There Is Only One Place To Go From Here
The Register Guard reports from Oregon. “Lane County home sales soared to new heights last month, according to the Regional Multiple Listing Service. It’s typical for home sales to peak during summer months. But some local real estate brokers said homes are selling faster than they’ve ever seen. ‘We are just inundated with offers,’ said Karen Church, principal broker at RE/Max Integrity in Eugene. ‘If priced correctly, (homes) are moving in 48 to 72 hours.’”
The Journal Times in Wisconsin. “Homes sold at a frenetic pace in June with the year’s first half running one-fifth ahead of last year’s pace, according to the latest Multiple Listing Service report. Homes sold in the city of Racine showed a much stronger surge in the average purchase price during the same periods. From an average of $74,908 in first-half 2014, the average jumped by 22.8 percent to $91,984 this year to date. And it soared by 61.9 percent compared with 2012’s first-half average of just $56,805. ‘There are a lot more buyers in the market because of (Federal Reserve head) Janet Yellen’s threats to raise interest rates,’ said Racine Board of Realtors past president Jim Chiappetta. ‘That is driving it.’”
The Des Moines Register in Iowa. “Bidding wars and offers above asking price have become increasingly common during the first half of 2015, with the Des Moines area real estate market seeing prices surging and homes selling at the fastest pace in years. Les Sulgrove staked a ‘for sale’ sign in front of a brick Beaverdale cottage at 4 p.m. one day last month. By 5 p.m. it was listed online. By 8 p.m., three potential buyers had taken tours. By 9 p.m., there were two offers.”
“‘I don’t think I ever remember seeing it this crazy in 25 years in real estate,’ said Sulgrove, a Realtor with Keller Williams. ‘We go through spurts, but nothing sustained like this.’”
“Fast home sales and rising prices are good for business. But the trends also have real estate agents thinking about the ‘B’ word: bubble. ‘It does worry me that there is only one place to go from here,’ said Matt Mauro, an agent with ReMax Real Estate Concepts. ‘If it stays this way another two or three years, there will be another burst.’”
The Virginian Pilot. “Area home sales were way up in June over last year - and so were foreclosures. Last month, 1,652 existing homes were sold in South Hampton Roads, up 27.1 percent over June 2014, according to the Real Estate Information Network. According to a separate report released by RealtyTrac, foreclosure-related filings in Hampton Roads increased year-over-year in June to 714 from 499 - a 43.1 percent increase. There were 117,055 U.S. properties with foreclosure filings last month, up 9 percent from a year ago, according to RealtyTrac. June was the fourth consecutive month with a year-over-year increase in filings.”
KPHO in Arizona. “The economy is slowly improving, and that’s been good news for Arizona’s housing market. But it has not stopped the high number of mortgage fraud cases. A new Lexus-Nexus report ranks Arizona No. 4 in the country when it comes to mortgage fraud. In fact, Arizona has been in the top five since the housing boom when lending guidelines were looser and cash deals more common.”
“Mortgage lender David Krushinsky of AmeriFirst said another type of mortgage fraud he’s seeing involves home buyers who are lying about where they work, how much they make and where they intend to live. ‘That’s one of the biggest things of mortgage fraud is occupancy fraud,’ Krushinsy said. ‘People say they will use it as a primary residence, or a second home, and actually buy it as a rental because you get a better interest rate and lower down payment.’”
The Houston Chronicle in Texas. “Houston-area buyers closed on more single-family homes in June than in any month on record, reversing a two-month sales slide and proving the market’s resilience despite volatile oil prices and deep cuts in the city’s dominant energy industry. Looking further ahead, however, Houston’s housing market could see ‘real problems’ in 2016 and 2017, said Jim Gaines, an economist with the Texas A&M Real Estate Center. ‘They haven’t faced the reality yet of $50 oil,’ Gaines said, referring to the price paid for a barrel of U.S. crude oil.”
“The slump has Houston’s once-sizzling job market in somewhat of a holding pattern. Shoppers previously reluctant to buy among fierce competition for homes started seeing some stability and were more willing to step up. ‘Some of these people are coming forth,’ said Beth Wolff, CEO of Beth Wolff Realtors. ‘It’s not as competitive as it was.’”
The Elko Daily Free Press in Nevada. “The first half of 2015 saw a slight increase in prices from this time last year for Elko’s housing market. According to the Multiple Listing Service, the median sale price in the City of Elko was $245,000 from January through June — up $10,000 from that time a year before. The average number of days on market was 142, as compared to 141. Spring Creek’s median price decreased from $230,000 in the first half of 2014, to $223,000 for that time period this year. The average number of days on the market, however, rose to 182 from 142. ‘There’s lots of competition,’ said Marissa Lostra, Realtor with Lostra Realty. ‘There’s a wide variety of what is available.’”
“Janell Silva, Realtor with Coldwell Banker in Spring Creek, agreed, saying competition means the houses tend to stay on the market for longer. ‘We’ve got a lot of building going on, so that adds to it,’ Silva said.”
