Once Red-Hot Is Quickly Turning To A Fizzle
The Folsom Telegraph reports from California. “Luxury home sales in the greater Sacramento area soared more than 47 percent in the second quarter of 2015 from the same period a year ago. Meanwhile, the median sale price of a luxury property in the second quarter was $900,000, down 1.9 percent from a year ago but up 3.9 percent from the previous quarter, when the median stood at $866,150. ‘The Sacramento area’s luxury housing market closed the spring home buying season with very strong numbers,’ said Kris Vogt, president of Coldwell Banker Residential Brokerage. ‘The good news for buyers, though, is that prices remain attractive and inventory is starting to bubble up a little, giving buyers more opportunities to get into a home as we make our way through summer.’”
WVVA in West Virginia. “Raleigh County’s once red-hot housing market is quickly turning to a fizzle for potential sellers. Real estate broker Tim Berry said a rising number of properties for sale are driving down prices across the region. ‘Anytime you have the supply up that high, it tends to drive the prices down and the buyers, they enjoy nice savings.’ Berry believes there are other cost effective ways to break free from the pack. ‘Number one, you gotta clean your house. Give it a good smell. When most buyers walk through the door, they make an immediate opinion of the interior,’ Berry recommends.”
From MarketWatch. “According to CoreLogic, prices in the Baltimore-Columbia-Towson metro area were down 8% in the year ending June, the worst showing of the 100 biggest metro areas. What’s driven that is a huge rise in foreclosure sales. Maryland, despite being a so-called nonjudicial state where judges do not have to approve foreclosures, had a program that delayed foreclosures to give homeowners more a chance to fight them.”
“Other metro areas where prices have declined include Boston (-4.4%), Hartford (-0.1%), New Haven, Conn. (-1.8%) and Worcester, Mass. (-7%). Sam Khater, deputy chief economist at CoreLogic, said that’s more a reflection of the languid economy in New England.”
The Boston Globe in Massachusetts. “Massachusetts foreclosure filings shot up 81 percent in June compared to the year before, continuing a rise in foreclosure activity that began early last year. ‘The increases in foreclosure starts that we have been seeing steadily for months now are likely to continue through the second half of the year,’ said Tim Warren, the chief executive of The Warren Group. ‘Some lenders had let a lot of delinquent mortgages accumulate in the pipeline over the past few years. Now that the market has improved and buyers are eager for affordable homes to purchase, the backlog is getting pushed through the system.’”
Tucson News Now in Arizona. “Residents of several neighborhoods have reached out to Tucson News Now, claiming abandoned and foreclosed properties are creating an eyesore and blight in their neighborhood. Some are still owned by banks. ‘In a lot of these cases, the homes were lost by the owner in the recession. We’ve actually had homes where the ownership of the property, just as we’re trying to track down the owner, changed hands four to five times in a matter of months,’ said Michael Wyneken, the interim code enforcement administrator for the City of Tucson.”
“Many of these properties have been sitting empty for years. He added that the banks own many of these properties, and are not stepping up to their responsibilities. ‘The banks have done a masterful job across the country of making it very difficult to pin them down to make repairs or keep these places up,’ he said.”
The New Jersey Spotlight. “A new report finds foreclosures and housing vacancies continue to destabilize Newark. ‘This is a problem that kind of spreads out throughout the city,” said Christopher Niedt, an associate professor of sociology at Hofstra University and a co-author of the study. Onerous mortgage terms, disconnected from market values, are ‘one of the biggest culprits’ in Newark’s ongoing foreclosure crisis, according to Niedt. At least 1,151 underwater mortgages in the city have been traced to securities sold off by the original lenders to private investors, he said.”
“Because the mortgage-backed securities are often divided among many investors and administered by real-estate trusts, it is often difficult to impossible to negotiate with anyone to modify them to reflect the actual value of homes, Niedt said. The gap can be significant, Meyer said. For 125 Newark mortgages purchased by NJCC, ‘the average amount of the loan was $325,000, but the average value of the property was $175,000,’ he said.”
