The Unreal Real Estate Reality
It’s Friday desk clearing time for this blogger. “Residential properties – both single-family homes and condominiums – are staying on the sale market longer, according to the Miami Association of Realtors. The numbers reflect a shift from a seller’s market to a buyer’s market. ‘If properties are priced close to fair market value and are shown in clean, somewhat groomed and updated condition, we still are selling quickly,’ said Jeannett Slesnick, broker with Slesnick and Jochem LLP in Coral Gables. ‘Our condos are the same way, despite the huge amount of new construction.’”
“The pace of home price appreciation declined to a more than two-year low in San Diego County in October, continuing the slowdown that began last year. ‘The market’s coming in for a soft landing,’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘We had been seeing double digits rates of increase a couple years ago and that’s not sustainable. That could not continue, people would be hurt because values can’t keep going up that fast. The metrics that push values up would not support that rate of appreciation.’”
“Robert Shiller said in an interview on CNBC that there could be signs of a bubble in the City by the Bay. Goldman said he appreciated Shiller’s concern, and noted that people are willing to pay a large premium for urban living, especially in San Francisco, where cost of commuting is high.”
“Special education teacher Edward Singleton said he spent nearly a decade saving for the $20,000 deposit he put down on a home he contracted to buy in Loudoun County, Virginia. But he broke down in tears when he explained how he’s spent the past four years fighting to get his life savings back after he lost both the $20,000 deposit and the home. Real estate agent and grandmother Tarshia Brown lost $52,000 when she put the money down to buy a house in Prince George’s County, Maryland. ‘That $52,000 could have put my daughter through college. It could have put my son through college,’ she said.”
“But after signing contracts, Brown and Singleton were told they no longer qualified for their original financing offer. Instead, they said Toll Brothers offered them loans they couldn’t afford or no loan at all, meaning they lost their dream home and their down payment. ‘I was told that my debt-to-income ratio was too high,’ Singleton said. ‘After I signed the check.’”
“New foreclosure activity soared 203 percent in Worcester County during November as lenders filed 115 petitions to take back homes. Worcester County again led all other Massachusetts counties in new foreclosure activity and accounted for 18 percent of all petitions filed statewide, according to the Warren Group. ‘The large gains seen in November in all three stages of foreclosure activity are expected given the backlog of delinquent mortgages in the system,’ Timothy M. Warren Jr., Warren Group chief executive, said in a news release. Worcester County has been a hotbed of foreclosure activity for months, partly because of subprime mortgages written during the nation’s pre-recession housing bubble.”
“In February 2014, I rang up Bob Hoye, a financial forecaster in Vancouver well known for his bearish outlook, to talk about where oil prices might be headed. Here’s an excerpt: ‘Somewhere in the next couple of months, the price advance in crude will probably have maxed out for this business cycle,’ he says. ‘It’s easy to say that crude oil could fall to 25 per cent of its recent high. It will change things enormously.’”
“You can imagine what my inbox looked like in the following weeks. Messages and comments flooded in, mostly anonymous, dismissing Hoye’s forecasting record and pointing to Maclean’s dour covers about the housing market. (For the record, I stand by everything we’ve written about Canada’s housing bubble, now more than ever). But one Alberta reader was particularly incensed and aimed to set me straight. Here are parts of the email. ‘I wonder what will happen first? Maclean’s long-standing claim of a housing market crash in Canada or oil returning to $25 a barrel?’”
“There is growing concern Australia is in the grip of a rural financial crisis as banks foreclose on hundreds of properties and force farmers off the land. Rural lender Landmark, once owned by the Australian Wheat Board, held the long-term mortgages of hundreds of Australian farmers but at the height of the global financial crisis sold its loan book to big four bank ANZ. With slumped property prices, some rural families also faced a situation where their debt was higher than the value of their farms.”
“Like hundreds of other farmers, Rodney Culleton did not choose to be an ANZ customer but faced the bank’s new loan agreements and demands for fresh guarantees after Landmark offloaded his loan. ‘We didn’t want to go with ANZ. We wanted to exit. So we didn’t make an application,’ he said. ‘They did come with an offer and basically said ’sign this or we’ll default you’. Well, we didn’t sign it. We didn’t sign it and so what they did is default us.’”
“Apartment rents have dropped in the Phoenix metro area even as more new units are entering the market. Three-bedroom apartments rented on average for $1,338 per month in Phoenix during this fiscal year, according to RealtyTrac and the U.S. Department of Housing and Urban Development. That is down 5 percent from $1,410 last year. Rents also declined in Dallas, Las Vegas, Houston, Tucson and Los Angeles. Texas and Southern California — like Phoenix — have seen plenty of new apartment developments. There are more units in the construction pipeline and planning stages and numerous sales this year of older complexes.”
“An urban rental boom wasn’t enough to offset a decline in suburban new home sales in the Twin Cities this year, causing a modest correction in the construction recovery. Throughout the 13-county region, builders were issued 4,914 permits to build 10,093 units, according to a year-end report from the Builders Association of the Twin Cities. That was a 1 percent decline in new units compared with 2013, which was the best year for new homes since the housing collapse in 2008. ‘We expected 2014 to show an increase, but it didn’t,’ said David Siegel, executive director of the Builders Association of the Twin Cities.”
“By now the people who argue about and propose public policy really should have learned that nothing exists in a vacuum. It’s simply not possible to just tweak one part and then see all the rest stay the same. Obviously, this is akin to Hayek’s concept of the planner’s conceit: that someone can be so august and knowledgeable that they can plan how the rest of us should live our lives. An obvious little example of this is playing out now in the housing market. As a result of the housing crash, and certain less than completely and wholly legal activities after it, for a mortgage holder to be able to foreclose on a housing loan in default is rather more difficult than it used to be. There are, not surprisingly, therefore fewer mortgages being offered to people. This is causing some to hyperventilate.”
“And what are those mortgage offerrors doing that is so heinous? They’re refusing to offer mortgages at all in many cases. Instead they will only offer a deed of trust. This is largely the same except at that point of foreclosure, if that should ever happen. For under a deed of trust there’s no need to go to court to gain repossession of the property. This obviously makes it easier to repossess, faster, and cheaper.”
“It seems that tightening up the rules of how you may foreclose on a mortgage is having the effect of making the mortgage itself extinct, to be replaced by those deeds of trust. If you make it more difficult for people to gain the security against which they’ve lent then they won’t lend against that security.”
“Hucksters, self-promoters and cattle call bus tours are back. Déjà vu 2005 all over again may best describe at least some of Florida’s real estate markets in 2015. The unreal real estate reality show stars are back, giving lessons on how to become rich using other people’s money. Realtors and cocktail party experts are again hyping the market (although many hyped the market all through the bust). In some areas of the state, bus tours of foreclosed properties have given way to bus tours of new condominium projects, single-family-home neighborhoods and retail centers.”
“The grandiose sales parties, celebrities and real estate magnate wannabes are back, too. So are the developers that cut the financial legs out from under buyers in the last boom by slashing prices on their unsold units. More than ever, buyer beware!”
“…….a hotbed of foreclosure activity for months, partly because of subprime mortgages written during the nation’s pre-recession housing bubble.”
The nightmare that will not end: 2002-2005 shenanigans. Still sorting out the tragedy a decade later!
