A Continuing Trend Toward A Correction
The Tampa Bay Times reports from Florida. “With interest rates near rock bottom, unemployment down sharply and a Florida economy on the rise again, you’d think homeownership would be on the upswing. But cheap mortgages are not stemming the tide. Homeownership peaked in Florida in 2005-2006 at 72.4 percent of the population. It has been heading south ever since, falling under 63 percent in late 2014. That’s a lower homeownership rate than this state has seen in at least 30 years.”
“And the rising cost of renting only compounds the struggle of younger people trying to save for a down payment. Many young people are less enamored with the ‘dream’ of homeownership after they saw their parents and friends struggle in the recession with mortgages larger than the value of their homes or, of course, foreclosures. Why stretch so far to buy a home — plus pay for property taxes and insurance — only to risk another housing bubble and crash in values?”
“Does any of this really matter? Yes, says Ron Terwilliger, who spent nearly 20 years running Trammell Crow Residential, one of the nation’s largest apartment developers. If renters are unable to ever become homeowners, Terwilliger recently told the Wall Street Journal, who will buy those homes when today’s homeowners need to sell? Nobody. Until those home prices start falling again.”
The Miami Herald. “A delegation of South Florida real estate brokers traveled to Beijing last month hoping to raise interest from wealthy Chinese buyers at a luxury real estate conference. Developers and brokers are turning to buyers from other countries, including China, as a Latin American currency crisis slows the cruciall flow of foreign cash that drives Miami’s real estate market. Chinese buyers make up a tiny fraction of international buyers in South Florida — just two percent in 2014, according to a report by the National Association of Realtors.”
“‘The presence of Chinese buyers in South Florida is definitely growing,’ said Christopher Zoller, president of the Miami Association of Realtors residential division, who attended the showcase. ‘South Florida has long led the nation in international real estate sales, and we feel very strongly that China, the world’s most populated country, will only increase Miami real estate sales to foreign buyers.’”
The Real Deal. “Downtown Miami condo prices and rental rates are leveling out after two years of rapid appreciation, offering another sign of change afoot in the market as supply and demand shift, a new report obtained by The Real Deal reveals. The Miami Downtown Development Authority’s Q2 2015 Residential Real Estate Market Update, written by Integra Realty Resources, shows a continuing trend toward a correction in the market, amid the ramifications of foreign currencies sliding against the dollar.”
“‘Conventional rental rates have remained level [year-to-date] in 2015, as new condo projects are being completed and listed within the rental inventory,’ the report said. Among examples: buyers of BrickellHouse‘s 374 units have listed 45 percent of the units for rent, while buyers of 1100 Millicento‘s 382 units have listed 72 percent of the 171 closed units to date, according to the report.”
“‘The decline in foreign currencies compared to the U.S. dollar over the past 18 months has narrowed the buyer pool,’ the report said. ‘Several brokers have expressed concern regarding the closing ability of mid-level buyers that may not be fully denominated in U.S. currency. There have mean early reports of buyers seeking approval for the assignment of their contract to a third party.’”
The Sun Sentinel. “Average consumers in South Florida would be slightly better off renting a home than buying one — assuming they invest the money they would have spent on a down payment and other cost savings, a new study shows. The Beracha, Hardin & Johnson Buy vs. Rent Index, a creation of professors from Florida Atlantic and Florida International universities, determines whether market conditions favor buying or renting a home in terms of wealth creation and investment opportunities.”
“As of the first quarter of 2015, all 23 metro areas nationwide tracked by the index are moving closer to renting or already favor renting. The South Florida metro consists of Palm Beach, Broward and Miami-Dade counties. ‘There’s no reason not to buy right now,’ said Ken Johnson, an FAU professor and one of the authors of the index. ‘But I would ask for price discounts and evidence that supports the value that sellers are asking. Be willing to walk away from one property to buy another.’”
