Overvalued Homes And A Glut Of Supply
A report from the New Zealand Herald. “It appears that Auckland’s housing bubble is indestructible if one bank economist is to be believed. BNZ’s chief economist Tony Alexander is forecasting the city’s house prices will go up by 14 per cent this year, just as they did last year. ‘Short of a nationwide outbreak of foot and mouth disease, Mt Rangitoto erupting, or an asteroid striking, Auckland’s house prices are likely to remain high and keep rising,’ he says in a paper called Auckland is Different.”
Estate Agent Today on the UK. “Recent figures from estate agents showing transaction volumes falling sharply have been confirmed by the registry, which says the number of completed house sales in England and Wales dropped 18 per cent in March to 53,168. The number of properties sold in England and Wales for over £1m dropped by 19 per cent to 851, from 1,049 a year earlier. This prompted a Savills buying agent - Guy Meacock of Savills’ Prime Purchase off-shoot - to describe there being ‘panic in the housing market’ as a result of recent stamp duty changes and a possible mansion tax.”
The Rio Times on Brazil. “A survey by Secovi-Rio, the city’s housing union, shows that ten out of eighteen neighborhoods in Rio saw a fall in rent in March 2015, when compared to February of the same year. This demonstrates a more significant drop than when compared to March 2014, where a decrease can be seen in eight locations. Vice president of Secovi-Rio, Leonardo Schneider suggesting that the real estate market in Rio de Janeiro is experiencing a period of transition and adjustment. ‘We had a very strong appreciation in recent years and this is changing a bit, mainly because there is more supply in the market and demand has decreased. We have seen more listings entering the market,’ he said.”
“When looking at the annual comparison in rent prices, Gávea, in Zona Sul (South Zone) has seen the largest regression with 6.81 percent. ‘[Prices in] Gávea rose because of expectations of the metro, and it was an interesting alternative to high priced Zona Sul areas Leblon and Ipanema,’ Schneider stated. ‘However, [now] a year later, these prices have dropped as if it was a wave,’ he reveals.”
The Global News in Canada. “The Canadian Mortgage and Housing Corporation is out with a report this week making some homeowners nervous. According to the CMHC, Regina is at a high risk of a housing correction, partly blamed on overvalued homes and a glut of supply. ‘Builders were a little aggressive last year with the housing starts,’ said Regina realtor Craig Adam, pointing to the Harbour Landing neighbourhood. ‘Certainly there were a lot of basements that were poured.’”
“The Archer family listed their bi-level home in Harbour Landing on ComFree for $429,900. The difficulty is the family is competing with large home builders still selling off oversupply. ‘We’re kind of not pricing over what’s being sold right now as a new model. We’re just pricing a bit under it to be a bit competitive,’ Matthew Archer said.”
“Regina has seen a huge price growth over the last decade. In 2004, the average sale price was $111,000, compared to $313,000 last year.”
Domain in Australia. “Prime Minister Tony Abbott will announce his plan to crack down on illegal foreign buyers of Australian real estate on Saturday. From December all foreign buyers will be slugged with a $5000 fee to apply to buy property in Australia. That fee will be used to fund the policing of the new rules. ‘I know from personal experience how tough it is to get into the housing market,’ Mr Abbott said. ‘I’m determined to crackdown on any illegal activity that could be putting upward pressure on property prices.’”
“Foreign buyers who breach the rules can expect to face stiffer penalties and possible three-year jail terms under new rules set to be introduced to Federal Parliament in Spring. ‘We will ensure stronger enforcement of new and existing foreign investment rules by transferring all residential real estate functions to the Australian Taxation Office,’ a statement from the government said. ‘The ATO will use its data-matching systems to identify possible breaches and the Commonwealth will pursue those foreign investors who break the rules.’”
“The announcement comes just two days after a report from the Foreign Investment Review Board showing that foreign buyers of Australian real estate had doubled in one year.”
From China Worker. “For China’s one-party dictatorship (CCP), 2015 is turning into quite a dangerous year. After years of rapid debt-driven growth and the world’s biggest construction boom, China’s economy faces a multitude of serious problems. Overcapacity, deflation, a housing slump and local government debt crisis are all acting as a drag on economic growth which by several measures has slowed to a crawl. The economy is of critical importance for any government but especially for the Chinese regime which has relied on a combination of fearsome state repression alongside sustained rapid economic growth to maintain itself in power.”
