A Bit Of A Rough Patch
The Edmonton Sun reports from Canada. In June, this column reported on Metropolitan’s Edmonton’s ‘Goldilocks’ economy, which, despite the calamitous drop in oil prices, continues to chug along. But if oil prices stay low, City of Edmonton chief economist John Rose warned at the time, ‘we could be in a real pickle by this time next year.’ I disagree. Rose’s ‘real pickle’ is not conditional. Residential vacancy rates in Fort McMurray are at an alarming 9%. One year ago, beds were so scarce that workers were sleeping in their trucks. Fort McMurray house prices are down 9% to 10% from 12 months ago.”
“In Metro Edmonton, the sale of homes worth over $650,000 has considerably slowed down. Overall in Alberta, luxury vehicle sales are down, as are vehicle sales in general. Net migration within Canada to Alberta has dropped like a rock. No one knows when a recession will come crashing down. Who knows when and why a few loose pebbles turn into a landslide.”
The Leader Post. “Regina’s housing slump continued in July, as home builders started work on 185 housing units, down 47 per cent from 348 during the same period last year, according to Canada Mortgage and Housing Corp. (CMHC). ‘Regina’s total housing starts are still expected to end the year lower than in 2014 as weaker economic conditions and elevated inventories of new homes add downward pressure to new construction over the remaining months of 2015,’ said Lai Sing Louie, regional economist for CMHC’s Prairies and Territories region.”
The Prince Albert Daily Herald. “Prince Albert’s housing market has hit a bit of a rough patch according to the latest report from the Canada Mortgage and Housing Corporation. Communities in oil-producing regions like Estevan, Weyburn and Lloydminster were hit the hardest, with seven, zero and 12 new single-family housing starts respectively. Last year at this time, Estevan had 24 starts, Weyburn had 18 and Lloydminster had 65. ‘I’m not sure if we’re worried. I see oil prices have dropped to the lowest it’s been in six years today, so that’s something that affects the Canadian economy directly in a lot of areas,’ said John Guenther, the director of planning and development services with the City of Prince Albert.”
The Terrace Standard. “Real estate sales dropped here for the first half of the year compared to the same period in 2014, according to statistics from the BC Northern Real Estate Board. Sheila Love from the Terrace office of Remax Coast Mountains noted that there are not a lot of homes on the market at the lower end of the price range. That may be a partial reflection of more new or newer homes up for sale. ‘Prices were once in the $200,000-$225,000 range but there is not a lot there now and I don’t think we’re going to see those [prices] again. For a three-bedroom house in the Horseshoe with a full basement, you’re now looking at close to $300,000,’ she said.”
“Love added that prices for mobile homes and rowhouses have also increased over the past several years. This year’s housing market is also different from last year because the number of single family homes for sale has increased. ‘This year we have 52 listings in that [average] price range, at least double from last year,’ said Love. ‘It’s definitely a buyers’ market out there.’”
The Calgary Herald. “Prices for repeat home sales in Calgary dropped in July, according to the latest Teranet-National Bank National Composite House Price Index. The index said prices in Calgary were off by 1.9 per cent from the previous month and down by 2.3 per cent from a year ago. Prices are also off by 4.6 per cent from their peak in October 2014, said the report. Mike Fotiou, associate broker with First Place Realty, said it was the largest annual decline in Calgary since June 2011.”
“‘Although overall sales volume is down, prices are sustained and new condo sales are up. Buyers are flocking towards the new shining condos forgoing a little size for a sense of luxury,’ said Christina Hagerty, a realtor with RE/MAX Realty Professionals. ‘Prices over the years in Calgary although have increased at sustainable rates unlike the spikes and losses we have seen in more speculative markets in Toronto and Vancouver. Sales volume is down to substantially but so is desirable inventory. Listings are holding onto their prices. If they do not obtain a sale price within the range that they’re looking for, they simply won’t make the move.’”
