The Fast-Moving Gravy Train Is Drying Up
Bloomberg reports on Massachusetts. “Developers rushed to build multifamily buildings to capitalize on the demand, spurring a surge in supply that’s now keeping a lid on rents. More than 77,000 apartment units were added across the country in the past three years, according to Axiometrics Inc., a rental-data company. Nationally, Household growth and rental demand will be greater in the urban core than in the suburbs over the next year, said said Sean Breslin, chief operating officer of Arlington, Virginia-based AvalonBay Communities Inc., the second-largest publicly traded landlord in the U.S.”
“Yet that demand will be overshadowed by the high volume of supply coming to markets such as Boston, where rent growth in the city proper averaged 0.3 percent last year, making it among the weakest urban areas in the country, according to Axiometrics. In January, average rents in the city fell 2.4 percent from a year earlier. ‘Even though there’s more demand there, supply is sort of swamping it at the moment,’ Breslin said.”
InForum on North Dakota. “The sharp decline in crude oil prices was unexpected, but as with any quick change in a marketplace, there can be good news for some residents of North Dakota’s oil country. Renters, who were subjected to some of the highest rental costs in the nation during the oil boom, are getting a break. Rents are down as demand for housing slides. The owners of rental properties, who have been riding a fast-moving gravy train, are seeing the gravy dry up.”
“The collapse of oil prices from over $100 a barrel to below $50 was not expected. No one saw it coming. The experts were caught off guard. So was the housing industry in oil country. Now there’s a mini-scramble underway to keep those thousands of new rental units filled as oil employment numbers sag. The rental shoe, so to speak, is on the other foot, and it’s pinching a little. At the risk of mixing metaphors: What goes around comes around …”
From CNBC. “For the first time in more than two years, the number of repeat foreclosures took a U-turn and was higher in January compared to a year ago. Repeat foreclosures are when a home has been in the foreclosure process once, was somehow saved by either a loan modification or payment program, but then goes back into foreclosure. This can happen when the borrower either can’t or won’t keep up with the new payments. New repeat foreclosures rose 11 percent in January from December and accounted for more than half of all new foreclosures, according to Black Knight Financial Services.”
“‘It’s not surprising because so much tinkering was done with defaulted borrowers over the last five or six years. It’s not surprising they’re running into problems again,’ said Guy Cecala, CEO and publisher of Inside Mortgage Finance.”
The Worchester Business Journal in Massachusetts. “Foreclosure deeds in Massachusetts fell sharply in January to their lowest level in six months, but foreclosure petitions, which launch the process of taking over properties whose owners have failed to keep up with mortgage payments, increased, according to The Warren Group. The firm said deeds fell more than 27 percent in January, but lenders filed 618 petitions, up 70 percent from 364 petitions filed in January 2014.”
“In Worcester County, deeds fell 18 percent from January 2014 while petitions jumped 82 percent and auctions 258 percent. In Middlesex County, deeds plunged 84 percent (only 8 deeds were processed) while the number of petitions rose 44 percent and auctions soared 400 percent, from 15 to 75. Meanwhile, the number of auction announcements tracked by The Warren Group jumped 250 percent in January, with 575 announcements compared with 165 in January 2014. That marked the highest percentage increase since April 2007, when announcements climbed almost 340 percent year over year.”
“And there could be more, according to Timothy M. Warren Jr., CEO of The Warren Group. ‘What is happening in Massachusetts with increased foreclosure activity is happening nationwide, as lenders continue to wade through a backlog of delinquent mortgages that have yet to be addressed,’ he said in a statement. ‘We will continue to see petitions increase as long-time delinquent mortgages continue to be processed.’”
The Press of Atlantic City in New Jersey. “Sheriff’s sales are occurring throughout South Jersey in increasing numbers. Atlantic County had nearly double the sales listed in January than a year earlier. They are a combination of the region’s economic struggles and the gradual unclogging of New Jersey’s foreclosure process that had halted for several years just after the recession over concerns of improper lender foreclosures, experts said.”
“But as of yet, they do not reflect thousands of job losses tied to Atlantic City casino closings last year, real estate professionals and officials involved with sheriff’s sales said. ‘We don’t anticipate seeing them in a year or more. … These (properties now) are things that are a year and a half, two, three years old,’ Sheriff Frank Balles said.”
PBS NewsHour on Florida. “This is economics correspondent Paul Solman reporting for the PBS NewsHour from a truck stop in Fort Myers, Florida. ‘Despite what you may have heard, the foreclosure crisis is far from over, especially in Florida, which leads the nation, more than 300,000 cases still pending, another half-a-million homeowners delinquent, hundreds of thousands of modified loans about to balloon in payments.’”
