Demand For Luxury Has Limits
The Los Angeles Times reports from California. “Packed open houses. Bidding wars. Rising prices. That’s the landscape for much of the Southern California housing market as the spring selling season gets underway. ‘Be ready to write the offer on the Realtor’s car,’ mortgage broker Jeff Lazerson said.”
“Sameena Shaikh, a medical researcher, and her husband, Muddassar, who works as a software engineer in Santa Monica, have been searching for a home for about a year but haven’t pulled the trigger. As they surveyed the packed open house they vowed to be less picky. Muddassar explained their new tactic: ‘Let’s just buy something.’”
“Not everywhere in Southern California is red hot, however. Pegi DiRienzo, a Teles Properties agent, said the market has slowed in the corner of Irvine in which she specializes. There are fewer buyers from China than last year, given troubles in that country’s economy, DiRienzo said. ‘It’s going to take a little longer this year to sell properties,’ DiRienzo said. The ultra-luxury market — $10 million and above — has also floundered as international buyers pull back while the economies in their home countries weaken and the U.S. dollar strengthens, said Nick Segal, chief executive of the Partners Trust brokerage in Beverly Hills.”
“‘A fair number of these purchases 12 months ago were aspirational luxury purchases: ‘I now own a home in Los Angeles and it’s my fourth residence,’ he said. ‘Those buyers have dried up.’”
From Hawaii News Now. “Howard Hughes Corporation will begin accepting applications for buyers in a new Kakaako high-rise that’s mostly moderately priced Saturday, sparking an important question: Is the luxury condo market softening? In January, the luxury condo Vida at 888 Ala Moana, planned by a different developer, announced it was scrapping the project because of a lack of sales and increased construction costs. In a letter to shareholders on Wednesday, Howard Hughes CEO David Weinreb said ‘Demand for luxury condominiums in Honolulu, like any market, has limits.’”
The Institutional Investor on Florida. “The South Florida real estate market, which includes Miami-Dade, Broward and Palm Beach counties, has enjoyed a strong rebound over the past six years from the meltdown of 2007–’09. But some analysts say a bubble may be percolating in the condominium market, especially in Miami, which has seen a huge influx of foreign buying.”
“‘South Florida is in a big bubble for high-end condos,’ says Jack McCabe, an independent residential real estate analyst in Deerfield Beach, Florida, who correctly forecast the rout in the 2000s. The bubble is different this time around, he says. ‘Last decade it was U.S. real estate causing a U.S. recession, causing a global recession. This decade it’s a global recession that will end up causing a U.S. recession, causing a decline in the U.S. housing market.’”
From CNBC. “CNBC Contributor Ron Insana thinks high-end housing is headed to crash, particularly in New York where he’s seen a dangerous oversupply, citing slowing demand, especially from foreign buyers. ‘Anything under $3 million, we’re seeing go right off the market,’ Austin Hoffman, real estate agent with Douglas Elliman told CNBC. ‘We’re seeing a lot of price reductions in those higher end properties as listings are not moving as fast.’”
The Oklahoman. “Houses sold faster this winter than last, but for a little less on average, according to the Oklahoma City Metro Association of Realtors. After a bottleneck dating to the Great Recession, new neighborhoods with ready-to-build lots are coming available, said developer-builder Jack Evans, owner of TimberCraft Homes. Houses priced much over $275,000 to $300,000, he said, ‘are a little sticky,’ but he’s not aiming for the upscale market.”
“For all the worry about depressed crude oil prices, job losses and the effect on the economy, Evans said, housing not connected directly to the high-income unemployed isn’t feeling it. ‘That’s part of our strategy. We don’t sell a lot of houses to people who work at Chesapeake,’ he said, but so far this year, ‘I’ve sold three houses to people who work at P.F. Chang’s.’”
KTRH in Texas. “Home ownership is becoming increasingly more difficult for Americans. The average price of a single-family home in Houston in February was just under $261,000. ‘People are not able to afford a home because prices are higher than their actual wages and what they could qualify for,’ says Michael Weaster of Berkshire Hathaway HomeServices Anderson Properties.”
“Weaster says Houston remains relatively affordable compared to other major U.S. markets, and should become a buyer’s market in the coming months. ‘Its all shaking out with oil and the layoffs that have been happening in the last 12 months, I’m starting to see more and more defaults happening within the energy corridors,’ he says.”
The first thing you need to do is set the marks up, and you do this by setting the tone:
“Sameena Shaikh, a medical researcher, and her husband, Muddassar, who works as a software engineer in Santa Monica, have been searching for a home for about a year but haven’t pulled the trigger.”
The tone has been setting in for about year.
“As they surveyed the packed open house they vowed to be less picky.”
The tone is becoming one of urgency.
“Muddassar explained their new tactic:”
This “new tactic” is one that consists of deep thought and consideration and since this couple have been at this for a year or longer they fully understand that whatever decisions they make concerning this issue will carry with it some very hefty financial burdens that very possibly and most probably will endure over a very large stretch of time that very possibly and most probably will cover many decades.
With all this in mind this couple now decides to activate this brand new well thought out and well deliberated “new tactic” of theirs as disclosed to the world by the statement:
“‘Let’s just buy something.’”
They’ll be whining soon. What is it with these Californians? They almost wallow in stupidity about buying houses. I wouldn’t say “just buy something” about a fishing reel.
Do you think people who wallow in stupidity when casting their votes are going to be any more judicious when it comes to buying a house?
I must have missed the part in the article where they voted. Who did they vote for?
RKH is trying to steer the conversation back to politics.
Ignore him.
Why buy today what you can rent for half the price? Buy later after prices crater for 65% less.
“RKH is trying to steer the conversation back to politics.
Ignore him.”
Really? You mean just like you tried to do below?
Complete hypocritical ass.
+1, palmetto
Never underestimate the power of FOMO.
“They
almostwallow in stupidity about buying houses.”Fixed it!
Real estate in California is a way to say you are progressive so you deserve the best sex and at the same time you can get back at the high income and sales taxes of California. Real Estate is like Apple Pie, Chevrolet, etc for Californians. Californians argue over politics but make up and become close friends if you own California property.
What is the correlation between California real estate prices and the tech boom? The average Joe might be able to reap some of those humungous California RE gains by going long tech companies, right /s
“‘Let’s just buy something.’”
As long as there is a fool willing to lend, stupidity will rule until the fools willing to lend finally dry up for good this time.
Neil, please pass the popcorn.
‘Be ready to write the offer on the Realtor’s car’ says the mortgage guy.
The LA Times like articles like this. Every day it’s a mad, mad world in southern California real estate. It does mention there’s over 4 months of inventory. So just why should I write an offer on the UHS car? I’ve got months to decide. It’s like children watching a puppet show.
Four months of inventory doesn’t mean four month of *good* inventory. When I was looking at houses in 2012, there was plenty of inventory but at least half of it had been neglected or actively trashed by lower-middle-class occupants.
Despite what the Property Brothers say, end-consumers simply haven’t saved up the cash the rehab the house they want to live in. There is some competition for a habitable house.
That’s not to say that prices in California aren’t crazy. Maybe Cali real estate is different or newer. But I’m wary of the inventory months.
” there was plenty of inventory but at least half of it had been neglected or actively trashed”
Thats when you lower your price commensurate with the value of the remedial work.
Simple math Donk. Simple math.
That still doesn’t work, sweetheart, and you know it. It’s much easier to get a mortgage a $300K livable house than it is to get a mortgage for a $270K trashed house and come up with $30K cash for a rehab.
It’s the main reason professional rehabbers don’t go out of business.
Because construction loans don’t exist?
You’re winging it again Donk.
FHA will loan you the money for a rehab.
FHA Loan Rules: 203(K) Rehab Mortgage Loans - FHA.com
http://www.fha.com/fha_article?id=337
The 203(K) Rehab loan is the FHA’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community …
FHA 203(k) Rehab Loan - FAQs and Guidelines
homerenovations.about.com › … › Fund the Remodel
Get the scoop on FHA 203(k)–the “rehab loan”–which will help you buy and remodel your home.
Home-rehab dream ruined? Try a 203(k) loan - Bankrate.com
http://www.bankrate.com/…/home-rehab-dream-ruined-try-a-203-k-l...
Bankrate
An FHA 203(k) loan can provide money to buy a home and rehabilitate it in one transaction.
FHA 203k loan rehab guidelines and requirements
http://www.fhainfo.com/fha203k.htm
FHA 203k loan; HUD rehab loans for home improvement, repairs and fix up. The FHA 203k loan is the perfect loan for fixing up your dream home.
FHA $0 Down House Loan - getahomeloanaz.com
Adwww.getahomeloanaz.com/
Attention First Time Home Buyers Easy to Qualify. Get Pre-Qualified
FHA Loan · 45% DTI Okay · Close in 2 Weeks
“It’s much easier”
Epitaph of DebtDonkeys.
Wow thanks Ben! Next time I’m gonna get me a koi pond.
Actually, sometimes it is rather easy to buy a house at a tiny fraction of construction cost, and to pay for the rehab with cash.
My son looked at a serious rehab with FHA loan a couple of years ago. It looked like it would pencil out well for him as he has the trade skills; wiring, plumbing, heavy carpentry. He would have “hired” me to do joint compound and finer carpentry.
He found that he wouldn’t be allowed to do any of the work himself. Had to hire it all done by contractors. It no longer penciled out for him. I was bummed, there was an orchard with a big following of whitetail.
“He found that he wouldn’t be allowed to do any of the work himself. Had to hire it all done by contractors.”
blue-
Was that on anything w/ a permit or all improvements and deferred maintenance? If so, they sure have chutzpah.
“Actually, sometimes it is rather easy to buy a house at a tiny fraction of construction cost, and to pay for the rehab with cash.”
You’re right, it is. Everyone had the same idea that you do — except in 2010-2013. All of the housing that could be “value added” was snapped up long ago for a song, given the pergraniteel treatment, and sold for above Zestimate.
But my area is flush with gov and contractor jobs, so any rehab is a nearly guaranteed sale. Your area seems slower, so there’s probably still inventory out there.
NoVA is full of excess empty housing. That’s why prices are falling there.
You’re right Oxy. There are still houses here that are fixeruppers. There are some that haven’t been lived in for 50 years.
You live in the ant hill. I don’t. You chose it. I chose not to. Most of the people here chose not to.
” I was bummed, there was an orchard with a big following of whitetail.”
Bummed? That’s odd. Are these things only available to owners?
There is some conflict in your message. Is there perhaps some benefit to owning that you are grasping at?
(
)
They looooooooove the gogogo real estate fast moving world of Southern California! Meanwhile it’s unlivable unless you are single or rich or bought and settled a looooong time ago and can afford to send the kids private.