“Moreover, while banks often refuse mortgage modifications to individual borrowers, ‘they have no problem selling a mortgage at a discount to large private equity firms,’ he said.”
The Tampa Bay Times in Florida. “Jay Magner was watching the noon news one day when he heard that real estate tycoon Donald Trump and a group of local developers were planning a 52-story condo tower on the river in downtown Tampa. ‘It changed the course of my life, literally,’ says Magner, who at the time owned a dollar store. ‘I thought, ‘Oh my God, I could finagle that and live there.’ ”
“Magner put down a deposit, joining dozens of other buyers eager to own part of what Trump called a property ’so spectacular that it will redefine both Tampa’s skyline and the market’s expectations of luxury.’ Magner often walks or cycles by the acre and a half site, still weedy and empty. ‘I lost $130,000,’ he says. ‘I didn’t know people could take your money and not build the building.’”
“Despite the hoopla, signs of trouble soon emerged. At the same time, Florida’s condo craze had started to cool. Even as the developers held a ceremonial ground-breaking in 2006, they had yet to obtain financing. In 2006, the licensing agreement was modified to increase Trump’s fees to $4 million in exchange for a concession in the amount of money he would get from condo sales. Nonetheless, SimDag stopped paying and in May 2007 Trump sued, claiming he was owed $1.03 million in licensing fees. That was the first time most people — including the now-frantic buyers — realized Trump was part of the tower in name only.”
“Lawyer Mary Ann Stiles sold another condo she owned to put down $400,000 on a unit in Trump Tower. Stiles is out $200,000. She acknowledges she should have read the sales agreement more closely but remains convinced the project would have succeeded if the economy hadn’t tanked. ‘Everything in 2005 and ‘06 was going great guns,’ she said. ‘I didn’t think the bottom would fall like it did.’”
‘the project would have succeeded if the economy hadn’t tanked. ‘Everything in 2005 and ‘06 was going great guns,’ she said. ‘I didn’t think the bottom would fall like it did.’
A reader sent this in:
‘3 S.F. home sales proving market’s insanity knows no limits’
‘Followers of San Francisco real estate trends have every right to stifle yawns when news breaks of yet another expensive sale. But even the most jaded market watchers may find these three sales worth at least the raise of an eyebrow. We think they’re proof we haven’t yet seen how crazy this business can get.’
See, it’s all ’stifle yawns’, and ‘watching paint dry’. Then ‘mommy pull it out make it stop I didn’t think this would happen!’.
That SF stuff is pretty insane…
“inventory is starting to bubble”
Starting? The truth haunts the rotting core of realtor.
3,663 properties found Sacramento, CA Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Sacramento_CA
855 properties found Sacramento, CA Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Sacramento_CA/show-price-reduced
Keep slashin’. You’ll get there eventually.
‘If you are looking to rent a single-family home in Sacramento, you’d better be prepared for rising rents and greater competition. That is the message from Stewart Guthrie, a local franchisee of Real Property Management.’
‘Guthrie said one of the reasons for the increase is that investors who purchased homes as rental properties are now selling them for a profit. “So you have more people looking for a commodity, housing to rent, and less of commodity. So, the price goes up,” Guthrie said.’
I dunno Steward, commodity prices don’t always hold up.
Amazing how many dummies out there believe housing is a commodity…
Or an investment. I like to go to the grocery store and invest in my dinner.
You’re right, housing is special, unique, something to be treasured.
/sarc
I think what they meant is not that it is a commodity like corn or copper, but that housing is relatively fungible–one house is not all that different than another house; they all provide shelter.
If you think of housing as shelter, with no barriers to adding supply, it should be priced like a commodity–when prices go up, more supply is added (dampening prices), and when prices go down, less supply is added (strengthening prices).
There’s no need to add supply Rental_Fraud. Not with 25 million excess, empty and defaulted houses.