The Orlando Sentinel. “Five years after Metro Orlando’s distress sales peaked, the region still ranks first nationally for financially troubled house sales, a new report shows. More than 22 percent of all home sales in Orange, Seminole, Osceola and Lake counties were mired in underwater mortgages during March, according to CoreLogic. What has changed in Orlando during recent years is the disappearance of short sales. They were so commonplace four years ago that 22 percent of all Orlando home sales were financially underwater houses. In March, only 4 percent of home sales in the Orlando region were short sales. Before the bubble burst in 2007, few had ever heard of them.”
“Foreclosure sales by lenders, meanwhile, have held steady at about 18 percent of sales during the last four years.”
The Palm Beach Daily News. “Palm Beach developer Robert V. Matthews — embroiled for years in the much-delayed Palm House hotel-condominium project on Royal Palm Way — is facing a foreclosure suit against his oceanfront house. The action filed Wednesday involves the same $24 million mortgage that was the focus of a similar suit filed in 2011 and dismissed early last year by a circuit court judge after both sides consented.”
“Matthews and his wife completed the six-bedroom house in 2006, with nearly 15,850 square feet of living space, inside and out. The foreclosure filing is the latest in a series of legal actions against Robert Matthews that have sought payment for debts related to his ownership, through different companies, of properties that ended up in foreclosure, including two office buildings on Royal Palm Way that later changed ownership. Under construction, the Palm House at 160 Royal Palm Way also is in foreclosure.”
‘Several brokers have expressed concern regarding the closing ability of mid-level buyers that may not be fully denominated in U.S. currency’
Oh dear. More on this:
‘There are 26,263 condos in the pipeline in downtown Miami, according to the DDA study. That breaks down to 1,413 completed, 5,650 under construction, 2,223 signing contracts with buyers, 1,113 taking reservations and 15,964 proposed. The bulk of the activity is in Brickell, the Central Business District and Edgewater. There was a 26 percent spike in projects announced since the last quarter.’
‘Rental growth will be constrained the next two years as more condo projects are completed and delivered into the rental inventory, the study said. For example, 72 percent of the closed units at the Related Group’s Millicento have already been listed for rent.’
‘In addition, 3,715 conventional apartment projects are under construction downtown to more than double the existing stock of about 2,500 units. That should also place downward pressure on rents, the study said.’
‘The Integra study noted that this cycle has seen its first canceled project, the Ion at Edgewater, which is being changed from a condo tower to a mixed-use building. It said the waterfront properties in the Edgewater neighborhood are selling well, but the pricing is not as proven for non-waterfront condos there.’
“The continued increases in land pricing and construction costs are beginning to constrain irrational exuberance over the state of the market,” the DDA report said.’
‘Some market analysts have advised individuals to be cautious, as this may be the advent of a property bubble. One of these, as reported on miamiherald.com, is Dezer Development President Gil Dezer. According to Dezer, “The buildings aren’t selling out in five minutes anymore because there’s the same number of buyers for some projects. It’s not a normal or stable market when the units are going that fast.”
I remember reading a Miami real estate blog years ago that was full of posts by people in disbelief at how much money they had lost on their condo. I wonder how many of them turned around and bought another one as soon as prices started to go up again?
The numbers that keep sticking in my mind were from the 2005-2006 era. At that point, there were 50k condos being built. Over the prior decade, there were only 10k built.
Puts the 26k in perspective…a big number.
Why would any be built considering there is no demand at any price?
50k? 26k? That’s still a lot of condos.
“who will buy those homes when today’s homeowners need to sell? Nobody. Until those home prices start falling again.”
That’s right…
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
But falling home prices destroys equity. And destroying equity destroys wealth. And destroying wealth impoverishes people.
And impoverished people are not spenders, and spenders - lots of spenders - is what is needed in a consumer-based economy.
Well…. not really. “Equity” in a depreciating asset like a house evaporates.
We’re all out of spenders. What we have is generations born into debt slavery.