“Hagerty said she has not witnessed any panic sales in the city as interest rates remain low and people can afford to stay in their homes.”
From 660 News. “Calgary’s rental market is feeling the fallout from a weak economy as vacancy rates continue to rise in the city. Gerald Baxter, executive director at Calgary Residential Rental Association, said layoffs and new construction are contributing to what has suddenly become a renters market in the city. ‘Not as many calls from prospective tenants when properties are being advertised, tenants come by and look but they’re being selective and they’re shopping around, a year ago it was pretty much if you found somewhere that was available, you took it,’ Baxter said.”
“The Canada Mortgage and Housing Corporation reported a six per cent increase in rental rates but that number is a reflection of stronger demand late last year. ‘People are losing their jobs and moving out, and others have lost their jobs and have moved out of the province so we’re seeing a lot of people who have become unemployed and have had to leave the province,’ Baxter said.”
“It is a stark contrast to last year at this time when the CRRA was fielding calls from students panicking because they had no place to live. Baxter said he has had no such calls so far this summer.”
The piece from the Calgary Herald seems particularly idiotic. Volume is down, prices are sustained, no panic sales? Fat chance of sustaining THAT if the oil bust continues.
I am back here after an absence of 5 or more years, because the Case Shiller Index has reached the levels of year 2003, which were already insane — before Angelo Mozilo and that ilk peddled mortgages to the last zillion gullible buyers. If there’s no Mozilo this time, I expect another housing price decline to come soon, and not just to oil-bust areas.
Prices are already getting slashed.
4,655 properties found Dallas, TX Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Dallas_TX
1,339 properties found Dallas, TX Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Dallas_TX/show-price-reduced
Welcome back. First txchick and now az_lender. I’m gonna party like it’s 2005!
“You can always check out, but you can never leave … “
Hey yo.
Been watching the bubble build with everyone else. Saw a post on a bear in the pool in LA Canada and remembering when one of the regulars got mauled.
Anyhow, just like last time, here we go again.
Laef2
From the Edmonton Sun piece:
‘The price of oil – the mega-driver of the regional economy – is not going to recover. The analysts were hopeful things had bottomed out at $60 a barrel in June. This week, the price has dropped to under $45.’
‘CFCW’s Making Money show host and financial advisour Ron Hiebert of ScotiaMcLeod has researched oil prices from 1894 to 2011. Historically, there have been four extended periods of low global oil prices, for 73 of those 117 years. Each lasted an average 18 years.’
‘This one is still a baby, just one year old. There’s no sign of a price recovery. Increased production and a plateauing of demand means the world is awash in oil.’
Paging AlbqDan…
Paging AlbqDan ??
Adan revealed his colors…Tucked his tail and ran…Could not man-up and say he was wrong…
He did say he was wrong, but then said he was mistaken.
Wsj dot com
Markets
Quicken Loans Takes On the U.S.
Quicken Loans’ lawsuit against the Justice Department reflects the gumption that has come to define the mortgage lender.
Quicken Loans considers itself more in sync with Silicon Valley than Wall Street. ‘We’re a technology and marketing company that happens to do mortgages,’ says CEO Bill Emerson.
BRIAN WIDDIS FOR THE WALL STREET JOURNAL
Quicken’s offices have the trappings of a highflying tech startup, including an indoor basketball court. BRIAN WIDDIS FOR THE WALL STREET JOURNAL
Quicken Loans, in Detroit, Mich., is the country’s third-largest mortgage lender.
BRIAN WIDDIS FOR THE WALL STREET JOURNAL
By Peter Rudegeair
June 14, 2015 7:13 p.m. ET
At Quicken Loans Arena in downtown Cleveland, a 5,500-square-foot “Humongotron” updates fans on the efforts of LeBron James and his fellow Cavaliers as they try to capture an NBA title.
Across Lake Erie, in Detroit, a smaller digital display in the Quicken Loans Inc. headquarters tracks the firm’s quest to reshape the mortgage market.