That’s nothing compared to the subprime junk written 2008-2013 just starting to implode Jingle_Fraud.
Yet you bought a bunch of houses before all that inventory was sorted out. Brilliant.
Thank you GR.
I am working on my taxes this holiday weekend so I can tell you my cash flow was $23,000 in 2014. Additionally, I paid down $21,000 in debt (includes primary residence) and the portfolio of 8 properties is worth $725,000 more than my cost. I will have another $16,000 of excess depreciation to use for sheltering income, but will probably not be able to use it because of phase out rules.
I could hardly be more pleased with my decisions. LTV is under 50% and dropping fast. Occupancy exceeds 99%. Life is good.
You’re forgetting the losses on the underwater shacks Jingle_Fraud.
Typical degenerate gambler.
Shouldn’t you be counting your 4.4 million “foreclosed & vacant” houses in CA? HA, Ha….
That’s your job Jingle_Fraud.
They aren’t there, as we’ve shown you so many times!
And they’re not going away no matter how much you hide from them Jingle_Fraud.
‘Tempe’s building boom: There’s no way all the planned developments and proposed hotels in Tempe are going to get built. The Monti’s and Flour Mill redevelopments, USA Place, TrendEx Holdings’ $1.2 billion proposed project on Tempe Town Lake coupled with Arizona State University’s development district are all poised to add millions of square feet of commercial space to the Valley’s real estate market. There are also several hotels proposed in and around Mill Avenue.’
‘The proposed new space is far more than the whole region — or even the whole state of Arizona — absorbs annually.’
‘Apartment bubble: At some point, the Phoenix area is going to hit a tipping point with new apartment development. There have been scores of new units coming on the market in recent years geared towards millennials and all those folks who can’t qualify for mortgages because of foreclosures and poor credit.’
‘There is demand for apartments. But just like with other developers there are going to be too many new units chasing too few tenants pretty soon.’
So awesome that one of the few remaining landmarks in Tempe (Monti’s La Casa Vieja) was shut down to build more real estate that will never be used.
http://www.azcentral.com/story/news/local/tempe/2014/11/03/tempes-iconic-montis-la-casa-vieja-closing-nov/18436845/
Depressing.
Keep building. I plan on spending some winters in AZ when I retire, and the less I have to pay in rent, the better.
Malinvestment due to Fed intervention.
“Higher learning meets elevated living at West 6th, a student-friendly luxury apartment community located just steps from Arizona State University and Sun Devil Stadium.”
Welcome to West Sixth Tempe
http://www.west6thtempe.com/
Looks like they found another developer to finish the project.
‘Prominent money managers are warning of a bubble in some technology stocks and recommending that investors avoid emerging markets in favor of Europe. “The high probability is when you look back on this period five years from now, you’ll say some of these companies grew into their (earnings) multiples … but I think biotech and other areas in tech have seen multiple expansions beyond what we can justify beyond any kind of reasonable cash flow expectations,” Doug Silverman, co-founder of $6.7 billion hedge fund firm Senator Investment Group, said.”
“You can only call it a bubble. But I have not guessed when it will end,” Silverman added.’
‘Rich Pzena, of $23.7 billion Pzena Investments, agreed. “Yeah, I think we are in a bubble. I don’t know if I would say it’s broadly in tech stocks. I think it’s in certain stocks. But the hype feels like we’re in another Internet-type bubble like 1999,” Pzena said.’
“I agree it’s not predictable when it will end. But what is predictable is that most of the companies won’t grow into their multiples. And shorting them with guts and not looking at the portfolio for three years is probably a smart thing to do,” Pzena added.’
‘Pzena’s firm manages long-only funds that focus on investing in stocks to appreciate, unlike a hedge fund that also bets on their decline, or “shorting.”
J’ames Dinan, of $21 billion hedge fund firm York Capital Management, said he was avoiding “hyper-growth” businesses, but wasn’t shorting them either. “The last thing we want to be is the proverbial investor being carried out on the stretcher,” Dinan said of betting against irrationally priced stocks.’
‘Dinan noted that most of York’s exposure was in the U.S. despite uncertainty about economic growth. “I personally don’t see equity (price) expansions in the U.S. equity markets being more likely than not,” Dinan said. “The U.S. is not doing, in my view, as well as people are told. Everyone keeps blaming the weather, the weather, the weather. At some point you have to stop blaming the weather.”
‘The managers were also bearish on emerging markets. “The emerging market world is really going to take a big hit,” Dinan said in noting the global impact of slowing economic growth in China. “We’re going to continue to see a lot more turmoil … and that’s going to keep investors on the edge.”
‘The managers were also bearish on emerging markets. “The emerging market world is really going to take a big hit,”
I personally know of 3 people(who know nothing about a market) who were advised to pile into emerging market funds by retail brokers very recently.
Best indicator ever.
‘Hundreds of employees at Civeo, a provider of housing for oil workers, have lost their jobs in recent months. There’s concern this is only the beginning of the energy sector layoffs.’
‘Now that crude oil has plunged to nearly $50, Big Oil companies like ConocoPhillips are significantly dialing back spending.’
‘Civeo primarily houses people working in the Canadian oil sands industry, a previously red-hot area of the North American economy that relies on lofty oil prices to turn a profit.’
‘More job cuts are expected, including at shale oil producers that don’t survive the oil meltdown. Earlier this month Halliburton said it plans to cut 1,000 positions, while BP announced an unspecified number of layoffs as part of a $1 billion restructuring program.’
‘Shares of Civeo plummeted 50% on Tuesday, a day after the company dropped a bombshell on investors. Civeo warned of gloomy 2015 financial results due to slower spending by major oil companies in North America, especially in Canada’s oil sands fields.’
‘Just look at the company’s depressed occupancy rates: Just 35% to 40% of its lodge rooms in Canada are even under contract heading into 2015. That’s down significantly from over three-quarters contracted at the start of 2014.’
‘That’s why Civeo said it has reduced headcount in its Canadian and U.S. operations by 30% and 45%, respectively, from levels at the start of 2014. The company employs nearly 2,400 people.’
‘For the past few years there have been two shocks newcomers to Estevan experience when they begin looking for accommodation: there are no available rental units and if there are, the monthly price is much too high.’
‘According to the latest figures from the Canada Mortgage and Housing Corporation, the former is no longer the case. There are available rental units, perhaps more than there have been since before 2010.’
‘At one time in early 2013 the city was experiencing, effectively, a 0.0 per cent vacancy rate. Estevan was the most difficult place to find accommodation in the province and maybe even the country. One year later, and Estevan is suddenly the easiest place in the province to find a rental unit. The vacancy rate was a barely believable 12.5 per cent in October.’
“The completion of a major project and subsequent downsizing by some employers contributed to the decline in rental demand,” said the CMHC report, and added, “Further contributing to the increase in vacancy was a number of newly completed condominium apartments this year, which provided the opportunity for many renters to move into homeownership.”
‘Chipley said everybody can now find a place to stay. The next hurdle is finding an affordable place. Though at some point the vacancy rate should be expected to impact price and begin lowering what people pay for rental units in Estevan, that hasn’t happened yet. If it comes to filling a residence or seeing it remain vacant, prices will drop.’
