July 24, 2014

Stuck In A Trade

The Press Democrat reports from California. “Sonoma County’s housing market wrapped up the first half of 2014 by once more posting both a drop in sales and a double-digit jump in prices, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. While it remains a sellers market, Laws said buyers are cautious and at times have sought concessions. ‘I’ve seen numerous occasions where buyers take a walk,’ he said. ‘And basically it’s that they don’t want to overpay.’”

From Bloomberg. “Alexander Philips joined the rush to buy foreclosed U.S. homes four years ago, spending $40 million on houses in California and Nevada to operate as rentals. Now his firm is getting ready to sell. ‘We didn’t want to be the last one standing when the music stopped,’ Philips said. ‘We view this as a trade, not as a business.’”

“Corporate owners with limited capital or deadlines to repay investors are now selling houses in bulk, or one by one, after a 26 percent surge in prices from a March 2012 low. ‘That consolidation phase will be bigger than the original buy phase,’ Tom Barrack, whose Colony American Homes is the third-largest single-family landlord, said at Bloomberg’s Los Angeles bureau. ‘Now we’ll sweep up everybody over the next two years who got stuck, who says I have home price appreciation, which they do. They bought right, but now they are stuck.’”

The Press Enterprise. “The national housing activist group Right to the City Alliance has released a report that claims the $20 billion that private equity firms have spent to acquire REO-to-rental and single-family rentals since 2012 has created a ‘faceless’ landlord-tenant dynamic in communities hit hardest by the housing collapse. The report was based on canvassing and tenant surveys on 1,402 properties in Los Angeles and Riverside that were owned by the world’s largest private equity firm, The Blackstone Group, or its purchasing subsidiary, THR California.”

“The properties, managed by Blackstone subsidiary Invitation Homes, were largely unaffordable for tenants, the report found. The report found that 33 percent of the tenants said their rent consumed at least 50 percent of their take-home pay, 74 percent had not met their landlord in person, and clauses in rental agreements enabled that landlord to terminate a lease and evict a tenant with a modicum of warning.”

“U.S. Reps. Mark Takano, D-Riverside, said the report confirms what his office found earlier in the year. ‘Rental costs are getting further and further out of reach for working families in the Inland region,’ he said.”

All Gov California. “Home prices calculated by the San Francisco Association of Realtors hit $1 million in 2013, but that excluded condos, which were lolling about somewhere around $850,000. But the good times kept rolling, and DataQuick reported this week that the median for condos and homes combined has breached the magic million-dollar mark and continues headed up. The continued influx of tech employees rolling in stock option money and Asian investors offering all-cash deals drove prices up 13.3% compared to a year ago. That is actually a slower pace than a year ago, when prices were up 23.8% over 2012.”

“San Francisco has been undergoing an intensified gentrification of its less desirable areas as well as bidding wars in its nicer neighborhoods. The result is some of the worst income inequality in the world. The San Francisco Human Services Agency crunched data from the U.S. Census Bureau and the World Bank to determine that San Francisco’s income inequality was on a par with Rwanda.”

The Desert Sun. “The largest unpaid property tax bill in the Coachella Valley belongs to a long-stalled project with ambitions so big, it was once called a ‘city within a city.’ The 50-acre plot in Indio along Highway 111 remains empty scrub land, except for a lonely building with a sign announcing the name of its owner: Polo Square. In July, the property received a notice of power to sell, a red flag warning that it is now on track to be sold at a tax sale auction. Polo Square Partners, however, still has many chances to pay off taxes before the county sets an auction date.”

“The backbone of the project, originally estimated to cost a staggering $850 million, included 350,000 square feet of retail, 200,000 square feet of offices, a 120-room extended stay hotel, a 250-room hotel and 516 condos.’

“The city has no plans to buy the property, Indio Councilman Glenn Miller said. ‘The city’s been in a holding pattern trying to figure out first, who’s going to end up with the property, and second, if they have any wherewithal to develop it out,’ said Indio Mayor Michael Wilson. So the land sits vacant, an eyesore to residents who live near Highway 111. The city fined the property a total $53,540 for nuisance abatements from March to May 2013, in response to complaints from neighbors about loitering vagrants and the overgrown brush being a possible fire hazard.”

