January 31, 2016

The Statistics To Confirm, Or Alter, What You Know

A weekend topic on a piece written by Bill McIntosh - a full-time realtor in Nevada for 20 years. It’s in The Spectrum. “Michael Lewis wrote ‘The Big Short,’ a best-selling book about the recent housing and credit bubble, that has since been developed into a movie. Near the beginning of the film, a Mark Twain quotation fills the screen, ‘It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.’ The start of a new year in Mesquite is usually the peak season for new listings and hope for increased prices from escalating demand. During the first three weeks of this year, 77 new listing were taken, plus 14 added back-on-market properties, while just 35 single family homes, townhomes and condos accepted offers. Total active listings stood at 314, and this figure was just 16 properties short of the 2015 high.”

“In 2005, near the top of the market, a Mesquite property was purchased for just under $200,000. Slightly over a year later, it became an active listing at a price that would allow the owner to make a very slim profit. It remained listed at that price for more than a year without a buyer.”

“Now, 2006 is regarded as the year prices started to fall. Five years later, and now owned by the lender, this property sold in the low $100,000 range. I am sure the owner that lost the property ‘knew for sure,’ in 2005, that prices would continue to rise for a number of years.”

“Of the 314 active listings, 98 have been listed between 30 and 100 days, 76 between 100 and 200 days, 47 listed 200 to 365 days with 17 over a year. These numbers only represent the current listing period, many have been listed more than once with various real estate offices.”

“While the housing bubble was inflating, only two or three savvy investors took the time to examine the actual loans supporting Wall Street’s mortgage-backed securities or talk to the rating agencies that were placing profit ahead of accurate ratings. The devil can be found in the details if one takes the time to review statistics.”

“With well over 300 listed resale properties, and numerous new home developments building a variety of models, Mesquite has more than six months of supply in real estate at the current rate of absorption – or a buyer’s market demanding competitive pricing for success. Your agent has the statistics to confirm, or alter, ‘what you know for sure.’”

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Comment by Professor Bear
2016-01-30 05:03:54

“During the first three weeks of this year, 77 new listing were taken, plus 14 added back-on-market properties, while just 35 single family homes, townhomes and condos accepted offers. Total active listings stood at 314, and this figure was just 16 properties short of the 2015 high.”

A big difference between real estate markets and stock markets is the existence of centralized stock exchanges that reflect up-to-the-minute accounts of market activity which are electronically disseminated through MSM outlets on the Internet to every corner of the developed world.

By contrast, no such gauges of current market activity exist for housing, at least to my knowledge. For all we know, the next housing crash might already be underway, in perfect sympathy with the January stock market panic, but broad indexes like Case-Shiller won’t reflect this for months.

Comment by Blue Skye
2016-01-30 06:00:54

“a buyer’s market”

It’s the Spring selling season, which comes early in Mesquite. Could he have said buyer beware any more politely?

Comment by Jingle Male
2016-01-30 14:20:01

Tertiary markets are the most vulnerable and feel the downturn when others haven’t. Mesquite is a subset beyond tertiary!

Comment by Mafia Blocks
2016-01-30 15:14:36

Speaking of CS. Sure looks like housing never hit bottom.


Comment by Kidbuck
2016-01-31 05:58:05

No reason to expect a different generation, a different pool of individuals, to allocate their resources in the same way as people in the past. Two incomes now more common, fewer children now more common, tastes in many areas of life simply can be different. Have any other tastes or values changed in the last 30 years?

Comment by Mafia Blocks
2016-01-31 06:41:57

Nor are there any reasons to expect the price to permanently deviate 300% from long term historic price and input costs.

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Comment by Karen
2016-01-31 10:33:51

The decrease in home ownership is definitely more of a price than a “changing tastes” issue. Same with teenagers not wanting to get drivers licenses. It’s because of the increased cost of owning a car. Basic needs and desires don’t really change.

Comment by The Central Scrutinizer
2016-01-31 11:29:58

Kids have cell phones and uber now, which makes a car a lot less valuable to them.

Comment by Mafia Blocks
2016-01-31 11:35:55

Right. People choose to eat beans and rice now because steaks are less valuable to them.

Comment by rms
2016-01-31 12:29:53

Ain’t carp, boy… datz bugle mouth bass!

Comment by Karen
2016-01-31 12:33:49

“Right. People choose to eat beans and rice now because steaks are less valuable to them.”

Exactly. And the lengths some people will go to justify this “logic”, including many posters right here on these boards…

They really twist themselves in knots

It’s all BS

Cell phones and uber do not make people want cars less. I have a cell phone and live in an area serviced by uber, but these do not replace the convenience of having your own car. You have got to be kidding.

The only reason someone would choose not to have a car is because of cost: purchase cost, insurance cost, parking cost (in places where you have to pay to park), tolls, gas, maintenance, the ever-present-threat of traffic tickets, etc.

There is no “new economy” and basic needs and wants do not change. We only change our decisions regarding these in response to market forces (cost-benefit).

