The Collective Madness Of The Super Cycle
It’s Friday desk clearing time for this blogger. “Potential home buyers will get some modest relief from escalating home prices next year, according to the 2016 real estate forecast from the Everitt Real Estate Center at Colorado State University. The Everitt Center predicts about 3,477 home sales in Fort Collins and Timnath with new home stats holding steady at about 825 for the year. Much of that construction will come from national builders who have flooded the Fort Collins market and control the majority of available building lots, said Eric Holsapple, founding member of the Everitt Real Estate Center. Closings in Greeley are expected to spike to 2,840, reflecting rising prices in surrounding cities as consumers drive until they qualify. ‘We are starting to see people not qualifying again for that $400,000 home that used to be $300,000,’ Holsapple said.”
“Is Related Group CEO Jorge Perez worried the Miami housing market is in another bubble? ‘Yes I think we’re building a lot,” Perez tells Bloomberg. ‘Perhaps we’re getting a little bit ahead of the demand. Nevertheless, remember there is almost no speculation because the buyers that we’re selling to right now are all cash payers - 50-percent down payments…So will there be a decrease in demand and a market slowdown? Yes it could happen. We’re seeing it now.’”
“RealtyTrac found new foreclosures — when banks first start the process — are at a 10-year low, but repossessions — when a homeowner actually loses their home — are up. ‘Nationwide, we’re still seeing the market dealing with the sins of the past when it to comes to foreclosures in the form of these bank repossessions,’ RealtyTrac’s Daren Blomquist said. ‘Those were up 60 percent in November and it was the ninth consecutive month when we saw those bank repossessions up on a year over year basis.’”
“RealtyTrac said home repossessions are up nationally because bad loans made during the mortgage crisis are just now resulting in some people losing their homes. In Texas — especially Dallas — that number of home repossessions is even higher. RealtyTrac said trouble in the oil industry may be partly to blame. The company also said to expect the trend to continue since foreclosure filings are also up in Texas. ‘We saw nearly 300 percent year-over-year increase in Texas in the bank repossessions,’ Blomquist said. ‘If we center in on Dallas, we saw 500 percent year-over-year increase.’”
“As oil continues to slide, Alberta landlords are offering more and more incentives in an attempt to woo renters to their properties at the same time as rental prices are falling in the province’s two largest cities. The number of houses, condos and apartments for rent in Calgary and Edmonton has risen sharply in 2015. Monthly rents for condos in Calgary have fallen more than 20 per cent since last year to an average of $1,716 from $2,150, RentFaster data shows. ‘In general terms, we’ve regressed to 2012, 2013 prices,’ said Mark Hawkins, owner of RentFaster.”
“The FipeZap Index, which measures the changes in price of property in twenty cities across Brazil, has released its monthly figures which show the average price per square meter of properties advertized for sale in Brazil between January and November this year presents a real decrease of 7.44 percent after inflation is taken into account. The real-estate sector is being affected by four compounding factors: high unemployment, rising inflation, insufficient wage increases and falling consumer confidence which all result in the banks becoming increasingly reluctant to lend money.”
“As the market drops, however, opportunities are arising for buyers. Many companies are offering promotions, as they did during Black November, in order to shift stock and discounts are being offered for those who can pay in cash.”
“A new report offers an infuriating insight into what’s going on inside the houses that city fringe-dwellers are clamouring to get their hands on, and the answer is nothing at all. Data analysed in a new report indicates about one in five investor-owned properties in Melbourne are unoccupied. The 2015 Speculative Vacancies Report analysed water consumption in Melbourne households, and classed those with abnormally low water consumption — a daily amount less than that used by a leaky tap — as speculative vacancies.”
“Queensland University of Technology property economics professor Chris Eves said under-utilisation of properties was a national problem, mainly in very high or very low socio-economic areas. ‘The Brisbane CBD is a good example. If you look at the unit blocks at night, there’s not a lot of lights, which indicates the owners are holding back for higher rent, they can’t get tenants, or it’s just not being used,’ he said.”
