A Riskless, Highly Profitable Investment
It’s Friday desk clearing time for this blogger. “Sonoma County home sales remain at their lowest level in seven years, but last month, 613 properties entered the market as new listings, the most for March in five years. Bill Facendini, president and broker for Terra Firma Global Partners in Santa Rosa, said the new listings in March didn’t have much effect on home values in three of the county’s hotter markets: Healdsburg, Sebastopol and west Petaluma. ‘The prices they are achieving are way above where they should be,’ he said.”
“Stephen Liebling, manager of the Coldwell Banker office in Sebastopol, noted that typical tract homes in Sebastopol are selling for $750,000. ‘It’s really crazy,’ he said.”
“Susan Coyle says her Real Estate Two agents can feel it, whether at her original office in Shelton or in Fairfield. Buyers are out in force and sellers appear ready to make a deal, if not quite at the prices they would like. ‘A lot of listings have, all of a sudden, started to come onto the market,’ said Coyle.”
“Across Fairfield County, the average price for a single-family home climbed just 0.6 percent, to $643,000, while the price of the median home sold was off slightly to $394,000. ‘The hardest thing is to explain to the seller that prices have not increased,’ said Coyle. ‘(Homes) are coming on the market, they’re selling; but … the prices have not gone up.’”
“The specter of plunging oil prices hung over Baton Rouge-area real estate market discussions, with predictions that it could lead to a glut of new apartments. In 2015 alone, 1,666 apartment units are expected to be completed. The vacancy rate was 5.5 percent during fall 2014, compared to the national average of 4 percent. Rents have gone up 6 percent since 2010. ‘We could end up with a glut of units,’ said Wesley Moore, with Cook, Moore & Associates. Moore said nearly 6,000 new apartment units are planned in the Capital Region by the end of 2016.”
“Brokers say condo rental rates in Brickell and downtown are largely the same as six months ago and expect they will remain so or even trend down a bit as new units come on line. Jonathan Garcia, broker for ONE Sotheby’s International Realty said the condo market in Miami is strongly linked to foreign demand, with some 80% of the units purchased by foreign investors. He said changes in the currency exchange rate of countries like Brazil, where the currency has dropped 30% since October, will affect Miami.”
“In the next 2½ years, Mr. Garcia said, 40,000 new units will be coming online in South Florida, 20,000 of which will all be in the downtown market at the same time. With so many new units hitting the market at once, said Duff Rubin, senior VP of the Southeast region for Coldwell Banker Residential Brokerage, renters will have that many more choices so prices will have to be more reasonable. ‘Owners saw unrealistic appreciation, which is no longer sustainable,’ he said. ‘Supply has caught up with demand.’”
“Calgary’s resale housing market saw the country’s steepest year-over-year sales decline among major cities last month, says the Canadian Real Estate Association. Meanwhile, property listings continue to rise. More than 5,800 Calgary properties were for sale on MLS listings this week compared to about 3,600 a year ago. Gary MacLean, a realtor with RE/MAX Real Estate Central in Calgary, said the median and average sale prices of single-family homes and condos in Calgary have remained depressed since peaking in March 2014.”
“‘This occurred long before oil prices crashed,’ he said. ‘The thing that is concerning is we are in our peak listing period of April and May and more and more homes will be coming to market in an already overcrowded market place. Sellers must price their homes competitively. If they are the least bit overpriced, they will just sit there.’”
“Before the crash, investors piled into one large apartment block named after Hanover Square in the West End of London. The Dubai development is 15 minutes from a golf course and the sea and half an hour from the busiest international airport in the world. Speculators made a fast buck by selling off-plan properties for a large profit within weeks of their initial investment - with no intention of ever living there. In 2007 investors put down tens of thousands of dollars but have so far received nothing. Linda Mahoney, one of Dubai’s first Western estate agents, described it as a game of musical chairs. ‘It went on and on and on and there was always another place to sit… In June 2008 the music stopped and the chair wasn’t there.’”
“A surge in house prices and sales since 2013 suggests confidence is returning to Dubai’s real estate sector after its disastrous past. Many in the industry do not rule out another bubble forming. Sunil Jaiswal organised the first international property show dedicated to Dubai. He told me that the question he gets asked most in any show is whether the market will crash. ‘Right now the market is quite stable in Dubai. We haven’t seen excessive growth… Will the market crash? Of course it will. Maybe it’s three months away. I don’t know,’ Mr Jaiswal said.”