People will, of course, lie to themselves and others. Most people, including teenagers, don’t want to say they won’t do something because they can’t afford it. They will turn it around and claim they just don’t care about it.

Can’t blame them. People don’t want to admit to being victimized by forces they can’t control.

Just wait until the cost of cars and houses plummet to a reasonable price and watch how fast all these same people go buy them.

Comment by The Central Scrutinizer
2016-01-31 13:36:55

It was just an observation… No need to get upset.

Comment by Mafia Blocks
2016-01-31 16:49:48

Your contortions are rivaled only by Rental_Fraud.

Comment by Karen
2016-01-31 18:39:52

“It was just an observation… No need to get upset.”

It’s not an observation, it’s a lie.

Comment by Professor Bear
2016-01-30 05:23:08

“With well over 300 listed resale properties, and numerous new home developments building a variety of models, Mesquite has more than six months of supply in real estate at the current rate of absorption – or a buyer’s market demanding competitive pricing for success. Your agent has the statistics to confirm, or alter, ‘what you know for sure.’”

We saw some old friends over the holidays, a couple who were headed to Mesquite after the New Year to visit the woman’s family. I’m wishing we could reconnect now, as the real estate situation there sounds fascinating and a first-hand account is usually most informative.

Comment by salinasron
2016-01-30 07:54:56

Here in the Salinas area the high end pricing seems to have slowed. However, HD has been full of cars since Sept last up into early Jan of this year. It seemed more like small DIY type projects for the most part. However a lot of contractors were in and out too. I can’t remember it being so busy in the last 5 yrs. I don’t know if it’s the rain or lack of money now slowing things down. Field hands not getting in the fields with the mud (rain almost weekly). Can’t get a roofer as all are busy and not answering phones and the follow up work is substandard. On the other hand flooring businesses have a supply of people rotating through the doors (Woods and tile).

Gas $2.15 gal./ enjoying life and weather/ weekly jaunt into Carmel to sit and eat by the ocean.

Extended family and old friends still taking multiple trips/cruises to Europe, Africa, Greece and Turkey.

Comment by Mafia Blocks
2016-01-30 07:58:32

Good to know they’re all going deeper in the financial hole by throwing good money after bad on a depreciating asset like a house.

Santa Cruz, CA Housing Prices Dive 4% YoY As Excess Housing Inventory Balloons


Comment by Jingle Male
2016-01-31 05:57:10

It is a great time to travel using the American dollar. The currency is stronger than I have ever seen it. 30% discounts in Europe, 45% in Mexico. Wow.

Comment by Mafia Blocks
2016-01-31 06:49:26

Remember….. Hold onto every dollar you’ve got, liquidate assets for whatever they’ll fetch and get out of debt.

Especially in your case Jingle_Fraud.

Comment by Senior Housing Analyst
2016-01-30 08:44:36

Houston, TX Real Estate and Homes for Sale-35,037 properties found


Houston, TX Price Reduced Homes for Sale-8,870 properties found


25% of Houston area sellers slashed their price at least once

Comment by taxpayers
2016-01-30 09:51:20

The reduced price ratio doesn’t move much as Houston will have all sellers slashing and seattle not so much.

Comment by Mafia Blocks
2016-01-30 10:23:14

Remember…… Current asking prices of resale housing are 300% higher than historical trend and double construction cost.

Comment by azdude
2016-01-30 12:41:14

its a sellers market still after like 7 years dude. people are lining up for a chance at some free equity.

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Comment by Mafia Blocks
2016-01-30 15:05:18
Comment by Ben Jones
2016-01-30 09:04:14

‘Single-family home sales grew 16.4 percent in November by posting 2,210 sales, continuing a very strong year for Connecticut’s residential real estate market, according The Warren Group, publisher of the Commercial Record.’

‘While overall sales grew from the November 2014 mark of 1899, median sales prices decreased 8.4 percent, slipping from $250,000 last November to $229,000 in November 2015. Median prices have fallen or remained flat 23 out of the last 25 months, starting with November 2014. March 2015 (3.1 percent) and February 2014 (4.9 percent) was the only two months of year-over-year median price increases. November’s sales continued the hot market; year to date, there have been 26,846 single-family home sales, a 14.4 percent increase from the 23,464 through the first 11 months of 2014.’

“It has been very much a buyer’s market in Connecticut,” said Timothy Warren Jr., CEO of The Warren Group.’

‘There were 578 condos sold in Connecticut in November 2015, an 8.2 percent rise from November 2014, which had 534 condo sales. The median price for a condo was $158,000, a 6.0 percent decrease from the median in November 2014 of $168,000.’

‘Through November there were 7,165 condo sales in Connecticut, a 12.7 percent increase from the 6,358. The median price for a condo through November was $160,000, a 2.9 percent decrease from the median of $170,000 through the first 11 months of 2014.’

Comment by Ben Jones
2016-01-30 09:06:47

‘these numbers only represent the current listing period, many have been listed more than once with various real estate offices’

Recall the North Carolina appraiser who wondered out loud why, with a two month supply of houses, there were such an abundance of concessions from sellers.