Iowa is to ag
As Texas is to oil
Both in the tank
Both have endless land unbounded by water etc
Behind a pay-wall:
‘Austin home sales up 5% in June, but some agents say market cooling’
‘Boosted by a 5 percent uptick in June, Central Texas home sales are on track to potentially top last year’s record sales, the Austin Board of Realtors said Tuesday.’
‘Despite the sales bump, however, some area real estate agents suggest the local housing market might have cooled off a bit.’
I have heard the same thing about Reno. Up abut 14%, now no more multiple offers. They think Tesla will bring 50k jobs with is over 10 yrs. They love to say, they are running out of room. lol!
I saw a study from May for Reno. They expect Tesla to bring 6,500 direct jobs, and about 7,600 indirect and induced jobs.
They expect a 10k+ jobs from other imployers (data centers, several new manufacturers, etc.).
The FIVE-year total of jobs expected from this report is 50k jobs. It’s a pretty crazy number when you put it in the context of the current Reno/Carson population.
http://www.rgj.com/story/opinion/columnists/2015/07/15/edawn-carson-citys-worth-housing-needed/30206019/
Except it’s all a bunch of tripe.
It’s all tripe until you drive out to see where Tesla is building their plant. My partner was out there last week and drove up to where the security guard was stationed…he couldn’t get inside.
It’s a big damn building. And it’s not going to be empty.
There are currently about 210,000 employees in the whole Reno/Sparks MSA.
Even if you exclude all the other stuff that’s going on (Switch building a new $1B plant, Apple building datacenters, etc.), Tesla’s impact will not be small.
too late to buy there–for now, they had their run, slowing way down now as you see price drops on listings. Those at $320k should be at $220k. It is still Reno with average wages at $17 an hr! Only thing I like is proximity to Tahoe and OK weather.
Dumped the Austin place awhile back for a nice gain but not ridiculous. Austin is a true shit hole now, just as bad as DFW. Too many frigging idiots from California, nightmarish traffic and moonbats on every street corner. No thanx.
I was there 2 yrs ago, not impressed at all. Just another sprawling city with traffic. Same stuff ya find everywhere, nothing unique and not great weather. But, maybe the best TX has to offer?
I prefer northern NM, unless you need to work for someone else.
I visited St. Augustine on that trip, now that is a nice little town on the water. Destin was OK, but the locals were brain dead.
This is what’s happening everywhere. Si si puede!
Lots of coastal towns have neither traffic nor white trash and idiots. They cant compete, too expensive.
That’s what we like to do in CA….send our idiots to TX. The average IQ score rises in both states….
And the rest of the country sends their child molesters and rapists to CA.
“‘There are a lot more buyers in the market because of (Federal Reserve head) Janet Yellen’s threats to raise interest rates,’ said Racine Board of Realtors past president Jim Chiappetta. ‘That is driving it.’”
Now this makes a lot of sense only because the world has gone crazy.
In this crazy world the driving force is determined not by price but by “affordability” - by how-much-a-month.
And if Janet says that affordability will decrease tomorrow because interest rates will rise tomorrow then it makes perfect sense to buy today before the cost goes up. (Note: the cost is not determined only by the price, the cost is determined - mostly determined - by the monthly payments).
So all Janet has to do is to say she will raise interest rates and - presto! - demand quickens. And if demand quickens then prices will rise and rising prices creates equity (right out of thin air!) and creating equity creates wealth (right out of thin air!) and creating wealth creates prosperity (right out of thin air!), so …
It is all good!
‘From an average of $74,908 in first-half 2014, the average jumped by 22.8 percent to $91,984 this year to date. And it soared by 61.9 percent compared with 2012’s first-half average of just $56,805′
Some gloss over this stuff, but like the Victoria Texas report I posted, prices shouldn’t be doing this. In 100 something years to get to 60k and it jumps by half in 3 years? It reminds me of the farm land bubble. It’s not in the news because there’s no big city involved.
I don’t understand why so many people cheerlead for higher housing prices. I get the wealth effect, so I get why the Fed would want higher prices, and thus why they keep interest rates low. It’s monetary shenanigans. But I don’t get why the average person would want higher prices.
If you’re a renter, obviously you don’t want higher prices in case you ever want to buy.
If you’re an owner, you probably have kids. Don’t people want their kids to eventually be able to buy a house? Like you say above, Ben, that level of price inflation is not sustainable. Only a small portion of 20-somethings today have the ability to buy a house in a decent neighborhood, and that has all kinds of social/demographic consequences, not to mention the stress it puts on them. People can bash millennials all they want, but the truth is this generation is pretty optimistic and resilient in the face of a lot of crap they have to deal with that Gen Xers and Baby Boomers didn’t (like crazy tuition prices and unaffordable housing).
Also, if you’re an owner, you don’t want higher property taxes every year. If the city wants to raise my taxes, they should have to be honest about it and increase the actual rate. Instead, they just ride the wave of property price inflation.
If you are part of the small percentage of owners planning to sell at any given point in time, I can see why you have an economic incentive to want a good price. But really, isn’t it enough to get back the same price you paid for your house? That means you got to live in the house for the cost of maintenance, insurance, and taxes. Should you really expect/need to turn a profit on your house? For much of history, that was never the expectation.
Anyway, I just don’t get it. I wish we could go back to a sane world where property prices barely keep up with overall inflation.
