Bits Bucket for July 17, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
April 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Monterey County CA Housing Demand Plunges 20% YoY As Prices Resume Cratering Down 5%
http://www.zillow.com/local-info/CA-Monterey-County-home-value/r_2444/#metric=mt%3D18%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D2444%26el%3D0
Prices turning negative in a supposed “hot market” during the realtard selling season??
How can this be?
have u ever been to monterey mr shoeshine?
Good morning Amy/$hitHouse Poet.
This paid message sponsored by the National Association of Realtors®
Realtors are liars
good morning realtor Got anymore bogus data today BILL wannabe?
This is the Housing Bubble Blog, not the city-data forums, you paid NAR hack.
hows renting in denver shrill?
Lying underwater realtor
Wait, azdude isn’t doing a parody of realtors? He’s actually bullish on residential RE?
If so, LOLlies
F R A U D
Go get tested, dude. You don’t want to know what your girlfriend Amy has been doing moonlighting for some extra cash to make up for her dwindling sales commission checks…
Poet and Liberace LOL
shoeshining wont last bill
Then you better get some new skills. Poet and Liberace LOL.
No, but I’ve read about it in several books
Cannery Row, for one.
Liberace!
John Steinbeck is a commie.
What about Jack London? (I think he spent time in Monterrey as well.)
John Steinbeck, Jack London, Ken Kesey, Jack Kerouac, Allen Ginsberg, all fruits and nuts from the land of fruits and nuts.
Hunter S. Thompson is the only writer who lived in Northern California and didn’t turn into a fruit.
Hunter turned into a nut.
Then into gunpowder.
the Beats were in Carmel
Carmel is a little pricier than Monterrey, right? Isn’t Carmel also the place that elected Clint Eastwood as mayor? When I was there, it was really nice, old houses, set back from scenic roads on nice, wooded lots.
I thought they elected Sonny Bono as mayor. I believe that Carmel has the highest concentration of Storybook Style houses in the country.
“When I was there, it was really nice, old houses, set back from scenic roads on nice, wooded lots.”
+1 Indeed. No gangsta SUV on the front lawn in Carmel.
Sono Bono was in Congress. And not in that part of CA, either, I don’t think.
Try Clint Eastwood (”Play Misty for Me“).
azdude, I haven’t been to Monterey either. Is there some specific reason that median list price should be dropping in about Monterey?
Lol…this is priceless.
Oxide, needs to travel more. Monterey is a wonderful place to visit. Oxide, you would have more money to travel if you rented.
If oxide wants, she could live in RAL’s head, rent-free, like me. There’s plenty of room in here — RAL’s head is ridiculously empty.
So you’re on the National Association of Realtors’ payroll too now?
Monterrey is gorgeous but it’s too far from a big job market to make prices tenable over long periods of time. Like, it’s too far from SV/SF for it to be commutable. Monterrey is near some exclusive areas (e.g. Carmel, Pebble Peach CC) but that general region of CA is actually kind of poor. Central CA in generally is just as poor as most of the south, but people don’t know that bc they only think of the coastal areas.
http://valleywag.gawker.com/investors-plan-to-split-california-would-create-poores-1516826595
(Central CA’s per capita income is about 1/2 of Silicon Valley’s per capita income)
You have absolutely NO CLUE what you’re talking about when it comes to California. Why do you continue to act like you do? My gawd…
I just posted the stats. There are some gorgeous areas of CA with good climate that, nonetheless, have very low per capita income.
The Central Valley is, in particular, turning into a shithole overrun by immigrants and general lawlessness bc the gov’t turns a blind eye to QOL issues and focuses only on the war on drugs. They’re rearranging the deck chairs on the Titanic, basically.
You post junk Liberace.
Post all you want to keep people out of this area!
Median prices suck either way, but if you are going to use median as your BS measure of the day, at least use median SALES prices, not median list prices.
Aren’t you the person who always says that it doesn’t matter what your asking price is ($50k for a 20 year old Camry), but the actual selling price matters?
http://www.zillow.com/local-info/CA-Monterey-County-home-value/r_2444/#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D2444%26el%3D0
And here is some other data for Monterey County (whether or not you want to believe it, given the source):
http://www.car.org/3550/pdf/econpdfs/Monterey_05-14.pdf
Yesterday you invoke “Zillow Home values”… today it’s something else.
R._Fraud… You duck and weave like Liberace.
In other news;
Contra Costa County, CA Housing Demand Nosedives 17% YoY; Prices Sink 3% As Sellers Panic And Slash Prices
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D18%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
Median List Price–the worst measure (doesn’t reflect actual transactions)
Median Sale Price–OK measure (reflects actual transactions)
Zillow’s Home Value Index–Better measure (reflects actual transactions and adjusts based on property specific metrics; age, size, bedrooms, etc.)
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D34%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
The ONLY of these three metrics that shows values falling in Contra Costa County, is also the worst, the Median List Price.
Median List Price- the best measure (reflects direction of prices)
Median Sale Price- Ok measure (reflects a number lower than list)
Zillows Home Value Index- When R._Fraud can’t duck and weave anymore, this is what he invokes
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D34%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
http://www.zillow.com/local-info/CA-Contra-Costa-County-home-value/r_3159/#metric=mt%3D18%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3159%252C51518%252C16780%252C26751%26el%3D0
The ONLY valuable of these three metrics that show falling prices in Contra Costa County, is also the only accurate one, the Median List Price.
S/b a good day for gold.
ft dot com
Global Market Overview
Last updated: July 17, 2014 10:40 am
Stocks down but gold up on Ukraine tension
By Jamie Chisholm, Global Markets Commentator
Thursday 10:40 BST. European stocks are tracking falls in US index futures, while gold and Treasuries are in demand, as a bout of mild risk aversion hits markets amid increased tension between Russia and the West over Ukraine.
Moscow’s Micex equity index is down 2.6 per cent and the rouble is 1 per cent softer against the dollar at Rbs34.94 after the US and EU increased sanctions on Russia and Russian President Vladimir Putin threatened retaliation. Russia’s implied 10-year borrowing costs are jumping 27 basis points to 9.03 per cent.
Analysts at Citi said that though some unilateral US sanctions were expected, “this is slightly more aggressive than the market was pricing in”.
