The Herd Mentality Will Also Drive The Selling
It’s Friday desk clearing time for this blogger. “Federal Reserve Chair Janet Yellen was right to point out that markets are overvalued, said Yale economics professor, Robert Shiller. ‘It’s part of their job to disturb the tranquility and I praise Janet Yellen for doing that,’ he said in an interview with CNBC’s ‘Squawk on the Street. Shiller said that the Fed was right to go ahead with quantitative easing when it did. ‘Nobody knows for sure because it’s a new experiment, and yes the boom in the housing market and the stock market are partly the Fed’s doing. But on the other hand, we were close to a depression and they had to do something.’”
“Home flipping declined across South Florida in the first quarter, but the region was still among the nation’s most active for home flippers, a new report shows. David Dweck, a private lender and founder of the Boca Real Estate Investment Club, said he turned down two loan requests recently because he was concerned the investors were not making sound purchases. ‘People are starting to pay too much,’ he said.”
“Top analysts say the booming DFW housing market could be too hot. Some worry the lack of inventory in cities like Plano could lead to big trouble. ‘The inventory is so low, it’s driving the prices up,’ says realtor Valerie Kirkpatrick. ‘It’s driving the buyers up, they’re having to pay more and more and more and the houses are not worth what they’re paying.’”
“Kirkpatrick says she’s worried. She’s seeing an influx of cash buyers and she says that pushes price points higher. Too high. ‘It is absolutely scary to me…no matter how much relocating companies we have, we just don’t have enough houses to sell and I fear we are going to end up facing what California faced and Arizona faced when the bottom fell out,’ says Kirkpatrick.”
“A new commentary from David Roberton, the head of equities at Macquarie Securities (NZ), suggests Auckland’s rapid housing bubble may be headed for a bust similar to Toronto’s mid-1980s crash, when downtown real estate prices dropped by as much as 50 percent between 1989 and 1996. The New Zealand Herald quoted Shamubeel Eaqub, New Zealand Institute of Economic Research principal economist. ‘The Auckland housing market is a speculative bubble… and we have no idea what will be the catalyst for a change,’ he said. It will most likely be something external, even a ‘hard landing in China or Australia.’”
“The more staggering number might be this: In April Auckland house prices rose by NZ$918 per day, according to sales data from Barfoot and Thompson, and for the first time the average price in Auckland has topped NZ$800,000.”
“For the first time in many years leading apartment developers have become very nervous about a pending fall in the values of Sydney and Melbourne apartments plus parts of the suburban residential housing market in both cities. In recent months, the actual prices of inner Sydney apartments has started to fall. Yes, fall. No one has heard about falling apartment values in Sydney for a long time. In Sydney, over 80 per cent of inner city apartment buyers are Chinese or Asian investors. In Melbourne’s CBD the figure is even higher.”
“In Melbourne, there is already a big difference between ‘off the plan prices’ and the sale value of completed units. In Sydney, if Chinese buying turned into selling, the market would collapse and that collapse would affect values of a wide range of Sydney residential properties. As we have seen so often in other markets, there is always a danger that the herd mentality that drove the buying will also drive the selling.”
“The departure of some of the real estate industry’s most prominent senior executives in China has deepened concerns as the cyclical downturn unfolds. The widespread worry is that an unprecedented glut in the housing sector, which absorbs 15 per cent of China’s urban jobs, will take about five years to clear and force developers to cut down their headcounts, especially in construction, marketing and sales departments. ‘Traditional project managers are no longer in need,’ said Beijing-based head hunter Carrie Ren, who specialises in the real estate industry.”
“Deep discounts. Free cars and flat TVs. Easy instalments. Nothing seems to have helped the flagging property market in the National Capital Region (NCR) as buyers, suspicious of builders, continue to stay on the sidelines. The result: a pile-up of inventory in India’s largest property market that will take close to 78 months to clear at the current pace of sales.”
“‘The residential market in NCR is not likely to see any momentum for another two years. Confidence in developers is at an all-time low and customers feel projects will not be delivered. There are a number of payment and discount schemes that have been launched by developers, but none of them seems to be working,’ said Rajeev Bairathi, executive director, capital transactions group, at property advisory Knight Frank India.”
“The total number of property transactions in Dubai halved last month compared with a year earlier as the market slowdown continued. According to the latest figures from the Dubai Land Department, the total number of transactions in the emirate plunged 51.8 per cent to 7,311 last month compared with April 2014. The fall in volumes was one factor that prompted the consultancy JLL and the ratings agency Standard & Poor’s to predict that average house prices in the emirate would fall by between 10 and 20 per cent this year.”
“‘These figures come as no surprise although from the face of it they look quite dramatic,’ said Craig Plumb, the head of research at JLL’s Dubai office. ‘A fall in volumes is a good leading indicator that prices will fall and we expect that to continue for the rest of this year. Last April the market was still booming, so any year-on-year figures will reflect that fact.’”
“Expats who make up about 70 percent of the ‘owners’ of a Phuket condominium development that has yet to take shape turned out to join a protest today. The protesters are out of pocket by many millions of baht. Tonny Gao from China, said he and a friend invested four million baht. Didier et Nadine Giesen said that he had used his retirement funds to buy a unit. Australian Paul Schmierer said that he had invested 1.152 million baht. ‘We thought it was good value because of the location, in the heart of Patong,’ he said. ‘Now most of us would just be happy to get our money back.’”
“Laws have been tightened to protect consumers but there’s a glut of condos on Phuket at present, so developers hoping to derive income from quick sales are in some cases struggling. The present condo glut also means that apart from condos in secluded or desirable locations, people who bought condos for investment may not see any appreciation until the glut becomes a shortage.”
“If I were an Australian central banker, politician, bank economist, or even a negatively geared property investor, I’d be telling you Australia has a chronic housing shortage, which is responsible for our sky-high housing prices. But as an independent macro researcher, the data tells me otherwise. In September 2014, Australia had a net cumulative excess supply of at least 165,000 dwellings. This surplus is equivalent to more than one year’s supply at current population growth rates nationwide, and about three years for the most oversupplied state, Victoria.”
“If there were such a dire shortage of housing as the housing cheerleaders suggest, property investors en masse would not be negatively geared in a record low interest rate environment. This tells us leveraged speculation has generated ‘artificial’ demand that has absorbed a wealth of the supply. Sydney and Melbourne are today’s prime examples. Unfortunately, it is only when the tide rolls out that the masses realise no such housing shortage exists.”
