November 18, 2014

To Absorb The Supply, Prices Will Have To Weaken

Stuff reports from New Zealand. “Auckland’s galloping property market is already outrunning the latest rates valuations, released frenzied anticipation. Loan Market mortgage adviser Bruce Patten said he had already seen a property assessed by a valuer as worth $715,000, when its new council valuation was $620,000 – a difference of $95,000. Another property had a new capital valuation of $590,000 and had a new CV (capital valuation) of $530,000. ‘Because they were actually done six to eight months ago, they can get way off kilter. At the higher end it’s hit and miss. We say do not think that the capital valuation is the value of your house, the value of your house is what someone is prepared to pay for it.’”

“Recent sales figures supplied by Ray White and Loan Market showed a Massey home selling for 22 per cent more that the latest CV. On the other hand, a Westmere house sold for 21 per cent less than it new CV of $1,480,000.”

Bloomberg on the UK. “Ruth Marchand said her six-bedroom house in the leafy south London village of Dulwich would have sold within six weeks if she’d offered it earlier this year. Instead, she’s still waiting for the first bid two months after the property went on the market. ‘Nothing is selling now,’ said Marchand, who said she doesn’t expect a deal before Christmas. ‘Any comparable houses in the area are still on the market.’”

“Owners who offered properties for sale in the most- expensive districts earlier this year are having to cut prices as more homes come onto the market at lower values, Countrywide Plc, the U.K.’s largest real estate agency, said Oct. 30. ‘The supply and demand dynamic that had proved such a boost during 2013 has largely gone into reverse’ in London, RICS said Nov. 13.”

CBC News in Canada. “What was a booming real estate market has flattened out and turned to a buyer’s market. The planned condos for the old Newfoundland Telephone building in downtown St. John’s are now instead being listed as an executive rental project. ‘We’ve come through an aggressive growth cycle over the past five years,’ said Chris Janes, the senior market analyst with the Canadian Mortgage and Housing Corporation. ‘It’s not sustainable for the market to continue at that level and so that’s where we appear to be now … more in the downward slope, I guess, of that cycle for lack of a better term.’”

“On the condominium side of things, new condo after new condo is sitting empty and unsold. Janes has a word to describe the condo market: ‘oversupplied.’ ‘There are a fair number of completed new units in particular that are for sale and have been sitting on the market now in excess of six to 12 months, and the majority of these units would be targeted to the higher end of the market, or what we would call the executive level,’ said Janes.”

The Malaysian Star. “The property market in Singapore, described by a developer ‘to be in a (state) of slumber’ and by a Singaporean analyst that it ‘could get worse,’ may pose a challenge to some Malaysian developers. A report by Maybank Kim Eng forecasts ‘up to a 15 per cent decline in home prices from mid-2014 to end of 2015′ while property consultants say prices in some locations have already dropped by as much as 30 per cent from their launching price. A Bloomberg repor says home prices on Sentosa had fallen by about 40 per cent since 2012, compared with a 28 per cent drop in 2008, the year when Lehman Brothers fell, precipitating the global financial crisis.”

“Analyst Ng Wee Siang from Maybank Kim Eng says in an Oct 27 report that the ‘property market is not a pretty sight.’ His prognosis is based on three factors - vacancy rates for non-landed private homes, excluding executive condominiums, have risen to 8.3 per cent, their highest in eight years. ‘Secondly, current seemingly high rental yield spreads could reverse when interest rates start to rise in 2015.’ A massive supply of new homes - 63,000, of which 6,038 are unsold - could tip the balance in 2015 as household formation tapers off. ‘To absorb the supply, property prices and rentals will have to weaken, a consensus view,’ he says.”

Mortgage Business in Australia. “According to S&P managing director and chief economist, Asia Pacific, Paul Gruenwlad, the weakening Chinese property sector is a significant risk for Australia if China’s government fails to adjust policy settings to keep the bottom from falling out of the market. Mr Gruenwald said that during a recent visit to the world’s second largest economy the local expectation was that property prices only go one way. ‘As economists and analysts we should all get very nervous when the expectation is that prices are only going to go up,’ he said.”

