’
‘On top of that, both the major consumer confidence surveys showed the budget was taken hard by consumers, reducing their confidence about the year ahead. And remember that forecast of lower economic growth and rising unemployment.’
‘The budget papers actually spelt out that the hope for increased consumer spending rests on increased household wealth, meaning housing prices – already high – going higher. Said Treasury: “Further gains in household wealth are expected to support a further modest decline in the savings ratio, enabling consumption to grow faster than income.”
‘A thrice-bankrupted property developer allegedly withdrew investor funds associated with troubled Auckland housing projects and is now being chased for close to $300,000 in the High Court. Damien Grant and Steven Khov of Waterstone Insolvency, as liquidators of Blake Street Trustee, have filed civil action in the High Court at Auckland against triple-bankrupt Peter Chevin.’
‘The liquidators, in their claim against Chevin, say these projects depended on investors “signing up to a financial scheme”. Investors were recruited from Hong Kong and Singapore. A chain of further transactions followed, which the liquidators allege ultimately meant Chevin and a person associated with him used the above three firms ” to take investor funds and to transfer it to themselves for no value”.
‘Younger Taipei residents are fed up—and as in other countries in the region, at least some of that rancor is directed at China. There was a series of huge protests in March and April over a proposed trade pact with the mainland that people feared would flood the housing market even more.’
So now the Chicoms are providing cheap mortgages to the Taiwanese?
Is there anyplace in the world where real estate isn’t in the mother of all bubbles? Other than Cuba and North Korea?
‘Named for the year this bicontinental city passed from Christian to Muslim hands
The Byzantine empire was invaded by islamic armies. Constantine was put under siege. When it fell, every man i the city was executed. The young boys and women were taken as sex slaves. Every church was closed and most were demolished. A few were turned into mosques.
This sounds like the Turkish equivalent of the Mall of America in Minneapolis. Everywhere in the world retail is expanding, completely without regard for the ability of people to buy things without going into debt.
I was in Minneapolis a few years ago, and before my trip I googled what the local places of interest were. The Mall of America was by far and away the number one attraction. It’s a shopping mall! I skipped it and went to Al’s Breakfast.
Wow, look at those responses by Western political and economic leaders. They’re going to get self-serving book deals too, no doubt. We have discredited democracy in order to expedite a re-inflation of the housing bubble. Terrible policy, terrible leadership.
But not everyone agrees with me. Exhibit A, from earlier this week:
Federal Reserve Chairwoman Janet Yellen on Wednesday delivered what you’d expect from a commencement speech: graduates, she said, should “tend the fires of curiosity,” listen to others, and show grit in the face of failure. Yellen reminded New York University students in Yankee Stadium that even Babe Ruth, Lou Gehrig and Joe DiMaggio failed most of the time they stepped to the plate, according to a text of her remarks.
And what example did Yellen find for such an inspirational beacon of bravery?
Why, her predecessor, Ben Bernanke.
“My predecessor at the Fed, Chairman Ben Bernanke, demonstrated such courage, especially in his response to the threat of the financial crisis. To stabilize the financial system and restore economic growth, he took courageous actions that were unprecedented in ambition and scope. He faced relentless criticism, personal threats, and the certainty that history would judge him harshly if he was wrong. But he stood up for what he believed was right and necessary. Ben Bernanke’s intelligence and knowledge served him well as Chairman. But his grit and willingness to take a stand were just as important. I hope you never are confronted by challenges this great, but you too will face moments in life when standing up for what you believe can make all the difference.”
http://tinyurl.com/prahr5j
‘The Conejo Valley real estate market may be improving, but it’s becoming increasingly difficult for middle-class families to own or even rent in the area, according to experts at a housing forum last week. “The prices have gone up because we live in paradise. It’s that basic. . . . It’s just the nature of where we live,” said panelist Connie Reed, past president of the Conejo Simi Moorpark Association of Realtors.’
‘Meanwhile, inventory is starting to creep up. Reed said there was a 26 percent increase in the number of houses for sale in the Conejo Valley in the first quarter of this year compared to the first quarter of 2013. And there were 81 condos for sale this year versus 33 last year in the first quarter.’
‘While there are more units on the market, the number of sales are down, Reed said. Perhaps most telling, she said, was the median sale price for a home in the Conejo Valley last year was $800,000. Thus far this year, it is $616,000. While prices are down, they’re not far enough down for many first-time or lower-income buyers.’
