The Housing Bubble

Cray
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Tur
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CRATOR

‘Short of cash and unsettled in their careers, young Americans are waiting longer than ever to buy their first homes. The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to Zillow. The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments. Increasingly, too, they’re facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports.’

‘These shifts help explain why homeownership, long a source of middle class identity and economic opportunity, has started to decline. The share of the U.S. population who own homes has slid to 63.4 percent, a 48-year low, according to the Census Bureau.’

‘And when young adults do sign the deed, their purchase price is now substantially more, relative to their income, than it was decades ago. First-time buyers are paying a median price of $140,238, nearly 2.6 times their income. In the early 1970s, the starter home was just 1.7 times income.’

I still get some smug reactions from fracking areas
They act like their budgets are a -ok

Had a laugh yesterday. One of the DC news radio stations had its weekly segment with a local real estate agent. The subject was, “How to bid for a property.”

What made me laugh darkly was the agent’s suggestion that the real estate agent and lender speak directly, to get an understanding of the buyer’s finances.

I thought, “Wow. You can shear a sheep multiple times, but you can skin him only once. This is shearing the sheep, closely.”

The buyer’s real estate agent is not the buyer’s teammate. He’s on the seller’s team. His interests are opposite to the buyer’s in the most important category - price.

The seller is interested in getting as high a price as possible, his agent is interested in getting a high a price as possible and the “buyer’s” agent is interested in getting a high a price as possible. Why? Because those three make more money the higher the price is.

The buyer is interested in a lower price. None of those three aforementioned actors wants a lower price.The lender and RE agent speaking directly simply provides an insight into the maximum price the buyer can pay.

It’s extremely deceptive. And deception is the core component of fraud.

If someone has so little understanding of the game that they’d allow “their” real estate agent to speak with the lender to understand the maximum price the buyer can pay, yet they are prepared to spend north of half a million dollars (500K is the median price in DC), and get on the hook for well over a million - well, it’s startling.

This is the famous Milton Friedman quote: “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Without deception or fraud. Entirely too easy to ignore that last part.

‘The problems afflicting Castro’s Cuba were systemic and not so easily solved: while economic efficiency increased, the economy was still heavily dependent on Soviet subsidies. And when those were reduced to a trickle, and then finally ended with the Soviet implosion, popular discontent and “social deviancy” skyrocketed. Cuban Communism was in crisis.’

‘Castro reacted with his crazed “Rectification” campaign, a set of new policies that had three prongs. The first prong was an economic belt-tightening: imports were curbed along with consumption, and a strict rationing system was introduced.’

‘Secondly, the private market that had cautiously yet steadily grown up around the margins of the state-controlled economy was viciously assaulted and shut down: farmers’ markets were closed, small traders and other micro-scale businesses were outlawed, and even street vendors were swept off the sidewalks and alleyways of Cuba’s cities.’

‘The third prong of the “Rectification” crackdown was a renewed effort to instill Leninist dogmatism in every aspect of Cuban society. The Soviet reforms of the Gorbachev era were denounced as a “betrayal”: “It is disgusting,” fumed Castro, “that many in the Soviet Union are dedicating themselves to denying and destroying the historic feats and extraordinary merits of that heroic people.” The stern figure of Che Guevara was restored as the epitome of “socialist consciousness,” and the militarization of labor, coupled with fierce repression of the slightest ideological “deviancy,” was reintroduced. Moral hectoring replaced material incentives: Cubans must work for the glory of the Communist state without “selfish” desires for physical comforts.’

‘The reason for this was because the regime had no material comforts or rewards to offer: the Cuban economy was collapsing. Yet Castro persisted, driving the country into penury, otherwise known as the “special period.” It wasn’t until his illness and retirement, and the assumption of de facto power by brother Raul, that economic reform was instituted and the economy slowly improved.’

‘Opponents of normalization, such as the neocons’ favorite son Marco Rubio, don’t have a leg to stand on. The idea that the embargo does anything but reinforce the totalitarian rule of the Communist Party is now completely discredited. Bereft of the excuse that the “Yankee imperialists” are responsible for Cuba’s parlous condition, the regime is now being forced to move in the same direction that Gorbachev did – and the results will be quite similar, insofar as the Communist Party will be forced to give up its dictatorship. While they won’t go quietly – indeed, their accommodation of the need for political and economic change is an attempt to forestall the loss of their power – the Leninist project in Cuban is doomed, and they know it. What they are counting on is the possibility that decades of ideological indoctrination and nationalist sentiment will give them the edge when the one-party system finally gives way before the tides of history.’

