January 23, 2015

Bits Bucket for January 23, 2015

Post off-topic ideas, links, and Craigslist finds here.

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Comment by watching
2015-01-23 03:56:35

In the last two days two different colleagues revealed that they’ve doubled down on residences.

Colleague 1 just picked up a new house in Waltham, MA. Current residence in Jamaica Plain (Boston), wants to sell it but can’t put it on the market yet because of delayed renovations. Desperate to move because current commute adds up to well over 2 hrs/day (for those who don’t know Boston, JP is near downtown, but getting in and out is hell on earth). I suggested caution about legging into the trade from the long side and was told “if I have to I can easily rent it for more than my monthly payment.” Meantime they’re picking up the new place from a flipper who is desperate to get out, having had the place on the market for 120 days and having had to bring the price down by 10% to get them to bite after two other contingent sales fell through. Cherry on top was getting to listen to her and a new owner from a couple of years back talk for 20 minutes about “how it works” with flippers and bidding wars and psychology of pricing … nothing that would surprise anybody here (triumphant stories of getting that 10% off, of hearing confirmation from their realtor that they’re smart for planning to not overprice the JP unit, the other guy agreeing and talking about winning their bidding war with less than the top bid because they wrote a letter) but my god … the blind acceptance of arbitrary parameters is unreal. What sense does it make to believe that you can write a letter worth thousands of dollars in hard cash? If you’re so sharp, and if indeed houses in JP have been selling in less than a week on market, why are you bringing a realtor into the transaction? Are you deaf to the fact that your only data point in concluding that x-10% is a good deal is the original wishing price x? And so on.

Earlier, colleague 2 joins a small group of us walking inside and says “anybody looking to buy a condo in Cambridge?” Turns out he’s just moved and now has *three* residences — his old condo and his wife’s, along with the new place — and he’s getting ready to unload the old ones. Someone said “well you won’t have any problem selling those” and he kind of laughs and says, “Oh, I know.” The mix of bravado and self-congratulation and wobbling fear in that laugh was spooky.

I don’t wish these people ill, and god knows I have been wrong about these markets for a very long time now. But I’m watching these things and thinking that you could not possibly, ever, get me to do what they are doing. It’s terrifying.

Comment by Housing Analyst
2015-01-23 06:23:48

Rolling dice with OPM is nothing to degenerate gamblers….. until they lose their ass.

Comment by Shillow
2015-01-23 06:27:02

Ten percent off bubble high flipper wishing price? Not the bargain he thinks it is.

As for easily renting for more than monthly payment, maybe, depending on how long ago she bought, but probably just talking out of her ass.

Why is she renovating a house she knew she was going to dump? For the renters?

Comment by 2banana
2015-01-23 06:56:22

In a year or so the conversation will have these words…


I am a victim

No one could have seen this coming

Fighting to save my house

Comment by Bill, just south of Irvine
2015-01-23 08:13:19

He should sell and now own. Just rent where he goes. Buying houses is silly in this mobility era. If you are anticipating changing jobs within 10 years then do not buy. If you are not anticipating changing jobs, you better have a big pile of cash.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 10:16:19

Not changing jobs usually entails putting up with a lot of BS for years at a time.

Comment by Dman
2015-01-23 08:39:21

If you want to keep your braggart colleagues awake at night, casually mention that you hope prices don’t drop like they did before.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 10:12:18

I have one coworker who’s wife has been wanting a new house for years. He’s been making believe to “look” with her, but actually playing mind games to prevent an actual purchase. According to him, he sees prices drifting down. Last year, he saw them flattening out. I wonder what next year will bring.

In the meanwhile, another coworker recently purchased a house in the ghetto so he won’t be priced out forever. He had been looking for a year and kept losing out to higher offers. Now, all the sudden, he “wins” a bid, even though he hasn’t decreased his maximum price or his expectations (still ghetto). He works for a very low wage. If he’s so worried about being priced out forever, then how did he manage to finally win one of these bidding wars without changing his bid or his wage? Granted, he had a down payment (most don’t), but still.

Comment by MightyMike
2015-01-23 10:57:25

As a single guy, the idea of having to go home and play mind games after a day at work sounds exhausting.

Comment by Neuromance
2015-01-23 18:22:43

Historically, people used to rent in order to build up some downpayment before buying. The carrying costs are lower and the monthly nut is typically lower. And there are those of us who kept renting and let the net worth keep increasing.

The value of a house comes from consuming the benefits it provides, and its price appreciation, yielding a future profit upon sale (provided no helocs, not counting interest payments, carrying costs, etc). I’m guessing there are a lot of folks out there who are still hoping for that second component.

Comment by azdude
2015-01-23 06:08:57

anyone get the feeling there is basically no growth and we are basically servicing what we got?

Comment by Mr. Banker
2015-01-23 06:29:53

“… we are basically servicing what we got?”

Bahahahahaha … or being serviced by what you’ve got.

Or, rather, you being serviced by what I’ve got.

Comment by Bill, just south of Irvine
2015-01-23 08:16:41

There is growth in technology. Lots of start ups.Lots of very exciting work that will liberate humanity. But just not enough growth to be significant…yet.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 10:20:57

Growth in technology will not necessarily translate into a sustained or improved standard of living for the American middle class.

So we make a new medical device, but it costs so much that only the top 1% of the global elite can afford it, and it’s manufactured for a total of five bucks by slave-workers in communist China. In the meanwhile, J6P lives in a two-bedroom apartment with his unmarried girlfriend and their three kids, feeling great because they get free school lunch and an earned-income tax credit every year. Nice growth.

Comment by dwkunkel
2015-01-23 11:51:05

I see the same thing here in Silicon Valley, Bill.

Comment by Dudgeon Bludgeon
2015-01-23 06:23:29

It’s terrifying to you but they love it. It makes them feel alive! They embrace risk because with great risks come great rewards!