“Australia will have a housing surplus by 2017, according to one of those who predicted the current surge in housing activity, Goldman Sachs head of macro-research in Australia, Tim Toohey. Price falls are possible. The managing director of property and building forecasters BIS Shrapnel, Robert Mellor, says that in markets with significant excess supply, prices could fall 5 to 10 per cent. It will have a dramatic effect on housing demand, with Goldman Sachs revising an estimated shortage of 140,000 homes in 2017 into a 75,000 surplus.”
“BIS Shrapnel is no longer pointing to undersupply in many metropolitan markets. Brisbane is heading towards balance, Melbourne has a massive inner-city apartment supply pipeline, South Australia is already oversupplied and Perth faces a ‘massive’ population correction. ‘The primary determinant of net migration to Australia is not the number of illegal immigrants or the number of tourist arrivals, it is the relative strength of onshore versus offshore labour markets,’ writes Toohey. ‘Would you move to a country where you can’t get a job?’”
“Land sales revenue in 40 mainland cities plunged 57 per cent last week, with industry experts saying developers could have chosen to stay out of bidding wars at auctions due to a softening market. China Index Academy said there were 4.17 million square metres of land released for sale last week, 70,000 square metres less than the previous week. Twenty-six of the 40 cities it monitored sold no land last week. ‘Big developers have already built up relatively large land banks that are sufficient for development for next several years,’ said Thomas Lam, the head of valuation and consultancy at Knight Frank. ‘In the absence of fierce competition, land being sold for record high prices may not be repeated in coming sales.’”
“‘For some of these governments, income stemming from land sales could be as high as 60 per cent [of the total],’ Lam said. China Index Academy said land sales revenue generated from the sale of residential sites amounted to 3.6 billion yuan last week, down 69.5 per cent from 11.8 billion yuan the previous week.”
“Former Reserve Bank Governor Don Brash says the Government won’t be looking to bring down house prices too quickly because it would see them voted out of office. His comments come as the bank urges the Government to consider a capital gains tax on property to ease housing pressures, particularly in Auckland where the average sale price is now above $750,000 – almost nine times the average annual household income.”
“Dr Brash says ‘bubble’ is an emotive term, but house prices in Auckland have become out of proportion with incomes in recent years. ‘Once this momentum starts, people assume that it will always go on. House prices haven’t fallen for 45 years in New Zealand, people assume they never will fall and therefore this is a riskless, highly profitable investment.’”
“If the Auckland market is a bubble and it bursts, it won’t only be investors that get burned. ‘The one sure thing is if house prices do return to their normal relationship with incomes, the Government’s gone because a whole lot of property owners will be badly hurt by that process. But who knows? We don’t know how it will end, but we do know that we can’t keep on going as we are now.’”
“The regulator of Fannie Mae and Freddie Mac will direct the housing-finance firms to slightly cut mortgage fees for riskier borrowers. To cover the cost of the reductions, Fannie and Freddie will raise fees on some other borrowers, such as those borrowing for an investment property and some of those who have safer borrowing characteristics, with the intent of the changes to be revenue-neutral for Fannie and Freddie, the people said.”
“Separately, the Federal Housing Administration–which insures loans to borrowers who make down payments of as little as 3.5%–in January said it would cut fees by 0.5 percentage point for most borrowers.”
“The FHFA’s latest decision to lower fees for some borrowers is ‘just starting to look like part of a larger trend, that’s my real concern. What’s next?’ said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute. ‘There was not some single moment or event that got us into the last mess, but the accumulation of lots of errors.’”
‘The 3,454 new residences built last year are 48 percent more than in 2013 and 73 percent higher than the city’s 10-year average of 1,992 new units, according to San Francisco’s 2014 Housing Inventory, which was presented to the City Planning Commission Thursday.’
‘The inventory, which has been done annually for the past 45 years, is designed “to give a snapshot of how much housing construction has been done and provide a window into the pipeline” of future development, said Gil Kelley, director of citywide planning.’