‘If I were them, I wouldn’t count on it. Their only hope is that the Marco Rubios of this world will prevail, and the US embargo remains in place. Then they can point to external factors, rather than the abject failure of socialism, as the source of Cuba’s problems. This was Castro’s strategy, and they’ll fall back on it if they have to. However, the question is – why are the alleged anti-communists of the Rubio persuasion giving the Cuban communists this out?’

‘In the housing bubble, prices rose beyond all reason. In the bust, they fell even more than they had risen. For a long time since then, they recovered in fits and starts.’

‘Recently, however — as is fitting in a saner real estate market — house prices have been rising in line with personal income and other economic fundamentals in local areas. But a return to a more stable growth pattern does not mean that housing will once again become the economic engine it was in the decades before the bubble.’

‘One reason is that millions of homeowners still owe hundreds of billions of dollars more on their mortgages than their homes are worth.’

‘One solution for many troubled borrowers would be to modify their loan terms. But as Gretchen Morgenson of The Times reported recently, banks are still unwilling to modify loans, despite rules imposed by regulators and legal settlements after the bust that were supposed to make it easier and fairer for borrowers to obtain relief.’

‘Another reason that housing cannot propel the economy the way it once did is the growing inequality in incomes. That home prices are increasing in tandem with income is a sign of stability. But only investment income has been rising steadily in the recovery, while wages from work have stagnated.’

‘One result is that buying a home is still out of reach for many working people, particularly those who would have been first-time buyers in a healthier economy. Another result is that builders have largely focused on higher-end homes, leading to a low inventory of new starter homes.’

‘The situation is evidence of the unrepaired damage from the bust. Aggressive intervention to provide debt relief and create good jobs is still needed, but has not been forthcoming. It is not too late for remedial steps, if only the political consensus to take them could be found.’

‘American Home & Hardware announced Friday it is closing its home interior outlet, located a short distance from the main store at the corner of Main and Bridge streets. American Home & Hardware’s main store will remain open.’

‘Harry Brown, owner of the 91-year-old lumber, hardware and home supply company, said he thought about closing the outlet for a couple of years. He finally pulled the trigger last week and announced the news to his employees. “It’s just sad,” he said, repeating what one of his employees said when he announced the news.’

‘Opened in 1924 as Elkton Supply Company, over the years the business operated under two trade names, American Home & Hardware and American Home Interiors, to serve builders, remodelers, and homeowners in the Maryland, Delaware and Pennsylvania area.’

‘The decision to shutter the 27-year-old American Home Interiors building will allow American Home & Hardware to consolidate some of the interior’s store lines, such as cabinetry, into the main store. At the same time, it will cut the overhead expenses of maintaining two separate facilities, Brown said.’

“The world has changed and we’ve reinvented ourselves many times before,” he added. “This is just a reaction to the marketplace.”

‘Brown lamented that the real estate market hasn’t fully recovered in Cecil County yet.

“Not very many new homes are being built and there’s more competition than there was in 1988 when Harry Hammond and I opened American Home Interiors,” he said.’

‘When the housing bubble burst in about 2007, Brown employed 115 people. “I now have 72 employees, and I won’t be able to keep all five of the employees who currently work at the home interiors store,” he noted. “I’ve already told them so they have time to look for another job.”

‘Hammond retired several years ago, but he and Brown still own the building that houses American Home Interiors at 207 S. Bridge St. and will be putting it on the market. Brown hopes to be out of the American Home Interiors building by the end of October.’

“We’ve been selling off our appliances for a few months now,” he said.’

‘A lot of the merchandise in the American Home Interiors building can’t be relocated into the existing store, so Brown is offering bargains to move out as much as he can. “We will still be carrying cabinets, just not as many lines,” he said. “The appliances and flooring are going.”

‘Whitfield’s problem actually began in 2005, when her mother fell prey to one of the mortgage industry’s most notorious types of loan — the reverse mortgage — typically advertised on late-night infomercials and endorsed by national celebrities.’