The theory is, make housing more expensive so people feel wealthy and go out and spend more, but more expensive housing means people have less income to spend because a large chunk of it is going to the banks to pay off a mortgage, so the banks have to make more home equity loans so people can actually have money so they’ll feel wealthy so they’ll go out and spend it and thus help the economy. It makes sense to any economist who has recently smoked a rock of crack.
so the banks have to make more home equity loans so people can actually have money so they’ll feel wealthy so they’ll go out and spend it and thus help the economy
Or keep lowering interest rates so “consumers” can refi and spend the monthly savings on frivolous purchases. Of course, as interest rates approach zero that loses its effectiveness.
Will we someday see a negative rate mortgage?
That works, until the generation that can in no way afford to buy a house in the first place. The millennial are close, but I think it will be their kids that cause the whole stupid machine to seize up.
But we’re not out of spenders in my neighborhood. The foreign buyers continue to pore in. The are having Chinese RE bus tours here now - yes, really!
These buyers were not a factor during the last bubble.
Palm Beach Gardens, FL Housing Prices Fall 16%
http://www.movoto.com/palm-beach-gardens-fl/market-trends/
3656 Daphne
Palm Beach Gardens, FL 33410
$305,000 3 Beds | 2 Baths | 1,914 Sq. Ft.
From 1983 - 1999 this house would have been listed between $140k and $160k
“If renters are unable to ever become homeowners, Terwilliger recently told the Wall Street Journal, who will buy those homes when today’s homeowners need to sell? Nobody. Until those home prices start falling again.”
And some of us who are renting and flush with cash will never buy a home again. Ponder that Mr. Terwilliger.
Leave the poor guy alone. With a name like Terwilliger, he’s probably been tormented enough as it is.
‘Property values in Lee County continue to rise as indicated by the estimated 2015 Tax Roll Values released Friday by Property Appraiser Ken Wilkinson.’
“For the last two or three years we have seen a positive overall increase in all areas of the county,” said Wilkinson. “We are in a positive market with about 60 percent cash sales. This kind of steady increase will benefit buyers and sellers, but I’m not as concerned as a few years ago when the bubble was not sustainable.”
‘Wilkinson said the foreclosure rate remains a factor in the local market, but not what it was before the downturn. He said the inventory is being absorbed by the market very well. “I’m happy to see us get into this upward trend,” said Wilkinson.’
‘Property values started to rise in the county overall two years ago while some communities still saw decreases. Most property in the county increased for 2013 with few exceptions. This year every city, town and taxing district in the county is seeing higher values.’
“The last time we had an up market was January 2007 when the market was at its peak,” said Wilkinson.’
‘Property values started to rise in the county overall two years ago while some communities still saw decreases. Most property in the county increased for 2013 with few exceptions. This year every city, town and taxing district in the county is seeing higher values.’
“The last time we had an up market was January 2007 when the market was at its peak,” said Wilkinson.’
. . . for some reason that evil kid-catcher in Chitty Chitty Bang Bang comes to mind when reading about this Wilkinson government toady . . . . dressed in his skinny black undertakers suit, fondling his net in greedy anticipation of more taxes !
Years ago, circa 2005-2007, there was a fellow who posted here his name “nhz” IIRC. He would post about housing in the Netherlands and the outrageous prices fueled by various government policies.
I wonder what has happened in the Netherlands in the last 10 years and how it compares to what’s happening in the USA and the rest of the world.
I also wondered what happened to nhz; he had pretty good info on the Netherlands and Europe.
I remember nhz. He stopped posting, oh, about five years ago.
Wow now that’s a name from the deep, dark past!
‘Cerberus Capital Management is buying about 4,200 U.S. houses, expanding its foray into home rentals in the industry’s largest bulk purchase.’
‘The investment firm plans to acquire the properties from BLT Homes, a rental company owned by closely held Building & Land Technology, according to three people with knowledge of the transaction. The houses are mostly in Midwest cities such as Indianapolis and Chicago, as well as in Florida, said the people, who asked not to be named because the deal is private.’