‘Reed said she wouldn’t be surprised to see prices go down in the next quarter as well. “The fact is that 2013 was fueled by investors. Investors were coming along with all cash and were buying up properties that were for sale. That segment of the marketplace dominated,” she said. “Now what we’re trending toward is a more balanced market, and that’s a good thing.”
‘Housing prices in Yuba and Sutter counties are still trending upward when looking at the “big picture,” a local real estate numbers watcher said Monday. “Even when you are looking year to year, these numbers bounce around,” said real estate agent Lloyd Leighton of Yuba City. “But looking at the big picture, you can see the trend is still up.”
‘Leighton said those affordability issues could also play a larger role as Yuba-Sutter prices climb. “There is a general sense that any increase in home prices will depend on how much family incomes are increasing,” he said. “We are starting to run into some affordability issues.”
‘Low inventory numbers — given as a primary reason for increasing prices last year — are improving, he said. “But I don’t hear anybody talking about increasing levels of family income,” Leighton said.’
‘The developer of a seven-story, high-end condo project on one of the most-coveted corners in Indian Wells filed for Chapter 11 bankruptcy in Idaho’s U.S. Bankruptcy Court before asking the City Council to grant him a two-year extension of deadlines included in a development agreement, The Desert Sun has learned.’
‘Ryerson, part owner of Ryerson Group LLC, filed for Chapter 11 bankruptcy on Aug. 30 to reorganize his finances following a foreclosure associated with his $10 million “dream home” on Lake Coeur d’Alene, according to court documents obtained by The Desert Sun. Ryerson has $14.1 million in assets but owes creditors $14.6 million.’
‘During a meeting with The Desert Sun on Tuesday, Ryerson stressed that his bankruptcy is “totally separate” and will not affect the much-anticipated project in Indian Wells.’
‘Ryerson’s proposed high-end condos are designed for residents ages 55 and older, would range in size from 1,200 to 6,000 square feet and be priced from $800,000 to more than $5 million.’
“The concern obviously is people misjudge. This is purely a strategic reorganization filing to work through that single property asset up there,” Ryerson said, referring to his foreclosed home.’
‘Mullany called Ryerson’s explanation for remaining silent about the bankruptcy a “lame excuse.” “I don’t know how you can bifurcate one’s personal life and one’s business life and say one has nothing to do with the other,” he said.’
‘Reed said she wouldn’t be surprised to see prices go down in the next quarter as well. “The fact is that 2013 was fueled by investors. Investors were coming along with all cash and were buying up properties that were for sale.”
800K ? Not Blackstone they were buying sub 400K homes in Simi and Oxnard.
There was a map showing this action I saw it somewhere maybe on this Blog ? .
‘Home prices in Loudoun County continued to climb in the month of April, even as inventory increased, according to the April 2014 Loudoun County Existing Housing Market Trends Report.’
“According to the report, the number of closed sales in the Loudoun County existing housing market showed a mild increase from last year in April, though new contract activity was down 12 percent for the month.”
‘The greatest decline came among detached homes, with activity falling by 15.1 percent. Nevertheless, detached homes also saw the largest price increase, of 6.6 percent from April 2013.’
“With seller activity gaining over April 2013, as evidenced by a 15.6 percent jump in new listings [the most since May 2007], active supply is now back to 2011 levels. The 10 consecutive months of annual gains in inventory levels are a positive indicator for potential buyers, as increasing inventory could moderate the upward pressure on prices experienced over the last several years.’
“That said, the county remains a seller’s market and the median sales price rose 3.4 percent in April to $423,000. Even with this pricing gain, the average sales-price-to-original-list-price ratio decreased from 98.2 percent last April to 97.8 percent in April 2014. While a modest drop, this represents the first month since December 2011 with a lower sales-to-original-list-price ratio than the prior year, another indication that the county’s real estate market may be balancing out to some extent.”
‘Nearly 10 million U.S. households remain stuck in homes worth less than their mortgage and a similar number have so little equity they can’t meet the expenses of selling a home. But many aren’t budging. “There are people who still have their jobs and they’re not late on their payment, but they can’t move,” said Vita Deveaux, a real-estate agent at Keller Williams Realty First Atlanta.’
‘Take Patricia McCutcheon, 50 years old, who lives in the Clayton County area near Atlanta. Ms. McCutcheon and her husband owe $119,000 on their home, but figure it could sell for about $70,000 based on recent sales in the area. The debt hasn’t kept them from moving up: In July, they are leaving their home for a new place in Paulding County. But instead of selling their underwater home, they are going to rent the place out. “It seems to be the only option that we have,” she said.’
