Interwoven In An Obscure Chain Of Ponzi Credit
It’s Friday desk clearing time for this blogger. “If you’re trying to sell a single-family house priced at $1 million or more in Northern Virginia, better make sure it’s in tip-top shape. Demand for pricey houses in that range has cooled in that part of the region. Listings rose the most in Fairfax City, by 40 percent, followed by a jump of 31.1 percent in Fairfax County, 24 percent in Montgomery County and 23.3 percent in Arlington County. ‘In the city, the market is still competitive, and the pace of new contracts is exceeding the pace of new listings, but we’re seeing the opposite trend in Northern Virginia,’ says David Howell, executive VP for McEnearney Associates in McLean. ‘That trend is more pronounced the farther you go from the city.’
‘In January, we started seeing inventory from last year that was priced incorrectly come back on the market and once they were re-priced buyers started to snap them up,’ says William F.X. Moody, an agent of Washington Fine Properties in Washington. ‘Last year, sellers didn’t want to let go of the crown and thought they were still in control, but it was shifting to a buyers’ market.’”
“Las Vegas used-home prices are rising, which is good news for the real estate market. But, if there is one concern about the region’s housing market it would be homeowners setting their asking prices too high. As a result these overpriced listings go unsold for months. GLVAR President Keith Lynam argues overpriced listings may be holding back the local housing market. ‘We’d like to see more Nevada homeowners realistically pricing their homes at fair market value,’ Lynam said. ‘One of our challenges lately is too many would-be sellers have been watching home prices go up for the past few years and are now asking too much for their homes.’”
“In 2013, of 905,639 households in Miami-Dade, 55.8% owned their residences compared with 67.6% statewide, according to the University of Florida Bureau of Economic and Business Research. Javier Gonzalez, an associate with RE/MAX Advance Realty, said the market is flooded with too many condos right now and the prices are too high for the average buyer. ‘We need to slow down the building and let the properties become ownership [rather than investment],’ he said. ‘An investment is used and traded; your home is not.’”
“For investors with dollars, the dream of a condominium by Rio de Janeiro’s most famous beaches is suddenly within reach. A 467-square-meter (5,027-square-foot), four-bedroom apartment with views of ocean swells rolling up on Ipanema Beach sells for 17 million reais, or $5.2 million. That’s about half the price in dollars from a year ago thanks to sliding property prices and a rout in the local currency, according to Judice & Araujo, a Rio-based luxury home broker.”
“The slowdown in the energy industry coincides with a surplus of new properties in Rio, leading to a weaker real estate market, said Pedro de Seixas Correa, a professor at the Getulio Vargas Foundation specializing in the construction industry. ‘The market is suffering this negative economic outlook and will continue doing so,’ he said . ‘When we have a reduction in business activity, revenue falls and the real estate market is immediately impacted.’”
“India’s debt-laden property developers are turning to deep discounts, free parking spots and even gimmicks like gifts of gold coins and motorbikes as they struggle to sell billions of dollars worth of as-yet unfinished homes. India has a real estate market mired in debt piled up in a 2006-2007 construction boom that gave way to slowdown. It now takes developers about 4-1/2 years to turn property inventory into cash, more than a full year longer than it takes developers in China, according to Thomson Reuters Starmine data.”
“‘It is a buyer’s market,’” said Preeti Patil, a 28-year-old who was in the market for a two-bedroom house in the suburbs of Mumbai. ‘Last week, we turned down a deal, two days later we had the builder call us to offer $8 (500 rupees) per square foot discount.’ Even worse for developers, Patil is among those who have little confidence property prices will rise in future. Despite cut-price offers, she abandoned plans to buy, saying she feared the investment would not reap near-term returns.”
“House prices in China can fall fast. According to private surveys, units sold in 48 cities declined by 10.9 percent over the year as government revenue from land sales cratered 36.2 percent in the first two months of the year, according to Shanghai Daily. More than one in five homes in China’s urban areas is vacant, with 49 million sold but vacant units, and 3.5 million homes that remain unsold. The other problem is that most of the debt incurred building this huge bubble is on the books of property developers.”
“On March 17, Evergrande Real Estate Group, one of the country’s largest developers announced it had secured new financing (i.e. a bailout) from large state-owned banks. How much? A staggering $16 billion. This makes the $4.1 billion Bank of America spent on Countrywide Financial at the beginning of 2008 pale in comparison. It can only be hoped that losses don’t multiply the same way they did at Countrywide, but chances are they will.”
“Chinese developers and construction companies are interwoven in an obscure chain of Ponzi credit. If one doesn’t pay, the other will almost certainly default. At the end of this chain stands the Chinese banking system and by extension the Chinese regime. Both are too big to fail and too big to bail out at the same time. ‘Quite simply, China has produced and built far too much capacity, through overinvestment in steel and cement firms and in accelerated housing development. In the process, it has amassed the largest buildup of bad debt in history,’ writes economist Richard Vague.”
“Homeowners in one of Queensland’s most prestigious property markets want the Federal Government to open the door to foreign buyers. ‘We have an abundance of luxury property where our demographic can’t really support it,’ said Keith Douglas, who recently sold his home for $400,000 less than the purchase value. ‘I’m not alone there was another property that sold for $9 million under auction a few years ago and it only realised $7.3 million so there are still some fairly serious losses being incurred.’”
“In India, it is a leading electric utility, Jaiprakash Power Ventures, selling off facilities and negotiating with lenders to avoid a default, having increasing its debts thirtyfold in six years. In China, it is one of the country’s largest real estate developers, the Kaisa Group, threatening to pay only 2.4 cents on the dollar to its creditors, leaving countless would-be Chinese home buyers stuck in the middle of a multibillion dollar standoff. And in Brazil, a wave of bankruptcies among sugar producers has been driven not just by falling sugar prices, but also by debts that they owe in United States dollars, which are becoming more expensive practically by the day.”
“Years of low-interest-rate policies from the Fed have encouraged companies in these fast-growing economies to borrow dollars because they could do it more cheaply than if they took out loans in their local currencies. By September 2014 there were $9.2 trillion of such dollar loans outside the United States, up 50 percent since 2009, according to the Bank for International Settlements. As Raghuram Rajan, the Reserve Bank of India’s governor, put it earlier this year in an interview with Bloomberg Television, ‘Borrowing in dollars is like playing Russian roulette, especially if you’re borrowing relatively short term.’”
“A leading financial advisor is projecting a 40-50 per cent housing price correction and is laying the blame on the CMHC. Author Hilliard MacBeth says the Canadian real estate market is poised for a painful 40 to 50 per cent drop in value when the bubble pops. ‘I think the government has genuinely tried to encourage the housing market and home ownership, which started after the Second World War. But in the last 15 years it’s kind of taken on a life of its own. It’s this monster that nobody can really tame. The reality is, lenders don’t really take any risk, so they keep on providing more and more [loans].’”
“U.S. housing finance companies Fannie Mae and Freddie Mac could require more bailouts from U.S. taxpayers as risks are rising due to shrinking reserves, an internal watchdog for the firms’ regulator said. Washington bailed out the two firms in 2008 at the height of the financial crisis and has since seized all their quarterly profits while demanding the firms reduce their capital buffers.”
“‘Future profitability is far from assured,’ Federal Housing Finance Agency Office of Inspector General said in a report, pointing out that the firms could again chalk up losses on their derivatives portfolios, similar to those they reported in the fourth quarter. ‘(This) increases the likelihood of additional Treasury investment,’ the report stated.”
‘An investment in bitcoin promising a 150 percent yield. That’s what was being offered to more than 2,000 people last August in the grand ballroom of the Sheraton Macao Hotel. MyCoin attracted an estimated 3,000 people from Hong Kong and across the China border in Shenzhen, and similar MyCoin conventions or promotional dinners held elsewhere in China, Thailand, South Korea, the Philippines and Taiwan may have drawn hundreds more.’
‘Most of MyCoin’s investors live in China and haven’t contacted police, they said. “People around the world are trying to get money out of the Chinese,” said Hu Xingdou, an economics professor at the School of Humanities and Social Sciences at Beijing Institute of Technology. “Mainland Chinese are very vulnerable to these kinds of schemes.”
‘About $324 billion flowed out of China last year, in contrast with 2013’s net inflows of $56 billion, as Chinese sought in part to flee a declining yuan and make investments abroad, according to estimates by Wang Tao, chief China economist at UBS Group AG in Hong Kong. Money from China has driven up housing prices in Sydney, Vancouver and elsewhere.’
