The Last 20 Years Were An Aberration
A weekend topic on construction, Builder Online. “I have been sitting on the sidelines and patiently watching the spring selling season play itself out and testing a couple of hypotheses in my head regarding where we are, where we are going, and what strategies might be appropriate to consider. One of those hypotheses is that, from a long-term perspective, the last 20 years were an aberration for the home building industry, at least in terms of the composition of product mix.”
“Those making strategic asset acquisition and financial decisions using this frame of reference might be making bad decisions if the ‘cheese’ has actually reverted to patterns indicative of the period prior to the aberration (notice I did not use the word ‘bubble’). This fact gets ignored because the data set most analysts and commentators use runs the 25 years from 1990 to the present. It is as if the period prior to that timeframe did not exist and bears no relevance.”
“Yes, there were up and down years, but when taken in 10-year batches, the only decade that jumps out is the 70s, when the baby boomers were full-bore coming into the housing market, and the recent time period coming out of the Great Recession. The mix of housing stayed remarkable similar, also, up until the early 1990s with about 55% of production in single family, 30% in multifamily, and 15% in manufactured housing.”
“However, as the housing recession of the late 1980s and early 1990s began its recovery, this pattern began to change in marked ways. As the recovery took hold in the early 1990s, the mix changed to 65% single family, 16% multifamily, and nearly 19% manufactured. Yet the total number of homes produced was not markedly different on an annualized basis than prior decades; just the mix changed.”
“The cratering of the manufactured housing end-loan financing structure in the late 1990s took nearly 200,000 units of mostly-affordable housing per year from the production mix. This supply went to the lower end of the single-family sector (aided by ever-more aggressive financing) and back to the multifamily sector. Yet the number of homes created for the 2000s decade was not materially different from the prior decades, even though the housing crash occupied the latter third of the decade.”
“However, as the residential real estate market bottomed out around 2009-2010 and began to recover, the composition of production began to change (and continues to change) with a multifamily sector mirroring what is was from 1960-1990. The single-family production is proportionately higher than during that earlier period, primarily because the manufactured housing segment is still hobbled, taking out the most affordable sector of detached housing.”
“What is more surprising is that during the period (1960-2010) the population of the country increased from 179 million people to 308 million, about a 72% increase, while the US housing stock increased from 58 million to 130 million, about a 124% increase. Yet, the average annual production of shelter did not increase in any meaningful way, except at the height of the sub-prime boom. Essentially, we became less intensive in our use of shelter, going from about 3.1 persons per housing unit in 1960 to about 2.4 in 2010.”
“Considering that the weighted average new house size went from 1093 sf to 1899 sf in the same 1960-2010 period, an increase of 74%, we essentially enjoyed a luxury of both fewer persons occupying each house and those persons enjoying more square footage than before. We essentially lived in a period when we created the ability to have more space to store more stuff that we were buying with more credit card and mortgage debt.”
“What does all of this imply? First, it looks like that the period 1990 to 2006 was an anomaly, not the ‘normal’ that many think we should be returning to, at least in terms of the distribution of production. When we look at the changes to the dynamics of the housing market that occurred from the mid-90s until the late 2000s, particularly in public policy favoring home ownership and laissez-fair lending, it is no surprise that production shifted to single-family homes disproportionately.”
“Similarly, the huge defaults in the manufactured housing segment in the mid-90s meant that lending stopped in that segment and manufactured housing shipments declined with the change. The fallout of all of this has been a change of rules that is driving different results. Dodd-Frank has made lending into the real estate sector less attractive, as have the plethora of fines and penalties. Freddie and Fannie now are the major players in individual residential mortgage finance and their political exposure and legal situation pretty well drives them to a level of conservative underwriting not unlike bankers did 30 or 40 years ago.”
“The explosion of student debt has put a prior lien on the vessel of personal credit capability of many in GenX and GenY that was not there in the past. The dollars that went to a mortgage and a car in the past now go to the student loans first and then cell phone bills and cable TV and Internet subscriptions. Connectivity, entertainment, and paying for the great party that college has become is now the primary tap on income, not leaving much for housing, particularly owning a house.”