“The risk is the intersection of China’s shadow banking or non-bank credit boom going into the interest rate sensitive sectors like housing, Mr Gruenwald said, adding that the market has already started to turn. ‘We now have prices falling in 69 of the 70 cities that report in China,’ he said. ‘Everything is softening now in China and the question is: can the government adjust the knobs and keep the thing going or are we in for something more serious?’”

The Epoch Times on China. “Beijing’s indifference to the international anti-tax evasion campaign forms a sharp contrast to its highly propagandized effort to hunt down runaway officials. For Chinese, however, hunting corrupt officials and recovering taxes are two very different things from an ethical perspective. The former targets corrupt officials who fled the country with illegally obtained assets, while the latter involves all wealthy Chinese who have transferred their wealth abroad.”

“The International Consortium of Investigative Journalists revealed that nearly 22,000 offshore clients with addresses in mainland China and Hong Kong hold companies in tax havens. Among them are relatives of the ‘red nobility,’ the wealthy, and Chinese congress members, according to the report. ‘By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000,’ the report stated. Compared to the 800 billion yuan that corrupt Chinese officials took abroad, the $1-4 trillion is a much larger amount. Furthermore, quite a large portion of the $1-4 trillion was obtained illegally.”

“The United States, Canada, and Australia are the defecting officials’ top choices since these traditional immigration targets provide good living conditions and high-quality education. It is said that ‘corrupt official neighborhoods’ and ‘corrupt official offspring villages’ can be found in these countries.”

The Hurriyet Daily in Turkey. “The price of new houses in Turkey increased by 7.3 percent in October compared with the same month of the previous year, according to the Reidin-GYODER New House Price index, which was released on Nov. 14. Around 13,611 real estates were sold to foreign buyers in the first nine months of the year, an increase from 12,181 the year before. But high-end properties were not popular this year.”

“Nizameddin Asa, president of Istanbul’s Real Estate Association, said that there is now no activity in the market for high-end real estate. ‘There are too many construction projects for luxury houses, but buyers are limited for such projects due to high prices. The unit cost in a luxury project in Istanbul starts at $10,000 per square meter (10.76 square feet). You can see from how many commercials are on television for these luxury projects, that they cannot sell,’ Asa added.”

RSS feed


Comment by Housing Analyst
2014-11-18 05:34:43

McLean, VA(DC Metro) Sale Prices Turn Flat YoY; Crater 6% MoM and 3% QoQ

Comment by Housing Analyst
Comment by Housing Analyst
2014-11-18 05:39:39

Naples, FL Sale Prices Turn Negative On Year; Crater 30% QoQ and 6% MoM

Comment by Allan
2014-11-18 22:47:42


Comment by Housing Analyst
2014-11-18 22:49:51

I guess you’re not looking. ;)

Comment by Jingle Male
2014-11-19 02:56:30

HA! Ha, ha, hahahaha…..someone else is on to to the Housing “Analyst”. Allan, please don’t let the facts interfere with HA’s headlines!

Comment by Housing Analyst
2014-11-19 05:54:51

Falling prices Jingle_Fraud.

(Comments wont nest below this level)
Comment by joesixpack
2014-11-19 07:01:19

Looks like upward movement to me too. I looked, blinked eyes a couple times and still said …

“The median home value in Naples is $701,500. Naples home values have gone up 14.8% over the past year and Zillow predicts they will rise 4.9% within the next year.”

I hope I am not misunderinterpreting this, because I punched in my zip and it said my market is “Hot”

Comment by Housing Analyst
2014-11-19 07:17:43

If you believe in “home value”.

Meanwhile sale prices continue to fall.

(Comments wont nest below this level)
Comment by Wittbelle
2014-11-18 06:07:29

Is it wrong that I hear all of the New Zealand news as if it’s being read by Murray Hewitt?