Comment by Ol'Bubba
2016-01-30 10:19:54

“Recall the North Carolina appraiser who wondered out loud why, with a two month supply of houses, there were such an abundance of concessions from sellers.”

It comes down to cash to close the deal. Some (most?) of the concessions were in the form of contributions toward closing costs.

Comment by SD_LI
2016-01-31 11:36:48

Ben, if you happen to still have the link to what this North Carolina appraiser said, please do post it. Thanks!

Comment by Ben Jones
2016-01-30 09:11:17

‘Don’t expect Charlotte’s apartment boom to slow down anytime soon. That’s the conclusion at the Greater Charlotte Apartment Association’s 2016 forecast. The factors behind the boom aren’t cooling off, and developers plan to keep building.’

‘In case you’ve missed the forest of cranes and new construction: Charlotte is in the middle of a record-breaking boom in apartment construction. According to the latest numbers from Real Data, more than 12,300 units are under construction with about 13,500 more planned.’

‘Despite the flood of new supply, vacancy rates remain low due to strong demand, and that’s giving landlords the ability to push rents higher. The average apartment rent in Charlotte hit $1,000 last year for the first time, straining affordability.’

‘The level of amenities expected by renters in new, high-end apartments keeps going up. Pet washing stations, dog walkers, dry cleaning and laundry delivery, package storage and high-end demonstration kitchens were all cited as important features.’

‘Malcolm McComb, vice chairman of brokerage CBRE, said institutional investors and private equity firms with billions of dollars to spend are increasingly looking to acquire and finance apartments, as many other assets are more volatile and aren’t providing good returns. And federal tax rules changed late last year will make it easier for foreign investors to pile money into the U.S. apartment market, he said.’

‘With North Carolina’s population growth ranked fourth among states and many of those new people streaming to Charlotte, developers are confident the renters will be there to fill new apartments. What worries them more than the market fundamentals are external risks: Stock and oil price declines, an economic slowdown in China, political turmoil, and, as Crescent Communities vice president Ben Collins put it, “the R word,” or another recession. An unexpected shock could pressure apartment developers with loans coming due at that time.’

Comment by Ben Jones
2016-01-30 09:16:15

‘The Valley is home now to a record number of townhome, condominium, and loft developments. In 1997, Phoenix topped the nation’s list of cities with vacant landfill; today, builders are waging bidding wars to get hold of the same empty parcels. Likewise, older buildings — even the eyesores — are being snapped up for adaptive reuse programs that turn them into high-density infill developments.’

‘East and West Valley cities are seeing their own infill developments, as well: Glendale, Gilbert, Chandler, Mesa and Peoria are all selling condominium developments faster than single-family houses. But the downtown condo projects — which include Phoenix high-rises at Portland on the Park, Scottsdale’s concrete-and-steel Envy Residences and the downtown Aerium lofts — have the highest coming-soon profile.’

‘The median price of new, high-end downtown condos, according to a recent report in the Arizona Business Journal, is up 15 percent. That increase puts new downtown condos at an average price of about $150 per square foot, up from $123 in February 2013. Most offer fees-funded amenities including common-use areas, gardening, and some maintenance. Swimming pools and clubhouses are replacing considerations like curb appeal in these condos and other low-maintenance, high-density housing developments.’

‘ Scott Jarson of Jarson and Jarson, a real estate firm that specializes in the sales and marketing of unique Valley homes, has some ideas. “I think the recession made Phoenicians rethink their priorities and their lifestyles,” he says. “A desire to spend less led to a less-is-more ethic.” “We’re getting more calls for new buildings that are in town,” Jarson says. Right now, that means more condos. It also means that the city is losing some of its best sites to deep-pockets builders who can afford the highest bid.’

‘“This is as exciting a time to live in Phoenix as any other in my memory,” says Jarson, who’s lived in the Valley his whole life. “The city is coalescing around a sense of place that we haven’t had for decades. And it’s getting better every year.”

‘But will the Valley’s rush to infill and build high-rise condos lead to a burst bubble down the road? In a Forbes article published early last year, real estate investment advisor Jason Hartman warned that a similar situation in Miami doesn’t bode well for that city. “Miami represents one of the most notorious bubble markets in the United States,” he said. “High-rise condominiums bore the brunt of Miami’s value freefall.” He believes “investing in Miami condominiums is still problematic.” In Miami, 72 percent of its condos are paid for in cash, which isn’t the case in Phoenix or Scottsdale.’

Comment by Ben Jones
2016-01-30 09:18:42

‘Nearly half of Arizona households face chronic financial struggles despite a declining jobless rate and overall progress for the economy, according to a new report.’

‘Some 45.7 percent of statewide households are stuck in a new normal of financial insecurity, unable to build enough savings to last even three months in a pinch despite general improvement in the job market, said the Corporation for Enterprise Development, a group that supports anti-poverty measures. Nationally, 44 percent of households lack three months of savings.’