“The rules of employment have changed also. Starting with the downturn of the early 1990s and then into the 2000s, employment security began to evaporate. You could be doing a great job and be let go on a whim in order to make the financials work. Loyalty and security were replaced by temp and contract status with little certainty of whether your job would be around next week or next month. Throw in a slow economic recovery here and abroad, that creates uncertainty, too. This is not a good environment to take on long-term economic obligations.”
“Sure, this situation does not impact everyone in the workforce, but few would contest that it is more prevalent today than 10 or 20 years ago. It is no surprise that these core changes have resulted in a different composition of residential living demand than in the recent past. The data from the past several years that have now been influenced by these changes seem to indicate that the composition of housing production is reverting to something that looks more like it did 30 years ago, with a higher proportion of multifamily production. The still moribund manufactured housing sector is giving up some of its share to multifamily, but a good portion of that demand just seems to have disappeared.”
“We see it in overall starts not coming back to norms as people had thought. The other apparent outcome from this new reality is that the volumes of production are significantly less than they have been overall and in single-family for-sale in particular. In fact, the situation may be worse than people think. The recent public builder report cards show increases in incentives in some markets and gross margins declining from already somewhat weak levels. These are indicators of a supply-demand imbalance, with there being too much supply and production being forced through.”
“The good news is that people still need roofs over their heads and the population is growing. The bad news is that to create the new shelter for that population, many of the business models, assumptions, and management practices from the past won’t work anymore and, in fact; the old practices will probably take a bunch of existing builders to the ash-heap of history.”
Demand Or Not?
Yogi Berra housing economics teaches that we may already know what we’re trying to find out; which is what learning is all about
By George Casey
Mr Casey has been writing very interesting columns for years. He’s writing from the industry, to an audience of the industry. But he tells it like he sees it and regularly takes fellow builders to task for ignoring what customers can afford and want. Plus he’s got a great historical viewpoint I haven’t seen anywhere else. I encourage anyone to read the entire piece.
From the article:
‘ The Need for Speed. Anyone who has done a pro-forma on a subdivision or a master planned community knows the importance of absorption. Slow absorptions kill the financials of a project and fast absorptions make them sing. With the market segment able to afford and truly purchase single-family homes more limited in many markets than before, for-sale absorptions are often forced by price discounting. At some point, other uses including attached for sale, attached for rent, additional for-sale product, and single family for rent actually give incremental higher absorptions and better returns. Builders who embrace a broader set of strategies to drive absorptions will win over those who either do nothing or use a more limited palate of tools.’
‘The Need for Speed II. The other kind of speed is found in cycle time improvement and process improvement in general. Builders who are not organized to improve processes continually and meaningfully are going to be road-kill in this new environment. Those who are able to build homes from dig to close in under 60 calendar days will prevail and will most likely be the early adopters of other technologies such as robotics and 3D printing that may take home production even faster. To think that the industry can operate insignificantly different than it did one or two generations ago in a world where every other industry has had quantum improvements in production efficiency is just lunacy.’
A Youtube I made recently:
https://www.youtube.com/watch?v=cFoaLS4D6Fw
Does that look like fast absorption? IMO these guys have gone back to bubble business as usual. Pay a bunch for the land, put up way too big a house (or sit there and look at an empty lot), and rely on easy credit to bring the market to them.
From yesterday:
‘Weak supply may be because home builders aren’t building cheaper homes, said Michael Orr, who released the report. They are focusing on building homes in the $300,000 price range and up, he said. Demand has been up across all levels of homes, but supply is very weak in the $200,000 price range where homes on the market receive multiple offers, Orr said.’
“It’s really tricky right now and that’s trickling towards the $300,000 range,’ O”rr said. “But once you hit the $500,000 range you’ll find a home easy.”