“The numerous global housing price booms of the 2000s were written off by government, industry and the economics profession as a failure of inadequate housing supply and a rapidly growing population. The facts later demonstrated these booms were actually gigantic asset bubbles, spectacularly crashing and revealing mass overbuilding. A tiny fraction of the 15,000 professional economists in the United States managed to correctly identify that their housing price boom represented a bubble and was not the result of a dwelling shortage.”
“It is easy to see why Australia’s housing lobby places the blame for high prices on government regulations and dwelling shortages: it’s an easy and a much safer explanation than admitting the real cause to be debt-financed speculation – a bubble.”
‘Anyone who follows international markets has noticed the tear that China’s stock exchange, the Shanghai Composite (SHCOMP), has been on for the past year, with returns of over 90 percent…The massive influx of Chinese investors is driving the Shanghai exchange to illogical levels. According to Bloomberg China economist Tom Orlik, 5.8 percent of China’s new investors are illiterate and 60 percent have less than an 8th grade education.’
‘As the graph shows below, the last time new account openings reached these levels, they were followed by around a 70 percent correction in the Shanghai just a few months later.’
‘Jiangsu and Anhui provinces did not attract sufficient buyer interest last month for their bond offerings. As a result, Beijing’s heralded debt-for-bond swap program failed to launch. The unexpected withdrawals suggest central government technocrats are running out of options to rescue the faltering economy.’
‘Despite the strict rule against borrowing, local governments had managed to incur, by June 30, 2013, 17.9 trillion yuan of debt according to the National Audit Office. The actual sum was probably in excess of that, and the amount has undoubtedly increased since then as municipal and city tax collections and other revenue have recently plummeted.’
‘The land-sale revenue of Nanjing, Jiangsu’s capital, fell 39% in 2014, for instance. This revenue, which until recently was the primary source of cash for many local governments, will almost certainly drop this year. Land sales declined 32% in the just-completed quarter for the country as a whole. In the second week of April, revenue from such sales fell 57% in 40 Chinese cities.’
‘No wonder the underwriting team for the Jiangsu deal, led by seven banks, had problems marketing the paper. Apparently, banks, the primary takers of bonds in China, thought the offered interest was too low.’
‘Many analysts say the only solution to China’s debt load is growth, but China has been trying to grow its way out of debt for years and has only fallen further behind. It is unlikely that the country, hooked on a debt-financed growth model, can now perform better than in the past.’
‘So the unvirtuous cycle is beginning again as growing faster seems to be Premier Li’s plan. At a meeting of the Politburo on Thursday, the Communist Party signaled it was shifting its emphasis from reform to investment-fueled growth. Investment means, of course, more debt, and in an environment where there is little demand, there will ultimately be even more bad loans to be repackaged and refinanced. The central government still has some flexibility to manage debt, but options are narrowing fast.’
‘Beijing can always overpower the market by resort to fiats, behind-the-scenes tricks, and strong-arm tactics. That’s where China is headed, as Jiangsu’s failed bond issue tells us.’
This has to be at least the 147th time in the last two decades that China’s leadership has walked back talk of reform. Of course, real reform would result in the imprisonment, or worse, of the entire Chinese party elite, and severely would impact Western interests benefitting from its venality.
This time is different.
“unprecedented glut in the housing sector, which absorbs 15 per cent of China’s urban jobs, will take about five years to clear…”
Someone is not doing the math. Five years of frantic overbuilding cannot be cleared in five years if the construction jobs are lost, and then the jobs supporting the construction materials & etc. are decimated.
We are told there are another 75 million housing units in the pipeline.
If 15% of China’s economy dies, the jobs start disappearing, the defaults start cascading, and everyone will want their money back at the same time. The government can try to prop up the local governments by converting their short term debts to long term bonds, but the banks don’t want to have anything to do with that, since they’d be losing money, and they’re in a deep enough hole as it is. And all China can do with the money it makes on exports is buy U.S. bonds, so that’s not an option. I bet there are a lot of officials buying one way tickets out of the country right now.
Denver, CO List Prices Crater 9% YoY; Inventory Explodes 135%
http://www.movoto.com/denver-co/market-trends/
HA - you might consider looking at these links in a little detail before you post them. Your link shows a 4% increase in median list per sq/ft, which, I would argue, is a more telling statistic.
Ahhh ….. But failing prices aren’t worthy of mentioning?
Why do you think that might be friends?
Not sure I understand you’re point - in your “headline” you asserted that the data indicated list price was down by 9%. I replied by pointing out that, while it was true that list price was down by 9% YOY, the relevant measure, list price sq/ft, was actually up by 4% - that says rising prices to me. What am I missing? As to inventory increase, the increase was from 1,438 to 3,385 - in a city the size of Denver, I’d call that “the miracle of the 0 baseline”
That’s your claim. The relevant measure in a retail transaction is price. Not unit price. Learn the difference.
The price is falling.
“The relevant measure in a retail transaction is price. Not unit price. Learn the difference.”
Someone should tell Costco that their business model of selling in bulk for lower unit prices is faulty.
Let us know when I can buy a resale house in bulk on a square foot basis Rental_Fraud.
When 50 to 75% of the ft2 is excess, the price/ft2 is not as telling of a speculative bubble as the total price. Anyone buying now is buying the most expensive house they can get a loan for.
So, HA’s link indicates avg ft2 of listings is 1,845 - you’re asserting that 50 to 75 % of that is excess (unnecessary)? On what facts are you basing that assertion? I don’t think that’s a grotesque amount of space for a family of 4, or for that matter, even two adults, and maybe a dog.
On what facts are you basing your false assertion that prices aren’t falling and inventory isn’t rising?
Here’s what you need to learn;
Falling prices to dramatically lower and more affordable levels is your wallets best friend and good for the economy.
List price = wish price, which is borderline delusional in many cases, and not a good indicator of overall market value for an area.
Sale prices are the bottom line; they reflect what buyers are willing and able to pay, which list price may not.
Agreed, I was simply addressing HA’s “headline” referring to a a % decline in list price (but the fact is, sales price is also increasing). I’m not arguing that the prices aren’t getting out of hand, I believe they are, I’m simply looking at the data HA linked and trying to understand his conclusions.
80212-
Don’t try to understand his conclusions. He only writes headlines based on cherry picking data that suits his “stance”. He is not interested in really what’s going on–or even deeper thoughts on what is happening.
I’d like to say that I’ve stopped trying to explain to him the rationale behind my views, but like an addict, I can’t help myself. Inane argument drives me crazy.