“Absolutely, getting 80 per cent of what you were getting before is better than getting zero,” she said.’
‘At one time in early 2013 the city was experiencing,”
CITY ! ! !
Maybe a village, perhaps even a town, but certainly not a CITY !
But sitting on oil, and a thousand year supply of soft coal -
Low oil prices are finally going to pop the Canadian housing market.
But no worries - Canadian banks already have a built in TARP
‘The federal economy, Loudoun’s most important economic engine, is showing signs of recession. Every graph that could be used to explain the health of the federal sector in Loudoun County looks like the backside of the first hill on a roller coaster.’
‘In 2013 Loudoun companies took in $624 million less in federal contracting revenue compared to 2010, according to Fedmine US, a data analytics firm focusing on federal contracting. Statewide, Virginia lost around $9 billion from 2011 to 2013.’
‘The county also posted a job loss of 664 federal sector employees across all industries, according to the Bureau of Labor Statistics. Not included in The Bureau of Labor Statistics data are private sector employees who lost their jobs as subcontractors to the federal government, a number which could be much higher, especially at the statewide level.’
‘Dr. Stephen Fuller, of George Mason’s Center for Regional Analysis, projected a loss of 154,000 jobs in Virginia, about 4 percent of the commonwealth’s labor force, due to sequestration last year.’
‘The county has continued, however, to post solid unemployment numbers mostly by replacing six-figure government salaries with lower-paying service sector jobs ‘
‘In 2009 most of America began picking up the pieces of the housing crash. Loudoun’s economy, meanwhile, was living high off the federal government hog. In 2011, the county garnered the highest median household income ever recorded by the United States Census.’
‘Federal budgets eventually caught up with the recession and sequestration hit. Virginia was subsequently crushed by federal spending cutbacks.’
‘The for-sale housing market has returned slower in Northern Virginia due in part to federal spending woes.
Seeing signs of a return, people listed their homes for sale at alarming rates in the past few months. November closed with nearly 50 percent more homes on the market than the previous year, however houses are staying on the market longer and cost more than last year at this time because people are not buying at the rate people want to sell.’
emerging markets folks work
even in 1998 everyone worked
in EU you can sit around indefinitely
the siQuestor was an extra 17 days of vacation for fed “workers”
“workers”
What exactly do those quotes mean? Are you trying to insiniate that people who work for Uncle Sam get paid to do nothing?
Whac, as somebody who has witnessed fed worker capability up close and personal for a minimum of a decade, your statement is spot on. On the major programs of which I have been a part, the feds spend six hours a day jockeying for position (internally), and the remaining two hours documenting the inches gained (for internal consumption).
Another phenomenon I’ve observed is that prior to being appointed as SESs, the appointees grease up their future cogs by hiring in sycophants (it’s quite acceptable to designate who you want to hire, and OMB will never override the hiring manager). In one department, for example, the CIO hired almost a hundred “program managers” who do not know the fed domains, who got their creds by virtue of one - at most, two - one week boot camps, and who do not know the first thing about IT or network engineering. The contractors, of course, can get away with hiring $10/hr employees (because the feds who are providing “oversight” cannot tell the difference). Is it a wonder that the o’care launch was a disaster?
It would seem like the agency heads should have had some capability in the problems their agencies need to address. No. Their capabilities lie in jockeying for position.
Fed capability is now at the point where the objective of the program (for a private sector firm) is to make sure the feds’ cover isn’t blown.
What you get is a culture that is staggeringly inept.
Solution? Whack down fed employment by 50%, eliminate departments wholesale. In many, most of the work that is done is inward-facing - e.g., has no impact on the citizenry or on the “program”, whatever it is. Have somebody who knows about “mission” do a bottom up restructure. I’d start with basics: what needs to be done.
The answer to that question does not involve posturing. For many civilian agencies, there IS no “what needs to be done”, there. I’d suggest a detail from the Air Force, who would do the restructure if they were ordered - but who would hold their noses the entire time.
The smell of rot takes a long time to wash out of your pores, and out of your clothing. If they started out capable, the obstructionists around them put ‘em out of commission.
If it comes to it, I’ll go down with the superstructure. However, there are lots of other places in the country to live. This problem has swallowed DC Metro alive.
Just my opinion, of course.
As somebody who is on this inside, I couldn’t have said it any better.
Jockeying for position is what you do, if you want to move up so you can maximize your retirement income (that’s why most people I know seem to want to do it for anyways; the actual jobs suck and people want to do them only for 3 years right before they retire).
And this year, we’re likely to have more government shutdown countdown-to-zero cliffhangers. Watch March and September for the key dates.
‘According to the latest housing report from realtor.com, there are 10 metro areas in the country that are particularly “ready for significant acceleration across housing metrics” in 2015. Topping the list is Atlanta and Sandy Springs.’
‘Prices are much higher than last year, but the rate at which they’re rising is slowing down. Vic Miller, Managing Broker at the Coldwell Banker Intown Office supplied some details: the median sales price was $200,000 in November 2014, up 16.3 percent over the previous November ($172,000), and up 38 percent over November 2012 when it was $145,000. The average sales price in November 2014 was $259,557, up 13 percent from $230,000 in November 2013.’
“While we’ve moved to a more balanced buyer/seller market, many homeowners think we’re in a seller’s market and are a bit overzealous on their prices – and homes that are not priced appropriately are not selling,” Miller said.’
Leave it to NAR to make a curtain call. Pile in now suckers!
“…many homeowners think we’re in a seller’s market and are a bit overzealous on their prices – and homes that are not priced appropriately are not selling,” Miller said.’”
I have been watching certain areas for the better part of a decade, and there are houses which have been for sale for the same length of time. Has there ever been another time in history where a house is on the market close to 10 YEARS without a buyer? Who ARE these sellers, and WHAT are they doing?
‘Life after En Vogue is not going well for original member Maxine Jones. Jones is in danger of losing her Virginia home as the bank that owns the residence is demanding the court to allow it to foreclose on the property. The reason for the foreclosure stems from Jones’ refusal to pay her mortgage.’
‘The bank’s case, as detailed in the documents involves Jones taking out a $215,000 loan with them in 2006 to purchase her Palmyra, Va. property. As of this month, the bank says Jones owes $208,025.13 on the note, which continues to grow with interest. Despite filing for bankruptcy, the bank says Jones was to continue making her mortgage payments on the note at $2,052 a month. Jones is reportedly accused of missing her October and November payments.’
‘Court documents reveal the singer filed for Chapter 7 bankruptcy on Dec. 18th in Virginia Federal Court. According to Jones, she has $298,900 in debt and only $172,000 in assets. The documents further note that Jones has $50 in her checking acct. as well as $4,030.00 in household items, $200 in clothes and a 2008 Toyota Scion worth $9,000.’
‘Jones’ debts reportedly include $212,000 on her Virginia home, $32,000 in a judgment against her won by a private school and $2,000 in Virginia State taxes. Other debts amount to $800 in unpaid telephone bills, $17,000 owed to her attorney, over $1,000 in medical bills and $22,000 in California State taxes, in addition to $440 to T-Mobile and $539 to Victoria’s Secret, not to mention other money due to creditors.’