‘In Portugal, Chinese rushing to buy real estate have been burned by middlemen, some charging a quarter of the sale price as commission. Also this year, Chinese investors complained they lost a total $1.2 billion when a Geneva-based foreign-exchange investment firm said it was taken over by hackers that lured money from 20,000 people, China’s state broadcaster CCTV reported in February.’
‘More than 80 percent of the world’s bitcoin transactions are now carried out in Chinese yuan, up from less than 10 percent at the beginning of 2013, according to a report from Goldman Sachs Group Inc. Bitcoin is more widely accepted outside China than by Chinese merchants after the People’s Bank of China imposed restrictions last year. One possible explanation: bitcoin transactions may enable citizens to circumvent China’s $50,000-a-year limit on moving money out of the country.’
‘Investors in MyCoin paid a minimum HK$400,000 and were promised HK$1 million a year later, as long as the bitcoins’ value remained the same or appreciated, according to documents given to Bloomberg News by investors.’
“My family is in total chaos now,” said Lin, who said she invested about 900,000 yuan ($144,400) along with her daughter and younger sister. “They invited famous people to their events. How would I have thought the whole thing was a scam?”
Generally there are two parts to a joke. First there’s the set up …
“‘Investors in MyCoin paid a minimum HK$400,000 and were promised HK$1 million a year later, as long as the bitcoins’ value remained the same or appreciated, according to documents given to Bloomberg News by investors.’
“My family is in total chaos now,” said Lin, who said she invested about 900,000 yuan ($144,400) along with her daughter and younger sister. “They invited famous people to their events.”
And then comes the punch line …
“How would I have thought the whole thing was a scam?”
Bahahahahahahahahaha … dumb ‘em down, and then profit. Works in the U.S., works in China, works all over the globe.
“famous people”
Blind trust in voices of authority can be costly.
‘The surreal cost of housing in Metro Vancouver is the biggest issue facing the city. Yet it’s hard to find people who can fully inform us about what’s really causing it and, therefore, what can be done about it.’
‘Most Canadian governments and politicians are keeping mum. Unlike in other jurisdictions around the world, most Canadian politicians are refusing to even collect the relevant data — including the numbers on the extent of foreign ownership, something I started writing about in 2012 and 2013, relying on the excellent Vancouver researcher Andy Yan.’
‘In addition, a March 10th Vancouver Sun story by Joanne Lee-Young showed just how stubborn all levels of Canadian government have been about refusing to seriously explore what’s causing our run-away prices. That is even while evidence makes it clear it’s related to East Asian investors, particularly those who have, as Lee-Young noted, been taking US$1.08 trillion in capital out of China illegally.’
‘Whatever is causing Metro Vancouver housing prices to be among the most unaffordable in the world, it’s making it impossible, as Sun columnist Barbara Yaffe pointed out on March 9, for even high-earning professionals to afford houses or family-sized condos in the city. Many are moving away.’
‘It’s of course difficult to fully trust the information of realtors and the development industry. They’re not only heavy financiers of civic, B.C. and federal politicians, it’s decidedly in their interest to keep certain facts away from the public. Not surprisingly, they’ll welcome whoever and whatever keeps housing prices hot, the golden goose.’
‘The South China Morning Post highlighted how the centre run by UBC business professor Tsur Somerville, who has been quoted hundreds of times by print and broadcast media outlets in Metro Vancouver, receives part of its funding from developers.’
‘Ian Young’s article say he has been trying without success to get an interview with Somerville — who has frequently tossed the labels of “racist” and “xenophobic” at those who suggest high immigration rates and foreign ownership influence real estate prices.’
‘Young’s article is headlined: “Vocal academic isn’t just an observer of Vancouver’s real estate scene, he’s a part of it.’
‘Here’s an excerpt: “… While Tsur Somerville is enthusiastically cited {by the Vancouver media} little if any mention is made of an important fact: His Centre for Urban Economics is sponsored by the real estate industry. And his job is to prepare people to join that industry.”
“The centre’s sponsors have included the developers Grosvenor, Henderson Development, and the Vancouver chapter of the Commercial Real Estate Development Association (all currently listed on the centre’s website), as well as Polygon Homes, the Canadian Home Builders’ Association and the Greater Vancouver Home Builders’ Association (listed as sponsors as recently as 2012, along with Grosvenor).”
“And despite impressive credentials, Somerville hasn’t conducted a single piece of peer-reviewed research on what might be responsible for Vancouver’s outrageous unaffordability. He hasn’t recently done much peer-reviewed work at all: In the past decade, his entire peer-reviewed output amounts to three journal articles.”
“He’s been plenty busy though, teaching courses on real estate development, setting up student internships in the industry, and generally churning out new generations of real estate professionals.”
“He’s also delivered dozens of presentations, unhindered by the need for peer review. Here’s a sample of the titles: “Bubbles”, “Immigration and Real Estate”, “The Effect of Foreign Investment on Vancouver’s Housing Market”, and “Maybe the sky doesn’t have to fall”.
Bloomberg was talking about Canada today and was showing charts about how deep in debt they are. Vancouver was mentioned as one of the least affordable housing markets in the world.
“…taking US$1.08 trillion in capital out of China illegally”
Ironic that last year something around the same amount came into China as overseas loans.
Canada was supposed to be the sober version of the United States, but it has joined us in moral and ethical collapse.
Some prominent people have commented on that Vancouver blog post. All ardently defend the status quo.
“Some prominent people have commented on that Vancouver blog post. All ardently defend the status quo.”:
They’re defending their money, which depends upon maintaining the status quo.
‘The reduced inventory (as well as a widespread underpricing strategy by local realtors) has led motivated buyers to bid considerably over the asking price for the vast majority of S.F. sales.’
‘Now for some (slightly) good news for buyers: Paragon claims that even in this hot market a good 20%-30% of homes are price reduced before selling or are so overpriced they are removed from the market without a sale taking place.’
‘Emily Landes is a writer and editor who is obsessed with all things real estate.’
‘Bay Area home sales fell to their lowest level in seven years in February while prices rose only modestly, compared to a year ago, a real estate data firm reported.’
‘Buyers purchased 4,376 houses and condos last month in the nine-county region, down 10.9 percent from a year earlier, according to CoreLogic DataQuick. It was the lowest total for a February since 2008.’
‘The median price for February was $565,000, a decrease of 1.2 percent from January but an increase of 4.6 percent from a year earlier. The year-over-year gain marked the smallest annual increase for any month since the median price began rising, year over year, in April 2012.’
‘Meanwhile, Truckee-based PropertyRadar reported that California home sales last month also fell to their lowest level in seven years.’
I don’t follow any of the inland California markets. Near the California coast we have very low inventory so far this year. We’re having a very slow start to the season. Sellers are listing properties way over comparable recent sales prices and then slowly reducing their asking price or accepting lower offers. Realtors are playing along just to pick up the listing and letting the properties sit overpriced and not even bothering to show them until the sellers get real. Adding 10% to the last sale price isn’t working anymore even with the low inventory.
Properties are in abysmal condition. Sellers refuse to do anything to enhance the property. And more than any previous year a lot of families are still living in the homes they are trying to sell so they don’t show well. That’s slowing sales because buyers don’t want to get entangled in months of waiting for the sellers to buy a new home. I’m seeing pending sales fall through because the sellers can’t find a new home in time. Empty, *well staged* properties priced near comparable recent sales are going quickly. There is a big business in high end staging and buyers fall for it hook line and sinker. Stuff the house with high end furnishings, fancy art work and put fresh wood chips all around the house and a feeding frenzy ensues.
Price appreciation based on actual sales in the last month is very low so far in the median and lower end coastal market. But the super-high end homes in prime locations near the beach are on fire. There is no shortage of all cash buyers for prime beach real estate. Also a lot of buyers near the beach are investors turning properties into vacation rentals. California beach vacation rentals are the big thing right now.
Not really… Not at all. Remember… housing demand has all but collapsed in the Bay Area.
Demand has not all but collapsed its just experiencing negative expansion. And besides - that’s only occurring in areas that are not part of “the real bay area.” The real bay area is a special place.
Of course.
The real bay area is a special place.
Because it’s different there.
That person is our resident hyperbole provider, but “experiencing negative expansion” is a new one, almost like Dilbert decided to get into real estate.