The rental market and the product type where I invest, the supply is down about 80% from what it was just a few years ago. When I post a house for rent on CL, I typically get 4 to 5 calls in the first few hours. I usually have the property leased withing a week and the new resident is ready to move in right on the heels of the old resident moving out.
Friends are calling us asking if we have anything available for someone they know needing a house. It is a very tight rental market in the Sacramento foothills.
Doubtful…
Sacramento, CA Housing Demand Falls 8% YoY; Down Every Year Since 2009
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
He’s referring to the foothills.
Same difference. Housing demand is in the gutter statewide.
I am also referring to rental demand. The population is growing and housing inventory is growing at a slower rate.
No Jingle_Fraud. Population growth is the lowest in US history. With 4.4 million excess empty houses in CA, I don’t think you have to worry about housing inventory for a good long time.
I saw a commercial touting Realtor.com last night. I guess realtors think this website will encourage people to buy, but if too many people realize how effective it is at showing what a bubble we’re in, it won’t last for long. I wonder how long before they take away “price reduced” as a filter option.
That occurred to me too. But that website isn’t run by the UHS. It’s run by News Corp.
“Many of these properties have been sitting empty for years. He added that the banks own many of these properties, and are not stepping up to their responsibilities.”
Vacant or occupied…. there are 25 million of them. Not to mention tsunami of defaults building from Phase II of the Great Housing Fraud, 2009-2014.
This is where most of the inventory lies- empty and sitting on the banks’ books.
‘I lost $130,000,’ he says.’
That’s what happens when you pay more than $40/sq ft for a used house. Most lose triple that so consider yourself fortunate.
Lesson: Houses are depreciating assets that only cost you money. Alot of money.
“The Great Realtor Rip-Off”
http://www.economist.com/node/21554204
It would be cheaper to advertise the house yourself and pay a lawyer to handle the legal documents. When it’s cheaper to pay a lawyer to do something, you know things are bad.
“When it’s cheaper to pay a lawyer to do something, you know things are bad.” Amen!!!!!
But how do you protect yourself from getting swindled by a lawyer? You sit down with them and the nebulous “billable hours” clock starts ticking immediately, for which you have no control over. You can literally receive an eye-popping bill in the mail.
If for some reason you can’t avoid it and find yourself in close proximity to a Realtor, smell it and document your findings here.
So far I’ve detected sort of a combo between rat piss and a sewage treatment facility.
And that’s assuming they haven’t had their morning coffee and cigarette.
‘Sales prices in Northern Virginia have stagnated. The biggest countywide gain in Northern Virginia occurred in Arlington County — up 2 percent to $663,642. Loudoun County’s sales prices rose 0.4 percent to $498,654, while those in Fairfax County dropped 0.8 percent to $565,665.’
‘In all, Loudoun County has seen spikes in large sales throughout Paris, Upperville and Middleburg. But their gains are difficult to quantify as there are few sales; this distorts the average sales price year over year by more than 100 percent in some areas.’
‘Median days on market increased 20 percent in Arlington County to 12 days this year; 27.3 percent in Fairfax County to 14 days; and nearly 31 percent in Loudoun County to 21 days.’
‘Finally, the sales price to list price ratio shows us a little more about how competitive the Northern Virginia market has been for buyers. In all, pockets of the Northern Virginia market are beginning to creep toward that 98 percent plus range that requires a buyer to offer nearly a full price of the listed value.’
47 properties found
Loudoun, VA Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Loudoun_VA/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home
22 properties found
Loudoun, VA Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Loudoun_VA/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home/show-price-reduced
‘requires a buyer to offer nearly a full price of the listed value’
‘requires a buyer to offer nearly a full price of the listed value’
Seems realtors say anything irrespective of the data and reality.
Fast turnover w prices going nowhere
=weird
With demand at 20 year lows and falling, it’s hardly fast turnover.
‘Here’s my summary of the key events overnight that affect New Zealand, with news of more commodity price falls. The big news today is the continuing slump in dairy prices. They were down another -9.3% overnight taking the drop from February an eye-watering -46%. WMP prices are down -51%.’