http://thehousingbubbleblog.com/?p=9069
Ben…What I have seen locally is the Big builders coming way down the food chain to development smaller properties…What this has done is take the medium to small builders out of the market..They can’t compete with the big cash buyers for the dirt…
I can’t give a better example than the following which I observed just recently;
DR Horton is the biggest home builder in the country…They recently made this acquisition in 95051 for $105-mil…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&cad=rja&uact=8&ved=0CEsQFjAIahUKEwiNqYu8-4zGAhWJL4gKHVPAADA&url=http%3A%2F%2Fwww.bizjournals.com%2Fsanjose%2Fnews%2F2014%2F02%2F14%2Fdr-horton-buys-into-santa-clara-big.html&ei=b0l8Vc21A4nfoATTgIOAAw&usg=AFQjCNH80GdSrZLUBTk2D-NL0ZXwst4aXg&sig2=mNVzUvPFHme0cogck4g7jw&bvm=bv.95515949,d.cGU
Anyway, in 95008 close by, I saw three homes get demolished…It was obvious to me that it was a small development coming…Maybe 8 houses on very small lots (4,000 sqft)…Driving by the other day I see the sign on the property Homes coming soon by; DR Horton…
Thats right…The biggest builder in the country doing a 400 mil development and then just down the road doing a 8 lot subdivision..Point is, they are buying anything and everything they can get their hands on no matter how big or small…
The small to medium builder is basically done around here…Out of business…Has had to turn to remodeling just to earn a paycheck or just packed-it-in all together…
‘Public homebuilders with access to Wall Street money have been especially aggressive on the acquisition side, paying big bucks for fewer and fewer sites of significant size. “The publics are driving the market right now, price-wise,” Rowland said. “They have Wall Street sources of money and funds that the private companies don’t.”
You could have pulled this right out of 2004.
that video was pretty cool. Do u remember all the foreclosures up in surprise? How far r u from there?
I’m not real familliar with the north valley. I have driven the 101 loop from avondale over towards tempe. Went into cabellas over there by the stadium.
My buddy is renting a crib off the 17 right out of town in n phx. He got a job as an accountant in phx.
He bought a small crib up in payson where he hangs out on the weekends.
He like to explore and go hiking in the hills of az.
There still are foreclosures in Surprise, I saw a W&W auction of one last week. I’m just a few miles from there.
I did a lot of foreclosure work in and around Payson. All those second homes were the first to go. Beautiful country though. I like it better up on the Plateau near the Mogollon Rim. Ponderosa pines grow as high as you’ll ever see one. Not many people either.
yeah payson is cool. He bought a modest place near a river up there . I think around 110,000.00. I went up there and we cruised around on the rim. went to black butte lookout tower where u can basically see most of az from on a clear day.There is a lady who works the tower spotting for fires. she has been there for like 25 years. There are some douglas fir trees up there too but mostly pine.We stopped at a brewery in pine on the way back.
I remember folks going out to laveen and surprise driving till they qualified. Seems at one point the homes got up to the 300-400 range and then cratered to like 70k and then bounced off there. I guess there is a sun city somewhere off the 101 to the west of it. South phoenix seems a little rough in spots. I cruised south to baseline to avoid traffic near the airport a few times. You run into south mountain and then go east and takes you out by tempe. Over south mountain is awhatukee and that seems to be a nice area. I know they wanted to build a freeway from awhatukee around s mountain to the west valley over by avondale and buckeye.
“Thats right…The biggest builder in the country doing a 400 mil development and then just down the road doing a 8 lot subdivision..Point is, they are buying anything and everything they can get their hands on no matter how big or small…”
Got low interest loans?
Got 4%+
=change
Do we have to get to 5%
So Horton The Peanut Butter Eating Elephant(or was that Smedley?) overpaid by multiples (10x? 20x?) for some worthless dirt and are speculating they can install 100 trailers of materials and sell to some unknown buyer?
It doesn’t work that way. Horton The Elephant is standing in your living room…. and you’re ignoring him.
Good report Ben and Michael Orr is a sharp man for whom I have been to hear his take on trends and Real Estate. I totally agree in the over $500k and especially over $700k it is easy pick time. Going to be very lonely at the top of the market when “WALL STREET IS OUT OF FAVOR,” it is coming to a location near you?
There’s always this…
Scottsdale, AZ Housing Prices Fall 4%
http://www.zillow.com/scottsdale-az/home-values/
All this trying to look at fundamentals is garbage. People CANNOT afford the houses they live in and CANNOT afford the houses they are buying. Helicoptered money dropped in is the only aberration worth following. It’s all gonna be fine and dandy until that heroin is taken away!
See the above reads kind of ungrateful for the find of this. No offense to Ben and appreciate the article.
The guy makes valid points and it’s an excellent read but he’s speaking of an approach for publicly traded “builders”.(coincidentally, that term for contractors appeared in 2000). That is a wall street thing.