Comment by oxide
2014-11-18 10:39:24

At least you don’t have Peter Jackson’s voice in your head (or worse, Richard Taylor’s. :shock: :wink: )

Comment by Ben Jones
2014-11-18 06:34:02

‘On Halloween, the BOJ and Japan’s Government Pension Investment Fund announced one of the largest market interventions in modern history, a decision that may well threaten the monetary stability of other nations.’

‘Part of the reason that the BOJ decided to act was not just the end of QE by the Fed, but because it is increasingly clear that China will not add further to its stimulus program. Leland Miller and Craig Charney of China Beige Book International wrote in the Wall Street Journal last month: “It took years for the markets to acknowledge that China was slowing down. Now many investors are panicking, calling for Beijing to achieve its growth target by resorting to large-scale stimulus. Yet such a move isn’t justified by the state of the economy.”

‘As with the case of the Fed in the United States, the purchase of assets has so far not resulted in an increase in economic growth, particularly in consumer demand or jobs. Asset prices have risen and Japan’s government bonds essentially trade at zero interest rates, but there is not yet any indication that the purchase of assets by the central banks in the United States and Japan is doing anything other than creating more hazard for investors today and a foundation for inflation in the future. Eventually, political leaders around the world may be forced to consider debt reduction and tax cuts as an alternative to the printing press and hyperinflation.’

‘Michael Lewitt, a principal at Eccles Street Management, likens Japan’s decision to vastly increase asset purchases as tantamount to a declaration of war. In a comment entitled “A New Pearl Harbor?” Lewitt writes: “On October 31, two announcements came out of Japan that pose a direct threat to global financial stability. The fact that global stock markets rallied on the news is not surprising, but investors should be proceeding with caution rather than pouring more money into risk assets… We are moving to the next phase in the unprecedented monetary experiment that began during the height of the 2008 financial crisis. Investors should begin hedging their portfolios of risk assets for the coming storm. To repeat an overused phrase, this is not going to end well.”

“The world is collectively disregarding an indisputable reality,” notes my friend and co-author Fred Feldkamp, “namely that ‘real’ economic growth is only generated by raising future cash flows. Unless valuations are supported by higher cash flows, elevated cap rates eventually disintegrate under the pressure of rising real interest rates and higher risk premiums.”

Comment by Housing Analyst
2014-11-18 06:43:58

Measures to avoid the inevitable collapse in asset prices simply enlarges the scope and size of the collapse.

Comment by MacBeth
2014-11-18 08:15:06

Yes, but the current “I have mine, so screw you” generations will likely manage to hang onto theirs.

Only when fewer “I have mines” are still alive while the markets be allowed to correct.

That day is coming as the raping and pillaging of younger generations (younger than 50) continues.

Comment by Blue Skye
2014-11-18 09:44:59

“I have mine, so screw you”

These people are living in the center of the credit pyramid. When the pyramid collapses, it is these people who will be crushed. Be patient, and stay out of debt.

(Comments wont nest below this level)
Comment by Whac-A-Bubble™
2014-11-18 07:22:36

“According to S&P managing director and chief economist, Asia Pacific, Paul Gruenwlad, the weakening Chinese property sector is a significant risk for Australia if China’s government fails to adjust policy settings to keep the bottom from falling out of the market. Mr Gruenwald said that during a recent visit to the world’s second largest economy the local expectation was that property prices only go one way. ‘As economists and analysts we should all get very nervous when the expectation is that prices are only going to go up,’ he said.”

China is the New Era California.

Comment by Combotechie
2014-11-18 06:54:56

“To absorb the supply, prices will have to weaken.”

But … but … but if prices weaken then the FORCE THAT DRIVES DEMAND will weaken because in the crazy world or real estate (and the crazy world of stocks) PRICE EQUALS VALUE which means if the price is reduced then that means the value is reduced.

The rules of Econ 101 do not apply in RE as they do in, say, Macy’s. You do not move inventory by lowering prices such as Macy’s does; instead you move inventory in RE by raising prices.

Sounds a bit crazy, but there it is.