‘As for the type of money she brings in nowadays, the documents note that Jones gets nothing from her music royalties. The only income she collects comes from rental properties, which net her $3,473 a month. Monthly expenses total $4,110. As a result, Jones is in the hole $636 a month.’
‘The way it looks now is Jones is in default on her mortgage, the bank says as it demands the court to allow it to foreclose on the vocalist’s property in light of the nonpayments and the fact that the home is currently worth only an estimated $158,000 at this time.’
“The only income she collects comes from rental properties, which net her $3,473 a month. Monthly expenses total $4,110. As a result, Jones is in the hole $636 a month.’
This should sound real familiar to our liars here. Jingle_Fraud?
It would be hilarious to see the Fraud’s monthly cash burn.
I am cash flow positive and always have been. I will not purchase without a minimum 5% cash on cash. My last purchase was in 2010.
Given all your misrepresentations to date, nobody believes a word you say.
Shouldn’t you be counting your 4.4 million “foreclosed and vacant” houses in CA. HA, Ha!
That’s why you’ll always be known as Jingle_Fraud.
I will not purchase without a minimum 5% cash on cash.
Why did you settle on that amount, Jingle? If a property cash-flowed with no downpayment, and you could afford it, why the limitation? I’m sure you realize that the downpayment protects the bank, not you…
5% is a minimum. I usually put 25% down.
Reading between the lines, I take it that you actually want to pay off the mortgage, and own them free-and-clear… Kudos.
Yes. I have the same strategy Ben uses for his investments in housing. Buy at distressed prices, create quality housing for people looking to rent, give them excellent service and encourage them to stay as long as they choose.
With a little luck, good management, and a conservative economic strategy, in 15-20 years I will have some nice assets owned free and clear of debt.
Real estate is not the sink hole so many here portray. It can be a great investment. It has been for me.
And you overpaid by 100% or more?
Not much of an investment Jingle_Fraud.
The reason for the foreclosure stems from Jones’ refusal to pay her mortgage.
Wow. Who knew?
That’s what happens when you overpay 250% for a depreciating asset like a house.
Maybe if she tells the bank ” you’re never gonna get it, noooo you’re never gonna get it” they’ll leave her alone.
Maybe she should call Geico about employment opportunities. Seems to have worked for Salt-N-Pepa.
She may have no financial stake in that song whatsoever (even though she sang it).
http://en.wikipedia.org/wiki/My_Lovin%27_%28You%27re_Never_Gonna_Get_It%29
Writer(s) Denzil Foster, Thomas McElroy
I bet these guys aren’t being foreclosed.
Time to bring in the “No justice No peace” rent-a-mob to intimidate the bank.
The only income she collects comes from rental properties, which net her $3,473 a month.
Strange, I didn’t see these mentioned on the asset side of her balance sheet… Also fully mortgaged or underwater, I suppose.
‘We’ve been in the season of celebration. Parties were roaring across the landscape, including in the real estate market. Unfortunately, as we all know, eventually the punch bowl gets taken away, and if you’ve overindulged, you’ll pay for it the next day. That pretty much sums up the state of the real estate market in 2014. Sure, there were some good times. But there was also a little bit of a hangover that lasted the entire year.’
“We were expecting a gangbusters 2014 after the 30% run-up in 2013. Alas, prices plateaued, buyers got cautious and things have been pretty calm,” said Brock Harris of Brock Real Estate in Silver Lake. He said he also expects more of the same in 2015.’
‘Harris’s assessment is echoed by data from CoreLogic, a property information, analytics and data services provider based in La Jolla, CA. They report that Southern California home sales dropped to the lowest level in seven years for November.’
“Southern California home sales are closing on a low note in 2014,” said Andrew LePage, a data analyst for CoreLogic DataQuick. “Inventory still lags demand in many markets and traditional buyers haven’t filled the void left by the investors who’ve pulled out.”
‘buyers haven’t filled the void left by the investors ‘
They haven’t? Golly, I know I’ve read somewhere that this was going to happen, fer’ scher’. It may have even been you that said that Andrew. Of course, it was a pipe dream all along, but it made the sheep feel better and kept those checks rolling in.
We posted on this eventuality early and often on the HBB to the point where we exhausted the topic and moved on. But people who are blinded by greed have no interest in such admonitions.
Ben, you are a smart man, I am sure you have saved your nickles.
Please let us know when you decide to buy!
Lots of us are on the sideline with cash, waiting to get a nice place to live in, grow vegetables, a hot tub and build a bunker.
Snap out of it Lolacado.
Ben’s buying all the time. He recently moved from Flagstaff to an undisclosed market where he has more opportunity to buy.
Ben, where did ya move? NM?
^ LOL
and build a bunker.
LOLZ!!! I was with you right up until the ‘bunker’ bit!
but it made the sheep feel better and kept those checks rolling in.
Ben, you perfectly captured the end-goal for all of the various manipulation schemes.
Alas, prices plateaued, buyers got cautious and things have
been pretty calmcratered.Fixed
Still waiting (and cheering on) the cratering. So far, no cratering that I can detect in my vicinity.
‘Harris’s assessment is echoed by data from CoreLogic, a property information, analytics and data services provider based in La Jolla, CA. They report that Southern California home sales dropped to the lowest level in seven years for November.’
Seven years ago would have been November 2007, one month before the onset of The Great Recession plus the most violent real estate crash in U.S. (and California) history.
But not to worry, as history does not repeat itself, although it sometimes rhymes.
‘From 2003 to 2012, $6.6 trillion was secretly and illegally funneled out of developing and emerging economies by entities that may have been involved in crime, corruption and tax evasion, according to a new report by Global Financial Integrity’
‘Nearly 80 percent of that money was transferred through fraudulent trade invoices, falsifying the value of trade deals, making it possible for the funds to illicitly leave one country and move offshore, the report said. The huge outflows are a major problem for poor and middle-income economies. In 2012 alone, there were $991.2 billion in illicit financial flows. The biggest amounts left China, Russia, Mexico and India.’
Massive money laundering from Chinese, Russian, and Mexican entities that “may have been involved in crime”? You don’t say. I’m shocked, shocked to find that gambling is going on in here. It’s obvious that some of that money flowed into Western real estate, but unfortunately that’s a taboo subject.
The wealthy elites of the world are, by and large, CROOKS.
“Behind every great fortune is a great crime.” Can’t remember who said that.
‘California’s high cost of living has pushed hundreds of thousands of low- and middle-income workers to other states, federal data show. Experts point to the state’s increasingly unaffordable real estate markets as a major driver of the trends. More than half of the nation’s 50 most expensive residential real estate markets are in California, according to Coldwell Banker’s Home Listing Report, including nine of the top 10.’
“It’s getting harder and harder for the middle-class Californian to buy a home,” said Jordan Levine, director of economic research at Los Angeles’ Beacon Economics, who points to the migration trends as a major hurdle for the state’s future economic growth.’
exactly
In the valley of CA the reasonably priced homes are in terrible neighborhoods. So to get into somewhere you can sleep at night you are looking at 300k most of the time.
You just have to laugh at markets in so cal. I guess compton is even making a comeback.
This story is timeless. In response, some Democrat politician should propose a new affordable housing initiative to help California poors get into subprime mortgages that enable them to buy houses priced at 10X their annual household incomes.