They’re players in the game and they are talking MONEY with many zeros.

They live for the phone calls with the buzzwords and the conversations with their friends and relatives. They are moving forward and gaining that elusive step into the upper echelons of wealth - maybe some day soon they will be a part of the 4% or, maybe even the 1%!

Good Heavens! Can’t you feel the RUSH!
Their will be Porches and S Class Mercedes’ soon, Patek-Philippes and Admiral Shares! Club memberships and First Class flights to Europe.

And, and mistresses!

And divorces and lawyers and rehab and suicide! Oh, the suicides!

Beautiful tragedy requires an audience and no one cares or looks if you’re poor. Only the RICH deserve our attention! It’s ART man, and you just aren’t getting any of it but you will PAY attention to them. You listened and opined on the interweb!

You need to tell them. Text them now and tell them you posted about their nascent RE empires on the blog of Housing something that you regularly read. Let them know that they are already on their way to being known as quick thinkers, savvy investors!

You should listen to these people. They have the right stuff! Some have it and some don’t.

To the Victors go the Spoils! You’re no Victor are you?! No, you’re probably a John or a Mike. *shudder*

Comment by 2banana
2015-01-23 07:00:28

Everyone can be a Trump!

Comment by palmetto
2015-01-23 07:50:42

Awesome, Dudgie! Whew, you spoke some serious truth there. Really, the only way to handle these characters (from these minor wannabes, to the big zits at Davos) is to first mock them, and then ignore them. I’ll leave you in charge of the Department of Mocking.

Comment by rms
2015-01-23 08:44:10

“And, and mistresses!”

Now I’m listening…

Comment by Puggs
2015-01-23 12:52:45

LA is their breeding ground.

Comment by real journalists
2015-01-23 06:37:47

Region VIII

Comment by real journalists
2015-01-23 07:46:07

Region VIII news

“Colorado Republican lawmakers on Wednesday rejected a request to shore up the state’s cash-starved driver’s license program for those living in the country illegally.”


Because denying free sh*t for the Free Sh*t Army is racist


Comment by 2banana
2015-01-23 08:05:47

Move long - there are NO differences in political parties…

Comment by real journalists
2015-01-23 08:37:23

the Free Sh*t Party versus the More Free Sh*t Party


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Comment by 2banana
2015-01-23 09:34:58

Until we end up like Greece

Comment by real journalists
2015-01-23 10:13:46

the More Free Sh*t Party versus the Even More Free Sh*t Party


Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:31:06

Arizona is now being forced to give driver licenses to illegal immigrants. Not sure how that’s legal; I’m sure AZ will appeal.

Comment by Albuquerquedan
2015-01-23 13:01:26

Obama’s amnesty program. If they are legally in the country the federal court ruled that they must have access to driver’s licenses. I am sure it will be appealed.

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Comment by Professor Bear
2015-01-23 06:52:25

Got cr8ering crude?

Comment by Professor Bear
2015-01-23 06:53:39

At least you can hide an oil glut at sea, unlike a housing glut.

Comment by Blue Skye
2015-01-23 06:59:46

The Sea of Deflation.

Comment by Albuquerquedan
2015-01-23 07:24:46

From Peak Oil and BTW, 80% of the drilling rigs are needed just to keep production stable, just a few months ago the predictions were for a one million barrel increase in U.S. production, if we lose a third of our rigs we will actually lose production, get ready for $80 by the end of the year:

With crude prices down nearly 60 percent from their highs, investors are learning that not all oilfields are created equal.

U.S. oil production grew 49 percent between 2008 and 2013, as drillers improved productivity and tapped high-yield debt markets. But with their product fetching far less these days, exploration and production companies have slashed capital expenditure budgets and are being pickier about where they plumb for oil.

At current price levels, firms could take as many as 650 onshore rigs offline—or about one-third of the nearly 1,900 that were drilling at last year’s peak in November, Wells Fargo analyst David Tameron told CNBC’s “Power Lunch” recently. Last week, the U.S. rig count stood at 1,676, according to Baker Hughes.

Drillers have begun reducing rigs in big shale regions, including the Permian Basin in Texas and New Mexico, the country’s highest-producing region, as well as North Dakota’s Bakken Shale and the Eagle Ford in south and east Texas. But shutdowns in other, less productive and emerging areas will likely be more widespread.

The Tuscaloosa Marine Shale (TMS) has some of the nation’s highest breakeven costs—about $70 to $90 a barrel for benchmark West Texas Intermediate crude—according to energy investment banking firm Tudor Pickering Holt.

The TMS lies under a swath of the Deep South that runs along the border of Louisiana and Mississippi. While it is believed to hold 7 billion barrels of oil, that black gold is buried between 11,000 feet and more than 15,000 feet below the surface. That compares with depths as shallow as 5,500 feet in some parts of the Permian Basin.

Already, exploration and production companies are pulling out. Last month, Comstock Resources suspended drilling in the TMS, and Halcon Resources said in November it would wind down operations there.

Halcon recently slashed its drilling and completion budget roughly by half. The company has about 315,000 acres in the play and attracted $400 million in investment to drill there, according to its website.

“I’m going to do my darndest to make sure that people understand that we’re highly confident and we like the play,” Halcon CEO Floyd Wilson told investors on a conference call in November. “However, it is currently a relatively high-cost play, and with currently low crude prices we will not be devoting a significant portion of our resources to TMS in the near term.”

Another area that will definitely see cuts is the Mississippian Lime, said Michael Rowe, an analyst at Tudor Pickering Holt. Located in Oklahoma and Kansas, the play is comprised of a basin roughly the size of West Virginia. Producers need oil at roughly $75 a barrel to break even there.

MS Lime wells produce a lot of water, and regulations connected to the water use create additional labor, transportation and power costs, said Richard Tullis, energy equity analyst at Capital One Securities.