“China’s major commercial banks, ostensibly controlled by the CCP, are refusing to direct the extra cash to where the government wants it. Instead most of the extra liquidity is flowing into the stock market, which has surged by 80 percent in the past six months. Small traders are flooding into the market with four million new trading accounts opened in the last week of April alone. Around 40 percent of shares are now bought on credit and people are selling their homes to join the stock market ‘gold rush.’ According to economist Andy Xie, more than 2.5 trillion yuan of loans has poured into the stock market. Whereas China’s debt crisis is the result of huge stimulus policies to build infrastructure and housing, much of it wasted, today’s stimulus policies are creating nothing but fictitious wealth on the stock market.”
“For the CCP, a booming stock market is seen as desirable, despite its obvious dangers, partly to cushion the blow of the burst property bubble, but also to develop equity markets as an alternative source of financing for credit-starved businesses, especially private businesses. But government policy is hopping from frying pan to fire and back again – the share market rally is draining liquidity from the banking system as savers withdraw funds to join the gambling binge, thus forcing the central bank to take further easing measures to prevent a liquidity crisis.”
“A report by Reuters showed that none of the major banks have passed on Beijing’s recent policies to support the property market, which include cheaper mortgage rates and more generous lending rules for second home loans. The banks clearly do not have confidence that house prices will rebound in the short-term. ‘Banks look for good investment return, so they’d rather invest in the stock market,’ a Shenzhen property developer told Reuters.”
‘David Roberton, the Auckland-based head of equities at Macquarie Securities (NZ), has released a timely commentary in which he recalls Canada’s real estate boom and bust in the 1980s which saw prices plunge up to 50 per cent.’
‘Roberton declined comment on the report but Shamubeel Eaqub, NZIER principal economist, says it is timely as many of the same issues faced by Toronto in the 1980s were in play in Auckland right now. “The Auckland housing market is a speculative bubble. Debt is fuelling the Ponzi scheme and we have no idea what will be the catalyst for a change,” Eaqub said. “Most likely, it will be external, affecting our economy, jobs and supply of easy money. Maybe a hard landing in China or Australia. But that is purely speculative.”
‘Some similarities with Auckland included rising immigration, strong jobs growth and a population which envisaged no end to price rises during the boom. But as Roberton points out, that was to their extreme cost eventually. “Between 1985 and 1989 the average price of a house in the greater Toronto area increased by 113 per cent in real terms or by $240,992 in today’s dollars. Low unemployment and large inflow of immigrants helped to inflate the bubble…”
“However, one could argue that bubble was fuelled mostly by massive speculative investment. In the late 1980s, everyone thought that the housing prices are going to rise indefinitely and that turned real estate into a compelling investment for everyday Joe. More people jumped into the market hoping to make a fortune causing an artificial increase in demand. Suddenly housing became scarce, which further increased the price. Developers decided to profit on this illusive scarcity by building condos …”
“Between 1989 and 1996 the average price of a house in GTA declined by 40 per cent adjusted for inflation or $182,625 in today’s money. Downtown of Toronto was hit the worst with over 50 per cent decline in value of a home.”
What is driving NZ appreciation? They basically have an agrarian economy. Is it foreign money to buy a “safe house” in the isolated islands? According to wikipedia it’s not immigration, as NZ has a net negative # (so much for everyone wants to live there). I knew a guy who lived there briefly and said that good jobs were very hard to find (which is why he came back).
So why are houses in Auckland and other cities so expensive? Speculators? zero percent interest loans?
‘China’s real estate bubble is looming with over 10. 7 billion square feet square meters (1 billion square meters) of unused housing, Zhu Min, deputy managing director at the International Monetary Fund said this April at a meeting in Washington, D.C.’
‘Zhu did not state the source of his figure, though it corroborates with what is widely known about China’s real estate market: many housing stock go unused, and the market may see a significant price correction in the future, wiping out vast household wealth. Zhu made his remarks at the IMF spring meetings held in late April, and they were later quoted by China Times, a semiofficial newspaper.’
‘China’s state mouthpiece, Xinhua, quickly worked to counter the idea that there’s a real estate bubble in China, publishing an analysis that sought to dismiss the number provided by Zhu Min.’
‘The idea that there is a bubble is not particularly controversial, though there are questions as to when it will burst, and what impact such an event will have on the economy.’