“Though there are no similar studies measuring water usage in other states, evidence of vacant dwellings has emerged elsewhere. There have been reports from Queensland that wealthy Chinese buyers leaving luxury mansions empty for most of the year had led to Gold Coast suburbs turning into ghost towns.”
“Kowloon Development Co.’s Upper East project in Hong Kong’s Hung Hom area is offering a raft of rebates and hidden discounts that can reduce the cost to a buyer as much as 14 percent, and it will throw in a second mortgage too. Kowloon Development is not alone. ‘After 12 years of a bull market, Hong Kong property is at an inflection point,’ said Spencer Leung, a Hong Kong strategist at UBS Group AG. ‘Property developers are trying hard not to paint a picture that things are going down.’”
“Leaders of the world’s No. 2 economy face a vexing problem: How can they get its people to buy more houses? China has a surplus of them. Economists generally agree that most Chinese cities are ringed with empty apartment buildings and residential developments with varying degrees of completion, from projects where the ground hasn’t been broken to fully finished apartments waiting for someone to move in. That’s bad news for the Chinese economy, and thus for the world.”
“In March, the government had started rolling out loosening measures such as multiple interest rate cuts, looser home purchase rules, and tax reductions. Others voice caution on pinning hopes on urbanization as a source of housing demand. For one, no matter how affordable a home in a city might be, it isn’t clear that rural residents would find jobs waiting for them. ‘Rural dwellers will think about job prospects and social benefits when they consider a move into the cities,’ said Song Huiyong, research director of real estate consultancy Shanghai Centaline Property. Referring to China’s old system of assigning jobs and offering guaranteed employment benefits, he added, ‘nowadays there is no such thing as centralized job allocation or iron rice bowls, so what are they going to do when they move?’”
“Even for a company that once had the global monopoly on diamond production during almost a century of all but constant expansion, the collapse in commodities prices is proving too much. Anglo American Plc will shrink beyond recognition after Chief Executive Officer Mark Cutifani on Tuesday announced a package of asset sales, mine closures and job cuts. Among the potential casualties is Minas Rio, a Brazilian iron-ore mine where spiraling costs and collapsing prices turned a $14 billion project into the epitome of the company’s predicament.”
“More recently, it sought to expand into iron ore to join the companies feeding China’s seemingly insatiable need for steel. Like banks before the financial crisis or energy companies before the collapse of oil prices, Anglo American is the classic tale of over-extending during the good times only to be left with too much debt and too little money when markets take a dive.”
“‘Minas Rio is the high water mark of their mistakes,’ said Jeremy Wrathall, head of global natural resources at Investec Plc. ‘It was a series of strategic errors, the collective madness of the super cycle where everyone got it wrong.’”
‘RealtyTrac’s November statistics show banks repossessed more than 2,500 California homes in November. RealtyTrac’s Daren Blomquist says repos were up 26 percent year-to-date in November. And he says the increase was not just a one-month anomaly. “We’ve now seen eight consecutive months in California where those REOs, or bank repossessions, have increased from a year ago,” says Blomquist. “So that is a bit of a red flag.”
‘The percentage of “scratch and dent” loans, which are loans that were 60 or more days delinquent at some point but are now current, is currently reported at 12 percent of all outstanding mortgages, which is lower than its peak of 15 percent in December 2011 but still more than double its normal level of 5 percent.’
‘The majority of these loans were originated during the housing bubble years from 2003 to 2008, a group that made up 62 percent of foreclosure starts in July 2015. By comparison, mortgages originated prior to 2003 made up only 10 percent of foreclosure starts during July.’
“In other words, legacy loans are the bad gifts that keep on giving,” Khater said. “The persistence of legacy loans to drive foreclosures a decade later indicates how sensitive mortgage market performance is to underwriting decisions made long ago, even in an otherwise sanguine economic environment. Clearly, this means that a large segment of mortgage loans remains very sensitive to the economy and home prices.”