Fears that geopolitics will damage already weak European growth seem to be counteracting the week’s early burst of bullish ardour, which came in response to generally dovish comments from Federal Reserve chairwoman Janet Yellen; a bout of mostly well-received US corporate earnings reports; and yet another mega M&A move in the shape of a mooted $80bn bid for Time Warner.
Futures indicate that the S&P 500, which closed on Wednesday just 4 points shy of its record high, is on course to open down 6 points at 1,975. The FTSE Eurofirst 300, which jumped 1.3 per cent in the previous session, is retreating 0.4 per cent, though its Asia-Pacific peer is up 0.1 per cent after Tokyo lost just 0.1 per cent.
Geopolitical stress tends to be good for gold and the bullion is back above $1,300 an ounce, gaining $4 to $1,303. The price of palladium, of which Russia is the biggest producer, has moved up to a 13-year high of $880 an ounce. Russia is also a leading oil producer and Brent crude is advancing 37 cents to $107.54 a barrel.
Investors are moving into the perceived safety of highly-rated government debt. The yield on the 10-year Treasury note, which moves inversely to the price, is down 3 basis points to 2.51 per cent, while equivalent maturity Bunds are off 2bp to 1.18 per cent.
…
What is really moving is platinum and palladium. Obama talks tough and it makes platinum and palladium move up since Russia produces so much of the supply. Russia gains and I gain. Thanks Obama.
Bloomberg blames gold’s increase today on a Malaysian airliner crashing in the Ukraine.
Next an increase in gold prices will be blamed on a monsoon in Pakistan.
Actually, Bill a good monsoon in India often causes gold to rise due to more buying by farmers so that would not be too much of a stretch. However, unless that Malaysian airliner is the one that disappeared a few months ago and we are in the twilight zone, Bloomberg is way out there. Glad to see the manipulation fail that Goldman Sachs tried with the help of the MSM. just a few days ago. Tried to get it well below 1300 before expiration.
Given the fact that the initial reports are saying it was about two hundred miles from the Russian border, it is hard to believe that the Russians shot it down. A manpad which the rebels might have would have taken out one engine but most likely the plane would still be able to fly. So it does appear that the Ukrainian air defenses took it out. That appears to be a big oops. However, it does not explain gold’s jump.
Now gold is taking off, up over $23 an oz. Sum ting up.
Sum ting
updown: Namely, an airliner.Dumb question of the day: Are we currently in a historic bubble?
July 17, 2014, 5:20 a.m. EDT
We’re in the third biggest stock bubble in U.S. history
By Brett Arends, MarketWatch
Getty Images
New York Stock Exchange traders, October 1929.
Here’s a quick question for you. What do the following years have in common:
1853, 1906, 1929, 1969, 1999
Pass the question around your office. Call your money manager and ask him or her, too. Post it on your office notice board.
Give up?
Those were the peaks of the five massive, generational stock-market bubbles in U.S. history.
Investors who bought into stocks around those peaks ended up earning terrible returns over the subsequent 30 years. Forget “stocks for the long run.” They ended up with “stocks for a long face.” The bigger the bubble, the worse returns.
And, according to a new research report, we are back there again.
U.S. stocks are now about 80% overvalued on certain key long-term measures, according to research by financial consultant Andrew Smithers, the chairman of Smithers & Co. and one of the few to warn about the bubble of the late 1990s at the time.
The five dates listed at the start of this article, he says, are the only times since 1802, when data began being tracked, when stocks have been 50% or more overvalued according to these measures. And only two of those bubbles — 1929 and 1999, both of which were followed by disastrous crashes — were bigger than today.
That’s right: According to Smithers’s data, we are now in the third biggest bubble in U.S. history. (Oh, to jump ahead slightly, he also suspects it will go up even further before it comes back down.)
Smithers bases his analysis on a combination of measures: Subsequent 30-year returns, and a comparison of U.S. stock prices (since 1900) in relation to a key measure called “Tobin’s q,” which looks at how much it would cost to replace corporations’ assets from scratch. The two measures march closely together: For over 100 years, nothing has predicted investors’ future 30-year returns better than to compare the stock market to the q.
Smithers used data from Jeremy “Stocks for the Long Run” Siegel, from London Business School professor Elroy Dimson and his colleagues, and from London University finance professor Stephen Wright.
Caveats to this alarming analysis? My MarketWatch colleague Howard Gold recently warned that fear can be dangerously seductive and influential when it comes to financial news, and he’s right. One should always take a deep breath and a pause for thought when reading anything deeply bearish (or bullish). Smithers has been bearish for some time, although he has not attempted to predict short-term moves in the market.
Today Smithers argues that stock prices are first likely to go even higher, because they are being driven upwards by two forces. The first is the Federal Reserve’s “quantitative easing” program - the policy of flinging money at the banks in the hope some of it doesn’t stick, but finds its way into the wider economy. The second is corporate buying. Under-appreciated at the moment is that the top buyers of U.S. stocks these days are the companies themselves. U.S. companies have been borrowing aggressively and using the money to buy their own stock.
Probably the most important single implication of this analysis is not what is going to happen today or next week or even next year. It is to remind investors that stocks in aggregate have not always generated high returns. On the contrary, the stock market has throughout modern history gone in long waves, with booms of several decades, followed by mediocre or even disastrous returns for many years. Since hardly anybody studies history any more - and people on Wall Street think they can extrapolate the future from 20 years’ data - this one insight is likely to be heavily under-appreciated.
…
its not a bubble until it collapses and the experts say it was a bubble in hindsight.
Sell more of your biggest stock gains.
HOARD in cash in your brokerage and keep it in cash a few years. Be fearful when the others are greedy. The time to be greedy is going to come up.
The “problem” I had that caused my 401k and IRA balances to total over $920,000 after 25 years of investing is this:
I bought stock funds in 1999.
But I bought stock funds in every year since 1989. Dollar cost averaged.
The fallacy of the report is that it assumes that someone had most of his net worth in cash, then on the year of the peak (1929, 1969, 1999) capitulated and moved it all to stock index funds.
For Buddha’s sakes! How many people actually do that? WTF?
So it will take me 30 years to recover from the loss of the $10,000 I put into the stock funds in 1999.