Selling out the kids has been part of the American dream for the last 30 years.
One reason for the cheerleading is that the average person has been heavily indoctrinated by advertising, media, economists, think tanks, and politicians to believe that rising housing prices are “good,” end of discussion. There’s very little counterweight to that, and the contrarian thinking that does exist tends to be ridiculed by those with power, a microphone, or both.
Another problem: even among fiscally prudent people, comparatively few are going to generate a nest egg of any size by saving, thus the perceived need for asset price appreciation. Costs for basic items are rising. Wages aren’t rising in tandem, nor will they be anytime soon. Interest rates have been at zero for almost seven years, and our economic leaders are trying to stimulate 2% annual inflation.
“…comparatively few are going to generate a nest egg of any size by saving, thus the perceived need for highly leveraged asset price appreciation.”
Fixed it for you…
I wish we could go back to a sane world where property prices barely keep up with overall inflation ??
They do in most locations…
Nonsense. Housing prices are massively inflated irrespective of location.
Was it 1975 when the prime was 20%?
Average is 8% I believe. Wow, the interest on our debts would be nuts if the prime went from 3% to 8% avg! Maybe it cant go up?
I believe it was 1980.
It doesn’t much matter what interest rates are considering housing demand is at 20 year lows.
I always tell the Millennials I come into contact with to stay optimistic on housing. All manias, including this one, eventually come to an end, and when this one ends, we should have a long period ahead of relatively affordable housing, thanks to the many fundamental factors that work in that direction which have been covered at length on this blog.
(Note to paid housing trolls — please don’t play stupid by asking, “Like what?”)
I remember in the 1960’s my parents were proclaiming we children would never be able to buy our own homes when we became adults. The concern has been vioced for decades. We all found a way…..
‘In addition, the median home price peaked in May at $179,000, up 8.5 percent from a year earlier. Iowa Realty agent Cary Clayborne recently saw a $325,000 house in Clive come on the market at 10 a.m. It looked like a good fit for his clients, but by the time they arrived at 4 p.m., two prospective buyers had made offers, a third had finished a tour and a fourth was waiting outside.’
‘Homes in the western suburbs priced between $200,000 and $350,000 are selling particularly fast. Those priced between $150,000 and $200,000 in neighborhoods in northwest Des Moines such as Beaverdale, Ingersoll Park and Waveland Park are going even faster, agents said.’
‘Fast home sales and rising prices are good for business. But the trends also have real estate agents thinking about the “B” word: bubble. “It does worry me that there is only one place to go from here,” said Matt Mauro, an agent with ReMax Real Estate Concepts.’
From Monday:
‘Saratoga-based Alain Pinel agent Mark Wong said, ‘over asking’ bids are not as extreme as they were a few months ago, when buyers typically would throw an extra $400,000 or $500,000 into the mix to make their offer more attractive. The sellers’ market is at ‘a point of leveling off right now.’
California, you are headed for a recession.
wpa thinks more taxes will keep things Keynesian can kickin good
what % of Austin inflow is from peoples republic of CA?
‘Companies closed their books for last quarter on June 30 – more than three weeks ago. So how did the story of the quarter change so much in the past week or two - going from “earnings are just good enough” to “earnings weren’t so good at all?”
‘In the last couple of weeks, traders celebrated results from tech and growth-stock bellwethers Netflix (NFLX), eBay (EBAY), Intel (INTC), and especially Google (GOOGL, GOOG) that were modestly better than anticipated.’
‘This week so far, reports similarly in the zone of forecasts from Apple (AAPL) and Microsoft (MSFT) were met with disappointment and reflex selling after Tuesday’s close and early today.’
‘The fact is that the only thing that’s truly changed over that span is stock prices and the investor emotions and expectations that rose with them.’
I am living in the PRofCA and I can say confidently that the move out of the state has eclipsed the move in…with the exception of foreign investors. I just wonder if the government can withdraw the $1 million investment for VISA exchange program. If they do, you may see a faster collapse.
Moving van statistics show that California has slightly more people moving in (54%) than moving out (46%).
http://www.cnbc.com/2015/06/22/high-state-taxes-spurring-migration.html
The states with high outmigration include IL, NY, NJ, CT. Oregon is a popular destination.
Another sign there that CA is in the pre-crash / parabolic price increase phase of the Echo Bubble…
Boomers retiring are leaving CA to stretch out their buying power. If you get $4k a mo pension in CA, might as well move to Mexico (or Texas).
But the high paying jobs in Silicon Valley, might fight that trend and keep the nice areas very pricey.
Yes, Austin is a little better than Fresno/Bakersfield/Stockton/Compton….
this happens every bubble.
The outlying areas are getting a bump from all the international buying coming from China. The bay area sellers are moving outward to the commutable areas, causing the whole area to see higher values, but we saw all this before…right before…the last bubble burst. Mark my words, when the price of gas goes over $4, you will see the implosion. That happened in 2008 too.
I have been saving since 2008. I am putting my money in precious metals and forgetting the property game.
Mark my words, when the price of gas goes over $4, you will see the implosion ??
The property market in SV is going to implode because gas goes to $4.00 ?? Please explain how & why ??
