August 10, 2015

Flashes Of High Spirits

KXLY reports from Idaho. “Everywhere you look new homes are being built across Coeur d’Alene. ‘We did that building right down there, we’ve got another one right there, we’ve got four more over there. Our boss has three other crews going so we’re slammed,’ Dustin Jurcevich with Tamarack Construction said. Kootenai County issued 168 building permits in July, up from 138 two months ago. ‘We don’t have a day off. We’re working when we can work, seven days a week if we’d like so it’s keeping the lights on,’ Jurcevich said.”

The Coeur d’Alene Press in Idaho. “As anticipated, the North Idaho real estate market continues to outperform the last several years of activity and prices continue to climb. It appears that shadow inventory is coming into the market albeit at a slow enough pace that it is not dampening prices. Shadow inventory is foreclosed inventory that has been held off the market until a reasonable price can be expected. With our strong current market we have begun to see an increase in foreclosure sales even though we are seeing fewer ‘notices of default’ that indicate pending foreclosure.”

The News Press in Florida. “Real estate professionals say that because of the flashes of high spirits some are jumping the gun and assuming there’s still a rapid escalation of prices. Broker Denny Grimes of Denny Grimes & Co. said one client thought the reason nobody was buying his house, listed at $299,000, was because ‘it’s priced too low. His strategy is ‘Raise the price.’ That’s classic 2005 thinking and actually might work in an over-heated market, but it’s not worth trying now, said Grimes, who dropped the client.”

“Most likely, he said, in Florida it would be concentrated in high-end residential properties, many of them in luxury high rises, which disproportionately are bought by overseas investors seeking to hedge their bets against the currencies and economic conditions of South America and, to a lesser extent, Europe and Asia. ‘We are looking at a bubble but it won’t be widespread over all property types and all locations like we saw the last decade,’ he said. ‘But I think we are going to see a correction in the upper end condominiums and single-family homes.’”

The Moorpark Acorn in California. “In response to the complaints, Ventura County supervisors have ordered a study into short-term rentals and requested staff to hold a public workshop on the issue within the next four months. ‘We’re now seeing—and we’re seeing it happen in a number of places in the county—people actually purchasing homes purely to rent them out through Airbnb and other websites, and that decreases the number of homes available,’ said District 1 Supervisor Steve Bennett.”

The Times Picayune in Louisiana. “What was billed as a rallying cry against the proliferation of short-term rentals in New Orleans turned tense when dozens of those running such Airbnb-style operations showed up to the meeting too. The so-called ’sharing economy’ is a sham, said Rob White, a French Quarter resident. ‘Sharing is when I have a ham sandwich and I give you half’ When someone gives you a sandwich and then hands you the bill, that’s a restaurant, he said.”

NPR on Georgia. “Atlanta’s housing market seems to be back. Condos and apartments are shooting up, and there are plenty of construction cranes around the city. But those cranes aren’t everywhere. Across the metro area, there are hundreds of subdivisions still showing signs of the great recession. ‘This house has never been completed,’ said Jerry Hicks, standing in front of a house where the lawn’s overgrown and plywood covers the windows. Hicks lives down the street. He said there used to be a house like this one right across the street from his home.”

“Hicks said he’s underwater on his mortgage, stuck in this unfinished subdivision. The gates at the entrance don’t work. People have sewer problems. Half the roads in the development have no houses, and trees and weeds have taken over, like some kind of post-apocalyptic movie. Hicks bought his house in 2006, before it was completed. The next year, he moved in, just in time for the mortgage crisis and great recession. He and many of his neighbors stuck it out, but the developer didn’t.”

“Villages at Oakshire is in Atlanta City Councilwoman Joyce Sheperd’s district. She said there are four or five other subdivisions in her district that were never finished. Some are just what she calls ‘pipe farms.’ ‘They are now sitting there overgrown with pipes coming up out the ground, and nothing happening with them.’”

“Hicks said city officials have been involved intermittently, but when he sees the development happening in other parts of town, he said he feels like a stepchild. ‘Why do you put so much effort in that area, and completely ignore us altogether?’ he asked. ‘So there’s animosity. You know, we’re angry about it.’ He said he’s stuck around for so long, partially to get his money back, but the main reason is his home. ‘I fell in love with the house,’ he said. ‘And I do think it’s going to turn around, just when.’”




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45 Comments »

Comment by Combotechie
2015-08-10 04:01:52

“He added low interest rates are also making it nice for home buyers”.