Sacramento foothills sales report (since SF Bay Area never leaves the coast)
There is only a month or two of mid-value inventory, so transaction volume is stifled in the $200-400k range. Well priced product sells. Not so many multiple offer deals anymore. The prices have dropped about 5% since mid 2013
Properties over $1 million are mostly sitting. There is 12+ Mons of inventory. Prices are dropping 10-20%. Many sellers want their 2006 price and we are still 30-40% below those values.
Here is a new one for you! A buyer can get a reverse mortgage upon acquisition. $800k purchase, $200k down. $600k mortgage at 4%. Done for 65+ buyer. He only pays taxes & insurance moving forward.
The lender (insured by you know who) assumes price appreciation on $800k will exceed accrual on $600k at 4% (w a $200k or 25% equity cushion).
With 4.4 million excess empty and defaulted houses in CA, there is no inventory issue.
That sounds more like a report I’d expect in the LA area.
Beach property in the Bay area is hot? Seriously, that’s the most affordable area because of the difficulty in getting there, the fogged in cold and dreary coast that depresses people and the lack of quick transit access in the Sunset district of SF proper.
So yes there are some lots that sold and homes were built resulting in an appearance of massive profits but that in no way makes the “beach area ” hot compared to the rest of the SF bay area.
Maybe your report is true for Marin , but doesn’t sound right for SF and the peninsula.
What I see is the hot market is South of Market/ Mission condos and houses and condos on the peninsula that are within walking distance of a decent downtown (Burlingame and San Mateo ) and also have decent train service.
The houses that I see that sold recently in San Mateo that are selling are flips and remodels that look perfect - I only saw one house that was in dire need of repair that sold.
Dani - thanks - I’ve been looking at the Central Coast specifically not Northern California.
For what?
Sorry, I guess I got confused by your tagline.
And ipod white is in. Paint all the cabinets, beams, trim, etc white and buyers are loving it. White paint and wood chips - the perfect combo for 2015.
“White paint and wood chips - the perfect combo for 2015.”
Undoubtedly for those who ate paint chips as a child.
PropertyRadar breaks down distressed and non-distressed sales.
Non-Distressed sales are up year on year.
Distressed sales are down year on year.
The combination of the two is overall decline in sales year on year.
Here are the two stats (both true):
1. Overall transaction level for February 2015 is the lowest February transaction total since February 2008.
2. NON-distressed transaction level for February 2015 is the highest non-distressed transaction level since February 2007.
Is this the sign of a worsening market (fewer overall sales)?
Or the sign of an improving market (fewer distressed sellers, more non-distressed sellers)?
I submit that it all depends on your understanding of the market dynamics.
I personally believe that fewer distressed sellers, and more non-distressed buyers is an indicator of a SLOWLY improving market.
With housing demand at 20 year lows, parsing sales doesn’t make much sense Rental_Fraud.
Housing Demand Plummets YoY In 55 Of 58 California Counties
http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv
Malaria and no water is priced in on Rio properties, I hope.
Olympic sailboat racing in an open sewer is priced in too.
I heard that Rio prices can never go done. You see it’s different there.
down not done.
Same difference….
I heard that Rio prices can never go done. You see it’s different there.
Who told you Rio prices could never go down? I’ve always said prices could go down but “probably not for the “easy financing” reasons” like the USA. Does it take a high IQ to comprehend that? BTW. Prices are not down much at all valued in the Brazilian Real. What you’re seeing mostly is a currency play - super strong US Dollar/Weak Real. I’ve said since before 2009 Brazil prices could fall. See below from 2009.
Comment by RioAmericanInBrasil
2009-09-13 14:16:16
……..I know that Brazil is increasing the availability of home loans and other programs but these new “easy money plans” being introduced do not amount to much yet in light of Brazil’s current lack of mortgage debt.
Brazil home prices could very well fall but probably not for the “easy financing” reasons you suggest.
Nobody cares Lola.
Of course they care HA. I live in a lot of heads rent free. Look above. It’s obvious.
I had a friend that used to sell produce down in Rio in the 90s. Saw a cop shoot a kid in a favela for no reason other than being poor. He hasn’t been sober since.
You live in an alley Anklepants.
Saw a cop shoot a kid in a favela for no reason other than being poor.
Very sad and probably true. Brazil is not for the faint-of-heart or cowards. Some famous Brazilian once said “Brazil is not for pussies.” One can easily die, get robbed or get thumped here - at any income level.
And I have no reason to disbelieve your story but that would have been rare for a gringo (or a single cop even) to have been in a favela in the 90’s - well before the cops took a few of them over a couple years ago.
The only time cops would go in favelas in the 90s would be en masse on drug raids. They literally were self-ruled by the drug gangs.
I’ve never been to Brazil, but aren’t there some favelas, like Rocinha, where residents will give you a tour during daylight hours?
http://www.favelatour.org/
From pictures I have seen, one of the odd things about some favelas is that they often are located adjacent to very upscale areas. Gross wealth disparity could not be more evident; it’s thrown in your face daily.
Living in Latin America gives you a different perspective on personal security. When I came back to this country to go to college, I was shocked at how lax some people were about locking doors, cars, etc., and about leaving personal possessions unattended. I also regularly was amused, and still am, at the number of people who pay no attention at all to what is going on around them.
aren’t there some favelas, like Rocinha, where residents will give you a tour
Yes, the past few years since Rocinha has been “pacified” by the cops - tour companies too. And they pay a cut to the community somehow. I never heard of those tours in the 90’s when Rocinha was totally drug-gang territory.
the odd things about some favelas is that they often are located adjacent to very upscale areas
Totally. It’s a trip. I went to a millionaire’s penthouse party in São Conrado where he was bragging about his view of Rocinha. His million dollar view depressed me. (Except the ocean view on the other side.)
number of people who pay no attention at all to what is going on around them.
That’s a big one down here. Ya gotta pay attention.
“Brazil is not for the faint-of-heart or cowards. Some famous Brazilian once said “Brazil is not for pussies.” One can easily die, get robbed or get thumped here - at any income level.”
Sounds just dreamy. I think I’ll pass…
As I’m sure RioAmerican can attest, living in Latin America is surprisingly addictive. It has plenty of flaws and dangers, but you feel much more alive than you ever do here, especially if you live in suburban sprawl.
“I live in a lot of heads rent free”
This is not a healthy life goal.
“…As I’m sure RioAmerican can attest, living in Latin America is surprisingly addictive…”
Nose candy has a way of doing that.
Lola no more lives in Brazil than The Donk is the donk.
living in Latin America is surprisingly addictive. It has plenty of flaws and dangers, but you feel much more alive than you ever do here
Totally amigo - the Wild West. I feel 10 years younger, am 30 lbs lighter, more interesting to peeps and added 10 kilos to my bench-press since I moved here in 2008.
Partly because:
“Brazil is not for pussies.”
Btw. Dinner was great and packed.
This is not a healthy life goal.
It’s all about you dude. I don’t try.
“I feel 10 years younger, am 30 lbs lighter, more interesting to peeps and added 10 kilos to my bench-press since I moved here in 2008.
Partly because:
“Brazil is not for pussies.” ”
NEWSFLASH: A bullet will rip through that extra muscle with the same ferocity.
NEWSFLASH: A bullet will rip through that extra muscle with the same ferocity.
I know. I didn’t mean you get stronger in Brazil to dominate the danger. You can’t. (But it can help if they don’t have a gun)
I meant getting stronger is part of the lifestyle in an athletic, hotter than hell Latin beach environment.
‘SINGAPORE - The 382 private homes that developers sold last month marked the lowest February sales since the 174 units sold in February 2008 when home buying was hit by the global crisis - roughly half the 739 units developers sold in the same month last year.’
‘The continued weak sales last month came amid a slowdown in launches by developers during the Chinese New Year period.’
‘Chua Yang Liang, JLL South-east Asia and Singapore research head, said that developers and buyers are both likely to remain cautious. “Developers are likely to feel the pressure more to cut prices, given the state of the unsold inventory (both launched and unlaunched) at some 21,000 private homes.”
‘Amid the current environment where “everyone expects prices to drop further”, argues Knight Frank executive chairman Tan Tiong Cheng, “unless your project is priced to sell, there is very little to attract buyers, especially if there are similar developments in the vicinity”.