‘Another area of concern is the affordability of the national housing market. Price volatility is elevated, driven by high home price cross correlations across various markets. The lower end has comprised much of the overall home price appreciation; according to Khater, real lower-end home price growth is currently higher than 10 percent, partially due to the FHA reducing mortgage insurance premiums by 50 basis points at the beginning of the year.’
“Higher price cross correlations are driving higher home price volatility,” Khater said. “Real home price volatility, as defined by the standard deviation of the inflation adjusted three-year moving average in price changes, is currently twice the historical average. Higher home price correlations increase home price volatility and risk of national booms and busts because the benefits of geographic diversification is reduced.”
‘lower-end home price growth is currently higher than 10 percent, partially due to the FHA reducing mortgage insurance premiums’
Gosh, I’m surprised the government is screwing poor people the way it is. They usually stand up for the little guy and fight the money-ed.
“12 percent of all outstanding mortgages, which is lower than its peak of 15 percent in December 2011 but still more than double its normal level of 5 percent.’”
The 5% number is BS. As I recall in a MBA whitesheet, the long term trend is 1% give or take a fraction of a percent.
That’s right, for prime loans 1% would be terrible. And they’re all prime now, right? From the CA link:
“Of all the properties that are actively in foreclosure in California right now, 64 percent of them are on loans that were originated between 2004 and 2008,” says Blomquist. “Which tells you most of this increase we’re seeing is linked still to this last housing crisis.”
Hmmm, so 36% aren’t old loans. Nice switcheroo there.
Yea this will end well….
http://wallstreetonparade.com/2015/12/regulators-banks-are-now-making-riskier-loans-just-like-before-the-crash/
‘The Office of the Comptroller of the Currency (OCC), which regulates national banks, including the behemoth Wall Street banks that either blew themselves up or became part of shot-gun marriages during the 2008 crash to avoid outright collapse, issued a warning yesterday that credit risks are rising at banks. The rising risks are the result of a loosening of loan underwriting standards, which, says the OCC, “reflects broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis….”
‘The first question that comes to mind from this report is what good is increased capital at the mega banks if the banks are simultaneously increasing the riskiness of the loans on their books. The next question is why the regulators have sat back and watched this risk grow over the past tumultuous year without nipping it in the bud. And the final question is what does the Financial Stability Oversight Council (FSOC) – the coalition of all the bank and Wall Street regulators that huddle together regularly in secret – plan to do about this growing threat to financial stability.’
‘As it turns out, FSOC is well aware of the growing risks at the banks. Its ingenious plan is to take the same action regulators took going into the 2008 crisis: to “monitor” the imprudent risk-taking rather than stopping it. According to FSOC’s 2015 annual report, it’s well aware of the following: “The historically low-yield environment continues to encourage greater risk-taking across the financial system…Banks, credit unions, and broker-dealers have lower net interest margins (NIMs), leading some firms to increase risk by holding longer- duration assets, easing lending standards, or engaging in other forms of increased risk-taking. For example, federal banking agencies have found serious deficiencies in underwriting standards and risk management practices for certain leveraged loans…”
‘Where does the OCC think the rising risks are concentrated? It says it’s “primarily in commercial loan products,” writing as follows in yesterday’s report: “Thirty percent of commercial loan products reflected increased credit risk, compared with 27 percent in 2014. Over the next 12 months, examiners expect credit risk to increase in 50 percent of commercial loan products, and examiners expressed concern with this anticipated level of risk in 73 percent of the products.”
‘What is motivating banks to assume this increased risk at a time of market convulsions, a potential tightening by the Fed, and a doubling of defaults in junk bonds year over year? According to the OCC report, “Strong competition and ample market liquidity caused banks to reassess their risk tolerance and market strategies to remain competitive.”
‘And, finally, the OCC slips in this worrisome detail: only 32 percent of the banks in its survey (which includes the largest 19 banks in the U.S.) are considered to have “conservative” underwriting standards.’
have the new tax bills come out for chighetto?