“Marc Joseph, Real Estate Agent: ‘There is still a lot of what they called shadow inventory that nobody wants to talk about, it’s not there. It’s still there.’ Solman: ‘The foreclosures that are going to happen, but haven’t happened yet.’ Joseph: ‘They’re going to happen, because people did loan modifications, which was only a Band-Aid on the problem. So guess who I’m out doing foreclosures on now? The people that did the loan modifications, and now they’re being reset back to their old payments.’”
“Solman: ‘And that’s the shadow inventory that’s out there and could flood the market?’ Joseph: ‘This is a whole new wave of what I see coming.’”
Boston, MA Sale Prices Crater 19% YOY As Housing Correction Resumes; Prices Nosedive 12% YoY Statewide
http://www.zillow.com/ma/home-values/
‘What is happening in Massachusetts with increased foreclosure activity is happening nationwide, as lenders continue to wade through a backlog of delinquent mortgages that have yet to be addressed,’ he said in a statement. ‘We will continue to see petitions increase as long-time delinquent mortgages continue to be processed.’”’
Tens of millions of excess empty houses can be hidden for a while but not forever.
San Francisco And Los Angeles Foreclosures Skyrocket 35% YoY
http://www.realtytrac.com/images/reportimages/foreclosure_trends_20_largest_metros_jan_2015.png
“Marc Joseph, Real Estate Agent: ‘There is still a lot of what they called shadow inventory that nobody wants to talk about, it’s not there. It’s still there.’
Shadow inventory…. millions of excess empty and defaulted houses.
San Francisco, CA Excess Housing Inventory Billows 111% As Prices Resume Falling
http://www.movoto.com/san-francisco-ca/market-trends/
Thanks in no small part to the steadfast efforts of the National Association of Used Home Sellers, U.S housing policy has been tilted to favor the interests of owning over renting since long before I was paying attention.
Could it be possible that Mr Market is finally responding in favor of renting, through the combination of a glut of newly constructed apartments plus a bevy of foreclosures?
“Solman: ‘And that’s the shadow inventory that’s out there and could flood the market?’ Joseph: ‘This is a whole new wave of what I see coming.’”
Kirkland, WA Housing Inventory Explodes 94%; Sellers Slash List Prices 19%
http://www.movoto.com/kirkland-wa/market-trends/
“This is economics correspondent Paul Solman reporting for the PBS NewsHour from a truck stop in Fort Myers, Florida. ‘Despite what you may have heard, the foreclosure crisis is far from over, especially in Florida, which leads the nation, more than 300,000 cases still pending, another half-a-million homeowners delinquent, hundreds of thousands of modified loans about to balloon in payments.’”
Thanks to extend-and-pretend bailout measures, it could take decades for the massive market distortions of the Housing Bubble to finally settle out.
Problem is it becomes perpetual given all the dimwits who overpaid and got bamboozled 2009-2014.
2009-2010, Millions of empty pocketed fools who got take advantage of by the Homedebtor tax credit.
2011-2014, Millions more who paid a higher price premium than the suckers who bought 200-2008.
C.R.A.T.E.R.
“The foreclosure crisis is far from over, especially in Florida, which leads the nation, more than 300,000 cases still pending, another half-a-million homeowners delinquent, hundreds of thousands of modified loans about to balloon in payments.’”
That’s a lot of houses that will someday be empty. Put them all together and we’d have a ghost city to rival anything in China.
I don’t know about that. It isn’t just about numbers, but geographic distribution of empty real estate. Five hundred thousand homes spread all over Florida is a lot different than an entire city’s worth of a million empty housing units.
It isn’t just about numbers, but geographic distribution of empty real estate ??
Exactly….So its kind of asinine how one in particular here wants to paint the country with the broadest of strokes…
Corelogic sent out their Foreclosure Report for the month of January.
The most interesting statistic is that 36 states have an inventory of foreclosed homes below the national average.
Of those above the national average of 1.4%, all but two are judicial foreclosure states–the exceptions are NV and RI.
Serious delinquencies are at 4.0% nationally, still down year on year. So whatever re-defaults are occurring, they are not yet occurring at a great enough level to reverse the broader trend…at least as of January 2014.
With 25 million excess empty and defaulted houses and foreclosure moratoriums in effect in all 50 states, it doesn’t matter what the foreclosure rates are doing.
“There is still a lot of what they called shadow inventory that nobody wants to talk about.”
Remember when this term was a figment of our imagination, and no such homes existed?
Why would so many lie and deceive about this?
Perhaps they made loads of money off perpetuating the lie?
The government papered over peak foreclosures. Now they’re back, like a zombie army called “repeat foreclosures”. You can bury a reckoning, but it just won’t stay buried.
Repeat foreclosure = You can bury a reckoning, but it just won’t stay buried = ZOMBIE!!!