Boo fricking hoo!
I more than made up for it on the down years. Yeesh!
Correction: It took me 15 years to break even on that $10,000 I put into stock funds in 1999. And BFD about the fallacious study. Come on W-A-B, put on your analysis cap and debunk it. Dollar cost average in bad years means you are buying when everyone is fearful. I backed up the truck and loaded up in 2003, also 2009. A lot of the peanut gallery was laughing off stocks as a casino and would never get into them - in those years, even in 2010 and 2011.
My only worry is the Japanese scenario — two decades of falling stock prices with a 75%-off-peak bottom that no amount of quantitative easing can fix.
But not to worry, as this could never happen here in ‘Merikuh.
America is different from Japan.
America has plenty of natural resources.
Japan is xenophobic (racist) and its politicians certainly would not grant citizenship to illegals.
On the other hand what saved the typical Japanese citizen from the 20 year melt down was their very high savings rate, I heard 30%. While Americans save maybe less than 5%.
“America is different from Japan.”
True. But does that somehow make us immune from the aftermaths of epic bubbles?
“According to Smithers’s data,…”
Who knew Smithers had data? I can’t recall him ever posting anything here except unsubstantiated BS.
Smithers?
Slithers? Bwhahahahahaha!
Bubble_year Subsequent_gap
1853
1906 53
1929 23
1969 40
1999 30
2014 15
It is hard to know in advance how to date the current episode, as it hasn’t yet blown up. But it appears the gap period since the last humongous bubble may prove to be one of the shortest on record.
If you think these high stock prices can be sustained without uncle FED I have some ocean front property for you.
some sort of catalyst will send everyone to the exits at once.
“Are we currently in a historic bubble?”
Maybe, but there’s a lot of contenders for first place:
“The ten most bizarre economic bubbles in history.”
http://www.businesspundit.com/10-most-bizarre-economic-bubbles-in-history/
“The past 15 years have been especially hard on the nation’s largest man-made reservoir. Lake Mead has seen its surface drop by more than 130 feet amid stubborn drought in the mountains that feed the Colorado River…
Forecasters are predicting another big drop at Lake Mead next spring, as the lake stair-steps its way down to elevation 1,069, and below. By June 2016, the reservoir could hit 1,064, just 14 feet away from shutting down one of two intake pipes the Southern Nevada Water Authority uses to deliver 90 percent of the Las Vegas Valley’s water supply.
With that in mind, the wholesale water agency is rushing to complete a new intake that will reach deeper into the lake. The $817 million project has seen its schedule slip by more than two years, but is on track to finish next summer.
‘We feel confident the third intake will be complete before we lose Intake No. 1,’ authority spokesman Bronson Mack said.”
If they DON’T finish it, do you think that might impact home values in Vegas?!
http://www.reviewjournal.com/news/nevada/lake-mead-sinks-record-low
This is where the Colorado River is born, as photographed last weekend west of the Continental Divide in Rocky Mountain National Park (view the pic on desktop, not mobile, to see the elk herd)
http://www.picpaste.com/IMG_20140713_065128_912-dzjDyG9G.jpg
When “Go Time” happens, we are going to build a dam at the Utah border keeping all of our water. Any Californians caught trying to poach our water will be shot on sight. Have a nice day
Albuquerque picked up over an inch a rain last night. Those godless communists can go without water in California .
Saw two elk on the side of road a couple days of go with racks more impressive than Kate Upton.
the number of points on this rack is incalculable
http://www.picpaste.com/IMG_20140713_070130_059-vuhH7Zpt.jpg
sorry, low-resolution due to zoom on phone camera
Ms. Upton is a long way from #6 jeans. When her 15-minutes are up it isn’t going to be pretty.
She has great looking baby fat.
Even if they do finish it, Vegas is burnt toast and always was. I’ve spent a couple of weeks there and it was worse than New Orleans.
That said, Bronson Mack is too cool a name for a bureaucrat.
I enjoyed the French Quarter more than I ever have enjoyed Las Vegas.
Housing starts drop 9.3% in June (must be due to that unseasonably cold and snowy weather, right?)
And so it begins….
http://www.marketwatch.com/story/housing-starts-drop-93-in-june-to-893000-annual-rate-2014-07-17
With 25 million excess empty houses and collapsing housing demand in all 50 states why bother?
do u remember crisp & cole of bakersfield CA?
http://www.bakersfieldcalifornian.com/local/breaking-news/x2027872331/David-Crisp-sentenced-to-17-1-2-years-wife-to-probation
The small fry go to jail, the real criminals on Wall Street got bailouts and bonuses. And are back up to their old tricks, unsurprisingly.
Obama’s new sanctions on Russia send global markets reeling. Can you say “unintended consequences” boys and girls?
http://www.zerohedge.com/news/2014-07-17/obamas-latest-russian-sanctions-send-global-stocks-reeling
Can you say “disaster”, boyz n’ gurlz?
El Coyote strikes again! Maybe he can pull things out with his human traffucking operation.
I read an online comment suggesting that the US sanction Mexico for aiding and abetting the children’s crusade. Wouldn’t that be a hoot. Better stock up on fresh vegetables while you can.
Better stock up on fresh vegetables while you can.
Less Mexican vegetables less e-coli infections, it is all good.
Vegetables? Crater taters.
Bill Gates, maker of buggy software, slashes another 18,000 Microsoft jobs. His open borders and unrestricted immigration agenda is clear: dump those overpaid American employees and hire Asian wage slaves in their stead. Shareholder value!
since like a company that got real big and couldn’t sustain growth.
Everybody has a computer and they seem to last a long time. The new windows didnt seem to sell well.
Why would you own this stock?
Windows 8 sucks.
Microsoft is trying to save itself by turning to China:
http://www.chinaeconomicreview.com/china-cloud-computing-microsoft-azure-amazon-aws-ibm-aliyun
Don’t worry those jobs will be made up by fast food jobs and nurse’s aides positions . In fact, if some of them work two jobs instead of one to make up for the wage difference, the way the government counts jobs it will increase employment in the U.S.
microsoft up 3% on the news their business is so bad they will can 18k.