Both efforts look surprisingly promising, though major tests loom.
Quicken Loans last year extended $59 billion in mortgages, surpassing Bank of America Corp. to become the third-largest mortgage lender in the U.S., according to Inside Mortgage Finance, an industry publication. Unlike its big-bank rivals, the firm achieved its rapid growth without the benefit of a network of branches or ties to local agents, instead relying on technology and aggressive marketing.
The privately held firm, controlled by Cavaliers owner Dan Gilbert, is now making another unconventional—and much bolder—move: suing the U.S. government.
In April, the Justice Department accused Quicken Loans of defrauding taxpayers, charges Quicken denies. The government says the company submitted mortgages for insurance by the Federal Housing Administration that it knew, or should have known, were ineligible. Prosecutors say that between 2007 and March 2015 the government paid out over half a billion dollars in insurance claims on defaulted mortgages endorsed by Quicken. Prosecutors didn’t specify how many of those claims they allege were linked to fraudulent loans.
“Fraudulent origination activity resulted in significant losses of federal funds and is one of the precise types of conduct that caused the financial crisis and housing market downturn,” a Justice Department spokeswoman said in an emailed statement.
In prosecutors’ lawsuit, they cited alleged abuses such as Quicken endorsing a loan from a borrower who requested a refund of the $400 application fee so she could afford to feed her family. She ultimately made only five mortgage payments before defaulting, costing the government about $94,000 in insurance claims.
Quicken Loans disputes the allegations and, before the Justice Department launched its suit, Quicken pre-emptively filed its own in which it accused the government of trying to illegally pressure the company into a big settlement.
The company said prosecutors cherry-picked 55 FHA-insured loans out of the nearly 250,000 the company closed since 2007, and that its mortgages were projected to provide the government with billions in profits via the insurance premiums such loans generate.
Quicken executives added they are fulfilling the mission of the FHA program by lending to low- and middle-income consumers, an area in which they have picked up market share as banks such as J.P. Morgan Chase & Co. have retreated from the business. The executives added that prosecutors’ actions are resulting in fewer lenders making loans to marginal borrowers and first-time home buyers.
Quicken Loans Chief Executive Bill Emerson says the government’s action will have a negative effect on the middle class. “It’s mind-boggling to me,” he said in an interview.
…
“Quicken Loans, in Detroit, Mich.,”
Here you’ll find a mountain of fraud. A prosecutors dream date.
Why a mountain of fraud? Detroit isn’t a bubble city, and bubble cities are usually ground zero for fraud. Check out the number of houses for sale and prices reduced in the City of Detroit. Nobody has any delusions about real estate here. Go across the river into Canada though, and the dream is still alive, although it will soon be a nightmare.
Across the river from Detroit is Windsor, site of many a bachelor party back in the day. Also the hometown of Bob Probert.
Did Probert ever find his missing teeth?
Windsor, the home of authentic Chinese restaurants and authentic Canadian strip clubs, or so I’ve been told.
I think Probert’s teeth can still be seen frozen in the ice at Joe Louis Arena.
Quicken loans… I couldn’t care less if they’re headquartered in Detroit or on planet Mercury.
What is this about a prosecutors’ lawsuit? Are they being sued or prosecuted criminally? Calling a civil suit prosecution is a joke.
There’s your updated version of Countrywide. “A technology and marketing company that happens to do mortgages.” Right. Stop “doing mortgages” and we’ll see what remains of the business model.
Pre-emptively suing the federal government on those grounds isn’t “gumption,” it’s arrogant. And on that subject, naming a sports arena is a leading indicator that hubris has reached a dangerous level. See below:
_____________________________/
“There’s a well-known phenomenon that bad things happen to companies that put their name on a stadium.
The most notorious example was in 2000 when Enron bought the rights to Enron Field in a $100-million, 30-year deal. Just two years later, the defunct company would sell the contract back to the Houston Astros for $2.1 million.