“…can afford to send the kids private.”
Not necessary in San Diego…
“…can afford to send the kids private.”
Not necessary in San Diego…
Maybe if you live in Poway or RB.
It isn’t just Poway that has good public schools. I believe Del Mar, La Jolla and Rancho Santa Fe do as well, to name a few others. Needless to say, housing is not cheap in any of these areas.
We bought at the beginning of the 4th qtr of 2012, so I can relate to oxide. There was some inventory, but it was either trashed, a bad location, or it was a cosmetic flip. The HVAC or other essentials (like the roof) was not addressed.
Yeah, we bought a fixer, but bought in a So Ca dip, and accepted some sweat equity as price fluctuation insurance. So far, we’re in good shape. Most importantly, we like our home, and worse case scenario, we’ll break even having lived here for $550/mo.
BTW, I won my Obamacare hearing. I did all the paralegal work.
We bought at the beginning of the 4th qtr of 2012″
Now 400K is just a distant memory. I never thought it would go up so quick .
And now you’re stuck with a depreciating asset at a grossly inflated prices and empty pockets.
Well done.
I don’t think the article mentioned ‘lend’.
If it did:I’m sorry for the interuption.
If it didn’t :you just put the spin you needed, based on nothing.
It’s like 2008 lasted a month and happened 20 years ago in most SoCal MT skulls…
Keep in mind that many of the H1B tech job seekers weren’t even in America in 2008. Ignorance is bliss . . .
A friend of mine (a partner at a lawfirm) and his wife (a doctor) recently had a similar experience in SF–looked for years, and couldn’t find something that they wanted at a price that they were willing to pay.
So, they changed their tactics.
They stopped looking, and decided to rent for a while.
At some point in the future, they’ll probably look again.
Back in the 2005-06 time frame, one of my co-workers related at lunch that two married friends of his, both physicians, worked in S.F. but couldn’t afford to buy a house there. I blurted out “when two doctors can’t afford to buy something, then you know there’s a problem.” My co-worker shrugged and said: “Everybody wants to live there.”
“Weaster says Houston remains relatively affordable compared to other major U.S. markets, and should become a buyer’s market in the coming months. ‘Its all shaking out with oil and the layoffs that have been happening in the last 12 months, I’m starting to see more and more defaults happening within the energy corridors,’ he says.”
Just for fun let’s substitute the word “Bodie” in place of the word “Houston”, subtract any reference to oil and use the word “mining” instead, and let us see what we end up with …
“Weaster says Bodie remains relatively affordable compared to other major U.S. markets, and should become a buyer’s market in the coming months. ‘Its all shaking out with layoffs that have been happening in the last 12 months, I’m starting to see more and more defaults happening within the mining corridors,’ he says.”
I realize Houston is not Bodie, but I couldn’t help myself.
San Francisco, CA Housing Market Caves; Prices Plunge 7% YoY As Housing Inventory Balloons
http://www.zillow.com/san-francisco-ca/home-values/
I did a Zillow and discovered that my imputed rent was raised by ninety-five dollars as compared to what it was last week.
That’s $2,395 of phantom (phantom = non-existent) income that I, as a good American, get to contribute to the nation’s GDP each and every month.
Same goes with my neighbors, good Americans all; they get to contribute - collectively - enormous quantities of phantom income to the nation’s GDP. This phantom money does not meet the standards that most people require of money (such as being spendable) but nevertheless it counts as part of GDP just as much as spendable money counts.
All that is required for this to happen is for prices to rise a bit.
Magic.
Is this imputed rent included for everybody who bought a house, or just those who paid off the mortgage? Effectively, you’re only making that “income” if you own the house outright, and technically you’d need to subtract insurance and property taxes from market rent.
Even using the model where two people rent to each other, the two virtual LL’s are still paying a mortgage which lessens their imputed income.
“Effectively, you’re only making that “income” if you own the house outright, and technically you’d need to subtract insurance and property taxes from market rent.”
This is true and these expenses cut into income (actual or imputed) but it is also true that expenses to you is income to others and hence your income (actual or imputed) contribution to GDP remains intact.
Taken far enough this idea of rental prices determining imputed income could work for anything that is rented - cars, boats, furniture, household appliances - anything that is rented.
Raise the rents for the few items that are rented and - presto! - you have just raised the imputed income for the many comparable items that are owned, and - presto! - this imputed income will magically find it way into the computation of GDP.
Gross domestic product (GDP) is a comprehensive measure of the nation’s production. In order to be comprehensive, it must include some goods and services that are not traded in the market place. Those components of the GDP are called imputations. Examples include the services of owner-occupied housing, financial services provided without charge, and the treatment of employer-provided health insurance.
Imputations approximate the price and quantity that would be obtained for a good or service if it was traded in the market place. The largest imputation in the GDP accounts is that made to approximate the value of the services provided by owner-occupied housing. That imputation is made so that the treatment of owner-occupied housing in the GDP is comparable to that of tenant-occupied housing, which is valued by rent paid. That practice keeps GDP invariant as to whether a house is owner-occupied or rented. In the GDP, the purchase of a new house is treated as an investment; the ownership of the home is treated as a productive activity; and a service is assumed to flow from the house to the occupant over the economic life of the house. For the homeowner, the value of that service is measured as the income the homeowner could have received if the house had been rented to a tenant.
- See more at: http://www.bea.gov/faq/?faq_id=488#sthash.aHi86ZFm.dpuf
Do zombie houses generate imputed rent?
And how do they avoid double-counting? For example, is interest on the mortgage recorded as imputed income or real income for the bank, or both?
I think they count the interest paid in GDP too.
Yes, I think the loan is viewed as an investment by the bank that pays interest as its return, the house is viewed as an investment by the buyer, with shelter being its return. The shelter is valued by comparing it to rent for a similar house.
I’m not sure if that’s double counting, though.
“GDP accounts is that made to approximate the value of the services provided by owner-occupied housing. That imputation is made so that the treatment of owner-occupied housing in the GDP is comparable to that of tenant-occupied housing, which is valued by rent paid. That practice keeps GDP invariant as to whether a house is owner-occupied or rented. In the GDP, the purchase of a new house is treated as an investment; the ownership of the home is treated as a productive activity; and a service is assumed to flow from the house to the occupant over the economic life of the house. For the homeowner, the value of that service is measured as the income the homeowner could have received if the house had been rented to a tenant.”
http://www.bea.gov/faq/?faq_id=488
Yet is it founded in reality when rental rates are a small fraction of the cost of buying the same property.
In the Oklahoma article, the cheapest price quote for a new home is $170K. Those workers at PF Chang’s better be upper managers, or have a spouse with higher-paying better career.
(FWIW, I checked to see if those PF Chang jobs were corporate career. They aren’t. The HQ is in Scottsdale.)
Donk,
Like we’ve known intuitively all along, housing prices are massively inflated irrespective of location.
And that TimberCraft house pictured in the article is massively butt-ugly.
There is also a pic of builder Jack Evans smiling proudly in the fancy kitchen, with perfectly placed bowls and wooden spoons the counter, a Keurig machine … and no faucet on the sink! How does he expect to make coffee?
You get the water from the spaghetti-pot spigot over the 7-burner Viking range.
A relative lives in a Raleigh exurb, where he paid 200K for a 3000 sq ft house a few years ago. He and his wife have a combined gross income of about 180K.
He told me that, much to his surprise, he found out that one of the Hispanic toilet scrubbers at the office (the office happens to be in the exurb) lives in his neighborhood and “owns” her house (she is married and hubby also has a menial job).
I explained to him that with his income he should “in theory” have bought a 500K+ house closer to Raleigh and that he’s living with the unwashed plebs. His reply was that having a mortgage that big is “scary”. So not everyone is drinking the Kool-Aid
You seem to have alot of relatives.
Actually, he really does have a large extended family.
Actually, he really does have a large extended family.
Not really that large, but I’ve mentioned this Raleigh relative more than once here in the past. I also have relatives in Dallas, Tampa, Indiana and Mexico City.
And Europe, via the wife. Pretty nice tribe, if you ask me.
And Europe, via the wife. Pretty nice tribe, if you ask me.
UK and Germany. I also have some distant relatives in Hungary and Spain, but I’ve never met them.
That hispanic toilet scrubber may have a few relatives living with him in his exurban McManse. Those houses are custom-made for extended families, it’s really the only way they make sense.
From what I was told she bought one of the smaller houses in the nabe, about 2000 sq ft. I was told she paid about 150K for it. According to excel P&I for that would be $700. That’s about half of what my ex Marine nephew pays to rent his apartment in Denver.
Actually $750/month. Now double it to account for all the expenses you excluded.
Isn’t socialism grand?
http://time.com/4274666/arduous-march-north-korea-famine/
To be fair, places like France or Denmark are socialist and there is no famine in those places. North Korea is Stalinist Communist not socialist.
to be even more fair the 2 koreas were equal at one point
the most lefty EU countries are losing wealth- it takes time for it to drain away.
Agreed on the Koreas. But to equate Western Europe with North Korea is disingenuous at best.
That wealth is being redistributed to the financial services industry. As is ours.
‘The bubble is different this time around, he says. ‘Last decade it was U.S. real estate causing a U.S. recession, causing a global recession. This decade it’s a global recession that will end up causing a U.S. recession, causing a decline in the U.S. housing market’
In the podcast I did with Jack McCabe in (September, I think) 2014, he gave the price run two years. At the time Orlando was looking wobbly and I thought he was giving it too much time. But given the Florida post I did recently it looks like he was more accurate. At any rate, this is an interesting call: more like an economist than a real estate analyst.
I’ve been giving it six more months for what seems like forever.
How all these people can afford all these things, houses included, I’ll never know. Bailouts and bourbon.
“How all these people can afford all these things, houses included, I’ll never know.”
Come and pay me a visit and allow me to enlighten you just a wee bit.
Even with all the borrowing it doesn’t make sense.
Yea, I’m thinking the solution is just to make more money.
‘How all these people can afford all these things’
‘A recent report by the Office of the Comptroller of the Currency, a federal agency that regulates the nation’s banks, warns that declines in mortgage underwriting standards are mirroring pre-crisis trends.
‘Underwriting standards eased at a significant number of banks for the three-year period from 2013 through 2015,’ the report said. ‘This trend reflects broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.’ Not since 2006, it noted, have lenders taken on so much credit risk, and it says the hazard will continue to grow this year: ‘Examiners expect the level of credit risk to increase over the next 12 months.’
‘A large chunk of the risk is coming from first-time home buyers with shaky credit and so-called ‘rebound’ buyers who previously defaulted on home loans. The demand from otherwise uncreditworthy home buyers ‘is driving home prices up faster than incomes and inflation,’ noted Edward Pinto, co-director of AEI’s International Center on Housing Risk in Washington.’