“A leading financial advisor is projecting a 40-50 per cent housing price correction and is laying the blame on the CMHC. Author Hilliard MacBeth says the Canadian real estate market is poised for a painful 40 to 50 per cent drop in value when the bubble pops. ‘I think the government has genuinely tried to encourage the housing market and home ownership, which started after the Second World War. But in the last 15 years it’s kind of taken on a life of its own. It’s this monster that nobody can really tame.”
A 40-50 percent drop in prices? Ooops … somebody’s going to take it in the shorts, especially when there’s all sorts of leverage involved. I wonder just who it will be?
Bahahahahahahaha … well let’s read on a bit and discover just who it will not be:
“The reality is, lenders don’t really take any risk, so they keep on providing more and more [loans].’”
As it was with Reverend Ike, you cannot lose with the stuff I use.
Bahahahahahahahahahahahaha … dumb ‘em down, and profit.
They have already lost 25% without CMHC taking a hit just in exchange rate to USD. Mr. Banker’s loans might be guaranteed, but they are worth a lot less than they were.
“Mr. Banker’s loans might be guaranteed, but they are worth a lot less than they were.”
Ah, so. Part of the joy of using other people’s money.
Do you feel joy when you fail a bank “stress test?”
‘Norway’s central bank unexpectedly left interest rates unchanged and signaled another cut to protect the economy against a plunge in oil prices. The bank predicted its rate may drop to as low as 0.95 percent in the first quarter of next year, versus a December forecast of 1.13 percent.’
“We chose to keep the rate unchanged but given that our estimates come through, there are prospects that interest rates are going to be lowered in spring or summer,” Governor Oeystein Olsen said.’
‘Policy makers in December cut rates to spur growth as a 50 percent drop in crude prices pummels the economy of western Europe’s biggest oil and gas producer. The slowdown is coinciding with a return to extreme easing from the world’s biggest central banks. The European Central Bank last week started buying debt to add to stimulus, while neighboring policy makers in Sweden and Denmark have cut rates deep below zero.’
‘At the same time the government is working on plans to cool a run-away housing market. Norwegians owe their creditors about twice as much as they make in disposable incomes, more than at any time in the country’s history. House prices jumped about 9 percent in February from a year earlier to a record high.’
‘At the same time the government is working on plans to cool a run-away housing market. Norwegians owe their creditors about twice as much as they make in disposable incomes, more than at any time in the country’s history. House prices jumped about 9 percent in February from a year earlier to a record high.’
Something tells me the oil price collapse may take care of that problem for the Norwegian government.
Here’s a question for discussion. Will we have NIRP here?
San Francisco And Los Angeles Foreclosures Skyrocket 35% YoY
http://www.realtytrac.com/images/reportimages/foreclosure_trends_20_largest_metros_jan_2015.png
From a base of nearly zero. I sat on the courthouse step week after week in one coastal market and nothing but crickets last year. The condition of the stuff getting auctioned off now is borderline toxic.
With foreclosure moratoriums and moratorium like rules in effect, it’s going to seem that way.
The good houses aren’t going to auction on the courthouse steps. They’re sitting vacant, parked on the Fed’s G A R G A N T U A N balance sheet.
San Francisco And Los Angeles Foreclosures Skyrocket 35% YoY
“Skyrocketed” from nada to almost nada.
And prices falling……. Lola. lol.
And prices falling…….
Has the USA median home price fallen year over year?
And demand collapsing Lola.
And demand collapsing
We’re not talking about your life HA.
Data Lola data.
‘The Bay Area has become a magnet for Chinese real estate companies, with developers and investors from the world’s second-largest economy pulled into more than a dozen high-end residential, office and retail projects in a little more than two years. Six of those deals have come since December.’
‘Trends in China are also driving overseas investment. The country’s massive economy has slowed. The result is that the Chinese property sector has suffered high vacancies and stalled projects. Architectural firms are laying off staff there.’
“While the Chinese economy might be moderately toning down, the ripple effect is that real estate has taken a nosedive,” said Jeffrey Heller, president of Heller Manus Architects, who has worked in China for more than 10 years.’
‘Loosening restrictions have also expanded global investment. In 2013, the Chinese government allowed companies to invest overseas without specific government approvals. And last year, President Barack Obama expanded U.S. visa durations for Chinese citizens and businesses. Wealthy Chinese families are looking more and more to buy condos to use as pied-à-terre vacation homes or housing for their children studying at Bay Area colleges.’
‘Chinese companies are looking beyond the core San Francisco office market, placing big bets on properties in the Peninsula and East Bay. Zarsion Holdings Group has committed to finance thousands of residential units at Signature Development Group’s Brooklyn Basin project in Oakland, while Genzon Group has just snapped up a prime development site in Burlingame.’
““While the Chinese economy might be moderately toning down, the ripple effect is that real estate has taken a nosedive.”
With 15% of the economy based on churning out concrete and steel for empty apartments, the economy will be taking a nosedive soon enough.
You can’t run a huge trade deficit year after year ad ad nauseam and not expect our dollars to eventually slosh back onto our shores. And this is just a trickle compared to what will happen eventually when all those dollars come back. The hot flows haven’t even started to really hit the states.
That’s right you get it. Check this out
http://www.arcadiaweekly.com/news/featured/arcadia-housing-boom-with-chinese-dollars/
I guess they don’t want to buy in Saint Louis ?
“The hot flows haven’t even started to really hit the states.”
Cool. Maybe I can find a Chinese sucker to sell some land to.
‘The Bay Area has become a magnet for Chinese real estate companies, with developers and investors from the world’s second-largest economy pulled into more than a dozen high-end residential, office and retail projects in a little more than two years. Six of those deals have come since December.’
Didn’t Japan go head-over-heels into U.S. real estate just before the onset of their twenty-five year period of post-bubble asset price collapse?
Didn’t Japan go head-over-heels into U.S. real estate”
I don’t know if its the same this time ?
‘After skyrocketing in recent years, China’s property prices have been cooling as economic growth has moderated. But it’s been a completely different picture in the Chinese stock market, which just hit a near 7 year high.’
‘For more on this, we are joined in the studio by my colleague, Wu Haojun.’
‘Q1: The government has tried for years to cool the housing market and by the look of things in the past few months, can we call it “mission accomplished”?
‘A: Well, I’d say it’s being accomplished quicker than expected and that’s why measures have been put in place to give the market some support again. New-home prices in February fell in 66 of the 70 cities tracked by the government from a month earlier. And the big cities that many people thought would be immune to property cooling? Well, they didn’t fare any better either. Prices in Beijing and Shanghai fell 3.6% and 4.7% respectively from the previous month in February. The numbers are slightly alarming, considering there were two interest-rate cuts in the past 3 months, and the government removed property curbs, which many thought would be able to bolster the market.’
‘Q2: While the real estate market seems rather languid, the stock market here in China is as bullish as ever. Tell us more about that.’
‘A: Yes, this is a time when everyone is telling everyone to get in the stock market. And this is why the stock market rallied for a sixth straight day on Wednesday to levels not seen since before the global financial crisis in 2008. The Shanghai Composite Index, for example, climbed 0.8% to above 35-28, taking gains this year to 9.2%. It also adds to last year’s 53% surge, when Shanghai ranked as one of the world’s top performers. And here’s something interesting, despite the wobbling home prices, real estate stocks are doing just fine. Analysts say it’s due to expectations that the government will take measures to bolster the market, including lowering taxes and loosening requirements for mortgage lending. So at least for the time being, for many people, equities seem to be a much better bet than real estate.’
“The numbers are slightly alarming.”
Slightly alarming now, scary alarming soon enough.
‘The practice of investing in real estate with untaxed income or unaccounted wealth is widely prevalent in India. That may be about to change if Prime Minister Narendra Modi has his way. His government is planning a new bill to curb “black money” that has inflated property prices, narrowed options for buyers and kept homes beyond reach for many Indians.’
‘“The first and foremost pillar of my tax proposals is to effectively deal with the problem of black money which eats into the vitals of our economy and society,” Jaitley said. “This law will enable confiscation of benami property and provide for prosecution, thus blocking a major avenue for generation and holding of black money in the form of benami property, especially in real estate.”
‘Data provided by Mumbai-based Liases Foras Real Estate Rating & Research Pvt. show the real estate industry accounts for a large share of illicit deals in the South Asian country, with an estimated 30 percent of transactions done with black money.’