The San Francisco Chronicle. “Cory Tschogl was priced out of the San Francisco housing market, so she bought a one-bedroom condo in a gated Palm Springs community 18 months ago. She visits it often and her father lives nearby. She’s rented it occasionally through Airbnb and Flipkey for about a year. The income from guests who paid around $450 a week helped meet her expenses for the mortgage, taxes and insurance. But her current tenant’s stay had issues from the beginning.”

“Tschogl says she has an Airbnb squatter - a guest who rented her vacation condominium, then stopped paying rent, refused to leave and threatened her with legal action. Tschogl realized that she couldn’t legally cut off the electricity, although her SoCal Edison account showed daily usage was triple to quadruple normal. Her father went by the unit several times and photographed it with the sliding glass doors and windows wide open, presumably while the air conditioning was going full blast to combat the 114-degree heat. ‘It’s a horror story,’ said Tschogl, who lives in San Francisco.”




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67 Comments »

Comment by Get Stucco
2014-07-24 03:35:14

“They bought right, but now they are stuck.”

Go figure.

Comment by Jingle Male
2014-07-24 03:38:31

Bought CLNY a year ago. With dividends of 7% and the increase in the stock price, the ROI is 22%.

Go figure.

Comment by Housing Analyst
2014-07-24 05:50:24

Of course you did J._Fraud. lol

Comment by Jingle Male
2014-07-24 07:49:01

HA, put your money where your mouth is. I did:

Comment by Jingle Male
2013-11-14 13:50:08

“…..Bought a house for $296,000 in 2010. Sold it for $420,000 in 2013. Used the $90,000 to buy CLNY and just got my first dividend of $1600.

Burdbrain ® just sat on his HA and sucked his thumb. You gotta play to win…..and sometimes you lose, but if you’re not in the game, you only get to suck your thumb…..”

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Comment by Housing Analyst
2014-07-24 08:01:39

More tall tales from J._Fraud.

 
Comment by Ben Jones
2014-07-24 08:03:15

‘This week the San Bernardino County Board of Supervisors considered a major increase in real estate instrument recording fees.
The proposal will increase the fees by more than 300 percent from three dollars to ten dollars at the time of recording of each real estate instrument. These fees were last adjusted in December 2008, when they increased from two to three dollars.’

State law requires that the monies collected from the fees (minus ten percent for administration) be used to fund the Real Estate Fraud Prosecution Unit in the San Bernardino County District Attorney’s office—a responsible for investigating and prosecuting real estate fraud crimes in the county.’

‘According to documentation provided to the board by District Attorney Michael Ramos the increase is warranted because in recent years, referrals to the unit increased exponentially while at the same time, revenue and staffing decreased.’

‘In San Bernardino County it is estimated that the fee increase will generate 1.9 million dollars annually in additional revenue. These funds will enable the district attorney’s office to increase the Real Estate Fraud Prosecution Unit’s staff from seven to seventeen full time staff members. The additional staff will be dedicated to the investigation and prosecution of real estate fraud cases. It will also enable the department to address the pending backlog of cases, offer victim outreach services, etc.’

‘With the passage of the proposed resolution San Bernardino County will join twelve other counties in the state that have already approved increases.’

This can’t be right. We’re often reassured that there is no real estate fraud in Rwanda, I mean California.

 
Comment by Jingle Male
2014-07-24 08:30:47

I worked on busting the fraud rings in my market in 2006-2009 and the local District Attorney said he had neither the time nor the funds to work on my reports.

I had to go to the FBI and they would only work on deals exceeding $1,000,000.

Perhaps all counties should get a transfer-tax funding for a fraud department, because I have a list of 18 people who so far got away with their actions….. although the IRS is interested in 9 of them. Proceeds from real estate fraud are taxable in the year received…and I bet none of these fraudsters declared the income!

 
Comment by Housing Analyst
2014-07-24 08:34:08

What a unique diversion from your very own misdeeds. Like the thread title states, you’re stuck in a bad trade, smoke and mirrors is your stock in trade.

