Consumers Believe Their Home Is An Investment
A report from CNN Money. “Home Depot on Tuesday revealed it experienced a record number of transactions in the last three months. On average, shoppers spent more than at any point since 2006 and sales at stores open for a year or more jumped 6%. All of that suggests Americans are ramping up spending on efforts to spruce up newly-purchased homes or ones they’d like to sell. ‘When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,’ said Carol Tome, Home Depot’s chief financial officer.”
KIRO TV in Washington. “Renters in King, Snohomish and Pierce counties are spending 31.6 percent of monthly gross income on rent, which is the highest it’s ever been, according to Zillow. The CEO of Realogics Sothebys International, Dean Jones, said many current renters have no idea that they’re prime candidates for home ownership.Jones said the cost of renting is not just the money being turned in to a landlord every month, but the lost opportunity to buy a home before prices potentially soar higher. Jones said the Internal Revenue Service is also allowing each parent of a buyer to pay $14,000 toward the down payment of a child’s house without any tax consequences.”
“Cassie Daughtrey, a broker, was involved in three to four sales in the last month that went to buyers who had previously been renting. Daughtrey said, ‘In Green Lake, a big house can rent for sometimes over $5,000 a month. If that’s what you’re paying in rent, you can buy a house. I know you can.’”
The Times Call in Colorado. “Rising Boulder County home prices are pushing thousands of people out of the running for home ownership, with more than 60 percent of Boulder County residents age 25 and older earning too little to purchase median-priced homes, according to an analysis by the Times-Call. County wide, median home prices have risen 32 percent since 2010, to $469,000 in the first half of 2015, mirroring major gains in the larger Denver metro market. But median income is just $67,959, well below the $90,000-$100,000 needed to purchase a home here.”
“A July report from the Federal Reserve Bank of Kansas City found that Colorado was the least affordable housing market in the Rocky Mountain states. That’s both a blessing and a curse, said Longmont mayor pro tem Brian Bagley. ‘If houses were $120,000, that wouldn’t be good, (because it) would mean the economy was bad and no one would want to live here,’ Bagley said. ‘So it’s a double-edged sword.’”
The Washington Post on Florida. “Jack McCabe watched the last housing bubble rip through South Florida like a hurricane. For 15 years, he has consulted on real estate deals here, advising clients large and small on what to buy and where, and on when to get out. And increasingly, he worries that South Florida is drifting back into bubble territory, in danger of another collapse that could hurt homeowners and investors alike.”
“‘We have short memories here in Florida, as I think they do in most places,’ McCabe said in a recent interview. ‘And we’re back at it. Every project is getting approved again. Particularly in the luxury condo sector, there’s going to be a crash in prices in the next few years.’”
The Idaho Mountain Express. “The Wood River Valley is once again seeing the flow of tourists and wealthy home-buyers that it relies on. Prices depend on the number of units for sale in the valley. During the worst of the recession, total listings of Sun Valley Board of Realtors members grew to more than 2,400 properties. Just a few years prior, during the rush, said Board of Realtors President Jed Gray, they typically sat on 1,100 to 1,150 properties.”
“The company ‘chipped away’ at the distressed inventory once the economy began turning around in 2013. By the end of 2014, it got down to only 1,250 properties. However, following a profitable second quarter, the market became flooded with sellers and—after a ‘lackluster’ July—it’s back up to 1,750 units, Gray said. ‘It really takes the pressure off a buyer because they have many more choices than they had before,’ he said. Sue Englemann of Sotheby’s International Realty is showing a multi-million-dollar home in Sun Valley this week—and she says the time is ripe. ‘The selection of high-end properties has never been as strong as it is right now,’ she said.”
NPR on New Jersey. “Michael McCabe still lives in the neighborhood where he grew up, Woodbury Heights, N.J., a middle-class suburb of Philadelphia. He knows which houses are in foreclosure and which have been abandoned. The latest seems to be right behind his own. ‘We don’t know what’s going to happen,’” he says. ‘We’re kind of prepping, because a gentleman who was there, who rented, came and told us, ‘I’m just letting you know: I’m moving. That means the grass isn’t going to get cut by me.’ And the house is in foreclosure.’”
“With the growing backlog of foreclosures, local officials are having a hard time keeping track. Chad Bruner, administrator for Gloucester County, N.J., says individual towns are having trouble getting even the most basic information from banks. This summer, Bruner commissioned an outside company to track all the abandoned foreclosures across the county to help towns make sure these houses don’t become eyesores and hassles for the neighbors.”