Low interest rates = “affordable” - affordable in that monthly payments may be doable.

“Right now interest rates are fairly low but there’s been talk they may be raised in the coming months, one more reason those selling homes say now is the time to buy.”

But if interest rates are raised in the coming months then houses will not longer be as affordable - affordable as determined by monthly payments - and if houses are no longer as affordable then the price rise will halt and (gasp) may even go into a decline.

Which means that a sign that there may be an increase in the interest rates - a pending increase in the cost of buying - should not be seen as a reason to buy now but should be seen as a reason to hold off on buying now.

That is unless one especially enjoys being the guy that ends up buying at the top of a price rise.

 
Comment by Combotechie
2015-08-10 04:26:00

“As anticipated, the North Idaho real estate market continues to outperform the last several years of activity and prices continue to climb.”

“… prices continue to climb” = the main attraction

“It appears that shadow inventory is coming into the market albeit at a slow enough pace that it is not dampening prices.”

“… not dampening prices” = not dampening the price rise, not dampening the main attraction

“Shadow inventory is foreclosed inventory that has been held off the market until a reasonable price can be expected.”

Translation: Shadow inventory is being metered out into the market instead of being simply dumped into the market so as to protect the price rise, so as to protect the main attraction.

“With our strong current market we have begun to see an increase in foreclosure sales even though we are seeing fewer ‘notices of default’ that indicate pending foreclosure.”

“… even though we are seeing fewer ‘notices of default’ that indicate pending foreclosure.”

Yeah? Well stay tuned; When it comes time for the lender to drop the hammer then this what the lender will do. Up until then the occupant of the house - the one who is spending his own time and money in maintaining the house that is in fact owned by the lender - gets to enjoy the illusion that he is pulling a fast one on the lender.

Comment by snake charmer
2015-08-10 12:47:44

How many of the purchasers up there are hedge fund manager survivalists? DennisN used to be an excellent source of Idaho information, but I haven’t seen him post for awhile.

 
 
Comment by Ben Jones
2015-08-10 05:35:14

“Some people dismiss it, but I think it’s an important inflection point,” said Gheit. “Banks sit down with their customers and reevaluate their positions. Oil companies borrow, and the collateral is the reserves in the ground. Last year, the oil prices averaged $94 so when investors and banks sit around and say this company borrowed $2 billion, that was fine last year…. But then the bad news started trickling in. Now it’s an avalanche of bad news. They are borrowing money to stay in business. They are funding their dividends with additional debt.”

http://finance.yahoo.com/news/oil-collapse-couldnt-come-worse-104202263.html

Comment by Ben Jones
2015-08-10 06:06:59

‘It’s crunch time for Tesla Motors. The Silicon Valley automaker is losing more than $4,000 on every Model S electric sedan it sells, using its reckoning of operating losses, and it burned $359 million in cash last quarter in a bull market for luxury vehicles. The company on Wednesday cut its production targets for this year and next.’

‘Tesla’s stock is still about 70 percent higher than it was two years ago, and 8 percent ahead of its level on Jan 1. With a market capitalization of $31 billion, Tesla is worth more than Fiat Chrysler Automobiles NV, the much larger maker of Ram pickups and Jeep Grand Cherokees.’

http://finance.yahoo.com/news/tesla-burns-cash-loses-more-110938456.html

Comment by taxpayers
2015-08-10 06:54:41

$7500 from us taxpayers and in CA even more

 
Comment by Dman
2015-08-10 07:40:38

Maybe Tesla can find someone dumb enough to pay top dollar for a money losing, bubble company that specializes in selling cars to money losing, bubble millionaires. But if it was going to happen, it would have happened already. Got DeLorean?

Comment by Ben Jones
2015-08-10 08:37:11

‘The only way for oil producers to cope with the low price of crude is to hike rather than cut production, an industry analyst told CNBC.’

‘Natixis Lead Oil Market Analyst Abhishek Deshpande said that both the Organization of Petroleum Exporting Countries and Western producers were working hard to maintain oil levels-simply as a matter of self-preservation. “They’re left with no choice,” Deshpande told CNBC on Monday.’

‘Both OPEC and Western producers want to keep production high, but their motivations are different, said Deshpande. OPEC is trying to preserve its market share and offset losses from low prices with an increase in sales, he told CNBC. However, Western producers are ramping up production to service a growing debt pile.’

“They have taken large amounts of loans to drill rigs on a weekly basis or monthly basis-how do they pay back this money? The only way you can pay back this money is by keeping on drilling,” Deshpande said. “If you stop drilling, basically the music stops.”