Stock is always on up layoffs. Fewer expensive employees means higher profit margins.
why did they hire them in the first place if they weren’t adding value to the company?
Business is slowing way down. I think the best thing they have going is xbox.
Because CEO went on a buying spree . . . buyee employees either assimilate into the borg and/or are eventually laid off. Pretty typical situation that could be seen coming for at least a year now.
“…slashes another 18,000 Microsoft jobs.”
It will be near impossible to claim discrimination.
Bank of America’s litigation costs are $4B (with a B) per quarter. Those numbers include the settlements and the lawyer bills. B of A “bought” has purchased millions of hours of lawyer time to deal with the mess of their various ill-conceived schemes. (To be fair, a lot of the schemes have to do with Countrywide and BoA’s acquisition of Countrywide a few yrs ago.)
“B of A Beats Expectations But Litigation Costs Still Haunt Them”
http://www.thewire.com/business/2014/07/bank-of-america-beats-expectations-but-litigation-costs-still-haunt-them/374512/
If anyone wants to know why corporate lawyers are against normal regulation like western euro nations do, now you know why. ^^
Of course, they always couch it in “freedom of the markets” and semi-libertarian reasoning. “Don’t let regulation stifle innovation.”
they will need another bailout.
What I cant figure out is why is it that the only people who get money out of these huge settlements are the ones who dont pay their mortgage?
Shouldnt everyone who took out a mortgage get a piece on the settlement?
Welcome to the recoveryless recovery
Washington Post - A part-timer boom, or blip?
“In June, part-time jobs (defined as less than 35 hours a week) increased by 1,115,000, reports the Bureau of Labor Statistics; full-time jobs fell by 708,000.”
There is no “pent-up demand” for $500,000 starter homes
The future belongs to Lucky Ducky
Excerpt from Wall Street Journal subscriber pay wall article:
“U.S. home construction fell 9.3% in June, a surprising sign of weakness for a sector that has struggled to maintain momentum over the past year.”
Note to lying liar Realtors: there is no “pent-up demand”
Nobody is buying these $500,000 starter homes
foreign investors might buy them with some yuans? keep your trips to walmart high so they have some yuans to buy these 500k starter homes.
Once the yuan is a full reserve currency they will not need to earn them, they can just print them like we do with dollars. It will be the U.S. that will have to learn how to sell things again for a price that the world is willing to pay. That will not be pretty.
Who buys Chinese products?
Since they are running a large trade surplus while we are running a large trade deficit, I would say a lot of people.
We do.
“Seasonal adjustments” and other statistical fakery cannot hide the reality that the “economic recovery” touted by the Fed and its Wall Street accomplices is grinding Main Street into the dirt.
http://www.zerohedge.com/news/2014-07-17/seasonal-adjustment-swings-initial-jobless-claims-6-month-highs-cycle-lows
More CRATER from the Washington Post:
“The official homeownership rate for just about every demographic in the country has been declining since the eve of the housing bust. And this is particularly true for the youngest potential homeowners under the age of 35.
By this Census data, homeownership for young adults is now at its lowest level since the Housing Vacancy Survey began collecting this data in 1982, suggesting that Millennials have either been sacked by the recession, or that their attitudes toward homeownership have begun to fundamentally shift.”
There is $1.2 trillion of outstanding student loan debt, none of these kidz will be buying your $500,000 starter homes
More CRATER from Bloomberg
“Beginning home construction unexpectedly declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S.
Construction slumped 29.6 percent in the South to a 375,000 pace, the weakest in almost two years.”
Haven’t heard a peep from Eddietard recently about his crumbling empire of suburban Atlanta rentals
Craterrrrrrrrrrrrrr!
He sure quieted down, didn’t he!?
his west coast buddy jingle fraud should be waking up the homeless shelter any minute now and heading to the public library computers to post about his alleged empire of cash-flowing rentals in the sacramento foothills
your broke arent you bill jr
Realtors are liars.
PONZI BILL
http://www.zerohedge.com/news/2014-07-17/housing-starts-tumble-miss-most-january-2007-permits-have-biggest-two-month-plunge-l
“Epic disaster.” Those two words best explain what just happened with US housing starts and permits in June.
Those who want a slightly more detailed narrative of what the Department of Commerce just reported here it is: in June housing starts were expected to print at a solid 1020K, to validate the sustainable “recovery.” Instead, what happened was that the May downward revised number of 985K, which was a consensus beating 1001K last month, crashed to 893K, a drop of 92K which was the biggest since the January “polar vortex” effect, the biggest miss to permaoptimistic expectations since January 2007, and which brought the total number of starts to the lowest level since September 2013. Was it the harsh weather’s fault this time too?
Builders and boomers trying to sell their oversized McMansions will be in a fight to the death. Anytime McMansion sellers think they’ll see a price increase, it will be erased by whatever schlock the builders can produce (at a much lower cost). There simply is NOT enough demand to support price increases in the vast majority of locations.
Then there’s the whole interest rates issue… bad for both builders and used house sellers.
used house sellers.
Previously owned houses? After all, it is only Lola that is used. You of all people should know that.
Lola Poet Liberace LOL
Speaking of McMansions, wasn’t there that saying about Tool Brothers McM that “they look great for five years and then they fall apart.” Well, it’s been 10 years now. Are they falling apart yet?
And in attached product news, new-build townhomes look even worse than bubble-era townhomes. They don’t even bother with gables or quoins or shutters or even garage doors which blend in. They look like something out of a western movie.
I live in a garage mahal McM that was built in 2001. The innards of the house were designed to have rounded edges, rather than the normal 90-degree type of edges that you see on regular walls around the world and throughout history. These rounded edges were produced by bending malleable metal and placing that over the connections between surfaces. This malleable metal has been dinged and dented in every possible place. Hence, the walls of my house are dented like an old car.
If I were the owner of this house, it would really bother me a lot. It would make me feel depressed to own a house that was built by complete idiots. However, since I only rent the house, and don’t intend to stay more than a year or so, I don’t really care. I figure the dents make the rent a little cheaper.
Yes, they have more problems that houses built 50 yrs ago. A lot of foundation issues, for one. Also, a garage mahal from circa 2000 looks awfully out of date if it hasn’t been thoroughly upgraded. This is because they used trendy (at the time) fixtures, surfaces, flooring, purchased in bulk. And with so many rooms (bathrooms, big kitchens) to update, that’s not cheap.