‘The city’s residential construction boom shows no signs of abating. Last year, 269 projects for better than 8,000 units were filed with the Planning Department, 66 percent more than the year before and more than double the five-year average of 3,690 units.’
‘The construction numbers are as high as they’ve been in the past 60 years, “except when we were bulldozing neighborhoods and building skyscrapers,” in the days of urban renewal, said Peter Cohen, executive director of the city’s Council of Community Housing Organizations.’
‘Rising home prices and stagnant wages are fueling concerns about a looming downturn in the Fort Collins real estate market.’
“We’re not in another housing bubble,” said Lawrence Yun, the National Association of Realtors’ chief economist.’
‘Matthew Gardner remains comfortable with these steeply rising housing prices. The long-time Seattle economist — who does a lot of work in the housing market — thinks the dramatic price increases will continue this year and possibly for the next few years because inventory remains tight.’
‘But he notes that the really big jumps are mainly in “close-in Seattle” — particularly places like Queen Anne and Capitol Hill. Across the metropolitan area prices haven’t and won’t climb so steeply. Those locations are in fact still affordable, he said.’
‘Well, these close-in price hikes are starting to get into OMG territory so Crib Notes asked Gardner, who is principal of Gardner Economics, and some other experts to answer this question: When does this stop, and how?’
‘These increases can’t keep going. It’s not natural, not sustainable. A huge question on a lot of folks’ minds is: Will this end with a “soft landing” or something more like a slam down? You know, like something bursting?’
‘Crib Notes wrote a year ago: People, it’s a boom, not a bubble, because there isn’t the crazy-bad lending, appraising and non-regulation now that stoked THAT bubble.’
‘But dang, does “It’s just a boom” still hold true? How about that recently headline saying Seattle’s median home price rose 18.9 percent from March to March, to a hefty $535,000. Really, 18.9 percent!’
‘Gardner made a key point: The crazy lending that fueled the last big bubble and burst is not happening this time. “There isn’t any subprime now,” he said. The science of it starts with income levels. If incomes climb enough to support the higher monthly house payments created by these big fat house prices, then they are sustainable. If prices rise too high, then the market corrects.’
‘Gardner reports that the Seattle metro area reached a nice 4.8 percent unemployment level by the end of 2014. He forecasts it will drop to a mere 3.9 percent by the end of this year. “We forecast close to 48,000 new jobs in the metro area this year,” he said. “Seattle remains one of the best locations relative to potential growth in 2015. We still have some potential for prices to move higher without a bubble forming.”
‘Pat Grimm, owner of Windermere Capitol Hill and a former board chair of Northwest Multiple Listing Service, has ridden residential real estate cycles for three decades. He said he thinks current conditions most resemble 1990.’
‘Prices were rising. Speculation had set in. The bursting of the savings-and-loan bubble was over. Multiple offers on homes had become a norm, like now.’
‘This area and the country went into a recession by mid-1991. But a mild, short one compared to the recent Great Recession. No billboards went up saying “Last one leaving turn out the lights.” “Prices dropped about 10 percent,” Grimm recollects. “The bottom did fall out.”
‘That doesn’t sound like “soft landing.” But it could be worse. Folks who had seen their value rise from, say, $187,000 to $225,000 by late 1990 “had to dial it back” to $200,000,” Grimm said. The natural feeling could be, “Whoa! I just lost $25k, OMG!” But folks had to catch on that no, they were up from $187k to $200k. That’s still $13k.’
“The people now who are paying 20 percent over the asking price (when that happens) are saying they’re willing to give up future appreciation to get something now,” Grimm said.’
‘We have role models for this: San Francisco, San Jose, New York, LA, Chicago. They stratified long before this. So through Gardner’s eyes the current conditions — “tight inventory,” “seller’s market,” “multiple-offer situations” — which we’ve had now for three years straight seem like they’ll be with us for quite a while. Interest rates are “the first force.” But the worst force would come from an unexpected cataclysm. And, well, those don’t get predicted. They’re sort of “the expected unexpected.”
“All markets reach their equilibrium,” Grimm said. “This one will too. There’s a tipping point.”
“The science of it starts with income levels.”
The science of it.
I like it. Makes it all seem … seem rational. Seem scientific.