‘Buyers are staying away from a market that is caving in on itself.’
‘Indonesia feels brunt of commodities slump’
‘Some lenders had let a lot of delinquent mortgages accumulate in the pipeline over the past few years. Now that the market has improved and buyers are eager for affordable homes to purchase, the backlog is getting pushed through the system.’
Translation: This is the Echo Bubble peak. Either offload your depreciated foreclosure inventory now, or hold it off the market forever.
A cheating husband or boyfriend who was caught once figures out how to hide it a little better the next time. And the wifey or girlfriend will turn an even blinder eye.
This is where we are at in the housing bubble.
‘Mark and Star King thought they’d make some extra cash by renting their house out on Airbnb. They didn’t expect this. Picture: Calgary Herald.’
‘There were piles of rubbish littered throughout the house.’
‘Wild partygoers renting CBD apartments for short stays are urinating, vomiting and stripping off in public view to the horror of regular residents.’
‘Reports include bottles and furniture being dropped from balconies, dirty linen in hallways, nudity in pools, vandalism, stolen car parks, security concerns and lifts cluttered with cleaner trolleys and equipment.’
‘Sole resident representative panel member Roger Gardner, president of the Owners Corporation Network Victoria, said the majority recommendations were a “whitewash”. Short stay bans similar to those overseas including New York, San Francisco, Paris and Berlin were needed.’
“It is unacceptable that people innocently and unknowingly buying into residential apartment buildings to live there should be forced to put up with drunken and drugged-up parties. Residents are being forced out,” Mr Gardner said. “The police have stated that short stays are used for drug dealing.”
“Suggesting that these short stays are necessary to tourism is a red herring. There are loads of other places people can go including hotels, motels, holiday houses and dedicated short stay buildings.”
‘The panel’s report found short-stay guests caused a “disproportionate” number of problems in some buildings, particularly at Docklands and New Quay. Loud music, foul language and drunkenness were among the biggest complaints.’
‘Some occupants crammed in extra visitors after booking online, overcrowding pools and gyms and breaching health, building and safety laws.’
What was that?
I think one of our guests is throwing up.
You clean it up, I’ve got to drive them to the airport.
I like the disrupting of old entrenched corrupted power networks for things like airbnb and Uber. I don’t like the cheating, lying, lawbreaking, ignore the rules aspects though.
Do apartment buildings really have to allow this? Can’t they pass some strict rules and heavily fine the culprits who break them?
What’s interesting to me is how this is gliding through the media. I really want to drive a cab. I want to clean toilets, in my own house, for strangers. This is some new fantastic economy?
I’m a libertarian. Break these rules up and watch the economy flourish. But I have to think, what if the people in Colorado and Washington had said, “pot should be legal, so we’re going to deal pot and to heck with the laws.” I wonder if we would see the government sit on its hands?
This stuff from these silly valley geniuses is a bums rush. “Oh I did it on my smart phone, it’s the new economy, you can’t put the genie back in the bottle!” Whatever, pick me up at 5 and don’t be late.
Like I said, AirheadBNB will morph into 2hr room rentals for hookers and johns. Anything illegal? Use AirheadBNB. And the empty pocketed home debtors in Californica will establish the trend. Washing sheets, disposing condom wrappers and cleaning toilets. Yep…. You’ve really come a long way.
Look at what the Fed has done to this country. And nobody notices.
Honestly I’m a little surprised airBnB isn’t yet being used by backpage hookers and dudes in the dope game. Think about it: the accommodations are more private and upscale than some cheap hotel, and before too long you move to another location, and avoid the police.
What makes you think it’s not?
Ben, what I fear is that this will be the New Normal.
Yeah, the extra cash is great now, but when “everybody does it,” that extra income will shift from luxury cash to a necessity to survive. Same way we went from needing one income to needing two incomes.