“But back in Woodbury Heights, McCabe and his wife, Maureen, are skeptical — after all, one neighbor’s house has been empty for seven years. She says this used to be a beautiful house. Now it’s hard to imagine anyone buying it. One window is boarded up. She says it’s hard to see this house every day and wonder what it means for her neighborhood. ‘I love my home; I love this town,’ she says. ‘I wouldn’t want to sell. If I had to sell, I know I wouldn’t get the value of what it’s really worth.’”
“Renters in King, Snohomish and Pierce counties are spending 31.6 percent of monthly gross income on rent, which is the highest it’s ever been, according to Zillow. The CEO of Realogics Sothebys International, Dean Jones, said many current renters have no idea that they’re prime candidates for home ownership.”
In a static environment or one where prices never fall, this might be proven accurate. The reality is, housing prices fall, historically. These charlatans like Dean Jones are a threat to your economic health.
“In markets from Seattle to Connecticut we’ve seen prices slow or decline.””
Seattle, WA Housing Prices Fall 15%
http://www.zillow.com/ballard-seattle-wa/home-values/
From the Washington link:
‘In a market where demand far outpaces supply, Jones said it will take several years for there to be more units built or put on the market. Until then, prices will keep climbing.’
‘He said there are some private lenders now offering cash for up to 75 percent of the home value and promises to close within a week. That means the buyer puts down 25 percent but can still be competitive against bidders coming in with all cash. This “same-as-cash” loan requires that the buyer then refinances within six to eight weeks.’
“same-as-cash”
Not really. You’ll see the difference when these deals start blowing up, leaving whomever is owed the money holding the bag.
But what if demand collapses? Jones acts like demand is constant, and only supply can change.
Ask yourself why housing demand has collapsed to 20 year lows.
Ask yourself why that isn’t true in certain parts of the country.
It’s reality my friend. And demand is far lower in coastal states.
Ask yourself if you’re conversing with a jingo spouting lackwit.
“Mommy…. please make him stop!”
Remember….. you can ask $50k for your run down 14 year old Chevy pickup but where is the buyer at that price?
“…. jingo spouting lackwit”
Hey, I take offense at putting so many of my same letters into your description of HA! We all see he is a joke, let it go at that. No reason to go jingo…….HA, HA, HA!
Data my friend.
Westchester County, NY Housing Prices Fall 9% YoY
http://www.zillow.com/westchester-county-ny/home-values/
“And we’re back at it. Every project is getting approved again.”
Do they mean by the banks, or by the municipalities. Surely they don’t expect planning officials to regulate the supply of housing?
“Home Depot on Tuesday revealed it experienced a record number of transactions in the last three months. On average, shoppers spent more than at any point since 2006 and sales at stores open for a year or more jumped 6%. All of that suggests Americans are ramping up spending on efforts to spruce up newly-purchased homes or ones they’d like to sell. ‘When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,’
Very imaginative notions here. Where do you begin with this mountainous fable?
The truth?
Robert Shiller: “Houses Depreciate”
http://www.pragcap.com/robert-shiller-dont-invest-in-housing
The biggest item I see people buying here in Salinas from Home Depot is crappy wood fencing boards and sacks of concrete. Most of this fencing will be falling apart within 3 to 5 years.
I also see a lot of people exiting with small project remodel stuff for bathrooms.
Speaking of crappy stuff falling apart, Ben you have to check this one out:
http://tinyurl.com/olwrznw
That article was very entertaining, thanks!
Gotta love it when people continue to buy condos in that building, even though the structural problems and associated litigation are well known.
“missing or improperly installed rebar”…that is why the Harmon Hotel here in Vegas had to be demolished, without ever being fully finished or opening!
Home Depot is bordering on irrelevancy. When this ship goes down, HD and Lowes’ will have to merge to stay competitive and relevant. They don’t recognize the power of the Internet, and while Lowes’ has the better website, their online prices represent the fantasy-land prices they change in their stores. I learned a lot during my home remodeling project, including the inconvenient truth that I bought nothing at HD/LOWES that I couldn’t have bought at Amazon for less price minus the lumber, which I could pick up at the Ace right down the road, supporting a small business owner and while it might cost a tiny bit more, the savings from the Amazon/online purchases wholly outweigh the additional cost. Same holds for garden plants. And the tools I bought at HD, they are the same “made in China” items offered at Harbor Freight tools for 1/3 the cost. Some of the other items like fans, flooring, faucets are also available at Costco for significantly less, with a better warranty as well.