My favorite is when he posts links of the data from one zip code within a large market and presents his “headline” as the whole market (when in fact, it is data derived from only a few dozen sales).
Rental_Fraud backpedals on falling local prices.
Rental_Fraud backpedals on falling national prices.
Backpedal Rental_Fraud.
“they’re having to pay more and more and more and the houses are not worth what they’re paying.’”
That’s been the case since 1999.
Lesson: Never pay more than reproduction costs for a depreciating asset. If you paid more than reproduction costs ($55/square foot; lot, labor, materials, profit), you got ripped off.
That’s not the point. The point is to flip the house, therefore ripping off the next guy, and the next guy will simply do the same thing, and it all actually works well as long as you’re not the next guy which has no next guy, i.e. the last guy. And if it goes on long enough, enough people get caught up in it, that the government bails it out, meaning the losses are spread amongst the taxpayers across generations, greatly hiding the losses and giving the next bubble-riders all the impetus they need to just do it again.
The larger housing bubble has been going on since the early-to-mid 20th Century. Now since capital formation has stalled from all the oil shortages and gluts (sure signs of Peak Oil), people are desperate to continue the Oil Age by any other means, and just creating money from nothing gives the illusion of growth for enough time for people to make careers out of it all, which is good enough in Human view. If you can eke out a 15-yr career from some bubble, then follow that up with another 15-yr career in some other bubble, then you’ve covered about 3/5ths of your working life, hence chasing bubbles from the personal viewpoint is prudent behavior. Eventually petroleum shortages will starve out too much capital formation and worthless dollar-denominated bills will flutter down burned-out neighborhoods, but that’s for your grandchildren to deal with. (We’ve always hated out grandkids since they were too damned expensive to raise.)
The greater housing bubble economy will probably continue until I die around 2050 AD. Fortunately, I understood that my Rust Belt city entered a major dip in housing prices around 2008 and I jumped at the chance to buy a property at auction for less than ten dollars per SF. If I had just continued to wait, the locust horde of equity investors would have arrived to essentially monopolize the market, even in my depressed neighborhood. I bought at just the right time to have escaped the trap of wage slavery and debt slavery. (Sadly, I can’t do much about avoiding the upcoming era of tax slavery, but you do what you can. Maybe I can start a small business and cheat like crazy on my tax filings, like many of the rest of the small businessmen do, converting as little of my revenue into official profits as possible. Is the effin’ IRS asleep?)
No that is precisely the point.
Getting ripped off on a depreciating asset isn’t the way its always been.
Better Renter:That’s not the point. The point is to flip the house, therefore ripping off the next guy, and the next guy will simply do the same thing, and it all actually works well as long as you’re not the next guy which has no next guy, i.e. the last guy.
In a world of greater fools, it is important not to be the greatest fool.
“… i.e. the last guy.”
= Ponzi scheme looser
“David Dweck, a private lender and founder of the Boca Real Estate Investment Club, said he turned down two loan requests recently because he was concerned the investors were not making sound purchases. ‘People are starting to pay too much,’ he said.”
So long as home prices are improving at a double-digit annual rate, how can anyone conceivably overpay? Makes no sense whatever.
I was thinking that we could really goose things by building a house out of Beanie Babies. Forget double digit increases, these would be triple digit plus! And of course there would be a garden bed full of tulip bulbs.
A whole subdivision of such houses. We could name the streets after central bankers and the local elementary school after P.T. Barnum.
But will it teach Mandarin?
I suggest building robots to teach Mandarin. We could pay China to build an army of robotic Mandarin instructors, which would also serve to eliminate the steel glut.
“House Flippers Seeing Record Returns”
http://www.cnbc.com/id/102655216
Everybody quit your day jobs.
It’s sad. We know this is wrong, we know this will blow up at least as badly as it did before, and we can’t seem to do a thing to stop it. And then we have an alleged expert claiming that Yellen’s job is to be a boat-rocker. “Disturb our tranquility”? The chair of an institution that debated, with respect to interest rates, whether to change the words “considerable time” to “patient” in its statements? Boy that was inflammatory, it was like Antony’s funeral oration for Caesar. Was there a laugh track running simultaneously with Schiller’s remarks?
“A new commentary from David Roberton, the head of equities at Macquarie Securities (NZ), suggests Auckland’s rapid housing bubble may be headed for a bust similar to Toronto’s mid-1980s crash, when downtown real estate prices dropped by as much as 50 percent between 1989 and 1996.”
Given the global reach and multi-decade duration of the present episode,
the correction needed to reverse this mother of all housing bubbles is on a scale nobody alive today has ever witnessed.
“The departure of some of the real estate industry’s most prominent senior executives in China has deepened concerns as the cyclical downturn unfolds. The widespread worry is that an unprecedented glut in the housing sector, which absorbs 15 per cent of China’s urban jobs, will take about five years to clear and force developers to cut down their headcounts, especially in construction, marketing and sales departments. ‘Traditional project managers are no longer in need,’ said Beijing-based head hunter Carrie Ren, who specialises in the real estate industry.”
Crow…it’s what’s for dinner tonight.
“A tiny fraction of the 15,000 professional economists in the United States managed to correctly identify that their housing price boom represented a bubble and was not the result of a dwelling shortage.”
If you’re going to be wrong, it’s useful to be in agreement with most of your peers.
“If you’re going to be wrong, it’s useful to be in agreement with most of your peers.”
Vital, it’s vital to be agreement with most of your peers.
When you are with the majority and the majority you are with is wrong then you get a free pass which is phrased something like “Nobody could have seen it coming”.
But when you are alone and wrong then you are on you own.
“But when you are alone and wrong then you are on you own.’”
A chapter of Nate Silver’s ‘The Signal and the Noise’ discusses this very topic quite well. Portfolio managers are quite literally sheep by necessity.
“Portfolio managers are quite literally sheep by necessity.”
And, IMO, this give the individual investor an edge.
Since the individual investor does not have to answer to anyone but himself (and maybe his spouse) he is able to check out the merits of an investment as an investment using (gasp) fundamentals rather than something other than fundamentals - such as a price change.
Something to keep in mind:
If you as an individual investor choose to wade into a market that is dominated by institutions you should always remember that while you have a choice in the matter they do not.
You do not have to plunk you money down but they do. It may not make any sense for these guys to do so - and they may know this - but they will do it anyway because this is how they get paid.
And besides, the money they use, the money they put at risk … it belongs to somebody else.