And I’m not sure I like the peer pressure to treat my home and free time as excess capacity to be exploited. Is this going to be the new watercooler conversation? You watched Game of Thrones? Dummy, that coulda been two uber fares. Left your house empty when you went away for the weekend? You dummy! you could have rented that out and come home to a cool $300 for doing nothing…
Heard this being pushed on the radio here in Vegas:
“Make Your Mortgage in a Weekend”
Vacation Home Rental Program by Cathy Burch in Las Vegas
Left your house empty when you went away for the weekend? You dummy! you could have rented that out and come home to a cool $300 for doing nothing
Only a dummy would let strangers stay in his home, especially unsupervised. Sheesh! But yeah, I too fear this will become the “new normal”. Of course, if everyone is renting out their spare rooms and driving a cab, who will be their customers?
But what if you are using your cloud-connected home security system interior cameras to keep eyes on your guests - is that allowed?
But what if you are using your cloud-connected home security system interior cameras to keep eyes on your guests - is that allowed?
Good question. But if you’re out of town when a moving van backs into your driveway and they clean out your house, it won’t do much good.
“This is some new fantastic economy?”
Worth billions and billions, apparently…
Their business product appears to be a glorified HR service: vetting, punchclock, payment. It’s a lot like Kelly Temp services, only with a lot more employees and a lot less vetting. I guess it’s a viable product, but it’s definitely not worth billions.
I lived in several apartment buildings in my younger days and would have hated seeing strangers come and go all the time. No doubt the majority would be harmless but some seriously crazy stuff happens in the hotel business and someone experienced needs to be onsite to deal with it quickly. (Have heard many horror stories from a sibling who manages high end hotels, also my favorite noir writer Jim Thompson got some of his best material from his years working in hotels)
BTW another large “new economy” company that had a swift and spectacular failure recently was Homejoy, sort of an Uber for housecleaning…
http://techcrunch.com/2015/07/31/why-homejoy-failed-and-the-future-of-the-on-demand-economy/
Dangit! I really wanted to clean houses for a living.
‘Essential California: Life in a shipping container’
‘J.P. Morgan Chase & Co. is loosening its underwriting criteria for big mortgages, as lenders ramp up competition to grab a bigger share of the high-end housing market. The nation’s largest bank by assets plans to announce Wednesday that it is lowering the minimum credit score and down payment it requires for mortgages as big as $3 million. The New York firm’s moves follow similar steps at Bank of America Corp., Wells Fargo & Co. and other banks.’
‘For jumbo mortgages, J.P. Morgan plans to lower the minimum FICO credit scores it requires to 680 from 740 for loans on primary single-family purchases, second homes and certain refinances on those properties.’
‘The moves by J.P. Morgan are in some ways more aggressive than those of its peers. The bank is allowing a 15% down payment for loans up to $3 million, compared with Bank of America and PNC Financial Services Group Inc., which permit a 15% down payment for jumbo loans of up to $1 million and $1.5 million, respectively.’
“In some cases, our customers have been helped by other banks that have different guidelines,” said Sean Grzebin, head of retail mortgage lending at J.P. Morgan. “Some of this is [about] retaining customers we should have gotten and we hadn’t because of program restrictions.” The bank, run by Chairman and CEO James Dimon, said in July 2014 it was repositioning its mortgage strategy to focus on higher-end customers.’
‘Sales of existing single-family homes priced between $750,000 and $1 million, for example, increased 21% in June from a year prior, according to the National Association of Realtors. Sales of homes priced between $100,000 and $250,000, in contrast, increased 12.5%, while those priced lower fell 3%.’
“The upper end of the segment has improved quite a bit,” said Sam Khater, deputy chief economist at CoreLogic, a real-estate information firm. The improvement is in part because banks are giving out more jumbo loans, as well as the recovery of the stock market, which is highly correlated to jumbo mortgage demand, he said.’
‘The bank also is lowering down-payment thresholds for jumbo mortgages used for second homes, such as vacation homes, and certain two- to four-unit properties. The bank says the changes simplify its offerings. Several large banks have recently lowered their jumbo-mortgage requirements. Wells Fargo last year cut the minimum down payment it requires to 10.1% from 15% for jumbo mortgages of up to $1 million.’