 
Comment by Guillotine Renovator
2014-07-24 11:36:48

“I worked on busting the fraud rings in my market in 2006-2009 and the local District Attorney said he had neither the time nor the funds to work on my reports.”

BS. You’re a proven liar.

 
 
 
 
 
Comment by Mugsy
2014-07-24 03:36:25

“San Francisco has been undergoing an intensified gentrification of its less desirable areas as well as bidding wars in its nicer neighborhoods. The result is some of the worst income inequality in the world. ”

I still find it ironic and slightly delicious that this happened in the most liberal of cities in the US. Boston, New York, and San Francisco’s prices have gone through the stratosphere and left their citizens behind in favor of cash rich interlopers from China and Stock Option Land. I hope these people realize this the next time they obligingly pull the handle for the local Democrat. Maybe they’ll wake up from the two-party dilemma (fallacy of false choice) and start to look at Libertarian and alternative candidates. It can’t get any worse for them so there’s not much to lose.

Comment by rj chicago
2014-07-24 09:09:16

Agree - right in Shumer’s and Pelosi’s backyard. Just great!

 
Comment by Mole Man
2014-07-25 10:15:20

It is funny how this shows how far off political ideologies are from the math of the world. High taxes on the rich were supposed to ruin their businesses and send them packing, but even with California’s tax rates, regulations, and fees the problem seems to be that the talented and lucky end up wealthy enough to cause systemic problems with their winnings. The left wanted compassionate equality and the right wanted a neoliberally just distribution and neither side got what they wanted because economic reality is something quite apart from the humbuggery and manipulation of politics.

 
 
Comment by Jingle Male
2014-07-24 03:42:37

“…..so she bought a one-bedroom condo in a gated Palm Springs community 18 months ago……‘It’s a horror story,’ said Tschogl, who lives in San Francisco…………”

The first rule of owning rental property:

Make sure it is within easy driving range. I only buy properties I can go by on my way to work.

Comment by Get Stucco
2014-07-24 03:48:58

How could she legally run the AC with the doors open without creating grounds for eviction? Is the problem with the lease or with the law?

Comment by Jingle Male
2014-07-24 04:36:57

I doubt an AirBnB rental contract even addresses utilities. It is more like a hotel rental agreement.

Most Palm Springs hotels have auto shut off for air conditioning if a door is open. Same in most hot climates like Cabo and Puerto Vallarta.

She just Got Stucco……..

 
Comment by Salinasron
2014-07-24 08:52:20

While she can’t legally turn it off she can and should have stopped paying the bill and PG&E would turn it off for non payment.

Comment by Jingle Male
2014-07-24 09:00:06

Brilliant…..except for the risk from the tenant destruction of the premises at 110′F…..

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Comment by Blue Skye
2014-07-24 09:36:28

It is hard for me to imagine that paying for one night at a “B&B” could entitle one to protections for “tenants”.

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Comment by Ben Jones
2014-07-24 09:54:10

30 days in California.

 
 
 
 
 
Comment by Ben Jones
2014-07-24 04:56:14

‘Tschogl was priced out of the San Francisco housing market, so she bought a one-bedroom condo’

It’s funny how the writer puts this. She was “priced out”, therefore it makes perfect sense to buy some air box in the desert hundred of miles away.

Comment by Blue Skye
2014-07-24 05:05:23

Because it’s a casino.

 
 
Comment by Ben Jones
2014-07-24 04:59:21

‘A record home sale in America’s Last Hometown is likely to be just around the corner. The price tag on the pending sale of the home at 1400 Sunset Drive, on the market for $10.6 million, would shatter the previous high in the city.’

‘The highest sale of a Pacific Grove house to date was $3.5 million for a home on Sunset Drive in 2009. Second was a $3.2 million sale of a home on La Calle Corte in October 2013, according to Monterey County Assessor Stephen Vagnini.’

‘The current owner, Douglas Johnson, has lived at the home since 2000, according to property records. The home was listed for $15.9 million in 2011. It dropped to $12.9 million in August 2012 and down to $11.5 million by the end of that year.’