It’s already imploding Dave.
It’s WAY over $4 in SoCal now with some stations approaching $5.
Really, approaching $5? I just used gasbuddy dot com to check prices in my old stomping grounds (Escondido). It’s about $3.90
In my neck of the woods it’s $2.65 or so.
“I am putting my money in precious metals and forgetting the property game.”
Try not to catch yourself a falling knife, as India and China are in the middle of a correction for the history books.
Loosing sheen: Gold in free fall as China dumps metal, Indians wait for further price decline
Jul 22, 2015 07:33 IST
Blame poor rains or a lack of weddings, but Indians, for whom gold is the investment of choice, aren’t rushing to buy bullion after this week’s sharp sell-off.
India and China are the world’s top gold buyers and, after massive selling on the Shanghai Gold Exchange on Monday helped drive down gold prices by 4 percent to a 5-year low, traders hoped demand would perk up in India, or elsewhere in Asia.
The last big slide in gold prices - a 13 percent drop in just two consecutive trading days in April 2013 - prompted weeks of long queues of Indians outside gold showrooms.
Not this time. India’s gold appetite - it accounts for more than a fifth of global demand - remains sluggish, with only modest local premiums to the global spot benchmark.
“That’s really a bearish sign, when the main consuming region remains on the sidelines after such a price drop to a multi-year low,” Commerzbank senior oil analyst Carsten Fritsch told the Reuters Global Gold Forum on Tuesday.
“Who’s going to buy gold if not the Asians?”
…
RE: Gasoline over $4/gal
I paid over $4/gal when I fueled up last night. SoCal prices are up by over $0.50/gal in less than a month. Meanwhile oil prices continue to take it in the shorts.
What gives!?
SoCal Gas Prices:
- $0.60-0.70 per gallon cap-and-trade scheme global warming tax that went in to effect beginning of the year
- Mobil/Exxon refinery operating at 20% capacity after explosion because they can’t get the parts to meet current CA environmental rules and the state won’t let them use older backup equipment until the new ones come in
- Tesoro Refinery work slow down in Martinez
- Tesoro Refinery maintenance in Carson
- State not allowed to import non-CA blend gasoline and state won’t wave rules
Other smaller refiners have fled the state/shut down over the past 20 years so one one is there to pick up the slack.
High gas prices are entirely a man-made phenomenon. As much as they feign care for the “working poor” and “middle class” the elite liberals in this state go out of their way to make their life difficult.
Oh, and I just got back from Hawaii, the MOST isolated land mass in the world. Gas there was only $3.49.
So maddening.
It is. Gas was cheaper the last time I was in HI than in some places stateside as well!
You look on the globe to see where the islands are, and you have to really scratch your head on how that can possibly even be so.
CHE - I too was in Kauai last month, gas was cheaper there than the central coast by almost 1 dollar. I put almost 500 miles on my rental in 9 days–it was a Nissan Versa.
Oil is cheap, but gas is still expensive in California
A sign at a Mobil gas station in Pismo Beach, California.
by Gigi Douban
Wednesday, July 22, 2015 - 16:00
Willie Hudgins drives a 2006 Ford Expedition stretch limo. Earlier today, he pulled into a Mobil station in Birmingham, Alabama to get gas. He paid $2.39 a gallon. Happily.
“Oh, it’s like, man, pennies on the dollar,” he says, compared with before global oil prices collapsed.
The national average for gas is $2.74 a gallon. Then there’s California, where prices are almost always higher.
“Typically, California prices should be about 40 cents above the national average,” says Severin Borenstein with the Energy Institute at UC Berkeley’s Haas School of Business.
But in Los Angeles right now, people are paying a dollar and a half more than the national average, he says.
Part of that is because California requires a cleaner burning fuel, Borenstein says, “and as a result, we can’t trade gasoline with other parts of the country. We need this special blend.”
Because there’s no quick way to relieve a shortage, he says, prices spike when there’s a hiccup in the production of that special blend — like an explosion at the Exxon Mobil refinery in Los Angeles in February. Borenstein says those usually fizzle out within a month or so, but not this time.
“It has definitely raised concerns that this isn’t just natural shortages,” he says.
One explanation: the California Energy Commission says refineries are making more than twice the profit per gallon than a year ago.
And finally, analysts say, when other states have shortages, they bring gasoline in through pipelines…but California doesn’t have pipelines, so when the gas finally comes, it comes by barge or tanker, which costs more. Ed Hirs, an energy economist at the University of Houston, has a message for California residents: “You guys are screwed!”
…
Crude Oil Prices Break $50 A Barrel
Michael Seery of Seery Futures - IF -
2 hrs 17 mins ago
Crude Oil Futures— Crude Oil futures in the September contract are down $.93 currently trading at 49.92 a barrel as I’ve been recommending a short position for the last two months as we have rolled from July to August and now the September contract and if you are still short place your stop loss above the 10 day high at 54.35 as prices hit a four month low in today’s trade.
Crude oil futures are trading far below their 20 and 100 day moving average telling you that the trend is strong to the downside and if $49.00 is broken I think you can see a sharp decline down to $45 rather quickly as this market remains very heavy along with gold prices.