Like physics. Derive a few equations, plug in a few variables, and - presto! - a VALUE has been created.
And if it’s science - especially if the science is settled - then why should any of this ever be questioned?
Especially if it is gibberish.
You can’t just look at median income. I live at ground zero near Microsoft HQ. These dual-income techies can buy a lot of house, especially when they come from another country with their parents in tow and combine all of their assets to buy.
Plus, the offshore investors parking their money in real estate here is not just a fable. I know two people who sold to these investors, sight unseen. Realtor comes (owners are out of country) and takes hundreds of pictures, and an all-cash no-contingencies offer is received later in the same day.
It truly is crazy - far moreso than it was back in 2006-07. Yes, we had more zero-down and liar loans back then, but far less of the offshsore investers than we do now and tech is really booming with more companies coming here to leech employees away from existing ones.
The globe is awash in central banker liquidity. It’s running into all assets. Bankers are blowing massive bubbles everywhere. It’s one big global tulip mania.
I get the sense that people like these socialize, and work, in a narrow circle of people with identical perspectives and high incomes. The 2012 median household income for Seattle was $65,000, so the median house is now roughly eight times the median income.
This is from Gardner’s website:
“Mr. Gardner chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; sits on the Urban Land Institutes Technical Assistance Panel; is an Advisory Board Member for the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate forecasting; and is Chairman & Editor of the Central Puget Sound Real Estate Research Report, published by the University of Washington. He is also the retained economist for the Master Builders Association and Windermere Real Estate Company.”
That’s one of the fundamental problems I’ve been stating here for years. It’s a den of self serving thieves.
The price increases are only in pockets and close to Seattle. Go farther out and it’s a totally different story. You can buy a rambler on 5 acres for under $200k within 50 miles.
‘Rising home prices and stagnant wages are fueling concerns about a looming downturn in the Fort Collins real estate market.’
Fort Collins is trying to position itself as “Boulder Jr.”, but there are some major differences:
1) It’s far from Denver. Boulder is a suburb, Fort Collins is an exurb.
2) It’s job market is much, much weaker. Wages are much lower than in Denver.
But it does a great job of appearing far more prosperous than it really is.
“The regulator of Fannie Mae and Freddie Mac will direct the housing-finance firms to slightly cut mortgage fees for riskier borrowers. To cover the cost of the reductions, Fannie and Freddie will raise fees on some other borrowers, such as those borrowing for an investment property and some of those who have safer borrowing characteristics, with the intent of the changes to be revenue-neutral for Fannie and Freddie, the people said.”
Have ‘the people’ over there ever heard of adverse selection or moral hazard? Something inside says that ‘revenue neutral’ assumption is destined to result in external losses to third parties.
Brilliant plan to deploy more risk.
‘A just released research paper indicates that loan modification programs that were supposed to help homeowners actually boosted the number of people deliberately defaulting on their mortgages.’
‘Entitled “Strategic Defaults Induced by Loan Modifications,” the report lays claim that modification programs like HAMP (Home Affordable Modification Program) actually induced some to be strategic (purposeful) defaulters.’
If they had read your blog, the research was already done for them.
Let me get this straight: fees are going to be LOWERED for borrowers more likely to default? What kind of regulatory judgment is that?
Yeah. I was going to snippet that one and repost it but it’s just too outlandish to wrap my mind around.
Because they know the responsible ones who don’t borrow money will pick up the tab?!?!!??!
Increased risk subsidies increase the level of risk in the system and the external cost of providing subsidies to the non-beneficiaries who pay for them, due to the aforementioned adverse selection effects.
What ‘revenue neutral’ means in this context is a mystery.
Building forecasters named Shrapnel and a central banker named Dr. Brash…you can’t make stuff like this up.
“‘For some of these governments, income stemming from land sales could be as high as 60 per cent [of the total],’ Lam said. China Index Academy said land sales revenue generated from the sale of residential sites amounted to 3.6 billion yuan last week, down 69.5 per cent from 11.8 billion yuan the previous week.”
I can’t wait for the convoluted explanation of how this is a healthy sign that China’s GDP growth will remain at 7% forevermore!
That’s how propaganda works. Even though you know it is not true, when you hear it over and over hundreds of times, it stays in your head anyway!