‘Large landlords are seeking economies of scale by acquiring bulk portfolios, while smaller companies are taking advantage of gains in real estate values to sell as it gets harder to compete.’
“Everything that I hear and see in the market points to this wave of consolidation happening,” said Jack Micenko, an analyst with Susquehanna International Group LLP who covers single-family real estate investment trusts. “We keep hearing the bid-ask spread is narrowing. Seller expectations are getting more reasonable.”
Do a search on Invitation Homes and the problems that tenants have had with things like getting repairs. This private equity adventure will not end well.
http://www.latimes.com/business/la-fi-blackstone-lawsuit-20140506-story.html
‘The latest national housing market index produced by Florida Atlantic University and Florida International University faculty indicates it is becoming more favorable for renters than buyers in terms of wealth accumulation.’
‘Three cities (Dallas, Denver and Houston) are clearly in rent territory, with property pricing clearly out-pacing rents, meaning buyers should proceed with strong caution.’
‘In contrast to the latest Standard & Poor’s/Case-Shiller Home Price Indices, which recently reported a five percent year-over-year property appreciation rate, the BH&J Index suggests that potential purchasers in many cities around the U.S. should begin to bargain more aggressively.’
“Potential buyers should be cognizant that ‘the deals’ are out of the marketplace and that it is essentially a tossup between rent and ownership as to which way will, on average, provide greater wealth accumulation,” said Ken Johnson, Ph.D., a real estate economist who is one of the index’s authors and an associate dean of graduate programs and professor in FAU’s College of Business. “Miami, in particular, deserves attention as it has been trending toward rent territory for several reporting periods. In Miami, potential buyers should seek to bargain more aggressively.”
‘Seven cities (Miami, Honolulu, Los Angeles, Pittsburgh, Portland, San Francisco and Seattle) are at or near the indifference point between ownership and renting.’
‘Seven cities (Miami, Honolulu, Los Angeles, Pittsburgh, Portland, San Francisco and Seattle) are at or near the indifference point between ownership and renting.’
Scary. Who can afford to live in those places?
Dual-income tech workers. And there are a lot of them here in Seattle.
Also: foreign investers. Seattle real estate still looks cheap cheap cheap in comparison to Vancouver BC and SFO.
Dual-income tech workers. And there are a lot of them here in Seattle.
I’ll bet they’re still the minority of workers and that the majority don’t even come close to those income levels.
And how many “Dual-income tech workers” can there really be when there are so few women in tech?
You’d be surprised. I have two sets of new neighbors and both wives work in tech.
And you’re right that the majority of workers don’t have that kind of income. But housing prices aren’t set by the majority.
We are now in a global housing market, where the spoils go to the richest. That means prices here are being set by rich buyers from all over the world, not by the majority of non-tech low-income workers that already live here.
How is it that my Russian neighbors own three million-dollar homes here? I don’t know, but I do know that there is no way I can compete with them financially.
A lot different than it was during housing bubble 1.0.
Same fraud, same borrowed money, same bubble.
Bellevue, WA Housing Prices Fall 6%
http://www.movoto.com/bellevue-wa/market-trends/
All-cash is NOT borrowed money. What part of all-cash do you not get?
Foreign buyers come here with cash.
No mortgage.
No borrowing.
No bubble for those buyers since they will never be underwater on their loans. Even if the market crashes, they will still own the property free and clear. And they value owning the land, regardless of its cost or decrease in price.
And boots-on-ground data refutes falling prices in Bellevue, BTW. It’s the hottest market for Chinese investors in the US right now.
Nonsense.
And there are no “foreign buyers”. It’s all dumb.borrowed.money.
Well you have a problem with your understanding of the english language and word definitions then, and I can’t help you with that.