‘Despite what you may have heard, the foreclosure crisis is far from over, especially in Florida, which leads the nation, more than 300,000 cases still pending, another half-a-million homeowners delinquent, hundreds of thousands of modified loans about to balloon in payments.’”
UNPOSSIBLE! Why, just a couple of days ago some internet sleuth pointed out that RealtyTrac had data showing that there was less than that many in the entire country!
Found it, from back on the 6th. I should have just considered the source.
” Comment by Beer and Cigar Guy
2015-03-06 12:48:05
“Most recent data I’ve found: 142k total zombie foreclosures.”
And you actually believe that data? How about unicorns and the Easter Bunny?
(Comments wont nest below this level)
Comment by Rental Watch
2015-03-06 14:45:41
So, what data do you believe?
Here’s the problem:
If you discount every source of data that gives you ONE number you don’t like, you end up with no data sources at all.
If, however, you look at all data sources, you begin to see where data overlaps and trends emerge…LIKE:
Trend 1: Serious delinquencies falling substantially from the peak.”
Oh, I get it. If you pick up enough individual turds to fill a basket, and they start to overlap, a picture emerges! It’s like staring at the clouds and seeing nothing until a Zen like trance reveals a puppy.
And full disclosure on my part- I don’t know what the actual number really is- nobody does. If they tell you that they do, then they are either a liar or a fool. But to embrace and quote an obviously flawed statistic simply because it supports your desired world view invites incredulity. I don’t know what the actual number is, but I know what it is not. It is not 6. It is not 18 or 2600 or 142,000. Any objective person who is aware of the scope of this debacle can see that. Hell, Stevie Wonder can see that.
Let’s look back. We were told HAMP/HARP was going to ’save’ millions of FB’s. It got nowhere near that number. What happened to all those that didn’t sign up? Did they win the lottery? The ones that did sign up have been re-defaulting above 30% almost from the beginning. How many articles have I found over the years quoting UHS saying stuff like, ‘the banks are dribbling out the REO’s so they don’t flood the market’? Hundreds, at least. There was the foam the runway thing; this was a big con all along. Then there was this:
‘Growing threat hangs over legacy mortgage bonds’
‘Fannie Mae’s general counsel held a conference call just before the Christmas holidays - all of its retained law firms were required to participate - to ask how the government-run mortgage agency could alleviate such losses, a person with knowledge of the call told IFR. “[Fannie Mae's] general counsel asked: ‘How bad is it?’” the person said, adding that one of the lawyers on the call answered: “We can’t even begin to tell you - there are so many loans.”
I’ll say it again; this article looks like a CYA piece. Why didn’t the media follow up? Because if it’s true, you just watched millions of people dive under the bus.
The Frisco Fraud’s wallet isn’t aligned with reality…. and it’s painful.
Zombie foreclosures = a home in the foreclosure process that is empty. Once this home goes through the foreclosure process, it is net additional supply WITHOUT a family that needs to find another place to live. A “+1″ on the supply side of the supply/demand equation.
Non-Zombie foreclosure = a home in the foreclosure process that still has the family living in it. Once this home goes through the foreclosure process, the displaced family will need to find a place to live. This doesn’t change the supply/demand equation as it relates to supply of shelter and those to need shelter.
Zombie foreclosures + Non-Zombie foreclosures = Total Foreclosures.
Total Foreclosures is what is typically reported. Zombie Foreclosures are only reported by CoreLogic.
You’re drawing a distinction without a difference.
Excess, defaulted housing, occupied or unoccupied is the problem. Falling prices is the solution.
By the way, the total number of serious delinquent homes in the US as of January (per CoreLogic) is 1.538MM (4% of all mortgages). This is down from 1.953MM last year.
The total number of homes in the foreclosure process (again per CoreLogic) is 549k (1.4% of all mortgages). This is down from 793k last year.
Per RealtyTrac (I misspoke above), the total number of the 549k homes that are in the foreclosure process AND are unoccupied is 142k.
To calibrate, RealtyTrac says that the 142k zombie foreclosures represent 25% of all foreclosures, with the implication being that RealtyTrac’s estimate of homes in the foreclosure process is 568k (+/-).
So, as I look at things, RealtyTrac and CoreLogic both note total foreclosures at about 550k (i.e. pretty consistent numbers).
Both understate the amount of excess empty inventory as a result of the foreclosure moratoriums.
If someone is living in the house, it’s not really “excess”–it is serving as shelter for someone. If they leave that house, they will need to go to another one (or an apartment).
If someone is not living in the house, it can be considered “excess”, especially in a market with higher than typical vacancy rates (if it’s a “zombie foreclosure” in a market like the Bay Area, I wouldn’t consider it “excess”).
I’d ask you if you understand, but clearly you do not.
“Question: How many homes are still in active foreclosure?
Answer: It depends on what you consider a property foreclosure. RealtyTrac, a source for housing data, recently released its first-quarter 2015 Zombie Foreclosure Report.”