Two related articles linked to this:
‘Price Drops in China Housing See Investor Fury’
April 15, 2014
‘“Refund our houses!” screamed protesters at the Tenhong Land sales office in Hangzhou, China, before smashing up house models, holding banners, and yelling at staff. They were furious that apartments in the same building, and similar to those they had just bought, were now being sold at a deep discount, damaging their investments.’
‘The chaos that took place in Hangzhou was the result of discounting like that experienced by Mrs. Pan. A Hangzhou resident, Pan bought a house at high price of 19,300 yuan per square meter a few hours before the huge price drop of up to 6,000 yuan ($964) per square meter announced by Tenhong. That made the housing 500,000 yuan ($80,366) cheaper than what she paid, according to China News.’
http://www.theepochtimes.com/n3/623148-price-drops-in-china-housing-see-investor-fury/
‘Real Estate Development in Southern China Goes Bust, House Owners Protest’
February 11, 2015
‘Thousands of new properties under construction by the Kaisa Group, a large-scale property developer in China, have been suspended from the market due to the company’s financial crisis. Over 2000 house owners who’ve paid down payments or who’ve paid in full protested in southern China’s Shenzhen City of Guangdong Province on Jan. 24. They appealed to city government officials to protect their investments.’
‘The protesters wearing T-shirts printed with “I want my home,” gathered at the Civic Center in Shenzhen on Saturday morning for several hours. A large number of police and riot police set up a temporary fence to block them.’
‘Most of the buyers have paid the down payments for of at least 600,000 yuan (US$96,000), and some have even paid several million yuan (1 million yuan equals about US$160,000) of full payment.’
‘The Kaisa Group is not the only real estate company that has had to suspend construction. Around 20,000 houses, of over 30 real estate companies have been suspended by the government, according to China Real Estate Information Corp (CRIC).’
‘Chinese economist Ma Guangyuan stated on a national economic forum last October that a large number of cities and developers will face the issue of overcapacity in the next five years, according to state-run China News. “Only 20 percent of China’s developers can survive and the rest, the 80 percent, will be miserable,” Ma said.’
http://www.theepochtimes.com/n3/1246971-real-estate-development-in-southern-china-goes-bust-house-owners-protest/
It’s clear that just like here in America, the government in China will have to do whatever it can to keep housing prices from falling in order to defuse social unrest.
War is a great way to get rid of excess housing inventory.
You can’t do that anymore. War has a way of spilling over the borders of areas where you wanted it be. Using war today to clear up excessive housing is only going to harm much of your housing investments in neighboring areas.
http://www.cnbc.com/id/102643762
Collapsing consumer and producer prices. Collapsing employment. Collapsing real estate. Yep, sounds like 7% growth for sure.
Collapsing consumer and producer prices. Collapsing employment. Collapsing real estate. Yep, sounds like 7% growth for sure.
Consumer prices are rising, producer prices are falling due to lower commodity prices, employment is growing by about one million jobs per month, real estate is showing signs of turning around with many cities actually increasing in value. Well you got one of them right.
Dan,
Prices are falling across China.
If they can count empty cities as part of GDP, this GDP thing is kinda pointless.
Unless they continue to build empty cities they would not be part of the GDP. It is not pointless to count GDP in any country although I agree it is not the only measure of well being. Housing is important and it is being absorbed in China to the betterment of the people getting the housing and the economy as a whole:
http://www.shanghaidaily.com/business/real-estate/Shanghai-new-home-sales-remain-robust/shdaily.shtml
GDP is a measure of production, not of “well being”.
For instance, empty cities don’t necessarily represent an improvement in “well being”, even though their construction helps maintain 7% GDP growth in perpetuity.
Bloomberg
China April Manufacturing Weakens Further in Final HSBC PMI
6:45 PM PDT May 3, 2015
China’s Manufacturing
Workers assemble pens at the A.W. Faber-Castell Stationery Co. factory in Guangzhou, Guangdong province. China’s economy is slowing, spurring policy makers to loosen monetary policy and pledge targeted steps to counter downward pressure. Photographer: Brent Lewin/Bloomberg
A Chinese manufacturing gauge trailed economists’ estimates in April as new orders declined, underscoring forecasts for policy makers to step up stimulus to shore up growth.
The final Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 48.9, missing the median estimate of 49.4 in a Bloomberg News survey and lower than the preliminary reading of 49.2. Numbers below 50 indicate contraction.