Mel Watt has already taken care of this - I predict within a year this whole mess is gonna blow up again due to Mel Watt and his cronies - read obamao, durbin, schumer et.al.
Take off your partisan blinders and slap your face a few times, dolt.
Agreed, this is Mr. Banker’s doing.
And politicians on both sides of the aisle dance to his tune.
The dwindling number of productive, taxpaying Californians have to carry an exponentially increasing burden of paying the costs of Comrad Pelosi’s entitlements-for-votes demographic, which is growing in leaps and bounds with more on the way.
Sounds like a great recipe for chasing out the productive middle class to Texas. It will increasingly be up to the landed liberal class to provide for California’s burgeoning illegal immigrant population’s welfare programs.
The “landed liberal class” produces nothing and creates no wealth. They’ll have to run deficits and soak the productive who are still hanging on.
And they lead the free s*** army.
“Those moving to California tend to have higher incomes. About 35% of working-age people moving in make more than $50,000 annually, compared with 27% of those moving out.”
A family of four living near the coastline on $100k/yr are barely getting by, IMHO.
“But after signing contracts …”
(aka Dotted Line Specials)
“… Brown and Singleton were told they no longer qualified for their original financing offer. Instead, they said Toll Brothers offered them loans they couldn’t afford or no loan at all, meaning they lost their dream home and their down payment. ‘I was told that my debt-to-income ratio was too high,’ Singleton said. ‘After I signed the check.’”
Yes? And then what did he do?
“But he broke down in tears when he explained how he’s spent the past four years fighting to get his life savings back after he lost both the $20,000 deposit and the home.”
Some people just cannot take a joke.
Ah, yes, it is indeed going to be a good AND a prosperous new year.
Toll Bothers is just an evil company.
—————-
But the company’s financial statements to the U.S. Securities and Exchange Commission show it reported more than $125 million in revenue since 2006 by seizing down payments from cancelled contracts.
In a statement, Toll Brothers told the News4 I-Team, “In each of these instances, we retained the original buyer’s deposit to mitigate the actual losses we incurred” but “only after many attempts to work with those buyers to save their deals. Ultimately, the retained deposits were not to enough to cover those losses.” Toll Brothers also said the revenue from those deposits were “gross amounts [that] do not reflect the losses that the company actually sustained.”
Pennsylvania-based real estate lawyer Jim Tupitza told the News4 I-Team he sees cases like this “all the time” — customers who think a Toll Brothers contract will allow them to recover their down payments if they can’t get a mortgage or close on their home, when that’s not actually the case.
Tupitza said it all boils down to the “Mortgage Application” paragraph of the Toll Brothers contract, which he said is one of the most confusing contracts in the business.
“… customers who think a Toll Brothers contract will allow them to recover their down payments if they can’t get a mortgage or close on their home, when that’s not actually the case.”
Bahahahahaha … again, if you choose to play the game of Gotcha then you need to study up on the rules.
My favorite part of this post is: “… customers who think …”
Bahahahahahahaha … if there was such a thinking customer then he wouldn’t be sucked into playing somebody else’s game.
Confusing fine print on a contract is a time-tested tool for separating greater fools from their, or other people’s, money.
Car dealers used to do this all the time. They tried it on me way back in the early 90’s. Told them they could have their truck back, just give me mine. They realized if they took the new truck back it would have to be resold as used. They ended up sticking with the original loan. Truck was a piece of c4ap and I got rid of it within a year anyway.
Don’t people use lawyers in these transactions?
Never put a down payment on anything. Ever. If its not available, or you can’t afford it, its not worth the risk. If the seller files bankruptcy, you will suddenly find yourself at the end of a long line of unsecured creditors waiting to get paid after the government and secured creditors get priority treatment. Nothing is worth that.
“Like hundreds of other farmers, Rodney Culleton did not choose to be an ANZ customer but faced the bank’s new loan agreements and demands for fresh guarantees after Landmark offloaded his loan. ‘We didn’t want to go with ANZ. We wanted to exit. So we didn’t make an application,’ he said. ‘They did come with an offer and basically said ’sign this or we’ll default you’. Well, we didn’t sign it. We didn’t sign it and so what they did is default us.’”
Bahahahaha … if you choose to play the game of Gotcha then you should first try to learn and understand all the rules.
Step 1: Dumb ‘em down.
Step 2: Prosper.
So banks can sell a loan and the new bank can change the terms of the contract?
We used to have the rule of law in this country.
After six years of obama - now the law is what someone in power says the law is…
“After six years of obama - now the law is what someone in power says the law is…”
Psssst … it isn’t just Obama, it’s just Obama’s turn.
When you control both political parties then you will always get to experience a win.
Bahahahaha … you can’t lose with the stuff I use.
I can still remember 1500 bankers going to jail for fraud in the S/L days.
Neal Bush was NOT one of them though.
I can still remember 1500 bankers going to jail for fraud in the S/L days.
Apparently they learned the right lessons from that, and made sure to grease the correct palms for the past forty years.
Net effect: zero bankers go to jail this time around!
2B, in case you don’t know, ANZ is an Australian and New Zeeland banking group that purchased Australian mortgages. I don’t see how six years of Obama has anything to do with that. Next time, you should mute Fox News and try that new fangled thing called “the google” to check your facts before you post.
“This country?”
It’s Australia you fawkin’ fool.
Oh please. Obama was an extension of Bush. Jeb or Hillary - it matters not which one wins - will follow exactly the same policies with their fiscal and monetary policies dictated by Goldman Sachs “alumni.” This is what you voted for, America. Bend over and enjoy the ride.
Bahahahaha … if you choose to play the game of Gotcha then you should first try to learn and understand all the rules.
or you can simply read what you are signing.
I doubt it would have mattered to folks who believed the purchase plan in place was a done deal and a certainty.
was just skimming. I guess it would have helped to have read the whole thing. oops.
‘They did come with an offer and basically said ’sign this or we’ll default you’
I struggled to understand this statement a bit when I first read it, because it sounds like they were changing the contract terms.
In this context, though, it makes more sense: it sounds to me as though much of the agricultural debt down there must have been revolving in nature; in other words, you have to replace your old loan with a new one, or pay it off.
People take part in such schemes in times of stability, because the new debt is always available under terms very similar to the old debt. When times change, though, this turns out to be a faulty assumption.
So the gun to their head was “sign the new note, or pay in full the old note”. That makes more sense. If they can’t pay the old note’s “crippling balloon payment” at the end of the term, they are truly in default.
‘These days if you have a wad of cash to invest in a classic car, Ferrari seems to be the best option. Hagerty’s price index for the Italian supercars was up 43 percent in 2014, and Prancing Horses made up eight of the highest-selling vehicles at auction for the year. However, if you really want to watch your funds grow faster than practically any other legal investment, it might be worth setting your sights north of Maranello to Porsche in Germany.’
‘According to research from the Discovery Channel, the 1973 Porsche 911 Carrera 2.7 RS is the quickest-appreciating vehicle in the past decade, at least in the UK. In 2004, prices hovered around 65,000 pounds ($101,350 in current money), but buying one today would set you back over 500,000 pounds ($779,600). Rarer lightweight models go for even more.’
http://www.autoblog.com/2015/01/01/porsche-911-rs-values-quickest-appreciating-car/
Classic vehicle prices will probably crash too when Bubble 2.0 pops…they did by about 50% after 2008 just like RE…many hucksters in the business, and lots of customers with more money than brains who buy for the wrong reason (as a trophy, to get rich quick, etc.)