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Comment by Anonymous
2015-08-10 09:06:43

“Tesla reports its finances in a different way from the Detroit automakers. Using the generally accepted accounting principles, or GAAP, used by GM or Ford, Tesla’s operating losses per vehicle have steadily widened to $14,758 from $3,794 in the second quarter of 2014.”

Losing almost $15K per car!! And that’s with the Federal and state governments propping them up. SMH.

Comment by Mafia Blocks
2015-08-10 12:08:29

Just think of your own losses if you were dumb enough to shell out the cash for one of those jalopies.

Got Prius?

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Comment by redmondjp
2015-08-10 16:26:04

Prius - another car that the manufacturer admitted they lost money on every car built/sold, for the first several years.

Try again . . .

 
Comment by Lola
2015-08-10 16:29:39

Prius. An electric car 1/3 the price of TeslaJalopy.

Price my friend.

 
 
 
 
 
Comment by Ben Jones
2015-08-10 06:39:14

‘Across the Des Moines metro, there are signs of prosperous times. Iowa homes are selling at their fastest rate in three years, and property values are climbing, especially in urban areas of central Iowa. Ankeny’s valuations, for example, grew by about $264 million, or 6.8 percent, between 2013 and 2104.’

‘Such factors help explain the rising confidence of local consumers, who appear more willing to spend their paychecks on big purchases such as homes and cars. “Clearly, it plays a great deal into financial decisions we all make,” said John Sorensen, president and CEO of the Iowa Bankers Association. “Economic activity can build upon itself.”

‘And though Iowa bankers are concerned about the long-term effects of low commodity prices on the agricultural economy, they have also expressed growing confidence in the state’s residential housing market, according to a recent survey by the Iowa Bankers Association.’

‘More than 90 percent of bankers surveyed predicted moderate to strong demand for home mortgages going forward — and all expected property values to remain stable or increase.’

‘Still, not all economic indicators are rosy. A report from Creighton University released in July called for sluggish growth in Iowa’s economy over the next six months, with slow to no economic growth across the Midwest and Plains states.’

‘And the latest Leading Indicators Index from the Iowa Department of Revenue is calling for economic contraction for the state, influenced largely by sinking agricultural prices, said Amy Harris, the department’s chief economist. “You see a lot of help-wanted signs around the Des Moines area. Housing is doing well,” Harris said. “But it’s still giving us pause.”

‘In Steven Shriner’s view, however, this economy leaves little reason to complain. Shriner, 35, is in the middle of a collision repair program at Des Moines Area Community College. Even with a criminal background — often a major obstacle to finding good work — Shriner said he’s found a job each time he’s gone on the hunt. “If somebody can’t find a job in this economy, they’re not trying,” he said.’

‘While the effects of the Great Recession might still be far-reaching, Shriner said he thinks some people tend to lean on it as an excuse for their own economic realities. “I don’t know if we’ll ever be beyond it,” he said. “But I think we’ve passed the point where people should worry about it.”

Comment by taxpayers
2015-08-10 07:22:59

weird as AG is in the tank

Akeny IA ? tight land supply for sure

 
 
Comment by Ben Jones
2015-08-10 07:26:41

‘Craig Baute has figured out how to turn a big profit on a small City Park studio. The 29-year-old purchased the 425-square-foot space in October with his father to rent through Airbnb. The apartment brings in $1,900 each month, and Baute said he pockets about $900 after paying mortgage and utilities.’

“After the down payment, we spent about $5,000 to furnish the place and give it a fresh paint job, which is below what we were expecting to pay,” he said.’

‘Baute is one of more than 1,000 Denver residents who earn extra cash by listing their apartments, homes and condos on Airbn. Hundreds of Denver-area apartments and homes listed on Airbnb require only a one-night minimum stay, generally priced between $50 and $300 a night. For $150 or less, users can rent a room downtown or an apartment in neighborhoods such as Cap Hill and the Highlands. For more than that, the options include LoDo lofts and penthouses and entire homes near the city’s parks.’

‘Makshanoff said Mosaic first became aware that some of its tenants were subletting their apartments through the site last summer. “We did some research and found out that we had three people in Capitol Heights and one in Highland Park using Airbnb, and that’s an absolute violation of our lease,” she said. “We gave them notices to quit (their leases).”

‘Hogan said members of his staff check the site about once a month for listings in any of the company’s 107 buildings. If one is discovered, the company notifies the tenant and asks that they resolve the issue within three days – something it has done three times within the past two years.’