‘This is especially true in hot spots like California, where subprime-mortgage lenders offering interest-only loans with no FICO-score requirements are cropping up from the ashes of Countrywide Financial, the bankrupt subprime giant.’
‘In another sign housing is overheating, home ‘flipping’ is red hot again and hitting levels not seen since just prior to the mortgage meltdown. Nationwide, almost 180,000 homes were sold and then resold last year — the highest level since 2007. In fact, according to RealtyTrac, flipping in a dozen metro areas — including New York, Los Angeles, San Diego, Miami and Jacksonville, Fla. — exceeded peaks set in 2005.’
‘Like the last bubble, this one is fueled by artificial demand from government-induced lax lending standards and accommodative interest rates set by the Federal Reserve. Today’s relaxation in mortgage-underwriting standards is largely a function of government housing-policy changes at FHA, Fannie Mae and Freddie Mac, which dominate the nation’s mortgage activity. As in the last easy-credit cycle, we are seeing ‘the promotion of policy to push firms to seek riskier products to promote growth,’ Wells Fargo Chief Economist John Silvia said.’
‘All three agencies have slashed down-payment and other requirements under pressure from Obama regulators, who include, most significantly, former Congressional Black Caucus leader and Obama appointee Mel Watt, head of the new Federal Housing Finance Agency, which now controls Fannie Mae and Freddie Mac.’
‘Last year, Fannie Mae launched a new subprime-mortgage product called HomeReady that caters to recent immigrants with weak credit and limited income. The new loan program, which offers ‘income flexibility,’ allows borrowers for the first time to bundle income from roommates and relatives to meet qualifications for income. They only have to put 3% down, and can use gifts from nonprofit groups to subsidize their down payments.’
‘There is no limit on the number of non-borrower household members who can be present on a single transaction,’ Fannie advises originators. And even then there is ’documentation flexibility,’ a frightening echo of last decade’s ‘no-doc loans.’
‘You don’t have to show personal financial independence. You can be maxed out on credit cards and even live in government-subsidized housing. Just as long as you round up enough income-earners and pool finances to help meet a debt-to-income ratio of up to 50%. And you don’t need good credit. ‘If the borrower’s credit score is less than the minimum credit score required,’ Fannie tells loan underwriters, ‘the lender may develop an acceptable nontraditional credit profile’ that takes into consideration timely payments on electricity bills and car insurance — and even gym dues — in lieu of payments on credit cards and loans.’
‘Under HomeReady, you can even qualify for a ‘cash-out refinance’ of your mortgage, a type of loan that led to over-leveraging and a wave of defaults during the mortgage crisis.’
‘Why would Fannie offer the same kinds of poorly underwritten loans that forced it into bankruptcy? Because HomeReady aligns ‘with our housing goals’ set by Watt, it says in its HomeReady literature. It’s all part of a government campaign to ease access to home loans for recent Hispanic immigrants — including those living here illegally. In fact, HomeReady caters to illegal immigrants by allowing borrowers to waive Social Security documentation.’
‘Watt, who as a congressman once demanded Freddie Mac back loans for welfare recipients in his North Carolina district, has instructed Fannie and Freddie to come up with ‘alternative credit-scoring models’ to FICO and approve more home buyers. ‘We have the pedal to the metal’ on adopting a new model, Watt said.’
http://thehousingbubbleblog.com/?p=9573
“and so-called ‘rebound’ buyers who previously defaulted on home loans”
I thought they called them “Boomerang Buyers”.
Boomerang Buyers
By Andrea Murad Published October 30, 2015
Lifestyle and Budget FOXBusiness
The housing crisis was seven years ago and if you had a foreclosure or short sale, enough time may have passed for you to be eligible to buy a home again. However, these boomerang buyers do need to be prepared.
Research Wait Period
Industry guidelines generally require borrowers with a short sale to wait four years from the date of discharge or dismissal before applying for a mortgage again, while those with a foreclosure have to wait seven years. This date is on your credit report that you can access at http://www.annualcreditreport.com.
While few exceptions are made for foreclosures, borrowers with prior short sales may be eligible for a new mortgage in two years if there were extenuating circumstances. A lender may shorten waiting periods for one-time events, like high medical bills or a prolonged reduction in income, but it’s subjective and lender-specific, says Rodriguez.
“Boomerang Buyer” AKA: “Just in Time to Overpay Again, Buyer”
Smells like smelly Mel
I know, the crazy strawberry picker borrowing is back and has been for a while, heck, looks to be bigger than ever. And no one (much except a few intrepid HBBrs) cares.
I just have a huge mental block thinking everyone jumped right back on that syphilitic whore. Back on the heroin. Bubble on.
The heroin never went away.
Keep in mind that at their lowest point since 2006, housing prices were still 250% higher than long term historical trend and double construction costs.
You just keep posting your bogus fantasy-land construction costs, Housing Analyst, that have no bearing on reality.
You can ignore the artificial constraints (growth management laws, environmental and stormwater regulations, etc) all that you want, but these costs are all real and are passed onto the consumer.
And you always leave out profit. As if somebody is going to just give their labor away for free. People will make as much profit as the market will bear. Your saying otherwise doesn’t change that. Everybody gets their cut, and that costs a lot more per SF than you allow.
Sorry my friend. All of us are profitable at $50/sq ft.
I think someone paid too much for a depreciating house.
Sorry, nope. I paid $160K for my house in a neighborhood where new homes are now selling for $1M+. I am a very happy homeowner.
And you paid too much….. Just like millions of others.
“They only have to put 3% down,”
Remember….. 3% down payment mortgages are the very definition of sub-prime.
How do these mortgages jive with the credit-risk retention rules put out by the Dodd-Frank regulations? Does the originator have to keep 5% of this trash paper?
‘Does the originator have to keep 5%’
You may have heard non-bank lenders are the majority now. Just how strong is Quickens balance sheet? Rocket Mortgage!
https://rocket.quickenloans.com/
Push Button
Get Mortgage
cuz it’s easier.
“…interest-only loans with no FICO-score requirements…”
What’s not to like? Hehe.
Ever loosening lending standards helps perpetuate “affordability” at ever-rising prices.
How all these people can afford all these things, houses included, I’ll never know. Bailouts and bourbon.
Restaurants make me scratch my head. Was in Denver on Saturday and after we were done for the day we just stopped at a chain restaurant at 8PM to grab a late dinner.
The place was mobbed, full of young families with children. How can they afford it? Rents are sky high. Wages are low. Yet there they were, having a dinner that would probably end up costing $70-80 (or more) with the tip.
Maybe they haven’t hit their credit limit yet.
I suppose that many are doing the “max out credit cards, refi the house, pay credits cards off with equity, lather, rinse, repeat” until they can’t.
“I suppose that many are doing the “max out credit cards, refi the house, pay credits cards off with equity, lather, rinse, repeat” until they can’t.”
I worked for a number of years at a law firm, and we would see the same people doing cash out refi’s every couple of years and pay off tens of thousands of dollars of credit card and auto loan debt each time.
Sometimes the total consumer debt payoffs neared 100K for a single refi.
They’re the ones with the houses before the run-up?
Or maybe there are good paying jobs, dual incomes?
Houses are not unaffordable if they are selling. That phenomenon is called a market.
That said, in a world of ever depreciating dollars, and zirp returns on cash, coupled with an ever increasing immigration population, where else should one put ones money?
But, of course, as long as the Fed is printing, might as well convert all that new fiat into something real.
Precisely. But the problem is they’re not selling. There is no market.
US Housing Demand Plummets To 20 Year Low
http://2.bp.blogspot.com/-yX5B5Hn95bQ/VYC3Wr6ihBI/AAAAAAAAj7I/alOslZa-cK8/s1600/MBAJune172015.PNG
We aren’t adding much in the way of supply. So, the buyers of the marginal additional homes built tend to skew toward the upper end of the income curve.
If you have the same number of people looking to buy a smaller number of homes, those who make the most out of the buying pool, will be the ones who buy the homes. This is what is driving home prices today.
In other words, the median income family is not buying a median priced home…they are renting.
With 25 million excess empty and defaulted houses, there isn’t much need to add more housing.
‘The bubble is different this time around, he says. ‘Last decade it was U.S. real estate causing a U.S. recession, causing a global recession. This decade it’s a global recession that will end up causing a U.S. recession, causing a decline in the U.S. housing market’
I think this is right.
We aren’t building enough homes for the classic developer-driven supply glut to eventually crush housing. It will be some other factor that slows down housing.
HOWEVER, if housing starts stay at current levels, the carnage won’t be as bad as the prior downturn.
The excess, empty and defaulted inventory from the minor correction in 2008 has yet to be dealt with.
Jacks comment is interesting, and I think he is correct. When massive layoffs in industries such as Tech come home, it’s going to cause a lot of problems with housing.
http://www.vanityfair.com/news/2016/03/silicon-valleys-tech-employees-are-getting-nervous
Silicon Valley’s Tech Employees Are Getting Nervous
The tech labor market appears to be sizing up, as tech employees hunker down amid the cooling environment in Silicon Valley. They’re strategically planning their moves from company to company, according to The Wall Street Journal, avoiding start-ups that plan to raise more funding soon and asking recruiters questions about lowered stock prices and compensation in cash instead of equity. “I used to look at equity and think every company was going to be the next Facebook. Now when I see equity I’m like, ‘That’s nice but I want it in actual money,’” one designer told the Journal. Others are looking for “safe” jobs with tech companies sturdy enough to withstand the fallout from an imploding tech bubble. The mood still isn’t exactly austere— last year, the average salary in the San Jose and San Francisco metro areas was $197,411 —but the party in Silicon Valley seems to be ending, and tech employees aren’t oblivious to it. Gone are the days of hyperbolic language in tech recruitment and cheerleading when companies raise new rounds of funding or attain “unicorn” status.
Lavish perks—beer fridges, catered lunches, free Uber rides—used to be alluring, but now they make some prospective employees wary of how companies are spending their money. “I’d rather have the company have a long lifespan than have a hoverboard riding around the office,” one tech employee in Silicon Valley told the Journal. Venture capitalists have been openly critical of burn rate—how quickly a start-up spends its cash—over the past year. Y Combinator president Sam Altman has called burn rates “frightening,” and Benchmark’s Bill Gurley has sounded the alarm on the cavalier attitude in Silicon Valley, warning of “dead unicorns” as a result of the frothy funding environment in the private tech market
‘There’s a new postmortem written weekly about a start-up that’s run out of cash and shut its doors. Start-up executives are sobering up, realizing that their companies actually need a path to profitability. Now, not wanting to be stuck on a sinking ship, tech employees are thinking about the bubble, too’
Here’s the link in that section:
‘SpoonRocket informed its investors it’s shutting down its on-demand pre-made meal delivery service after failing to raise the necessary capital to continue operations. SpoonRocket had reached a positive contribution margin — it was selling meals for more than it cost to cook, package, and deliver them. But due to other costs and the frosty fundraising climate, it wasn’t able to get the money it needed to continue operating. The startup found an unnamed quick-service restaurant (QSR) chain to acquire it, Hsiao tells me. But the acquirer abandoned the deal, leaving SpoonRocket to die. “Last minute, all signs pointed to something getting done, but they pulled out. It’s just an unfortunate situation,” Hsiao said with obvious disappointment in his voice.’