Oklahoma City-based SandRidge Energy, the largest player in the MS Lime, said this month it was reducing its rig count and capital expenditure levels. The company’s shares are down nearly 80 percent over the last six months, from just under $7 to little more than $1.

The upside is that SandRidge was able to buy property in the area on the cheap, perhaps for as little as a few hundred dollars an acre, Tullis said. That compares with tens of thousands of dollars per acre in parts of the Permian when oil prices were at highs.

Low land prices make it less painful for exploration and production companies to put the brakes on projects. “I suspect you can let leases expire in the MS Lime and then come back and re-lease them for the same or better terms,” Tullis said.

Producers can continue drilling in plays with break-even levels at the midrange, provided they have a top-tier capital structure, Rowe said. And they can reduce well costs not only by renegotiating prices with oilfield supply companies, but by drilling more efficiently.

Jones Energy is doing that in the Anadarko Basin, located in western Kansas and the Texas panhandle, analysts said. It produces more than 18,000 barrels of oil a day from 1,284 drilling locations across 152,000 acres in the Cleveland, Tonkawa and Marmaton areas, according to its website.

Those are “tight sands” plays—meaning the ground has low permeability and must be drilled using more advanced methods. They can be unpredictable from a drilling standpoint, Rowe said. Their break-even prices range from the high $50s to high $70s per barrel, but Jones thrives in the area because its focus is narrow.

“This is all they do. They know it extremely well. They build relationships with service operators in the basin and tailor well completion design depending on which zone they’re trying to target,” he said.

Producers who are not on the same page—on the cutting edge in terms of drilling technology and capital costs—will have to pull rigs out of pricey shale plays, Rowe said.

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Comment by Blue Skye
2015-01-23 07:55:13

Strings of words not understood:

debt Ponzi
building mania
fake miracle
collapsing demand
cascading defaults

Comment by Albuquerquedan
2015-01-23 08:01:32

No, it is this string:

finite resources
increasing demand
governmental manipulation
below marginal costs
rapid decline rates

Comment by Housing Analyst
2015-01-23 08:17:49

In the meantime:

-Oil demand craters
-Oil production balloons
-Oil supply balloons

And best of all….Oil prices crater.

Comment by Blue Skye
2015-01-23 08:20:02

We’re likely to have some surprises in 2015 which will be very educational. In the meantime, keep your strings of words away from my strings of words until after my cruise this summer.

Comment by Albuquerquedan
2015-01-23 08:44:15

The dollar is up strongly yet oil is still up slightly. About a month a go such a move in the dollar would be worth at least a $2 decline in the price of oil. The manipulation game is playing out.

Comment by Housing Analyst
2015-01-23 09:14:37

What matters is cheap oil. And oil fell 65% in 6 months and about to get a whole lot cheaper.

Comment by Blue Skye
2015-01-23 09:23:16

Only gambling losses will school him.

The house he bought in 2012 will carry extra credits.

Comment by Albuquerquedan
2015-01-23 09:25:18

I did not buy in 2012.

Comment by Housing Analyst
2015-01-23 09:26:06

Get out…. Dipstick bought a shack in 2012?


Comment by Albuquerquedan
2015-01-23 09:51:39

No, I bought in 2011 and received the $8000 tax credit. Thanks for your money.

Comment by Housing Analyst
2015-01-23 09:55:53

Even worse. Good luck youre gonna need it.

Comment by Blue Skye
2015-01-23 09:56:54

Close enough! LOL.

Comment by Albuquerquedan
2015-01-23 10:19:25

Do not know if BHI’s weekly rig count will be delayed by the holiday but local ones are pointing to another large drop in rig count numbers:


Comment by Housing Analyst
2015-01-23 10:24:44

Do you know how much you overpaid for that shack?

Comment by Blue Skye
2015-01-23 10:35:00

It’s OK, really. Just a debt Ponzi building mania fake miracle collapsing demand cascading defaults thing working itself out. 100% of those $200K/yr guys can be back on the job in less time than it takes to shake a hangover when the next big credit expansion kicks up.

Comment by Whac-A-Bubble™
2015-01-23 11:31:11

Lost money on the oil crash? Then why not double-down on your losing bets?

Finance More: Oil
Traders Are Hoarding Oil In These Colossal Ships While They Wait For Prices To Bounce Back
Mike Bird
Jan. 20, 2015, 10:28 AM

Traders are in a mad dash to rent some of the world’s biggest oil tankers so they can store crude while prices remains in record-low territory.

The Wall Street Journal reports that TI Oceania, which has been booked by oil traders Vitol, is stationed off Singapore and is likely to remain there for most of 2015.

China’s Unipec booked Oceania’s sister ship, TI Europe, way back in September, when oil prices dropped below $100 per barrel (let’s hope they didn’t buy the oil then).

The ships are giant. Here’s the TI Europe, for example:

As oil prices continue to plunge amid a supply glut and weaker demand, companies reckon they can make more money from simply hoarding the oil and selling it at later date, when prices rebound.

This phenomenon is known as “contango,” a term for when the price of commodity futures is higher than the current price. In this case, traders believe there is more money to be made from simply sitting on oil, if they can bear the costs of storing it.

Comment by Albuquerquedan
2015-01-23 11:55:58

Then why not double-down on your losing bets?

What makes you think they lost money on the way down? They are probably politically connected and knew Obama was going to manipulate prices lower and bet on the down side. Now, they know that the manipulation can only be of a short duration and will make money on the upside. Crony capitalism is great when you are politically connected.

Comment by Whac-A-Bubble™
2015-01-23 10:51:51

Perhaps EU QE will rescue the oil traders from their losses, as QE1 did in 2009?