“Twenty-six of the 40 cities it monitored sold no land…”
How does zero equal 60% of something?
The grandsons of the victors in China’s civil war are still reaping the booty seventy years later by selling the people their own land back and lending them the money to do so at interest.
“How does zero equal 60% of something?”
0 is 60% of 0.
0 is 60% of 0.
Haha, I’ve got 80% of 0… more than you!
I’ve read that the Chinese government still owns all land. The people just work in sweatshop factories and borrow at interest to buy poorly-made fungible apartments that will be dust soon enough. The Chinese political economy is as deformed as its Western counterparts.
Why don’t you look at the percentage gain of land sales the week before and it will be clear how it is 7% growth. Apple sure is not seeing a collapse in China:
http://europe.chinadaily.com.cn/business/2015-04/17/content_20456776.htm
Ban,
Collapsing GDP growth in China is a positive.
Real estate is choppy in China but if you bought real estate as late as March 2014, you still are up 10% and property is already stabilizing, but you can still wait decades predicting China is imminently going to collapse and make your investment decisions based on that theory if you want to:
http://usa.chinadaily.com.cn/epaper/2015-04/17/content_20457822.htm
Houses depreciate Dan… even in China.
Even the Chinese are saying Propagandadan is wrong.
Baghdad Dan
Who was right on China in 2014 and is proving to be right on China in 2015, still waiting for the collapse or even hard landed predicted by 95% of this board.
It’s hard to ever be wrong if you continually adjust your predictions for changing circumstances.
“Baghdad Dan”
Baghdan.
Remember…… “location” is a realtor marketing technique to get the target to pay far more than a depreciating asset is worth.
Bothell, WA Sale Prices Crater 8% YoY
http://www.zillow.com/bothell-wa/home-values/
Los Angeles, CA List Prices Dive 12% YoY; Housing Correction Resumes
http://www.zillow.com/los-angeles-ca-90034/home-values/
“Across Fairfield County, the average price for a single-family home climbed just 0.6 percent, to $643,000, while the price of the median home sold was off slightly to $394,000.”
What’s the (supposed) connection between those two figures?
It may have seemed obvious to the real journalist who wrote it, but I’m scratching my head.
“Oil Prices Fall as Supply Glut Concerns Persist”
http://www.wsj.com/articles/oil-prices-fall-as-supply-glut-concerns-persist-1429265504
Remember…. Falling prices of all items is positively bullish, good for the economy and your wallets best friend.
“Local Farmers Worry About The Possibility Of Land Prices Falling”
http://www.wgem.com/story/28810931/2015/04/15/local-farmers-worry-about-the-possibility-of-land-prices-falling
Considering land prices have been falling for a while now, does this mean they ‘worry’ more or less?
More positive economic news!
“Nine Months of Falling Prices in Spain”
http://blogs.barrons.com/incomeinvesting/2015/04/14/nine-months-of-falling-prices-in-spain/
Can’t go wrong economic news. Very positive.
“Food Prices Fall As Supertstores Cut Costs And Worldwide Oil Prices Plummet”
http://www.mirror.co.uk/news/uk-news/food-prices-fall-superstores-cut-5502559
How long before quicken loans clowns are indicted?
‘The pint-size pad is sandwiched between two double fronted properties on a street in north London. Despite being only a little wider than a rugby player’s shoulders, the estate agency blurb described the property as being “well proportioned”.
‘At its widest, it stretches across 8ft 8in. The property, in Islington, was put on the market with Foxtons for £750,000 - almost double the price it sold for in 2001.’
‘Foxtons would not comment further, but the advert called it a “stylish two bedroom period house” which “offers beautifully bright living space throughout with characterful touches and a pretty rear garden”.
‘At this price, the buyer will have to pay £27,000 in stamp duty - the same as a second-hand narrow boat which is 50-foot long and 6-foot 10 wide. Henry Pryor, a buying agent, said: “This home must be one of the few in which you genuinely could not swing a cat.”
“Strangely the first floor master bedroom is wider than the ground floor room below and it has what boat owners would know as a ‘galley kitchen’. A lot of buyers would struggle with the idea of living in a home little bigger than a cricket net.”