With economic expansion threatening to dip below the leadership’s 2015 target of about 7 percent — one state-affiliated group reportedly sees a 6.8 percent pace this quarter — officials have already loosened monetary policy. Anticipation of more measures to come has helped stoke a rally in stocks the past two months.
…
>> GDP is a measure of production, not of “well being”.
It simply amazes me how many people really just don’t get this.
“It simply amazes me how many people really just don’t get this.”
The misconception makes sense once you realize that AlbqDan is an attorney, not an economist.
“is an attorney,”
Ah of course, that explains the inability to admit being wrong.
China sees biggest drop in factory activity in a year
Kevin Yao, Reuters
8:01 AM, E.T. | May 4, 2015
International
China’s factories suffered their fastest drop in activity in a year in April as new orders shrank, a private business survey showed on Monday, hardening the case for fresh stimulus measures to halt a slowdown in the world’s second-largest economy.
The latest indication of deepening factory woes raises the risk that second-quarter economic growth may dip below 7 per cent for the first time since the depths of the global crisis, adding to official fears of job losses and local-level debt defaults.
The HSBC/Markit Purchasing Managers’ Index (PMI) fell to 48.9 in April – the lowest level since April 2014 – from 49.6 in March, as demand faltered and deflationary pressures persisted.
The number was weaker than a preliminary reading of 49.2, and below the 50-point level that separates growth from contraction compared with the previous month.
“China’s manufacturing sector had a weak start to Q2, with total new business declining at the quickest rate in a year while production stagnated,” said Annabel Fiddes, an economist at Markit.
“The PMI data indicate that more stimulus measures may be required to ensure the economy doesn’t slow from the 7 per cent annual growth rate seen in Q1.”
…
“It appears that Auckland’s housing bubble is indestructible if one bank economist is to be believed.”
Auckland? Did you say Auckland?
(So? What’s in a word?)
Go here for a laugh:
http://articles.latimes.com/1985-04-03/local/me-28522_1_europe-vacation
“From China Worker. “For China’s one-party dictatorship (CCP), 2015 is turning into quite a dangerous year.”
From a magazine which is critical of China’s government because it is not socialist enough. My criticism is just the opposite and it is moving in the right direction.
Which direction does the water swirl when you flush the toilet in China?
The ceiling?
Speaking of housing in China:
BEIJING, May 3 (Xinhua) — The transaction volume of second-hand homes in Beijing reached 17,191 in April, the highest in nearly 25 months, according to new data from property agent Centaline.
Zhang Dawei, chief analyst with Centaline, attributed the rise to easing policies on buying and selling the second-hand homes.
In late March, China’s central bank cut the minimum down payment requirement for second home buyers to 40 percent.
Minimum down payments for first and second home purchases using the housing provident fund, which offers urban residents lower rates than those of commercial banks, were also lowered.
Business tax will be exempted on sales of homes purchased more than two years ago, in stead of the previous requirement of five years, announced by the Ministry of Finance.
The property market will be better this year, Zhang said, citing continuous policy stimulus. The demand for improved housing will increase and add energy to the brisk market.
China’s property market took a downturn in 2014 due to weak demand and an excess of unsold homes. The cooling has continued into 2015, with both sales and prices falling and investment slowing.
Since November 2014, the central bank has cut interest rates twice. Banks’ reserve requirement ratio (RRR) was also cut twice.
Hooray centrally planned economy!
Hooray economy moving away from central planning toward capitalism, just opposite the Obama model.
If you want almost pure central planning go to North Korea.
‘moving away from central planning toward capitalism’
Yeah, that’s why all we hear is stimulus, QE, bail-outs. It’s an all you can eat crow buffet.
Buh buh but OBAMA!
Actually, I am hearing lower tax rates, privatizing SOEs, less regulation and better access to credit for private companies. It sounds very much like Reaganomics to me.
From China Daily, have to go to a conference, hope they have good internet, if not maybe last post of the day:
BEIJING - China’s small and micro enterprises saved 24 billion yuan ($3.92 billion) in the first quarter of 2015 due to preferential tax policies, the State Administration of Taxation (SAT) said on Monday.
Statistics from SAT showed that a total of 2.16 million small and micro firms enjoyed a 50-percent cut in income tax, resulting in savings of 5.1 billion yuan.