‘If enacted, the law could mean a “healthy” correction to property prices, said Samir Arora, founder of Helios Capital Management Pte., a Singapore-based hedge fund. “The biggest beneficiary of black money in India is real estate,” Arora said. “The government looks all serious on this bill. Once you make the rules tough, somebody will get caught. When a few get caught, then others will freeze.”
‘For land deals, the cash component could range between 30 percent and 50 percent of the deal value, said Pankaj Kapoor, founder of Liases Foras. Politicians and businessmen hold a lot of land as they expect asset appreciation, Kapoor said.’
“If black money goes away, property prices could see a sharp correction,” Kapoor said.’
China’s housing bust is too big to hide.
Go back and see what I said last summer. China’s housing prices down between 20 to 30% at the bottom, however China maintaining growth in 2014 and 2015 of around 7%. It is exactly on track.
I have to fight with the Chinese just to do PCB layout.
They are not very good at it but I have to correct and teach them per my new boss. I expect they will get better.
Soon all I will do is design and then they will farm that out too. I guess they can get rich and buy my house. Its a good time to OWN things and NOT WORK for a living.
Will it ever go back to a time when a working guy can live like a 3rd world king in the USA? House , car, health insurance?
Or was it just a extraordinary blink in time?
China housing bust. Steel bust. Cement bust. Copper bust. International trade bust. 20% of their GDP leaving the country in cash in one year.
Some will call that steady growth, Monty Pythonesquely.
Some will call that 7% growth.
It is as real as Obama’s 2.2% growth.
So because Obama gets to talk out his backside, we’re supposed to believe you?
“Obama”
LMFAO. You are sick in the head.
“…49 million sold but vacant units”
And that’s just what they admit to in a culture where lying is fine if you don’ t caught. Lot’s of real estate tycoons aren’t fessing up.
China housing bust. Steel bust. Cement bust. Copper bust
You missed your piece of it huh?
It is a perfect bust. Brazil is at the end of the whip.
‘Banners hanging from roofs, flyers stuck on parked cars and signs on street corners are all delivering the same message: All those fancy new apartments going up in and around Washington? The rents may be going down.’
‘The booming Washington apartment market, which a few years ago ran hotter than ever before, has slowed. In some neighborhoods there are so many new units in the works that developers have lowered their rent expectations or even put construction plans on hold.’
‘Many of the new buildings are going up in neighborhoods that are subject of high-profile economic development efforts. In Tysons Corner, 1,721 apartments were recently completed or are under construction (not counting subsidized units). In NoMa, north of Union Station, 1,820 units were recently completed or are under construction. Around Nationals Park, the boom is even bigger, with 2,242 units recently opened or on the way.’
‘All those new units might suggest a glut is building in the market. Most experts see a growing number of soft spots in the market for high-end units — think floor-to-ceiling windows, stainless steel appliances and roof-top pools – that have driven the region’s commercial real estate boom. Real estate services firm Cushman & Wakefield, for instance, reported at the end of last year that the building boom “could induce modest declines” in rents in 2015.’
‘Some building owners are aggressively discounting rent by 10 percent or more or giving a month or two free up front, not to mention gimmicks such as putting a communal English bulldog in the lobby.’
‘Federal Realty Investment Trust, has had to lure people in with lower rents. Chief executive Don Wood told investors on a conference call last week that the company “missed our leased-up per-square-foot numbers by 9 percent” in PerSei.’
‘On the call, Wood attributed this to two culprits: added competition and all the construction happening around the building he was trying to rent: “Now that I think is pretty indicative of not only supply coming on in the market, but if I were asking you to move into that apartment, with all the cranes and the concrete that is being poured, and the construction site that it is, I suspect you would be in a better negotiating position too in terms of being able to lease it that way.”
‘Developers of another new building in the neighborhood, the Aurora, have had to discount rents as well. “The rental rates aren’t quite where we wanted them to be. There’s a little bit of a fall off there,” said Bill Hard, executive vice president at the company, LCOR.’
‘Another 4,194 units are either under construction or planned for the next three years in the area, third most in the entire region, behind only Tysons and Southeast-Southwest D.C.’
The DC article on SFH in the main post is pretty interesting. In the burbs, $300K is a starter home in the burbs. In the District, $300K is a 100-year-old decrepit rowhouse which need $70K of work. “Affordable” District markets are “first-time buyers can find homes near the Fort Totten Metro and along the east side of North Capitol Street…” Bad neighborhoods and you better pay for private school. Inner suburbs are hot, outer suburbs are not.
Where’d Polly go? I hope she’s ok.
It’s Friday desk clearing time and Ben Jones is on fire!
Yes, just when I thought the real estate news was getting a little stale, Ben comes along and puts the fear of God in all the housing bulls.
Ben’s persistent enthusiasm for chronicling this seemingly-interminable mania never ceases to impress me.
P.S. I find my own dwindling interest in the mania a sign that it may soon enter the final denouement stage. It has continued for so long now that it seems entirely normal, even at the point when the fundamental disconnect between seller asking prices and buyer ability to finance them is once again choking off the flow of sales transactions, the same way it did in 2007.
We’re back to a time when he can post daily if he wanted to.
‘According to data compiled from census numbers, more than half of San Miguel County’s housing stock is unoccupied and it’s a trend that seems to be growing. In 2013, 51 percent of the county’s total housing stock was categorized as unoccupied, 31 percent was owner-occupied and 17 percent was renter-occupied.’
‘Broken down by community, in 2013, 71 percent of the housing stock in Mountain Village was unoccupied, 56 percent in the town of Telluride, 38 percent in the unincorporated parts of the county and nine percent in Norwood.’
‘And that trend has been increasing over the past 13 years or so. According to the 2000 census, just 42 percent of the county’s total housing stock was unoccupied, 30 percent was owner-occupied and 28 percent was renter-occupied.’
“I don’t know if I could do better in summarizing those issues than ‘The Lost People of Mountain Village,’” said Jonathan Schechter, who compiled the data and is director of the Jackson Hole, Wyoming-based think tank Charture Institute.’
‘Schechter is referring to the 10-minute 2005 video parody, which compares Mountain Village’s sometimes-empty plazas to the remains of lost civilizations like the Mayans. The Denver Post called “The Lost People of Mountain Village” a mockumentary that pokes fun at wasteful opulence.’
‘Of those county dwellings that are unoccupied, Schecter says nearly 46 percent are vacation homes and short-term vacation rentals. According to Schechter, the data indicates a lack of workforce housing — not just from an increase in dwellings used as vacation homes, but because of something he calls the “demographic cliff.” People who moved to the area 20 or 30 years ago and could afford to buy a free-market home will be retiring, leaving one less home occupied by the community’s workers. Or if they sell their home, it won’t be affordable for local workers and will likely go into the growing pool of vacation homes purchased by wealthy out-of-towners.’
“My great concern is that people are putting a lot of effort into trying to address [workforce housing] and they will wake up and find out we have this whole demographic thing barreling down on us,” he said.’
‘San Miguel County Commissioner Joan May said the data clarifies and quantifies what she has suspected for some time. “It’s quantifying something I think we all instinctively know: A lot of the free market homes are being converted into vacation homes and are only occupied a few weeks out of the year,” she said. “I don’t know what you do to discourage vacant homes and I think that if we try to do that we would get a lot of pushback from the real estate community and the construction community… Nobody that earns their income in San Miguel County will be able to afford a free-market home.”
“’I don’t know if I could do better in summarizing those issues than ‘The Lost People of Mountain Village,’” said Jonathan Schechter, who compiled the data and is director of the Jackson Hole, Wyoming-based think tank Charture Institute.’”
Go here for a viewing of “The Lost People of Mountain Village” (if you dare!):
https://www.youtube.com/watch?v=hzoN2MFkCXI
The run time for part 1 is nine-and-a-half minutes.
That is very entertaining. Part 2 also. Some of the dialogue from the faux archeologists:
“Clearly these people perceived themselves as deities, as the scale of the architecture is immense.”
“We often see this funneling of immense resources into pointless displays of status as a dominant civilization enters its final state of decay.”
“Like a tick about to burst, it clearly fell victim to its own gluttonous excess.”
“Did they simply walk off into the sunset, suddenly beset by the realization that their lives and community were empty, wasteful, and tasteless displays of dominance and wealth?”
On the other hand, close to half of the comments are very hostile. A surprising number of people did not detect that the film is a satire.
commies hate this
of the free market homes are being converted into vacation homes and are only occupied a few weeks out of the year
how dare they
Considering that one market for those is China, perhaps it could be said that communists love that.