Comment by Jingle Male
2014-07-24 05:23:40

Drop south about 5 miles to Pebble Beach and here is one for $79 million. Location, location, location!

http://blog.sfgate.com/ongolf/2012/06/15/golf-fans-ultimate-pebble-beach-property-for-79-million/#5826101=7

Comment by Get Stucco
2014-07-24 06:17:56

Homes in SD were listed at similarly crazy valuations (north of $50 mil) before the first round of bubble price collapse in 2007. I haven’t checked whether they ever returned to those levels.

Comment by Jingle Male
2014-07-24 08:44:28

The Pebble Beach house has been for sale for about 2 years. I think they are going to break it up into three different properties, since it was assembled from three different properties…….

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Comment by Salinasron
2014-07-24 09:00:02

I have to check this one out next trip over to PG. It must be an overseas buyer. Most honest RE’s in PG will tell you that because of the marine layers in the mornings many people get and want to move within a year or two. pG also has a water problem and houses have water credits.

 
 
Comment by Ben Jones
2014-07-24 05:42:15

’spending $40 million on houses in California and Nevada to operate as rentals. Now his firm is getting ready to sell. ‘We didn’t want to be the last one standing when the music stopped’

It wasn’t that long ago when we had posters here say, ‘oh, they’re in it for the long haul. They’ll never sell.’

That charade didn’t last.

Comment by Housing Analyst
2014-07-24 05:51:58

“That charade didn’t last.”

They never do. Consistency and truth aren’t elements of fraud.

 
Comment by Rental Watch
2014-07-24 08:33:55

The major buyers who have gone public (and owns thousands and thousands of homes) are in it for the long haul, the smaller buyers (who bought hundreds), not so much.

The call from many on this board (that I objected to) were people saying that Blackstone, Colony, AMH, etc. was going to be dumping homes.

Comment by Ben Jones
2014-07-24 08:38:20

‘that I objected to’

What do you think the bonds they are selling adds up to? Jeebus, the rats are leaving the ship. If a company has a solid revenue stream, why sell? Because they are speculators. Why does Blackstone have to lease houses to people barely getting by? Do they tell the bondholders about this? I’d guess not. Maybe some lawsuits a brewing.

Comment by Rental Watch
2014-07-24 08:47:14

The bonds are loans on the real estate they own.

They don’t make a penny in profit from floating the bonds, they simply leverage up their investment–returning some money to their investors.

The only time they’ll make money on their investment is when they sell, and floating a bond is not selling.

Now, going public, and selling a stake in the company is different…then they are selling interests in the leveraged real estate. But at the same time, they are not converting rental homes back to owner-occupied–which is what needs to happen if their “exiting” adversely affects the housing market.

Just because you don’t use leverage on your rentals doesn’t mean it’s not reasonable for others to use leverage.

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Comment by Housing Analyst
2014-07-24 08:48:51

They’re negative cash flow….. That’s OK with you be cause you are too.

 
Comment by Ben Jones
2014-07-24 08:51:44

‘returning some money to their investors… floating a bond is not selling’

They are selling the houses to the bond market. Where do you think they got money to “return to investors”?

‘going public, and selling a stake in the company is different’

Funny how that IPO market went away. Darn rats.

 
Comment by Rental Watch
2014-07-24 09:22:56

“Selling the houses to the bond market”?

???

Title doesn’t change hands.

That’s like saying a person who obtains a loan on a free-and-clear property is “selling it” to the bank. That makes no sense. I thought you had an accounting background…you should know better.

AMH is now trading at $18.50, $2.50 (15% over their IPO price of a year ago). The public is gaining acceptance of the business model.

 
Comment by Ben Jones
2014-07-24 09:30:54

‘a person who obtains a loan on a free-and-clear property is “selling it” to the bank.’

They basically are, and then they are supposed to buy it back. Who gets the house if they don’t make payments? I’ve changed the locks on so many refi’s and HELOC’s I’ve lost count.