If you wanted to erect a SFR on a lot somewhere, would you call Horton The Elephant? The Brothers Troll? Of course not. You’ll call a local contractor. I’ll wager these guys don’t have a single tradesmen on their payroll or own a single piece of iron. The point is there is a much larger and broader wood framing construction market out there yet charlatans like Troll, Wall Street, Horton the elephant are allowed to establish reality.
Try audacity for voice over to remove rumble
Love the saguaro cacti at the end. Maybe a tumbleweed going by would of nailed the moment a bit more.
Like he said.
Las Vegas Real Estate Market Update (June 2015)
Chart in video.
‘Local home prices and sales stabilized in May while the housing supply remained tight, according to a report released Tuesday by the Greater Las Vegas Association of REALTORS (GLVAR).’
“Overall, home prices have been stable this year, and demand is steady in our housing market,” said 2015 GLVAR President Keith Lynam, a longtime local REALTOR. “Inventory has been an issue. We have less than a three-month supply of homes available for sale, which is less than half the inventory we’d like to have for a balanced market. Some of our members who study the market estimate that most of the local homes currently listed for sale are actually overpriced.”
Those dark clouds quantified, from MarketWatch article below:
Negative equity rate: 25%
Number of homes in negative equity: 83,476
% of Underwater Owners Who…
Owe 100 to 120% of Home Value: 35.5%
Owe More Than 120% of Home Value: 64.5%
Florida metros (Miami-Fort Lauderdale - 64%, Tampa and Orlando - 58.1%), and Chicago (59.6%) are also tops in the owe more than 120% crowd.
Tarara Boomdea ..negative equity is a huge problem going forward and no answers how to fix it other than, take a hefty loss or walk away again> Storm weather you can bet on it and this comes from a hawk on RE.
Doom says negative equity is a huge problem going forward.
I’m sure, but family issues complicate our decision on whether or not to buy our rental. I know, if we do it, we’ll regret it eventually.
Two weeks left to go! Called my LL this AM to low ball him (that doesn’t sound right) but he couldn’t talk, at work. Thank goodness the rental we’re eyeing is still available.
I didn’t want to get involved with the mess they call a RE market here, but I have to consider an old person w/problems, a young person w/problems and my husband and I are in our 60’s. It’s a pretty cheap house, not worth it or much of a looker, but cheap. PITI is half the rent. LL probably won’t go for it anyway.
Decision has been made, not by me. LL just found out next door sold for significantly higher price ($25K higher.) So message was pay full asking or get out, so we will.
I confess I’m a little relieved.
Got a link?
Henderson, NV Housing Prices Fall 10%
http://www.movoto.com/henderson-nv/market-trends/
I don’t live in Henderson. I can’t even see them from here (h/t to Tina Fey.)
At this point, I hate landlords (apologies to the decent - we had one one time.)
I settled down and really read what he sent me. He’s set restrictions on my communicating with him personally. (This jerk owns his house and the one I’m in; he’s hardly the Donald.)
He mentioned never raising the rent and implied we should be grateful. The rent has been and still is significantly higher than market, which I found out afterward (my fault.) They’ve had a big change in attitude from the beginning when the wife thanked me for “saving them” since they had already bought another house and were finding paying on this one along with the new a real strain. He mentioned other things for which we should be grateful, too stupid to repeat.
He keeps saying he’s enjoyed having me as a tenant. Why not? Never a late payment in almost five years, fixed all the small stuff ourselves, no major repairs.
There will be no negotiation on price ($175K, highly desired price point in Vegas) because he feels I’ve delayed too long. My brother’s on my case, even though he’s never made a good financial call in his life, saying it’s 12% instant equity (the old bat’s next door slightly smaller, completely original 1978 shanty just sold for $200K after cleaning and painting) and how I should disregard how condescending the LL (despite the $25K discount) and PM are. I have a hard time with that; I’m very angry.
A side wrinkle - latest missive tonight is from the PM - “You are herby noticed to please refrain from accessing the attic due to safety concerns.” Well Herby, I’m amused by your bad spelling, but that’s about all. My husband had the attic ladder break under him last week when he was about three quarters of the way up. The ladder, as it turns out, was the subject of a class action lawsuit (Werner, check yours.) We are not the litigious type, and he wasn’t hurt as I’ve told both the LL and the PM.