I don’t know what you do to discourage vacant homes and I think that if we try to do that we would get a lot of pushback
Extremely high real estate taxes on non-resident homeowners vs. those imposed on owner-occupants have been used all over the USA. She probably can’t deal with the “pushback” however that might be applied.
Bremerton, WA List Prices Dive 15% YoY; Sellers Slash As Foreclosures Ramp Up
http://www.zillow.com/bremerton-wa-98310/home-values/
‘An Internet company in Beijing may struggle to pay bond investors next month, the latest sign of stress in China’s debt markets a year after the nation’s first onshore default.’
‘There are “big uncertainties” about whether Cloud Live Technology Group Co. can repay interest and principal on a note investors can opt to sell back on April 5, according to a statement Tuesday from GF Securities Co., the securities’ lead underwriter. Cloud Live said March 4 investors had applied to sell back 398.71 million yuan ($64 million). The company had only 10.39 million yuan in a special account for the repayment as of Tuesday, GF Securities said.’
‘Cloud Live reiterated earlier this month it saw “big uncertainties” over the possible note repayments, after saying the same thing in February. GF Securities said in its statement Tuesday that Cloud Live is “actively promoting” asset sales and account receivable retrievals to help ease its capital shortage.’
‘The yield on Cloud Live’s 6.78 percent 2017 bonds has jumped to 19.15 percent from 9.7 percent on Dec. 31, exchange data show.’
‘Phoenix and Arizona continue to struggle with negative equity for homeowners, each ranking in the top three of the worst in the nation, according to a study out today by CoreLogic.’
‘Arizona ranked third as a state during the fourth quarter of 2014 with negative equity — defined as homeowners who have a mortgage that is worth more than their home — with 18.7 percent of homeowners owing more than they can sell. Only Florida at 23.2 percent and Nevada at 24.2 percent were higher.’
‘The Phoenix metro ranked second on the list of the worst negative equity markets, with 18.8 percent of homes in the region being underwater. Only the Tampa-St. Petersburg area in Florida was worse at 24.8 percent.’
‘Although 1.2 million borrowers saw their homes move into positive equity in 2014, the total number of mortgaged residential properties with negative equity totaled 5.4 million, or 10.8 percent of all mortgaged properties by the end of the year, according to CoreLogic.’
‘This compares to 5.2 million homes, or 10.4 percent, that were reported with negative equity in Q3 2014, a quarter-over-quarter increase of 3.3 percent.’
‘In Stockton-Lodi, 16.3 percent, or 20,554, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 20.6 percent, or 25,788 properties, in Q4 2013 and 15.9 percent, or 20,084 properties, in Q3 2014. An additional 2.5 percent, or 3,178 residential properties, were in near negative equity for Q4 2014.’
‘In Modesto, 15.9 percent, or 15,103, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 21.4 percent, or 20,435 properties, in Q4 2013 and 16.4 percent, or 15,608 properties, in Q3 2014. An additional 2.5 percent, or 2,409 residential properties, were in near negative equity for Q4 2014.’
‘In metropolitan Sacramento, which includes the city of Roseville and the unincorporated county area known as Arden-Arcade, 11.3 percent, or 54,356, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 15.1 percent, or 72,372 properties, in Q4 2013 and 11.3 percent, or 53,987 properties, in Q3 2014. An additional 2.5 percent, or 12,158 residential properties, were in near negative equity for Q4 2014.’
‘In Bakersfield, 18.9 percent, or 28,357, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 24.3 percent, or 36,019 properties, in Q4 2013 and 19.5 percent, or 29,297 properties, in Q3 2014. An additional 2.9 percent, or 4,389 residential properties, were in near negative equity for Q4 2014.’
‘In Visalia-Porterville, 17.4 percent, or 12,032, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 20.2 percent, or 13,912 properties, in Q4 2013 and 16.7 percent, or 11,504 properties, in Q3 2014. An additional 3.4 percent, or 2,338 residential properties, were in near negative equity for Q4 2014.’
‘In Fresno, 19.2 percent, or 28,942, of all residential properties with a mortgage were in negative equity as of Q4 2014, compared to 23.8 percent, or 35,836 properties, in Q4 2013 and 19.2 percent, or 29,083 properties, in Q3 2014. An additional 3.1 percent, or 4,640 residential properties, were in near negative equity for Q4 2014.’
“The share of home owners that had negative equity increased slightly in the fourth quarter of 2014, reflecting the typical weakness in home values during the final quarter of the year,” says Frank Nothaft, chief economist for CoreLogic. “Our CoreLogic HPI dipped 0.7 percent from September to December, and the percent of owners ‘underwater’ increased to 10.8 percent.”
Metro Phoenix’s housing market didn’t start the year with a bang. January was a slow or even dismal month for home sales and prices.
The Valley’s median home sales price fell to $208,000 in January from $215,000 in December, according to a report released this morning from the W. P. Carey School of Business at Arizona State University. Home sales dropped 26 percent.
Don’t know how to post linkee, but from Azcentral business section page.
‘Trying to sell a home is a pain. Believe me, I know. Last year, my wife and I tried to sell our West Valley home. But thanks to low comps, lowball offers and general malaise in the market, we couldn’t sell the property.’
‘Phoenix Business Journal tech writer Hayley Ringle reported on a startup that seeks to take the hassle out of selling your home. Opendoor promises to take your home off your hands in as little as three days. All you have to do is submit some information about the property, and a few hours later Opendoor emails you an offer.’
‘Just out of curiosity, I gave it a try. And I was pleasantly surprised by the offer. But it still wasn’t good enough for me to sell. With residential real estate, the devil is in the details — and the fees.’
‘After Opendoor took its cut, I would have been about $7,000 short on what I owe on my mortgage. Oh, and let’s not forget about closing costs, which I would have had to come up with.’
Las Vegas foreclosure filings on the rise, report finds
By Eli Segall - Wednesday, March 18, 2015
My 85yo next door neighbor planted the for sale flag yesterday. Can’t wait to see if she’s going for the $300K she said she wanted.
Yes seeing some mixed signals in the Vegas area. Some places are dropping but others going up. Of course that does not mean selling at those prices but they are being asked for.
So I take it that’s why inventory is so low in Phoenix? You removed 20% of the houses because they are underwater and another 25% that are investor owned, and barely 1 of 2 homes can ever be put into circulation.
Doesn’t stop the local Realtors from screaming recovery.
“San Bernardino Has Defaulted On $10 Million In Bond Payments”
http://www.cnbc.com/id/102514993
Given the fact that CA is the most impoverished state in the country, this isn’t a surprise.
‘The city continues to pay its monthly dues to Calpers in full, but has paid nothing to its bondholders for nearly three years, according to the interest payment schedule on roughly $50 million of pension obligation bonds issued by San Bernardino in 2005.’
‘The non-payment of the bond debt and the city’s lack of interest in talks with its pension bondholders just weeks before it must produce a bankruptcy exit plan should serve as a wake-up call to Wall Street issuers of debt to struggling cities, according to Michael Sweet, a bankruptcy attorney with Fox Rothschild in San Francisco.’
‘San Bernardino’s bankruptcy is being closely watched by the $3.6 trillion U.S. municipal bond market.’
‘In the recent municipal bankruptcies of Detroit—the biggest-ever U.S. municipal bankruptcy—and Stockton, California, bondholders were forced to accept big cuts to their debt while pensioners emerged relatively unscathed.’
“Bondholders should be realizing that in Chapter 9 cases those who will invariably get better treatment by the cities are former and current employers, who are part of the community, and not the faceless bankers holding commercial paper,” Sweet said.’
“but has paid nothing to its bondholders for nearly three years”
Not to mention the millions of suckers who bought a house in CA in the last 5 years who haven’t made a single payment in years.
the millions of suckers who bought a house in CA in the last 5 years
Houses are up in CA the past 3 years.
Remember Lola…. You can ask $500 for your diminished credibility but where is the buyer at that price?
But houses are up in CA the past 3 years. How were they suckers?
Because it was/is a suckers rally.
Prices are falling Lola.
Not yet but one day you’ll get it right HAHA.
And demand is collapsing Lola.
Pension obligation bonds? Uh oh. Is this a fight between a drug dealer and a junkie?
I’d worry if I had a pension from Ca. All those illegals ain’t gonna make you solvent.