Yeah people are smart.
‘Minnesota’s vacation home market has turned a critical corner, with sales on the rise in many parts of the state. Such transactions increased nearly 30 percent nationwide last year to the highest level since 2006. Even listings that have been sitting on the market for years are starting to be sold off.’
‘Jason Martin, a farmer from west-central Minnesota, recently bought a lot on Lake Mary. He has a camper there, but has no immediate plans to build. His real motivation was financial. He thinks prices have hit bottom, and he was able to refinance the mortgage on his house for 2.78 percent and pay cash for the lot.’
“You have to take advantage of these low prices and low rates,” he said. “It’s by far a better place to park your money than in a bank.”
‘Blackwell, the school secretary from Oak Grove, agrees that her family’s decision to buy now had everything to do with a renewed sense of confidence in the market. And with interest rates near all-time lows, they were able buy their cottage within their $175,000 to $225,000 budget with a home-equity loan.’
“I love having a cabin and looking forward to Memorial Day weekend and the 4th of July week. It’s a special thing,” she said. “And we’re already seeing prices going up, so I’m so glad we bought when we did.”
The DumbAss Factory is cranked up again.
Heeenh-Hawwww <– Debt Donkey for “I agree.”
You were produced in the factory Donkey.
So having just come to the Las Vegas area it seems that there are a ton of new houses going up. A 44% increase in prices over two years and the local realtor I spoke with seems convinced that 10% increases per year are “healthy”. Is this heading into bubble area once again or is it a correction from the last downturn?
The last downturn was the correction.
‘After rising steadily for five years, home prices tumbled by an average of more than six percent in the city of Geneva during the first quarter of this year, compared to the same period in 2013. The price drop is affecting the properties the least demanded — the biggest and the most expensive, the Tribune de Genève indicated.’
‘The federal government and the Swiss National Bank have taken a series of measures over the past year to cool down Switzerland’s property market, which saw price increases outstripping economic growth with concerns raised about the potential for a speculative bubble to develop.’
‘Lending requirements were stiffened and banks required to hold more capital for mortgages.’
‘For sale’ signs are sprouting in South Florida neighborhoods, but buyers see sticker shock.’
‘Sellers think they can get what they want,” said Francisco Angulo, who manages Coldwell Banker’s Coconut Grove office. “It’s not what you want — it’s what the market will bear.”
“They’re probably over-confident at the moment. Each new seller wants to reach a new high for their neighborhood. Sellers are getting a little too greedy,” EWM’s Smith said.’
‘If a Realtor can’t persuade a seller to be realistic about pricing, it isn’t uncommon to agree to list a property at a lofty price — with the proviso that if it doesn’t sell or at least draw lookers after a reasonable period, a price cut is in order. “It takes a very strong agent to say, ‘Hey, you’re nuts,’ ” said Gonzalez, the RE/MAX agent.’
‘Oregon mortgage lenders nearly doubled the pace of repossessions in April, according to RealtyTrac. Repossessions increased in 26 states in April compared to March. Oregon had the fourth highest increase, 91 percent, after Iowa (237 percent), New York (142 percent) and Delaware (94 percent).’
‘Oregon led the nation in other aspects as well, a sign that the foreclosure crisis may be tailing off elsewhere but is not finished here. Oregon experienced a 229 percent increase in the rate of foreclosed homes scheduled for auction.’
‘Oregon’s top five counties for foreclosure were Jefferson (one in 754), Josephine (one in 808), Deschutes (one in 843), Polk (one in 943) and Washington (one in 957).’
condo threat- http://finance.yahoo.com/news/youre-market-condo-better-cash-172854320.html
have we peaked or do we need to see condo hotels fist ?
‘Myrtle Beach Seaside Resorts - operator of the area’s premier oceanfront condo-hotel and vacation rental properties - announces the “Father’s Day Golf Getaway” featuring oceanfront accommodations and four rounds of championship golf at the “Big Cats” courses.’
“With the cold, bad weather, we all had more bills to pay, but everyone needs a break. Everyone needs a vacation, and that’s what summer is all about,” said William A. Gibbs, who owns the Breakers Hotel on Ocean City’s boardwalk, as well as rental condominiums and four Dough Roller pizza restaurants in the beach town.’
“Advance reservations have been very good,” ahead of last year’s preseason pace, Gibbs said. “I think it will be a little busier this year.”
‘He already has booked his condo rentals for nearly all summer weeks, has few hotel rooms to spare in July, August and much of June, and has sold out for the weekend of Sunfest in September.’