‘Rising home values have helped give lenders confidence that lower down payments won’t leave borrowers at risk of owing more on their homes than they will eventually be worth.’
http://finance.yahoo.com/news/j-p-morgan-loosens-terms-235900445.html
If average prices are declining due to foreclosures, that doesn’t really make a difference to end-consumer buyers. Repairing a foreclosed house to livable condition will cost just as much as buying a market house, and if fixed up by a flip-joint, that house will ultimately cost more.
“Repairing a foreclosed house to livable condition will cost just as much as buying a market house”
It will? Explain how.
‘If average prices are declining due to foreclosures, that doesn’t really make a difference to end-consumer buyers’
I’ll have to think about that.
‘if fixed up by a flip-joint, that house will ultimately cost more’
Flippers never lose money. Never.
‘Repairing a foreclosed house to livable condition will cost just as much as buying a market house’
As one who has bought foreclosures that needed repairs, I tended to offer less. And I know it’s silly, but I hammered these sellers til their ears bled. Why? Because it was distressed sales. You got a problem? I’ll take it off your hands but it’s gonna hurt.
Ben, I specified end-consumer buyers. Despite what those Property Brothers tell me, not many young families have the cash, time, or gumption to fix up a fixer-upper. It’s much easier (if not cheaper) for the end consumer to borrow more and buy a fixed up house, even if it means paying the flipper premium.
And I suppose I should confess that I really LIKE the Flip or Flop and Property Brothers shows on HGTV. Leaving out the economics, I love the before and after of a trashed house in an otherwise decent neighborhood get cleaned up and fixed up. It seems like a healthier shelter than the soulless boxes being tossed up 20 miles out of town.
(alright HA you can go ahead and donk me now)
They have the cash to pay a 250% premium for a a rapidly depreciating asset but they don’t have the cash for the same item at half the price that requires another 10% in repairs.
You really don’t make any sense Donk.
Just ignore HA….Your correct…Most would not know where to start in fixing up a house and it is cheaper due to the fact that you need much more cash to fix it yourself after you have purchased it…
Are you sure Dave?
Show the costs. Let’s review the estimate right here.
It’s true, HA.
Today’s buyers don’t know which end of a hammer to pick up. And as long as they can scrape together the monthly nut, itsallgood. I see this with the newbies buying homes in my neighborhood.
Compare and contrast to my “great generation” elderly neighbor, who built his own house and then added onto it, using mostly recycled building materials, over several decades.
What is the key difference between ‘then’ and ‘now’?
Access to cheap, borrowed money. Back then, people HAD to live within their means, so they scraped and saved and scratched out a living by any means possible.
Only the estimate will confirm it’s true or not.
Go ahead and post your estimate and we’ll review it.
What hourly value do you place on your own ’spare’ time?
What about the opportunity cost of not spending time with one’s children?
What is it worth to you to spend your weekends hiking in the mountains instead of drywalling that third bedroom?
It’s hard to put a dollar amount on intangibles.
I’m living in a half-remodeled house right now. I would rather play ball with my kids while they still want to do that with me. The house can get finished later.
Your priorities may be different.
Post an estimate and we’ll review it.
I read the story about the Trump Tower last weekend and several times had to stifle a laugh. While I don’t know any of them personally, some of the buyers who lost large sums of money appear to be socially ambitious, upper-middle class people with assets, who wanted to flaunt an association with the Trump name. Indeed, the individuals who conceived the project fit in that category too.
I hope these people realize that they were, and are, marks. You might as well go play the shell game or three-card monte, and lose $20 rather than $200,000.
Just for fun, check out listings for Highland Park, a city totally surrounded by the City of Detroit itself:
http://www.realtor.com/realestateandhomes-search/Highland-Park_MI/sby-1
Most of these homes are post WWII boxes or 100 year old fixer uppers, but there are many that would fetch a decent amount if they were better maintained, and located in a different area, of course. Check out the last six listings - 450k and up. These houses are on the streets where the wealthy lived in the 1920’s, but are now threatened by the creeping decay around them.