The LL, if we decide to buy, is showing up here Monday AM for a $5K earnest money deposit because we are still his “preferred buyer”. I’m sure.
I think I’m going to check out the botanica over on Tropicana for a curse I can sprinkle liberally around the house if we pass on it
There’s always falling prices in Vegas.
Las Vegas, NV Housing Prices Fall 22%
http://www.zillow.com/las-vegas-nv-89138/home-values/
‘re is as stock w a 7% commision fee (6+expenses)
Takes along time to break even
Fixt.
Takes along time toHouses are a depreciating asset that you’ll never break evenWOw, sounds like you have a tough decision to make. That’s never easy when you’re on the clock so to speak. I would agree with your brother in that you should set aside the emotional aspect of dealing with your soon to be former landlord. Sounds like you know the house fairly well and the proposed numbers are not outrageous. I question the notion that you are certain you’ll regret it if you buy it.
Would you regret paying a 300% premium for a depreciating asset?
Would you regret paying double for a used item that you could buy new for half the amount?
Well Idgits?
I’ve calmed down a little bit.
This is the page for that area from Zillow, Paradise,NV:
top half
bottom half
Not sure how re contracts work in Nevada, here in Texas there is an option Period, I.e. $2500 earnest money deposit, 10 day option period. if at the conclusion of the option Period, the buyer does not want to proceed there is usually an option fee of a nominal amount, $100.so the buyer gets to conduct inspections and if they are not happy, they can cancel the contract for $100. They receive the earnest money deposit back.
Don’t do a deal with someone who you know is an ass.
I’ve gotten help from a CPA/financial adviser friend of my brother’s. My regular load (caring for family members) keeps me way off kilter, and a little down. She’s taking it from here, and I’m very grateful. I wouldn’t be surprised if my LL refuses to deal with her, ill mannered, my way or the highway type that he is, so it still may not work out. It’s just a relief to have someone to help me. Thank goodness the rental is still available.
Blue Skye, he’s a real ass. He wants me to give him a $5K cert ck (personally, no escrow) by tomorrow noon. My friend is calling to say no to that, and go on from there. I’ll be amazed if it works out.
Your LL sounds desperate to sell to you. Don’t you think if it were such a great deal, he would just list it? It almost sounds like he is trying to bully you into buying.
Sara, he’s a mystery except that he’s a definite hot head. I can’t pretend to know his reasoning. He seems to have taken offense to my turning down his offer in 2012 (he brought it up in an email that at the time he wanted $150K and we refused; estimates at the time were $115K). As it’s risen and three years of rent later, I haven’t felt too good about that.
The location is good, neighborhood not great except it’s so central - ten minutes from everywhere. The house - eh…
He shouldn’t be desperate. He’ll probably do pretty well on it. I mentioned here that the old bat next door’s place that just sold for $200K. Apparently, he just found that out. He should have said goodbye to us, put it on the market and tried to find a buyer. There are others on the street that have sold/contingent/pending for up to $250K. IDK what his deal is, except he’s bound and determined to do it FSBO (fine). He kept saying I’m his preferred buyer (quite an honor, apparently).
The deal broke down this morning over his insistence that we give him $5K earnest money CC personally (no escrow, non-refundable if anything goes wrong). My friend/representative got a load of him on the phone and told me to forget it. Maybe he was going for a small score, no idea.
Anyway, the deal is dead. Even so, I got yet another email afterwards delineating from here on out when and what I can speak to him personally about and when/what I cannot = loony.
It’s been As the Stomach Turns. I had that rental lined up, still available. Spoke to the agent, asked if the slight discount still applied - he tried to say no. I pointed out to him that the place has been empty since the end of March. He said that had nothing to do with the deal. I think it does. I said you offered me a week free to move in, he said ah, maybe a few days. I said how about right after we sign the papers tomorrow.
These people are nuts. I’m happy tonight, still steering clear of this lunacy.
” I mentioned here that the old bat next door’s place that just sold for $200K.”
How come no link?
Sure. This is it.
More:
Another one.
Another.
Another.
Another. Flip, was $160K.
I think there were a few more.
I left out the best one.