“It found that as of the end of January 2015, 142,462 homes actively in the foreclosure process had been vacated by the homeowners prior to the bank’s repossessing the property, representing 25 percent of all active foreclosures.”
“The total number of zombie foreclosures was down 6 percent from a year ago, but the 25-percent share of total foreclosures represented by zombies was up from 21 percent a year ago. “While the number of vacated zombie foreclosures is down from a year ago, they represent an increasing share of all foreclosures because they tend to be the problem cases still stuck in the pipeline,” said Daren Blomquist, vice president at RealtyTrac.”
http://www.realtytrac.com/images/reportimages/foreclosure_starts_completions_10_year_trend_jan_2015.png
Notice the gap between starts and completions.
A backlog ontop of backlog ontop of backlog. They’re racking up.
You rack’em, I’ll crack’em.
Don’t know if my post made it through…browser crash.
Not all foreclosure starts end up as a foreclosure finish.
A lot of homes that are in the foreclosure process wind up as short sales (for example, HUD reported 24k foreclosure completions in December 2014, and 12k short sales in November 2014–both the latest numbers as of the report). Some just outright sold (if there is equity). Some (albeit a small number) have the default cured in other ways. And some loans are modified/extended, etc.
Since pretty much all the data is showing a reduced number of homes in the foreclosure process on a year on year basis, then the sum total of these “alternative exits” combined with actual foreclosure completions exceeds foreclosure starts.
http://portal.hud.gov/hudportal/documents/huddoc?id=Jan15scorecard.pdf
Large PDF, note the bottom of page 5 showing foreclosure completions and short sales. This is an illustration only of there being alternative ways to exit a foreclosure, not national numbers for all lenders.
Also note on page 6…they note their sources for the data…includes CoreLogic and RealtyTrac.
You’re backpedalling Dan.
Foreclosures don’t make it to finish because they get tossed in the moratorium grinder.
I thought I was the only Dan on this blog, is Rental Watch named Dan also?
Remember…. Falling housing prices to dramatically lower and more affordable levels is positively bullish and good for the economy.
San Francisco, CA List Prices Plunge 18% YoY
http://www.zillow.com/san-francisco-ca-94117/home-values/
“Large PDF, note the bottom of page 5 showing foreclosure completions and short sales. This is an illustration only of there being alternative ways to exit a foreclosure, not national numbers for all lenders.
Also note on page 6…they note their sources for the data…includes CoreLogic and RealtyTrac.”
Seriously, do you believe everything just because it was said by some supposed “expert” or printed in a report? You do understand that many of these people obfuscate, falsify statistics and lie as an occupation, don’t you? Do you still believe these “experts” as well?
“We are really on track for a soft landing. There are no balloons popping.”
- David Lereah, NAR’s chief economist, December 2005
“If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing.”
- Anthony Hsieh, CEO Lending Tree
“I think investors will have a good reason to come out here and buy again.”
- Jeromith Sutton, 2006, NAR Investment Advisor
“We may see a blip up in foreclosures and delinquencies.”
- Leslie Appleton-Young, Chief Economist, California Association of Realtors
“…housing activity will remain healthy for some time to come.”
- David Lereah, NAR’s chief economist, October 28, 2005
“There is no bubble to burst,”
- Jim Folkman, VP of the Home Builders Association of Central New Mexico
“The idea that we’re going to see a collapse in the housing market seems to me improbable”
- John Snow, Secretary of the Treasury
“People who talk about a bubble are blowing smoke,”
- Michael Carney, Real Estate Economist
California State Polytechnic University Pomona.
Thursday, February 10, 2005
“There was never a “bubble”, so there is nothing to “burst”.
- Jeromith Sutton, 2006, NAR Investment Advisor
“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.”
- David Lereah, NAR’s chief economist, August 2005
“The retreat in housing-market activity that’s now under way amounts to a simmering-down process…rather than a classic cyclical contraction that could spiral down for some time.”
- David Seiders, Chief Economist, National Association of Home Builders, Jan 2006
“It’s impossible for prices to go down this year.”
- Gary Watts, Spokesman Orange Country Association of Realtors
“There is no national housing market, so there can’t be a national house-price bubble.”
- Michael Youngblood, Managing Director, Friedman Billings Ramsey & Co
“Seriously, do you believe everything just because it was said by some supposed “expert” or printed in a report? You do understand that many of these people obfuscate, falsify statistics and lie as an occupation, don’t you? Do you still believe these “experts” as well?”
LOL
You do realize that I was responding to a graph posted by Ben who’s data source was…RealtyTrac.
So, what part of the RealtyTrac’s data should we believe?
The part where RealtyTrac shows a gap between foreclosure starts and completions, which, if you ignore short sales, sales, cures and modifications would imply a growing backlog (which was the point Ben was trying to make)?