The curse also famously struck TWA, PSINet, Fruit Of The Loom, CMGI Inc., Savvis Communications, 3 Com and Conseco.
…
Niederhoffer attributed the stadium curse to hubris: ‘Corporations are beset by the same harmful tendencies as investors. When they are at their peak, they reach for the sun.’”
http://tinyurl.com/6sf9kgm
‘We’re a technology and marketing company that happens to do mortgages,’ says CEO Bill Emerson.
Angelo Mozilo uttered the EXACT same words in 2003!
These guys are usually pretty interesting:
“Texas alone accounts for 15% of all new single family homes built in the United States.” I find this factoid interesting on a number of levels, and can see why Wells Fargo included it in its July ‘15 Housing Chartbook.’
(I’ve read it’s a high as 17%.)
‘MBA’s chart of the week for July 24th highlights the FHFA U.S. purchase-only house price index rising to a level seen in April 2006. The national index of house prices is now just 1.8 percent below the peak level in May of 2007. The regional price indexes range from 11 percent higher in the West South Central region to 12.7 percent lower in the Pacific region.’
‘Here’s a quiz for you. In the first three months of 2015, credit unions accounted for what percentage of residential production? A) 4%, b) 6%, or c) 10%. Or maybe none of the above.’
‘While we’re discussing lending trends, Fortress Financial was recently featured in a story in the Wall Street Journal discussing subprime lending.’
‘Optimal Blue’s Tammy Butler sent a note regarding her, “Disparate Impact White Paper with Bonus Readiness Checklist!” “With the recent Supreme Court Ruling upholding Disparate Impact, lenders are required to take a strong look at their Fair Lending Analysis by strongly monitoring their lending in well -served vs. under-served markets, product diversification, pricing parity and pricing exceptions.’
‘The forthcoming Fed rate hike is analogous to the day before you go to the dentist for a root canal….the waiting is the worst part. Katie H writes, “Rob, with the Fed poised to raise the Fed Funds rate after the summer, what can we expect with securitizations post-hike?”… historical perspectives get cloudy, as all rate environments are unique, and usually poses very distinct yield curves, but here goes….February ‘94 - February ‘95 (3.25 to 6.00%): Issuance dropped sharply during the Feb-to-Feb rate hiking period, from $573B to $360B annualized.’
‘Gross and net issuance of 15yrs declined more substantially than the corresponding figures for 30yr mortgages, likely as the flattened curve reduced the incentive for homeowners to take out 15y mortgages. June 1999-May 2000 (5.00 to 6.50%): Gross issuance fell to $469bn during this 12-month period, from $758B in the preceding 12 months. Meanwhile, net issuance fell to $174B from $248B in the same period.’
‘As in the 1994 hiking cycle, issuance of 15yr mortgages fell significantly more than issuance of 30-year mortgages. June 2004-June 2006 (1.25 to 5.25%): If you recall the Federal Reserve was a skipping record during this two year period, raising the Fed Funds target by 25bps at every FOMC meeting….’
‘I remember one risk manager told me at the time, “what the Fed lacks in originality, it makes up for with predictability.” As with the prior two cycles, gross issuance declined during this period, falling to an average annual rate of $938B, compared with issuance of more than $2 Trillion in the previous 12- month period. Net issuance declined to an annual rate of $150B, down from $315B in the prior 12-month period. Long after everyone is gone, economists will still be studying this period of home finance given the huge subprime-induced housing bubble that subsequently burst.’
‘Jobs and Announcements. Citadel Servicing Corporation, specializing in Non-QM & Non-Prime lending, is expanding its Correspondent Conduit. Citadel’s leading industry slate of Full Doc and 24 Month Bank Statement programs with extended ratios is available to those qualified borrowers who don’t fit into the Prime Conventional box. Additional features include loan to value up to 85%, interest only, loan amounts to $3MM, no reserves, no seasoning on bankruptcies, short sales or foreclosure to name but a few of the value added items Citadel programs brings to this part of the mortgage space.’