This holds for other retail channels as well - either innovate or die. Young people shop online. The retiring boomers might have enjoyed their Saturday’s driving around to different stores but that doesn’t appeal to my generation at all.
You can procure much better materials for a third less at supply houses and yards.
A third more is more like it. You must live in Bizarro world. It’s called buying power. Data my friend, data.
You go HomeCheapoBoy!
I’m no contractor but I’ve done a reno recently. My local yard beats the prices of the big box hardware stores by a nice margin. They then give me a 10% additional discount. Once I passed $1200 it went into effect retroactive to my first order and is now permanent. They also deliver to my doorstep (today if I want) or even inside if I ask for free. They all know my name and if I want to sort through something in the yard they send someone to do the lifting for me. They don’t chase me around the isles and they don’t ask me at checkout if I “found everything”.
That last is priceless.
What world does jp live in?
A world in which the local home centers and lumber places all charge significantly more than the big box stores.
Recent example: 7/16″ OSB is under $8/sheet at big box store. Almost double that at local home center.
A supply house isn’t interested in your $50 patch job project.
Remod and doing housing projects doesn’t appeal one bit to my generation at all. Rent on. The house is someone else’s problem. I got micro brews to visit on my fixie.
We have owed 3 homes since 1984 in So Ca. We made a sizable net profit from our prior homes, and this home is an unknown, but we will most likely make a profit. We paid cash.
Unless you’re living in your parent’s home, you have to pay for place to live. There are variables to account for, so blanket statements are just ridiculous.
The key in our experience is to not over improve, buy smart, and not house jump. 14 yrs 1st home, 7 years 2nd, and this 1 is 3 years so far. We also FSBO.
A paid off home in retirement is mandatory. “chit” happens as you age.
“The key is” you overpaid a lifetime of earnings for a depreciating pile of materials.
No. We paid for 2 homes in REAL R E markets. Made good $ on them, an PUDS are always a good investment in So Ca.
And then you proceeded to throw more good money after bad on it.
Math. Try it.
Mafia Bot denies it all!
Substantiate it with math my friend.
Mafia Bot denies it all! ??
Its how he gets his rocks off each day, everyday…Ignore him…
Math my friend. Data.
It’s well established that Inchy paid a fortune in cash for a very expensive house, then bust a gut with “improvements”. This is a bet on ever climbing house prices, a bet that has impoverished Inchy and hubby. while they could have lived modestly the rest of their lives on that savings, Inchy now has to shuffle for a meal ticket.
It is ironic that Inchy thinks she will “make a profit” on the granite countertops. She’d have to sell while the market was still soaring. Oops.
So you made money during the largest real estate bubble and price run up in history. Congratulations I guess?
Looking around my neighborhood, people who bought townhouse for $480,000 in 2008 just sold for $475,000.
Zillow calls N VA flat
re tax hikes will kill it
“So you made money during the largest real estate bubble and price run up in history. Congratulations for participating in the biggest bag holder farce the union has ever seen.”
Fix’d
Prior to the 2nd qtr 2002 housing was slow but steady appreciation over time, with marginal ups and downs. The Savings and Loan bubble came and went. We have always made $ in the So Ca market. Even in this home, we’ll make a profit.
EE hubby did the carriage light infrastructure electrical and fixture installation over the weekend, and told the electrician to shove his $2,000 quote.
If you do some sweat equity on a good bones home, and sell a one-story in a low availability market, you’ll do OK. No house pymt is a factor as well. Renting isn’t for us. But everyone is different.
DonkeyMath my friend.
McCabe: “…..there’s going to be a crash in prices in the next few years.’”
That is one of the biggest problems with housing bubbles. The markets move in slow motion. Once the bubble pops in 2018, it will take another 4 years to sink to the bottom! It will be time to buy again in 2022.
It’s already bursting Jingle_Fraud.
Hmm, whom should I believe….a “senior” housing analyst or Jack MaCabe? HA! No brainer.
“Believe”?
Data my friend.