OR
The part where RealtyTrac estimates the number of the number of properties in foreclosure at being substantially below last year?
They note 142k zombie foreclosures representing 25% of all homes in foreclosure, or 568k total homes in the foreclosure process.
142k is reportedly down 6% year on year (last year the number was about 151k), but at that time represented 21% of all foreclosures, implying total homes in foreclosure of 719k.
So, what is it, RealtyTrac’s data implying an increasing number of homes in the foreclosure process? (completions less than starts)?
OR
RealtyTrac’s data explicitly stating that the number of homes in foreclosure is declining?
I submit that both cannot be true. However, when you factor in short sales, regular sales, cures, modifications, the data hang together.
By the way, do you think RealtyTrac/CoreLogic sell more data if everything is fine, or if everything is going to hell?
I guarantee you they sell more data if people are nervous.
Consider that when you read how they present their data.
And when all the excess empty and defaulted houses hung up in foreclosure moratoriums are included Rental_Fraud?
By the way, RealtyTrac’s graph is explicit. They label the red line “Foreclosure Completions (REO)”. In other words, they specifically are not counting all the categories that I note (short sales, cures, modifications, equity sales).
Correct but they don’t include the millions of excess empty and defaulted houses hung up in foreclosure moratoriums.
There is a Big Irony in that conversation. We used to get it here in rural NY. Beautiful Victorian houses, 4,000 ft2, are worth half what a 2,000 ft2 house is. It’s because they are excessive, they are bubble houses and the upkeep is crushing. We’ve been building excessive houses for a couple of decades all around the US now. They will be like beanie babies in a Rubbermaid tub.
Grandma raised two kids in an 800 ft2 house, happily. Mom raised two kids in a 1200 ft2 house, happily and in luxury. I raised four in a 1200 ft2 farmhouse, happily. Now we have DINKS with 3,000 ft2 houses, hoping to get rich by it. The actual number of extra houses pales in comparison to the number of wrong houses. Grandma told me we would have to learn to live like they did.
Epic Irony. Buckle up!
The trend goes back more than a couple of decades. This table shows the trend back to at least 1973:
https://www.census.gov/construction/chars/pdf/medavgsqft.pdf
I’m willing to bet that if the data were available, it would show the trend going back even farther.
That goes to show you how material fabrication technology results in increasing efficiencies in labor labor leading to lower cost per square foot.
“LOL
You do realize that I was responding to a graph posted by Ben who’s data source was…RealtyTrac.”
Way to answer the question there, Brainiac. You just proved yourself. Everything you write appears to be utter tripe, misdirection or propaganda. Are you actually Lawrence Yun attempting a disinformation campaign or are you just so deeply fangnu that you are delusional? Either way, you have now made yourself irrelevant in my book. To me, your screen persona will hereafter be ‘Grundle’.
To answer your question:
No, I don’t believe everything that I read.
But I do seek to read whatever data I can find.
And when all the data is pointing in the same direction, that indicates to me that direction is likely true.
To believe otherwise is simply believing in conspiracy theories.
Do you just think all articles noting data should be excluded from the blog?
You’re right on that one Rental_Fraud. The data all points in the same direction. Massive excess and empty housing inventory growing by the day.
Let’s revisit some of your old tripe you seemingly abandoned.
- You paid a 250% premium for a depreciating asset and then doubled down on your losses.
Why?
“And when all the data is pointing in the same direction, that indicates to me that direction is likely true.
To believe otherwise is simply believing in conspiracy theories.”
“You do understand that many of these people obfuscate, falsify statistics and lie as an occupation, don’t you? Do you still believe these “experts” as well?”
Baghdad Bob issued a lot of data too, all pointing in the same direction. I’m now confident that you believed him as well. You are beyond help, Grundle. Beyond help.
“There is still a lot of what they called shadow inventory that nobody wants to talk about.”
These “Florida po’ folks” haven’t got a hope in hell in modern America with MBA sharks feeding on them. Lösers!
I hope it’s a fucking bloodbath in Boston. People are dropping $600K on 1400 SF suburban shit-shacks that require another $100K of work. And we’re talking an hour-long commute to the city. I’m sitting on my $200K down payment and waiting for a reversion to mean.
It’s already started…..
What are property taxes on a $600K house on 1400 SF suburban shit-shacks that require another $100K of work?
Taxes on that shit-shack will be on the order of 1%, or $6K. That’s on a postage-stamp sized lot (e.g., 6,000 SF).
“I’m sitting on my $200K down payment and waiting for a reversion to mean.”
I’d rather be sitting on $200K in an apartment than a house and no $200K.
^ Right there.
Yeah, I can’t see how this market is sustainable. I hope I’m right.