‘SpoonRocket raised $13.5 million through a 2013 seed from Y Combinator and several angels, and a 2014 Series A from Foundation Capital, Base Ventures and Sherpa Capital. The startup will liquidate material assets to pay back some creditors, but doesn’t have remaining venture capital to hand back to investors.’
‘SpoonRocket’s approach was speed and low prices over quality, shooting for sub-10 minute delivery of sub-$10 meals. It aimed to be cheaper and faster than cooking or ordering delivery from a traditional restaurant. SpoonRocket’s chefs made its limited selection of meals each day in bulk, then sent them out for distribution through cars equipped with warming cases.’
‘I ordered SpoonRocket a few times soon after launch. However, I and other customers I spoke to found the meats to be sketchy and the whole meals to be somewhat gross.’
‘Many conveniencetech startups have suffered hard times since a public and late-stage market correction hit this year. While it’s tempting to think everything you buy or do could be made easier with an app, the economics are a lot tougher than many would assume. It’s difficult to find a price point that’s still attractive to consumers but pays for the goods and services, delivery and startup overhead.’
‘Other on-demand services should be scrutinizing their finances and cutting costs however they can to give them a longer runway to hit milestones and secure their next round. Otherwise, we might see more startups suddenly vaporize.’
On this:
‘While it’s tempting to think everything you buy or do could be made easier with an app, the economics are a lot tougher than many would assume’
Wait a minute. Are you saying apps aren’t going to become a complete reordering of the universe? They aren’t going to change how I buy a can of almonds? Next thing you’ll be saying I won’t get a can of almonds dropped outside my door by a drone!
Come to think of it, I have two stores within a couple blocks that have almonds. Other stuff too, like chips. And a grocery store about a mile away. Lots of dine in, take out food too. It’s almost like these people are just sitting around trying to come up with something an app can do, rather than what customers would want. If that’s the case, the customer was a venture capitalist, who isn’t very good at capitalism.
‘beer fridges, catered lunches, free Uber rides—used to be alluring, but now they make some prospective employees wary of how companies are spending their money. ‘I’d rather have the company have a long lifespan than have a hoverboard riding around the office’
Giving employees beer is a bad idea? These guys deserved having their 13 million go down the drain.
Free beer and an office hoverboard probably aren’t the wisest combination of work perks.
Making $200K a year for a company who has yet to turn a profit since its inception, living off investor seed money and spending all day looking at cat videos online while drinking beer and playing fooseball. And these are the loanowners of the Bay Area. This is just going to end terribly!
I don’t see what the problem is. Sounds great to me. I’d be happy to live off investor seed money all. day. long.
I’d be happy to live off investor seed money all. day. long.
+1 Sounds like a good way to get some velocity in that money.
I’d be happy to live off investor seed money all. day. long.
If you thought about it, you wouldn’t bee happy, you’d be stressed.
When you know your company is burning through cash at a rate where if you don’t get another investor, your salary lasts another 6 months, you aren’t happily playing ping-pong and drinking beer at lunch.
You’re working 18 hour days trying to figure out how to either generate more revenue for the company, or create a plan for the company to generate revenue so you can attract that next investor.
If you thought about it, you wouldn’t bee happy, you’d be stressed.
But as a young employee when the word gets out that the fun money is running out you just start looking for a job at another fun startup that was recently funded. Had a niece who did that in the first dot com boom. It was fun while it lasted. She’s a school teacher now. Heck, I kind of did that 30 years ago. Of course back then startups were not as hip and cool as they are now; because we actually tried to make stuff to sell and you didn’t make millions on your stock option even if it was successful. And we didn’t have hoverboards or get free beer.
I guess I’m at a point where my friends have families and aren’t into having “fun” for as long as it lasts. They are looking for a stable career path.
Assuming you care. And assuming you have kids. And assuming you’re spending that money not putting it somewhere else.
It does get boring eventually but it seems inevitable they’ll spike the punch bowl again. What else can they do?
Let it collapse and the rich and powerful get ruined?!? That’ll be the day.
Sean is rational.
I work for a more mature company that has the start-up vibe. They’re not profitable because they don’t want to be, they’re investing in things for their future so they can out-compete people who copy their ideas. We don’t have beer in our office but the other other offices do. I don’t think it’s that big of an issue, the employees don’t get drunk all the time.
A place I worked at had a freaking bar and brewery in the basement, parties every Friday, free gourmet meals, a coffee shop with baristas, luxury team trips, free snacks and drinks, all manner of video games…. Yet the work we were doing was such a clusterf*ck I left after 6 months.
They still have a couple billion left to burn through.
‘I’d rather have the company have a long lifespan than have a hoverboard riding around the office’
Yeah, but there nothing sexy about that is there??? Guess you might have to move to Omaha.
I can’t recall where I saw this clip, maybe someone posted it here on the blog, maybe it was one of those YouTube “suggested for you” videos they show on the right hand side of your screen while you’re watching something else. Anyway, here’s an enterprising small business, Bay Bridge Drive Overs:
https://www.youtube.com/watch?v=v-B3j83ozJk
and their website:
http://www.kentislandexpress.com/
They might not be making a ton of money, but it seems to keep a few employees busy. I’d totally use that service if I had to cross that bridge, I get the willies crossing certain bridges. Causeways, even the rope foot bridges over ravines don’t bother me, go figure.
Yeah, but there nothing sexy about that is there??? Guess you might have to move to Omaha.
Only Olds care about job stability. If you’re young and working in the startup/small biz scene you’re expecting to change jobs every 12-18 months.
Palmetto, you can drive people across the Sunshine Skyway. Last year was the 35th anniversary of the Summit Venture accident. I’m not afraid to drive on the bridge, but won’t deny being happy when it’s in my rearview mirror.
Cooper river bridge in Charlston scares the crap out of me. It’s so impossibly high.
‘beer fridges, catered lunches, free Uber rides—’
We are obviously talking about private sector employers here, the kind that provide real economic value. Can you imagine what would happen if a government office gave their employees free beer?
Drunken nap time instead of nap time?
You wouldn’t notice any change in their work output. In fact, they might actually get more done, as they wouldn’t be as stressed-out about all of the bureaucracy that they have to deal with daily.
Beer isn’t always a bad sign. After all, the Royal Navy has beer for their enlisted men (and it’s pretty awesome) and a full bar for the officers — and they are very professional.
And in Europe, our conservative, privately owned company has beer available in the cafeteria (but most people don’t drink it).
However, I think the atmosphere in those places is a little different from a Sillycon Valley startup.
I question the wages quoted — maybe you can get $200K if you’re lucky, but the median income here (even median tech income) is nowhere near that. Maybe $200K if you count stock options, but not cash.
Finally, these companies really do remind me of the dot-bombs. “The internet is here and its changing EVERYTHING!!! Pets.com !!! WebVan!!!!” Yes, some applications really do benefit from a smart phone app (navigation and traffic, for example — including Uber/Lyft a bit because location does matter for taxis), but fast food delivery has been around a long time, and having an app adds nothing over using the web or a phone.
I question the wages quoted
Agreed. My experience has been that they pay less than bigger, established employers, but they dangle the “get rich quick” carrot with stock options, plus the hoverboards and other perks,
There are plenty of cynical kinds.
You need to keep your intentions secret - a tough proposition for most engineers who are kinda direct.
Yes, they exist. They’re a tiny minority but the idea that all Californians are dumb is, well, dumb.
When the money is flowing, take the money and run.
Ok then. Most Californicans are dumb.
“but fast food delivery has been around a long time, and having an app adds nothing over using the web or a phone.”
Yes, but the difference between a successful company and a failed one is where the focus is on the business.
A restaurant which is popular in a city may say “Lets make an app”, whereas an App company will say “Lets make a restaurant”. It seems everything is focused on the apps first with the end product secondary.
The goal, as always, is to get a tiny cut of that restaurant’s business. And it’s scalable (theoretically anyway) since there’s very little in the way of actual production. They’re all trying to get that tiny cut except the barrier to entry is ZERO.
Uber is an exception which has more to do with corrupt governments and the taxi/limousine industry putting artificial limits on supply. The rest are generic.
These are the apps I know that are trying to supply tampons:
My Cotton Bunny
LeParcel
HelloFlo
Juniper
Peachy
Code Red (!!!)
Lola
Dribbble (yep - three ‘b’-s)
Tampon Run
Ben can keep his almonds. I’m going with tampons and I’ll even program it so that the app changes color once a month!
I had a random headhunter call, dude immediately said $180-200K. It was with a contract position doing work for Facebook in Cali and something to do with F5 load balancers and network engineering. It sounded like everyone quit because the job sucked or management sucked. It also sounded like they expected tons of hours which means the $200K is the same as working two full time $100K jobs.
So I suppose they’re out there. I just need to make that kind of scratch here, and not work more than 40 hours a week. Then that $700K starter home is not such a big deal.
We’ve had beer Friday’s in my company the first year I was employed. Then we were bought by a bigger company and only get occasional beers.
Free beer? Hoverboard? What kinda workers comp. insurance premium would that command?
Didn’t anybody learn anything from 1999? Back then spending money was more important to investors than earning it. I couldn’t figure that one out. Nor could I understand why our company’s stock was going up, sometimes by several dollars a day, and was forecast by Wall Street analysts to soar considerably higher still, when we’d never made a profit, not even a penny. And then it all ended.
I’ve come to the conclusion that, with enough money, any culture’s learned wisdom, no matter how painfully acquired, will be ignored.
yep, agree about the dotcom crash…and locally many people apparently learned nothing from the 2008 crash either. In California house prices declined by about 50% by 2011 and currently they are just about back to 2006 levels…but if if you say anything about this being a second bubble that will inevitably pop many will look at you as if you are deranged.
I don’t think this is a new bubble, but a continuation of the original 2002 (2nd qtr) bubble. We lived it a decade and it sucked. Central Banks have f@*ked up many people’s lives.
last year, the average salary in the San Jose and San Francisco metro areas was $197,411 ‘
Median salary wld be a better metric. CEO’s make millions with stock options so screw averages up.