Comment by Housing Analyst
2014-11-18 07:02:37

Not really but if you say so.

Comment by Whac-A-Bubble™
2014-11-18 07:25:24

“…instead you move inventory in RE by raising prices.”

Not sure how that works for new construction.

I get it for owner-occupied units, provided there are all-cash buyers willing to pay ever-higher prices or lenders willing to loan ever larger principle balances, as owners are naturally more willing to sell at a higher price.

Comment by Combotechie
2014-11-18 07:31:22

“Not sure how that works for new construction”.

It works because RE is bought (and marketed) as an investment item while in reality it should be bought as a consumption item.

Comment by Combotechie
2014-11-18 07:50:00

For an example, take a look at all the ghost cities in China.

Housing there wasn’t built to become consumption items, they were built to become investment items.

(Comments wont nest below this level)
Comment by Housing Analyst
2014-11-18 08:12:01

That theory isn’t working too well in reality.

Comment by Blue Skye
2014-11-18 09:47:13

That theory is not working in a serious way in St. Johns.

Comment by In Colorado
2014-11-18 09:48:50

Also, they are a jobs program.

My employer has a big campus in Beijing. I haven’t had the pleasure of going there yet, but my coworkers who have tell me that they see a lot of make work done in China: bathroom attendants, parking lot attendants, etc.

Comment by tresho
2014-11-18 11:16:31

lot of make work done in China: bathroom attendants, parking lot attendants, etc.
Chinese ‘full employment’ policy, nothing new

Comment by alphonso bedoya
2014-11-18 09:47:37

“…you move inventory in RE by raising prices.”

The same holds true in the stock market.

The acceleration of money growth also plays a pivotal role. A slow-down inevitably leads to Recessions which we are rushing towards.
The nail in the coffin is a stronger dollar.

Comment by Ella58
2014-11-18 12:48:31

“You do not move inventory by lowering prices such as Macy’s does; instead you move inventory in RE by raising prices.”

Oddly enough, I’ve noticed certain retailers trying to adopt the RE “model” of raising prices to sell more, though I don’t think it’s working. Must be a New Normal thing - “buy now before prices rise!” incentive for the consumer, and “don’t take the loss because of mark-to-model” incentive for the retailer.

Comment by Ben Jones
2014-11-18 06:56:24

‘The Beijing Police said on Friday that they had busted over ten “underground banks”, which were used to illegally trade foreign currency and transfer money across borders. The cases involved nearly 140 billion yuan (about 22.6 billion U.S. dollars), the police said.’

‘More than 400 police in September were dispatched to undertake the operation, which resulted in the arrest of 59 suspects; the seizure of over 800 bank cards and more than 100 Internet banking digital certificates; and the freezing of 264 bank accounts.’

‘A man surnamed Yao initially came under the police’s radar in February. Every transaction involved the exchange of yuan equal to 50,000 U.S. dollars, the maximum limit an individual can purchase within the country annually. He had used various bank accounts to send the money abroad. Over the past year, he transferred more than five million U.S. dollars overseas.’

‘The suspects transferred money online or by cellphone rather than trading in cash. They often operated business from their own homes and borrowed, rented or bought others’ bank accounts.’

Comment by Ben Jones
2014-11-18 07:00:50

‘China’s shadow banking sector has rapidly burgeoned and now ranks as the third largest in the world, according to a report issued last month by the Financial Stability Board (FSB), which was created by the G20 economies in the aftermath of the 2008 global financial crisis.’

‘By definition, shadow banking refers to capital-lending intermediaries, or ‘other financial intermediaries’ (OFI) that operate outside the traditional banking institutions (banks where money is deposited) and therefore are exempt from the limited regulations and oversight placed on the traditional banking sector. However, some analysts accuse traditional banks of being a principal force in the shadow banking sector.’

‘The most advanced capitalist countries such as the United States and the United Kingdom have the largest shadow banking systems, representing a third and 12pc respectively of the totality of shadow banking around the world.’