Would you like to meet my Russian neighbors to the north of me, the Chinese owner to my east, or the two Pakastani neighbors to my south? And they didn’t borrow any money either. You can look that up in public records.
Prove it.
Data my friend data.
Thanks for the link, it’s interesting.
BTW, if SFBA is close to even buy/rent even with the current crazy rents, imagine what the chart will be like if the “App Bubble” crashes, and rents along with it (rents will crash quicker than house prices).
Also, I wonder how the investment environment affects their calculations…
‘Black Knight examined the most recent data on home retention actions– i.e., loan modifications and repayment plans– and found that of the approximately 952,000 borrowers who are 90 or more days past due but not yet in foreclosure, 62 percent have been through some form of home retention program. As Black Knight Data & Analytics Senior Vice President Ben Graboske explained, while overall retention actions have decreased over the past two years, they are making up a greater share of that seriously delinquent inventory.’
“In analyzing the data around home retention initiatives, we found that nearly one in five seriously delinquent borrowers are currently taking part in an active trial modification or payment plan,” said Graboske. “With 62 percent of loans 90 or more days delinquent but not yet in foreclosure having been through some form of home retention action, we’re currently seeing the highest level of saturation yet, but that’s only marginally up from last year in other words, that saturation level is beginning to flatten. Overall, home retention actions have declined 42 percent over the past two years, but at the same time have increased nine percent as a share of that seriously delinquent inventory. We’re also starting to see some redundancy in this activity 70 percent of all new trial modifications and repayment plans have already been through one or more home retention actions previously.”
‘Black Knight found that Washington, D.C., led the nation with 67 percent of its seriously delinquent inventory having gone through some sort of home retention activity; of these, 26 percent are currently in an active trial modification or repayment plan. Maryland, Georgia, Texas and Connecticut followed; all having seen 66 percent of their 90+ day delinquent inventory participate in some form of home retention action. Additionally, at the national level, some 53 percent of loans in active foreclosure had taken part in home retention initiatives.’
“Of these three states, Florida has seen the most improvement, with a 37 percent decline in inventory over the last year, and a 63 percent drop over the last two years,” Graboske said. “On the other hand, low foreclosure completion rates in New York and New Jersey have contributed to lingering inventory in those states. Looking at pipeline ratios– the length of time it would take to work through the backlog at the current rate of foreclosure completions– we see New York and New Jersey with nearly 13 and nine years of inventory, respectively. Even though Florida peaked with 20 percent of the entire state being 90 or more days past due, its pipeline ratio was never longer than 10 years and is currently the lowest among all the judicial foreclosure states at just under three years. Compare that to Washington, D.C., which uses a non-judicial foreclosure process and a comparatively very small backlog inventory, yet still has a pipeline of over 43 years, primarily due to extremely low foreclosure sales volume there.”
DC and NoVA is ground zero on the east coast for excess empty and defaulted inventory and housing speculation.
Nope dc area has 1/2 the negative equity rate of USA
Nope.
Worse yet, DC and NoVA experience the worst of boom/bust due to the massively inflated prices and underwater conditions of homeowners.
Alexandria VA Housing Prices Fall 10%
http://www.movoto.com/alexandria-va/market-trends/
http://www.bkfs.com/Data/DataReports/BKFS_MM_Apr2015_Report.pdf
The link to the report.
“Does any of this really matter? Yes, says Ron Terwilliger, who spent nearly 20 years running Trammell Crow Residential, one of the nation’s largest apartment developers. If renters are unable to ever become homeowners, Terwilliger recently told the Wall Street Journal, who will buy those homes when today’s homeowners need to sell? Nobody. Until those home prices start falling again.”
Could central banks potentially play a role in generating artificial purchase demand (e.g through large scale MBS purchases)?
What about federal agencies? Couldn’t otherwise unqualified buyers be added to the demand pool by using lax lending standards, down payment assistance and super-low interest rates to break the linkage between household incomes and home purchase budgets (aka subprime lending)?