Comment by Combotechie
2016-01-30 09:40:18

“‘Nearly half of Arizona households face chronic financial struggles despite a declining jobless rate and overall progress for the economy, according to a new report.’”

And that’s because …?

“While U.S. unemployment has fallen to 5 percent, the underemployment rate — which measures part-time workers and those who stopped looking for work out of frustration — is more than twice as high at 10.8 percent. One in four U.S. jobs is a low-wage occupation, according to CFED.”

Comment by Blue Skye
2016-01-30 15:24:55

unable to build enough savings…

What percentage of these households have no debt? What would be the appeal of saving when you are under a burden of relentless debt service and savings have a negative (it would seem to most) return? Aside from generally flat or declining household income for over a decade, our beloved central bank/central planners crushed households by facilitating the doubling of the price of everything they need.

Comment by Neuromance
2016-01-30 20:32:26

What’s puzzled me are the policies which erode people’s purchasing power, which are publicly stated as trying to get people to spend. Policies like inflation or negative interest rates. But… when they erode people’s purchasing power, people are going reduce in their spending, not ramp it up.

It’s truly bizarre.

If they want people to ramp up spending through manipulation of the currency, it would have to be a big enough inflation so that people can see their wealth erode week to week. But then of course, there would be political consequences to that.

The PTB are squealing about Trump and Sanders who are relatively mild in absolute terms. If they caused people’s wealth to significantly erode week to week, they’d really see some truly squeal-worthy actors rise to the national stage.

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Comment by Ben Jones
2016-01-30 20:47:09

‘they’d really see some truly squeal-worthy actors rise to the national stage’

I wonder if they ever think of that.

Comment by Gary R
2016-01-31 07:14:48

And let’s not forget a lot of canadians own homes in Phoenix and with the Loonie weak it could force some selling .

Comment by Ben Jones
2016-01-30 09:26:00

‘During the height of last decade’s housing boom in Los Angeles, developers drew up plans to place luxury condos on top of hotels. The pitch was not only the posh digs, but the hotel services wealthy owners would enjoy without having to leave the comforts of their living room.’

‘Now, some developers are providing over-the-top concierge services to apartment buildings, targeting wealthy renters who want to be pampered but not at the cost of a multimillion-dollar mortgage.’

‘The latest project is from Crescent Heights, a Miami firm that plans to open a long-awaited 40-story luxury apartment tower this summer at the gateway to Century City and Beverly Hills. In anticipation of an August opening, the firm announced a list of amenities for the 283-unit Century City building that underscores how luxury landlords are increasingly looking to do much more than provide granite counter tops and a spa.’

‘The building, which is not attached to a hotel and is known as Ten Thousand, will have a private theater, on-call personal drivers in luxury cars, on-site personal trainers and an indoor lap pool with an underwater speaker system.’

‘Not enough? The Crescent Heights’ tower is also set to have a butler services, a 24-hour concierge and more than 50 full-time employees who will help get residents’ laundry done, coffee brewed, apartments cleaned and groceries delivered.’

‘Roman Speron, Crescent Heights regional manager for the West Coast, said his company is even working on having a private lounge with full bar for tenants. “Everything you can get in a hotel, you can get in this building,” Speron said.’

‘A spokesperson for Crescent Heights originally said rents for the two- and three-bedroom units at 10000 Santa Monica Boulevard would start at $8,000 a month, but Speron later said rents have yet to be set. Regardless of the price, they’ll be expensive and almost certainly unaffordable for the typical renter.’

‘Javier Rivera, a senior vice president with commercial real estate brokerage JLL, said more developers, who he declined to name, are looking at the hotel-like apartment concept for upscale areas, seeing concierge services as a way to charge ever higher rents — especially after the success of shopping center magnate Rick Caruso’s 8500 Burton Way.’

‘Lee Mintz, a real estate agent with Partners Trust in Beverly Hills, said that before Burton Way, if her L.A. celebrity and athlete clients sought such pampering, they had to turn to one of the hotel-condo projects around town. There they could buy or lease a unit at a new crop of projects conceived during last decade’s housing bubble.’

‘But now more options are opening up for folks who have lots of money but may not want, or be able to quite afford, such a multimillion-dollar investment. Rents at Burton Way start at $6,300. “If you can’t afford a $2-million condo and can afford a one-bedroom at $6,000 a month, you [can still] feel like a king or a queen pulling up to the building,” Mintz said.’

‘Crescent Heights scooped up the property in 2010 for $59 million — about half what SunCal had paid — and went to work on its apartment tower, this one designed by Handel Architects, a U.S. firm with an international portfolio. The building is set to welcome the first tenants in August. What the market for ultra luxury rental will be then is unclear.’

‘Major stock indexes have tumbled this year, a decline that hits the wealthy more, since they tend to own more stock. And some economists are warning the U.S. could fall into an recession in the months ahead.’

‘Speron said the company always considers economic downturns in its planning but was building a “luxury product that can stand the test of time.” “We are trying to take care of everything, the things you need to do everyday” he said, adding that way “people can think about tomorrow.”