05/14/15 Sold $252,350
03/19/15 Listing removed $275,000
03/17/15 Price change $275,000
01/11/15 Price change $298,000
11/14/14 Price change $310,000
10/19/14 Listed for sale $319,000
12/14/12 Sold $189,900
09/14/12 Sold $130,300
12/23/11 Listed for sale $125,000
05/28/04 Sold $315,000
“Sure. This is it.”
It never sold. It’s still for sale.
http://www.movoto.com/las-vegas-nv/1981-rockledge-dr-las-vegas-nv-89119-321_1531793/
HA, I’m getting a little worried about you.
“This is it” link once again:
2032, next door
You are quite right that 1981 is still for sale, the only one of the bunch with no bites.
Anyway, I no longer care! We sign a new lease tomorrow and will be able to start moving in a few days (almost two weeks free). Better house, nicer neighborhood. PM guy has been great, hope to never meet or speak to the LL. That will be fine with me.
More than Half of Underwater Homeowners Are Nowhere Near Re-Surfacing
And I believe this is only based on first mortgages….lots of purchases during the bubble years were piggy-back 1st & 2nd mortgages, plus plenty more taking out HELOC’s to “liberate their equity”. So this % is likely higher.
Just wait until the tide rises (interest rates); they’ll be even more underwater.
‘Americans are regaining their confidence in the housing market and in homeownership as a long-term investment — but they’re also seeing their access to it slip away.’
‘That according to a survey conducted for the John D. and Catherine T. MacArthur Foundation, which first commissioned Hart Research Associates to conduct the annual survey in 2013. The survey found that a vast majority of Americans believe housing affordability is a problem, and that the inability of some to access housing they can comfortably afford is weakening the middle class.’
“I think what America is trying to tell us through this survey is that the lack of safe and affordable housing … deserves the same kind of discussion as the cost of education, or the cost of health care,” said Geoffrey Garin, one of the researchers.’
‘They feel that homeownership is increasingly out of reach. Eight in 10 respondents said housing affordability was a problem. Those worries are widely held, crossing party lines, race, income and educational attainment. Seventy-six percent of respondents said it would be harder for young people to buy a home now than it was in generations past.’
They want everyone to get used to $500000 homes and $20 hamburgers.
It’s interesting looking at this from a builders standpoint. It’s not a business I would want to be in. In my area of Detroit’s suburbs, most of the new building is taking place in the subdivisions that were left half empty when the last bubble popped. A few houses at a time, which is probably smart if you’re a builder. Of course, they all start at 350k, but its like that everywhere. Very few new subdivisions are being started, and they are small if they are. Someone down the road put up a new house in a small lot between two smaller houses. A strange color brick house between two small boxy houses with aluminum siding that could use a cleaning. He probably thinks the new house is worth 100k more than the houses next to it. It’s been a couple months now, and the for sale sign is still there.
“Of course, they all start at 350k, but its like that everywhere.”
Only $350k, for rust-belt hourly workers? Hehe.
Same old crap we heard right before the bubble popped! Everything is peachy, this time it’s different, better buy now before rates go up, it’s the best time to buy, it’s the best time to sell, demand is high, supply is low then POP GOES THE BUBBLE. This is the top beezy’s. They’ve reached the ‘unaffordable level’ and it’s a matter of time before they’re talking about 100 year mortgages.
Get out while the gettings good! Leave some money on the table for the next sucker.
As cars and homes get more expensive all they do is lengthen the loan term to keep payments low . Its like robbing from the future.
40 percent of the market disappears when buying for “investment” purposes doesn’t pencil out even superficially. This is where things are at or rapidly approaching again in most areas.
This is bubble dynamics, whether it’s tulip bulbs, baseball cards, beanie babies, art or housing.
‘An Alberta developer with his own Chinese factory claims he can build a 48-unit luxury condominium in Vancouver in six weeks at half the price of conventional concrete construction. “Absolutely, and that is fully furnished,” said Jim Dunn, president of Calgary-based Stack Modular whose company will soon begin a 700-unit high-end rental complex in Fox Creek, Alberta.’
‘According to Weiss, if the site’s foundation and servicing were in place, Stack Modular could complete a four-storey, 48-unit luxury-level condominium project in six to eight weeks for $165 per square foot, including all the furniture.’