Apparently there are ways available to qualify households which otherwise seem unfit to buy. The larger problem may be how to encourage buyers to make a purchase after those home prices start falling again. Nobody wants to catch a falling knife.
“‘Conventional rental rates have remained level [year-to-date] in 2015, as new condo projects are being completed and listed within the rental inventory,’ the report said.”
Sounds like a disaster for everyone who has invested in Miami. But a great deal for Miami itself and those who live there, as long as they are not condo owners.
Private sector subsidized housing, on a massive scale.
Is this the first time in history that financial engineering was used to create a synthetic housing recovery, rather than allowing time for the market to heal on a fundamental level?
If so, is there any reason to expect the synthetic recovery to last?
July 17, 2014
Begging For Inventory, Perplexed By Zombie Foreclosures
http://thehousingbubbleblog.com/?p=8496
There’s a zombie foreclosure just a few steps away from my parents’ place in eastern PA.
The original owner? Well, he was the richest man in the neighborhood, and it was quite the place. The rest of us felt a special thrill if we were invited to that house.
Mr. Rich Neighbor sold it to another family, there was a divorce, and the woman of that couple got to keep the place. She got remarried, and things didn’t go well. There was another divorce, and then the house was abandoned.
Mind you, this is not inner city Philadelphia. It’s a nice neighborhood and not the sort of place where bad things happen and houses get left without another buyer to move it.
I took lots of pictures of the place, mostly to show to my mom, who doesn’t get around much anymore. I got more than a few shots of the pool, which was full of algae water and was uncovered.
I also called the township inspector, who was already aware of the place. He was struggling with the fact that the lender just wasn’t interested in repossessing the property. Which meant that it was the township’s problem.
Fast-forward to this past weekend. My mom and dad were at a high school graduation party just two doors away from this house. It’s still empty.
The perfect place for the graduates to go all summer long to get wasted and take frustrations out on drywall and fixtures.
The Weather Channel just did a story about flooding in a north Louisiana neighborhood. Nice new barn-sized McMansions surrounded by 3 feet of water on every side. Some houses are still under construction. What is the mentality that drives these people to live in flood plains? Spend a couple hundred k or more on a house, and a few months later you’re living in the middle of a lake. But it’s a once in a 70 year flood, so once the water recedes, they won’t have to worry until 2085.
Most buyers are plain stupid. I recently looked at a very nice home located in the 100-year floodplain, and it sold for no discount (as compared to the same floorplan houses a few blocks away that are not in the floodplain). Plus mandatory $750/year floodplain insurance, if you have a mortgage on it.
Then, there was a brick 1929 house in Seattle that just sold for around $800K that needs $80K of foundation work (stabilize, and then level). Still, everything on top of the foundation even after all of that work is ’seismically-poor’ according to the structural engineer.
So almost $900K for a house that is going to crumble into a pile of bricks during the next big one.
Stupid, and you can’t fix it either.
Show us a link.
Yet another reason why I live on a hill.
‘Americans are suffering from FOMO, fear of missing out. And what is it they might be excluded from? You’ve probably guessed it: homeownership.’
‘This according to the MacArthur Foundation and Hart Research Associates’ 2015 How Housing Matters annual survey, which polled 1,401 adults, with an “oversample of millennials,” asking their feelings about housing.’
‘Guess how they feel? Depressed. Also: Despite the consistently rosy reports about home prices rising, “a significant majority of Americans believes the country is still not past the housing crisis that began seven years ago,” the survey found.’
‘Some 70% of those polled aspire to own, but they’re worried about affording a purchase in an economy where home prices keep rising but incomes, and inventory, aren’t keeping pace. They’re also worried about social mobility; 80% said they now believe it’s much easier to fall from the middle class than ascend to it. The findings come on the heels of news that U.S. homeownership rates hit a 20-year low.’