 
Comment by Jingle Male
2014-07-24 09:30:57

RW,

I believe the “bonds” Ben is referring to are the MBS instruments sold using repayment based on future rental income. They have not been received that well in the market, but they are being structured and sold for revenue to third parties.

The fund then receives principal from the sale of the securities (bonds) and gives up the right to the net rental income (after expenses and I assume, a hefty management fee to Blackstone.)

 
Comment by Rental Watch
2014-07-24 10:14:27

The other piece though is that they can’t sell the home encumbered by the bond without providing a payment to bondholders (i.e. a “release price”).

My understanding is that the structure allows flexibility with respect to the composition of the pool of homes (so they can sell some, and replace with other collateral, etc.). So, in essence it’s one security backed by a lot of homes.

 
Comment by Rental Watch
2014-07-24 10:23:07

Title doesn’t change. They are not “basically” selling the house.

The bank can’t rent out the home. The bank does not have keys to the home. The bank is not responsible for upkeep as a lender. The bank doesn’t pay the property taxes. The bank doesn’t get profit on sale if the value goes up–and they only take a hit if the value falls below the principal amount, AND there is a foreclosure.

The bank is a secured lender with the house as collateral–and the bank only becomes the owner after a foreclosure, which in many states takes well over a year through a judicial process.

This is fundamentally different than owning the house.

 
Comment by Ben Jones
2014-07-24 10:36:38

It depends on how it turns out, doesn’t it? And these guys weren’t speculators, they were in it for the “business”.

 
 
 
Comment by Housing Analyst
2014-07-24 08:41:39

They are dumping them R._Fraud. These are fly by night operators.

 
 
 
Comment by Combotechie
2014-07-24 05:48:49

“Alexander Philips joined the rush to buy foreclosed U.S. homes four years ago, spending $40 million on houses in California and Nevada to operate as rentals. Now his firm is getting ready to sell.”

“‘We view this as a trade, not as a business.’”

And there it is. So much for their stated idea to “operate as rentals”.

“Corporate owners with limited capital or deadlines to repay investors are now selling houses in bulk, or one by one, after a 26 percent surge in prices from a March 2012 low.”

IOW, they need the money. They’re not making enough money from rental income (surprise!) so now they have to make their money from selling off assets, and in this case, in this business, the assets are houses.

But if they or any other business continue to sell off their assets then they will someday run out of assets to sell and this is the time they will either have to close down ghe business or somehow come up with some more assets. But if the assets they need to get in order to sell are fully priced (fully priced because companies such as this one bid up the prices) then they are hosed - at least the investors (investors = OPM) are hosed; The guys running these companies aren’t hosed because while the party was going strong the guys running these companies got to extract some very big bucks.

Comment by Ben Jones
2014-07-24 06:11:34

‘The report found that 33 percent of the tenants said their rent consumed at least 50 percent of their take-home pay’

That’s very interesting. I have leases that state in large letters that rents can’t be more than 30% of take home pay. It’s almost like Blackstone is setting up an unsustainable situation. I wonder why they would do that?

Comment by Get Stucco
2014-07-24 06:24:02

They must know on good information that incomes will soon increase relative to rents.

 
Comment by Ella58
2014-07-24 10:50:07

A quote from a recent Salon article:

“Under the contracts of the rental-backed securities, if performance falls below a certain level, the entire portfolio goes into default, which may lead to evictions for thousands of renters.”

Does anyone know if this is this accurate?

I’m wondering if these funds are planning to 1) use high vacancy rates (that they cause by asking unaffordable rents) as an excuse to liquidate their portfolios into a strong sellers market (that is, if they need an excuse - or can they liquidate at will?), or 2) use “kicking the poor renters out onto the street” as an excuse to get a future gov’t bail-out (ie., “give us money or our tenants will be homeless” kind of thing).

Comment by Chief
2014-07-24 16:23:48

Like GMC, they need impossible-to-get-good-tenants so then go “Rental Sub-prime”. The intention was not a business but something big for an IPO to catch lots of floating cheap money from the FED and when it blows up they get out clean because “nobody saw it coming”

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Comment by Get Stucco
2014-07-24 06:21:44

“IOW they need the money.”