I think it’s pretty funny that on the second to last page, house prices rise from $43K to $550K over a span of 6 houses (out of 83 for sale). There is NO inventory in the middle price range.
HA, do you count these in your 25 million excess empty houses?
Data Donk data….
http://www.census.gov/data.html
And Hamtramck, another city completely within the city limits of Detroit, but dominated by ethnic and immigrant neighborhoods. It probably doesn’t hurt that GM has a large factory there.
http://www.realtor.com/propertyrecord-search/Hamtramck_MI/pg-10?pgsz=50
And Southwest Detroit, otherwise known as Mexican Town (and not insultingly, either. It’s a big destination for people seeking authentic Mexican restaurants).
http://www.realtor.com/propertyrecord-search/Southwest-Detroit_Detroit_MI?pgsz=50
And finally, the City of Detroit itself. Population: 680,250, Houses for Sale: 302,525.
http://www.realtor.com/propertyrecord-search/Detroit_MI?pgsz=50
The low to high filter has obviously been tampered with, but there are a surprisingly high number of neighborhoods that have held up over the years. Somebody really got a good deal on this house:
http://www.realtor.com/realestateandhomes-detail/19163-Winthrop-St_Detroit_MI_48235_M44492-98097?row=15
Detroit today, Boston tomorrow, LA the next. There are many more Detroits.
Just saw on Bloomberg an index called the RedFin demand index, which is based on millions of visits to Redfin.com home-listing pages, and thousands of Redfin customers requesting home tours and writing offers in 15 major metro areas. The CEO of RedFin expressed concern about a drop off in demand in the last few weeks
Their methodology is as sketchy as they are.
There is no better metric of housing demand than organic housing demand. Check it out.
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
Dublin, CA Housing Prices Crater 14%
http://www.movoto.com/dublin-ca/market-trends/
Yeah but the median house SIZE is down 24%; per Sq. ft. the median price has increased.
Once again, it’s the falling transaction price that is important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.
Which is not happening, so your whole point is irrelevant…..
And it’s happening in your neighborhood to Jingle_Fraud.
Don’t know where you live but prices here in the Bay area are definitely not falling - at least not at this point. All else equal, the price of an 800 sq. ft. house is going to be about 80% of that of a 1,00 sq. ft house. Don’t understand how else to explain it.
It’s falling transaction prices that are important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.
http://finance.yahoo.com/news/oil-companies-spending-cuts-unlikely-202900844.html
‘The world’s biggest oil companies have vowed to bring down the costs of big projects in the face of slumping oil prices, but the unrelenting price weakness—with crude below $50 a barrel—suggests they could have to dig deeper still.’
‘What the industry really needs is a shakeout, said David Tameron, an analyst at Wells Fargo Securities. Too many energy companies, particularly in the bottom tier, have been able to hang on through the downturn with the help of financial backers.’
Multiply this by millions of companies worldwide that should have gone away but are still there, borrowing, taking market share and keeping returns low. This is how QE etc, is deflationary. Over-capacity is created and prolonged.
‘Analysts at investment bank Jefferies say international oil companies lowered their break-even points by $10 a barrel after the latest round of spending cuts, but will still need a price of $82 a barrel in 2016 to cover spending and dividends, which have been the main investment attraction for the sector for decades.’
“In order to cover the shortfall, the sector will increase its borrowing. While leverage remains manageable within the sector, this is not a practice that can continue in perpetuity,” Jefferies said in a note on Wednesday.’
‘Part of the problem for the oil majors is that large national oil companies and shale producers have increased their share of global production gradually for years, leaving the majors victims of forces largely beyond their control. Their heavy investment cuts are expected to lower global production capacity by 2 million barrels per day by 2020, according to Rystad Energy. But OPEC producers will only move in to make up the shortfall.’