The State Council announced in February that, from this year through the end of 2017, companies with annual taxable income under 200,000 yuan ($32,573) will have their corporate tax halved. Previously, the threshold was 100,000 yuan.
Value added tax and business tax cuts resulted in more than 18.9 billion yuan in savings for 27 million small and micro firms due to a temporary suspension for some firms with monthly revenues under 30,000 yuan. The policy is effective from October 2014 to the end of 2015.
Previously, the threshold for the policy was 20,000 yuan.
China has expanded preferential tax policies for small companies and reduced their tax burden to boost economic growth and employment. Nearly 80 percent of urban jobs are provided by small companies.
0
Communist China sounds like Reagan. Better get a table close to the crow buffet. It’ll cut down on the time for round trips.
Gosh, I wonder who these “Centaline” people are? Let’s take a look:
“Centaline Property Agency Limited is one of the largest property agencies in Hong Kong. It was established in 1978 by Shih Wing-ching. Centaline Holdings is also the major shareholder of another property agency in Hong Kong, Ricacorp Properties Limited”
http://en.wikipedia.org/wiki/Centaline_Property_Agency
Ah, yes, people who can TOTALLY be trusted.
In China: “… the share market rally is draining liquidity from the banking system as savers withdraw funds to join the gambling binge …”
And, poof, there goes their so-called savings glut.
Again, in China: “‘Banks look for good investment return, so they’d rather invest in the stock market,’ a Shenzhen property developer told Reuters.”
“A good investment return” in this crazy world means “rising prices”.
And these prices rise because a lot of money is pouring into the market and this money chases prices up.
As the prices rise the attractiveness of the market increases - not DECREASES, as Econ101 says what should happen, but INCREASES.
Popcorn, anyone?
Like one of those Estes model rockets, it zooms into the sky, and you’re tempted to think it will go forever. And then it stops.
‘Britain’s growing army of buy-to-let landlords will hold its breath this week – and pray that a Labour Government is not elected. Many experts believe a Government led by Ed Miliband will wreak havoc on the attractive investment returns that many people now earn from owning a buy-to-let property – or a portfolio of properties.’
‘Mismanagement of the economy by Miliband and likely Chancellor of the Exchequer Ed Balls, they say, could trigger interest rate rises and a sharp housing market correction, proving disastrous for buy-to-let investors.’
‘Since the 2008 financial crisis, Britain has been transformed into a nation of amateur landlords. Fuelled by a cocktail of cheap mortgages, moribund savings rates and a generation of youngsters priced out of the housing market, a buy-to-let frenzy has gripped the country. People armed with wads of cash – some released from pensions under new rules introduced last month – and cheap interest-only loans have bought up investment property in droves. The Bank of England recently published data confirming that buy-to-let lending as a share of overall mortgage lending is now higher than it was before the crisis.’
‘An estimated one million people – amateur landlords, professionals, and so called mega-landlords – now run buy-to-let portfolios. Investors comprise celebrities, the retired and those simply looking to supplement their salary. It is not difficult to see why buy-to-let has become the ‘best’ (most sellable) investment story in town – bigger than the technology fuelled investment fund buying spree of the late 1990s – a spree that, rather ominously, ended calamitously for millions when the tech bubble burst in the spring of 2000.’
‘The superior return from buy-to-let, says Thomas, principally reflects strong house price (capital) gains over the period. But it also demonstrates how a feature unique to buy-to-let investing – ‘gearing’ (borrowing to invest more) – can work in investors’ favour.’
‘This allows investors to use the rental income they earn to be put down as a deposit on another property, thereby increasing their exposure to property in a rising market and ratcheting up their potential to earn even bigger investment returns.’
‘The £14,897 figure Thomas has calculated is based on a buy-to-let investor reinvesting their rental income in a new property once it covers the cost of a 25 per cent deposit. But if the same investor had on the back of rising prices remortgaged to provide cash to buy more property, he says their investment would now be worth £34,732 – and they would have accumulated ten properties along the way.’
‘Since the financial crisis of 2008, an era of low loan rates has provided landlords with an effective financial subsidy. Buy-to-let has been a hugely rewarding investment,’ says Thomas.’
‘Eric Pentecost, Professor of Economics at Loughborough University, says: ‘Buy-to-let investors face several potential downsides on the horizon. They include a future rise in interest rates, a fall in house prices and political interference in the rental sector. A Labour administration would more likely bring these downsides much closer to home.’