17% raise for teachers= bk
Salem, OR Housing Craters; Prices Plunge 11% YoY
http://www.movoto.com/salem-or/market-trends/
“Much of that construction will come from national builders who have flooded the Fort Collins market and control the majority of available building lots, said Eric Holsapple, founding member of the Everitt Real Estate Center.”
The problem seems more one of overinvesting than under building.
“Data analysed in a new report indicates about one in five investor-owned properties in Melbourne are unoccupied.”
This is over investment: Too much real estate owned by those who don’t need it as a place to live.
‘Australia’s three-year property boom is leaving Melbourne awash with empty homes. In the country’s second-biggest city, growing numbers of local landlords and absent overseas owners have locked up their properties — forgoing rental income as they focus instead on price gains, a report by Prosper Australia said.’
‘Some 82,724 properties, or 4.8 percent of the city’s total housing stock, appear to be unused, said the report, which estimated occupancy rates by gauging water usage. In the worst-hit areas, a quarter of all homes are empty, said Prosper.’
‘Driven by a wave of Chinese buyers and record-low interest rates, average home prices have soared to about A$700,000 ($505,000) in Melbourne and around A$1 million in Sydney. But with prices now cooling, the empty accommodation also masks a hidden glut of supply that could worsen any housing slump.’
“Those properties need to be utilized,” said Catherine Cashmore, author of the Prosper report, Speculative Vacancies. “Having property sitting vacant has a very high cost on the economy. It’s very destructive to our national prosperity.”
empty homes= lower tax base
see coastal areas for best results
“How can they get its people to buy more houses? China has a surplus of them. Economists generally agree that most Chinese cities are ringed with empty apartment buildings and residential developments with varying degrees of completion, from projects where the ground hasn’t been broken to fully finished apartments waiting for someone to move in.”
Take in Syrian refugees who need a place to live; problem solved.
‘Seven years after the housing bubble collapsed, Wall Street’s appetite for riskier mortgages is returning. Billionaire John Grayken’s Lone Star Funds issued last week a small batch of residential mortgage-backed securities tied to borrowers with weak credit, the second known private offering of its kind to be sold since 2008.’
‘It follows a similar offering completed by the firm in August, which was viewed at the time as a post-crisis milestone, signaling a re-opening of bond markets for non-prime mortgages. Since the U.S. housing crisis, Wall Street’s mortgage-securities issuance has been limited to bundling old, soured debt or big loans made to the wealthiest Americans.’
‘The only securities backed by new loans to delinquency-prone borrowers have been created by government-sponsored entities like Fannie Mae and Freddie Mac and are insured by taxpayers. Investment firms like Lone Star are betting they can generate returns by buying up mortgages made outside regulatory guidelines, which would encourage lenders to offer the loans to borrowers.’
Here it is again:
‘The only securities backed by new loans to delinquency-prone borrowers have been created by government-sponsored entities…insured by taxpayers’
And:
‘which would encourage lenders to offer the loans to borrowers’
It’s almost like “the government” is going way out of its way to make bad loans or goose the housing market, I’m not sure. But there is something going on here.
Does central planning result in a mismatch of housing demand and supply?
What could be done to remedy this?
‘Affordable developer banking on huge rent hikes in Harlem — despite rent-regulated status’
“Value enhancement plan” at L+M, Savanna’s Savoy Park includes renovation of 800 units’
‘One of the city’s top affordable housing developers is seeking partners to share in a giant revenue bump it reckons is possible at a large Harlem housing complex, despite the fact that all its units are rent-regulated.’
‘The offering memo, downloadable on TRData, indicates that 800 of the units are ripe for pricey renovations, allowing ownership to increase monthly average rents by $912, for a future gross potential rent increase of $9 million annually. This means the partners hope to bring in nearly 40 percent more in rent revenue once they execute their plan.’