“This has been really a tough time for the industry from Aberdeen to Angola to Houston … It does feel like 1986,” BP (BP.L) CEO Dudley said last week after a near two-thirds drop in quarterly profit.’
‘In late 1985, oil prices slumped to $10 from around $30 over eight months as OPEC raised output to regain market share following an increase in non-OPEC production. The industry responded by cutting spending by nearly a quarter and slashing its workforce by a third, according to Morgan Stanley. Prices gradually recovered over the next decade as global demand rose.’
‘But today’s supply overhang could last much longer. “If oil prices follow the path suggested by the forward curve … this downturn would be more severe than that in 1986,” Morgan Stanley said in a note.’
http://finance.yahoo.com/news/crude-50-oil-firms-fear-135858749.html
“This is how QE etc, is deflationary. Over-capacity is created and prolonged.”
It wasn’t too long ago that people were being told to get rid of their dollars and to put them in “things” because hyperinflation was coming. Well….hyperinflation never arrived because no one factored in the over-capacity that China created.
The housing boom has merely made the very rich more visible to us. It’s the same cup of water in S.F. as in Brooklyn heights. A condo there is now selling for $1.4 when two year ago you could not give it away. A man being paid $ 3 million on Wall Street finds $1.7 a steal. It’s the same on both coasts.
I still remember what happened to my neighborhood in Hawaii when Micro$oft people took a liking to it. Shades of Lake Tahoe.
“Lawyer Mary Ann Stiles sold another condo she owned to put down $400,000 on a unit in Trump Tower. Stiles is out $200,000. She acknowledges she should have read the sales agreement more closely but remains convinced the project would have succeeded if the economy hadn’t tanked.
In Bizarro world she would be able to borrow against the $200,000 she is out to buy another one today!
Can I also borrow against the $50,000 I owe on my credit cards… I’d also like a line of credit against my student loans of $150,000??
Where’s Mr. Banker when you need him?
“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” - Mark Twain
Centennial, CO Housing Prices Fall 8%
http://www.movoto.com/centennial-co/market-trends/
Again, the median house SIZE decreased by 12%; price per sq. ft. actually increased.
Again, it’s the falling transaction price that is important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.
“A couple in Florida is accused of lying about a sinkhole on their property to a homebuyer after cashing an insurance check without fixing it.”
Glenn Jasen, 64, and his wife Kathryn, 63, of Spring Hill, Tennessee, were arrested by the Florida Department of Law Enforcement and appeared in federal district court in Tampa yesterday for their bond hearing.
http://abcnews.go.com/Business/florida-couple-accused-allegedly-lying-sinkhole-homebuyer/story?id=32520698
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“The Scarpello’s and their children have lived in their Spring Hill home since November. But they said they want out, after seeing a MLS listing marking the property as an unrepaired sinkhole home.”
And they say the landlords, who live out of state, never told them.
http://www.abcactionnews.com/news/region-citrus-hernando/renters-find-out-house-has-unrepaired-sinkhole
Seattle, WA Housing Prices Fall 12%
http://www.zillow.com/seattle-wa-98105/home-values/
I notice that lots of properties are hitting the market in Vancouver, WA, just across the river from Portland, OR.
This may be the beginning of the end for Housing Bubble 2.0.
The Ponzi scam in housing is collapsing, like all other bubbles. The IMF is trying to push off China till 2016 from getting into the SDR, China will not take this sitting down. Watch as Sept comes and the AIIB launches and BRICS’s focuses on the U.S. dollar. Iran deal, that was for the U.S. trading dollars for oil, because they know the PETRO/Reserve Currency is dying. Once this happens, everything else will collapse, Stock Market, Housing, Auto Industry, Commodities, ect. The POTUS, Debates, GOP, Hitlery, it’s all to keep the sheep occupied while your wealth is destroyed. So, housing is just another leg soon to be kicked out from under the U.S. Economy, it’s all coming together for the next big bubble.