Loans gotta be repaid.

 
 
Comment by taxpayers
2014-07-24 05:53:44

“Alexander Philips joined the rush to buy foreclosed U.S. homes four years ago, spending $40 million on houses in California and Nevada

should make out well

Comment by Ben Jones
2014-07-24 06:13:43

‘We didn’t want to be the last one standing when the music stopped’

Music? Stopped?

Comment by Rental Watch
2014-07-24 08:43:22

“Twinrock’s target for liquidating its single-family rental funds is next year through 2017, so they’re not in a rush to sell, Philips said.”

Comment by Beer and Cigar Guy
2014-07-24 09:22:27

They won’t be in any rush to sell- until someone else puts their inventory on the block as well… And then its ‘every man for himself’ and ‘he who sells cheapest, sells first’… Seriously, how could anyone possibly believe that this time it would end differently? Magical thinking…

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Comment by Rental Watch
2014-07-24 09:29:46

This is why vacancy rates matter.

Every time Twinrock wants to sell a home, they need to evict a tenant. “Rushing” doesn’t work. That tenant adds pressure to the rental market. The rental market is where the net new buyers of owner occupied housing are coming from.

They’ll be selling $40MM of homes over a period of 3 years. That’s a laughably small part of the Southern CA market.

Property Radar has tracked homes acquired and sold by LLCs and LPs in CA. In tracking the buys/sells from 2011, there are less than 20k homes owned by LLCs and LPs in the entire state. This is approximately 2 weeks worth of sales inventory.

Believing that adding 2 weeks of inventory (even immediately, let alone over a 3 years period) will impact the market in any meaningful way is truly magical thinking.

 
Comment by AnotherNorCal
2014-07-24 10:32:07

It’s small peanuts until that 40MM grows larger. Think about it. If there are thousands of small investment companies and all of a sudden prices start to fall (as they are in some parts of the country) what do you think will happen? Do you think they’ll just sit and wait? No, they’ll dump.

When the stock market crashes, these small investors are going to have a hell of a time.

 
Comment by Guillotine Renovator
2014-07-24 11:44:49

All that’s needed for a rush to the exits is a severe and obvious decline in prices which hits the mainstream media. Those who can afford to cut their losses and sell will, those who cannot will take them anyway- because the market will make them.

 
Comment by Jingle Male
2014-07-24 12:02:35

RW says:

“…..That tenant adds pressure to the rental market. The rental market is where the net new buyers of owner occupied housing are coming from…..”

Exactly.

Case in point:

1) Tenant gave 45 days notice June 15th, because they are buying a new home (3+ years in residence).
2) Listed the property on Craigslist early July. Four calls by noon. Showed it at 3PM. Rented. Removed CL post.
3) Old tenant moving out over the next 7 days. He is fine with me working on the property, which I did this morning for a couple of hours.
4) New tenant moving in Aug. 1.

The rental market is so tight in the Sacramento foothills it squeaks.

The 5-year vacancy rate for my portfolio equals less than 1/10th of 1%.

 
Comment by Rental Watch
2014-07-24 12:18:50

The whole of LLC and LP owners represents less than 20,000 units in the State of CA.

Prior to the bubble/crash, there was something like 10MM homes owned by individuals who rented them out.

Owners of single-family rental properties suddenly flooding the market with homes has never been the source of a housing crash in the US.

My point quite simply is that the number of organized buyers of homes (formed LLCs and LPs to do so) is a tiny fraction of all homes owned, and a slightly greater fraction (but still a tiny portion) of all rental homes owned.

Said concisely, that small ownership amount is not enough to move the market, even if they were to dump them all on the market.

There will be another housing crash/correction. We’re setting ourselves up for it right now. But the catalyst for the fall WILL NOT be that all of a sudden these ownership groups decide to sell…there simply aren’t enough homes owned by them to make a difference. The catalyst will be something different. My money is on a more traditional recession in the course of the business cycle or global event that causes a non-traditional recession.