‘Analysts did note, however, that emerging markets, particularly China, warrant special attention due to the magnitude and rapid rise of shadow banking in that country. As the second largest economy in the world, a major financial meltdown would precipitate massive consequences throughout the globally integrated market system.’

‘Some independent economic analysts have said the FSB’s report underestimates the scope of the shadow banking industry in China. The Chinese Academy of Social Sciences has estimated that it may be $1.5trn more than the FSB’s report of $3trn. This equates to one-fifth of China’s supposed regulated banking sector. To date, OFI’s assets have ballooned to $6.54trn, according to analysts.’

‘The report is timely as it comes amidst a series of shadow banking defaults in China. Chinese state media had reported in September that a major bank faced $652m of defaults from surreptitious lending practices such as off-balance-sheet products.’

‘This type of parasitic lending has exploded in popularity recently. Banks and trust firms have been marketing off-balance-sheet products as high-yielding alternatives to bank deposits.’

‘Globally, the FSB said that the shadow banking industry grew by $5trn in 2013 to reach $75trn, explaining, “this provides a conservative proxy of the global shadow banking system.” It continued, “By absolute size, advanced economies remain the ones with the largest non-bank financial systems.” These assets represent on average about 25pc of total financial assets, about half of banking system assets, and 120pc of GDP.’

Comment by Jingle Male
2014-11-18 08:03:57

“…surnamed Yao…”. Yao says, “Yow”. His cousin Fook Da Hup is really hurting…..

Comment by Anonymous
2014-11-18 08:09:40

I wonder how much of the money floating around in this “shadow banking sector” ends up fueling the “gambling boom” in Macau?

Comment by Ben Jones
2014-11-18 07:04:20

‘Property prices are tipped to soar over the next decade as median house prices in most capital cities come with a $1 million plus price tag. While it will music to the ears of current owners, for hopeful homebuyers it means they will be further squeezed out of a heated property market.’

‘National house prices have skyrocketed at a rate of 8.43 per cent per annum in the 30 years until 2010 and given recent soaring growth rates it’s predicted Australians will need to stump up much larger deposits to afford properties that have risen beyond six digits.’

‘Analysis by mortgage broking firm Home Loan Experts found the median house prices in all capitals is set to climb beyond $1 million and unsurprisingly Sydney will remain the most expensive city to buy — the average median house price in 2024 is tipped to hit $1.824 million.’

‘Home Loan Expert’s managing director Otto Dargan is adamant property prices will continue to rise and said as a result homeowners would need to look at smaller properties including apartments. “The days of the quarter acre block are coming to an end,’’ he said. “Living in apartments will continue to become a much better trend. In the long term many Australian capitals with go the way of many international capitals, for example like London and New York, where most people rent for their entire life.’’

Comment by rj chicago
2014-11-18 08:57:43

With this going on - reminds me of the crazies from Japan some 20 + years ago - time to stick a fork in the US RE market?

Comment by In Colorado
2014-11-18 09:45:51

Time to stick a fork in the global RE market. Almost every other country is even more insane than we are.

Comment by Ben Jones
2014-11-18 07:09:24

‘Some of Plano real estate agent Michelle Lee’s best clients these days are coming from across the globe. Lee and other real estate professionals around the country are getting business from foreign buyers eager to snap up homes in America.’

“I get so many calls; this is an amazing time,” said Lee, who’s been in the business since 1986. “The Chinese people have a ton of money, and they pay cash. They buy expensive houses,” she said.’

‘More than half of Chinese buyers say they plan to use the property for more than six months out of the year.

“Just in the past couple of years the rise that we see from our clients from China is incredible,” said Alicia Matheson, a Florida real estate agent who represents clients from around the world. “I’ve been seeing folks from China and Saudi Arabia buying homes sight unseen,” she told agents last weekend at the Realtors’ annual meeting in New Orleans.’

‘Dallas real estate agent Ida Hung is originally from Hong Kong and works with Chinese buyers in Texas. She said Texas’ housing costs are seen as a bargain to Asian buyers who are used to paying West Coast prices. “They have gone to San Francisco, San Diego and Los Angeles to buy for a long time,” Hung said. “Now they are discovering Dallas.”