Many McM’s also lack a finished basement, whereas you can get a used house for cheaper that has a nice finished basement where you only have to repaint, etc.
Another thing about Garage Mahals–often they aren’t on natural gas lines, because they’re in outer suburbs/exurbs and also bc nat gas was more expensive back in the bubble days. Now, we have natural gas for dayssss and the price is “alot” (sic) lower.
That’s rich Liberace. You know as much about structures as you do automotive mechanical.
Your 50 year old dumps are fire traps Liberace.
Year head is a fire trap.
Still worth it, bc I pay no rent.
That’s right. You pay more Liberace.
From the NYT Blog: “The Federal Reserve remains concerned about the U.S. housing recovery–which began to slow down last year when mortgage rates spiked–and has so far has failed to regain much traction, Chairwoman Janet Yellen said Tuesday.”
Behind closed doors they’re worried.
the only way they can keep housing going is to keep rates low. If interest rates spike it is game over.
They have to keep buying bonds and rigging the bond market.
8-10% 30 year, please.
“8-10% 30 year, please.”
+1 Indeed. I’d like a $100k helping of those too!
The average person in his 20s and 30s has two paths to take: Either retire early or retire when he has chronic pains/illnesses.
If he buys a house that means he opts for retiring at an old age when he has chronic illnesses.
Exception is if he inherited lots of money or helicopter parents helped him substantially with his house purchase, such as paying for over half the loan.
Here is why:
When house prices go up, stocks go up. When house prices go down, stocks go down. However the important differences are:
1) You can dollar cost average into stocks but you cannot dollar cost average into a house;
2) You can diversify your risk in stocks by buying a stock index fund such as Vanguard 500 Index but you place an extreme gamble on the neighborhood where you buy - will it turn ghetto? Are your neighbors all keeping their jobs and able to make mortgage payments?
3) You can take your stock investments with you and move up to higher paying jobs anywhere. But with a house you are more likely to depend on your own community for work. So you might have to downsize your income sometimes.
4) A house is not an investment. Case-Shiller studies show that houses barely keep up with inflation over long periods but stock indexes generally go up an annual rate of 7% MORE than the average inflation rate.
5) Renting in upscale and high salary cities in high tax states is usually cheaper than owning. So you can tax defer into a traditional 401k and traditional IRA, then on retirement move to a state where the state does not tax your retirement distributions.
So by paying less monthly for a roof over your head by renting than by owning, you throw the excess money into stock index funds and keep at it for at least 25 years. Then when you start getting slight health issues it is a good sign that you should think about bailing out of the rat race and move to a lower cost of living area with no taxes. After 25 years of saving more than a home owner/buyer, you have a lot more wealth than that home moaner.
And none of this was true for me. Have a good day.
There is no such thing as a state with no taxes. If the income tax is lower, then the sales tax is probably higher, or property tax, or tax on rent. I, for instance, am required by the city to pay tax on rent. This makes no sense to me at all.
Except in border situations. Vancouver Washington. No income tax but a sales tax. Across the river to Portland Oregon. High income tax but no sales tax.
Yes. I know people in Vancouver that enjoy that game.
Only if you live/work in Vancouver and shop in Oregon.
WA residents who work in OR pay OR income tax.
aka…taxation without representation…
I think Montana/Wyoming is also the same situation. In a stretch, Montana and Nevada too. Montana has no sales tax, last time I checked, but it’s worth double checking in case you wanna go there.
You know about Montana. Big Sky Country, Chet Huntley country. Marlboro country, at one time had removed all speed limits from its highways and of course…”a river runs through it!”
http://peakoil.com/geology/the-big-one-russias-bazhenov-shale
Russia has the oil for the this century.
Yeah, but we have the world reserve currency, even if Yellen & Co. debase it by the day. Surely Russia will always deliver natural resources for green pieces of paper, no?
This is a new low for the Democrat Party
“Massachusetts Gov. Deval Patrick made comparisons Wednesday between a crisis involving tens of thousands of illegal child immigrants apprehended at the southern U.S. border and the Holocaust.”
http://news.yahoo.com/democratic-massachusetts-gov-links-holocaust-border-crisis-032018005.html
New low, made by one of Obama’s pals, it is fitting.
http://www.huffingtonpost.com/2014/03/19/obama-deval-patrick_n_4996440.html
Excerpt from link that will soon post:
WASHINGTON, March 19 (Reuters) - President Barack Obama said on Wednesday Massachusetts Governor Deval Patrick - a rising Democratic star - would make “a great president or vice president” but will likely take a break when his eighth and final year as state chief executive ends.
“Deval’s done a great job and I think (it) signals that he could be very successful at the federal level as well,” Obama told Boston NBC station New England Cable News.
“I suspect knowing his wife as I do, they’re going to be taking a little bit of time off,” Obama added.
The president said Patrick, who will be 58 this year, has “enormous talent” and would be wise not to rule out public service in the future.
Former Secretary of State Hillary Clinton is the frontrunner for the Democratic presidential nomination in public opinion polls but she has not declared whether she intends to run and the election is more than two years off.
Patrick said in July he is not running for president in 2016 and would return to the private sector when his term as governor expires in January 2015.
Patrick, who served as assistant attorney general for civil rights under President Bill Clinton, gave speeches at the 2008 and 2012 Democratic national conventions that boosted his profile. (Reporting By Mark Felsenthal; Editing by Bernard Orr)
It’s almost as bad as the persecution faced by the multibillionaires in the United States.
Watch out, everyone. Google is on a mission to rid the internet of “bugs”. I expect this NSA conspirator to get real nasty real soon. I wonder how many “bugs” will be found on the Housing Bubble blog?
Define “bugs” in this context. Also, reference?
cnn
Clinton News Network is a reliable source?
Go read the news, dude.
Why does this remind me of the Chris Rock routine on doing drugs… The government is okay with you doing drugs, as long as it’s their drugs. The money ain’t in the cure, the money’s in the medicine. Google actually wants us to have bugs, as long as it’s their bugs. The money is in the eyeballs…
sound like valid points to me, in whether China faces a real estate crash:
http://europe.chinadaily.com.cn/business/2014-07/14/content_17770111.htm
Excerpt:
China has strict home loan policies and requires high down payments for homes purchased with loans; home buyers have to put down at least 30 percent deposit and for second homes 60 percent; the period for mortgage loans is less than 10 years on average.