Arcadia, CA Housing Prices Fall 8% YoY As More Homeowners Fall Into Delinquency
http://www.zillow.com/arcadia-ca/home-values/
It is definitely not collapsing here in Northern CA. although prices are stabilizing. As for Arcadia, prices were pushed up astronomically by Chinese buyers (they are basically buying Arcadia and a few other Southern CA locations) who seemingly don’t care about price so that blip is meaningless. I mean personally it would benefit me greatly if prices were collapsing but it is most definitely not the case at this point in time. Every single decent house in this area goes pending within 2 weeks of the initial showing. Until/unless there is a Tech boom collapse these prices will stay high - very high.
Collapsing? Drama Queen talk.
Sure prices are falling in SoCal….. pretty much across the board. Meanwhile in NorCal….
Alameda, CA Housing Prices Crater 13% On Plummeting Housing Demand
http://www.movoto.com/alameda-ca/market-trends/
MarkinSF
Arcadia has a fabulous demographics and talk about a beautiful area. Wish we could afford it. Our plan A was So Pasadena, but we didn’t want a mortgage, so we went to a much less expensive area. Love the bay area. Lucky you.
Which of those 3 houses you claim to occupy do you actually live in?
I used O.O. home loans for all 9 properties, but I rent the place where I live cause it’s cheaper……HA, HA, HA!
All 9 are negative cashflow. Right?
Admitting to fraud on a public blog? Thank you for your honesty.
That’s where the “Fraud” part comes from.
+9 Blue
/sarc off/
Well JM, you either took out “home loans” on nine houses or you didn’t. We don’t know what an “Oh.Oh” loan is. If you got the loans backed as personal residence then it would be quite the scam. You’ve been asked about this before.
O.O. = Owner Occupied.
I used NOO (Non Owner Occupied) when I purchased properties in which I did not live. Rates have dropped so much since my last purchase (2010), I have refinance them all once or twice anyway.
You can’t keep your stories straight these days Jingle_Fraud.
ComfortableClass
We bought our 1st in 1984, sold at a sizable profit 14 yrs later, bought a 4,000 sq ft luxury view home in 1998, lived there and sold years later at nice net profit, and then eyeball issues came along, and we settled into a modest one-story pool (pita) cottage for cash. Love the floor plan and only 2,000 sq ft.
For 2 people, that’s big enough.
The later part of 2002 is when this bubblicious housing bubble started, and it pisses us off. Housing should not be a casino. It’s a place to live with 3% annual appreciation (So Ca pre-bubble history.)
LOL, it’s only a casino if you lose.
Houses don’t “appreciate”. Houses depreciate.
“That is one of the biggest problems with housing bubbles. The markets move in slow motion. Once the bubble pops in 2018, it will take another 4 years to sink to the bottom!”
I don’t know where you got that idea. The last bubble sure didn’t take 4 years to pop once peak prices were reached. If you think you’re going to have plenty of time to unload your properties, you may be in for a surprise.
The last bubble sure didn’t take 4 years to pop once peak prices were reached ??
The pop did not occur because of peak prices it popped because of the meltdown in the financial markets…It started in September 2008…
The housing price collapse of 2008 was caused fraud driven housing prices. The very same reason prices are falling right now.
‘It started in September 2008′
I have many hundreds of posts showing people losing their shirts in housing by 2006.
August 29, 2006
“The housing market has flattened, those who work in real estate say. ‘The housing inventory is the highest in years,’ said Don Earman, financial consultant with CTX Mortgage Co. of Harrisonburg. ‘Many sellers are actually lowering their prices since it is taking longer to sell homes.’”
“Home sales were down 5.9 percent in July and down 1.7 percent in the first seven months of the year, according to the Harrisonburg-Rockingham Association of Realtors. Other parts of the state have taken severe hits. In Winchester, home sales were down nearly 30 percent for the first seven months of the year. In the Dulles area, that number is 36 percent.”
“The biggest declines will be the high-end homes, because fewer buyers are willing and able to make the purchase, experts say. Builders will suffer because they can’t afford the carrying costs of finished houses sitting on the market.”
“The boom-based pricing is ending because housing shortages no longer exist, Earman said. Some buyers may be waiting for prices to drop, which has happened in Northern Virginia in recent months.”
“Sales and home prices fell at a faster clip than expected and inventories climbed further in August as the housing market continued to deteriorate, according to a Banc of America Real Estate Agent survey.”
“‘Consumers are shifting from a mindset of waiting for a better price to one where they do not want to buy at this time, no matter what the price is,’ the study said.”