“If there were such a dire shortage of housing as the housing cheerleaders suggest, property investors en masse would not be negatively geared in a record low interest rate environment. This tells us leveraged speculation has generated ‘artificial’ demand that has absorbed a wealth of the supply. Sydney and Melbourne are today’s prime examples. Unfortunately, it is only when the tide rolls out that the masses realise no such housing shortage exists.”
I can’t wait to see how this ‘negative gearing’ works out for the investor horde when rates eventually normalize.
I’ve never understood this shortage thing. Are there millions living in cardboard-boxes? If Tokyo can be overbuilt, any place can.
‘PHOENIX (KSAZ) - Maybe you’ve noticed it in your neighborhood, or as you’ve driven around town, large apartment projects being built. It’s a boom that will add tens of thousands of new units across the valley.’
‘There are some projects underway and more to come as more people decide they would rather rent than buy. Developers are building fast to keep up with the demand.’
‘Rental brokers ABI Multi-Family said there are 56 projects underway, which will add more than 13,000 apartment units in the valley. In the pipeline according to the company, 62 more apartment communities. That will add another 16,000 apartment units in the Phoenix valley.’
‘One question remains, is anyone alarmed that we will they overbuild in apartments in the valley?’
‘How fast is fast? For Bay Area real estate, the speed of deal-making is accelerating this spring as homes spend less time on the market and cash deals close at bullet-train speed.’
‘Ask Mei Zhang, who moved a year ago from Shanghai — another hot market — to the East Bay. In February, with all their loan pre-approval documents in order, she and her husband, Yudang, leapt on a house in Orinda, pushing it to contract in seven days. “We really liked it at first glance,” said Mei Zhang, “and so we made an offer really quick” — $41,000 over the $1,469,000 asking price.’
“The competition is more severe this spring,” said Val Vandervort, the Pierces’ agent with Keller Williams. “When you’re writing an offer, you may think you’ve written a fabulous one and then get beat out by three other people. Buyers throw their hands in the air and say, ‘OK, I’ll do whatever it takes to get it.’”
‘Some sellers prefer to have “a bird in hand” — straight-up money in the bank — by accepting an immediate cash offer, said Wendy McPherson, who manages four Coldwell Banker offices on the Peninsula. With the bank eliminated from the equation, that swiftly moves the deal through escrow.’
“Coming across my desk in the last 10 days, I’ve had 10 closings that were 10 days or less,” McPherson said. “In my 39 years in real estate, it’s never been this quick.”
Considering the tightening domestic security state, and the eagerness of certain police departments with respect to asset forfeitures, I must ask whether there is any official investigation into these gigantic cash purchases. Surely somebody knows where the money’s coming from.
At least we won’t have to bail out the banks this time when all these homes go underwater. Of course, Mr. Banker can’t take his cut when people pay in cash, so all these cash buyers are probably harming the economy. What’s good for the banks is good for America, after all.
Is this the future ? or just a trend that will bust ?
‘Ask Mei Zhang, who moved a year ago from Shanghai — another hot market — to the East Bay. In February, with all their loan pre-approval documents in order, she and her husband, Yudang, leapt on a house in Orinda, pushing it to contract in seven days. “We really liked it at first glance,” said Mei Zhang, “and so we made an offer really quick” — $41,000 over the $1,469,000 asking price.’
Orinda is beautiful, but a hard commute to anywhere that makes the money to support that price.
Orinda is for people who already have the money needed to live there. Though I had a professor at Berkeley who lived nearby (Moraga).
If you financially engineer ultra-low interest rates to goose the crap out of demand, mobilizing an army of speculators to suck up SFRs as investments, plus change the rules to enable previously unqualified folks to buy and to refinance, of course you get a shortage, at least temporarily.
Where will they get the water for all of these new apartments? I think the Colorado river is about tapped out.
There are various types of overcrowding in markets.
Kids live at home longer than typical, 3 people cram into a 2 bedroom apartment, etc.
People aren’t living in cardboard boxes, they are just living in ways that are not preferable.
And funny enough, 3 people crammed into a 2 bedroom apartment allows them to pay more in rent…
With 25 million excess empty and defaulted houses, why would anyone cram into an apartment?
Because they’re broke.
“Nobody knows for sure because it’s a new experiment, and yes the boom in the housing market and the stock market are partly the Fed’s doing. But on the other hand, we were close to a depression and they had to do something.”
That is the issue. Would we have been better off with a depression?
There would have been more pain, but at least those at the top would have shared in it, and been perhaps more humbled as in the 1930s.
“But on the other hand, we were close to a depression and they had to do something.”
And just why was that? Why were we close to a depression?
I thought these Phd-people had it all figured out as to how to “manage” the economies of the world so everyone on the planet could enjoy the benefits offered up by endless prosperity.
Apparently not.
And what’s with this phrase “because it’s a new experiment”? These Phds have centuries of history to draw upon but for some reason or another they have to try out “a new experiment”.
IMO some of the most dangerous people on the planet are people in power who are convinced that they have all the answers.
Not necessarily evil, just convinced.
They can always rely upon the standard political claim they did the right thing no matter how horrible the outcome, as things would otherwise have turned out far worse.
Oh it would have been worse at the time. But would it be worse now? Are things worse permanently?
And what is worse? Worse for whom? Oligarchy is good for somebody.
The question is, what would it have cost to wait until after mass bankruptcy to intervene with a massive bailout?
The mass bankruptcy would have had a leveling effect, as in the Great Depression, but the subsequent reboot of the economy could have been acted on more quickly.
“Not necessarily evil, just convinced.”
Convinced and connected. A lot of these people get where they are not because there are the smartest but because they are the most connected.
George Carlin: “It’s a private club, and you aren’t a member.”
Ever notice how the same people get to take turns over and over again?
You mean like the Clintons and Bushes?
I have all the answers. Some are the wrong answer, but they are mine, and I’m sticking by them.
A perfect opportunity was lost to quickly carve up the big banks, and kick out their greedy and incompetent leadership. But the Fed was there to make sure that didn’t happen.
I blame Obama too, and his insipid Justice Department, and his Cabinet-level appointees, people like Summers and Geithner whose sole interest was the restoration of the status quo. This administration’s fecklessness towards large banks has to rank as a terrible political failure, one of the worst ever.
No argument from me. And if it all comes tumbling down, Obama is the one history is going to blame. And rightfully so. He’s the one who put these people in, and he’s the one who let them cater to the financial industry. His reputation might suffer even more, because having seen how these people screwed things up the first time, he should have seen that they didn’t do it again. But we’re right back where we were less than a decade ago. Unfreakinbelievable.