Ben;
this is why you see $3000 viking stoves tile bathrooms, in a 6th floor walk up, there is nothing stopping a landlord from luxurizing a crappy apartment…
then add MCI major capital improvements like new security system new fire escapes new doors andersen windows even add new laundry Jacuzzi in the basement and all tenants must pay for it….ill check but it always was 1/40 of the cost added per month FOREVER!
then when it gets to $2000 a month it can be deregulated
some of these elcheapo apartments still have barely 40-60 amp service, so you cant run an air conditioner and must else at the same time. they usually have only 3-4 15 amp glass fuse circuits…
——————
According to state guidelines, landlords are allowed to make a permanent rent increase equal to 1/60th of the cost of the “Individual Apartment Improvement”, or IAI — even if the units are stabilized.
Collapsing global credit bubble rages on
“China ‘Stealth’ Devaluation Continues - Yuan Plunges For 6th Day, Default Risk Soars, Fosun Bonds Crash”
http://www.zerohedge.com/news/2015-12-10/china-stealth-devaluation-continues-yuan-plunges-6th-day-default-risk-soars-fosun-bo
‘Imagine opening the door to your brand new home only to discover it’s uninhabitable and a health hazard. Well that’s exactly what happened to a group of new homeowners from Xindeng town in Hangzhou, east China’s Zhejiang Province.’
‘Their newly-built villas have wires and cables running straight through the middle of them after village committee and utility companies had failed to coordinate their activities, reports The People’s Daily Online.’
You have to look at the pictures.
A classic.
It is pretty unbelievable.
“You have to look at the pictures.”
The sub didn’t have the time to wait for a change-order and as-built drawings, so they built it according to spec to get paid. Git ‘yer done!
Caveat: Lower prices is never a crisis. The crisis is rigged and fixed prices at grossly inflated levels. The solution is always falling prices to dramatically lower and more affordable levels.
“Copper, Aluminum And Steel Collapse To Crisis Levels”
http://davidstockmanscontracorner.com/copper-aluminum-and-steel-collapse-to-crisis-levels/
Next up: Inflated housing, automobiles
….. as I was saying….
“Retail Sales Growth Tumbles To Weakest In 6 Years As Auto Sales Drop”
http://www.zerohedge.com/news/2015-12-11/retail-sales-growth-tumbles-weakest-6-years-auto-sales-drop
And this too…
http://www.zerohedge.com/news/2015-12-11/crushing-auto-makers-dreams-2-depressing-charts
I mean really, Just drop your prices and I bet you’ll find moar buyers! I’d buy a new car for half the current price. It’s like they enjoy playing a game of chicken they can’t win!
Did we stop buying Toyota trucks for ISIS?
da bear
My son wants a Toyota Tacoma pickup… reasonable request. We have been browsing Craigslist, and a 10-yr old Tacoma with 180,000-miles fetches $8,800 these days! Fugg’n insane!!
“The Fed’s
In A BindBlind: The Cluelessness Of The Macroeconomic Establishment”http://www.zerohedge.com/news/2015-12-10/feds-bind-cluelessness-macroeconomic-establishment
“OPEC Production Hits Three-Year High As Oil Price Continues Slump”
http://www.zerohedge.com/news/2015-12-10/opec-production-hits-three-year-high-oil-price-resumes-slump
OPEC….. On behalf millions of typical consumers, I’d like to thank you for falling retail fuel prices to dramatically lower and more affordable levels.
“The Global Economic Reset Has Begun”
http://www.zerohedge.com/news/2015-12-09/global-economic-reset-has-begun
*And you all heard it right here on the HBB here well over a year ago.
Did you prepare by liquidate assets and get out of debt?
Plano, TX Housing Craters; Prices Plunge 15% YoY
http://www.movoto.com/plano-tx/market-trends/
Miami, FL Housing Craters; Prices Plummet 9% YoY
http://www.zillow.com/downtown-miami-fl/home-values/
‘New home permits taken out by home builders for Phoenix-area construction were up almost 77 percent in October compared to a year ago and are up more than 46 percent year-to-date versus 2014. But the volume of new home sales, while up, is not at the same robust pace, according to the latest numbers from the RL Brown Housing Reports.’