Oil Traders Look for a Bonanza Like 2009
By Matthew Philips January 22, 2015
Oil Traders Look for a Bonanza Like 2009
Photographer: Dado Galdieri/Bloomberg

The sudden collapse in oil prices has left the world awash in cheap crude. Analysts estimate that global production of excess oil—oil for which there is no immediate demand—is somewhere between 1 million and 2 million barrels a day. Oil traders are scrambling to find a place to store it all, leasing tankers at the fastest pace since the recession. With any luck, they’ll replicate a strategy that won them big profits in 2009, the last time oil was this inexpensive.

In 2008 oil prices crashed from $146 a barrel in July to $36 in December. Traders kept buying crude, but rather than sell, they sat on it and waited for prices to rebound. By the end of 2009, prices had almost doubled from their lows of a year earlier, and trading companies booked fat profits as they unloaded their stored oil. Gunvor, the world’s fifth-largest independent oil trader, made a record profit of $621 million that year, according to a company bond prospectus.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:37:09

I want a bonanza too.

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Comment by Whac-A-Bubble™
2015-01-23 14:10:10

I wonder what the cotango gamblers will do if oil prices don’t rocket up again within the next year, as in the 2008-09 episode, but rather stay in the basement like they did from the mid-1980s through 2000 or so?

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Comment by rms
2015-01-23 21:32:53

Yellen’s silence is deafening.

Comment by Whac-A-Bubble™
2015-01-23 13:57:42

Futures Movers
Oil at lowest level in 5 years, sheds 7% on the week
Published: Jan 23, 2015 3:45 p.m. ET
U.S. Secretary of State John Kerry and Saudi Arabia’s King Abdullah bin Abdulaziz, who has died.
By Claudia Assis

SAN FRANCISCO (MarketWatch) — New York-traded oil ended Friday at its lowest level since March 2009, amassing losses of more than 7% on the week.

Crude-oil futures were mixed, with London-traded Brent settling higher. Investors parsed news of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data.

Light, sweet crude futures for March delivery (CLH5, -1.97%) retreated 72 cents, or 1.6%, to settle at $45.59 a barrel on the New York Mercantile Exchange. That was the lowest finish since March 11, 2009.

Prices had traded as high as $47.76 a barrel earlier. On the week, New York-traded oil lost 7.2%, down for 15 of the past 17 weeks.

Brent crude for March delivery on London’s ICE Futures exchange (LCOH5, +0.29%) rose 27 cents, or 0.6%, to $48.79 a barrel. Brent traded as high as $49.80 a barrel. On the week, the commodity declined 2.8%.

The change of guard in Saudi Arabia, the world’s No. 1 oil exporter, is unlikely to change kingdom’s stance in oil markets. The new king has kept oil minister Ali Al-Naimi in power, and Saudi Arabia will continue to pursue the strategy of defending its own market share rather than help support oil prices, said Matt Smith, an analyst with Schneider Electric.

Saudi Arabia’s King Abdullah bin Abdulaziz al Saud died at the age of around 90, according to a royal court statement early Friday morning. The statement also said that Abdullah’s half-brother, Crown Prince Salman, who is 79 years old, was declared king and Prince Muqrin, 69, became crown prince.

Earlier Friday, Prince Alwaleed bin Talal, a Saudi businessman and a nephew of King Abdullah, said on CNBC the world would never again see oil at $100 a barrel, reiterating remarks he had made earlier this month.

“The price of oil will remain under pressure for the foreseeable future,” he said.

Comment by Professor Bear
2015-01-24 00:11:28

Can’t wait to fill up my gas tank again with even CHEAPER oil!

Comment by 2banana
2015-01-23 06:55:20

“The crisis has passed.”

“Not even a smidgen of corruption.”

“If you like your plan you can keep your plan.”

“I’ll cut the deficit in half.”

“It was the video.”

“I’ll have the most transparent administration in history.”

“I’ll stop the rise of the oceans.”

“I was born in Hawaii.”

Comment by real journalists
2015-01-23 07:19:39

If you think he’s a problem now, wait until he is the head of the U.N. in 2017. With Michael Bloomberg as his money man, you’re in for a “fundamental transformation” like nothing you could imagine.


Comment by nhtransplant
2015-01-23 09:53:17

Not #Extermination, # Depletion

Comment by Albuquerquedan
2015-01-23 07:50:29

ACA will lower costs and lower the deficit

Comment by real journalists
2015-01-23 08:05:53

ACA = corporate welfare for insurance corporations

Health care 18% of GDP = American Exceptionalism

But it should be at least 25%, that’ll show those Euro-socialists who’s #1

Comment by 2banana
2015-01-23 08:10:32

We only need bigger and bigger government, more and more regulations and higher and higher taxes to fix this problem…

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Comment by real journalists
2015-01-23 08:25:46

It should be at least 30%, that’ll show those Euro-socialists who’s #1

Comment by Dman
2015-01-23 08:46:14

So you’re a birther too? Why am I not surprised?

Comment by oxide
2015-01-23 11:42:29

It doesn’t matter where Obama was born. His mother was born in America.

Just ask Ted Cruz.

Comment by rj chicago
2015-01-23 10:17:34

Keep on ragin on Obamao - takes the heat offa me!!

Comment by 2banana
2015-01-23 07:02:33

Same rule changes will eventually come to your ROTH and 401K

It is for the children…

It is only fair…


White House Proposals on 529 College Plans Would Reduce Benefits
New York Times | January 22, 2015 | By Sara Siegal Bernard

President Obama is proposing a radical change to the 529 college savings plans held by millions of families, which would require those who use them to rethink their approach to college savings.

As part of his plan to simplify the tax code and help the middle class, one of the 529 plan’s most attractive benefits would be eliminated: Money could no longer be withdrawn tax-free.

The accounts, many of which are run by the states, allow people to make contributions that grow tax-free. The money can be withdrawn without the paying of capital gains taxes as long as the proceeds are used for education expenses. Many states provide state income tax deductions for contributions as well.