Freight volumes and rates plunging to new lows, belieing the rosy official (faked) statistics and “everything is awesome!” narrative.
http://wolfstreet.com/2016/03/28/ocean-freight-rates-collapse-to-zero-china-freight-index-ccfi-plunges-record-low-carrier-bailouts-loom/
Shipping Industry Confidence Index Hits Record Low
Carmencita
File image credit Paul Benecki / MarEx
By MarEx 2016-03-23 17:39:19
On Wednesday, shipping advisers Moore Stephens reported that overall confidence levels in the industry fell to a record low in the three months ending February 2016, according to the results of the firm’s Shipping Confidence Survey.
Overall, respondents reported a confidence level of 5.0 out of 10 for the markets in which they operate, compared with a 5.6 out of 10 in November. It is the lowest rating ever in the survey’s eight years of data collection.
Industry’s view of conditions was down in all geographic regions, marking a 1.6 point drop in Asia, a 1.0-point drop in North America and a small decrease in Europe.
…
Many executives described a bleak outlook. “As long as shipowners operate based on hope rather than on solid economics, there will always be booms and busts,” said one survey participant. Another forecast that there would be no solid recovery in the near future, writing that “the expected available fleet per metric ton of dry cargo available will be higher at the end of 2016 than it is now. As a result, there is no chance of freight levels improving.”
…
Are old people too dumb to get a mortgage?
http://www.ourbroker.com/news/old-people-dumb-mortgage-032816/
If texting while walking can be banned, why do we allow voting while stupid?
http://www.independent.co.uk/life-style/gadgets-and-tech/news/texting-while-walking-could-be-banned-in-new-jersey-under-new-rules-being-proposed-by-us-officials-a6956526.html
The dumbing down of our public education system and its special snowflakes continues apace.
http://www.breitbart.com/big-government/2016/03/28/ny-professor-says-algebra-is-too-hard-schools-should-drop-it/
What excuse(s) will Yellen the Felon use to avoid a rate hike that would crash US Ponzi markets, despite our supposed “recovery”?
http://www.reuters.com/article/us-global-markets-idUSKCN0WU00R
The fools are still rushing in.
http://www.marketwatch.com/story/city-by-city-how-house-prices-fared-in-january-2016-03-29
From the Houston article:
“actual wages”
LOLZ
“home price gains have outstripped income growth in much of Colorado, putting markets at risk”
http://www.denverpost.com/business/ci_29686554/bulder-and-grand-junction-housing-markets-at-risk
Side note: the Denver Post website is one of the most ad-choked, bandwidth hogging, browser crashing “news” websites on the internets. Note also they mispelled Boulder in the URL string.
“home price gains have outstripped income growth in much of Colorado, putting markets at risk”
Yeah? Well not to worry; These high house prices don’t need to be paid, they only need to be promised to be paid.
Party on.
The beauty (choke) of the system that we now have is while the seller gets his price immediately at the point of sale the buyer doesn’t have to pay it, at least not immediately, not at the point of sale.
All the buyer needs to do is promise to pay it, commit himself to paying it.
But do they? Where is the buyer?
Remember….. I can ask $50k for my used up 10 year old Chevy pickup but where is the buyer at that price?
So it is with all depreciating assets like houses.
“These high house prices don’t need to be paid, they only need to be promised to be paid.”
Homeowner bailouts are forthcoming at the point when the inability to repay the debt is revealed.
I take back my missed opportunity with Mr. Banker yesterday - He did not want to party at HIS expense - I decided to not attend his BYOB, but lo and behold……
Seems Combo wants to party - so……..
https://www.youtube.com/watch?v=TK5z9mwEJHQ
Well this is my back yard - my back gate
I hate to start my parties late
Here’s the party cart - ain’t that great?
That ain’t the best part baby - just wait
That’s a genuine weathervane - it moves with the breeze
Portable hammock honey - who needs trees
It’s casual entertaining - we aim to please
At my parties, all right, uh-huh
Check out the shingles - it’s brand new
Excuse me while I mingle - hi, how are you
Hey everybody - let me give you a toast
This one’s for me - the host a-with the most
Yeah
It’s getting a trifle colder - step inside my home
That’s a brass toilet tissue holder with its own telephone
That’s a musical doorbell - it don’t ring, I ain’t kiddin’
It plays “America the Beautiful” and “Tie a Yellow Ribbon”
Boy, this punch is a trip - it’s o.k. in my book
Here, take a sip - maybe a little heavy on the fruit
Ah, here comes the dip - you may kiss the cook
Let me show you honey - it’s easy - look
You take a fork and you spike ‘em - say, did you try these?
So glad you like ‘em - the secret’s in the cheese
It’s casual entertaining - we aim to please
At my parties, all right, uh-huh
Yeah at my parties, all right, uh-huh
Now don’t talk to me about the polar bear
Don’t talk to me about the ozone layer
Ain’t so much of anything these days, even the air
They’re running out of rhinos - what do I care?
Let’s hear it for the dolphin - let’s hear it for the trees
Ain’t running out of nothing in my deep freeze
It’s casual entertaining - we aim to please
At my parties, all right, uh-huh
Do what you please
At my parties, all right, uh-huh
Yeah, at my parties, all right, uh-huh
You do what you please
Oh yeah, at my parties, all right, uh-huh
Oh yes at my parties
Yeah I thought you’d like that
Hmm that’s nice
At my parties, all right, uh-huh
Yeah at my parties, all right, uh-huh
Oh yeah at my parties, all right, uh-huh
You do what you please
At my parties, all right, uh-huh
Lahaina, Hawaii Housing Market Sinks; Prices Crater 5% YoY
http://www.zillow.com/lahaina-hi/home-values/
Do You Need A Roommate?
The future looks grim
Zero Hedge - March 28, 2016
As discussed in length by Zerohedge and other financial sites across the internet, housing prices continue to rise globally with no end in sight. Aided by low interest rates, increases in inequality and capital flight (from corrupt governments), the millennial generation is caught in the cross fire and forced to either live with family longer (increase in missing households) or take on more roommates.
In the past, having a roommate was commonly associated with post secondary education and largely treated as something that everyone would eventually grow out of. A recent infographic I created, “Do you need a roommate?”, looks at how many roommates you need in order to afford moving away from home and why the millennial generation will be forced to answer to landlords into perpetuity. To all of you graduating, the future looks grim…
“forced to answer to landlords into perpetuity.”
Not if you get one of those HomeReady thingies from FHA! You can count all those roomies when you apply for the mort. Or is that only available to those who speak Spanish?
New York Times real journalists provide a narrative on Chicago:
“Unless something radical takes place, it’s going to be a blood bath this summer”
http://mobile.nytimes.com/2016/03/29/us/violence-surges-in-chicago-even-as-policing-debate-rages-on.html
Inconceivable! That would show that gun control doesn’t work and what’s needed is thug control.
Shekels:
Don’t move here - you won’t like it.
This just in……
Associated Press |
CHICAGO (AP) — Chicago’s credit rating has been downgraded to one step above junk grade by Fitch Ratings after the Illinois Supreme Court struck down Mayor Rahm Emanuel’s reform plan for two city pensions.
Fitch lowered Chicago’s rating from BBB+ to BBB- on Monday, increasing the cost of borrowing.
click here!
Fitch said it believes Thursday’s ruling “was among the worst of the possible outcomes for the city’s credit quality” and made clear the city’s “responsibility to fund the promised pension benefits.”
It said the rating could stabilize at BBB- if the city presents “a realistic plan that puts the pension funds on an affordable path toward solvency.”
Emanuel spokeswoman Carole Brown noted Fitch points out the city’s improved finances, adding its ability to meet its current commitment to the pension funds “has not changed.”
There’s that troublesome ‘p’-word again . . . coming soon to a municipality near you!
Huffington Post real journalists provide a narrative titled 7 things your real estate agent wants you to know (but will never tell you):
http://m.huffpost.com/us/entry/7-things-your-real-estate_b_9558744.html
Ben Jones this is the most important article you will read all day today.
The feds have resumed a controversial program that lets cops take stuff and keep it:
https://www.washingtonpost.com/news/wonk/wp/2016/03/28/the-feds-have-resumed-a-controversial-program-that-lets-cops-take-stuff-and-keep-it/
They’re cranking up the war on cash.
It’s the war for cash. Govt and citizenry are dead broke with $17 trillion in debt.
Heh. I remember when Holder, who is the ultimate feckless patsy, announced the DOJ’s “reform” of this practice. But this Administration, led by a former professor of constitutional law, doesn’t believe in reform of any kind. From the article:
“Asset forfeiture is a contentious practice that lets police seize and keep cash and property from people who are never convicted of wrongdoing — and in many cases, never charged. ”
Yeah, let’s indefinitely suspend the rule of law and steal from our own citizens, and spy on them too, that’ll restore people’s faith in America. The article also notes that asset forfeiture proceeds have surpassed losses from actual burglaries.
Snake - the bummer was only a ‘lecturer’ NOT a professor of Const. law.
In other words it was a part time gig with no benefits.
Didn’t we just get great unemployment numbers?
Second Great Depression: 25 percent of Americans between 25 and 54 currently not working
Submitted by IWB, on March 27th, 2016
(NaturalNews) The talking heads on the television can bumble all they want about the economy improving, but the latest labor statistics sing a much different tune. According to data compiled by the Bureau of Labor Statistics (BLS), roughly one-quarter of the American working-age population is currently unemployed, a figure that matches the unemployment rate during the Great Depression.
Extrapolated into a chart created by the Senate Budget Committee, the figures show that nearly 30 million Americans between the ages of 25 and 54 are currently not working — not because they aren’t able, but because they simply cannot find work. This translates into one in four of America’s most eligible workers sitting at home all day, or on the government dole.
“There are 124.5 million Americans in their prime working years (ages 25-54). Nearly one-quarter of this group–28.9 million people, or 23.2 percent of the total–is not currently employed. They either became so discouraged that they left the labor force entirely, or they are in the labor force but unemployed,” wrote the committee.
“This group of non-employed individuals is more than 3.5 million larger than before the recession began in 2007.”
Workplace participation hasn’t been this bad in 40 years
Though data of this type wasn’t tracked back in the early 1930s during the Great Depression, figures compiled by BLS in the following decade show a similar one-in-four unemployment rate. It was estimated that nearly 13 million people were without a job in 1933, which represented about 25 percent of the over-51-million-people labor force.
More than 66 percent of workforce ‘dropouts’ are under age 55
At the same time, the vast majority of those who are currently unemployed, and who dropped out of the workforce in recent years due to lack of work, are under the age of 55. This proves that the cause of poor workplace participation isn’t retirement, but rather the continual decay of the American economy.