“The study also found that prices fell sequentially for the 11th consecutive month. Prices tumbled in 82% of the markets surveyed. In July, only 79% of the surveyed markets fell. The use of incentives continued to rise, hitting record levels. The amount of inventory rose in all markets, except Austin, in August.”
“‘Consumers are just of the mindset at this point that it is not the time to be buying a home and this becomes increasingly problematic for housing,’ Raymond James analyst Rick Murray said. ‘Inventory levels right now would suggest that this downturn is probably going to last a period of years as opposed to quarters,’ the analyst said.”
http://thehousingbubbleblog.com/?p=1350
Chosen at random:
August 29, 2006
“It’s not just companies that build houses that are seeing their stock prices crumble under the weight of a weakening real estate market. Shares of mortgage lenders who provide the cash to finance deals are also sinking.”
“The outlook for lenders has become gloomy amid growing signs that the five-year housing boom is over. The fallout: Fewer people are taking out mortgages. Overall applications are down 25% vs. the same period a year ago, the Mortgage Bankers Association says.”
“Also weighing on home lenders is the potential financial fallout from the use of exotic mortgages. ‘Borrowers are missing more of their payments than before,’ says analyst Matthew Howlett. ‘A downturn will hit the subprime market first,’ says Jay Brinkmann, an MBA economist.”
“Another headache for mortgage lenders is the constant drumbeat of negative news on the housing sector.”
‘From Danielle DiMartino. “The bulls insist homebuilders are safer than in prior down cycles because they’ve consolidated into a group of stronger players. ‘I don’t buy it,’ said Mark Kiesel, bond portfolio manager at Pacific Investment Management Co.”
“The flaw, he explained, is that their newfound critical mass emboldened builders to be overly aggressive with land commitments. Land is where things begin and end for builders; it’s where they take their longest-term, and therefore riskiest, gambles.”
“‘The builders have finally realized they’ve been hit with a truck, and they’re trying like mad to get out of their land commitments,’ he said.”
“Speculative real estate investors could ruin Utah’s happy housing market, sending home prices nose-diving, according to Clark Ivory, chief executive officer of Ivory Homes, Utah’s largest homebuilder.”
“Behind the soaring prices, which are pushing homes beyond the reach of many working families, are speculators, Ivory contends. And he is blunt when it comes to homebuilders selling out to speculators, saying their motives amount to ’short-term greed and thoughtlessness.’”
“‘I basically have let my people know that if they sell to an investor and they knowingly do it, they are going to have trouble with management, and that means their job,’ Ivory said. ‘That’s how serious it is to us. I just think we ought to be careful and not let our market become artificially inflated so that we then have to see adjustments,’ Ivory said.”
“Ivory concedes there is no way of knowing how many speculators are out there. However, it is true that total unsold new housing inventory in the greater Salt Lake region is climbing. In the second quarter, unsold new housing inventory rose to 12,102 units, a 29 percent increase from 9,418 units in the second quarter of 2005.”
“Jeff Hansen, CFO of Sandy-based Liberty Homes, said he believes the percent of speculators in the market is much higher. Like Ivory, Hansen said such speculators can be damaging to the real estate economy by artificially pumping up prices.”
“‘Will there be a correction in the future here in Utah? I think there will be,’ Hansen said. ‘We are riding a high right now.’”
http://thehousingbubbleblog.com/?p=1349
When I checked Realtor.com over the weekend for Birmingham, MI, an upscale city outside of Detroit, there were 48 price reduced listings. Today there are almost 80 out of 251 total. When there are that many price reductions in such a short period of time, it shows that people are watching the news, and getting a little nervous about the economy. This is the same city Ben posted an article on a few weeks ago that quoted a realtor saying that people were paying over asking to buy in.
http://www.realtor.com/realestateandhomes-search/Birmingham_MI/sby-7?pgsz=50
This is how a bubble pops, not with a whimper, but with a bang.
Yeah, we backed out of a speculative land deal in Dec. 2005 because we were the only ones buying at that time. No other buyers in sight.
When we told the realtor we didn’t want it they asked us what we WOULD pay. We RAN.
More data supporting your timeline (the carnage started well before September 2008–the financial market meltdown was in large part because of the housing collapse…not vice-versa):
Homebuilder confidence turned pessimistic by May 2006 and didn’t get back above 50 (the dividing line between optimistic and pessimistic) until June 2013.