‘Documents from legal filings show that Whitfield’s mother, Betty Cook, then 71, borrowed from Financial Freedom, a reverse mortgage marketer based in Austin, Texas. She received $18,633 to pay off the outstanding mortgage on the house, relieving her of making any more house payments during her lifetime, and she received a check for $6,386 in cash, according to legal filings. But the lender immediately tacked on up-front fees, pushing the total that Cook owed to nearly $38,000. By the time she died five years later and the lender moved to foreclose, the amount owed had ballooned with interest to almost $60,000.’

‘“I believe she was a victim of predatory lending. The seniors are sucked into this crap,” Whitfield said, seated on crumbling concrete steps to the house she calls home. So, what did her mom do with the $6,386 in cash?’

“I have no idea,” she said, speculating that it might have gone toward repairs on the house.’

“Dawn to dusk, we’ll have people in front of that house,” said David Mitchell, 34, of Detroit. To mark the battle zone, Mitchell and other volunteers have erected fencing on weedy lots next to Whitfield’s house, covering it with kids’ murals and slogans: “Justice, Not Eviction.” “Foreclosure-Free Zone.” “Black Homes Matter.” “Black Women Matter.”

‘They predict that if a bank puts Whitfield out, the house will be stripped and perhaps burned within days, setting the city another step back in trying to revive its declining neighborhoods. Neighbors can vouch for that.’

“If they evict her at noon, by midnight that house will be stripped,” said Michelle Dexter, 48, who lives across the street from Whitfield.’

‘The irony is that Whitfield, 56, missed an opportunity to purchase the house. But she has a steady job and has since twice offered to buy the property. Trying to buy a home valued at $9,000, Whitfield has repeatedly been to court and faced the same mortgage financing giant that American taxpayers spent billions of dollars bailing out just a few years ago.’

‘Financial services giant Goldman Sachs has invested $150 million (Rs 978 crore) to buy a minority stake in Piramal Realty, the privately held real estate arm of Ajay Piramal-led diversified firm Piramal Enterprises Ltd, the company said on Monday.’

‘The proceeds would be used to expand the company’s current real estate portfolio and acquire prime properties in and around Mumbai.’

‘Meanwhile, the company has announced a special scheme for home buyers under ‘Piramal Assurance’. As per the plan, the company will offer to buy back any residential unit from a customer at a five per cent discount to the market value until possession if a buyer is not satisfied.’

‘What is interesting is even when real estate market is going through a slump, private capital has continued to flow in.’

Too many Yellen bucks circling the globe. Can’t get price discovery with GS running around buying up shacks and UHS.

From Drudge but still interesting….

Hmmm…How to invest?

Cash? Gold? A farm and a gun?

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As Central Banks Lose Control, Doomsday Clock For Global Market Crash Strikes One Minute To Midnight
Now The End Begins | 16 Aug 15 | Geoffrey Grider

China currency devaluation signals endgame leaving equity markets free to collapse under the weight of impossible expectations

When the banking crisis crippled global markets seven years ago, central bankers stepped in as lenders of last resort. Profligate private-sector loans were moved on to the public-sector balance sheet and vast money-printing gave the global economy room to heal.

Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.

Only bigger and bigger government, with more and more government spending can save us…

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More Government Spending Equals Higher Prices
Capitol Confidential | 8/15/2015 | Jarrett Skorup

A news article in The Wall Street Journal notes that a view long held by most economists is increasingly being accepted by other scholars and policymakers across the board. Increasing federal aid for higher education, intended to make college more affordable, is driving up prices and making it more unaffordable.

The federal government has boosted aid to families in recent decades to make college more affordable. A new study from the New York Federal Reserve faults these policies for enabling college institutions to aggressively raise tuitions.

The implication is the federal government is fueling a vicious cycle of higher prices and government aid that ultimately could cost taxpayers and price some Americans out of higher education, similar to what some economists contend happened with the housing bubble.

The new Federal Reserve study found that every $1 in federal grants and loans increased tuition by between 55 and 65 cents.

Even with a paid off mortgage - you never own your house. You just rent it from the state.

And public union goon pensions will be paid. And they support democrats 99-1.