It seems like Obama is just following a well-worn path that was paved many years back, when Ronald Reagan appointed Alan Greenspan, if not before.
Who can blame a leader who follows along in his predecessors’ footsteps?
I’m not going to let him off on waving away everything with that line. A depression caused by what? Artificially low interest rates and easy money? So we do more of the same? And what if we get a greater depression now? Kick the can down the road is no way to run a global economy.
There’s an army of paid prostitute financial journalists to back up the official explanation of events.
“Kick the can down the road is no way to run a global economy.”
Alas, the truth has been spoken.
The greatest error of our age is the belief that 99/100 economists would argue til blue in the face…namely, that modest inflation is not just a stated goal, but an achieve-at-any-cost directive. Two percent is a mandate. The zero bound should be the ultimate repellent, they believe. The concept of falling wages is something that by necessity is negative, they believe. People won’t consume when prices are falling, they believe.
What do I believe? I believe price should be consistent with value, whatever price movement that entails.
And I also believe that in 100 years, history will look back on current economic thought with the same shock at human ignorance we currently attach to believing the world was flat.
“And I also believe that in 100 years, history will look back on current economic thought with the same shock at human ignorance we currently attach to believing the world was flat.”
Hats off to the HBB’s leading optimist!
http://www.bloomberg.com/news/articles/2015-05-08/china-s-very-high-mountain-of-debt
http://www.bloomberg.com/news/articles/2015-05-08/china-exports-decline-in-april-compounding-pressure-on-economy
ADan, do tell us…how does one say crater in Chinese?
Caw, caw…
Interestin’ stuff …
Wiki-up “eating crow” and you will be presented with a good read. The article talks about “humble pie” as well.
https://en.wikipedia.org/wiki/Eating_crow
“humble pie”
It’s harder for me to imagine AlbqDan enjoying that dessert than it is to picture him swallowing a dollop of crow for dinner.
‘Increasing vacancy rates and an excess of housing stock has forced the WA residential building industry to rethink future forecasts for residential construction as some builders consider laying off staff. The Housing Industry Forecasting Group predicted last month that there would be 23,000 dwelling commencements in 2015/16, which is a 23 per cent decrease on the forecast for the current financial year.’
‘As a result, the housing industry will begin reducing the number of construction workers in the industry. It follows the employment high of October 2014 when the WA construction industry achieved a milestone of 150,000 workers.’
‘Master Builders Association housing director Geoff Cooper said at the time construction workers made up more than 10 per cent of employment in WA. “The number of people employed in the industry will also ease back in line with the demand for housing,” he said. “Demand is easing back across most residential building sectors. Alterations and additions might hold up better than others, but certainly new home construction markets we expect to weaken.”
‘According to the HIFG April report, the sales of new homes are now 14 per cent lower than the five-year high achieved last October.’
‘One of Western Australia’s biggest home builders will shed up to 30 staff at its Perth headquarters, as the number of homes built in the state continues to fall. It is understood Dale Alcock Homes has made between 20 to 30 people redundant this morning across four divisions within the company.’
‘Executive general manager Dean O’Rourke told the ABC the decision to cut staff levels would make the business more efficient and more competitive going forward. He would not confirm the exact number of job losses, but said the redundancies were internal and did not extend to Dale Alcock’s parent company, ABN Group.’
‘Mr O’Rourke denied the impact of a slowdown in the state’s mining sector had influenced the decision, saying there were a number of factors at play. However, he said the company was expecting to be competing in a tougher housing market over the next 12 to 18 months.’
‘Australian Bureau of Statistics figures showed the number of dwellings approved for construction in Western Australia dropped 1.9 per cent last month to 2,433, continuing a six-month downward trend.’
‘The data bucks the national trend, which showed a surge in the number of homes being built, led by growth in New South Wales, Tasmania and Queensland.’
‘Residential building approvals in WA reached record highs in August 2014, peaking at 2,757, but the latest figures were still far above what they were following the 2008 global financial crisis.’
WA state recession begins.
“WA” in this case means Western Australia.
Washington state Rental_Fraud.
‘The state employee who manages fraud investigations for the state welfare department was charged with fraud himself Wednesday for lying about his assets on an application to refinance his home mortgage.’
‘The U.S. Attorney’s office said that investigators had arrested Lynwood Patrick Jr., 39, at his home in East Hartford Wednesday morning on a charge of wire fraud. Patrick, charged by a new federal anti-corruption task force, was released on $150,000 bond after appearing before a federal judge in Hartford.’
‘Patrick’s arrest appears to follow a failed effort to establish several income-producing, residential properties, according to a bankruptcy he filed in Hartford in February. The Chapter 7 filing shows that Patrick had an interest in three properties that have been foreclosed upon and two that are in foreclosure.’
‘The complaint against Patrick said that he is employed by the state as director of investigations for the office of quality assurance at the Department of Social Services. Patrick is responsible for coordinating and conducting activities to prevent, detect and investigate fraud, waste, abuse and overpayments in federally funded welfare programs.’
‘He is accused of applying for a mortgage modification under the federal government’s Making Home Affordable program, which was created to make lower-rate home loans available to homeowners who have experienced a decline in income.’
‘When applying for a reduced rate loan through JP Morgan Chase, Patrick is accused of forging phony state of Connecticut pay stubs and underreporting assets to qualify. Patrick reported an annual income of about $55,000, when he was earning about $77,000, according to the arrest warrant.’
‘In addition, he is accused of claiming to have only $500 in a single checking account when he had thousands of dollars spread across multiple accounts at several banks, according to the warrant.’
‘State officials said that Patrick now earns about $101,000 a year.’
‘Ontario’s housing market is overvalued by about 25 per cent, a dangerous level that threatens not only home price growth in the province, but the overall Canadian economy, says Fitch ratings agency. Overbuilding is being blamed, notably condo growth in the Greater Toronto Area, where construction is at a record high.’
“Beneath the unprecedented boom in the Ontario housing market is a large overhang of pending supply that could threaten continued home price growth in the province,” states the report by Fitch Ratings director Stefan Hilts.’
‘It says more than 80,000 condo units are being built in Ontario, which is almost 50 per cent more than four years ago when the boom in multifamily units really started to take off.’
‘That supply spike, combined with flattening condos prices and a construction overhang at time when housing starts in the province have fallen “could present a problem for continued price growth, with the market potentially becoming oversaturated.”