‘This compares with up to $320 per square foot to build a luxury concrete condo building in Vancouver, sans furniture, according to Altus Group’s 2015 Construction Cost Guide.’
‘It takes an average of 15 months to build a conventional wood-frame, four-storey condominium building in Vancouver, according to Howard Steiss, a partner in Burnaby’s Texor Homes.’
https://www.biv.com/article/2015/6/developer-producing-instant-luxury-condos-resource/
Stack Modular whose company will soon begin a 700-unit high-end rental complex ??
I saw a 250+- unit modular complex go up in San Jose recently…Pretty fascinating really…
“Those making strategic asset acquisition and financial decisions using this frame of reference might be making bad decisions if the ‘cheese’ has actually reverted to patterns indicative of the period prior to the aberration (notice I did not use the word ‘bubble’).”
If it expands like a bubble, glistens like a bubble, and undulates like a bubble, IT’S A BUBBLE!
Pomona, CA Housing Prices Sink 4% At Peak Of Season
http://www.movoto.com/pomona-ca/market-trends/
“First, it looks like that the period 1990 to 2006 was an anomaly, not the ‘normal’ that many think we should be returning to, at least in terms of the distribution of production.”
Or prices..Even in 2011 resale prices were double over long term trend.
Current Housing Prices Sit At 300% Higher Than Long Term Trend
http://img802.imageshack.us/img802/7812/caseshiller.jpg
Bellevue, WA Housing Prices Fall 6%; Inventory Explodes 122%
http://www.movoto.com/bellevue-wa/market-trends/
Bottom Falls Out Of Nevada Market; Housing Demand Plummets 33% Statewide
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
Clearly, what is going on is all the world’s central banks are working on creating inflation. In fact, they have always worked on creating inflation. Usually, they are successful, except for the 2008 event. But, the central banks doubled down, and got inflation going again. I think they may overdue it this time.
The reason people always bought more house than they could afford, and usually got away with it, is the central bank inflation.
This time, the inflation will get out of control because of excessive money printing. The inflation will be so severe, it will threaten the financial system. In the short term, real estate investments will look smart. Perhaps for a few years. Then, the crash. Everything will crash. Everything. It will be very scary.
That’s not inflation. *Learn* the difference.
You didn’t learn about monetary inflation in school? You can even google it if you don’t know what it is. I’m an engineer and even I learned about that in college.
Of course it’s inflation - one of many types. Dude, did you even go to school, or do you just post random data you find on the interweb to prove how smart you think you are?
Wrong again.
*Learn* the difference.
It’s the debt donkeys that doubled down. Let their backs break. The rest of us will be better off.
particularly in public policy favoring home ownership and laissez-fair lending,
contradict’s himself
socialist / libertarian
Here’s what happens when you stop paying your federal student loans
Business Insider - Matthew Speiser - June 12, 2015
Two years after leaving school, students default on their federal loans at a rate of 9.1%, according to a 2013 report by the New York Federal Reserve. That figure jumps to 13.4% at the three-year mark.
VICE recently talked to Heather Jarvis, a self-proclaimed student loan expert who graduated from Duke Law School with $125,000 of debt and has been an advocate for borrowers ever since.
According to Jarvis, if you decide one day to stop paying your federal student loans, after 270 days the loan will default, at which point the government will start garnishing your wages, seizing tax refunds, and intercepting government benefits (like social security) without a court order. The government may also sue if they think it will give them access to your assets.
“They can and do — literally do — pursue debtors to their graves,” Jarvis said.
Jarvis says defaulting on your student loans can also affect your credit and hurt your chances of qualifying for mortgages and loans down the road. She does note that the government cannot put you in jail for owing debt.
Zillow calling Chighetto off .03% w bk pending?
They r already taxed up the booty
“Yet the number of homes created for the 2000s decade was not materially different from the prior decades, even though the housing crash occupied the latter third of the decade.”
CR8R
“We essentially lived in a period when we created the ability to have more space to store more stuff that we were buying with more credit card and mortgage debt.”
So long as plenty of credik is available to buy cheap crap from China, where is the problem?
Most Baby boomers were too young to buy a house. I was only 20 years old in 1977. Some were old enough but half were not during the 1970’s. It was the 1980’s that they started to really buy houses not the 1970’s.