It’s not. That’s why demand is at 20 year lows and falling.
“The sharp decline in crude oil prices was unexpected, but as with any quick change in a marketplace, there can be good news for some residents of North Dakota’s oil country. Renters, who were subjected to some of the highest rental costs in the nation during the oil boom, are getting a break. Rents are down as demand for housing slides.”
If you so desire you can go here for an example of a place where renters can really, REALLY get a break when a boom goes south:
https://www.google.com/search?q=bodie&biw=1813&bih=857&tbm=isch&tbo=u&source=univ&sa=X&ei=9-b-VO6COMSpogSxwYCYCA&ved=0CDwQsAQ&dpr=0.75
“Unexpected”
Yeah, it’s always unexpected.
“Repeat foreclosures are when a home has been in the foreclosure process once, was somehow saved by either a loan modification or payment program, but then goes back into foreclosure.”
Bleed ‘em, but don’t bleed ‘em dry.
IOW, don’t kill the host. And (especially) don’t kill their hopes.
“‘The foreclosures that are going to happen, but haven’t happened yet.’ Joseph: ‘They’re going to happen, because people did loan modifications, which was only a Band-Aid on the problem.’”
Loan modifications = Keep ‘em stayin’ and keep ‘em payin’.
And then? And then, whenever it suits you, you kick their stupid asses out into the street.
Except, no. Mr. Banker doesn’t want to do any kicking to the street, because it would only show that the bank’s assets are worthless. Ruptured, Mr. Bankrupt.
Yes, the reason the banks don’t foreclose on so many houses is they don’t want to have to declare their losses. If their losses were made public, everyone would know that they are bankrupt, and surviving on the low interest rates provided by the Fed.
You guys make me laugh. There are no losses; The Fed makes sure of that by “investing” in otherwise worthless mortgages.
Rev Ike: “You can’t lose with the stuff I use.”
Bahahahahahahahahahahahahahahahahahahahahahaha
There used to be a sort of curse inflicted on American citizens that went something like “We’re from the government and we are here to help you”, but, by golly, when it comes to banks and bankers it’s not a curse - it’s absolutely true!
At least all that money going to banks is trickling down to the rest of the economy. I hear that the shoe shine business on Wall Street is booming.
Runaway train tearing up the track…
https://www.youtube.com/watch?v=HDl3iUo__dY&spfreload=10
‘Home sales fell in January as investors bought fewer homes in metro Atlanta, The Atlanta Board of REALTORS reported. From December 2014 to January 2015, the area had 2,395 home sales — down 37.1 percent. The median price on those sales dipped 3.3 percent to $203,000.’
‘Metro Atlanta area housing inventory totaled 13,759 units in January, an increase of 13.6 percent from January 2014. New listings totaled 4,374, up 17.2 percent from January 2014 and up 54 percent from December 2014, The Atlanta Board of REALTORS said.’
Sales down 37% for a full year???
Prices about ready for the yell of “Timber”…
‘YORK, Maine – The volume of single-family home and residential condominium sales in town dropped by about a third during the fall months of September, October and November when compared to the same period in 2013.’
‘Home sales declined by 31.6 percent, while condo sales dropped 31 percent, according to an analysis of transfer tax declarations on file in the assessor’s office. The fall sales included four in excess of $1 million: On Sewalls Hill Road for $1.4 million in October, on Blue Heron Cove for $1.55 million in October, on Drifting Gull Lane for $1.45 million, and on Nubble Point for $1.035 million in November.’
‘The average price of a house in York that sold during the period was $399,356, a 24.5 percent decline. The average price of a condo was $252,990, a 24.1 percent drop.’
‘Connecticut’s January home and condominium sales each fell 6 percent from a year earlier, The Warren Group says. Prices were flat. It was the first year-over-year sales drop since last August. It also was the lowest January sales total since 2012. This marked the lowest number of sales in the month of January since January 2012 when there were 1,332 sales.’
‘The median price was unchanged in January at $230,000, ending 10 months of falling prices, CEO Timothy J. Warren Jr. said.’
‘Born-and-raised Killdear resident Ben Murphy said he knows, when someone rents moving equipment, if an oilfield worker was getting laid off. “You can usually tell with the customer when you call them if they knew it was coming or not,” Murphy said. If they’re leaving by choice, he said, they’re happy, not having planned on staying in North Dakota forever.’
“On my next off days I’m never coming back,” they’ll say, said Murphy, who opened his Killdeer U-Haul dealership around Thanksgiving. He’s been busy. The workers that get a day’s notice to leave their job and housing just want to be gone, he said. They’re frustrated and don’t know where they’re going, just wanting to head south for some warmth.’
‘Drive by a U-Haul dealer to get a good idea of the economy in that town, said Brian Way, the general manager of Williston’s corporate U-Haul location, which shares the market there with two other dealers. “We’re having a lot of people move out,” he said. “A lot of job cuts — it seems to be the main reason why.”