“Currently, we have a client that is sitting on $10 million and wants to buy a property and does not want to borrow a cent,” said Azizali Kamjee, a Canadian real estate agent who represents foreign buyers in North America. “What is the return on investment? They don’t care.”

Comment by Dman
2014-11-18 09:13:11

I was at a Chinese restaurant outside of a local college town recently, and the parking lot was full of luxury sport cars and SUV’s. The restaurant was packed with Chinese students. And I’m sure every single one has a daddy who is a member of the Chinese communist party.

Comment by In Colorado
2014-11-18 09:24:19

It’s good to be the King. Meanwhile, low paid serfs back home toil in the “World’s Factory” for slave wages.

Comment by Ben Jones
2014-11-18 09:36:31

‘I’m sure every single one has a daddy who is a member of the Chinese communist party’

In Flagstaff, a lot of Asian college students have shown up. They congregate usually not speaking English, so I suppose they are foreign. NAU has a reputation as a good language school. Usually I would see them walking, to the grocery store from campus, for example. But when I did seem them driving (the guys most often), it often would be a very expensive vehicle.

Of course, I don’t know where these students are from. But if they are from China, I think there are too many of them to be directly related to the CCP. It must be very extended families or even associates of extended families. Whatever is going on, these kids have a lot more money available than people I knew in college.

Comment by tresho
2014-11-18 11:21:39

You can always ask them, Nǐ shì zhōng guó rén ma?

(Comments wont nest below this level)
Comment by taxpayers
2014-11-18 12:20:57

sum ting wong?

Comment by goon squad
2014-11-18 16:41:27

“There were 886,052 foreigners enrolled in U.S. higher education in the 2013-2014 school year, the Institute of International Education and the State Department said in a report called “Open Doors.” The total rose more than 66,000 compared with 2012-2013, the eighth straight year of growth.

Chinese students make up 31 percent of foreign enrollment, the largest single bloc. Their total grew 17 percent, to about 274,000.”

(Comments wont nest below this level)
Comment by oxide
2014-11-18 10:53:52

I predicted this would happen. Why buy a house in San Fransicso or an effing floating box of air in Miami when you can buy entire blocks of Oil Cities, where there is potable water and clean air, pre-laid sewage systems, decent roads, natural gas delivery, etc.?

Comment by Jingle Male
2014-11-19 03:18:05

Cause you have to live there?

Comment by Ben Jones
2014-11-18 07:59:23

‘Hossein Goudarzi and his family moved to Liverpool thinking rent in the southwestern suburb would be more affordable because it was so far from the city. After paying $385 a week for a small town house for two years, he says the family made a mistake.’

‘Ayse Alidosti’s story is similar. She moved with her nine-year-old son from Homebush to Lidcombe chasing cheaper rent, but she didn’t find it. She now pays nearly $360 a week — “nearly all my money” — for a semi in Lidcombe with routine rent increases.’

‘These migrants’ friends and family in Iran and Turkey, respectively, think they are lucky to live in a postcard-pretty city like Sydney. But a glossy photo of the Opera House and Harbour Bridge hung on the wall of Salvation Army’s Auburn office where they both volunteer is usually as close as they can afford to get to the harbour’s glittering prizes.’

‘Goudarzi and Alidosti represent the dark side of the housing boom. Speculation by investors in Sydney’s west has created a nearly uninterrupted belt of disadvantage of skyrocketing rent and falling home ownership in battler suburbs stretching 35 km west and south west from Marrickville and Campsie to St Johns Park, Merrylands, Liverpool and Lumeah.’

‘These disadvantaged suburbs form a solid block containing 40 of Australia’s 177 most disadvantaged suburbs, finds new research by Professor Katherine Hulse of Swinburne University for the Australian Housing and Urban Research Institute. In contrast to a 51.5 per cent increase in median rents over the past 10 years across Sydney, private renters in Wiley Park have seen rents rise 125 per cent to around $450 a week.’