“I was very surprised by the Obama 529 proposal because in many ways it is anti-middle class for families trying to afford college,” said Joe Hurley, founder of the SavingforCollege.com website. ”

Comment by Housing Analyst
2015-01-23 07:21:21

There it is. They’ll do whatever they have to get their hands on it.

How else can they keep the SS ponzi afloat?

Comment by Rental Watch
2015-01-23 12:35:36

This would hurt the middle class, and kill 529 plans. Why?

The people who they are trying to get taxes from with this would simply gift the money to their kids in a trust rather than put it in a 529. Why?

Because 529 plans limit your investment options to mutual-fund like investments (ie. you don’t trade often), and 529 contributions reduce the amount you can contribute under the annual gift tax exclusion, AND Obama is proposing to tax the gain as ordinary income.

A wealthy person would be better off putting the money in a trust for education, and investing in an ETF (and not buying/selling until needed), and at the end selling and paying capital gains (not ordinary income).

Those who can’t afford to set up the trust would stick with 529s and get hammered (since there would be less money being managed, which would drive up costs). And they would get taxed at the end.

Nothing like taking a program that helps middle class folks take personal responsibility for their kids education, and destroy it. Idiot.

Comment by Brett
2015-01-23 07:05:53

Hello guys,
It’s been a while since I’ve made any comments, buts it’s become my daily routine to read the blog late at night before bed. Thanks for keeping me informed and entertained.

I am locked into a two-year rental contract, and my housing costs haven’t increased unlike most of the people I know. Thanks for convincing me not to buy a couple of years ago!


2014 home sales break Austin records

AUSTIN — The Austin-area housing market set a record for home sales last year, according to the Austin Board of Realtors.

According to the board’s report, 27,768 homes sold in the Austin area last year, a 2 percent increase from 2013.

December home sales also broke records. The report states 2,283 single-family homes were sold in the Austin area in December, a 14 percent increase compared to December 2013 and an all-time high for Austin-area home sales in the month of December.

In 2014, median home price increased by 8 percent to $242,500. The total value of homes sold topped $8.6 billion in 2013, an increase of more than $673 million from 2013.

Homes spent an average of 47 days on the market, three days fewer than homes sold in 2013.

Comment by Housing Analyst
2015-01-23 07:36:03

It won’t be long now before the wheels come off Austin. Thanks for reading and we’ll keep you informed.

Comment by Ben Jones
2015-01-23 08:06:40

‘Housing experts have said they expect Austin-area home prices to continue increasing in 2015, but also predicted that increase could decelerate by 2018 during a housing market slowdown.’

‘Ken Perlman, senior vice president at John Burns Real Estate Consulting, said Austin is “a little bit of an overpriced market,” especially given relatively low interest rates for home loans. However, he said he does not see the market slowing any time soon because of the 25 percent increase in single-family building permits in 2014.’

“It would not be unreasonable to believe a housing market slowdown could be on the horizon in the next two to four years,” he said during an address at a Jan. 20 meeting hosted by the Home Builders Association of Greater Austin. “I’m talking about a slowdown. … We’re still projecting price appreciation. We’re still projecting job growth.”

‘Perlman said increasing lot prices, along with a push from builders to construct new homes faster to meet demand, also put pressure on home prices, leading to slower 2014 sales. He said new homes prices in Austin are about $54,000 higher than resale properties, and historically that difference is about $35,000.

“We remain bullish on Austin but are concerned about home prices having a negative impact on volume in 2015,” Perlman said. “That’s one of the things we’re looking at here.”

‘Two other companies in 2014 ranked Austin as the most overvalued market in the U.S.—Trulia, an online real estate portal, and financial services company FitchRatings. Eldon Rude, principal at 360° Real Estate Analytics, said home sales slowed more than anticipated in late 2014 and more inventory was available. “A lot of that was buyer fatigue in terms of price increases,” he said.’

‘The so-called pricing bubble, Rude said, is more a psychological issue but one that still should be taken seriously. “At the end of the day what’s the most important thing [buyers are] thinking of?” he said. “Did I pay too much? That’s why it’s important.”

‘Perlman said homebuilders should target the first-time homebuyers market, which often means building new homes priced below $250,000. Homebuilders will likely turn to suburban areas such as Buda, Hutto, Kyle, Manor and San Marcos, to meet that price point.’

In 1996 I was working in Buda. At that time, there were new houses being sold for $50,000. And it’s probably an hour or two commute to Austin proper from San Marcos during rush hour.

Comment by 2banana
2015-01-23 08:09:16

You are in a magical place right now.

Renting for two years.

No mortgage or property taxes to worry about

And the oil crash is about to crash housing prices all around you

Comment by Blue Skye
2015-01-23 08:25:37

“the oil crash…”

Yet hardly anyone wants to understand why oil is crashing and why it went so ridiculous high in the first place. Understanding why this happened might help us prepare for what comes next.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:43:58


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Comment by drumminj
2015-01-23 08:35:07

Good to hear from you, Brett. I was down in Austin two weekends ago and was wondering what you had ended up doing.

IIRC, you had come into some money and had asked for advice — did you follow the BiLA plan?

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:42:02

Oil bust = Austin bust

Don’t worry kid, your inheritance will eventually be put to good use. You will get your cheap house soon. Maybe you will also buy a Yogurtini and give me the employee discount, even though I don’t work there.

So did you put it in stocks or keep it in cash?

Comment by phony scandals
2015-01-23 07:38:06

Forget about crashing house prices and get your obedient @ss into a 250 sq. ft. smart growth living space and wait for the high speed rail that was fully funded but never built while you are sitting next to the empty “walk score” retail shops in your mixed use community and like it.
Comment by Tarara Boomdea
2015-01-22 15:59:47

What are you peons thinking?

Billionaire Davos Attendee Thinks Your “Lifestyle Expectations” Are Too High
“Jeff Greene is a man who accrued billions by betting against subprime mortgages.”