‘The Canada Mortgage and Housing Corporation (CMHC) said recently that risks of overbuilding and overheated markets vary across the country, and that Regina and Winnipeg had the most to worry about. It said the Toronto market is at “moderate risk” of overheating, citing the condo building craze.’
“Overvaluation in Toronto is due to steady price growth that has not quite been matched by growth in personal disposable income,” the report states. “The level of completed and unabsorbed units and the rental vacancy rate are both below their respective historical averages. However, the level of units under construction relative to population is near historical peaks — inventories need to be managed.”
‘Foreigners have snapped up one third of the units in one of Vancouver’s most talked-about condominium towers, reflecting their preference for downtown properties in major Canadian cities.’
‘The unique design by Danish architect Bjarke Ingels, drew international attention when it was revealed in 2013. Developer Westbank Corporation said the building is nearly sold out, with 35 per cent of units sold to foreign buyers, but there are still five penthouses remaining, starting at around $5 million dollars.’
‘According to Westbank, the buyers are not just from Asia, but the U.S. and Europe too.
‘As Lower Mainland housing prices continue to soar out of sight, particularly in Vancouver, the panic that has been swirling around the issue for years is clearly building.’
‘You can tell by all the nonsensical ideas being floated of late to “deal” with the issue of high and rising property values — most of it envy-driven, barely contained xenophobic attacks on foreign investors and how their participation in the housing market is supposedly the cause of our affordability woes.’
‘Vancouver City Hall is foolishly planning to set up some kind of database, where people can rat out allegedly empty homes; someone has set up a website displaying photos and addresses of vacant properties; and many people are promoting various government interventions that will allegedly fix the price problem, such as slapping extra taxes on foreigner buyers, forcing them to rent out their properties or banning them from even buying property.’
‘There is this obsession with properties being left vacant and “zombie neighbourhoods.” Talk about a First World problem. Doesn’t that just mean quiet neighbours in your apartment or less traffic in your neighbourhood? And if foreign owners are paying property taxes but not using services, doesn’t that just mean more city resources for the rest of us?’
‘The reality is that Vancouver has grown up as a city and, like other big cities around the world, home ownership, especially in more desirable areas, won’t be available for everyone. It’s sad but true. Messing with the free market or blaming others won’t change that.’
Can’t wait to learn who gets blamed when the “free market” collapses on Vancouver real estate speculators.
The government, that’s why realtors will be demanding government programs to prop up housing after it collapses.
Talk about whistling past the graveyard. Vancouver prices are the product of a free market? Who is he kidding other than himself? Those readers rating the article have given it a “thumbs down” by a 2-1 margin.
‘Las Vegas’ used-home market had rising sales and prices last month, although ignored listings kept climbing, a new report shows. Buyers picked up 2,753 single-family homes last month, up 1.7 percent from March and 5.3 percent from April 2014, GLVAR reported.’
‘Meanwhile, 7,296 single-family homes were on the market without offers at the end of April, up 0.5 percent from March and 13.6 percent from a year ago.’
‘Real estate agents have said that ignored listings are climbing because sellers, emboldened by the investor-fueled run-up in prices the past few years, are overpricing and not getting any bites.’
Where have all the flowers gone, and where did all the investors go?
A lot of my neighbors in my Las Vegas apt. complex have moved out recently…I’ve been wondering why, and where they’re going?
“The mass of men lead lives of quiet desperation.” –Thoreau
“Worthless housing. Worthless worthless housing. Its worth less and less with each passing day”.
That’s right.
‘Two months after Miami’s Downtown Development Authority released a report signaling a slowdown in the downtown condo market, its author told The Real Deal that there’s enough buyer demand to keep up with the current inventory of units until the latter part of 2016.’
‘The report notes that 22,200 units are in the pipeline — the equivalent of an 11-year supply under the estimated 2,000 new condo units the Miami market can absorb annually, as reported by TRD columnist Peter Zalewski. Almost half of the 22,000 units are currently under construction or in the preconstruction planning and permitting phase, according to the report.’
“With the buildings coming out of the ground now, there is more than adequate demand to finalize and sell those out,” said Anthony M. Graziano, a senior managing director for Integra Realty Services Miami, which produced the report for the DDA. “I don’t project any vacant buildings that are going to be distressed,” he added.’
‘Studnicky acknowledged that the strength of the U.S. dollar versus the weakening of several foreign currencies that fuel the South Florida real estate market has dampened buying conditions. “There are some projects that have been or will be delayed to foreign demand curtailing,” he said. “But there is still plenty of demand from Brazil, Venezuela, and Argentina to maintain the next 18 to 24 months of supply.”
‘Studnicky also said that resales of existing condos could negatively impact the market. “Investors have not shown any desire to sell in big numbers,” he said. “If you are from Argentina or Venezuela, you are better off placing your money in a hard asset that appreciates in value. If you resell the unit, what are you going to do? Put the money in the bank for a 1 percent return or take it back to your country where your money is devalued? The indicators show that is not likely to happen.”
‘Yet there is some evidence that more investors are entering the re-sale market. Graziano said IRR reviewed units sold at completed buildings such as BrickellHouse and 1100 Millicento Residences to find out how many owners are looking to cash in.’
“About 50 to 60 percent are coming back on the market after closing,” Graziano said. “Half of those for rent and the other half are for sale or for rent.”
If you have to borrow for 15 or 30 years you can’t afford it nor is it affordable.
Exactly.
‘Real estate buyers seeking money to renovate and flip U.S. houses are getting help from some of the world’s biggest investment firms.’
‘Colony Capital Inc., Blackstone Group LP and Cerberus Capital Management are among the companies that have started making bridge loans to investors who buy homes to sell them quickly for a profit. Borrowing costs — traditionally the highest in residential lending — are tumbling as the firms compete for customers.’
‘The foray represents a deepening bet on the housing market by Wall Street-backed companies, many of which have built rental-home empires during the past three years and started specialty-lending businesses to finance smaller investors.’
‘The hard-money market is getting crowded, which may lead companies to loosen their standards, said Mark Filler, CEO of Jordan Capital Finance, a lender acquired by credit investor Garrison Investment Group about six months ago. His business has more than 300 approved borrowers with credit lines.’
“Everybody just jumped in,” said Filler. “The risk is people start to relax underwriting guidelines to chase loans. As this becomes more competitive, there will be more pressure to do that.”
‘The regulator of Freddie Mac and Fannie Mae plans to ease annual restrictions on their apartment mortgage business to prevent a lending slowdown, according to two people familiar with the matter.’