Will that recession then cause some of these groups to sell in a panic, or cause them to trip up on obligations they have to lenders/investors, etc.? It all depends on how they are set up, but it is certainly possible. But these groups being forced to sell in a panic will be a symptom of a greater economic/housing problem, NOT the cause of said problem.

 
Comment by AnotherNorCal
2014-07-24 12:27:20

“But these groups being forced to sell in a panic will be a symptom of a greater economic/housing problem, NOT the cause of said problem.”

I agree. But the downward pressure caused by these small investors will simply fuel the fire…

 
Comment by Ben Jones
2014-07-24 12:31:41

‘that small ownership amount is not enough to move the market, even if they were to dump them all on the market’

https://www.youtube.com/watch?v=eKOLBy2xYhQ

 
Comment by Rental Watch
2014-07-24 12:52:35

“I agree. But the downward pressure caused by these small investors will simply fuel the fire…”

It’s not much fuel. An extra twig on a campfire will quickly be consumed and not make the fire perceptibly hotter.

 
Comment by Ben Jones
2014-07-24 12:59:40

See, I don’t look at any of this the way you do. What makes prices fall is that prices get too high. These guys have already done the damage; openly paying way too much, bragging about it. What will determine how bad things get depends on the level of speculation. They are speculators and they aren’t alone. Let’s take this woman and her condo. Why buy it? She mentions staying there every once in a while to see family. She couldn’t stay with her dad? The taxes alone could pay for a week in a hotel every month. She’s gambling with borrowed money and will bolt like greased pig when it dawns on her that she’s holding the bag.

 
Comment by azdude
2014-07-24 14:47:03

I think stocks will crash before homes. people need a roof over their heads.

 
Comment by Guillotine Renovator
2014-07-24 19:52:55

“I think stocks will crash before homes. people need a roof over their heads.”

It has nothing to do with shelter.

 
 
 
 
 
Comment by Ben Jones
2014-07-24 08:09:15

‘New home sales fell dramatically in June and the prior month’s data was revised to show less robust growth, suggesting a weak housing market.’

‘The Commerce Department said on Thursday that single-family sales dropped 8.1 percent, the largest decline since July 2013, to a seasonally adjusted annual rate of 406,000 units. New home sales in May were revised to show a 442,000 unit pace, down from the previously reported 504,000 units. If the sales data are compared to June of last year, then sales were down 11.5 percent.’

‘U.S. housing starts and building permits also unexpectedly fell for the month of June…Many economists attempted to blame the weak housing market on unusually cold weather since February’s weak report was released, but that excuse simple will not do in the middle of the summer.’

‘Last month, new home sales fell in all four regions, declining by a whopping 20 percent in the once-robust Northeast region.’

‘At June’s sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since October 2011. The inventory of new houses on the market rose 3.1 percent to 197,000 units, which was the highest number since October 2010.’

Comment by Ben Jones
2014-07-24 08:17:12

‘D.R. Horton Inc, the No.1 U.S. homebuilder, reported a 23 percent slump in third-quarter profit, hurt by an impairment charge, mainly on properties in the weak Chicago market.’

‘The Chicago housing market remains weak, with sales absorptions and returns in these communities performing below its expectations, the company said in a statement.’

‘D.R. Horton reported a 15 percent drop in home deliveries in both the Midwest and the Southwest in the quarter ended June 30…
The company’s orders - a key indicator for builders, who do not book revenue until they deliver a house - fell 13 percent in the Midwest and 22 percent in the Southwest.’

 
Comment by Housing Analyst
2014-07-24 08:37:54

“Last month, new home sales fell in all four regions, declining by a whopping 20 percent in the once-robust Northeast region.’”

Collapsing housing demand and massive growing excess housing inventory in all four directions.

Comment by azdude
2014-07-24 14:43:45

buy now while they are still printing money?

 
 
 
Comment by rj chicago
2014-07-24 09:14:46

On housing in all four regions - LOOK OUT BELOW!!!

Comment by Whac-A-Bubble™
2014-07-24 21:38:40

Crap…is there even enough time at this point to refoam the runway?

 
 
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