I did get a great deal on a classic MC in 2010 but bought it to ride, NOT as an investment.
It’s easier to ask “what isn’t in a bubble?”
OK, what isn’t in a bubble?
Not housing.
Not cars.
Not almond & pistachio farms.
Not bonds.
Not the dollar.
Hmmm. Tough question:
Oil! (As of a couple of months ago)
What else????
In a bubble-
Housing
Autos
Bonds
Oil
Ag commodities
That’s why their prices and demand are falling Jingle_Fraud.
“Apartment rents have dropped in the Phoenix metro area even as more new units are entering the market. Three-bedroom apartments rented on average for $1,338 per month in Phoenix during this fiscal year, according to RealtyTrac and the U.S. Department of Housing and Urban Development. That is down 5 percent from $1,410 last year. Rents also declined in Dallas, Las Vegas, Houston, Tucson and Los Angeles. Texas and Southern California — like Phoenix — have seen plenty of new apartment developments. There are more units in the construction pipeline and planning stages and numerous sales this year of older complexes.”
My rent in Phoenix has gone up last year. Hmm.
I’ve noticed that the rental homes here are spending a lot more time on market now.
Interesting that Sarasota Magazine would have a piece urging buyer beware. It’s a society publication that focuses on the lives and pursuits of Sarasota’s upper crust.
If only more of the media told the truth about housing, millions wouldn’t be in the horrible financial position they’re in.
It’s a Jack McCabe piece. If you look at the rest of the edition, you would think everyone there drinks champagne with breakfast, lunch and dinner.
‘Residential properties – both single-family homes and condominiums – are staying on the sale market longer, according to the Miami Association of Realtors. The numbers reflect a shift from a seller’s market to a buyer’s market.’
Falling prices. Don’t forget the falling prices.
Miami Lakes, FL Sale Prices Plunge 14% YoY As Housing Correction Resumes Nationally
http://www.zillow.com/miami-lakes-fl/home-values/
“The pace of home price appreciation declined to a more than two-year low in San Diego County in October, continuing the slowdown that began last year. ‘The market’s coming in for a soft landing,’
Is a precipitous 10% price decline considered a ’soft landing’? And when it sinks another 15%?
San Diego Sale Prices Crater 10% YoY As Housing Demand Sinks To 20 Year Low Statewide
http://www.zillow.com/san-diego-ca-92130/home-values/
I remember in 2005 Leslie Simpleton Young also said we would have a soft landing in Southern California.
Given the extreme absence of fundamental demand, it is hard to grasp what keeps California housing prices from plummeting again like they did in the 2007-2011 period.
Maybe it is the 350,000 people moving here every year.
Jingle_Fraud,
CA is experiencing the lowest population growth in it’s history. Just like the US. Importing a bunch of poor people into the poorest state in the country just makes a poorer state.
Wrong again HA. Our population growth is now at pre-recession levels. Highest since 2006. You need to do more analysis, “Housing Analyst”!
Observations on California and its politics
California’s population slows, ages
By Dan Walters
12/27/2014 4:01 PM
12/28/2014 12:01 AM
California’s population has always grown, but its pattern has been that of an adolescent – shooting up dramatically some times, slowing to a crawl in others.
We’re now in another slow-growth period – perhaps permanently.
We saw a massive growth spurt during the 1950s and 1960s as the state’s economy soared, as millions of Americans migrated westward from other regions, and as their fecundity produced the massive post-World War II baby boom.
California’s population nearly doubled during those two decades to 20 million, surpassing New York’s to become the nation’s largest.
However, as the baby boom ended and the state’s industrial economy underwent a dramatic downsizing in the 1970s, population growth slowed dramatically to a fraction of its previous rate, leading many, including political leaders, to believe that it would never soar again.
Under two governors, Republican Ronald Reagan and Democrat Jerry Brown, the state cut back on infrastructure spending that had mushroomed during the previous era. Brown termed it “an era of limits.”
The 1970s were, however, merely a lull before another demographic storm. A post-industrial economic boom, a new surge of migration – this one from other nations, rather than other states – and a new baby boom pushed population growth upward again during the 1980s and early 1990s.
California added 6 million souls between 1980 and 1990, an eye-popping 26 percent gain. Highways became congested with millions of new cars, school districts that had seen enrollment declines in the 1970s and closed schools scrambled to handle a new surge of students, and other facilities became strained.
But as severe recession hit in the 1990s, sparked by the post-Cold War collapse of the aerospace/defense industry, more than a million Californians packed up and left the state. We continued to grow but at scarcely half the rate of the previous decade.
Growth dropped even more during the 21st century’s first decade to under 10 percent, and the state Department of Finance projects that it will slide to about 9 percent in this decade, just a bit higher than the national growth rate.
Foreign immigration is half of what it was in the 1980s, we lose more people to other states than we gain, the birthrate has declined sharply and deaths will rise as the huge baby boom cohort becomes the elderly.
…
December, 2013. 2014 was stronger.
Department of Finance said that the growth, despite being slow, was the fastest that California has seen since 2003-04, well before the recession….
http://articles.latimes.com/2013/dec/12/local/la-me-california-growth-20131213
Importing a bunch of poor illegals into a poor state merely makes a poorer state Jingle_Fraud.
California’s high housing costs drive out poor, middle-income workers
California out-migration up for poor, middle income
According to data from the Census’ Current Population Survey, those moving out of California over the last 15 years listed housing as one of the most common factors, behind only family and job concerns. Above, a banner advertising new homes for sale in Alhambra in 2013. (Frederic J. Brown, AFP/Getty Images)
By Chris Kirkham contact the reporter
California’s high cost of living has pushed hundreds of thousands of low- and middle-income workers to other states, federal data show.
The trend points to a challenge for the state’s economy: how to attract workers of moderate means to some of the nation’s most expensive housing markets.
The state overall has been losing people to other parts of the country since the 1990s. A snapshot of more recent U.S. Census migration numbers shows that nearly three-quarters of those who have left California for other states since 2007 earn less than $50,000 a year.
Experts point to the state’s increasingly unaffordable real estate markets as a major driver of the trends. More than half of the nation’s 50 most expensive residential real estate markets are in California, according to Coldwell Banker’s Home Listing Report, including nine of the top 10.
“It’s getting harder and harder for the middle-class Californian to buy a home,” said Jordan Levine, director of economic research at Los Angeles’ Beacon Economics, who points to the migration trends as a major hurdle for the state’s future economic growth. “People just keep looking for ways to maximize that residential dollar. That attracts people to inland areas of the state and to other states.”
…
The large flow of middle- and lower-income workers out of California is a trend that dates to at least the late 1980s, according to demographic expert William Frey, a senior fellow at the Brookings Institution in Washington.
During the last decade, out-migration from California peaked during the housing boom. The trend continued during and after the Great Recession, though at a slower pace.
The biggest recipients of the state’s out-migration have been Texas and other western states such as Arizona, Nevada, Washington and Oregon.