‘The government-controlled companies, which buy and guarantee mortgages, are on track to reach a $30 billion annual cap in their multifamily business in the third quarter. The Federal Housing Finance Agency intends to tell the companies this week how it will loosen the limits that it had set in January, the people said.’
‘Without an easing of the restrictions, Fannie Mae and Freddie Mac could have to hold back business in the second half of the year, resulting in higher costs to borrowers and less available multifamily credit. Fannie Mae might also have to slow sales of loans to investors. The companies have begun demanding wider interest rate spreads in an attempt to reduce their pace of business.’
‘Housing officials in the last month discussed several options for relaxing the limits, including raising the caps by $5 billion for each company, said one of the people. They have also considered broadening the criteria to make more mortgages exempt from the limit, the person said.’
‘Fannie Mae and Freddie Mac’s apartment business surged four-fold through April from a year ago, spurred by low interest rates and demand for rental units. Freddie financed $10 billion in multifamily loans in the first quarter, trailing just behind rival Fannie with $10.4 billion, both companies have reported.’
‘The FHFA would be in uncharted territory if it makes changes to the mortgage limits mid-year rather than in January, said Lisa Pendergast, an analyst at Jefferies Group LLC.’
“It would be unusual for them to think about raising the caps now, but on the other hand, by summer, they could hit the ceiling,” she said by phone this week. “They may have to shut down origination if that happens.”
“Everyone in this market will do more this year,” Jeffery Hayward, head of multifamily lending at Fannie Mae, said in an interview.’
‘Freddie Mac and Fannie Mae started increasing business last year in areas that are exempted from the caps: affordable and manufactured housing and small-balance loans.’
“It is a conscious strategy of ours to grow manufactured housing and small balance loans, in response to FHFA’s scorecard,” said David Brickman, executive vice president of multifamily business at Freddie Mac, adding that the firm plans to boost those categories of mortgages.’
‘Fannie Mae has similarly sought to maneuver around the volume limitations. “Affordable’ can be defined a bunch of ways,” said Fannie Mae’s Hayward. “We have done much more business this year because the market needs us to provide liquidity.”
‘The latest survey conducted by the Thai Chamber of Commerce has revealed worrying revelations that 94% of Thai workers remain in heavy debt, and of these 60% are unofficial loans.’
‘Umakamon Sinthornsurat, an academic with the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce, released the findings carried out on workers in the country yesterday showing that no less than 13.3% earn less than 15,000 baht per month and 55% of this group earn between 15,000 – 30,000 baht per month.’
‘Thailand’s household indebtedness for the whole year is expected to amount to 90% of growth domestic product or GDP, and there is a tendency that the household debt problem will worsen, according to the National Economic and Social Development Board.’
‘The NESDB’s findings show that 85-89 percent of the low income earners such as farmers and general workers have created debts from spendings on consumer products but only 17-18 percent of them are capable of servicing their debts.’
‘More worryingly, 61.9% have monthly expenses between 15,000 – 30,000 baht which mean that they have only marginal savings.’
‘Ninety four percent of workers are heavily in debt and of these 59.6% are unofficial or unregulated loans. On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month.’
‘Household debt is particularly worrying in Thailand and Malaysia, but the official data may not capture the full picture for families around the region. The official data can be worrying enough: Malaysia’s ratio of household debt to income is 146 percent, while Thailand’s is at 121 percent, based on mid-2014 data, up from 2007 pre-crisis levels of 139 percent and 93 percent respectively, McKinsey said in a report in February.’
‘The household debt of low-income earners is expected to surge this year, as the glum economic conditions and relatively high cost of living will lead them to rely more on both organised and unorganised loans.’
‘Thanavath Phonvichai, vice-president of research at the University of the Thai Chamber of Commerce, said the household debt of these workers was expected to grow by 10.9% this year to 117,839 baht per family. “The tepid economy will certainly lead employers to cut overtime payment, lowering their income, while the relatively high cost of living will deal another blow to workers, particularly those earning less than 15,000 baht a month, forcing them to rely more on both organised and unorganised lenders in daily life and to service existing debts,” he said.’
What’s Thai for Fang nu?
Phucket Buyer?
‘The number of unsold flats in six major cities is on the rise. It hit the highest at 6.88 lakh units in the January-March quarter, despite banks easing home loan rates, though marginally.’
According to Liases Foras, a real estate rating and research company, Delhi-National Capital Region (NCR) tops the list with unsold 321.68 million square feet, followed by Mumbai at 192.27 msf, Bengaluru (152.43 msf), Pune (70.64 msf) Chennai (64.03 msf) and Hyderabad (52.05 msf).’
‘Despite the pile-up of unsold units, developers have been holding on to their prices, says the report.’
‘NCR showed the worst at 71 months, while Pune market represented the least, at 18 month. Mumbai stands with 46 months of inventory. “This is is big paradox for this country, which is facing housing shortage. It is also facing problem of rising inventories. It clearly indicates that the prices are highly unproductive,” Pankaj Kapoor, managing director, Liases Foras, told dna.’
“We need to have price correction, which nobody is taking into account. New launches are still happening, but sales are declining; this is why, the inventories are rising,” he said.’
“The developers kept on launching spacious units. This is why price-sensitive people, the lower end of spectrum, are not buying. There is mismatch in what the market wants and what they are developing,” said Ashutosh Limaye, head, research, Jones Lang LaSalle.’
‘Housing shortage coupled with its soaring prices in New Zealand have turned into a political issue with main opposition parties, Labour and Greens taking the government to task, alleging that New Zealand homes are being marketed in Asian countries projecting it as a property haven for attracting buyers who want to make quick bucks and hefty profits.’
‘The two parties had been blaming foreign speculators for spoiling Auckland’s red hot housing market. They are now claiming evidence that New Zealand homes being advertised as an easy place to make a fast buck. “A Malaysian property website lists nearly 4000 New Zealand houses and boasts they work with a real estate company here to help Malaysians invest in our lucrative property market,” Labour’s Phil Twyford said.’
‘Twyford claimed that radio ads are playing in Malaysia, Singapore and Queensland, calling upon investors to buy Auckland properties while heralding the fact that capital gain tax or stamp duty are payable in New Zealand. Claims are also being made that investing in rental properties will be lucrative as they can earn half the New Zealanders’ weekly wages.’