I’d worry if I was leaning on any pension, anywhere, whether you’re drawing on it now or plan to in the future. \
I’d worry if I was leaning on any pension,
You worry about everything. It’s all you do. Oh and snarl. lol I’ll bet you’re a blast at the dinner table.
You’re projecting yourself again Lola.
I don’t think I’ve ever posted much about worrying about my money or life.
But you HA, you seem to live you life bitter and afraid-of-your-own-shadow.
This is one of those times when I agree with something he’s written. Pension funds are counting on rates of return that already are impossible without leverage and extreme risk-taking.
I have no idea when this is all going to blow up, but it will, and the innocent will suffer along with, or more likely instead of, the guilty. I plan to work for as long as I physically and mentally am able to do so. I don’t think the lengthy luxury retirements of the late 20th century in America will be an option, pension or not.
“…The city continues to pay its monthly dues to Calpers in full, but has paid nothing to its bondholders for nearly three years…”
Priorities, priorities…
CA is the most impoverished state in the country
California Is America’s Richest State | LA Weekly
http://www.laweekly.com/news/california-is-americas-richest-state-5136457
‘San Francisco’s foreclosure rate is very low relative to the rest of the nation, and has dropped considerably since the height of the mortgage default crisis. But foreclosure rates in the city’s southern and southeastern neighborhoods remain higher than the citywide average, according to a report issued by the San Francisco Controller’s Office in February.’
‘On Tuesday, the Board of Supervisors unanimously approved a resolution in support of an innovative strategy for stabilizing neighborhoods where homeowners face a higher risk of foreclosure.’
‘Typically, pools of delinquent mortgages are sold off to private equity firms and hedge funds. The resolution calls for joining with other cities to encourage owners of at-risk mortgages, such as Fannie Mae and Freddie Mac, to sell off the distressed mortgages to nonprofits and community development financial institutions (CDFIs) instead.’
‘The report found that 3,002 loans in San Francisco are currently underwater or nearly underwater, with almost half concentrated in Ingleside-Excelsior/Crocker-Amazon, Bayview-Hunters Point and Visitacion Valley/Sunnydale.’
“The 94124 and 94134 Zip codes, which represent Bayview-Hunters Point and Visitacion Valley/Sunnydale, make up the highest proportion of the at-risk borrowers, each with 17 percent of the at-risk population,” the report noted.’
Hunter’s Point.
I’m surprised they aren’t paying people to live there.
http://www.vice.com/read/hunters-point-is-san-franciscos-radioactive-basement
‘After sustained push for new multifamily projects in the West over the last 12 months, the Western firms Architecture Billing Index from the American Institute of Architects showed a steep drop in February.’
‘The ABI is a nine- to 12-month leading indicator for construction starts, and the West’s 46.7 index in February portends a serious drop in construction opportunities late this year. It dropped 2.6 points from a slumping 49.3 in January. The region includes Arizona.’
‘Residential design orders are down for the ninth month in a row. After peaking last June at 58.5, residential billings slumped nearly 10 points to 48.9 in February. Mixed practice billings slid even more, dropping 12.2 points from 57.5 in July 2014 to 45.3 last month.’
‘The streets of this northwestern Chinese city were once packed with Ferraris, BMWs and other luxury cars. Now, they are all gone. Average housing prices here have dropped by a quarter in two years. Driving across the city’s downtown, you see vacant buildings and empty restaurants.’
“The business of coal companies here turned south since late 2012,” Yang Cheng, a local driver, explained while passing by a closed hotel. “Yulin is a coal boomtown,” Yang went on. “Once coal businesses are not in good shape, the whole economy has been affected.”
‘Yang said that some companies in Yulin have already gone bankrupt and workers have been laid off. “People from nearby areas used to come here for jobs; now, many return home. It feels the city has fewer and fewer people,” Yang said.’
‘As the companies’ sales shrink, so does their ability to pay workers. Earlier this month, when representatives from all over China met in Beijing for the annual Congress conference, a delegate told reporters that about 23,000 workers at his company already had not been paid for two months.’
‘And the impact of China’s decline in coal use may go beyond the border. In 2014, Chinese coal imports dropped by 10.9 percent year over year. Analysts called this bad news for global coal miners, who had hoped Chinese coal imports would save them from collapsing markets in the West.’
‘As bad as it may sound now, the pain could get even worse. China plans to limit its annual coal consumption to 4.2 billion tons at the end of the decade, but its current production capacity has already surpassed 4 billion tons, with an additional 1 billion tons in the pipeline.’
If you look at China’s reserves vs. its production you will see they are rapidly running out of coal, I cannot see how they could possibly produce 5 billion tons or coal, perhaps the reporter misunderstood and the one billion tons is replacement for other mines running out of coal:
http://www.mining-technology.com/features/feature-the-worlds-biggest-coal-reserves-by-country/
That explains the collapse of coal prices perfectly.
“Flash in the pan”
‘Mainland Chinese account for over 80% of people awaiting visas that bestow US citizenship in return for investment, showed findings by real estate services firm Savills Studley, who said the trend is pushing up demand for commercial property.’
‘A rising number of Chinese are applying for EB-5 visas, where non-citizens put at least $500,000 into a business in the United States, as they seek to park their wealth offshore - in part to escape the impact of an anti-corruption drive at home.’
‘Australia has a similar scheme for those investing over $4 million, with 90% of applicants from China. Australian property has long been popular among Chinese but investment has accelerated since the start of the anti-graft campaign last year. In the US, Savills Studley said over 6,400 people are on the waiting list for an EB-5 visa, and that it expects this year’s allotment for Chinese applicants to be reached by September, compared with late August last year.’
‘The EB-5 program is also driving up prices of residential property, real estate agents said. Many Chinese immigrants with EB-5 visas make a living collecting rent in less expensive states such as Texas and North Caroline, they said.’
“Some of them don’t speak English and cannot find a job, so they buy four or five houses to generate rental income here, where housing prices are cheaper but can still give them a 6 to 7% yield,” said Houston-based agent Gladys Wang. “This is the third wave of immigrants; they’re the upper-middle class and no longer the most wealthy ones from China.”
‘Australia has a similar scheme for those investing over $4 million, with 90% of applicants from China.
Brazil’s missing the boat on that I think. Why? It’s too hard to set up a business here and the taxes required will put any business out-of-business, so every business has two sets of books.
This is what I mean that Brazil needs some sort of Reaganomic reforms now.
USA went way too far Supply-Side and Brazil too little Supply-Side.
I am not an ideologue. I am a pragmatist.
“I am not an ideologue. I am a
pragmatistsick ticket.”Livin’ the life. In the tropics…by the beach…with no rent or mortgage. And in your shrinking brain HA….rent free.
No get back to work.
Squalor and alleys isn’t living. Snap out of it Lola.
Squalor and alleys isn’t living.
I throw Brazilian nickles in those alleys trying to hit the homeless in the face with them.
Lazy bums should have gone to college.
(I’m like a Republican in Brazil.)
Yeah. You’re definitely projecting yourself.
‘People on the west coast are used to getting warnings about the Big One. But the earthquake imagined in a new report prepared for B.C.’s Financial Institutions Commission is economic - not seismic: a housing market crash leading to mass mortgage default.’
‘The report details models and methods for analyzing the probability of default on residential mortgages. The report comes on the heels of a warning from the International Monetary Fund about the possibility of a “hard landing” for a Canadian housing market described as “overvalued.”
‘The IMF’s commentary notes house prices have risen more than 60 per cent nationwide since 2000, with “Vancouver ranking second in terms of the lowest affordability globally after Hong Kong.”
‘Helmut Pastrick, the chief economist for Central 1 Credit Union, the umbrella organization for the credit union system in BC and Ontario. says the earthquake analogy is apt.’
“There could be an economic earthquake,” Pastrick says. “No doubt there will be another economic recession. There will be a time when housing prices decline. That’s almost certain. This current phase we’re in will not last indefinitely.”
‘The IMF noted that household debt levels have increased to historical highs over the past decade, at more than 150 per cent of disposable income.’
‘Southern California’s consecutive streak of year-over-year home price increases zeroed in on three years during February while the home sales slide moderated. Last month, sales of new and previously owned houses and condominiums in the six-county region fell 3 percent from a year earlier to 13,650 properties, according to CoreLogic DataQuick.’