“[O]ver two-thirds of all labor force dropouts since that time have been under the age of 55,” added the committee. “These statistics illustrate that the problems in the American economy are deep, profound, and pervasive, afflicting the sector of the labor force that should be among the most productive.”
Sources for this article include:
http://www.weeklystandard.com
http://www.dol.gov
http://www.heritage.org
http://www.cnsnews.com
investmentwatchblog.com/…/ - 121k -
Where’s all the Obama cheerers to claim this is all a lie?
Does Obama control the entire U.S. economy?
Cloward Piven is real.
‘Does Obama control the entire U.S. economy?’
He’s driving the bubble wagon now. This whole thing is his. Even wall street isn’t very involved. You might have noticed the federal government has been backing almost all the loans in the US for years. Putting Mel Watts in charge was nuts.
How about the rule that lets lenders hold onto REO’s, or this curious phenomenon of just not foreclosing? How many versions of HAMP loans have there been? I still hear an ad about those every time I turn on the radio.
Where does the central banks efforts end and the governments begin? Bernanke’s big idea was to blow up stock and house prices. How much foam does the runway need? But why won’t they stop? Everybody is paying way too much for shelter, but it isn’t good enough for the government.
Either these guys are dumb or they completely intended to reflate the bubble. Write the offer on the UHS car indeed.
“Either these guys are dumb or they completely intended to reflate the bubble.”
Where I live they are about 80% of the way there.
Talking to different people around here, the biggest problem isn’t the price to buy a place to live it is the cost to rent one. You don’t have to buy a place to live but most people given their druthers would like a roof over their heads. The rents on apartments and houses are so high that it makes buying something look good.
Maybe this is part of the grand scheme I don’t know.
‘Maybe this is part of the grand scheme’
I have documented that land prices have doubled or tripled in the past 2 to 4 years in places like Perrysburg OH, Bozeman MT and Omaha NE. We are at a 30 or 40 year high in apartment construction and one report I posted said zero were anything other than A (luxury) apartments. That’s all that “pencils out” because of land prices.
And Mel is at work in the existing apartment biz too, backing loans (something like a trillion bucks a year) to buy up B, C and D apartments, slap on some paint and jack the rents up. In Portland Maine rents went up 40% in 3 years and returns went down from 9% to 7%. How could that be? Apartment flipping is out of control. They are evicting entire complexes, rehabbing them and up go the rents. It’s so prevalent tenants don’t have any options. They sure as heck don’t have more income. The apartment bubble is real, I just don’t have enough time to focus on it like I should.
And why are rents so high?
Low interest rates allow development to occur at lower rent levels (lower cost of interest, and lower cap rates means that all-else equal, development “pencils” at lower rent levels), so interest rates are not driving high rents, they should be driving more supply (thus lowering rents).
The answer, I’m afraid is simply that we aren’t building enough new housing, and demand is outstripping supply.
This also contributes to higher home prices.
Is there any other credible explanation as to why rents are so high?
See above.
Dark towers in Manhattan, record high vacancy rates….
Not my funeral.
Ben, land prices are the “plug” number. What developers are willing to pay is a “land residual”–the value for the dirt.
The math is pretty straightforward:
Final value of the built product
Less cost of sale
Less profit margin for the developer
Less hard costs
Less soft costs
Less all other NON-land costs
EQUALS what a developer is willing to pay for the land.
It’s not the other way around.
There are lots of Class A apartments being built, but they are being rented when completed. And that therefore might be the “highest and best use”–and why land is being bought to build more.
Land values do not drive property values.
Property values determine land values.
And they paid too much for worthless dirt and now they’re stuck with it.
It really is that simple.
November 18, 2015
Greedy Bastards Selling At Inflated Prices
The News-Leader reports from Missouri. “Christian County, Nixa and Ozark issued a combined 163 building permits for single family residences in 2011. So far combined this year, they’ve issued more than twice as many — 354. Jason Massengale, a Nixa real estate agent with the Heartland team of Keller Williams, likened today’s sales to the rate during the bubble. ‘This real estate market — it’s kind of like it was in ‘06,’ he said, adding that he this year he has been able to list houses one day and sell some the very next day. ‘We haven’t moved stuff this fast since 2006.’”
“Massengale was at a recent board meeting of the Nixa Chamber of Commerce, and he asked those present to guess how much Nixa houses had been selling for recently, according to chamber director Marc Truby. Truby said everybody in the room started guessing, going higher and higher until Massengale ’spilled the beans.’ ‘I didn’t believe it,’ Truby said of when Massengale told them it was more than $200,000.”
The Bozeman Daily Chronicle in Montana. “Affordable housing — perhaps the single most fraught issue facing Bozeman — will be back in front of the city’s five commissioners Monday. Southwest Montana Building Industry Association chairman Brian Popiel said the building industry remains adamantly opposed to the mandatory portion of the proposal, which would kick in automatically if affordable home production falls short. As Popiel puts it, the policy relies on the assumption that builders are ‘greedy bastards selling homes at inflated prices.’ That’s ‘fundamentally misguided,’ he said.”
“The city’s housing consultant, Daniel Werwath, disagrees with the notion the construction industry is running on thin margins, however. Werwath argues Bozeman’s housing market has been distorted by ‘unnatural demand’ fueled by outside money, as retirees and others relocate to the area having sold homes in pricier markets or built savings in communities with higher wages. ‘Houses are not priced at the cost to build them,’ he said. ‘Houses are priced at what the market will pay. People are making good profits right now,’ he said. ‘People could be building lower-cost housing in Bozeman.’”
KTVN in Nevada. “If you’ve driven around any Washoe county neighborhood, you might have noticed a lot of homes for sale. ‘It was the fourth highest October in history,’ said William Process, the 2016 president of the Reno/Sparks Association of Realtors. ‘But we are seeing our traditional seasonal trends. So sales are down a bit from September, median prices are down a bit, sales are down a bit. But so is inventory.’”
“There are still quite a bit of homes for sale. The average median price for a home in Washoe County is $280,000, an 8% jump from last October, but down 2% from September of this year. But the affordability of homes remains a concern. There were only 71 listings that listed under $200,000. That’s a 42% decline from this time last year. And with thousands expected to move into the area, what we have now isn’t cutting it. ‘All the reports that are coming out right now are identifying that we need more homes in the area. And they are building them, Process said.”
The Press Democrat in California. “Sonoma County home sales picked up in October after an end-of-summer lull, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. As activity increased, the county’s median home price dipped 2.3 percent to $529,275 from September. That price remains 8 percent higher than a year ago. The median price reached a high this year of $546,000 in June but has dropped slightly each month since. With a relatively limited supply of homes for sale, ‘you would think prices would continue to rise, but I don’t see it,’ Laws said. ‘There’s definitely a plateau.’”
“Laws calculated that based on current sales, the county has a five-month supply of homes priced between $1 million and $2 million; a 14-month supply between $2 million and $4 million; and about a four-year supply over $4 million.’
http://thehousingbubbleblog.com/?p=9354
May 11, 2015
Reminders Of The Real Estate Bust
The Kirkland Reporter in Washington. “A rise in the number of people looking to buy homes and a historically low inventory has led to an all-out bidding war in Kirkland. This competition has led to a 11.7 percent jump in single family home prices in Kirkland from last year, according to Redfin, with the median price at $620,000. A buyer using a lender can still compete by agreeing to financially cover any difference between the appraisal and the asking price, according to RE/MAX Northwest realtor/broker Debbie Walter. But in order to match, buyers with lenders may have to waive all contingencies, which concern the conditions under which a prospective home buyer can withdraw a deposit made at the beginning of the transaction.”
“‘You have to go in a bit naked in regard to your protection,’ Brants said. ‘It becomes a battleground of sorts, where you’re competing in a multiple offer situation against cash buyers where the only way to beat them is to waive all contingencies. It becomes who wants it the most, essentially.’”
KENS 5 in Texas. “New data shows overvalued home prices could put San Antonio at risk for another housing bubble. According to Fitch Ratings, home prices in San Antonio are 15% overvalued. That’s third worst in the state of Texas, which already has one of the most overvalued housing markets in the country at 11%. That’s something that Kelley Guerrero, a homeowner who’s selling her family’s home in Alamo Heights, says she’s seeing first hand. ‘The price per square foot tends to be somewhere between $200-$300, which I think is a bit high but the buyers are willing to pay that,’ said Guerrero.”
“Average home prices city-wide are now $225,100, nearly one-third more than 2006, right before the recession.”
The Bozeman Daily Chronicle in Montana. “The cost of building homes is always on the rise. But never is the increase more apparent than during a strong rebound and growth period like parts of Montana — and the rest of the country — are experiencing now. Statistics from the U.S. Census Bureau show Montana building permits for single- and multi-family homes in March were up 75 percent over last year. Lot prices in and around Bozeman are still cheaper than they were in 2007, but they’ve nearly doubled from three years ago, said Brian Popiel, chairman of the Southwest Montana Building Industry Association.”
“Though Bozeman hardly has a glut of houses overall, the current boom in the larger homes market may lead to a time when there are too many homes that Bozemanites can’t afford, Popiel said. ‘Everything I’m seeing points me to (the notion) that we would get a glut of houses in the $350,000-$450,000 range,’ he said. ‘That takes a pretty sizable paycheck to get there. And Bozeman doesn’t have that many of those jobs.’”
The Tampa Bay Times in Florida. “All over Tampa Bay they lurk — deserted, decaying, scary reminders of the real estate bust. Zombie houses. Abandoned by their owners and stuck in the foreclosure process, they are a blight on neighborhoods rich and poor. Some have been vacant for years, so long that people like Lee Randall can’t even remember the last time they saw the normal signs of life. ‘It’s been like that for years,’ Randall said. ‘There’s some nasty stuff in there. You’d need a mask and bulldozer.’”
“George W. Bush was still president when the cute white house on Nevada Avenue NE began its transformation into rotting zombie. In 2008, CitiMortgage started to foreclose on the loan, which Michael R. Cole assumed when he bought the house in 1995. The foreclosure dragged on with little action until it was finally dismissed on July 18, 2012, for lack of prosecution. The bank quickly filed a motion to reopen the case, but nothing has happened in the almost three years since then.”
“Asked for an explanation, a CitiMortgage spokesperson said that Cole’s loan is now ‘investor-owned’ — he would not identify the investor — and that Citi’s involvement with the house ended last year. There is nothing in public records that shows Citi ever sold or transferred the loan. Cole did not return calls seeking comment. In 2006, according to records, he and his wife moved to Brooksville and bought a much larger home with a $265,000 loan from another bank.”
http://thehousingbubbleblog.com/?p=9009
National Vacancy Rates:
http://www.census.gov/housing/hvs/index.html
Rental vacancy rates are effectively the lowest level in 2 decades, homeowner vacancy rates are back to a more “normal” level of about 2%.