“For a while now, the new frontier has not been ‘Go west, young man,’” Frey said. “It’s ‘Go east,’ if you’re in California.”
…
It looks like California’s liberal politicians are achieving their long sought goal of driving lower- and lower-middle class families out of the state.
Oh wait…
California’s slow population growth likely to continue
By Dan Walters
12/10/2014 11:36 AM
Students raise their hands during a math lesson in his classroom at Raymond Case Elementary School in Elk Grove, Calif. on Thursday, April 18, 2013. California’s population rate continues to grow slowly, mostly because of slowing birth and immigration rates. Randy Pench
California’s once-soaring population growth slowed markedly during the last two decades, barely keeping pace with the nation as a whole since 2000, and a new Census Bureau report indicates that the state’s growth will continue that pattern for the next half-century due largely to slowing birth and immigration rates.
One political effect probably will be that California, long accustomed to gaining congressional seats after every decennial census, will have to be content with little or no change in its 53-member delegation for the foreseeable future.
However, California’s already diverse cultural makeup will continue to evolve, with Latinos, already the state’s largest ethnic group, becoming 48 percent of the state’s population in 2060, according to another projection by the state Department of Finance’s demographic unit.
…
Slowing population growth in California will not slow demographic change, however, with the major components being a very slow-growing and very rapidly aging white population, and a fast-growing, relatively young Latino population.
The state sees the white population increasing by just 4 percent between 2010 and 2060 due to a low birth rate and rising mortality among the large Baby Boomer cohort.
Meanwhile, the Latino population is projected to expand by 80 percent to nearly half of the state’s residents by 2060. Latinos, it says, will account for nearly three-quarters of all California population growth during that half-century period.
The state’s African-American population will grow as slowly as its white population, 4 percent, during the 50-year period, the state projects, while the Asian and Pacific Islanders will expand by about 50 percent.
…
“Special education teacher Edward Singleton said he spent nearly a decade saving for the $20,000 deposit he put down on a home he contracted to buy in Loudoun County, Virginia.
He would have lost far more if he bought the house.
Loudoun County, VA Sale Prices Turn Negative Year Over Year; Plummet 9% QoQ And 2% MoM As Price Declines Spread
http://www.zillow.com/loudoun-county-va/home-values/
“New foreclosure activity soared 203 percent in Worcester County during November as lenders filed 115 petitions to take back homes. Worcester County again led all other Massachusetts counties in new foreclosure activity and accounted for 18 percent of all petitions filed statewide, according to the Warren Group.’
Massachusetts Sale Prices Plummet 9% YoY Statewide As Housing Correction Spreads Nationally
http://www.zillow.com/ma/home-values/
‘Hucksters, self-promoters and cattle call bus tours are back. Déjà vu 2005 all over again may best describe at least some of Florida’s real estate markets in 2015. The unreal real estate reality show stars are back, giving lessons on how to become rich using other people’s money. Realtors and cocktail party experts are again hyping the market (although many hyped the market all through the bust). In some areas of the state, bus tours of foreclosed properties have given way to bus tours of new condominium projects, single-family-home neighborhoods and retail centers.”
“DC Realtor Indicted - Protect Yourself”
http://activerain.trulia.com/blogsview/4531677/dc-realtor-indicted—protect-yourself
“It’s Friday desk clearing time for this blogger.”
Today feels like a Saturday.
I can’t wait for next Monday. I am so tire of the “holidays” and everything being closed or packed with people.
What do you mean “everything?”
Like malls?? Applebees? Local Indian Casino??
‘It’s easy to say that crude oil could fall to 25 per cent of its recent high. It will change things enormously.’
I’m hoping and praying this prediction comes true, as I would savor the opportunity to see how the oil shills back pedal their way through another fifty percent oil price decline.
‘I wonder what will happen first? Maclean’s long-standing claim of a housing market crash in Canada or oil returning to $25 a barrel?’”
That’s a no brainer, except for the question of whether oil dips as low as $25 before reaching a trough.
Since oil is an internationally traded commodity with publicly posted prices, commonly agreed quality grades, and a highly liquid market, while real estate is a lumpy, illiquid, quality differentiated asset traded at arms length in one-on-one sales transactions, it is clear the oil price crash will win the race to the floor.
I’ve read that some think the absolute bottom for oil could be as low as $13 or so. Can you imagine?
It bottomed out around $10 in 1998. I guess with inflation, $13 might be a reasonable guess?
I remember paying about $1.20/gallon for unleaded premium in 1998.
IIRC that’s about the time the size of SUVs started to get humongous.
Home debtors crash one at a time.
At the glacial pace which the Canadian real estate crash is unfolding, I would suspect we could see several oil price bubbles and crashes before housing bottoms.
What’s to say the price prediction of 13 is any different than GS price prediction of 200 when it was spiking. The market is manipulated they can inflate the balloon more and for much longer than you think and they can trigger the collapse at a time of their choosing. Likewise they can hoard oil and trigger wars and manipulate data to drive prices back up. Their analysts will predict massive peaks and valleys. The elite make money on price swings.
I think the story for lower prices is not so much production as it is collapsing demand (due to technology (US gas consumption declined 2007 to 2013) and economic decline ) This of course could change if countries agree on infrastructure spending which I think is likely. The increase in US production has been offset by lost production from the north sea, and it does look like lower prices are going to trigger a fairly quick drop off from US fraking and other higher priced sources. At some point there will be a war and a shortage that no one saw coming and prices will rise rapidly again. I’m starting to trickle money into oil. If it get’s to 13 I’ll be all in energy stocks.
Opec and big oil derive power and higher stock prices by reporting larger reserves of oil. Thus all economic incentives are there to over estimate the amount they have, with very little in the way of verification. At some point this will be revealed. Probably after it goes to 6 and I sell everything I bought at 13.
Don’t put all your eggs in one barrel.
‘5 biggest threats to the housing market’
‘2. Foreign buyers stop buying. Foreign buyers have also helped prop up the housing market in recent years. A drop in foreign real estate investment already seems to be playing out in California, where trends often hit first. The number of sales to international clients there has fallen by about 25%, according to the California Association of Realtors.’
‘5. A sharp increase in mortgage rates. While Fannie Mae’s Duncan doesn’t expect to see a sharp jump in mortgage rates, he said the Federal Reserve could surprise everyone and send its benchmark rate higher than it’s projecting.’
“The Fed is uncharted territory,” said Duncan. “If it pushes rates up, it could have a big impact on the market.”
‘Stan Humphries, chief economist for Zillow, said if rates climbed to 6%, it would mean home buyers in high-priced markets like San Francisco, Los Angeles and San Jose, would be spending more than half of their income for housing. That would probably mean home prices would have to come down to more affordable levels or sales would slow to a crawl.’
http://finance.yahoo.com/news/5-biggest-threats-housing-market-111900014.html
It’s laughable how the flavor of the REIC pimping articles have changed in the last 12 months.
Why not just scream look out below?
“it would mean home buyers in high-priced markets like San Francisco…would be spending more than half of their income for housing.”
Hold on just a second. Home buyers in SF are already paying 10x income for a house. If it’s financed at 4%, total payments are 2x price, so buyers are paying 20x income. If 30% of income goes to taxes, that leaves nothing….for 30 years.