Long term democrat rule + public union goons + huge free sh*t army = bankruptcy, misery and ruin

And as a FYI - I have friends with nothing special houses on a 1/4 acre lots in NJ. Property taxes are $15-20K a year.

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The 10 worst states for property taxes
The Fiscal Times - Yuval Rosenberg - August 14, 2015

Residents of the Garden State are paying a whole lot for their gardens, according to a new analysis of property tax rates by the Tax Foundation.

Property taxes in the U.S. are a complicated patchwork of different policies set by states, cities and counties as well as local school boards, fire departments and utility commissions. Those differences — and the added complexity of valuing property — can make it difficult to arrive at apples-to-apples comparisons of property tax rates.

To cut through all those variables and map out where property tax rates are highest, the Tax Foundation looked at effective tax rates on owner-occupied housing. “This is the average amount of residential property tax actually paid, expressed as a percentage of home value,” the foundation’s Jared Walczak wrote in a blog post Thursday. The calculations exclude property taxes paid by businesses, renters and others. You can see how your state stacks up on the map below.

Keep in mind also that property taxes are just one part of your total tax bill. “Some states with high property taxes, like New Hampshire and Texas, rely heavily on property taxes in lieu of other major tax categories; others, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories,” Walczak explains.

Here are the 10 states with the highest effective property tax rates for homeowners:

State Tax Rate
New Jersey 2.38%
Illinois 2.32%
New Hampshire 2.15%
Connecticut 1.98%
Wisconsin 1.96%
Texas 1.90%
Nebraska 1.84%
Michigan 1.78%
Vermont 1.71%
Rhode Island 1.67%

William Kristol’s eyes, all you’ll ever be is a stupid f*ing goyim

It may be true.

But William Kristol will never send to public union thug with a gun to take my house (to fund pensions) and to make sure I paid my obamacare taxes (to fund health care for illegals). All to make sure he gets the votes.

And that my friend, is the difference.

I can make the choice never to read another Weekly Standard article again and William Kristol can do nothing about it.

And speaking of Drudge links and stupid f*ing goyim, there is a link on Drudge right now titled “ISIS ‘Mein Kampf’ Blames Israel for Global Terrorism”

There is no “smaller government” there

There are no “less regulations” happening

And there will be no “lower taxes” as a result

Just more blood, more borrowing, more death

Click that link and you deserve everything you get

FoxNewsHate leads with more Hillary email scandal now

But below that, is a link titled “Iranian video game simulates missile strikes on Israeli cities”

The national debt is over eighteen trillion dollars

Real journalists at the New York Times reluctantly report “Without Release of Video, Police Shooting of White Driver Gets Less Publicity”

70% of black children in America are born out of wedlock

But real journalists don’t like to talk about that, because it doesn’t script the narrative

It’s only 10am east coast time, the “progressives” who get paid to post here aren’t awake yet, they don’t clock in for their Monday shift until noon

Reposting The Don’s immigration position from yesterday. My thanks to Joe.

https://www.donaldjtrump.com/positions/immigration-reform

1. A nation without borders is not a nation. There must be a wall across the southern border.

2. A nation without laws is not a nation. Laws passed in accordance with our Constitutional system of government must be enforced.

3. A nation that does not serve its own citizens is not a nation. Any immigration plan must improve jobs, wages and security for all Americans.

Whether you do or don’t like Trump, this is very good.

“I won’t stand for standing behind things I don’t know if I stand for or not. I will make a decision soon depending how it affects the 95% of black votes for democrats.”

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Bernie Sanders backs away from campaign’s apology to #blacklivesmatter
americanthinker.com | 8/17/2015 | Thomas Lifson

The Soros-funded #blacklivesmatter movement is a big problem for the Democrats, and Bernie Sanders just stumbled over it. Failure to grovel risks dampening the extraordinary black turnout necessary for Democratic victories in many states. But excessive groveling (say, apologizing for saying, “All lives matter,” as Martin O’Malley did) makes the candidate look like a PC wuss, nobody to entrust the nation’s security to.

Appearing on Meet the Press, Bernie Sanders in effect pleaded incompetence as a leader for his campaign’s apology letter that made its way to Buzzfeed. Amber Ferguson reports in the Huffington Post:

Sen. Bernie Sanders (I-Vt.) says he was not the person who sent an apology email to Black Lives Matter activists and believes an apology is unnecessary.