Housing Starts
http://www.census.gov/briefrm/esbr/www/esbr020.html
Still very low by historic standards.
This data is not indicative of a market that is fundamentally “off” in terms of supply and demand.
If you don’t build more, all-else equal, there will be continued upward pressure on prices (rents and owner/occupied).
‘Land values do not drive property values.’
‘Property values determine land values’
I think I’ll stick with the greedy bastards theory.
October 26, 2015
The Kind Of Increases We Saw Before The Bubble Burst
The Toledo Blade reports from Ohio. “Home building in Perrysburg is in a resurgence. The city has home builder plats awaiting final approval, with just shy of 1,000 lots, said Brody Walters, Perrysburg’s zoning and planning administrator. During 2008 and 2009, the number of new homes built fell into the low 40s a year. Pent-up demand led to a brief surge to 62 starts in 2010, but that quickly subsided. In 2012, it slumped to 46 starts with an average new-home price of $205,000. In 2013, new homes jumped to 54, with an average price of $282,000. Last year, there were 59 housing starts, with an average price of $265,000. So far this year, there have been 46 housing starts, with an average price of $334,000.”
“Jon Modene, a real estate broker at Re/Max Masters in Perrysburg, said most first-time buyers are excluded from the home starts. ‘Now, the average start price is close to $400,000, which is unheard of in this market,’ he said. ‘Before you could do a cheap ranch home for $75 a square foot. You can’t build anything under $130 per square foot now.’”
http://thehousingbubbleblog.com/?p=9314
Why Is Home Building Lagging Job Creation? Realtors, Builders Disagree
Sep 10, 2015
‘David Crowe, chief economist of the National Association of Home Builders, counters that builders would churn out more houses if there was sufficient demand to warrant it. “Supply is an issue; that is true,” he said. “But the dominant issue still is demand. That’s the reason builders aren’t building more homes.”
‘Mr. Yun and others have pointed out that selling larger, high-priced homes brings builders better profit margins than building starter homes. Thus, builders have focused mostly on catering to the higher-end market in the recovery while largely ignoring the entry level, they say. “They will follow the profits,” Mr. Yun said. “Right now, there’s a bigger profit on move-up homes.”
‘That’s true. But it needs more context. In short, a builder needn’t sell as many move-up homes as it would starter homes to reach its targeted return on invested capital. Thus, the builders association and others say, there needs to be robust demand for starter homes in order for builders to justify developing starter-home communities. Many say that such demand hasn’t yet materialized.’
“If demand was there, there likely would be more supply,” said Mike Dahl, an analyst who tracks home builders for Credit Suisse AG.’
‘For his part, Mr. Crowe of the builders association noted that the Realtor group’s research overlooks a couple of points. First, he said, some people in newly created jobs might move into previously vacant, existing housing, such as foreclosed homes. Second, wage growth has lagged job creation of late, meaning that not all workers in new jobs can afford their own home.’
“Just because you have a job doesn’t necessarily mean you can afford to live on your own,” Mr. Crowe said. “More adult children are living with their parents that ever before. They may have a job, but it isn’t sufficient for them to move out.”
http://blogs.wsj.com/economics/2015/09/10/why-is-home-building-lagging-job-creation-realtors-builders-disagree/
Census bureau data excludes defaulted inventory.
“to buy up B, C and D apartments, slap on some paint and jack the rents up”
Talked to a lady working at a Speedway gas station/convenience store about a month ago.
She had rented a 3 bedroom 2 bath house in Lake Park for $900 a month for the last 4 years. The house was sold and the new LL sent her a letter saying the rent was going up to $1,200 a month and if she didn’t want it she had to be out by xyz date. She told the new LL all she could afford was $900 a month. She and her i believe she said 3 kids have been living in a hotel room that cost her $900 a month since the xyz date.
I asked her if she had applied for section 8 and she said that she had but never gets it. Which is a shame because I personally know of 2 section 8ers that are younger and healthier than I am with working people in their houses that sit and do nothing while paying $200 a month for a $1,400 a month (granted overpriced by about $600 a month) 3/2 town-home in a relatively decent hood.
I just got this in an email:
900 N Richey Boulevard, Tucson, AZ
Residential Income / 4 Plex
List Price: 350,000
Year Built: 1961
Cap Rate %: 3.87
3625 E Bellevue Street, Tucson, AZ
Residential Income / Apartment
List Price: 399,000
Year Built: 1940
Net Opp Income: -4,696.44
Cap Rate %: -1.18
76 year old apartments losing 4 grand a year. Yeah, there’s no bubble.
‘Land values do not drive property values.’
‘Property values determine land values’
I think I’ll stick with the greedy bastards theory.
I can be as greedy as I want with land.
HOWEVER, if a bank won’t lend you the money to buy the land from me because the economics don’t work, and an equity investor won’t give you money because you are overpaying for the land, the land transaction will not close.
ALL of this is driven ultimately by what you can sell the finished product for.
AND, as you point out below, a 4% cap as being common is the major part of the issue. The bubble is in the valuation of the finished product, which drives land prices. The land prices do not drive the 4% cap exit price. Buyers of the finished product don’t care at all what you paid for the land.
Land values vary widely based on terminal value of assets.
Let’s take your 4% cap apartment exit. Let’s say the rent per apartment is $2,000 per month, with 35% expense ratio. The income for that property is $1,300 per month, or $15,600 per year. Capped at a 4% yield, That’s $390k per unit…a HUGE price.
So, what does it cost to build?
Let’s say it costs $150 per square foot, because it’s higher end, and finishes, fees, and architecture drive prices higher. And the unit sizes are 1,200 square feet.
That’s $180k per door.
And let’s say the developer wants to build in a 125 basis point spread on the transaction (he wants to build the property to a 5.25% yield in order to sell at a 4% cap to make his profit).
His all-in cost can be no more than $297k per unit, so he can pay $117k per door for the land.
All-else equal, if the market changes by just 25 basis points (interest rates rise, cap rates rise by 25 basis points), and you do the same math, the land value falls by $14k per unit to $103k per unit.
A mealy 25 basis point move in cap rates drives down the land value by 12%.
You say land prices are too high because of greed.
I say that land prices are high because yields (cap rates) are low.
And why is that?
Fed intervention
Low inflation expectations
Globally crappy economy drawing money to the US
Demographics pushing pensions funds to have more cash flow investments and less “total return” investments
etc.
With the exception of demographics, most factors can reverse themselves. And watch this space if more than one of them does. Cap rates will rise, land values will fall.
“to buy up B, C and D apartments, slap on some paint and jack the rents up”
If there is enough supply, you can’t jack up the rents. It’s not possible. The tenants move out to other available properties.
Sure it’s possible. Remove supply by raising rental rates.
Absolutely insane.
Ben deals absolute beat down to Professor O-apologist
Labor Force Participation Rate Plummets To 37 Year Low; Jobless Population Soars To Record High
http://data.bls.gov/timeseries/LNS11300000
“25 percent of Americans between 25 and 54 currently not working”
Thanks to the new minimum wage hike, the percentage of Californians not working is about to increase.
I note the world of economists is divided between those who understand why this will increase unemployment, and those who pretend to not understand why this will increase unemployment. The reasons are covered in every introductory college economics textbook.
California raises minimum wage to $15 an hour
Paul Davidson, USA TODAY 9:13 a.m. EDT March 29, 2016
On Monday, California governor Jerry Brown announced a deal to raise the state minimum wage to $15 per hour by 2022. The deal marks the largest victory to date of the national fight for $15 an hour.
USA TODAY
(Photo: Ross D. Franklin, AP)
A deal to raise California’s minimum wage to $15 an hour by 2022 was reached Monday by Gov. Jerry Brown and state legislators, making the nation’s largest state the first to lift base earnings to that level and propelling a campaign to lift the pay floor nationally.
The increase will boost the wages of about 6.5 million California residents, or 43% of the state’s workforce, who earn less than $15, according to worker group Fight for $15. The proposal had been headed to a statewide referendum. It’s now expected to be approved by the state assembly.
…
So why is there any question as to why California is the poorest most impoverished state in the US?
Bring on the robots. It is time to automate in toto. Don’t have to pay medical, vacation, etc packages or worry about employees showing up for work and don’t have to tip. Result is better service and less people in the work force.
Maybe the robots will buy houses. I don’t see any other way to keep this game going.
I did see, much to my amusement, that RBS is replacing a number of its financial advisors with robots. If a machine can play chess, then certainly it can give basic financial advice.
roughly one-quarter of the American working-age population is currently unemployed, a figure that matches the unemployment rate during the Great Depression.
This statement is false. It compares the unemployment rate to the number of people not working, which are different things. Back in the Great Depression most women didn’t work outside the home, so the comparable rate back then was probably around 60%.
The good news is people are no longer quoting the meaningless rate that includes senior citizens.
And with that kind of disaster happening, 1/4 working age not working, your point is what?
My point is clear. The article made false statements. Here’s another point. The portion of the population aged 24 - 54 without a job has been always been at least 20%, except for a few years in the late 1990s.
https://3.bp.blogspot.com/-8lHGwC9lgzY/VrTGn8I54xI/AAAAAAAAmiw/Taf1AfiMkoo/s1600/EmployPop2554Jan2016.PNG
Irrelevant.
Record high unemployment.
Bernie Sanders says the real unemployment numbers now are over 10%.
“The Los Angeles Times reports from California. “Packed open houses. Bidding wars. Rising prices. That’s the landscape for much of the Southern California housing market as the spring selling season gets underway. ‘Be ready to write the offer on the Realtor’s car,’ mortgage broker Jeff Lazerson said.”
Not to pick on SoCal but it seems to me that’s all they know how to do, or want to do, is shop. We visited family in SoCal and we insisted on visiting Joshua Tree N.P. and they would rather shop at the outlet stores just outside of Palm Springs…
Joshua Tree
We had two vehicles there last month so I was able to do a 12 mile one way hike on the California Riding and Hiking Trail, only saw 4 other people on the trail all day.
Then I drove up to Keys View, the parking lot was full, and families of fats clutching bags of Cheetos and bottles of Mountain Dew were taking selfies and b*tching about the 100 foot walk from the car.
LOL, more room for us on the hiking trails.
of fats
tax fat people !
Good one. A few years ago, I hiked Mt. Mansfield in Vermont, without knowing much about the area. I went up a difficult trail and saw only a handful of people. But when I got to the summit, there were dozens of people there, some wearing sandals and many appearing out-of-shape.