‘On the broker side, rapidly growing Integrity First Financial Group, Inc. has entered the Non-QM, Non-Prime space with its own residential mortgage offering. Industry veteran Tim Larin, who will lead the “Specialty Finance” division, believes this space is grossly underserved. “Because our product adds theory to a make sense environment we still can maintain the requirements of ATR.” Alex Barnett, President of Integrity First, commented that, “With this augmentation in our product line, we feel Integrity First Financial can aggressively serve the communities of the 28 states in which we lend.” Integrity First’s sustainable growth has resulted in local and national recognition in Inc. Magazine’s list of “500 Fastest Growing Privately Held Companies.”
‘And for anyone that wants to tie up their money for 30 years go ahead and buy some of the $16 billion 30-year bond being sold today. After the initial round of economic releases the 10-yr is sitting around 2.17% after closing at 2.13% and agency MBS prices are worse .125.’
‘In Calgary, the seasonally adjusted annual rate plunged to 8,716 units in July from 19,146 the previous month due to a “pronounced decline in multi-family starts,” CMHC said.’
‘Actual housing starts were down 43 per cent, falling to 770 units last month from 1,354 in July 2014. It was a big enough drop to lower Calgary’s six-month trend. Edmonton’s and Saskatoon’s six-month trend was also down in July.’
‘Condominium-apartments are bearing the brunt of the slowdown in the Calgary resale housing market, with sales in July down 28% from July 2014.’
‘By comparison, sales of single-family homes declined 10% year over year, while sales of attached homes were down 11% last month from July last year.’
‘Calgary’s housing market continues to see some nuances in supply between the different segments of the market, said CREB president, Corinne Lyall.’
“These differences are really important to understand as it relates to consumer expectations,” said Lyall. “Some buyers expect they will get major price reductions in this market, but that’s not always the case. In some areas, supply levels are more balanced with demand and that creates price stability.”
These Canadian UHS are kinda full of it.
Alameda, CA Housing Prices Fall 9% YoY; Housing Inventory Balloons 68%
http://www.movoto.com/alameda-ca/market-trends/
Avg. sq. ft. declined by 24%; per sq. ft. actually increased
It’s the falling transaction price that is important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.
You are so clueless about the bay area housing market. It may correct someday, but it is not happening now!
Prices are falling my friend. Data. Stick with the data.
‘Numbers released by MacDonald Reality suggest in 2014, 70 per cent of homes costing $3 million or more were bought by people from Mainland China. Managing director Dan Scarrow says the participation rate from foreign investors is actually quite low when it comes to the lower 75 per cent of the market.’
‘Scarrow says Mainland Chinese buyers only represented 11 per cent of sales of houses under $1 million.’
OK, this guy and his “report” is being played up big time, but I’d like to point out that before, the REIC was constantly saying the total number of MC purchasers was around 2%. Not 70% of this, not 11% of that, but 2%.
Thats right.
Ben
From anecdotal evidence from around Ontario, the same trend seems to be happening - $1.5 seems to be the number. I have been told that some new, not even started, residential units have been purchased 100% by the Chinese. About 53 within a week or so.
‘Dan Scarrow moved to Shanghai in February to open a new office for Macdonald Realty targeting Chinese clients who want to invest in Vancouver’s real estate market.’
‘He says over the last six months the low Canadian dollar has given Chinese investors much more purchasing power in Canada. “They now see it as a good time to maybe take the plunge,” says Scarrow, who is in Vancouver to speak about the real estate market and the impact of foreign investment.’
“We have perception that we are a very expensive market, but I think globally we are seen as a very cheap market.”
“You are comparing these single-family homes in Vancouver to a 500 square foot condo in a London or a New York or even in a San Francisco, and that is where these sort of things are getting a bit out of whack. If you are looking at a purely price per square foot basis, Vancouver is still very reasonable on its pricing on a global standard.”