Comment by The Central Scrutinizer
2016-01-30 20:14:04

Having that concierge hold the door for you impresses the hell out of the ladies.

Comment by Ben Jones
2016-01-30 09:51:52

‘According to data from the latest Equifax National Consumer Credit Trends Report, first mortgage originations for subprime borrowers (consumers with an Equifax Risk Score™ of 620 or below) have shown steady growth from January to October 2015, with more than 312,000 new mortgages originated, totaling $50.7 billion. This represents an increase of 28 percent in number of first mortgage originations and a 45 percent increase in the total balances from the same time a year ago.’

“While there are many characteristics that define a subprime loan, such as the specific terms of the loan and the lender who issues it, credit standards are becoming more accommodating to meet market demand,” said Amy Crews Cutts, chief economist at Equifax.’

‘The industry is also seeing an increase in subprime activity within the home equity market, with the total balance of home equity installment loans originated for subprime borrowers increasing to more than $1.4 billion, a year-over-year increase of 32.7 percent; with the total credit limits on home equity lines of credit (HELOCs) reaching $608 billion, a year-over-year increase of 6.8 percent.’

‘The total balance of first mortgage originations January-October 2015 is $1.56 trillion, a year-over-year increase of 50.7 percent; In that same time, the number of new first mortgages originated was 6.64 million, an increase of 37.4 percent; As of December 2015, the severe delinquency rate (loans that ae 90-days past due, in bankrupty or forclosure), as a share of the total balance of first mortgages, is 1.77 percent, the lowest level since September 2007.’

‘The total balance of outstanding loans in December 2015 is $493.7 billion; The total credit limit of new HELOCs originated in January-October 2015 was $121.6 billion, a 19.7 percent increase from same time a year ago and a seven-year high; and In that same time, the total number of new HELOCs originated was 1.17 million, an increase of 11.8 percent and the highest since 2008.’

‘As of December, the total balances on outstanding home equity loans is $132.7 billion; The total balances originated January-October 2015 was $21.9 billion, a 20.1 percent increase from same time a year ago; and
In that same time, the total number of new home equity loans for subprime borrowers was 652,200, an increase of 24.7 percent and the highest level since 2008.’

Comment by Combotechie
2016-01-30 10:22:47

“While there are many characteristics that define a subprime loan, such as the specific terms of the loan and the lender who issues it, credit standards are becoming more accommodating to meet market demand,” said Amy Crews Cutts, chief economist at Equifax.’”

“credit standards are becoming more accommodating to meet market demand” = more accommodating to DRIVE market demand.

If the term “affordable” is redefined to referring to the cost of monthly payments rather than referring to the price of the house then the price of the house can rise up out of sight as long as the cost of the monthly payments is kept low enough and are kept doable for enough people.

And if the prices of houses rise up out of sight then this rising up out of sight is what will drive the demand.

Comment by Mafia Blocks
2016-01-30 10:27:55

Housing demand is already at 20 year lows as a result of massively inflated prices.

Comment by Double Flip Triple Gainer
2016-01-30 10:53:00

The spring listing season is about to arrive here in the Windy City. And thus far this season is unlike any of the past 8 years. There is just a mass of new construction in the $600K-1.2MM range throughout the nicer burgs. It’s downright shocking, given all of the closed sales you have seen over the past few years are in the $300-550K range. Clearly the builders just didn’t have the margins to build such homes. Unfortunately for them, there are plenty of 10, 20, 30, and 40 year old mcmansions to be sold at the higher end price points. These older McMansions are universally owned by empty nesters that climbed the property ladder in the 90’s and 00’s. And unfortunately for these folks, the 0% returns in their IRA’s and 401K’s just can’t cover the $20-$30k tax bill these shacks require. The wealth destruction over the next 18 months will be a thing of awe. Just a matter of who tips the first domino…the mindless builders or the over-extended baby boomers.

Comment by Obama Goons
2016-01-30 11:37:06

They’re earning buckets of money on anything sold above 150k…… If theycan find a buyer.

Comment by Mafia Blocks
2016-01-30 15:07:23

Less than that. Anyone competitive in this business is profitable at $55-$60/sq ft.

Comment by Double Flip Triple Gainer
2016-01-30 17:04:14

Well do note that these geniuses are out of pocket $350k just for the lot.

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Comment by Mafia Blocks
2016-01-31 06:50:49

Nobody believes that.

Comment by Gary R
2016-01-31 07:25:29

A tear down in my Dad’s burg, just outside O’Hare wanted $100K but the only offer they got was for $40K from a builder. Eyesore still there. (built in 1919)

Comment by Ben Jones
2016-01-30 10:59:42

‘Economist Michael Pettis, a superstar of China analysis, wrote a must-read (but massive) blog post on the state of the Chinese economy and whether planned reforms are likely to work. What Pettis considers a certainty is how the world will know China’s serious problems with debt and overcapacity are being dealt with.’