…
$20/bbl oil, here we come?
“Precious…”
Metals Stocks
Gold slides for 10th day, settles below $1,100
Published: July 22, 2015 2:23 p.m. ET
Metals drop across the board
By Myra P. Saefong, Markets/commodities reporter,
& Sara Sjolin, Markets reporter
The rout in gold prices continued on Wednesday, with the front-runner contract suffering from a 10th straight session of losses to settle below $1,100 an ounce for the first time since late March of 2010.
…
ft dot com > Markets > Commodities >
The Commodities Note
July 22, 2015 9:52 am
Midnight witness tracks gold crash
By Henry Sanderson
Yellow metal’s dramatic move shows level of market correlation
Gold scale
In the small hours of Sunday morning, when most traders in London were asleep, one gold broker who was suffering a restless night said he happened to check the price of the precious metal on his iPhone.
“I thought what’s going on, that can’t be right, that’s a bad print,” David Govett, of broker Marex Spectron in London, said. “Unfortunately I stayed up the rest of the night watching it.”
What he saw was one of the biggest and fastest moves in the recent history of the gold market, which took prices to a five-year low and attracted renewed attention to high-frequency traders in commodity markets.
At just after 2:29am gold futures suddenly lurched violently lower on the Comex futures exchange in New York. At 2:29:03 an electronic circuit breaker was quickly tripped by the CME Group’s infrastructure which is designed to avoid flash crashes.
After a 20-second automatic pause mandated by the exchange, the gold market restarted, only to trigger another 20-second halt 12 seconds later. Traders said it was highly unusual to see two so-called stop orders follow each other in such quick succession. Mandated stops are usually five to 10 seconds, CME says.
“There are not many people trading on the CME at that time — it happened so quickly most people would have looked at the screen and rubbed their eyes and wondered what happened,” Mr Govett, a gold market veteran, said.
In Shanghai, 7,000 miles away from Manhattan, the selling continued throughout the two 20-second pauses that stopped trading in New York. By 9:33am China time, just four minutes after the first wave of selling, a total of at least $1.7bn of gold had been sold across the New York and Shanghai markets. The gold price hit a five-year low of $1,088 a troy ounce.
“Everyone was headed for the same exit,” one analyst notes.
…
Other than the clowns at ZeroHedge, did anyone really believe in $5000/oz gold. You are dealing here with experts that supposedly read the track records of others or understand charts. For whatever the reason Gold follows Fibonacci retracements. My litmus test is two-fold. When ads start appearing on tv or when you are told the dollar is dead, it’s time to exit gold.
The second test is Ned Davis. When he predicts $600 Gold, look out. He’s early but seldom wrong. (Personally I think $960 is a given.)
And mortgage, realtor and appraiser fraud at unprecedented highs.
And occupancy fraud! In AZ, no less.
I’ve been hollering about this for years. Nice to see that the media is finally noticing.
‘A new report says although the rental housing market is booming across Colorado, Grand Junction may be missing the wave of growth.’
‘Researchers at Apartment List report in the past 12 months, rent for a one bedroom apartment in Colorado as a whole has grown 6.7 percent, but during that same period of time in Grand Junction, one bedroom rental prices have dropped 8.8 percent.’
‘According to the new report, the average price of a two bedroom apartment in Grand Junction is $860, a major bargain compared to $1,180 in Aurora and $1,680 in Boulder. Although the low rental prices in Grand Junction may vex property owners, the market is working in favor of those looking for temporary accommodations.’
You are in a oil energy state? We just made a deal with Iran, oil is tanking (like gold and silver) yet buyers still stand in line to buy a house in Texas and in Colorado another bust just around the corner.
Why should anybody feel sorry for these buyers, I say this because we all know what is coming from buyers “bail me out of my problems we made a mistake in 2015?”
Are you sure?
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
While buyers indeed might say that, just like in 2008-09, they won’t be bailed out, other than token measures whose real intent is to benefit politically-connected banks, who will be bailed out on demand.
When rates plunge like they did at the end of 2014, creating roughly an addition 10% in purchasing power to those getting a mortgage loan, it drives some incremental and A LOT OF pulled forward demand. Moreover, bank / mortgage fraud is surging as speculative buying has shifted from the institutions to ma and pa America saying they are buying a “second / vacation” home in order to get prime, owner occupied mortgage terms when in fact they are intending to use the house as a rental. When the next crash happens, the Federal prisons will be loaded with average Joe’s who who wanted to make a killing in Real Estate.
Anyway, nothing about this cycle is any different that 2003 to 2007; unorthodox demand with unorthodox capital buying real estate on speculation.
‘U.S. Vacation-Home Sales Set Record as Economy Improves’
April 1, 2015
‘Even before the remnants of eastern Massachusetts’ snowiest winter have melted, second-home buyers flocking to Cape Cod’s beach towns have helped Steve Clay’s team of agents break their sales record.’
Clay, an agent with Keller Williams Realty, said he and his four agents have 17 properties under contract, more than at any one time since the team formed in 2009. “Buyers know they missed the bottom of the market, and now they don’t want to miss the bottom of interest rates,” he said.’