There’s a road to the top. It’s like Pike’s Peak, with people driving up and hanging out in the gift shop and eating donuts.
There’s a road to the top. It’s like Pike’s Peak
Ah, but does it have a cogwheel train?
4393 elevation at the summit? That’s a nice, low altitude hike.
Not to pick on SoCal but it seems to me that’s all they know how to do, or want to do, is shop.
I think that is true of most Americans anywhere.
Californica….. the land of MT Pockets. Or is it MT Skulls?
None of these millennials will ever get hired for a real job:
http://www.foxnews.com/health/2016/03/29/blackout-tattoos-trending-as-people-cover-skin-in-ink.html
Miami Beach, FL Housing Market Implodes; Prices Crash 13% YoY On Billowing Housing Inventory
http://www.zillow.com/miami-beach-fl/home-values/
‘Let’s just buy something.’
Suckers will be suckers.
“Not everywhere in Southern California is red hot, however. Pegi DiRienzo, a Teles Properties agent, said the market has slowed in the corner of Irvine in which she specializes. There are fewer buyers from China than last year, given troubles in that country’s economy, DiRienzo said. ‘It’s going to take a little longer this year to sell properties,’ DiRienzo said.”
Nobody could have seen it coming!
Another day, another 3%+ drop in oil prices (yawn…).
Markets | Tue Mar 29, 2016 11:25am EDT
Oil drops as investors grow weary of rising supply
LONDON | By Amanda Cooper
A pump jack and pipes are seen on an oil field near Bakersfield on a foggy day, California January 18, 2015. REUTERS/Lucy Nicholson
A pump jack and pipes are seen on an oil field near Bakersfield on a foggy day, California January 18, 2015.
Reuters/Lucy Nicholson
Oil prices fell on Tuesday, reflecting growing concerns that a two-month rally may be fading, as supply looked set to keep rising and there appeared to be little immediate prospect of demand keeping pace.
The oil price has risen more than 45 percent since mid-February ahead of a meeting next month of the world’s major producers to discuss an output freeze. But there is growing scepticism about the outcome of the meeting.
“Verbal intervention, which has obviously helped the market greatly over the past two months, combined with a production slowdown in the U.S., has probably taken (oil) as far as it can. Now the market really wants to see some action,” Saxo Bank senior manager Ole Hansen said.
“We’re seeing more and more commentators raise the flag and saying ‘have we seen too much, too soon?’ in terms of the rally across the sector.”
…
“Verbal intervention”?
LOL, snake. I dunno, either.
Battery of reporters is right in line with the platform.
And there y’are, with a pathetic one cheek sneak.
For pent-up gas, buy Beano!
Two obtuse posts are better than one.
lol, you must have been dyin’, DYIN’ of anxiety for HOURS, you poor thing, trying to figure out how to sneak in a little political shot while others are on housing and economic issues. lmao, lolZ.
May I suggest Reddit? You can let it ALL out there.
‘A year ago, being known as the “Square of Canada” was a badge of honor. Payfirma Corp.’s smartphone-compatible credit card readers were in high demand, and local investors supplied the Vancouver startup with $13 million in funding. Like Jack Dorsey, the chief executive officer of Square Inc. (and Twitter Inc.), Payfirma CEO Michael Gokturk said he was aiming for “hypergrowth.” Gokturk doubled his staff to 80, including a chief operating officer formerly of Intuit Inc., and started talking about an initial public offering.’
‘But by November, being the “Square of” anywhere suddenly wasn’t such a hot title. That month, Square sold shares in an IPO that valued the company at about $2.9 billion, less than half its private valuation from a year earlier. In the runup to the IPO, analysts began questioning whether the card-reader maker should really be priced like a high-flying tech company.’
“Now that they started going through the rigors of a public market, you can see that their market is actually quite limited,” said Gil Luria, an analyst at Wedbush Securities. “It’s going to be much harder going forward for companies that try to emulate their model to raise capital.”
‘At Payfirma, Gokturk said he was forced to admit that recruiting 40 new people didn’t help with the company’s stalled U.S. expansion—or much else. “We were still doing the same results, from a sales perspective, from a revenue perspective, with a doubled staff,” said Gokturk, declining to provide revenue figures. “We made the mistake of overhiring and hoping that we were going to raise more money.”
‘Eventually, Payfirma cut 30 of its 80 employees. Afterward, Gokturk published a blog post on the company website asking Vancouver’s other businesses to hire the dismissed workers, including a list of names, skills, and contact information. The list has since been removed, but Gokturk said the effort helped three-quarters of his former employees find new jobs.’
‘There was no goodwill program when the lights went off at Powa Technologies Ltd, the U.K. Square clone once valued at $2.7 billion. Powa filed for administration, the rough British equivalent of bankruptcy protection, in February after struggling for months to make payroll and pay creditors. The board removed founding CEO Dan Wagner, who last year said he wanted to build the “biggest tech company in living memory.” It brought in accounting firm Deloitte to consult, which resulted in 72 jobs being cut at Powa’s London headquarters. In March, pieces of the company were sold off.’
http://finance.yahoo.com/news/no-one-wants-next-square-120003493.html
Vienna, VA Housing Market Craters; Prices Plummet 6% YoY As Prices Fall Across DC Area
http://www.zillow.com/vienna-va/home-values/
Rage…. CraterRage
It’s that uncomfortable feeling one gets when they realize they made a huge error with someone elses money.
http://goo.gl/53IBYr
“Boomerang Buyer” - I’m back to play with OPM, again… and make you eat the losses… Again.
This gives you the magnitude of the housing price correction to come.
http://picpaste.com/pics/de61c27614df214bc8a6a963a39031b9.1459270247.jpg
Get in on the ground floor of the Guam Housing Bubble, if this new FSA plan goes thru……
http://tinyurl.com/h4uhxle
Sarasota, FL Housing Market Craters; Prices Plummet 16% YoY On Skyrocketing Housing Inventory
http://www.movoto.com/sarasota-fl/market-trends/
Remember….. Nothing accelerates the economy and creates jobs like falling prices of all kinds to dramatically lower and more affordable levels. Nothing.
“All kinds” includes paychecks/salaries.
If the history of the past 50 years is a guide, paychecks will fall faster than prices.
Corrected for you.
“All kinds”
includesexcludes paychecks/salaries.Profits rise in an environment of falling prices.
If the history of the past 50 years is a guide, paychecks will fall faster than prices.
Yup. You can take that to the bank. It’s what happened during the Great Depression.
Opinion Survey:
Can the PTB continue keeping housing/apartment prices inflated for the next ten years?
The -fixr is wondering if they will correct within his remaining lifespan, making a retirement house w/workshop affordable.
Or….. should I just talk to my cuzzin in Oklahoma, and see if he wants to sell a share of the old family farm, and build a modest/shop house there?
Or…….. continue with Plan “C”; work until death?
Or…
All of the above?
The question is; Can they afford to drive demand even lower than it is today?
Remember….. Housing demand is at 20 year lows and falling.
X-GSfixr
Plan “A” IMHO, yes this bubble will pay out a while longer. 10 years would not surprise me, the central banks are mighty powerful.
Plan “B” Oklahoma sounds like a nice plan to do some inventing and get a product to market, Met a gentleman who saw a need for a product as an aviation machinist, and started a co later in life.
Plan “C” is out. Life is too damn precious.
I like the house/workshop on the family farm plan. Time it right and you can build it during the next slump/crash and get materials and labor on the cheap, unless you were planning on building it yourself. I suppose you could hire some hands to put up the frame and the exterior and do the interior yourself at your own pace.
“Can the PTB continue keeping housing/apartment prices inflated for the next ten years?”
Yes, this is my belief. Look what they’ve pulled off in the last ten years.
Collapsing housing demand to 20 year lows is all the accomplished.
And BIG FED is collapsing the supply faster; while simultaneously keeping rates low. Do the math, donk.
Distinction without a difference FL_Donk. A cratering market and failing economy is the end result.
LOLZ ^
Tears of _____?
Alexandria, VA Housing Prices Crater 13% YoY
http://www.zillow.com/alexandria-va/home-values/
Here you go fxr
http://www.farmersonly.com/
Arcadia, CA Housing Market Implodes; Prices Cave 12% YoY On Plummeting Housing Demand
http://www.zillow.com/arcadia-ca/home-values/
No comment…..just look
http://wwwtheworldandeverythinginit.blogspot.com/2016/03/nigel-farage-europe-is-burning.html
Very few markets are in true bubble territory at the moment in the US. Most of California, Denver, are 2 areas that come to mind as being very bubbly. The salaries have no relationship to prices.
Markets such as Houston, Atlanta, Chicago, Dallas, are all very reasonable. Most people can afford homes. I personaly wouldn’t go anywhere near Houston due to the Oil issue, but many cities have reasonable home prices given historically low rates.
Incorrect.
Resale prices in every single MSA in the country are inflated far over long term historical price trend.
Looks like the NAR plant just self-identified.
It’s the same old Donkey.
Poor donks. Poor poor donks.
Doral, FL Housing Market Caves; Prices Sink 7% YoY As Price Declines Appear Nationally
http://www.zillow.com/doral-fl/home-values/
Why are Chinese leaders so rattled by an anonymous Internet letter? Could it be they know how unstable their house of cards really is, notwithstanding ABQ Dan’s incessant shilling to the contrary?
http://www.nytimes.com/2016/03/30/world/asia/china-xi-jinping-resign-letter.html?_r=0
FBs may be looking at a bleak retirement when the housing bubble implodes.
http://www.telegraph.co.uk/business/2016/03/29/house-price-crash-could-leave-savers-without-cash-to-fund-retire/
“This sucker could go down” — George W. Bush
Goon, you got a plan to get out of Denver when it all goes down?
“If you bought a house in the last few years predicated on the false notion that prices bottomed or that houses don’t depreciate, you’re in for a painful shock of your life over the coming years.”
Correct.
The corrupt public uions who helped install successive corrupt Democrat municipal administrations (redundant, I realize) who ran Chicago into the ground are now about to get stiffed by the bankrupt pension system. Funny how the universe has a way of giving people what they deserve.
http://www.zerohedge.com/news/2016-03-29/fitch-downgrades-chicago-after-worst-possible-outcome-state-supreme-court-pension-re
Actually it’s the retired people getting stiffed. I’m sure the administration won’t get touched.
Remember…. a ‘housing recovery’ is falling prices to dramatically lower and more affordable levels by definition.
Santa Clara idiots
you can pay double for a 5 day turn time on a PCB fab and then spend 4 days trying to get the price down a few hundred bucks or start with a 10 day turn time and save a couple thousand dollars.
We go with the first option every time its the people from east of here way.
No wonder they over pay for housing.
IV