‘From his blog post: “It is only when credit growth begins to decelerate much more rapidly than nominal GDP growth that we can begin to talk hopefully about China’s moving in the right direction, and it is only when credit growth falls permanently below the growth rate of the economy’s debt-servicing capacity that China will have adjusted.”

‘When companies are paying off debt, they’re not reinvesting or expanding. They’re not hiring people. They may have to lay off workers. Worse, down the line, they may not be able to pay their creditors.’

‘The thing is, the longer this goes on, the less impact credit actually has. According to Bloomberg, every dollar of new credit added to China’s economy adds 27 cents to gross domestic product. Back in 2011 it generated 59 cents. This is hedge fund manager Jim Chanos, the famed China bear and short seller, calls “China’s treadmill to hell.”

Comment by Senior Housing Analyst
2016-01-30 15:35:15

Dallas, TX Housing Market Craters; Prices Plummet 15% YoY On Plunging Housing Demand


Comment by Mafia Blocks
2016-01-30 18:17:15

Because everyone fruit and nut wants to live there

San Francisco, CA Opens Public Open Air Urinals


Comment by localandlord
2016-01-30 18:55:46

Here’s an AP article that showed up in the Locaville times.

For purposes of obscurity I’ve linked the version from the boston globe.


Of the 24 neighborhood that combined walkability, affordability (?) and good public schools, the two that were highlighted were Adams-Morgan in DC and University District in Seattle.

Maybe they won’t notice in Boston, but here in flyover country the word affordable and $650,000 do not belong in the same sentence. I got a good laugh.

Comment by homie
2016-01-30 20:49:33

In the Boston ‘burbs with decent schools, $650K allows you to scrape the bottom of the barrel. We’re talking shitty small condo at that price. Or a 1100 SF house with some terrible flaw. $750K is an entry point to a decent house.

Comment by Ben Jones
2016-01-31 06:57:45

‘Nobody can accuse Elon Musk of not shooting for the stars. The SpaceX and Tesla founder said this week that he personally wants to visit space within the next five years and thinks that his company will launch a mission to Mars by 2025.’

‘Musk said that he had already taken parabolic flights to prepare for space, but had not done much else. “I don’t think it’s that hard, honestly,” he said. “It’s not that hard to float around.”

There’s also no value in it Elon, not anywhere near what it costs to float around. Here comes the big jokes:

‘He said that SpaceX is planning to reveal its next-generation spacecraft. That could be the next step toward eventually sending human beings to the Red Planet — something Musk said he thinks will happen by 2025. Musk thinks it’s vital for mankind to create a self-sustaining city on Mars to protect against human extinction, and also to inspire people.’

“This would be an incredible adventure,” he said. “It would be exciting and inspiring, and there needs to be things that excite and inspire people.”

People will be extinct not long after they got to Mars. And their bones would be falling apart by then anyway. This comic book thing is getting way out of hand. I still contend throwing away money on this scale for goofy stuff like this is a sign of way too many Yellen bucks floating around.

Comment by Mafia Blocks
2016-01-31 07:00:11

What do you expect from a SpaceShot with Charles Ponzi-like notions in his head?

Comment by Ben Jones
2016-01-31 07:34:19

It’s Sunday morning and I want a can of almonds within the hour Jeff! Wasabi. No, smokehouse!

‘Apple Inc. has been known for creating entirely new product categories. But that hasn’t been the case with the Apple Watch, Juniper Research analyst James Moar said in a post.’

‘While Apple AAPL shipped 3.9 million so-called wearables in the third quarter, giving it a 19% market share versus Fitbit’s 22%, according to the most recent data from industry tracker IDC, Moar said consumers simply don’t see a need for a smartwatch. And that means the market for such gadgets “still doesn’t know its overall direction,” he said.’

‘Of the consumers in a recent Juniper Research survey who indicated they don’t plan to buy a smartwatch in the next six months, 30% said it was because they didn’t think they’d use the device. “This is not something that many consumers seem to register as a need,” Moar said.’

‘Shares of Fitbit and Apple have taken a beating in recent months. Fitbit’s stock has plunged 62% in the past six months, and Apple’s has dropped 21%.’

On this:

‘30% said it was because they didn’t think they’d use the device’

What was the reasoning of the other 70%? I watched a video review of this watch and the guy said the best thing about it was “it’s a conversation starter.”

Can we talk? Can we talk about how I threw a bunch of money down the drain so geeks would have something to talk about?

Comment by scdave
2016-01-31 08:38:25

“This is not something that many consumers seem to register as a need,” Moar said.’ ??

Not yet…I surely don’t have any desire to have one and apparently most don’t…However, just like the first Apple I computer


Over time it evolves…Compare the power & image above to todays computers and smart phones…

I watched a program called Studio I.0 the other day…Basically its a Silicon Valley production that interviews some of the game changers here in the valley…Vc’s, scientists,Professors, CEO’s etc…

I saved one program that was discussing the apple watch and fitbit but mostly the apple watch…All agreed that the devise has limited ability and demand but, they also discussed the future evolution of the watch particularly as it would be linked with voice integration…

From all your medical files, monitoring your sugar balance for diabetes, to your general emails it was a incredible futureistic look at what the future may hold for the watch…

Given how we have seen computer power and technology evolve over the last 30 years, and maybe even more so over the last 10 years, I would not bet against this devise going out a decade or so…

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Comment by Ben Jones
2016-01-31 09:00:08

Or maybe it’s a gimmick.