“If the places are owned, I’m pro-Airbnb,” Hogan said. “I have no qualms with that. But when you’re making money off of someone else’s investment, I have a moral issue with that.”

Comment by Ben Jones
2015-08-10 08:22:27

‘Renae Crawford, who has run a vacation rental in Manitou Springs for two years, uses VRBO to get potential short-term renters.’

‘She said she had a bad experience with long-term renters and so turned to short-term renting. “We can maintain a beautiful house now,” she said.’

 
 
Comment by WPA
2015-08-10 07:42:08

The so-called ’sharing economy’ is a sham, said Rob White, a French Quarter resident. ‘Sharing is when I have a ham sandwich and I give you half’ When someone gives you a sandwich and then hands you the bill, that’s a restaurant, he said.”

I chuckled at that. What is it with millennials and their disrespect for zoning laws? And their disrespect for labor laws (e.g., Uber)?

Comment by Ben Jones
2015-08-10 08:09:28

‘The massive Trinity Place development was pushed through the city’s bureaucracy over many years, through many fights, by 90-year-old local powerhouse developer Angelo Sangiacomo. When complete it will ultimately contain 1900 units of housing, and it was approved in part because Sangiacomo agreed not only to house all the tenants who previously lived in the dilapidated Trinity Plaza complex on the property, but also because he agreed to include 500 affordable, below-market units on-site.’

‘However now that about two-thirds of the new Trinity Place has been built and occupied, City Attorney Dennis Herrera says he’s now investigating a report that at least 23 of those units are being leased to a single entity, dubbed The SOMA Suites Hotel. That outfit is renting all those units in two of the buildings, 1188 Mission Street and 1190 Mission Street, on a short-term basis, as tourist rentals.’

 
Comment by Anonymous
2015-08-10 09:09:02

I think it all started when they got used to stealing music, etc. off the internet without paying for it…

Comment by redmondjp
2015-08-10 10:22:15

The internet itself has been the single largest perpetrator of the “it’s free” mentality, which ironically is the biggest impediment to making most web-based businesses profitable.

And it has destroyed the fourth estate of independent media as well (by design, no doubt).

Comment by AmazingRuss
2015-08-10 17:15:36

I saw it first in the video game industry, and it isn’t going away. Adapt or fold.

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Comment by rj chicago
2015-08-10 09:59:26

And their disrespect for everything around them - especially us older set. I get that look at work from time to time from the younger set - and I see it in their eyes - something that says: “Why don’t you get out of here old man and just go die so I can get a better shot at accelerating my job and my life”. Just downright scary.
Did I say I loathe Millinials?
The other bone I have to pick with Millinials - what is it with them that they won’t yield when walking on a sidewalk? When I first started working in the Chicago Loop those in my elder age bracket would walk with head up and comfortably yield to one another on the sidewalks. Now days - not so much. The arrogance is just amazing to me. The lack of civility is just amazing.

Comment by snake charmer
2015-08-10 12:55:13

I’m more comfortable with Millennials than with Boomers, but then again I’m part of loser Generation X, who nobody likes. As for the lack of civility, some younger people, not all, seem to need a cell phone or a computer to mediate personal interactions.

 
 
 
Comment by Senior Housing Analyst
2015-08-10 07:42:19

Massachussetts Housing Prices Fall 10% YoY Statewide

http://www.zillow.com/ma/home-values/

Comment by taxpayers
2015-08-10 11:36:41

w a negative forecast
wow since Zillow is 99% realwhore funded that’s got to create some pucker

Comment by Mafia Blocks
2015-08-10 11:53:08

Let it crater then buy later for 65% less.

 
 
 
Comment by Ben Jones
2015-08-10 07:49:15

‘It’s getting ‘bloody’ for biotech stocks’

‘According to data from CNBC, 81 percent of stocks in the IBB with a market cap of more than $500 million are down more than 10 percent from 52-week highs, technically placing them in correction territory.’

‘Schlossberg said a correction in biotech stocks could be more severe than others, mainly because of the binary nature of biotechnology products. “It’s either a billion-dollar product or a big bagel, and therefore it has the hugest volatility,” he said.’

I don’t know Schloss, they could try to lose more money for every bagel; it’s worked for Tesla. Man, wouldn’t it be terrible if there was a stock, bond and housing bubble all at the same time?

Comment by rj chicago
2015-08-10 10:00:38

Bloody for Megan Kelly too according to Trump.