SELL NOW!

NO WAIT - buy the f*cken DIP!

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Market timer Tom McClellan sees stocks set up for ‘ugly decline’ as early as Thursday
MarketWatch | August 17, 2015 | Tomi Kilgore

McClellan is bullish today, but he expects definitive peak in stocks between Aug. 20 and Aug. 26

Tom McClellan loves doing what financial advisers tell you not to do. He tries to time the financial markets — to the exact day, if his charts align just right.

At the moment, they are telling him to be bullish on the stock market for all of his trading time frames, including those that trade every few days, weeks and months. But bulls should be ready to flee, as soon as this week.

That’s because McClellan said his timing models suggest “THE” top in stocks will be hit some time between Aug. 20 and Aug. 26. He expects “nothing good for the bulls for the rest of the year,” he said in a phone interview with MarketWatch.

McClellan doesn’t have a strong view on how far stocks could fall, just that it will probably be an “ugly decline” lasting into early 2016. The good news is that his models suggest it should not be as bad as the 2007-to-2009 bear market, when the S&P 500 Index SPX, -0.37% plunged as much as 57%, or the 2000-to-2002 selloff when the index plummeted 49%.

Salem, OR Housing Prices Crater 8% YoY

http://www.movoto.com/salem-or/market-trends/

Warmist Warming Monday

Commie rag the UK Guardian reports on how FoxNewsHate lies about warmism:

http://www.theguardian.com/environment/climate-consensus-97-per-cent/2015/aug/17/fox-news-inner-struggle-with-climate-misinformation

And now back to your regularly scheduled Drudge Report links

Before it was “Camp David” the presidential retreat was “Shangri La” (FDR). Ike named it “Camp
David” for his grandson.

Does anyone think that obamao would rename Camp David for his dead father?

Oakton, VA Housing Prices Fall 8% YoY

http://www.movoto.com/oakton-va/market-trends/

Goon:
You guys play Ten Years After in your shop?
Man if you don’t pull up a copy of A Space in Time - if you want to hear Alvin Lee in his prime - I think your patrons would like this music alot - jsut great to hear it again!!!

http://wolfstreet.com/2015/08/16/housing-affordability-san-francisco-bay-area-plunges-stocks-interest-rates-to-trigger-epic-bust/

The median house price in San Francisco has jumped 103% since the first quarter 2012 to $1.35 million in July; the median condo price has jumped 74% to $1.125 million. These aren’t palaces; condos include 1-bedroom and smaller units!

And incomes in San Francisco, it turns out, haven’t soared in lockstep (the Census Bureau pegged the median household income at $75,604 in 2013 though it has risen since). A similar scenario has played out in other Bay Area counties. And thus housing affordability has plunged. “Housing crisis” – that’s what a lot of people call it.

The Housing Affordability Index (HAI) for the 2nd quarter, just released by the California Association of Realtors, shows that only the top 10% of households in San Francisco can afford to buy a median house, and this despite historically low mortgage rates!

Bethesda, MD Housing Prices Fall 6%

http://www.movoto.com/bethesda-md/market-trends/

Does the low volume in stocks make it easier for corporations to keep their stock moving higher?

Worthless housing… worthless worthless housing. Housing is more worthless with each passing day.

home depot case study:

treasury stock 2011= $3.19 billion 2015 $26.19 billion

long term debt 2011= $8.71 billion 2015 $16.87 billion

shareholder equity 2011=$18.893 billion 2015 $9.32 billion

shares outstanding 2011 = 1.65 billion 2015 =1.34 billion shares = 310 million shares out of float in 4 years

Treasury stock value increased $23 billion over the 4 years
23,000,000,000 / 310 million shares = $74.2 / share avg price

Just looking at the charts looks like hd stock in 2011 averaged about 55.00, in 2015 110.00

55+110 /2 = 82.5 average price of two years pretty amazing how the $74.2 and $82.5 are so close isn’t it?

Can u see the game?

When you click on a Drudge link, you’re just scripting a narrative, their narrative

Same to be said about anybody who gets their “news” from a television

This is 2015 now, wake the f* up!

P.S. track 6 is China Cat Sunflower

No challenge poses a greater threat to our future and future generations than?