I’m thinking Dan is a bit of a scumbag. He’s off flogging his shacks to these corrupt Chinese and then he’s going to get on a soapbox telling everybody this is normal? You are personally raking it in Dan. Of course you see nothing wrong with it.
Dan.China.Housing.Corruption.Lying.
Seems normal to me.
“Seems normal to me.”
And profitable, at least to me.
Is it a surprise the Vancouver Sun and all the others have ignored this article from the Province?
‘Chinese money launderers snap up Vancouver real estate because of lenient border laws, loose regulations’
‘Vancouver International Airport is the major port of entry for millions in hidden cash being smuggled into North America by mostly Chinese citizens, a federal document investigation by The Province reveals.’
‘And according to money laundering investigators, the amounts identified in Canada Border Service Agency cash seizure data, obtained by The Province under freedom of information law, is only the tip of the iceberg.’
‘Experts said Vancouver appears to be targeted by Chinese citizens because Canada’s forgiving border laws allow seized cash to be returned for minimal fines. As well, permissive property investment rules and loose reporting compliance in the real estate industry make Vancouver homes the perfect vehicle for illicit offshore investment.’
“A lot of the illicit money coming into Canada from Chinese citizens is laundered through real estate in Vancouver,” Hayley Labbé, a senior forensic investigator with the firm MNP LLP, told The Province.’
‘The Province obtained several documents that indicate co-operation is increasing. A variety of Canadian agencies cited national security or China’s diplomatic privilege as a reason not to release information; for example, CSIS and the CBSA refused to confirm or deny the existence of certain documents.’
‘But the CBSA did release rare data on seizures of undeclared assets brought to Canada by foreign travellers. Recent data shows about 60 per cent of all undeclared money seized at YVR is from Chinese citizens — about five times the rate of money seized from Canadian travellers.’
‘The situation is similar in the United States, but also shows that Vancouver is North America’s primary entry for illicit money from China. Data reported by U.S. customs officials five years ago shows that undeclared cash taken from Chinese nationals was double any other foreign nationality.’
‘After he was caught with hidden rolls of Canadian and U.S. cash, the Chinese man told a CBSA agent that he intended to buy a house or car with the money. Although Chinese citizens are restricted by their government from removing any cash greater than $50,000 per individual each year — and the case raises red flags, according to money laundering experts — the man walked out of Vancouver airport with every cent of his hidden cash, minus a $2,500 fine.’
‘According to Chinese officials, Canada is a top destination for these funds. Yet Canadian border officials almost always return undeclared cash with light fines of up to $5,000 levied depending on the level of concealment involved.’
‘According to B.C.-based fraud investigation executive Kim Marsh, that’s one of the reasons Vancouver is such an attractive destination for money launderers. Marsh, an expert on tracking dirty money worldwide, served 25 years with the RCMP and led the force’s international organized crime unit.’
‘Marsh said he recently started work on a new case involving a Chinese man who absconded with $450 million in corruption money and has been laundering it in Vancouver for a number of years. Marsh said he is uncovering numerous Lower Mainland real estate assets that the suspect purchased with his stolen fortune.’
“This guy is just one of many,” Marsh said. “The evidence is mounting of a lot of grey money coming into Vancouver’s real estate market from China. So we have some serious issues in Vancouver and we need more deterrents. The money seized at YVR is a good example. You pay a pittance of a fine, and it is worth the risk.”
“The people buying these multi-million-dollar properties here in Greater Vancouver don’t care what the asking price is,” one experienced realtor said. “Some are corrupt government officials and insiders, and all they want to do is get the money out of China and use Vancouver to launder the money.”
‘Vancouver lawyer Christine Duhaime, an expert in money laundering law, said her contacts report that many Chinese money launderers hire mules in Hong Kong to carry illicit cash for a 20-per-cent fee. And the mules choose Vancouver airport as a soft target.’
“I think Canada detects this pretty well, but we return undeclared money much more easily than the U.S. and we fine much less,” she said. “So there is not much of an impediment against bringing money illegally into Canada.”