“…more than 2.5 trillion yuan of loans has poured into the stock market.”
So much for China’s ’savings glut.’
As I asked the WPA guy, if there was a savings glut, why did the central banks go on a money printing spree without precedent?
To rob the peasants of the economic power they were amassing with their savings maybe?
Sounds strangely familiar.
Peasants don’t have savings.
WPA guy here! The savings glut is disaggregated, some cash, some illiquid assets … it’s just stagnant capital scattered among a billion people and institutions. Most of it is not available as liquid cash on bank balance sheets, so if the Fed wants to increase bank liquidity, they still need to inject money even if there is a savings glut.
Which further collapses demand.
*THINK*
“China On Default Watch As Companies Buckle Under Big Debt Loads”
http://www.afr.com/real-estate/commercial/development/china-on-default-watch-as-companies-buckle-under-big-debt-loads-20150421-1mpmkj
Collapsing demand, falling prices. Good news.
Why China must shrink its huge debt burden: CHINA has a $28-trillion problem.
http://www.bdlive.co.za/world/asia/2015/04/23/news-analysis-why-china-must-shrink-its-huge-debt-burden
The weight of massive crushing debt on the shoulders of government and indebted citizenry.
This is what happens when you misallocate every bit of wealth you have and then borrow more and do the same.
Sound familiar?
Novato, CA List Prices Crater 11% YoY; Sellers Slash As Housing Bubble Deflates
http://www.movoto.com/novato-ca/market-trends/
Home
Chinese buyers fuel California property bubble
published by Asianpost on Wed, 04/29/2015 - 10:34
San Francisco residents are pushing back against surging house prices caused by Silicon Valley workers and overseas Chinese buyers
Image Credit: REUTERS/Robert Galbraith
By Jack Detsch
The Diplomat
Special to The Post
On an unusually clear March day in Northern California, Oakland Mayor Jean Quan gathered with several hardhat-wearing Chinese developers on a patch of dirt near the city’s waterfront. With local press cameras snapping away, the developers, led by China-based Zarsion Holdings Chief Weixun Shan and local planner Mike Ghielmetti, broke ground on “Brooklyn Basin,” a $1.5 billion development along a decrepit stretch of industrial waterfront.
Brooklyn Basin, which will bring roughly 3,100 new residents and 200,000 feet of retail space to Oakland by 2021, is just one example of major Chinese real estate investment in the Bay Area. Investors are descending upon the region in huge numbers: about 35% of Chinese residential real estate purchases in the U.S. occur in California, according to a study conducted by the National Association of Realtors. The same survey found that Chinese investments in U.S. real estate amounted to $22 billion in the year ending in March 2014, making up almost a quarter of foreign purchases.
“It is just a natural phenomenon.” Ellen Osmundson, Managing Partner of MJ Real Estate International in San Francisco explained to The Diplomat. “When more than 30 percent of the population in San Francisco is Chinese, it is natural that Chinese homebuyers are gravitating towards the culture, language and food that they are familiar with.”
…
Jean Quan is not mayor of Oakland anymore. What is the point of reviving old news?
Been away to NYC this last week - just getting back in the chair -
Seeing this just reminds me of the Japanese and their land/ RE rush in the eighties here in the US and look where that got them.
Love him or not, Bill Gross can pen some amazing pieces.
https://www.janus.com/bill-gross-investment-outlook
“When does our credit based financial system sputter / break down? When investable assets pose too much risk for too little return. Not immediately, but at the margin, credit and stocks begin to be exchanged for figurative and sometimes literal money in a mattress.” We are approaching that point now as bond yields, credit spreads and stock prices have brought financial wealth forward to the point of exhaustion. A rational investor must indeed have a sense of an ending, not another Lehman crash, but a crush of perpetual bull market enthusiasm.”
“crrrrrrrrrush” has a nice ring to it. More of these guys needs to invoke the word “crrrrrrater” more frequently.
“When investable assets pose too much risk for too little return.”
This is a natural consequence of pinning the risk-free rate against the zero bound.
CNN chimes in…..
http://money.cnn.com/2015/05/04/real_estate/real-estate-housing-bubble/index.html
Irving, TX(Dallas/FTW Metro) List Prices Crushed 17% YoY; Sellers Slash
http://www.movoto.com/irving-tx/market-trends/
What did you say? Prices are falling?
http://goo.gl/loFyZ5