‘Here’s an even more cringeworthy set of numbers: “Half of the public (55%) reports having had to make at least one sacrifice or trade-off in the past three years in order to cover their rent or mortgage. One in five (21%) reports having to get an additional job or work more, 17% stopped saving for retirement, 14% accumulated credit card debt, and 12% cut back on healthy nutritious foods. The segments of the public having to make trade-offs at the highest rates include renters (73%), racial minorities (68% of Hispanics and 62% of African-Americans), millennials (67%), and city dwellers (64%). Majorities of Americans continue to believe that it is challenging to find affordable rental housing in their own communities (58% in both 2014 and 2015), and housing to purchase (60% in 2015, 59% in 2014), and even more challenging for families at the median income (65%), young adults (80%), or families at the poverty level (89%).”
http://www.realtor.com/news/trends/americans-grim-on-homeownership-macarthur-report/
Mel, Janet, heck of a job.
But Tucson’s housing market is on the mend! Our local media says so!
Tucson home sales, prices tick up
oooooops…
Tucson, AZ Housing Prices Fall 6%
http://www.movoto.com/tucson-az/market-trends/
FOMO!
Redmond, WA Housing Inventory Balloons 82% As Prices Fall
http://www.movoto.com/redmond-wa/market-trends/
And yet, inventory is at historically-low levels.
The same link shows that median price per square foot is up, as is median price.
Inventory levels mean almost nothing, as it is merely a snapshot of houses available for sale on one day per month. That number can vary widely. It doesn’t tell you if 200 or 2000 homes sold the other 29 days of the month.
No my friend.
Median price is down 9% and inventory is up 82% at record levels.
Yes, you are correct, inventory is at record LOW levels.
And your own link says median price is up, I just looked at it again to make sure.
Down 8% and inventory up 82%.
Capiche DownIzUp?
Don’t blame me if your own data refutes you . . .
What part of record-low inventory don’t you understand?
If you started using actual good data, then maybe you’d have to stop posting this nonsense.
Inventory up another 3%. Refute the data my friend.
Redmond, WA Housing Inventory Balloons 85% As Prices Fall
http://www.movoto.com/redmond-wa/market-trends/
‘Bill Gross also saw an agenda in recent remarks by Fed Vice Chairman Stanley Fischer and European Central Bank President Mario Draghi when they warned investors to watch out for volatility, because the central banks have been trying to dampen volatility for the past five years.’
“To me that was a signal. To me that basically said they want longer-term rates to go higher,” he said. “Why would they want that? Because insurance companies in Europe, insurance companies in the United States, pension funds and so on are suffering with 2 to 3 percent long-term yields. They need higher yields.”
‘The intervention by the central banks may also have another effect-creating a bubble, Janus Capital Group CEO Dick Weil told “Power Lunch” Wednesday. While the global economy is stronger than people imagine, it is propped up by the central banks, he noted.’
“We’re not sure where all this money is flowing and which artificial pricing is worst and is going to pop like a bubble,” said Weil. “When times are more risky, such as now potentially with a lot of central bank intervention, there’s more risk of asset bubbles bursting.”
http://finance.yahoo.com/news/bill-gross-one-best-ideas-204416683.html#
Builders in Palm Beach County have been in a frenzy to get their projects through and know their time is limited. Building away, they are. Fast, too.
There are two houses next door to me that are owned by SWAY 2014 1 BORROWER LLC, mortgaged to the hilt to J.P. Morgan through their rental scam. The lawns died. It take about $100/mo in water to keep these lawns up. Neither of the tenants appear to be watering the lawn and I know the house immediately next to me does not have a functional sprinkling system. Last year the HOA got on everyone and made us put down sod. It is a problem, because my lawn on that side of my house drains there and it is hard for me to keep it from dying, too. I do not want my landlady to raise my cheap rent over sod for the stinkin’ lawn. Maybe I should complain.
I feel like I am watching a circus. It is all so insane. How long can this go on? I am planning on renting for another year. Maybe more.