‘Second-home buyers from Cape Cod and New York’s Hamptons to Miami and Lake Tahoe, California, are returning to the housing market as surging stock prices, job growth and low interest rates boost purchasing power and consumer confidence. U.S. vacation-property sales jumped 57 percent last year to an estimated 1.13 million, a record in data going back to 2003, the National Association of Realtors said in a report Wednesday.’
‘Purchases of owner-occupied homes fell almost 13 percent to 3.23 million, the Realtors group said.’
‘Vacation homes accounted for 21 percent of all transactions last year, the most since the National Association of Realtors survey was first conducted 12 years ago.’
While the media will focus on things like subprime loans, it’s speculation that should be noted.
Owning more than one SFR for personal use is likely the most misguided uninformed decision one can make. Financing such a decision ranks up near using drugs on the stupid scale. Lying about it to your Master(lender) is clear off the charts.
No you can’t afford it nor is it affordable. You borrowed the money for 30 years.
“Owning more than one SFR for personal use is likely the most misguided uninformed decision one can make.”
It’s a sign of financial genius: When real estate can only go up, owning two homes instead of just one doubles your capital gains.
Agreed. I’m seeing this happening across the street.
Guy bought an investment house for his college student daughter to live in. That was back in 2004 and she left town in 2009. Place was trashed by her and her buddies, and the son and his friends put it into worse shape.
You should see Dad scurrying about, trying to make the place look better. It’s almost comical.
Methinks that Dad is about to sell at a loss. Why? Because his castle isn’t the only run-down dump around here. And the others are NOT selling, even with multiple price cuts.
wake me up when floating hotel condos come back
that was the uber peak
Good morning.
Floating condo can promise you the world
Home around the world
A section of one of the 165 apartments on the the World residential cruise ship. (ROW Management)
By Si Liberman
Tribune Newspapers
How would you like to have a ritzy, waterfront condo in every port? If money’s no problem and you’re not prone to seasickness, the 43,524-ton World residential cruise ship may be just the ticket.
That ticket for one of its 165 luxurious shipboard condos, by the way, can cost from $1 million to $13 million. First, though, you’ll have to prove your net worth exceeds $10 million. Then add another 10 to 15 percent of the purchase price for annual maintenance and other fees based on your apartment size.
The posh 13-year-old vessel is the largest residential ship afloat. Its operating company, ROW Management (www.aboardtheworld.com), of Miramar, Fla., prefers to call it a private residential yacht with availability of every possible modern convenience in each apartment, including TV and Wi-Fi.
Residents, who collectively own the boat and yearly select its itinerary in cooperation with the management team and captain, hail from 19 countries, including many from the U.S. They are served by about 270 crew members, and the average owner is in the mid-60s age range.
The ship has 12 decks, a large lobby, six restaurants, seven cocktail lounges, a cigar lounge, boutique and showroom, grocery store, deli, fitness center, billiard room, golf simulator and putting greens, full-size tennis court, jogging track, spa, swimming pool, theater, and library.
Entertainment generally is low key in keeping with the ship’s intimate atmosphere. A nightly performer is likely to be a classical or jazz musician.
This year’s itinerary includes two- and three-day visits to 120 ports in 40 countries on six continents with expeditions to Antarctica and Greenland.
Along the way there are lectures and classes in dance, language, cooking, arts and crafts, computer, music and photography.
…
Something tells me that socially, that boat will not be pleasant.
didn’t the tax write off for second homes disappear a while back?
I’ve never understood the allure of a “vacation home”
1) Depending on the locale, the property taxes alone could pay for a real vacation.
2) Maintenance. Nothing says “vacation” like having fix things that broke during your absence. And paying for landscapers and others to keep up the exterior, when you could have spent that money on a real vacation.
3) Cleaning. When on vacation, I just love to clean the house every day
4) Always going to the same place for vacation. “Can’t we go to Europe this year?” “We spent 300K on this place, of course not. We have to get our money’s worth out of it”
5) Repair damaged caused by renters. “Hey, we can rent it out when we’re not using it to defer costs … so why does the house look so worn and dirty?”
I get it if you work and live in Sacramento, but want to spend your weekend 2 hrs a way at Lake Tahoe and money is not a big problem in your life.
If you have money to burn, I suppose that a vacation house could be a status symbol.
or an escape from a cruddy town like Sac.
you only live once
6) Having to deal with vandals and burglars who have fun during your absence. Maybe even having to evict squatters. That could be fun, pulling up in your driveway, ready for an extended weekend, only to find that a family has moved in while you were away and now you’ll need to get a court order to get them removed. Oh, and they’re trashing your house while they’re at it.
or get stung by a bee on the drive up there.
if you are scared of everything, there is no making you happy
if you are scared of everything, there is no making you happy
I’m not scared of everything. But I am scared of owning a money pit “vacation home”
if you bought that “money pit” in 2012 and sold it today you would have made $10’s of thousands and had a weekend retreat. Timing
That requires a buyer.
Remember you can ask $50,000 for your 12 year old Chevy pickup truck but where is the buyer that price?
There is always a buyer if you reduce the price far enough. In some cases, the required reduction may be to negative levels (thinking of housing opportunities in inner-city Detroit, for instance…).