‘Green Party housing spokesman Kevin Hague also said cash-rich non-resident buyers are thinking that New Zealand is an easy mark. “They can come here, score a bunch of properties, pay no capital gains tax and charge a premium for rent,” he said. Hague said current rules allow foreign buyers a free ride because official approval is needed only for deals worth more than NZ $100 million (AU$97.23 million). “We need to urgently tighten our overseas investment laws,” he added.’
From the post above:
‘In April Auckland house prices rose by NZ$918 per day’
And this:
‘In recent months, the actual prices of inner Sydney apartments has started to fall. Yes, fall. No one has heard about falling apartment values in Sydney for a long time. In Sydney, over 80 per cent of inner city apartment buyers are Chinese or Asian investors. In Melbourne’s CBD the figure is even higher.’
‘In April Auckland house prices rose by NZ$918 per day’
If that was sustainable (and well all know it’s not) that would be $300K per year.
Yeah, Silicon Valley prices in a sparsely populated, agrarian country with no real industry of any kind to speak of. That makes sense.
Grossly inflated prices are no more sustainable in the land of fruit fruits and nuts than they are in Auckland.
I heard a guy say the other day that Australia hasn’t experienced a recession in 25 years….it will be a big wake-up call when they do, since people in their 40’s don’t even know what one looks like.
‘Ten of China’s most wanted corrupt officials are believed to be hiding in Australia and have been outed publicly by Beijing, as it steps up pressure on foreign governments to extradite graft suspects.’
‘The birth dates, passport numbers and former occupations of 100 wanted officials have been released on the website of the Central Commission for Discipline Inspection, the Communist Party’s anti-corruption arm.’
‘The AFR can reveal that five of those believed to be in Australia have links to companies in Sydney, Melbourne, Perth and Adelaide and at least one owns property.’
‘Between 2002 and 2011, a staggering $US1.08 trillion ($1.39 trillion) was spirited out of China illegally, Washington-based non-profit group Global Financial Integrity said. The large flows of money helped boost house prices from Sydney to Los Angeles and also heightened diplomatic tensions as Beijing warned countries not to become havens for corrupt officials.’
‘This has put governments like Australia in a difficult position because of Communist Party control of China’s legal system and because some corruption crimes carry the death penalty.’
‘The United States tops the destination list of the CCDI’s wanted list with 40 mentions, followed by Canada, New Zealand and Australia. The fugitives’ names have been posted on Interpol, as China looks to speed up their extradition.’
‘The list is the latest effort by a team of anti-graft busters in China, who embarked in 2014 on “Operation Fox Hunt” to root-out the so-called “foxes” hiding overseas. Earlier in 2015, the initiative was broadened to “Operation Sky Net”, which will use the central bank and Ministry of Public Security to target money laundering and the underground movement of funds.’
“The large flows of money helped boost house prices from Sydney to Los Angeles and also heightened diplomatic tensions as Beijing warned countries not to become havens for corrupt officials.”
_____________________________/
Good luck with that one Beijing. Other countries want their money and don’t care where it came from.
Kind of funny that all the money we sent to China over the past 30 years fo plastic crap is now coming back to drive us out of our homes.
And they’ll lose every one of them like the Japanese in the late 80s.
The old “Emerging Market Two Step” that Uncle Sam does so well.
s now coming back to drive us out of our homes
The ChiComs are forcing Americans to sell against their will?
…no. They are forcing us to rent by pricing us out.
How can you be “priced out” if you already own?
Hi colorado. Hows it going?
“Between 2002 and 2011, a staggering $US1.08 trillion ($1.39 trillion) was spirited out of China illegally, …”
I wonder how much of that was spent on luxury suites and private gaming villas by “Asian whales” visiting here in Las Vegas?
I wonder how much of that was spent on luxury suites and private gaming villas by “Asian whales” visiting here in Las Vegas?
My brother works on the Strip (the place with the gondolas) and personally with the whales - he suspects he’s advanced as high as he’ll be allowed in that area because he doesn’t speak Chinese. They come with bags full of cash.
Response to sleepless from yesterday….
Comment by sleepless_near_seattle
2015-05-07 14:40:17
“expected the confiscatory property taxes to drop”
Don’t know how things are done there, but here the assessed price upon which property taxes are based is much less than market price. Law was passed such that property taxes can’t go up in Portland by more than 3%. (They can go up by more, I believe, if improvements are made that trigger a new assessment) Because of the way the assessment is set, taxes always go up. Did so even as houses lost “market value” in the 2008-2011 time period.
But guess what they invariably go up by? If you guessed 3% you’d be correct.
I think Double Flip can chime in here too…
What I know is that in Cook (aka Crook) County IL. up until 5 years or so ago had a cap on annual property tax increases equating to something like 2 to 3% annually - not sure what it was indexed to. Surrounding burgs had the same - Since that time - not so much - what folks are seeing is double digits now -
Over a beer with the guys last night we talked about the tax increases where they live in DuPage and Kane Cos. here in the Chicago area - the lowest number was a 7% increase over the last tax cycle - this in DuPage. In Crook Co the cycle is two years for reassessment - surrounding burgs I think it is annually - So….I am of a mind that the 7% YOY increase is just the beginning. What is coming out in common conversation over beers these days is the City of Chicago and the state in general are so far gone that there is no way out - libs and righties at least all agree on the fact that the debt is HUGE!! What is different between the stripes is how to cure the problem. As for me I think it is time to pull life support on this place and just start over.
Not sure what has changed in the last 3 years, but here’s the best link my brief search yielded.
http://www.illinois-attorney.com/news/how-real-property-taxes-calculated-cook-county/
Bill Gross: Central Banks Are Gaming Asset Prices
http://www.bloomberg.com/news/videos/2015-05-08/bill-gross-central-banks-are-gaming-asset-prices?cmpid=yhoo
He gets paid how much to reach these conclusions?
San Francisco Metro Sale Prices Fall 4% YoY On Skyrocketing Inventory
http://www.zillow.com/san-francisco-metro-ca_r395057/home-values/
HA,
Perhaps you would be more credible in your posts if the link did not suggets the San Francisco Market was very hot and healthy. I am a housing bear but reality is reality and you are not living in it.
Prices are falling. I don’t know how to help you.
A real estate broker told me that they sold 90 houses in Toronto in two hours last month - houses that will not be built for two years.
Realtor got $500 for every house sold and $400 more when each deal closes.
Big deposits and I believe three more deposits within two years totalling about $100,000. Also, no way to get out of the contract unless the builder wants out.
The builders today are a lot more informed, and able to protect themselves better, than before I became a crotchety old man.
This mania will not end well.
“A real estate broker told me”
That’s a problem.