The homebuilder ETF fell from about $46 in March 2006 to $30 in July 2006.
These are definitely leading indicators.
Despite these being the starting points, by the end of 2006, the HMI was still above 30 and the homebuilder ETF recovered back to $36 (a dead cat bounce). Builders were very seriously concerned, but not yet “jumping out of windows”. Home prices hadn’t really started to fall too much.
The carnage started in 2007, when home prices started to fall in a sustained and undeniable way…effecting the real economy and banking system that were previously propped up by home-equity driven borrowing, and ever-increasing home prices (which supported the lenders).
By the end of 2007, national home prices were down about 7% from the peak, the homebuilder ETF was down to $17, and the HMI was at 18.
And then it got downright ugly.
By the end of 2008, national home prices were down 17% from peak, the homebuilder HMI was down to 9, the homebuilder ETF was down to $12 (off 75% for those keeping score).
BTW, interesting to track Mark Kiesel’s housing view. He sold his house in 2006, and was a bear until Q2 2012, when he proclaimed it a good time to buy. As recently as July, he was still bullish. I wonder how long he stays bullish?
Rental_Fraud,
“Homebuilders” are a counterfeit. They might have 10% of the total residential market. Counterfeit notion, counterfeit indicator.
What matters is price. Right now, current asking prices of resale housing are 2x construction costs. 3x in some areas.
http://nahbnow.com/2015/03/top-10-publicly-traded-builders-increase-market-share-in-2014/
The top 10 publics have more than 25% of the market.
Private builders who build more than one home at a time (ie. they build subdivisions) are the vast majority of the rest.
Individual contractors with a Skilsaw and pickup truck who build one at a time are the minority.
Wrong again. 25% is the minority.
Math my friend.
‘Once the bubble pops’
You said there was no bubble.
‘If houses were $120,000, that wouldn’t be good, (because it) would mean the economy was bad and no one would want to live here’
Interesting, because the house I live in was sold new for $105,000 in 2001. I’m told by locals that not long before that this area was used for riding ATV’s and motorcycles and plinking with guns. Then it grew like crazy so that this house is a 25 minute drive from the edge of the desert. This is how warped our notions of what house prices mean or how prices should be determined.
738 properties found Longmont, CO Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Longmont_CO/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home
157 properties found Longmont, CO Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Longmont_CO/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home/show-price-reduced
‘If houses were $120,000, that wouldn’t be good, (because it) would mean the economy was bad and no one would want to live here’
No, it wouldn’t be good for the local economy because the local government is use to getting and spending the property taxes based on average sales of around $500K and they couldn’t pay for all those pensions and salaries on the new normal of $120K.
Actually $120k houses would accelerate the economy like you’ve never seen.
1. You are assuming that jobs and salaries would increase.
2. You are assuming that bidding wars wouldn’t occur.
3. You are assuming we need more housing while you have been saying we don’t need more housing because we are already overbuilt.
4. And my first comment was meant to be factious.
1. Falling prices and static wages result in increased economic activity
2. “Bidding wars” aren’t occurring now nor have they in the past.
3. Current demand for housing is at 20 year lows due to inflated prices.
4.
factiousfacetiousGee, thanks for the english lesson. Ah, let’s see what meanings factious means:discordant, conflicting, argumentative, disagreeing, disputatious, quarreling, quarrelsome, clashing, warring, at loggerheads, at odds, rebellious, mutinous.
I wrote what I meant.
And so did I.
my county u can retire at 52
how about u?
It’s all Greek to me…..
RE taxes are driven by county employment
they get pensions at a young age= escalation RE taxes
Exacerbated by flat markets since the source of rev is market appreciation
that help?
So Ca property owners saw a 2% (Prop 13 cap) for fiscal yr 2015-2016. For us, that means a $90/yr property tax increase. The compounding effect is a sting, for sure. What a cash grab.
157 properties found Longmont, CO Price Reduced Homes for Sale
El Longmonto is Denver’s Coalmine Canary. Being an exurb that is considered “close enough” to commute to a job in Denver, it is the poster child of the “drive ’til you qualify” crowd, and thus will be the first metro community to crash.
That’s where MMM lives. I hope he’s unloaded all his rentals!
I hope he’s unloaded all his rentals!
Does he owe anything on them?