‘”The fact that it is geographically concentrated, some people won’t see the households who pay more than 30 per cent to 50 per cent in rent, and who skip meals and who don’t send kids on school excursions and don’t see the dentist, and all the things that people do in serious numbers when they are paying unaffordable rents.” Dr Martin said the median price point for rents was $200 a week 10 years ago. Now the most common per cent was around $400 a week.’

“That’s what our housing system has delivered to lower income households, particularly renters who are priced out of owner occupation. The problem lies in the way Australian society - literally a million other households — have decided to accumulate wealth and try to fund retirements and that is by speculating on housing,” he said.’

Comment by goedeck
2014-11-18 10:10:58

“Battler” suburbs?

Comment by oxide
2014-11-18 13:48:06

Aussie vocab… I had to look it up. Here’s a 7-year-old article giving a decent description:

“Since being elected in 1996, Mr Howard [Aussie PM at the time] has drawn much of his support from “battlers” – blue collar families living in the outer suburbs of Australia’s big cities – seducing them with a Thatcherite philosophy of economic liberalism and social conservatism.”

Comment by oz
2014-11-18 19:30:50

…. and how did Rudd/Gillard go.

Good enough (not), to put Abbott/Liberals back in.

(Comments wont nest below this level)
Comment by Housing Analyst
2014-11-18 08:17:15
Comment by Blue Skye
2014-11-18 08:54:34

“Auckland’s galloping property market…”

Average house price $750,000. Median household income $75,000.

10:1. Wow, just like San Francisco, our number 1.

Comment by In Colorado
2014-11-18 09:40:45

I just checked mortgage interest rates in Kiwiland. They are about 6.5%. The monthly nut on a 750K loan is about $4800, about $58K per year. And since there is no MID I presume that amount is greater than the take home pay of said median income household.

Comment by Blue Skye
2014-11-18 09:54:42

Thanks Bernanke!

Comment by Puggs
2014-11-18 10:20:10

Ouch! Renting definitely smarter!

Comment by Cactus
2014-11-18 09:01:00

They thought losing their home was bad enough.

Now, years later, collectors are coming after them for thousands of dollars in back debt.

Ben McLarin lived near Jacksonville, Fla., until he lost his job and got divorced in 2007. His wife kept the house, but then couldn’t keep up the payments, spurring the bank to foreclose in 2009.

This year, a debt collector informed him he was being sued for $115,000, the difference between what was owed on the house and the amount the lender managed to recoup after it sold the home, said McLarin, an IT worker, who now lives in California.

His attorney, Chip Parker, with Parker & DuFresne in Jacksonville, said McLarin is one of thousands.

Parker estimates that one debt collector alone, Dyke O’Neal, has filed more than 10,000 suits in Florida this year, involving roughly $1 billion in foreclosure debt.

“There are people who lost their homes to foreclosure five to seven years ago, took the credit hit, repaired their score and, just as they were recovering, they take another hit,” said Parker.

Comment by Puggs
2014-11-18 09:37:57

What they didn’t mention in the article are HELOC’s. HELOC’s in most states ARE recourse.

Next time you plan to walk away from your house make sure you live in a non-recourse state and don’t have an outstanding HELOC. Knowledge is power.

Comment by oxide
2014-11-18 14:39:14

Florida IS a non-recourse state. So even if this guy walked, they coudn’t come after his personal assets in Florida. He must have cashed-out HELOC’ed, especially for a fat $115K.

So, Mr. McLarin, what did you do with the money?

Comment by Jingle Male
2014-11-19 03:31:13
(Comments wont nest below this level)
Comment by Jingle Male
2014-11-19 03:34:40
(Comments wont nest below this level)
Comment by Housing Analyst
2014-11-18 09:05:57

Contra Costa County, CA Sale Prices Down 3% QoQ and 4% MoM; YoY Gain Plummets

* Select median sale price from drop down menu above chart then select “view data table” and sort by county.

Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post