According to the article, it sold.
wow..
Location, location, location…
Quickin loans is the new Money Store/ Countrywide, the behind the senses sex, drugs, harassment, is epic.
We learned recently these non-banks are making a ton of GSE-backed loans and are helping out borrowers who can’t document their income.
Quicken is the most egregious.
Orly? Got a link? I’d love to read more about this, even though it comes as no surprise.
‘This article is from Elliott Wave International’s brand-new investment report, “U.S. Investors Face a Giant, Historic Bubble.” It originally appeared in the March issue of The Elliott Wave Theorist, published March 13, 2015. For a limited-time, EWI has agreed to give our readers exclusive free access to the full report.’
‘An article published on March 3 — which means the interview took place on March 2, the day of the Nasdaq’s high so far — included a revealing quote. The reporter asked a gentleman who started a tech fund in late 1999 (a few months before tech stocked topped and crashed), “Will investors ever see a bubble like the dot-com boom again?” The answer: “It’s unlikely.”
‘This Q&A is more evidence that people forget their prior moods and rationalize present extremes into normality no matter what is happening.’
‘Will we see another bubble? We are in one now, by some measures the biggest one yet. If people do not consider this a bubble, then I guess it makes sense to say that those living will not see one again.’
‘Most articles focusing on the Nasdaq Composite index’s return to 5000 quote professionals saying that this time it’s different: The last time was “dreams,” but this time there are “real profits.’
‘Investors are often non-rational in the past but never now.’
‘It is true that the 2000 top in the tech sector capped a bigger mania than we have today. But today’s condition is still a mania. Last year saw just shy of $50 billion worth of venture capital invested in start-up businesses, most of which are technology companies. The only years of higher investment are 1999 and 2000, as the stock market reached its greatest overvaluation ever, by multiples.’
‘So, 2014 is “only” the third-bubbliest year in U.S. stock market history. Yet most bubble talk today excuses the situation. It generally comes in three types:
1 “There is no bubble” (that’s from the Fed and most economists);
2 “It’s early in a bubble with much more to go” (that’s from the average money manager); and …
3″It’s definitely a bubble, but it’s not as extreme as the last one, so stay invested” (that’s from most other people who’ve commented).’
http://www.elliottwave.com/club/1504-FFS-bubbles-in-nasdaq.aspx?code=100879&articleid=
‘Time and tide wait for no men, but the cautious public with eyes on the local property market is watching the situation intensely after nearly one third of the year gone.’
“The most profitable business this year is dealing in chairs,” jests lawyer Chris Tan, “because most people interested in the property market, is just sitting, watching and waiting for sure signs of direction.”
“The market is due in for a correction, said a property valuer who indicated that the local property scene is quiet at this point in time.’
‘The President of the Malaysian Institute of Estate Agents opined that the property market would be flat first half of this year gradually recovering by 2018 when the upswing in the cycle would rise.’
‘Some property investment clubs are still active, smelling out deals to be acquired at lower costs to hedge for future capital appreciation given the potential of the state and country with a young growing population.’
‘Kuala Lumpur is a very good example of speculative purchasing. The market in Klang Valley was supposed to only have a demand of 10,000 houses per year. Unknowingly, the demand spiked to 50,000 houses in a year, with all available units on sale purchased. This begs the question: where did the additional 40,000 units demand came from? ‘
‘OPINION: I keep getting asked by people, “What will the market do over the next 12 months?”
‘I assume they know that I don’t have a crystal ball. However, they also know that I have up-to-the-minute information relating to the Gladstone market, and that can provide some guidance to making an informed prediction as to what may occur.’
‘We currently have property market commentators making sweeping comments about the Australian housing market, and these opinions are skewed by the Sydney market that is absolutely flying in terms of competition for property. The south-east corner of our state is travelling along nicely (in general terms), yet in central Queensland there are caution signs everywhere.’
‘The feel locally at present is that business in general is very tough and the cost of business is affecting employment, which in turn affects confidence and the housing market. Have we conceivably transitioned from an over priced market to an under valued one in super fast time? Time will tell.’