Kinda like ILLANNOY - the rate to rent a Uhaul going FROM ILLANNOY to another locale - much higher than the reverse. Last I looked rates TO Houston TX were near double what the reverse rate for the same Uhaul trailer would be.
‘With the Bay Area’s economic boom resonating across the globe, a foreign investment firm picked up a newly constructed San Mateo apartment complex for $73.6 million this week.’
‘The luxury apartments rent for an increasingly standard steep range between $2,800 a month for a less than 800-square-foot one-bedroom unit and almost $5,000 per month for 1,500-square-foot three-bedroom unit.’
‘The purchase sets the average apartment value at around $663,000 per unit.’
‘While offshore investments are nothing new, interest is trending and there has been a shift in purchasing methods, said Phil Saglimbeni, first vice president of investments at Institutional Property Advisors, who brokered the sale.’
“We are seeing an uptick, but it’s a very specific type of asset these foreign investors are looking for. They like class A assets,” Saglimbeni said. “The brand-new stuff like Mode is not very complicated. They buy it, hire a management company and put it on the shelf. Their motivations are multifold — a lot of it has to do with hedging or risk diversification out of their home country. And it also has to do with the Bay Area and how explosive the economy has been. Whether it’s foreign or domestic, people just want to be in this market.”
a lot of it has to do with hedging or risk diversification out of their home country ??
Wether its houses or apartments its one of drivers here…
‘Houston’s apartment industry, which likely is headed for a slowdown due to the drop in oil prices, was a huge boon to the Bayou City’s economy during its boom years, a new study finds.’
‘In Houston, those factors contributed $22.6 billion locally and supported more than 218,000 jobs in the metro area in 2013, the latest numbers available.’
‘In Texas, the industry and residents contributed $76.2 billion to the state’s economy and supported 722,600 jobs, and nationwide those figures were $1.3 trillion and 12.3 million jobs in 2013, according to the NMHC-NAA study.’
‘Although Houston’s hot apartment market continued into 2014, many industry experts forecast an abrupt slowdown in new construction will take hold this year.’
‘Currently, there are about 28,000 apartment units under construction across Houston, most of which are expected to be delivered by early 2016.’
“Despite the slowdown in the oil and gas industry, Houston is enjoying high occupancy levels and has already added more than 3,000 units in 2015,” Bruce McClenny, president of Apartment Data Services, said in a statement released with the NMHC-NAA study. “We expect more than 100 communities and 20,000 units to be delivered in Houston this year.”
A couple hundred thousand jobs go poof. And who is financing these things, what is the expected return? 5%, less?
A couple hundred thousand jobs go poof.
This is the unfortunate side effect of lack of demand for goods and services: Jobs go poof! Prices do come down, but if you’re unemployed that is a small consolation.
Prices fall, demand goes up, prices stabilize, production(employment) increases.
Oh, we’ve got trouble…
Las Vegas trend of homes on market with no offers seen as “troubling”
Yeah, this is typical:
‘the number of untouched listings is up from a year ago, with 7,313 single-family homes for sale without offers, down 1 percent from January but up 16 percent from February 2014.’
‘The findings are based on data from the GLVAR’s listing service, which is largely comprises previously owned homes.’
‘Price-growth has slowed considerably from the past few years as investors pull back from Las Vegas, and GLVAR President Keith Lynam said the valley has “a stable housing market, which is a good thing.”
‘But sellers, emboldened by the run-up in values since the market hit bottom, are asking too much for their homes. Real estate agents want them to “realistically” set prices at fair market value, Lynam said in the report.’
“Certainly some of the blame should be squarely placed on our members, but the trend of homes on the market with no offers is rising, and that is troubling,” he said.’
These people go from, ‘oh you buyers better get a big offer in there right away’ to ‘you sellers are going to have to be realistic.’
RealtorBlather has never been founded in english or logic.
Realtors are too stupid to figure out that if they just shut their mouths their credibility would double in an instant.
It sounds like the only thing that was propping up Vegas housing was investor purchases. The question is, what will investors do with their houses once prices start dropping again?
Yes seeing a lot of homes just sitting and not selling in LV. New builders have started offering free upgrades and other incentives to try to lure in buyers. The smart people got out 3-6 months ago and now it is only a matter of time until the tree falls.
As a noted HBB’er said yesterday - “no one saw it coming” - well here it is - right from the mouth of North Dakota babes!!
You just can’t make this stuff up anymore.
“The collapse of oil prices from over $100 a barrel to below $50 was not expected. No one saw it coming. The experts were caught off guard. So was the housing industry in oil country.”
Here’s a caption on one of the photos:
‘New housing is sprouting up in almost every corner of Sidney.’