Comment by redmondjp
2015-08-10 10:25:00

Uggh . . . that’s all they were talking about this morning on the talk radio stations . . . Trump is the PTB’s dream, as both left and right can froth mightily about him while they quietly go about their business.

Comment by snake charmer
2015-08-10 13:06:50

+1. His participation turns the electoral process into the equivalent of a reality television episode or pro wrestling match, featuring deliberately-provocative, staged conflict. He reminds me of Spencer Pratt and Scott Disick, with a little bit of Ric Flair. Woooo!

https://www.youtube.com/watch?v=yjW9UXoKU2s

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Comment by Mafia Blocks
2015-08-10 07:50:59

13,978 properties found Las Vegas, NV Real Estate and Homes for Sale

http://www.realtor.com/realestateandhomes-search/Las-Vegas_NV

4,676 properties found Las Vegas, NV Price Reduced Homes for Sale

http://www.realtor.com/realestateandhomes-search/Las-Vegas_NV/show-price-reduced

33% of all sellers are slashing prices in Vegas. Oh my word….

Comment by Anonymous
2015-08-10 09:10:29

I hope this means my rent doesn’t go up when my lease runs out this winter…

 
Comment by Tarara Boomdea
2015-08-10 10:50:12

The LV rental we were unceremoniously kicked out of on July 1 still on the market. LL ignored the demand letter, and we finally got a check for our deposit dated three days after the 30 day deadline - $385 out of $2,100. Off to small claims I go.

Comment by taxpayers
2015-08-10 11:38:04

kewl
small claims is part one unless they’re a c corp

Comment by Tarara Boomdea
2015-08-10 12:06:02

AFAIK, no corp. He was stuck with the house in 2010, underwater, so, so (unnecessarily) grateful to us for renting the place. Wife said we really saved them. Their attitude has changed, apparently.

What’s part two? We should win our claim due to his tardiness alone in returning our deposit; afterward he’ll file in small claims to recover cost of damage (the list is kind of amusing, not even the stuff I was worried about. I’m sure he’ll add to it.)

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Comment by taxpayers
2015-08-10 12:51:24

the judgement is only part one. Getting payment is tricky.
A c corp has to get a lawyer so small amounts are uncontested.
If this guy already has judgements against him he has no reason to pay.

 
Comment by Tarara Boomdea
2015-08-10 13:10:14

I see. I don’t think he’s the type that doesn’t pay his bills, he’s more of a self-righteous nutcase (neighbors’ stories). Well, if I can place a lien on his home or rental, I will, unpleasant as that is.

 
 
 
 
 
Comment by Senior Housing Analyst
2015-08-10 08:01:05

Sun Valley, CA Housing Inventory Balloons 132%; Prices Fall 5% YoY

http://www.movoto.com/sun-valley-ca/market-trends/

 
Comment by Yaan
2015-08-10 14:11:52

I recently tried using VRBO for a week’s rental in Silicon Valley. I corresponded with a couple who were running 15 properties as short term rentals- and none of them were available. Nice little real estate empire.
If prices are set on the margin, that right there is a nice contribution to overinflated house prices: 15 houses that aren’t available to someone who wants to buy one and live there.
Of course, I bet their occupancy rate isn’t so great in, say, March.

Comment by Mafia Blocks
2015-08-10 14:27:55

How about a vrbo link……

Comment by Yaan
2015-08-10 16:09:21

He told me they are listed on various rental sites. Here’s one:
http://www.homeaway.com/vacation-rental/p3929376

Comment by Mafia Blocks
2015-08-10 16:44:05

I have an inquiry in regarding availability. We’ll see.

Two of our guys went out there to bid some work and got one of these places on vrbo. One of them noticed something leaking out of the nite stand in the bedroom. He opened the drawer and found a large bottle of opened KY on its side. Worse yet, he found a used condom in the sheets.

No thanks.

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Comment by Jingle Male
2015-08-11 05:40:49

We rented 545 Sea Lane, LA Jolla for a week. Owner bought it to rent short term. Paid $1.6 million, I think. Said he is going to sell in Sept, cause he wasn’t making enough to keep it.

It was a nice place, but much more hassle than a Marriott room.

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Comment by Senior Housing Analyst
2015-08-10 16:34:56

Seattle, WA Housing Prices Fall 12%; Foreclosures Ramp Up

http://www.zillow.com/seattle-wa-98105/home-values/

 
Comment by Senior Housing Analyst
2015-08-10 16:57:10
 
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