‘The median price for a new home in the Phoenix area is $302,792 up 3.9 percent from a year ago. The median price for an existing home is $200,000, a flat 0.7 percent gain from 12 months ago.’
‘Santa Rosa County’s growth doesn’t appear to be slowing down anytime soon. From Navarre and Gulf Breeze all the way to Pace and Milton, new subdivisions are in the works to bring hundreds of houses to the constantly developing county.’
‘In Pace, 300-plus homes are projected to be built between two recently approved subdivisions, joining hundreds of residences already coming through other developments. Another 170-lot subdivision in Milton is also under review by the county’s engineering department.’
‘But unlike the unsustainable housing development during the 2005-2006 time frame, which left some subdivision plans on the shelf or in foreclosure, Assistant County Engineer Michael Schmidt said the recent growth is steadier and better supported.’
“We’re definitely seeing more subdivisions, more development on the commercial side that comes through here, too,” Schmidt said. “So it’s a nice, sustainable growth.”
‘And with neighborhoods often built close together, Schmidt said the county has broadened its approach over the years. “What we’ve learned and what we’ve gotten more attuned to is the bigger picture,” Schmidt said. “Subdivisions now aren’t so spaced apart as they used to be — they’re joined at the hip, if you will. They’re kind of coming in one next to another, so you just kind of have to think bigger picture and more than one subdivision.”
‘Real estate experts predict that more existing homes will sell in Manatee and Sarasota counties in 2015 than during any other year in history. On a pace that the president of the Realtor Association of Sarasota and Manatee calls “historic,” Sarasota County is expected to exceed an all-time high of 11,550 home sales by year-end.’
‘Matthew DiAndreth, a Pittsburgh physician, and his wife, Carmela, purchased a lot in The Concession in East Manatee for $326,000 in July. The couple is feeling less pressure on the selling side of the market. DiAndreth said he put the couple’s current home in Venice up for sale a month ago at a price somewhat higher than similar homes in the market.’
‘They’ve already had a number of showings, but are in no hurry to sell as their new home in The Concession won’t be finished for another nine months.’
‘During October, the biggest increase by housing category came in Manatee County condo sales, which saw median prices rise by 29.7 percent year over year. The median price of a single family home was up 17.9 percent year over year in Sarasota County and 12.7 percent in Manatee County.’
‘Those sorts of increases might not continue. Stafford Starcher, president of the Realtor Association, said he expects the market to slow through 2016 and 2017. He believes inventories will expand in the coming months as more sellers bring their properties to market.’
“Word on the street is people are just waiting to put their homes on the market,” Starcher said. “I don’t see us maintaining these types of price increases at all.”
Read more here: http://www.bradenton.com/homes/article47224470.html#storylink=cpy
“‘They’ve already had a number of showings, but are in no hurry to sell as their new home in The Concession won’t be finished for another nine months.’”
I can hear their squealing now. It’s an old script.
they’re going to chase the market down.
classic stupidity & greed.
“The Concession in East Manatee”? It sounds like an outlet mall already. News flash to Pittsburgh physicians: anything built east of I-75 is likely a fungible, unremarkable golf-club subdivision. We’ve already got hundreds of them.
And this guy should know that, because he already owns property in Venice, which straddles the interstate.
That part of the Panhandle is very popular with retired military. No jobs, though.
Milton has Florida’s record 24-hour snowfall accumulation: 4 inches, in March 1954.
is very popular with retired military. No jobs, though ??
Don’t need many jobs other than service….Economy is supported by all the transfer payments from the US treasury…
One reason it’s popular is that the housing is cheap. But I suspect the cost of the new houses being built won’t be a good match with military pensions. Hello, marketing materials in Mandarin!