‘What happens when the price of oil tanks and suddenly you’re faced with a whole lot less money to deal with your town’s explosive growth? If you’re 52-year-old Rick Norby, you lose a lot of sleep. “I haven’t slept since I became mayor,” he says. “I really ain’t kidding you.”
‘When Norby became mayor of Sidney, Mont., oil prices were at about $100 a barrel. A year later, they’ve fallen to roughly half that. Yet oil production has continued to churn right along. “All the action is still happening,” says Norby, who has lived here all his life. “We haven’t seen a slow down one bit in anything.”
‘The problem is Norby figures he’ll get about $600,000 less in tax revenue from oil production — and an untold drop is predicted for hotel and gambling taxes — to deal with all this. That’s a big deal when your whole budget is $11 million and your town now has a major highway running right through it.’
‘Lately, the extra oil revenue had helped him hire more teachers and classroom aides. They recently started a long-term facilities plan. But he says that never considered oil falling below $70 a barrel. “We’ve gotten accustomed to having a little bit more funding, gradually,” Skinner says. “One of my biggest fears is that tomorrow, all of the sudden, it’s gone.”
They need a tax cut for the “producers”, and sales/sin tax increases on the wretched refuse. That, and writing blizzards of traffic tickets, just like they do in Ferguson.
(Of course, punitive tickets aren’t a problem, as long as you aren’t racist about writing them).
Just ask Sam Brownback.
I remember hearing and reading the same thing (”no one saw it coming”) many times in 2007/2008 and often from people who should have known better…I’m much less surprised to read this stuff this time around. At the time I had been following the HBB and OTM for a couple of years and thanks to that knew what was coming waaay in advance and sold my place in early 2007, pricing it about $10K/3% under market got me a buyer under contract within a week. People holding out for top dollar now are likely to get a very expensive education, chasing the market down does not go well.
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
Upton Sinclair
RAAAAAAAAAAAAAAAAAAAAAGE!
Update: Oil Craters Through $49 Floor; Sinks $1.63 On Plunging Demand
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
And as a result (this from Reuters) Canadian Finance Minister Joe Oliver on Tuesday told Parliament that there was no housing bubble……
ummm….I am gonna predict this idiot will be going back to Canada Parly with hat in hand in 6 mos to a year….
Canada’s Oliver say there is no housing bubble
Reuters 3/10/2015 2:51 PM ET
Print Article
OTTAWA, March 10 (Reuters) - Canadian Finance Minister Joe Oliver on Tuesday told Parliament that there was no housing bubble and added that he continued to monitor the market very closely.
The government and the Bank of Canada have repeatedly predicted a soft landing for a housing market which boomed in the wake of the financial crisis, spurred by record low borrowing costs. (Reporting by David Ljunggren; Editing by Chizu Nomiyama)
trying to cover its azz:
http://eaglefordtexas.com/news/id/148064/goldman-sachs-just-kidding-about-the-40barrel/
And you thought you got screwed when you bought that house….
“This Indonesian House Is for Sale and Comes With a Pond, a Backyard and … a Wife”
http://time.com/3738528/house-indonesia-wife/
I just got this in an email:
‘Major Reduction. Priced Below Market Value!’
‘540 Hedges Way, Sunset Strip
Architecture: MARMOL-RADZINER
Views: EXPLOSIVE
Quality: SUPREME
Location: THE 50 YARD LINE
This pristine and voluminous contemporary home is designed by one of Los Angeles’s most respected architecture firms. Huge entertainers kitchen, dining room, and family/living room that converts into a theatre all spill out to the private backyard with massive city light views. Upstairs there are dual master suites and pocket door open to a fireplace lit terrace, oversized walk-in closet, office area, and fireplaces in each room. The pool area is situated to get unbelievable sun, outdoor shower, built in bbq, dining area, and a viewing promontory overlooking downtown. This turn-key gem is priced to sell and is the complete package.’
Offered at $3,995,000
Wow! what a deal! they were asking $6M only 2 years ago and $5M just a few months back
03/10/15 Price change $3,995,000-11.1%
02/09/15 Listed for sale $4,495,000-10.0%
12/12/14 Listing removed $4,995,000
02/17/14 Listed for sale $4,995,000-7.4%
12/03/13 Listing removed $5,395,000
07/27/13 Price change $5,395,000-0.1%
06/08/13 Price change $5,400,000-9.9%
03/26/13 Listed for sale $5,995,000+53.7%
03/19/08 Sold $3,900,000+4.0%
11/30/05 Sold $3,750,037+312%
12/20/96 Sold $910,000
What is amazing is the $910,000 in 1996, thank you Greenspan.
What do Texas,Co.,Wyoming, Big Sky country, and ND all have in common, if you are in the for sale sign business, you are going to make a fortune.
You can add every state in the country to that list.