‘Duhaime said Chinese citizens also use “trade-based” methods, including invoice manipulation, to transfer money illegally into Canada. And even China’s strict capital controls can be legally avoided through coercion or use of family members.’
‘She said in one case a Chinese businessman forced nearly 200 employees to each transfer $50,000 to his Vancouver bank account, all within several days. “He bought a $7-million mansion in Vancouver and had some spending money left over,” Duhaime said.’
Golly, there isn’t a single UHS in this report. Not one person profiting from this racket. But oh Canada, let’s listen to a guy tell us 11% of purchases by people thousands of miles away, and 70% of the expensive stuff, is nothing to be concerned with.
The same thing is happening on the Eastside of Seattle, although not to as great of an extent as up north.
I’m now calling my neighboring city Bellevue, R.O.C.
“And profitable, at least to me.”
No, I’m sure these Chinese purchasers are avoiding banks as much as possible with full payment at closing. When the government goes after their ill gotten gains, they don’t want the banks to rat them out.
‘Who’s Crazy Now? Yuan Bears Vindicated by Tumble See More Pain’
‘Sue Trinh had to defend her sanity. Albert Edwards almost got kicked out of meetings. Kevin Lai was ignored by clients for an entire year. Once ridiculed for their bearish forecasts on China’s currency, the analysts who predicted this week’s devaluation don’t look so crazy now. As investors around the world ask what happens next, the forecasters who got it right say the yuan has further to fall.’
“Some investors told me I was crazy,” Trinh, the senior currency strategist at Royal Bank of Canada in Hong Kong who predicted a yuan retreat in June, when most of her peers were forecasting a stable or stronger exchange rate. “The renminbi was misaligned with fundamentals.”
‘Further weakness could exacerbate capital outflows, make $3 trillion of dollar-denominated debt more expensive for Chinese borrowers and put pressure on export rivals to devalue their own currencies.’
“I see this going a lot further,” said Edwards, a global strategist at Societe Generale SA in London who’s been calling for a yuan devaluation for at least 18 months.’
‘Chinese authorities had been propping up the yuan, contributing to an almost $300 billion drop in foreign-exchange reserves over the last four quarters, as policy makers sought to deter capital outflows and encourage global usage of the currency.’
“For almost a year people didn’t pay attention,” said Lai, Daiwa’s Hong Kong-based chief economist for Asia, excluding Japan. “The market in general still doesn’t understand how the exchange-rate policy in China works. It’s not about exports, it’s about money supply. If you have a lot of money coming in for 10 years, it has to leave at some point. And you can use your foreign reserves to protect your currency, but using that is too painful” as it drains yuan from the economy.’
http://www.bloomberg.com/news/articles/2015-08-13/who-s-crazy-now-yuan-bears-vindicated-by-tumble-see-more-pain
I find it interesting that people in congress have been saying the Chinese were keeping their currency weak. It’s exactly the opposite. (And the Swiss removed a peg a while back and crunched the Euro).
‘make $3 trillion of dollar-denominated debt more expensive for Chinese borrowers’
Ouch!
Coral Gables, FL Housing Prices Crater 15% YoY
http://www.zillow.com/coral-gables-fl/home-values/
Maryland Housing Prices Fall 8% YoY Statewide
http://www.zillow.com/md/home-values/
‘The federal Conservatives are pledging to track foreign ownership in the housing market and also boost the amount Canadians can withdraw from their RRSPs to buy their first home.’
‘The election pledges came as Conservative Party leader Stephen Harper campaigned on Wednesday in Vancouver, where residents are growing increasingly concerned that foreign money is pushing real estate prices out of reach for many residents.’
‘They also follow on the heels of Harper’s earlier promise to bring in a permanent home renovation tax credit if the Conservatives are re-elected in October.’
‘The Home Buyer’s Plan allows Canadians to make tax-free withdrawals from their RRSPs to buy or construct their first home. Currently, the withdrawal limit is $25,000. Harper is vowing to raise that limit to $35,000 if the Conservatives are re-elected.’