From the comments:
“These folks must really believe we’re all moronic cretins. What else would the REIQ say? They created this social mess! The truth is, that in Gladstone at least, the real estate future is bleak and grim. The past few years of misery, greed and mayhem have been created by these very same people, who advocate greed and avarice where real estate is concerned. They should all be ashamed.”
“Prices can only drop so far. The cost to build a house will still keep the cost of existing homes up. Look at the cheapest land in Australia (around $5K). The blocks sell for $4-8K, but as soon as a (decent) house is on there the prices are up into the $100-150K zone. It still costs $150-200K minimum to build a typical 3 bed home. Housing prices will always be propped up due to the cost of labour. Its a simple fact. Unless building a new home halves in cost that is….”
“There are plenty of homes already for sale for far less than construction costs, in Gladstone and around Australia. The cost of building accommodation will mean nothing if there is little or no demand for accommodation.”
“I understand. But there is a limit, new houses will continue to be built, while the demand is still there.”
A letter to the editor:
‘On April 7th Channel 22 News aired a story claiming that vacant foreclosed homes caused the home property values of surrounding homes to decrease by 7%. In an interview, realtor Kevin Sears stated that the longer it takes for a foreclosure to happen, the more the surrounding community is negatively impacted. As a mother of two who has lived in a foreclosed home for the past 3 ½ years, I would like to argue that the true victims of the foreclosure crisis in Springfield are the families facing eviction and the communities that are destroyed from continuous displacement and increasing blight. The true villains in this crisis, rather than homeowners who may have missed mortgage payments, are the corporate banks that destroyed our economy and have never been held accountable for this destruction.’
‘Those of us who purchased homes during the housing bubble had no idea that the banks were intentionally selling grossly inflated and predatory mortgages with full knowledge that if these families faced a single difficulty- job loss, illness, a death…etc.- they would most likely fall into foreclosure. This is exactly what happened. As families were unable to pay predatory mortgages, the housing bubble burst, causing the economy to crash. Banks who had taken out insurance called “credit default swaps” profited off of mass foreclosures. The economic recession that ensued forced companies to restructure their businesses causing millions of lay-offs for the working class, which in turn triggered an explosion of foreclosures as recently unemployed homeowners were unable to make payments.’
‘Passing legislation sponsored by Representatives Swan and Gonzalez called “An Act To Prevent Unnecessary Vacancies” would ensure families could stay in their homes and pay rent and prevent abandoned properties that drag down property values. Second, banks should be required to sit with the owner of the property and a neutral third party to exhaust all avenues to avoid foreclosure before they are allowed to proceed. Massachusetts is the only state in New England that does not have mandatory mediation. Finally, banks should reduce the principle balance of a mortgage if it is higher than the current market value for the home (aka Principle Reduction).’
‘No family living in a foreclosed home wants a free ride. All we want is to stay in our homes, and are willing to pay whatever we are able to, but the banks refuse to work with us. Trust me, I do not want my home to be vacant and cause my community to suffer. We are not a 7% property value decrease. We are families, children, and senior citizens and we deserve the right to have a home.’
‘banks should reduce the principle balance of a mortgage if it is higher than the current market value for the home (aka Principle Reduction).’
‘No family living in a foreclosed home wants a free ride.’
I think that’s exactly what you want.
‘Playing a Sad Tune on Tiny Violin’
https://www.youtube.com/watch?v=Bxauqa7rJgI
My bartender should have to pay for my new liver.
People that lack principle want a principal reduction.
There is nothing wrong with wanting lower prices…… but you have to execute after prices fall.
‘Grilled Cheese, Inc. was a privately held California S corporation, incorporated on September 18, 2009. Immediately prior to the closing of the Share Exchange Transaction, David Danhi was the majority shareholder of Grilled Cheese. Grilled Cheese’s operations to date have consisted of sales of grilled cheese and food related items in their food trucks, business formation, strategic development, marketing, website development, negotiations with prospective licensees and franchisees and capital raising activities.’
‘The Grilled Cheese Truck is a gourmet food truck that sells various types of gourmet grilled cheese and other comfort foods principally in the Los Angeles, California area and in Phoenix, Arizona. Each of our trucks currently makes approximately ten stops per week (lunch and dinner five days a week) at prearranged locations. We are a hub and spoke operator, whereby all the food preparation occurs at our kitchens which support streamlined operations within the truck by limiting truck activity to assembly and grilling to focus on customer service, allowing the truck to achieve maximum revenues per hour and delivering melts, Tater Tots, soups and sides efficiently and consistently to its customers. Our business model implements the use of social media and advance location booking to secure high sales per stop.’