Market Cap: 539.71B

IIRC the market cap was a lot higher last year.

Where are those Mac sales now? Why does Apple feel the need to bet the ranch on China? Why not comfortably profit on the markets it now dominates?

Apple has another problem: The iPad is dying at MarketWatch(Sun 9:39AM EST)
Apple Inc. Is Still Betting Big on the China Market at Motley Fool(Sun 9:30AM EST)
#1 Reason for Apple’s Valuation Debacle - Forgetting That Growth Is What Really Matters at Forbes(Sat, Jan 30)

The last one is interesting. It isn’t enough to be profitable. The stock price depends on trees growing to the sky.

Comment by scdave
2016-01-31 09:28:19

Apple stock could drop another 20-30% and they would still be the 2nd biggest company in the “world”…Google is poised to pass Apple soon…Facebook will likely pass them also…So they are the third biggest…5th…10th ?? IBM is not the cutting edge company they once were either but they still exist and are quite a strong company…

So the iPad has slowing sales…The lap top is also going away…With the power of the phone, you really do not need a mobile devise like the lap top…I use mine for connivence and the bigger key board and screen while I sit on the coach in the morning like right now…

The smart phone is here to stay…As far as betting on China ?? There are two billion reasons to do that…So if apple falls back to being a company somewhat like IBM or Microsoft, whats wrong with that ?? If investors, speculators get taking to the wood-shed on the stock price then thats the price you pay for your speculation…

With all that said and I do not own any stock and never have but I would not bet against a company that has a talented force and 200 billion in cash…Maybe a continued fall in the stock price will be a buying opportunity…

Comment by Mafia Blocks
2016-01-31 10:59:55

Over time these outfits will be relegated to the commodity scrap heap. They’re already whining for monopoly status from DaddyState. They know what’s coming.

Comment by cactus
2016-01-31 12:12:01

At the company party the founder said the world needs bandwidth , no matter what everyone is looking at the cloud computers and the BW to get there and back.

Comment by The Central Scrutinizer
2016-01-31 11:41:33

Space travel is the future of the human race. No space travel, no future.

Comment by rms
2016-01-31 12:48:16

The average person is afraid of heights, can’t balance a checking account, can’t change the engine oil, can’t manage their diet, can’t choose an affordable mortgage, etc., so yes… no space travel.

Comment by The Central Scrutinizer
2016-01-31 13:39:29

True enough. May be that humanity doesn’t deserve a future.

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Comment by Ben Jones
2016-01-31 16:30:47

‘a self-sustaining city on Mars to protect against human extinction’

If you’re going extinct on Earth how long will you last on Mars seeing as how they don’t have self-driving cars there?

Comment by The Central Scrutinizer
2016-01-31 16:47:32

I thought you didn’t care for this kind of trolling tit for tat, and have been trying to honor that. Have I misunderstood?

Comment by Mafia Blocks
2016-01-31 17:17:20

It’s someone elses blog Lola. Smarten up.

Comment by The Central Scrutinizer
2016-01-31 18:46:01

Are you Ben’s alt?

Comment by Mafia Blocks
2016-01-31 19:03:17

I’m Mafia Blocks. You’re Lola among others.

Comment by The Central Scrutinizer
2016-01-31 21:03:48

Comment by Ben Jones
2016-01-31 11:25:09

‘Are some realty agents hyping the pricing information on closed sales they report to their local multiple listing services? And if so, should you care? A first-of-its-kind study by appraisal and real estate experts suggests that maybe you should.’

‘Researchers compared closing documents, which are supposed to indicate the final price in sales transactions, with the prices that agents actually reported to their local MLS and found that in nearly one of every 11 cases (8.75 percent) there were discrepancies. Overstatements of final price exceeded understatements by a ratio of nearly three to one. In one case, the price reported to the MLS was 21.4 percent above the actual closing price.’

‘One of the co-authors, Kenneth M. Lusht, a past president of the American Real Estate and Urban Economics Association, told me that some of the errors could simply be clerical mistakes — “typing errors” — but others could be the result of agents “purposely inflating” the prices they reported to the MLS.’

‘Though the average overstatement was not huge, 6.7 percent, the authors expressed concern that because the home appraisal system depends on accurate price reporting to MLSs, errors can distort appraisers’ valuations. Appraisers use MLS pricing data to identify “comparable” houses to help estimate the values of homes on the market for sale.’

‘Accurate appraisals are important to home buyers because lenders use them to help decide whether to approve their applications. Inaccurate appraisals also pose potential risks for lenders: If values are overstated, they may have less true “collateral” backing the mortgages they make, as they found to their horror during the housing bust of the last decade.’