“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” he said. “We need to reinvent our whole system of life.”

“Greene, who flew his wife, children and two nannies on a private jet plane to Davos for the week,”

Comment by real journalists
2015-01-23 07:52:16

Because pigmen gonna pig

Tales of a Davos Barfly: Billionaires, Royals and Scotch


Comment by 2banana
2015-01-23 08:13:08

2banana’s rule:

Conservative are more than happy to live under the same laws and taxes they want for everyone else.

Liberals/progressives expect to be exempted from the same laws and taxes they want for everyone else.

Comment by In Colorado
2015-01-23 14:29:49

Conservative are more than happy to live under the same laws and taxes they want for everyone else.

Lower Capital Gains Taxes for me and Higher earned income tax rates for you.

Comment by rj chicago
2015-01-23 10:21:31

They are all f…ing charlatans and philistines!!!

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:47:56

“… less things?”

Someone needs to learn English.

Comment by real journalists
2015-01-23 08:21:29

There is an article written by real journalists at the Washington Post titled “Netanyahu’s planned speech to Congress strains U.S. ties; no meeting with Obama”

Because the only solution to religious violence in the Middle East is more violence

America needs another trillion dollar war

Tea poors, black poors, brown poors all need to enlist and go fight and die

“Bomb bomb bomb, bomb bomb Iran”

How many of William Kristol’s children fought and died in the last war?

Shrinking the size of government to where you can drown it in the bathtub, one drone strike a time

Can I has Rapture plz?

Comment by real journalists
2015-01-23 08:45:17

Drudge Report
Washington Times
Breitbart dot com
World Net Daily
Weekly Standard

All Israel, all the time, and now with 33% more Christian Zionism per serving

Comment by 2banana
2015-01-23 08:47:04

Go walk in a muslim no- go zone a get back to me.

Comment by real journalists
2015-01-23 09:08:30

Sharia Law has been coming to America “any day now” every day since 2001

This is not Europe, where Patrick Buchanan correctly predicted everything that is happening there now

Name the locations of these no-go zones in the United States please

Comment by 2banana
2015-01-23 09:42:17

1600 Pennsylvania Ave?


Actually - the only difference between America and Europe with muslims is just we have less of them as a percentage of the population. Amnesty will change that along with refugees from muslim sh*tholes…

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Comment by redmondjp
2015-01-23 14:11:22

Dearborn(istan), MI, for starters . . . they have audible (loudspeaker) calls to prayer blasted five times daily from the mosques . . . same thing now happening in Hamtramck

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Comment by MightyMike
2015-01-23 09:52:49

Fox News apologized repeatedly for the nonsense about Muslim no-go zones in France and England. And yet some people prefer to think that they exist. They must get a nice, warm feeling from holding that belief.

Comment by real journalists
2015-01-23 10:11:30

“a nice, warm feeling”

The 2014 Super Bowl Coke commercial


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Comment by Albuquerquedan
2015-01-23 10:42:42

Fox may have gotten the total number of them wrong and some of the locations, but that they exist has been known for years and the MSM has even acknowledged them.

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Comment by Albuquerquedan
2015-01-23 10:51:20
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Comment by 2banana
2015-01-23 11:31:33

They have been known and written about for over almost 20 years now…


The 751 No-Go Zones of France
Middle East Forum | Nov 14, 2006 (updated Jan 17, 2015) | Daniel Pipes

They go by the euphemistic term Zones Urbaines Sensibles, or Sensitive Urban Zones, with the even more antiseptic acronym ZUS, and there are 751 of them as of last count. They are conveniently listed on one long webpage, complete with street demarcations and map delineations.

What are they? Those places in France that the French state does not fully control. They range from two zones in the medieval town of Carcassonne to twelve in the heavily Muslim city of Marseilles, with hardly a town in France lacking in its ZUS. The ZUS came into existence in late 1996 and according to a 2004 estimate, nearly 5 million people live in them.

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Comment by Dman
2015-01-23 08:55:47

Boehner knows that nothing will help the conservacowards in 2016 like a war with Iran, and who better to start one than our friend Bibi?

Comment by real journalists
2015-01-23 09:11:52

If America has to borrow another trillion dollars to fight a war that makes the Rapture happen five minutes sooner, it will all be worth it


Comment by phony scandals
2015-01-23 08:46:36

The Betters know what a better existence is for you so get out there and lower those expectations.

“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,”

Jeff Greene who flew his wife, children and two nannies on a private jet plane to Davos for the week.

Comment by real journalists
2015-01-23 08:54:52

My carbon footprint is bigger than your carbon footprint

Comment by phony scandals
2015-01-23 09:01:10

“My carbon footprint is bigger than your carbon footprint”

Sounds like you need less things and a smaller, better existence.

Comment by Albuquerquedan
2015-01-23 09:14:56

Thank you for adding a beneficial gas to the atmosphere. The trees I have planted around my house will enjoy the additional co2.

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:52:58

I’m sure you blow enough hot air for the trees in your entire neighborhood.

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Comment by In Colorado
2015-01-23 14:35:38

The Betters know what a better existence is for you so get out there and lower those expectations.

This is hardly news. The American Middle Class has been systematically dismantled by both parties for the last 4-5 decades. The goal, as Goonie has repeatedly pointed out, is to reduce the percentage of Americans living a middle class lifestyle to under 15% of the population, with the remainder being ass broke lucky duckies standing in line at the payday loan store.

Comment by 2banana
2015-01-23 08:52:10

Nothing Is Going to Save the Housing Market
Jan 23, 2015 - A. Gary Shilling - Bloomberg

U.S. housing activity remains weak despite six years of federal government aid, strong interest from overseas buyers, rock-bottom interest rates and massive purchases of mortgage bonds by the Federal Reserve. Does this mean housing may never spring back to its pre-recession levels? Many signs point to yes.