‘The single-family rental market has grown dramatically after around seven million families lost their homes during the foreclosure crisis and its aftermath. But there are signs that rents in some markets may be unsustainable, a new report finds.’
‘Single-family rentals now account for 13% of the overall housing stock, up from 9% in 2005, according to a report by Moody’s Analytics.’
‘There are signs the market is starting to overheat. Rents in San Jose, California – one of the hottest real-estate markets in the country – appear to be 19% overvalued when compared to home prices, according to Moody’s. The average rental price for a single-family home in San Jose is now $3,121. Relative to home prices, the average rent should be $2,632, Moody’s said.’
‘Similarly, rents in Denver are 18% overvalued, with families paying $1,746 on average, when normal rents would be closer to $1,485.’
‘Typically, rents for single-family homes should be in line with monthly mortgage payments for a similar house.’
‘Rents are also too high relative to home prices in Houston, where Moody’s estimates they are 8% overvalued. That could be particularly concerning given fears that the fall in oil prices will dampen the housing market there.’
If you’re asking people to pay your mortgage by renting your house, I wish you a lot of luck. Tenants aren’t THAT stupid.
Az Slim, I don’t understand your comment. The renters pay the ll and the ll pays the mortgage.
Of course the rent should be more than the mortgage. It should be more than a 15 yr mortgage unless possibly the house is brand new, low maintenance and not built by some shoddy outfit out of CT. But why build new houses for the rental market - that’s what apartment complexes are for.
The CA bubble has been going on so long the west coasters have lost touch with reality.
That’s her point. Rental rates don’t cover the cost of the principal interest taxes insurance and depreciation.
Good news….. The big dogs are in the house.
Welcome to The Housing Bubble Blog.
‘Colorado Springs ranks as 15th best city for first-time homebuyers’
Then elsewhere:
‘The local office market continues to struggle in its recovery from the recession, while shopping centers and industrial buildings are faring somewhat better, according to a second quarter report by Turner Commercial Research of Colorado Springs.’
‘Even as the local unemployment rate has dropped, too few new or existing businesses have added sizable numbers of jobs that would result in them taking large blocks of office space, according to the Turner report and other commercial real estate experts.’
‘As a result, the office vacancy rate remained in double digits during the second quarter - 13.5 percent for the overall market and 25 percent for Class A or top-of-the-line office buildings, the Turner report showed.’
‘”One out of every 4 square feet is vacant right now (in Class A buildings),” said Paul Turner, head of Turner Commercial Research. “It seems like the big users aren’t out there, the ones that are paying top dollar for space.”
If the Air Force Academy were to close or move away, Colorado Springs would shrivel up and blow away.
There is a “tech” remnant in Springs, though most of the big employers there like Hewlett Packard have been shedding jobs, sending them offshore. WorldCom used to have a big presence too.
It’s like Tucson. If the university and/or the Air Force base left, this place would be a ghost town.
ABQ losing Intel and it is in trouble too.
Comment by In CO is correct -
I was down there looking around for a ranch home last Fall and noticed that the Spgs is a city of two completely different worlds - the north end is relatively nice - nice nabes, tree lined and the like - businesses etc. and the south end of town not so much. Ft. Carson is very transient causing the south end to resemble the west side of Chicago - not a pleasant place if you have ever been here.
Enjoy your day.
The AF Academy, with its large pool of good paying, steady jobs, both military and civilian, is on the north side too, as is the tech remnant. Plus the cadets, while they live in the Academy, do spend some of their stipends in town.
The good news is that the cadets are required to live on the Academy campus. They won’t be partying your neighborhood into oblivion.
I don’t think that too many cadets are “party animals” like students at most Football Factory universities. They know that if they get into ANY trouble that they could get kicked out of the Academy.
That said, the Air Force keeps close tabs on them; and their daily lives as cadets are rather different from the typical college student.
I have a friend who’s a retired USAF officer (fighter pilot). He didn’t go to the Academy, but flew with a lot of people who did. He’ll vouch for what InCO just said.
It’s hard to get into the Academy. You need stellar HS grades and SAT scores AND you need to be nominated by you local congresscritter, and that’s just to apply. There is a lot of competition. One big bennie is that the Academy is 100% free AND you get a stipend. No flipping burgers for spare change; but a lot is expected from you. You’ll work your butt off at the Academy.
Isn’t this the city that couldn’t even afford to keep the street lights on a little while back?
‘I don’t think I ever remember seeing it this crazy in 25 years in real estate,’
That would get you back to 2015 - 25 = 1990, well before the onset of the mania. And this is coming from Des Moines, Iowa, which I presume is not exactly a real estate investing hot spot.
“Homes sold at a frenetic pace in June with the year’s first half running one-fifth ahead of last year’s pace, according to the latest Multiple Listing Service report. Homes sold in the city of Racine showed a much stronger surge in the average purchase price during the same periods.”
Many commute from extreme southern WI to downtown Chicago for work. Housing across the state line - alot cheaper and still the same amount of time as riding the rails from the far west burbs in ILLANNOY.
Could this be part of the reason for the increase?