‘Joshua Hunt, founder and CEO of Trelora, a Denver realty brokerage, said “many agents aim to show a higher closed sale price to show that their list-versus-sold percentage is higher (and) they will use this in their listing pitch to show how great they are.”

‘They do this, Hunt said, by omitting seller concessions — adjustments to the final price that reflect either repairs or closing costs the seller has agreed to fund — from the price they report to the MLS. The MLS doesn’t pick up these intentional misreportings, he said, because “there really is no audit system in place” to spot them.’

‘Bottom line: The jury is out on this one. Maybe the pricing errors found in the study sample were not typical. But maybe errors are more common than MLSs care to admit. As one Virginia appraiser told me, “we find inaccuracies quite often and have to verify information (on prices, square footage, etc.) before we use it.” He said he has seen pricing inaccuracies “more than two dozen times in the past year” alone.’

But there’s no fraud going on today.

Comment by scdave
2016-01-31 11:38:16

Interesting post Ben and I am sure quite true in some area’s of the country…In California, we have transfer tax that is paid at the closing by the title company…This confirms the sales price as documented on the closing statement…All appraisers have access the the MLS…If the transfer tax is inconstant with the reported sale on the MLS the appraiser would follow up on why there is a discrepancy…I could easily see a appraiser turning a agent in for doing this because this just makes the appraisers job that much harder…A licensee at a minimum would get his license suspended by the California Department of Real Estate or more likely revoked…Its a pretty big risk that the agent is running to accomplish the misinformation with a reasonable possibility of getting caught…

Comment by The Central Scrutinizer
2016-01-31 14:03:33

Given the rate these kind of crimes have been prosecuted at, the risk looks fairly minimal.

Comment by Bluto
2016-01-31 12:28:18

Another factor that makes sale prices look bigger than they actually are in some cases is cash back to the buyer from the seller, did this legally via the sales contract when I sold my last place (in Spring 2007 thanks to the HBB), was about $10K IIRC, the title company gave the buyer a check at closing….anyway the recorded sale price was for the full amount and did not reflect the cash back. Locally in California just about all listings use the square footage from property tax records, this is often MUCH less that the actual size and that too can make the price per square foot look much bigger than it really is.

Comment by Mafia Blocks
2016-01-31 14:08:11

Aside from the reporting and recording shady biz, there’s the issue of just how accurate are these appraisals.

Sadly, appraisals are “subjective” because 90%+ of appraisers don’t understand how to develop estimates or perform simple M&L takeoffs. To be clear, they don’t establish a value based on production cost plus profit.

“Subjective” is just nice way of saying they really don’t know what they’re looking at.

Comment by Mr. Banker
2016-01-31 15:09:56

David Lereah: The additional increase in home values (whether real or contrived) acts to seemingly add equity to the home which is something that can be readily and regularly cashed out and spent. It’s as if one’s mattress was filled with hundred dollar bills.

Suzanne: I researched the situation and discovered that Zillow will reflect these higher price valuations and hence people who have already committed themselves to becoming home buyers will be thrilled when they fire up their desktops and click on Zillow and discover that perfect (and even less-than-perfect) strangers have decided that they, the home buyers, have magically, suddenly, and effortlessly become richer.

Mr.Tax Collector: I enjoy the illusion of imagined increases in home values because it helps me to make my numbers.

Comment by Karen
2016-01-31 15:34:50

“But there’s no fraud going on today.”

I suspect there’s a lot of fraud in apartment vacancy statistics as well. I remember seeing an article you posted not that long ago that referred to these statistics as being based on self-reporting by apartment complex managers.

And the article said this in the context of, “we may not have statistics on all apartments in the area because some may be too busy with leasing to report” and I thought yeah right. And who says the ones who do report are telling the truth?

Several times a week I receive flyers in the mail and posted on my door by local “luxury” complexes offering all sorts of move-in concessions. And I’m sure they don’t lower the reported rental rate by the concessions either.

Comment by cactus
2016-01-31 18:14:55

Mid-500K most looked sold already marked off on the map taped to the door and buyers were in talking to agents in the garage turned into show room.

Grand Opening Jan. 30th 2016!

It’s time to discover a new community located in Simi Valley, California. Stratus, by D.R. Horton, will offer 37 new townhomes with up to approximately 2,093 square feet of living space. Anticipated to be priced from the high $400,000s, this community will feature homes with 3 bedrooms, up to 3.5 baths, 2-Car garages, and beautifully-crafted Spanish and Tuscan architectural style exteriors. Interest list now forming.
For more information, please call (805) 285-3629.

Comment by Mafia Blocks
2016-01-31 18:21:18

hmmm… Pre-sale condos.

Sounds familiar.

Comment by cactus
2016-01-31 18:23:23

Bad ratings at consumer affairs for dr_horton


Comment by Mafia Blocks
2016-01-31 19:13:08

“This Is Much Larger Than Subprime - Here Are The Legendary Hedge Funds Fighting The Chinese Central Bank”


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