‘We are capitalizing on the burgeoning food truck industry through our established food service operations and social media strategy. Driving our growth, we have received national media visibility and as of the date of this report, have accumulated over 150,000 followers through a variety of social media platforms, including Facebook and Twitter. The gourmet food truck industry is in an early stage of development and is highly fragmented and is expected to grow year over year for the foreseeable future.’
‘We believe that the use of social media allows us to communicate with a large group of an interested customers and our fan base in real time, letting them know exactly where and when our food trucks will be located. We believe that providing potential customers with up-to-date information regarding the time and location of our trucks helps promote and drive additional customers to our trucks, therefore increasing our sales at each prospective location. We believe we have established brand presence in certain locations, such as Southern California and Phoenix, Arizona, but have sustained losses to date.’
Total revenue 3,650,021
Total cost of sales 3,368,146
Total operating expenses 7,716,461
Other Income (Expenses): (277,622 )
Net loss $ (7,712,208 )
How do you lose $7 million+ cooking sandwiches?
How do you lose $7 million+ cooking sandwiches?
How much are the CEO and his cronies paid?
14 million
LOL…You crack me up Ben….
“How do you lose $7 million+ cooking sandwiches?”
Easy, just get Wall St. involved.
So are the home prices going to continue to go up in
Sonoma County, California…regardless of lack of salaries in the
area? Sebastopol, CA 750K for basic house? Crazy and the traffic
in the area is getting crazier!
What are anyone thoughts!
Thank You!!!
I like Sebastopol but $750,000 for a basic house is insane. BTW, what is a house in Occidental running these days?
There is a really cute new home with 2400 sq ft and tiny backyard for 750k not selling yet and anything good out there
starts are 750k onward.. You have to be careful what you buy.
Water or lack of it can be an issue.
Water or lack of it can be an issue
Has been for decades. As a Vermonter, I was amazed to find people burning redwood as firewood. I will say one thing for it, it sure is easy to chop.
Living in SANTA ROSA, am I, indeed, and a 2400 square foot house is not what the county needs!
But my home has gone up 2,000% in the last 40 years and the income of the population has not!
To think that property can continue to blossom like that is insane, except to realtors, and by the way I did have a broker’s license way back when.
Median Income of $75K, more or less, median hp of about $500K means half the people can not buy a house at median price,or I should say should not buy a house at that income level.
as the public demands housing for low income people, they fail to realize that will result in increases in local taxes that will affect house prices even more.
but as long as financiers do not worry about repayment it will continue.
Golden eggs will soon come to an end
SFJACK!
Remember…. I can ask $50k for my 10 year old Chevy pickup but where is the buyers at that prices?
So it is with housing.
Sonoma County, CA Housing Demand Dives 9% YoY
http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv
What are anyone thoughts ??
I suspect for Sonoma, to some degree, its being driven by flight of urban area owners….Sell in Palo Alto, Buy in Sonoma, bank a boat load of cash and still be reasonably close to everything you associate with AND live in a beautiful area…
Looks to me like prices will be dropping soon, in Santa Rosa inventory is up 120% and at a 3 year high. That putz Robert Digitale that writes RE stories for the Press Democrat can’t be trusted and is basically an RE shill, on 4/11 he wrote an article titled “Why aren’t more houses for sale in Sonoma County? ” There ARE more for sale, a LOT more
http://www.movoto.com/santa-rosa-ca/market-trends/#city=&time=5Y&metric=Inventory&type=0
http://www.pressdemocrat.com/business/3779497-181/why-arent-more-houses-for
http://www.bloomberg.com/quote/OMX:IND
Year To Date: +15.65%
1-Year: +27.70%
I was reading yesterday there is some wild on the ground action in Asian currencies.
http://www.xe.com/currencycharts/?from=MYR&to=USD&view=1Y
Gotta love an ever increasingly valuable dollar. Check out dollar/euro too.
Seems like there may be some good opportunities arising soon!