Other than down payments, China avoids difficulties from the perspective of ratio of housing loan balance to GDP, according to Qin.
In 2012, the rate was lower than 20 percent, far below that in the US (over 50 percent), UK (close to 50 percent), France (over 40 percent), and Japan (above 20 percent but below 30 percent).
China’s urbanization rate stands at 53 percent at present, leaving the county plenty of space to reach 70 percent, Qin said.
That means that the number of new urbanites would come to 20 million each year, which will protect China from the risk of a property bubble crash such as those in Japan in 1975 and 1989, when Japan’s urbanization rate was already 76 percent at the beginning of the 1970s, according to Qin
Ten year mortgage? Mr. Banker tell them that is appropriate for a new car not a mortgage.
The mortgage is for a lease, dan.
A seventy year lease, Auntie. You think you would outlive one?
Just as importantly, since you are really buying the structure, do you think the concrete structure will last longer than the lease.
70 years is an awkward length for a lease. The bank (or whoever) will yank the house back exactly when buyer’s child reaches retirement age.
Most people pay their leases monthly. When they want to move, they leave the structure there. Why would anyone borrow money to pay a lease?
Another fantastic reason to buy a home in Stockton:
http://news.yahoo.com/3-dead-california-bank-robbery-gunbattle-053248726.html
Unfortunately it looks like the third hostage was killed by the city’s finest. Seems like the police would have more rifle scopes deployed by now so that a hail of bullets wouldn’t be necessary within city limits.
Bill Clinton would not do well in China:
A Chinese regional official was sentenced to life imprisonment on Thursday for bribe-taking, a court said, the first high-ranking bureaucrat to be jailed in the corruption crackdown overseen by President Xi Jinping.
Wang Suyi (53) was last year removed from his post as chief of the Communist party’s United Front Work Department in the northern region of Inner Mongolia, an agency that liaises between the ruling organisation and non-Communist groups.
He was convicted of bribery and sentenced to life in prison by the First Intermediate People’s Court of Beijing, the court said on its official account on Sina Weibo, a Chinese equivalent of Twitter.
He was charged with taking more than 10.73-million yuan ($1.7-million) in bribes between 2005 and 2013 in exchange for securing business deals for companies and promotions for individuals, earlier Chinese media reports said.
Wang was the first official to face criminal trial among the 40 of vice-ministerial or higher rank investigated since China’s once-in-a-decade power transition in 2012 that anointed Xi as chief of the ruling Communist Party, according to the reports.
The South China Morning Post previously quoted a senior editor with a regional party newspaper as saying that Wang’s mistresses accused him of taking 100-million yuan in bribes, and of nepotism involving about 30 relatives.
Xi took office as president last year and has vowed to root out corrupt officials, warning that graft could destroy the ruling party.
Corruption causes widespread public anger in China and the drive has been widely touted.
At least 10 Chinese provinces have launched investigations to track down so-called “naked officials” - those whose relatives have moved abroad - and the party is increasingly punishing members on charges of “adultery”, as it tries to clean up cadres’ reputation for corruption and womanising.
But critics say no systemic reforms have been introduced to combat it, while citizen activists calling for such measures have been jailed on public order offences.
Why do you constantly yammer on about China? Have you read their Constitution yet?
‘Chinese family foam at the mouth after drinking pesticide in mass suicide attempt over housing dispute’
‘The group from the eastern province of Jiangsu were evicted five years ago. Developers then moved in to bulldoze property leaving them homeless. After failing to receive compensation, they agreed to try and kill themselves. A witness saw them collapse to the floor clutching their throats in agony.
http://www.dailymail.co.uk/news/article-2696291/Chinese-family-foam-mouth-drinking-pesticide-mass-suicide-attempt-housing-dispute.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490
Disturbing photo.
Yipes! I did not look.
I had to look.
Is this a fairly typical way for Chinese families with housing market grievances to resolve them?
Oh dear…
‘China’s interest-rate swaps jumped the most in a year and at least four companies scrapped debt sales amid concern the nation faces what would be the second default in its US$4.4 trillion (HK$34.3 trillion) onshore bond market.’
‘The cost of one-year swaps that exchange fixed payments for the floating seven-day repurchase rate rose 17 basis points, or 0.17 percentage point, to 4.1 percent in Shanghai, Bloomberg data showed.’
‘That is the biggest increase since July 22, 2013, and adds to a gain of 20 basis points in the past three days.’
‘Huatong Road & Bridge Group, based in the northern province of Shanxi, said it may miss a 400 million yuan short-term note payment due on July 23, according to a statement to the Shanghai Clearing House.’
“If these bonds are really going to default in principal, it would surely shake the confidence in the domestic commercial paper and medium-term notes,” said Becky Liu, a Hong Kong-based strategist at Standard Chartered.’
‘Huatong Road would be the first to fail to pay both interest and principal.’
‘Huatong Road & Bridge Group announced that it could miss a 400m yuan (£37.6m) note payment that is due on July 23rd. According to data from Standard & Poor’s, Chinese companies have the largest debt load in the world.’
‘The credit rating agency quoted data from the end of 2013 that showed $14.2trn (£8.3trn) in debt for Chinese firms, compared to $13.1trn owed by US companies.’
Nobody could’ve seen it coming. Nobody, I tell you! Like a bolt out of the blue….
I think many of the bond holders are selling now and buying up precious metals.
Interesting! This could be part of the price rise in metals we saw today.
Interest rates going up on bonds make them become hot potatoes. This is what happened in the USA in the late 70s. Those selling bonds bought gold. Conversely when interest rates went down in the USA over 20 years, the PoG went down. Investors were rushing to buy long term bonds.
It’s different. The high interest rates on US bonds in the late 1970s reflected an inflation premium, which was a predictable erosion in the value of future coupons. Nobody thought the US was about to suddenly not make payment on the bonds, as it was clear the Fed was using inflation to reduce the strain of future coupon payments.