Don’t blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007. They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.

The value of home sales to all foreigners rose 35 percent last year to $92 billion, up more than 50 percent since 2007 and accounting for 7 percent of all existing home sales. Foreigners view U.S. homes as safe investments and U.S. schools as good places to teach their children English.

With the federal funds rate at essentially zero and the Fed having ended its purchases of mortgage securities, the central bank can’t do much to help housing now. The Barack Obama Administration, however, is reversing some of the government post-crisis tightening of lending standards. Fannie Mae and Freddie Mac, which remain under government control and now guarantee about 90 percent of all new mortgages, have reduced the underwriting standards on packages of mortgages they guarantee, including allowing loans with as little as 3 percent down payments.

The Federal Housing Administration just cut its annual mortgage-insurance premium by half a percentage point, to 0.85 percent. The federal Home Affordable Modification Program (HAMP) has also reduced mortgage costs for 1.3 million homeowners by lengthening repayment terms, reducing interest rates and cutting the principal owed, but the backlog of unprocessed applications was well over 200,000 in the spring. The Treasury Department, in response, has extended the five-year-old program, set to expire at the end of 2015, for at least another year.

As you can see, the federal government is trying mightily to spur housing activity. But don’t expect this small but volatile sector to move the economic needle anytime soon, even as 30-year mortgage rates drop. The headwinds from consumer debt, high down payments, unforgiving credit-score standards and worries about another swoon in home prices are too strong.

Comment by rj chicago
2015-01-23 10:25:15

“Don’t blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007. They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.”

I am waiting for the two Chinese guys smoking cigs at the end of the driveway sayin “me thinkee me pay tooooo much for house.”

Comment by "Auntie Fed, why won't you love ME?"
2015-01-23 12:54:00

Who cares about the year ending MARCH 2014? Today is January 2015.

Comment by rj chicago
2015-01-23 13:32:55

I agree - this was pulled from Reuters this morning - just making the point that these bozos are a bit behind the times me thinks.
Thanks for the heads up on that one.

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Comment by Professor Bear
2015-01-23 08:52:26

Who moved my EU QE fueled rally on Wall Street?

Comment by phony scandals
2015-01-23 08:58:43

Remember to turn them all in Mr. and Mrs. America before you move into your lowered expectations mixed use smart growth quality constructed smaller better existence 250 ft. Green home.

When someone comes knocking on your door with a machete just call the police, they will be there in a half hour or so.

Break in Shooting - YouTube
http://www.youtube.com/watch?v=5bsAMSQ13bY - 185k - Cached - Similar pages
5 days ago

Comment by phony scandals
2015-01-23 09:05:59

Will the next False Flag be the grand finale?

Comment by MightyMike
2015-01-23 09:44:39

I’m still waiting for the first false flag.

Comment by real journalists
2015-01-23 10:07:35

Sandy Hook Elementary

Department of Homeland Security murdered all those children, because it was “for the children”

Do not underestimate what these people are capable of

Comment by phony scandals
2015-01-23 18:09:21

Two in Region I and one in Region IX

Crisis actors were horrible, we’re overpaying big time.

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Comment by real journalists
2015-01-23 09:54:14

Ask Vicki Weaver

“We had to gas and burn the children alive, to save the children” — United States Attorney General Janet Reno, April 1993

Comment by Albuquerquedan
Comment by Housing Analyst
2015-01-23 09:27:55

Just think about how that will collapse demand even more.

Got $10 a barrel oil and collapsing housing demand(prices)?

Comment by Albuquerquedan
2015-01-23 09:59:42

As I have said these fiat currency governments that lean left will create inflation. Despite inflation being low in the world Venezuela and Brazil have high inflation. QE from Europe will spill out just like our QE fueled inflation in the developing world. It is said about the futility of fighting someone that owns a newspaper never get in a fight with someone that buys ink by the barrel. It is equally true that you should never try to “fight” the ability of a fiat currency government to create inflation.

Comment by Albuquerquedan
2015-01-23 11:46:25

However the day of fiat currencies is coming to an end, just one gold backed currency in a major country will destroy all of them. People will finally have a clean shirt to buy. It is coming, first step have your fiat currency be accepted while you accumulate gold, second step announce it is gold backed, immediately your fiat currency opponent becomes a paper tiger, China thanks Obama for being so helpful in making it happen.


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Comment by MightyMike
2015-01-23 12:36:11

That’s one more prediction that will never occur.

Comment by Albuquerquedan
2015-01-23 12:46:52

You wish you were 10% as accurate as I am.

Comment by Albuquerquedan
2015-01-23 12:53:10

Clearly, a person that voted for Obama has no predictive abilities at all.

Comment by Blue Skye
2015-01-23 13:39:26

“You wish you were 10% as accurate as I am.”

Isn’t there some rule against dividing by zero?

Comment by MightyMike
2015-01-23 13:52:59

It’s interesting that you would mention predictions, voting and Obama.

Comment by Albuquerquedan
2015-01-23 16:05:01

For two years you and others on the left of this board have tried to claim, I predicted Romney would win. However, I never did, I predicted that he could win but even the day before the election I said it was too close to call. None the posts by me produced by you and others contradicted what I just said, in fact they confirmed it. So try to say I predicted it and you will show you either have a low IQ or you are a liar and that goes for anyone else thinking about it.

Comment by MightyMike
2015-01-23 17:24:19

Well, maybe it was too close for you to call. Many pollsters and poll analysts called it and called it correctly. In any case, that was an awful lot of typing on your part to make an argument that the election would be close, which no one was arguing against.

In any case, you wrote, “However, Rasmussen will get it right”. So here’s an opportunity to get into some absurd logical debates. You weren’t predicting that Romney would win, you were just claiming that whatever prediction made by Rasmussen would be correct. I suppose that your response could be that Rasmussen isn’t exactly in the business of making predictions. So what were you claiming that Rasmussen would get right? The fact that the election was too close to call?