I suppose he could sell them, but what would he do with the cash? Buy a CD that pays half a percent interest? Buy Treasuries? I suppose he could just hold onto the cash and buy new rentals after the crash at a huge discount.
Better to get a gauranteed half percent than to hold a depreciating asset while prices are falling.
That’s where MMM lives. I hope he’s unloaded all his rentals!
Over the years I’ve known a few people like him. One even had a saying: It’s better to collect rent than to pay rent. Their timing was impeccable of course, they bought their rentals with loans back when they were cheap. They love to gloat about how how much they clear every month from the rent and how they don’t have to work anymore.
Make fun of it all that you want, but my parents owned several duplexes (1970s - 1990s) that paid for college for all of us children. And I learned as a kid how to fix toilets, snake drains, fix leaky faucets, and replace electrical devices.
You’re a helluva handyman aka maintenance engineer.
“They love to gloat…”
More to gloat about when you buy productive assets after a depression rather than near the peak of a mania.
San Luis Obispo, CA Housing Prices Fall 5% YoY
http://www.zillow.com/san-luis-obispo-ca/home-values/
‘When consumers believe their home is an investment, not an expense, they spend differently. We are seeing that,’
Does it matter if the investment is going up or down in value?
Yes. Big time.
Does it matter if the investment is going up or down in value ??
No…It only matters when you want to sell it…Until then its irrelevant..
My grandparents moved into their home right after marriage…Grandpa passed after 63 years in the house…Grandma went after 71 years in the house…Do you think they ever gave one thought to how much there house was worth over that period of time ?? The answer is NO…
It might have something to do with the fact the market wasn’t driven by fraud back then.
“Jones said the Internal Revenue Service is also allowing each parent of a buyer to pay $14,000 toward the down payment of a child’s house without any tax consequences.”
_____________________________________/
And the multigenerational transfer of wealth continues. Savings that have been built up for decades are being destroyed to prop up manipulated markets, crooked and overleveraged banks, and a failed ideology. Apparently we can’t do any better than this.
even better than 2005 !
When salaries have been gutted, mom and dad’s money is a that is left
I can’t tell you how many open houses I go to where I see 20-somethings bringing their parents along, because Mom and Dad are going to make the downpayment. Infuriates me to no end.
Meanwhile, my wife and I’s parents are both broke. Before my wife and I got married she was sending them money every few months. Because they blew all their retirement funds on cruises.
Enablers.
That’s been true since… forever… Mom and Dad can give $14k to son and daughter-in-law totally $56k. And then $56k next January 1. And so on and so on…
Santa Monica, CA Housing Prices Crater 16% YoY
http://www.movoto.com/santa-monica-ca/market-trends/
“U.S. Foreclosure Activity Increases 7 Percent in July as Bank Repossessions Reach 30-Month High”
http://www.marketwatch.com/story/us-foreclosure-activity-increases-7-percent-in-july-as-bank-repossessions-reach-30-month-high-2015-08-20
‘What’s more, the number of properties that were actually repossessed increased by 81 percent from a year ago, with almost 47,000 homes repossessed by lenders in the U.S. This is an increase of 81 percent from last year. There haven’t been this many repossessions since January 2013.’
http://www.news3lv.com/content/news/story/Nevada-home-foreclosure-activity-up-10-percent/_lCXGv9XsEOQkI4vB7vaWw.cspx
“However, Blomquist said that most of the homes repossessed this month are from old loans that were taken out during the housing bubble between 2004 and 2008, and signals a flushing-out of old distressed loans rather than any coming foreclosure trends. Nationwide, the number of new foreclosures filed in July has actually decreased to the lowest levels since November 2005. “
With 25 million of them, they’ve got alot of work.
HA! you’ve been saying that for 10-years. Certainly ONE of those houses has sold. You must mean by now it is 24,999,999 vacant, abandoned, foreclosed shadow market inventory just waiting to come onto the market all at once and wreck the housing market.
When will those 24,999,999 houses show up? HA, HA, HA!
Data Jingle_Fraud data. Get to work.
https://www.census.gov/housing/hvs/data/histtabs.html
It’s a good thing these housing investments only go up because the usual suspects are headed down.
‘Apple’s 1.3 percent fall weighed the most on the Nasdaq and the S&P after a Gartner report that said China smartphone sales fell for the first time ever in the second quarter. Apple counts China as a key growth market.’