The high yields on Chinese bonds are a default risk premium — basically insurance against heightened risk your money will go POOF! if you buy them.
And meanwhile, the Chinese are snapping up US Treasurys like hot cakes.
I guess they like our bonds better than their own flavor?
Credit Markets
China Plays a Big Role as U.S. Treasury Yields Fall
Record Chinese Purchases of Treasurys Help Explain U.S. Bond Rally
By Min Zeng
Updated July 16, 2014 11:11 p.m. ET
Investors wrestling with the mysterious U.S. bond rally of 2014 got a clue about where to look: China.
The Chinese government has increased its buying of U.S. Treasurys this year at the fastest pace since records began more than three decades ago, data released Wednesday show. The purchases help explain Treasurys’ unexpectedly strong rally this year. The yield on the 10-year U.S. Treasury note has fallen to 2.54%, from 3% at the end of 2013. Yields fall as prices rise.
The world’s most-populous nation boosted its official holdings of Treasury debt maturing in more than a year by $107.21 billion in the first five months of 2014, according to the U.S. government data. The buying has been fueled by China’s efforts to lift its export-driven economy by weakening its currency, the yuan, against the dollar, market analysts said, a strategy that encompasses hefty purchases of U.S. assets.
China officially holds roughly $1.27 trillion of U.S. debt, about 10.6% of the $12 trillion U.S. Treasury market.
The country’s purchases have salutary effects on both sides of the Pacific. In addition to the weaker yuan in China, they hold down U.S. interest rates, making houses more affordable and generally easing financial conditions in the U.S. economy.
On the other hand, lower yields mean lower income for bond investors. They have spurred investors to chase assets globally for returns, fueling asset-price increases and investor fears that some market valuations are stretched.
Also, investors fear any reduction in Chinese purchases, along with other macroeconomic events, could destabilize the U.S. bond market and send rates higher, slowing the housing industry, widely viewed as a key driver of economic growth. Some analysts contend that low rates also can allow capital to be misallocated, fueling the risk of future economic disruption.
…
http://www.telegraph.co.uk/news/worldnews/asia/china/10972857/Chinese-protestors-attempt-mass-suicide-in-bid-for-justice.html
Rising social unrest and lack of recourse for endemic crony capitalism and miscarriage of justice by and fore the .01% at the expense of the 99% doesn’t bode well for China’s future.
Why does the US use Malaysian Airlines to false flag intimidate China and now Russia? Hope people are getting the message. Don’t book a flight on that airline for any reason.
That false flag took this right out of the news
OBAMA ATTACKS SECOND AMENDMENT WITH EXECUTIVE ORDER
Outlaws Russian-made AK-47 rifles with stroke of his unconstitutional pen
Obama Attacks Second Amendment with Executive Order
by KURT NIMMO | INFOWARS.COM | JULY 17, 2014
Obama exploited the conflict in Ukraine to target the importation of the popular AK line of firearms manufactured by Kalashnikov Concern in Izhmash, Russia. The unconstitutional ban includes the Saiga line of rifles and shotguns.
The Treasury Department’s Office of Foreign Assets Control (OFAC) attempted to soften the blow by stating the executive order does not outlaw Kalashnikov firearms legally purchased in the United States prior to the ban.
The OFAC, according to its website, “administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.”
The criminalization of an entire line of foreign manufactured firearms is possible under “national emergency powers” and there is no appeal process.
“Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments,” according to the Treasury Department.
“American civilians are buying as many AK47s from Russia’s top armory as the Russian military and police,” the Daily Mail reported in 2012. “The surge in sales of Russian assault rifles and shotguns are fueled by firearms enthusiasts who are paranoid about the weapons being banned in the United States.”
The paranoia about the government unilaterally outlawing an entire class of firearms has now come true.
Has anyone tried my donkcicle recipe yet? Did you attract any donkeys with it?
http://www.bloomberg.com/news/2014-07-16/bubble-paranoia-setting-in-as-s-p-500-surge-stirs-angst.html
Region VIII checking in.
Region IV checking in.
Politico dot com - Joe Biden touts progressive cred, claps for protesters
“Biden also faced immigration protesters, who interrupted his address partway through to chant, “Stop deporting our families.” Some immigration activists have been highly critical of the number of undocumented immigrants who have been deported under the Obama administration.
The vice president initially said that he would deal with one issue at a time. But when the activists continued, he began clapping to applaud them, leading the rest of the room to cheer, too.
“We should clap for these young people, you should clap for them,” he said. “… Can you imagine the pain, the anxiety, coming home every day, wondering whether or not your mother or father will still be there?”
http://www.politico.com/story/2014/07/joe-biden-touts-progressive-cred-claps-for-protesters-109067.html?hp=l4
Politico dot com - Rand Paul eyes tech-oriented donors, geeks in Bay Area
“Rand Paul goes hunting in San Francisco starting Thursday for two things Democrats usually expect to have locked up in the Golden State: rich technology donors and computer geeks game to leave their jobs to work on a White House campaign.
Focusing on a libertarian sliver of the Bay Area’s tech crowd, the Kentucky Republican hopes the three-day trip can tap into a powerful resource that could boost his fundraising skills, message delivery and voter turnout — potent technology tools that were a crucial component in President Barack Obama’s two general election victories.
But Paul also has a more lofty agenda — using his strongly held views on National Security Agency surveillance, Internet privacy and free markets to broaden the traditional GOP coalition — and perhaps even persuade California voters to turn their state red for the first time since George H.W. Bush in 1988.
“I think it has to be someone with the right message, but I think there’s room for us out there,” Paul said in an interview where he called on Republicans to “run a 50-state strategy.”
He is not his father’s son.
Hey Millennials, how’s that vote for hope ‘n change working out for ya?
Luuuuzzzaarrrrrs…..
http://www.latimes.com/business/la-fi-more-millennials-moving-home-20140717-story.html
Hey Realtor! Yeah, you @sshole. Who’s buying your $500,000 starter homes now?
And linked from the other Los Angeles Times article:
Moving in with parents becomes more common for the middle-aged
“At a time when the still sluggish economy has sent a flood of jobless young adults back home, older people are quietly moving in with their parents at twice the rate of their younger counterparts.
For seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.
The jump is almost exclusively the result of financial hardship caused by the recession rather than for other reasons, such as the need to care for aging parents, said Steven P. Wallace, a UCLA professor of public health who crunched the data.
“The numbers are pretty amazing,” Wallace said. “It’s an age group that you normally think of as pretty financially stable. They’re mid-career. They may be thinking ahead toward retirement. They’ve got a nest egg going. And then all of a sudden you see this huge push back into their parents’ homes.”
How many of these loosers are where they are today because they listened to a Realtor?
Never trust a realtor and remember this….. <bIf you have to borrow for 15 or 30 years, it’s not affordable nor can you afford it.
get a job F R A U D!
$hithousePoetLOL….. lol
“Never trust a realtor”
This guy seems honest.
http://www.youtube.com/watch?v=B5YFtZP7V5E - 125k -
Q: How many of these loosers are where they are today because they listened to a Realtor?
A: All of them.
eddietard
After watching a few minutes of this cr@p I have discovered that Realtors are not only Liars, they are back stabbers too.
Secrets-Interviewing a Buyer Agent - YouTube
http://www.youtube.com/watch?v=YGj6hozhHOM - 175k -
CHS: How to find shelter from the storm: Part II.
http://charleshughsmith.blogspot.com/2014/07/finding-shelter-from-storm-part-2.html
This is a screenshot of a Google search for “evil realtor satan”
http://www.picpaste.com/SCREENSHOT_evil_realtor_satan-bWOYbRtt.JPG
Only 25,000,000+ results, wonder why?
Are the Fed’s $4 trillion in bond holdings about to blow up in its face? I smell fear.
http://www.zerohedge.com/news/2014-07-17/feds-bullard-urges-investors-sell-bonds-not-stocks
Well lookie here….
“Big Banks Hit With Monster $250 Billion Lawsuit In Housing Crisis” http://seekingalpha.com/article/2318525-big-banks-hit-with-monster-250-b...
“…Investors led by BlackRock (NYSE:BLK), the world’s largest asset manager, and PIMCO, the world’s largest bond-fund manager, have sued some of the world’s largest banks for breach of fiduciary duty as trustees of their investment funds. The investors are seeking damages for losses surpassing $250 billion. That is the equivalent of one million homeowners with $250,000 in damages suing at one time.
The defendants are the so-called trust banks that oversee payments and enforce terms on more than $2 trillion in residential mortgage securities. They include units of Deutsche Bank AG (NYSE:DB), U.S. Bank (NYSE:USB), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), HSBC Holdings PLC (NYSE:HSBC), and Bank of New York Mellon Corp (NYSE:BK). Six nearly identical complaints charge the trust banks with breach of their duty to force lenders and sponsors of the mortgage-backed securities to repurchase defective loans….”
“…Beyond the legal issues are the implications for the solvency of the banking system itself. Can even the largest banks withstand a $250 billion iceberg? The sum is more than 40 times the $6 billion “London Whale” that shook JPMorgan Chase (NYSE:JPM) to its foundations….”
The few millennials who can afford to buy houses, are renting instead. (While the aging Boomers are downsizing). CNBC somehow failed to mention this trend.
http://america.aljazeera.com/articles/2014/7/17/millennials-homebuyingrenting.html
Caught between conflicting nanny-state demands in Pelosi’s increasingly dysfunctional People’s Republic of California. Bans on watering your grass, but fines for brown lawns. You deserve the government you voted for, Californians.
http://news.yahoo.com/calif-couple-conserves-amid-drought-could-face-fine-201644396.html
What a hell hole that state is. Both coasts for that matter.
Clueless MSM blow-on-her-nails Barbie gets pranked by Howard Stern listener.
http://www.youtube.com/watch?v=JFLZspYGsIY
Chinese housing bubble continues to do a soufflé-like slow-motion (for now) collapse.
SHANGHAI–The average price of new homes in 70 Chinese cities fell in June from May, extending declines for the second straight month as property developers stepped up discounts to lure home buyers amid the market downturn.
The average price in 70 cities slid 0.47% in June, compared with a 0.15% fall in May, which was the first drop in two years, according to calculations by The Wall Street Journal, based on data released Friday by the National Bureau of Statistics. On an annual basis, the average price in June rose 4.05%, compared with 5.35% in May.
Excluding public housing, prices fell 0.48% in June from May, compared with a 0.16% decline in May. Private-sector home prices fell in 55 of the 70 cities in June, up from the 35 cities that posted declines in May.
The property market is an important driver of growth in China, accounting for more than 20% of the world’s second-largest economy, including cement, steel, furniture and other related industries, analysts estimate.
Property developers have been struggling with fewer transactions this year, with housing sales down 9.2% in the first half compared with the same period a year earlier. Analysts said they expect further price cuts in the coming months as a glut of apartments and a tight credit environment continue to drag on market sentiment.
Developers also have continued to cut prices in China’s largest cities. Average home prices in Shanghai and Guangzhou in June fell 0.6% from May. In Shenzhen, the average home price fell 0.4%. Beijing bucked the trend–home prices there rose 0.1%.
http://wolfstreet.com/2014/07/17/chinese-construction-company-threatens-to-default-debt-dominos-are-lined-up/
Changzhou, a city of 4.7 million people in the Yangtze River Delta area, is most famous for its ghost city, one of many ghost cities in China, product of a ludicrously overheated, self-reinforcing, debt-driven property and construction bubble, powered by local governments’ limitless ambitions and hunger for revenues and by developers who took the money that grew on trees and plowed it into the ground.
What remains now is a simple question: Who would ever live in these luxury homes?
Rather than waiting for some unlikely miracle, the Changzhou Daily – a Communist Party rag, so this is the trusty government speaking – ran a front-page article that exhorted citizens to buy homes in the ghost city. The article proclaimed (via China Real Time) that it was “a good time to purchase real estate.” So prices in the ghost city had dropped 5.8% from a year ago and sales in the first half had dropped 11.3%, the article admitted, but what the heck, there is “no downside for home prices in our city.”
That’s how bad it is.
Bubbles, Bubbles, Everywhere
It’s so easy to make money now it’s not even funny.
Nonsense. The risk off loss is guaranteed.
phony scandals