‘The Fed is uncharted territory’
They are Doug. It sure was easy to walk everybody out on the plank at the time, though. And Stan; sales are already at a crawl.
Interest rates aren’t going anywhere anytime soon. There will be another excuse that comes up to keep them low. I guarantee they will print as much money as possible so:
1. Interest on the govt debt stays manageable
2. The FED doesn’t lose a bunch of cash on the treasuries it has
3. The deficits can continue
At the rate of adding 1 trillion a year to the debt it wont be long that even at say 3% the interest will eat a big hole in the budget.
Like the recent article floating around the net by stockman showed, 7 trillion in treasuries matured and 8 million more in treasuries were issued.
There is simply no way in h@ll rates will rise significantly. The path has been chosen.
unfortunately politicians don’t want to fix the structural problems in the economy.
I believe they played this game in Japan as interest rates fell to zero. Next month they will rise.
The FED want’s money to flow into stocks and real estate and stuff, and the way to get that to happen is to frighten cash and bond holders.
The reality is that raising interest rates will crash cars, real estate and gov spending and thus will be met by a crater in stock prices, rising unemployment and decreased tax revenue. Thus it won’t happen for long.
“Hold on just a second. Home buyers in SF are already paying 10x income for a house.”
Exactly. They are trying to put a little polish on a turd.
Todays CraterRage® Photo Of The Day
http://goo.gl/i3huyJ
What happened to that donkey’s ears and fur?
As many underwater houses, so there are many faces of rage.
Just in from the IL Policy Institute and the Chicago Tribune……
I suspect that CA and NY had higher rates.
Illinois was the No. 3 state in America for outbound moves in 2014, United Van Lines said Friday.
Funny how no one in the middle class actually wants to live under democrats and liberals…
But there is always the FSA
If you read the actual results from the moving company’s study, you’ll see that the number one inbound state for 2014 is Oregon, with Vermont ranking fourth. In fact, the data is non-partisan, because Idaho, Oklahoma, and the Carolinas also rank highly for inbound moves. Leading states for outbound moves are the Rust Belt states and the Northeast, but also include West Virginia, Mississippi and Kansas.
Florida ranks fifth for inbound moves, which no doubt will trigger more real estate propaganda that a thousand people a day move here.
http://www.unitedvanlines.com/about-united/news/movers-study-2014
VT and OR are no surprise considering they have the most liberal welfare benefits.
Pretty grim.
savers, kiss your @ss goodbye! They want you to give your money to wall street via stocks so they can get paid!
Some of these valuations are just absurd. Its like pets.com all over again.
You may never see any yield in your savings account for the rest of your lives. The interest on your savings now goes to a campaign fund!
In 1999, I used to buy and sell stocks. Buy, then 10 secs later sell when those sites posted buys. It was a game to see who was the fastest as stocks spiked on the recommendation. Good $$ for a few months. I would not even know what I was buying.
Then I bought 5,000 shares of (ATOM) Sold 8 secs later for about $900 profit. Turned out it was Atomic Burrito. I quit after that.
who wasnt day trading in 1999? Everyone turned into a genius stock picker until the bottom fell out of the market.
Do you remember the sites that would list their “pick” It would spike 50% in 5-10 seconds then crash. EVERY WEEK! it was ridiculous! It was second trading. Good for a couple hundred dollars before ya even had your coffee.
Back when that market crashed I had some stock options to exercise, and things weren’t looking good. I was at a farewell lunch for some co-workers at a local casual restaurant. The establishment had a television tuned to one of the business channels, and I kept one eye on the stock price crawl at the bottom of the screen, as for whatever reason the price was rising. Finally I excused myself, drove home, and exercised the options for a modest gain. Several months later they were worthless.
Yes but my growing pile of cash becomes more valuable by the day as prices crater.
Price pimping crosses party lines. The political pandering is mere cover for their primary motive which is…… pimping prices.
Instead of a hypothetical about interest rates, inflation, and bubbles, how about a real time example:
‘The elite property market in Moscow is booming this year with more than $1 billion in sales as new offerings and the ruble’s slide against the dollar spur wealthy Russians to safeguard their earnings in real estate, a report found. February and March saw record demand for top class residential real estate, with over 67 deals closed in February, according to the report by real estate consultancy IntermarkSavills. The total number of deals declined slightly from 518 in 2013 to an estimated 502 in 2014.’
‘The strong demand is tied to the falling ruble, which has lost more than 45 percent of its value under pressure from sinking oil prices and Western sanctions over Russia’s role in the Ukraine crisis. Russians in all market segments see real estate investments in Moscow as a safe bet, and for a certain wealthy upper class with income in hard currency, ruble-priced apartments now appear attractively cheap.’
‘The ruble’s slide has also had a decisive impact on the prices of elite property developments in Moscow, about 60 percent of which are denominated in rubles, the report said. The average dollar price of elite Moscow apartments has fallen 19 percent since December last year to an estimated $15,700 per square meter by the end of 2014. The average price in rubles, meanwhile, has risen 42 percent since Jan. 1.’
‘The average price of properties listed in dollars is now $23,900 per square meter, nearly three times the average price of those listed in rubles, which cost about 508,000 rubles per square meter ($8,500).’
‘Russian authorities are mobilizing to clamp down on spiraling mortgage costs as a looming recession erodes real wages and threatens to hammer homebuyers. Following the Central Bank’s bid to strengthen the flagging ruble by hiking the interest rate 7.5 percent earlier this month, rates on homebuying loans have risen between 12 and 13 percent to an average of from 15 to 16 percent, Maxim Morozov, managing partner of real estate firm M9 Development, told the Vedomosti newspaper.’
‘Russia’s biggest lender Sberbank said Monday that it would charge interest of 14.5 to 16 percent on mortgages from Dec. 22, the Interfax news agency reported.’
‘The market-wide increases translate to a 25 percent rise in loan repayments at a time when real wages are being squeezed by rising inflation and a rapid devaluation of the Russian ruble, which has fallen 40 percent against the U.S. dollar since January.’
‘Last week President Vladimir Putin asked banks not to raise rates and said the government should help mortgage lenders. Russian lawmakers have said they would introduce legislation to protect ordinary Russians from steep rate hikes.’
‘Every third property in Russia is bought with a mortgage, according to the Housing Ministry.’
Another nation turned into a state of slaves.
They consider the USD a hard currency. Oh well, everything is relative. The USD is experiencing a “hardening” which, like any old bull, we will take advantage of, in good time.
“‘The market’s coming in for a soft landing,’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘We had been seeing double digits rates of increase a couple years ago and that’s not sustainable. That could not continue, people would be hurt because values can’t keep going up that fast. The metrics that push values up would not support that rate of appreciation.’”
How often in the modern history of real estate has slowing appreciation in the wake of manic double-digit annual price increases ever ended with a soft landing? Don’t the investors who drive a mania typically panic in a race for the exits, resulting in a crash landing?
whats a roof over you head n so cal cost these days?
“Robert Shiller said in an interview on CNBC that there could be signs of a bubble in the City by the Bay. Goldman said he appreciated Shiller’s concern, and noted that people are willing to pay a large premium for urban living, especially in San Francisco, where cost of commuting is high.”
It’s different there in the City by the Bay, as it always has been.
And this explains the Echo Bubble how?