Ben:
This reminds me of your video post a couple months back in the west PHX area that you made. Alot of housing being built and yet the sound we heard was wind blowing.
‘Construction of new homes in Grants Pass is on the rise, but remains less than a third of pre-recession levels. So far this year the city has issued 75 permits for single-family home construction, a definite improvement from 2011, when new permits hit a low of 18. Even so, it’s nowhere near the pre-recession level of 259 new permits in 2006 and 235 in 2007, the year before the Great Recession hit Southern Oregon like a wrecking ball.’
“I remember we went through maybe a five-year period where we hardly built any new houses in the city or in the county,” said developer Gary Jantzer, CEO of Northridge Homes. “You’d be mindblown: Absolutely nothing happened.”
‘Jantzer said his company is just completing the tail end of several small subdivisions held over from the recession, which disrupted the housing market across the country even after it ended in 2009. “There was no demand, so they sat here until there’s been a new demand and prices have finally gotten back to a point where we can afford to build on them again,” Jantzer said.’
‘Jeff Crockett, owner of Grants Pass Realty and the real estate sales broker for Valerian, said homebuyers are now buying homes before they are even finished. “When they’re about a month away from being finished, people are more comfortable doing contracts,” said Crockett. “A couple pre-sold before the ground was broken.”
‘The West Loop is hot with trendy restaurants and new tech offices, and now a shortage of family-size condos is leading to bidding wars and higher prices.’
“I’m being contacted repeatedly by brokers on behalf of their buyers wanting to know about any larger units coming to market,” says Berkshire Hathaway KoenigRubloff agent Cindy Wilson. “Interest in three-beds and two-beds with a den is off the charts.” Wilson sold two 2,200-square-foot units at 850 West Adams Street this summer—one for more than $100,000 above its $699,000 asking price, the other before it had even posted to the Multiple Listing Service.’
‘How quickly are prices going up? A three-bedroom loft at 16 North Carpenter Street sold for $548,000 in August 2013 and again for $825,000 in June of this year. Another, at 6 North Throop Street, closed for $473,000 in January 2012 and $715,000 this July.’
“We went to see a three-bed at 14 North Peoria on its first day on the market and wrote up an offer that night,” says Baird & Warner’s Clare Zaro. “By the next day five other offers had come in.” They beat the competing offers only by inserting an escalation clause into their offer, pledging to best the top offer by a certain amount—a risky move, but an attention grabber. They ended up closing for $635,000, $40,000 above list price.’
“You don’t see as many bidding wars in areas like Lincoln Park, because sellers come right out of the gate with high prices,” Zaro says. In the West Loop, sellers have recently listed for lower prices in hopes of triggering a bidding war.’
West Loop not 15 years ago - cepting Oprah’s Harpo studios - was a vast wasteland of empty lots and crime. Now not so much. Very expensive there in the midst of the new hipster land.
When I re-visited Chicago this summer it was pretty obvious that a lot of money had poured into certain neighborhoods. Even the el seemed cleaner. And I did appreciate the train link to Midway airport, which didn’t exist twenty years ago.
‘The Pleasant View Estates development is one of the larger housing projects undertaken in Clark County since the Great Recession slowed homebuilding to the barest trickle. It’s not that homebuilding stopped, but most of what was built was a carryover from boom-time projects of the early to mid-2000s.’
‘Home construction is picking up again, especially in unincorporated areas lying outside city limits but within growth boundaries intended to contain urban-style development. “There’s pretty high builder optimism,” said Jack Harroun, president of the Building Industry Association of Clark County.’
‘By of the end of the third quarter this year, Clark County issued 947 permits for single-family houses, the most since 2007, when it issued 1,245 permits for the year. The next year, the housing bubble burst. “We tanked big time,” said Marty Snell, director of Clark County’s community development department. But the trend now is upward. Part of his job is to sign off when property in unincorporated areas goes through the subdivision process.’
“I used to get them more sporadically, and I’m getting them fairly consistently now,” Snell said.’