Karen Church, principal broker at RE/Max Integrity in Eugene. ‘If priced correctly, (homes) are moving in 48 to 72 hours.’”
No, Ms. Church, if a house sells in 2 days it is underpriced. You just want a fast commission.
Not necessarily a bad idea to price a bit under the market in bubble conditions, I did that when I sold in spring 2007, thanks to the HBB and OTM blogs I was (correctly) convinced that the bubble pop was imminent….priced my place about $10K under the going rate which only amounted to about 3% and that got me a buyer under contract within a week. This was my idea, not the realtors and she was surprised. (had used the same realtor 10 years earlier when I bought the place)
We did the same thing when we sold just before the bubble popped in late 2004 — priced $20K under market, and sold in a bidding war at $9K over market.
It was my idea as well, not the Realtor®’s.
Ehhhhhhhhh no. If it sells that quickly there is fraud involved. Every single time
For the record, there was no fraud involved when we sold either of the two homes we owned, each time within the span of a week. Rather we figured out the market value and priced a little bit under.
There is nothing to prevent anyone who wants to quickly unload a debt trap from using the same tactic to dispose of a home in under a week.
is this stale news? seems to be slowing down were I live
WASHINGTON (Reuters) - U.S. home resales rose in June to their highest level in nearly 8-1/2 years, a sign of pent-up demand that should buoy the housing market recovery and likely keep the Federal Reserve on track to raise interest rates later this year.
The National Association of Realtors said on Wednesday existing home sales increased 3.2 percent to an annual rate of 5.49 million units, the highest level since February 2007.
Existing sales this year are on track to record their biggest gain in eight years, the NAR said. Economists had forecast home resales rising to a 5.40 million-unit pace last month. Sales were up 9.6 percent from a year ago.
Tx I’ll buy one
The how fees may be high
If it sinks
With organic demand at 20 year lows, do you believe NAR?
http://www.bloomberg.com/news/articles/2015-07-22/these-are-the-top-20-cities-americans-are-ditching
http://www.ritholtz.com/blog/2015/07/when-your-city-became-unaffordable/
In a town that is the poster child for BFE/Flyover. The median price is 5x the median household income.
I guess they aren’t making any more land out there.
Here in Tucson, one of my former neighborhoods is in an uproar. The reason? Fear of gentrification.
https://news.azpm.org/p/state-and-local/2015/7/21/68533-fears-of-gentrification-divide-barrio-hollywood-residents-say/
So who owns the property in the “Barrio”? If the residents own their homes they are in control, as long as they agree to not sell out.
If they are renters, then I don’t see what they could do to stop “gentrification”, which to me sounds like they want to keep white people out.
Other chat is too much at times,
but look! $49 and change
Qualcomm Cuts 15% of Workforce
By SAMANTHA TATRO and ASSOCIATED PRESS
Jul 22, 2015 4:08 PM
San Diego-based Qualcomm has confirmed the company plans to let go of 15 percent of its workforce as a part of a strategic realignment plan meant to save $1.4 billion.
In a plan laid out Wednesday, the company announced it would cuts its spending by cutting portions of its workforce, streamlining its engineering organization, increasing its mix of resources in lower-cost regions and reducing locations and invest in differentiated technology areas.
…
For folks unfamiliar with the San Diego economy, Qualcomm is a major high tech employer, perhaps the biggest headquartered here.
But no worries on the housing impacts of the winnowing, as with all the Chinese investors buying on the West Coast, the market can only go up from here.
Reading between the lines of that statement, the San Diego area Qualcomm workforce reduction may exceed 15% if they are shifting resources to lower-cost regions, which San Diego is not.
Qualcomm Plans To Lay Off 15% Of Its Workforce
Wednesday, July 22, 2015
By City News Service, David Wagner
Pictured is the Qualcomm building in San Diego in this undated photo.
A massive drop in revenues and net income prompted Qualcomm Inc., the San Diego-based provider of computer chips for mobile devices, to announce a plan Wednesday to reduce its workforce to save costs and study whether to split up the company.
While the company did not specify how many employees would lose their jobs, it announced that it expected the cuts would save around $1.1 billion. CNBC reported that the personnel cuts will amount to 15 percent of the workforce.
Those reductions could lead to thousands in San Diego losing their jobs at one of city’s largest non-government employers.
The firm will also eliminate $300 million in stock-based incentives.
“We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance,” said Steve Mollenkopf, CEO of Qualcomm. “We are right-sizing our cost structure and focusing our investments around the highest return opportunities while reaffirming our intent to return significant capital to stockholders and refreshing our Board of Directors.”
Qualcomm, which has been buffeted by increasing competition and decreased revenues, also released its financial report for the third quarter showing net income of $1.2 billion, down 47 percent from the same period last year. The sum was 12 percent higher than the second quarter, however.
The company reported earnings per share of 73 cents, compared to $1.31 last year, and 63 cents in the second quarter.
The company also reported revenue of $58 billion in the third quarter, a 14 percent drop from the same time last year, and 15 percent less than the second quarter.
A review of its corporate structure willl be completed by the end of this calendar year, according to Qualcomm. Plans also call for streamlining the engineering organization, reducing the number of offices and increasing resources in lower-cost regions.
…