‘New home sales declined 8 percent to 1,025, and sales of previously owned houses also dropped 8 percent to 9,599, the company said. Sales of previously owned condominiums fell 5 percent to 3,027 units. In Los Angeles County, sales of all types of homes fell an annual 2.5 percent to 4,479 properties. Sales of previously owned houses fell 2 percent to 3,103 and condominium resales dipped 1 percent to 1,185 units.’
‘But new home sales dropped 19 percent to 191 properties.’
‘In San Bernardino County, sales of all types of homes declined 11.5 percent to 1,631 properties. Sales of previously owned houses fell 12 percent to 1,396 and condominium resales fell 27 percent to 93 units. New home sales also fell 27 percent to 159 properties.’
‘Price trumped all in the real estate market across Southern California in February, a recurring dynamic that had a hand in keeping a clamp on sales. The DataQuick report described February as the worst month for sales in all of Southern California in seven years.’
‘February has traditionally been characterized by year-over-year gains across the Southern California market. This year, sales were 21.6 percent below the February average of 17,420.’
‘Home sales in Southern California have fallen on a year-over-year basis over 15 of the past 17 months, Le-Page said.’
‘There are some good signs on the inventory front. On Monday, the California Assn. of Realtors reported 5.8 months worth of homes unsold on the market in Southern California, just shy of the six months that economists consider “normal” supply. In Riverside County, there are seven months of inventory available.’
‘I have no problem competing for business and have encouraged buyers and sellers to meet with more than one agent before making a decision but I get angry when I hear about agents using unethical tactics to get business.’
‘In the past this has been mostly a grey area of allowing a potential client to believe they can sell their home for a higher price than what a comparative analysis says is the market value. If one agent claims they can sell your house of $30,000 more than another we would all be inclined to go with the higher price. For some agents this is a way to get the listing, ride the price down and eventually make a sale. What the client doesn’t know is they will generally sell for a lower dollar amount than they would have if the initial asking price was closer to market value.’
‘Recently we have run into an agent who is taking unethical tactics to get business to a new level. When there is a chance of getting a listing, this agent claims to have a cash buyer for the homeowner’s house. Seller’s love cash offers, it removes the risk of the buyer having issues getting a mortgage and can close faster. With this agent, the cash buyer never seems to fully materialize or as reported to us makes a low verbal offer and says he wants to see what price other buyers will make before making a written offer. “I am sorry, Mr. and Mrs. Seller, my cash buyer has told me he is only willing to offer a low price but says if we can show other offers he will match them with cash. Let’s get it listed and I know I can get you a higher price he will match.”
‘You can finish the story, the house eventually sells but the cash buyer who the agent said wants your house never shows up. Most likely the agent does a good job with the listing and the seller’s walk away feeling good about their sale but is this the kind of person you want representing you? If they will lie to get a listing, what will they do to complete a sale?’
My God these realtors are hopelessly unequipped to advise anyone or evaluate the price of anything. Even if they were to acquire some technical training, their day to day actions and environment is completely absent of any ethical actions and good will.
Until this problem is solved, buying and owning a house will remain a radioactive, toxic exploit.
how much was your bar bill this week? Drinking on the house a lot I presume?
$hithousePoet… Never underestimate the power of falling prices.
Do u need a 20 spot for gas next week? living in your van still listening to way bitchen 80’s tunes?
Data Poet data…
Denver, CO Housing Inventory Skyrockets 92% As Demand Plummets To 20 Year Lows
http://www.movoto.com/denver-co/market-trends/
I’m in Long Beach Ca and there was a home in Bay Harbour that was listed for $1,280,000 and sold for $985,000. I guess the agent couldn’t talk some fool into the higher price.
The new agent trick is to List, Hold, Pending ,Sold.
Agents list so the listing is on the internet, immediately puts them on hold so they can’t be shown, holds open houses until they double end them.
‘More than 70 percent of China’s local government debts are in the form of investment which have good prospect of yielding returns, Chinese Premier Li Keqiang said on Sunday.’
‘Li made the remarks at a press conference after the conclusion of the annual session of the National People’s Congress, China’s top legislature, in response to a question on financial risks in the world’s second largest economy.’
Good prospect of yielding return? So after all the years of building, they haven’t done anything but sit there? Those prospects don’t sound so good to me.
Comments from the Mortgage Broker News.ca article in Canada.
All form Realtors, I assume:
Pure fearmongering and clickbaiting. Not even a new position. Not happy with this kind of journalism from MBN…
Mr Dubious on 18/03/2015 4:50:10 PM
Alarmist headline. Yes, values have risen high (in some areas too high), but 40%-50% “correction” is alarmist to say “the market” will face this and paint the entire country with this filthy brush.
TS on 18/03/2015 4:52:12 PM
Unfortunately the author has very little experience in Real Estate. He credits himself as being a financial expert. Perhaps he should stick to his own field instead of not truly understanding this one he is writing about. I had the displeasure of chatting with him and he is short on facts and long on BS
Tatiana Tisser on 18/03/2015 4:54:14 PM
Very shallow and misleading article
Paul Hudson on 18/03/2015 4:57:23 PM
Most people would not sell their homes if the market dropped by 40 or 50%, instead they would choose to stay put. It sounds like a great premise for a book for people who subscribe to conspiracy theories. I’m sure the author will garner a following from a handful of jaded people who don’t own real estate.
Proper staging goes a long way, as you can tell. Paging Mr. Banker, can I get a mortgage for this palace?
http://www.propertypanorama.com/instaview/snd/150011762
“Great opportunity in Bankers Hill! Fixer home is a blank slate for remodel. Zoned for up to 5 units if investor wants to develop property. Property has been in the same family for over 100 years. Originally built as the carriage house for beautifully restored historic home next door and probably rebuilt in 1910.”
Britain’s obsession with ownership has turned housing into a pyramid scheme
http://www.theguardian.com/commentisfree/2015/mar/19/britain-obsession-ownership-housing-pyramid-scheme
They call it “hutching up”, but the trend is nowhere near as cosy as the name makes it sound. Say you’re in your 20s or early 30s, living in London or some other property hotspot. You’re dating someone who isn’t Mr or Ms Right, exactly; but they’re not that bad. And together, if you pooled your resources, you could maybe afford to get on the property ladder – whereas if you broke up, then you might not make it.
Fifty years ago women struggled to buy property on their own because banks required a husband to guarantee the mortgage. Now it’s not sexism, but the seeming economic impossibility of buying on just one salary, that makes young women think twice about being single.
Enter a knight, then, in suspiciously shiny armour. Save up to £12,000 towards a house in one of George Osborne’s new help-to-buy Isas, launched in this week’s budget, and he will add £3,000 gratis (or £6,000 if two of you save). Free money! Who doesn’t want that? If I were 28 again, gloomily contemplating an eternity of creepy landlords who never fix the boiler, I’d probably grab that lifeline with both hands. But let’s be honest about who else this is a lifeline for: about who benefits from reheating a property market that had looked as if it were starting to cool a little faster than had been
Of course she keeps the flat when they divorce two years later.
Report Says “False Equity is on the Rise” in Housing Market
http://blogs.wsj.com/developments/2015/03/20/report-says-false-equity-is-on-the-rise-in-housing-market/
Home prices in some U.S. markets are rising much faster than rental incomes or what it would cost to build new houses in those markets, according to a new study by a real estate valuation firm.
The growing gap between sales prices, on one hand, and rents and so-called “replacement cost” on the other is evidence of markets that are over-heating, said the report by Jacksonville, Fla.-based Smithfield & Wainwright. “The build-up of false equity is on the rise again,” the report states.
Using inflation-adjusted data, the firm concluded that recent sales prices of single-family homes in 13 states and the District of Columbia are 10% more on average than what the homes would have been appraised for using two other methods.
One of those appraisal methods is simply what it would cost to replace the homes. The other method values homes by applying a multiplier to what those houses would yield in rental income.
Since home prices bottomed out in the second quarter of 2011, the firm says, sales prices increased 13.2% on average through the third quarter of last year nationwide. Meanwhile, rent and reconstruction costs have increased by only 1.9% and 3.3% on average, respectively, the report said.
It appears somebody is leading a bunch of lemmings to financial ruin again?
Oh dear…
Pasadena, CA Prices Fall; Inventory Explodes 125%
http://www.movoto.com/pasadena-ca/market-trends/
Inventory Explodes 125%
And it’s not even Spring. lol
Get your stories straight Lola.
Get your stories straight Lola.
You love Lola don’t you?