He’s not the only one affected by the uptick. Milada Allen, president of the Felida Neighborhood Association for the past 10 years, said her phone is ringing more often as projects like the one off McCann Road get underway. “Our phone calls about transportation impacts and stormwater runoff have increased in the past year,” Allen said. She estimates they’ve quadrupled.’
‘One of China’s top entrepreneurs, the chairman of the Fosun conglomerate that owns Club Med and other businesses in Europe and the U.S., is assisting Chinese authorities with an investigation, his company said, a possible sign that an anti-corruption campaign is widening beyond state companies.’
‘A series of figures in China’s securities industry have disappeared or been detained since August after authorities launched an investigation following a plunge in Chinese share prices in June. Fosun, China’s biggest privately owned conglomerate, and its pharmaceutical unit had suspended trading of their shares Friday in Hong Kong. Phone calls to Fosun’s media and investor relations departments weren’t answered.’
‘Fosun won a bidding war this year to take over Club Mediterranee, the French resort operator. Last year, it paid 1 billion euros ($1.1 billion) for Portugal’s biggest insurance company, Caixa Seguros. In the United States, it owns Meadowbrook Insurance Group Inc., 20 percent of insurer Ironshore Inc. and the 60-story office tower at 1 Chase Manhattan Plaza in New York City. Guo has a net worth of $7.8 billion, according to the Hurun Report, which follows China’s wealthy.’
‘A court in Shanghai said in August he had “inappropriate connections” with the chairman of a state-owned supermarket chain, Wang Zongnan, who was sentenced to 18 years, according to Caixin. The court ruled he misused 195 million yuan ($31 million) of Shanghai Lianhua Supermarket Holdings Co.’s money to help two other companies invest in real estate.’
‘The court said Wang misused his position “to seek benefits for Fosun Group,” according to Caixin. In exchange, the court said, Guo sold two villas to Wang’s parents at low prices. Fosun denied any impropriety and said the villas were sold at market prices.’
‘In China’s state-dominated economy, many entrepreneurs make deals with officials or state industry managers to gain government licenses, contracts or financing, said Zhang Tianyu, a specialist in corporate governance at the Chinese University of Hong Kong.’
“This is how some entrepreneurs get into trouble once they have an anti-corruption campaign,” said Zhang. Zhang said that in a series of deals in Shanghai, Fosun has bought stakes of less than 50 percent in state-owned companies but gained management control. He said that unusually favorable arrangement reduced the amount of capital Fosun had to tie up in the company while making it a partner of state managers.’
“What we guess is that someone should be helping him to make these transactions,” said Zhang. “Without more evidence, we don’t know who this is. A politician, or maybe a group of people.”
‘On Monday, China’s biggest brokerage, state-owned Citic Securities Co., said it could not contact the two managers in charge of its China and international investment banking business.’
Houston, TX Homes for Sale 31,652
Houston, TX Price Reduced Homes for Sale 9,919
http://www.realtor.com/realestateandhomes-search/Houston_TX/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home
31% of sellers in Houston TX reduced their price at least once
$36, we hardly knew ya. Hi Dan!
http://finance.yahoo.com/q?s=clf16.nym
LOL….He would get crucified if he showed up here again particularly after he ran away from all his predictions…
From the RealtyTrac article on TX foreclosures Ben referred to above:
“But the company said to keep things in perspective. Ten years ago, during the height of the mortgage crisis, there were about 6,000 foreclosure filings per month. Now, that number is about 1,600 per month. And Texas ranks 120th out of 214 markets.”
Ten years ago was the height of the mortgage crisis?!! I was here on this blog ten years ago. At that time no one but us and a couple of other websites were pointing out the absurdities going on. Officially, everything was copacetic. Now, they’re rewriting history and back-dating it. They just sort of slip that in there.
“Manhattan Vacancies Hit 9-Year High”
http://www.zerohedge.com/news/2015-12-11/has-nyc-real-estate-peaked-manhattan-vacancies-hit-9-year-high