‘Declining issues outnumbered advancing ones on the NYSE by 2,210 to 472. On the Nasdaq, 1,905 issues fell and 440 advanced. The S&P 500 index showed one new 52-week highs and 23 new lows, while the Nasdaq recorded six new highs and 89 new lows.’
http://finance.yahoo.com/news/wall-street-set-open-lower-131620207.html
Colossus in Cupertino indeed.
http://finance.yahoo.com/news/boomerang-home-buyers-poised-return-084629843.html
age 60 boomerang buyer
I was paid up at age 50
sorta like the previous generation
existing home sales = yr 2000
how about adjusted for population growth
anyone got that number?
BREAKING NEWS on CNBC.com’s front page at 2:35 PM: “US oil settles up 34 cents, at $41.14 a barrel” !!! LOL!
‘And perhaps this is precisely the problem: the Fed may have waited too long to back away from its crisis-era policies, and it now has ceded control to the next default cycle and the whims of other global central banks. That’s being treated as bad news by credit buyers, who are now demanding close to the highest premium to own junk bonds instead of government bonds since 2012.’
“The Fed was ready to move, waited too long, and China moved first,” wrote Wells Fargo & Co. analysts led by Richard Gordon on Aug. 18. “Now it’s up in the air as to whether a rate tightening by the Fed — any rate tightening — will be viewed years later as a major policy error, or a much needed push towards the normalization of monetary policy.”
‘Investors have sent yield spreads on U.S. junk bonds up 0.64 percentage point this year to 5.68 points, according to Bank of America Merrill Lynch index data. Those on speculative-grade energy securities have surged to 9.64 percentage points, close to the most since 2009.’
‘Investors are finally getting a glimpse of what markets look like when the Fed no longer has a vise over every price movement — and many are getting nervous about what they’re seeing.’
http://www.bloomberg.com/news/articles/2015-08-20/credit-traders-gird-for-the-worst-as-fed-loses-its-grip-on-debt
I forgot, who was driving the car at the end, Thelma or Janet?
Brad was driving the car. Janet spoiled the monster. There was a spaceship at the end.
Overrun! 9 of 11 U.S. Cities Have More Renters Than Homeowners:
http://davidstockmanscontracorner.com/overrun-9-of-11-u-s-cities-have-more-renters-than-homeowners/
Nice summation:
“For homeowners – especially in these large cities – I continue to advise you to sell all non-essential real estate.
If you’re holding onto property because you’re renting it out for stable monthly income, that’s fine – though I’d much rather have the cash on hand to buy up investments that get slaughtered through the global downturn ahead.
But if you’re a boomer hoping to retire on the value of your home in the next five to 20 years, think again. Demographics show we’ll never see these heights again.”
‘I love my home; I love this town,’ she says. ‘I wouldn’t want to sell. If I had to sell, I know I wouldn’t get the value of what it’s really worth.’”
Lines like that befuddle me. Who falls for the “I have to get $XXX,XXX out of my house for ____________ reasons, tripe.
So, for those of you, like Maureen, just tuning in “market value” is what a person is willing to buy your house for and a seller is willing to sell it for. Nothing more, nothing less.
Costa Mesa, CA Housing Prices Plunge 11% On Cratering Housing Demand
http://www.zillow.com/costa-mesa-ca-92627/home-values/
Lynwood, WA Housing Prices Plummet 11% YoY
http://www.zillow.com/picnic-point-north-lynnwood-wa/home-values/
Corelogic put out their August 2015 “MarketPulse” recently (today?).
They have in it a piece on the effect of Dodd Frank. Among the tidbits:
1. There have been 13,560 pages of regulatory rules created (including the QRM);
2. Low and no doc mortgages peaked in 2005 at 42% of all originations. They are now close to non-existant;
3. ARMs peaked in the mid-40%s as a percentages of purchase originations, and now they are less than 5%.
Exactly. The loans being made today are full doc, but people who are qualified to repay. Any downturn will be mild compared to 2007.
The majority of mortgages made 2009 to current are 3.5% downpayment mortgages.
This is the definition of subprime my friend.
Yes, now we are down to the price, which is multiples of what is realistic. Essentially nothing down loans. Millions of defaults held in the shadows. There will be a liquidation, postponed but not resolved.
This thread was Prime HBB. Quite the interesting read and unlike anything in the mainstream. Thank goodness for the side currents of truth! It’s just too bad the majority of people plug their ears and close their eyes while singing a Dreamtime song.