‘The Canadian Real Estate Association welcomed the pledge, saying 2.8 million Canadians have used the Home Buyer’s Plan since it was introduced in 1992. And CREA projects there will be $2.8-billion in spin-off spending this year as a result of purchases made under the plan.’
‘Following the home renovation tax credit pledge, critics noted housing is one of the sectors of the struggling Canadian economy that’s doing well – suggesting there’s not an urgent need for policy stimulus from Ottawa.’
‘The Canadian Real Estate Association welcomed the pledge’
I bet they did.
“If, in fact, foreign speculators are driving the cost of housing to unaffordable levels,” Harper said, “that is something the government can, and should, find a way to address.”
‘The leader’s call for data mirrors similar requests from federal New Democrat Member of Parliament Kennedy Stewart, who laughed when Tyee Solutions Society read him Harper’s statement over the phone.’
“He’s a little late to the party, but it’s nice that he’s here finally,” Stewart said with a chuckle. “The Harper government seemed completely uninterested in this until today — he’s had 10 years to do something about this and did nothing.”
‘Prices were once in the $200,000-$225,000 range but there is not a lot there now and I don’t think we’re going to see those [prices] again.’
They are running out of land there:
http://www.remax-terrace.bc.ca/Quickstart/ImageLib/Terrace_Aerial.jpg
‘Although homes are taking longer to sell and sales overall have dropped, average prices have increased for the first six months of this year. The average selling price of a home among the 80 that did sell was $302,162 compared to the average selling price of $294,651 among the 99 homes sold from the first half of 2014.’
‘The 2015 average is also considerably higher than the average price of homes sold in 2013 and 2012. In the first six months of 2013, 104 single family homes sold for an average of $235,000 and in 2012, 93 homes sold for an average of $211,733.’
‘On average, it took 70 days for those homes to sell, which is more than twice as long as the average 31 days it took for a house to sell in January to June 2014.’
‘Canada’s booming housing market has helped solidify Mattamy Homes’ position as the country’s largest homebuilder, but the red-hot market and Canada’s “scary” interest-rate environment are raising some red flags for the homebuilder.’
‘How consumers will ultimately react to rising interest rates is a cause for concern, Brad Carr, Canadian President of Mattamy Homes, tells BNN.’
“The scary part is the home building industry has really responded to a consumer who now thinks of housing as how much does it cost per month, not how much does it cost [in total],” he says. “When you think about where interest rates are likely to go, we could suffer some real pressures as people struggle to afford these houses as interest rates rise.”
‘See what $450K of real estate looks like across Canada’
‘Yellowknife’
‘Starting up north, where the average house price in June 2015 was $449,567, winters are long but lots are large. This Yellowknife home listed for $459,000 features three bedrooms and one-and-a-half bathrooms. The kitchen boasts granite counters and stainless steel appliances. The sprawling backyard has a large deck, a firepit and appears to back onto a wooded greenspace.’
Oh, there’s greenspace.
http://www.maca.gov.nt.ca/wp-content/uploads/2012/02/yellowknife.jpg
Dublin, CA Housing Prices Crater 14%
http://www.movoto.com/dublin-ca/market-trends/
Kirkland, WA Housing Prices Fall 5%; Housing Overhang Skyrockets 53%
http://www.movoto.com/kirkland-wa/market-trends/
‘The average sale price of a detached home in the city of Toronto in July dipped below $1 million, the first time in months, but Canada’s largest housing market shows no signs of slowing down.’
‘The Toronto Real Estate Board says the market is now on pace for a record year and while the average sale price of a detached home was $996,970 in July, that is still a 13.3 per cent increase from a year ago.’
Down over $100k in 2 months.
http://business.financialpost.com/personal-finance/mortgages-real-estate/toronto-detached-home-prices-drop-below-1-million-but-sales-approaching-record