Comment by Blue Skye
2015-01-23 18:49:41

Mike, you are trying to nail jello to a tree.

Comment by Cactus
2015-01-23 12:38:57

QE from Europe will spill out just like our QE fueled inflation in the developing world. ”

spill to where ? ideas ?

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Comment by Albuquerquedan
2015-01-23 15:58:14

Maybe India.

Comment by 2banana
2015-01-23 09:44:36

Sheer insanity…

Comment by Albuquerquedan
2015-01-23 10:14:53
Comment by real journalists
2015-01-23 10:54:01

Everyone on the HBB should take a moment to reflect on the brave and heroic contributions of the Israeli Defense Forces, putting their “boots on the ground” in the first Iraq, Afghanistan, and second Iraq wars

We couldn’t have done it without you

Comment by Dman
2015-01-23 11:09:03

But Obama still has enough power to drive down the price of gas whenever he wants. At least, that’s what you keep saying.

Comment by Albuquerquedan
2015-01-23 11:27:23

Third world dictators of all sorts can drive prices down they just cannot keep them down without creating physical shortages. See Venezuela for an example, a few months ago they mandated lower prices of many goods, not you cannot find them and prices are going up. Viva Chavez and Obama. One is actually dead and the other is only brain dead.

Comment by rj chicago
Comment by Albuquerquedan
2015-01-23 10:47:14

Strong dollar= weak exports

Comment by Housing Analyst
2015-01-23 10:57:16

And cheap imports, oil and houses.

Amen to that!

Comment by Puggs
2015-01-23 10:53:11


Comment by Albuquerquedan
2015-01-23 11:20:29

The only thing cratering is the number of oil rigs working. Lost another 49 rigs drilling for oil, which will translate in about 24,500 barrels of oil will not be produced. If they stay out of service about every month that number will occur again since about every month they could have drilled another well, so over a year being conservative about the number of wells that could be drilled we are looking at the lost of 245,000 barrels of lost production ignoring production declines. Since we gained six NG we will gain some incidental production of NGLs etc, which may offset the lost once again assuming best scenario for production,of a 100 barrels per well or 600 barrels within 30 days and 6,000 over a year. So folks it is gasoline lines or much higher gasoline prices by December.


Comment by Albuquerquedan
2015-01-23 11:51:56

BTW, BHI is up over 1% today, so that smart money does not see this lasting long.

Comment by Puggs
2015-01-23 12:55:25

Just idling until prices rise.

Comment by StantheMan
2015-01-23 12:45:55

Speaking of cratering, how about this place?


Comment by Housing Analyst
2015-01-23 17:03:12

A 25% price decline in San Diego. Ooooof. Cut it another 50% and it might develop some interest.

Comment by real journalists
2015-01-23 14:04:21


Comment by Tarara Boomdea
2015-01-23 15:00:27

Price discovery (18:19 to 20:08, 1 minute, 49 seconds)
“It was worth whatever he was willing to pay!”

The Gin Game (1980)


Comment by Albuquerquedan
2015-01-23 16:13:11

From China Daily, now we know what Chinese government will announce for its growth target in March and it has more than enough tools to get close to whatever it announces:

China’s economy is likely to stop falling and begin to stabilize with a predicted 7.2 percent GDP growth in 2015, according to latest forecast report released by the Chinese Academy of Sciences on Friday.

The report, the 2015 China Economic Forecast and Outlook, was published by the Center for Forecasting Science under the Chinese Academy of Sciences. The annual report focuses on China’s major economic indicators.

According to the report, steady economic growth in 2015 is to be expected, though the GDP growth rate is still predicted to drop by 0.2 percentage points from that of 2014.

China’s GDP growth rate has been on continuous decline since 2010, and had drooped to 7.4 percent in 2014, reaching the lowest record in 24 years, according to the National Bureau of Statistics.

“China is going through an economic transformation period from 2011 to 2015, with the pace of growth adjusting from high-speed to medium-to-high-speed. However, with a series of important reform measures adopted by the government, such as expanding free trade zones and the ‘One Belt and One Road’ initiative, the economy this year is likely to run smoothly,” said Chen Xikang, an operational research expert who took part in writing the forecast.

The “One Belt and One Road” plan, refers to the Silk Road Economic Belt and the Maritime Silk Road of the 21st Century, was an initiative put forward by President Xi Jinping in 2013 to promote trade and communications in the region.

In 2014, bilateral trade volume between China and countries in the region enjoyed a 7 percent yearly increase.

“The economic growth rate is unlikely to drop below 6 percent in the coming one and a half decades,” Chen said.

Chen predicts that the average annual GDP growth rate will hover between 6 percent to 8 percent till the year 2030, and then further decrease to 4 percent to 6 percent over the next 20 years, if not influenced by profound changes in external demand or government intervention.

Comment by Whac-A-Bubble™
2015-01-23 16:46:23

7.5%, 7.4%, 7.2%,…

Comment by Albuquerquedan
2015-01-23 16:30:36

Looking at the weather forecasts, the NY power grid is going to be under considerable strain the next few weeks. In fact, everyone in the Northeast will be paying for those coal plants and VT Yankee shutting down, both in reliability and in price. Interesting, the NWS was predicting well above temperatures for the Northeast with the only forecasts for this type of cold spell that I saw coming from forecasters that are known for not believing in the AGW computer models.

Comment by Albuquerquedan
2015-01-23 16:58:43

The predictions were made in November for the Winter.

Comment by phony scandals
2015-01-23 18:11:45

Everyone Must Check In

Comment by Housing Analyst
2015-01-23 18:28:18

“Winter Storm Lola Closes Schools in New Mexico, Texas; Snow Closes Part of Interstate 10″


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