Taking The Price Insensitive Buyer Out Of The Market
The Business News Network reports from Canada. “The real estate markets in Vancouver and Toronto are at it again, positing record sales and double-digit price gains. That’s pushed the benchmark home price up 23 per cent to $815,000 in Metro Vancouver, and the average home price up 12 per cent to $688,181 in the Greater Toronto Area. At National Bank Financial, analyst Peter Routledge has raised concerns about the ‘price insensitive’ foreign buyer. In a note earlier this year, the bank says it’s observing ‘accelerating outflows of hot money from China.’ While not all of it lands in Canada, ’some of it does and much of it finds its way into the housing markets of Vancouver and Toronto.’”
“So what takes the price insensitive buyer out of those markets? Routledge said he anticipates China will take steps in the ‘near future’ to stem currency outflows. ‘Our concern is that this hot stimulus could abruptly and unexpectedly turn cold, and force the price of homes in (Vancouver and Toronto) down,’ he wrote.”
The Calgary Herald. “City building permit values plunged by 67 per cent in the first two months of this year compared to the same time in 2014, just before the oil price crash. That’s also a 33 per cent drop from 2015 and doesn’t bode well for property tax payers who pick up the slack to maintain Calgary’s revenue-neutral mill rate system, said a member of city council. It’s all a reflection of a contracting city economy hit by the oil price slump and the caution that comes with that, said city Coun. Ward Sutherland.”
“‘In the past, developers would build quite a few homes in advance, now they’re building on immediate demand,’ he said. ‘It’s simple economics — you won’t pay that outlay if no one’s buying … it’s really a paradigm shift in the housing industry.’”
Dow Jones Newswire. “Brokers in Calgary are reporting that sellers have been offering a wide range of incentives to buyers, including a Tesla in one case. Many prospective buyers are retreating to the sidelines in that city, brokers say. ‘I haven’t got a buyer in real estate right now who isn’t petrified to even buy,’ said Keith Crawford, a Calgary- based realtor with Century 21, adding buyers aren’t sure if prices have hit a bottom.”
From CBC News. “The latest numbers out from one Saskatoon real estate company suggest the market is flush with brand new condominiums, and that is driving the price down. The number of new condominiums currently for sale in Saskatoon is up 35 per cent over last year, according to the report by Royal LePage. The average price for a condo is $226,186 right now. That’s 10.1 per cent less than last year. ‘New units resulting from condominium development projects that started two years ago are now coming onto the market and generating a spike in inventory,’ said Norm Fisher with Royal LePage.”
The Star Phoenix. “The ongoing economic slowdown continues to put pressure on Saskatoon home builders, who have reined in construction and could face significant challenges if the commodities market doesn’t rebound. Chris Guérette, who took over as CEO of the Saskatoon and Region Home Builders Association earlier this year, said the downturn has already affected the city’s ‘tremendous’ number of builders. Between 25 and 30 went out of business last year, bringing the city’s total to about 125 — well below the 2011 peak of 200, she said.”
“‘It gets tough and now the builders that thought they could do something — or were really successful because the market allowed for that — now they’re realizing that, ‘Oh, this is not going to be so easy,’ Guérette said.”
From Maclean’s. “In recent months, Fitzpatrick’s Auctioneers in St. John’s has seen its yard fill with trucks, snowmobiles and assorted toys their owners couldn’t afford. Down the road, at Traders Buy/Sell/Lend, Les Paul electric guitars line the floor, while a glass jewellery case is thick with gold chains of the sort seen on rappers and professional baseball players. Much of the stuff comes from Newfoundlanders laid off from jobs in Alberta, Erick Mathiasen, a buyer for the store, tells Maclean’s.”
“Things are different in Conception Bay South, a once-modest bedroom community about 10 km to the west. There too, tracts of attractive new homes went up during the boom along the community’s heights and ravines—along with bars, restaurants, an arena, a town hall and a spanking new firehall to serve the expected influx of residents.”
“These days, dozens of those homes sit waiting for buyers, and confidence is in short supply. Driving through an area known as the Upper Gullies, local resident Tim Kelly points to a row of tidy-looking homes that have languished on the market for four months. ‘There would have been bidding wars on half of them even a year ago,’ he says. ‘Now I don’t know if any of them are selling.’”
“The weight of these facts hits Kelly hard. His employer of 22 years, Acan Windows and Doors, had been going all-out to supply a residential construction boom fed by oil money. But the company was sold in a leveraged purchase to a smaller competitor when business slowed in 2014, and then the oil bust hit. Faced with a cash crunch, Acan shut down last November, throwing Kelly and 70 others out of work.”
“In retrospect, Kelly regards the building spree as a classic case of irrational exuberance—something to which Newfoundlanders may have been particularly susceptible. To many, thrift was a cultural habit born of necessity, says Al Antle, executive director of St. John’s-based Credit Counselling Newfoundland. But when oil-related income began pouring in, and interest rates plunged, they joined their fellow Canadians in spending with a vengeance. ‘We borrowed to the max, bought houses and used [equity in] their homes as ATMs, often to buy an extra car or new toy,’ says Antle, who finds himself counselling people with six-figure incomes. ‘But we were only doing what was expected.’”
‘The federal anti-money laundering agency has levied a $1.1-million penalty against an unnamed Canadian bank for failing to report a suspicious transaction and various money transfers. It is the first time the Ottawa-based Financial Transactions and Reports Analysis Centre of Canada, known as Fintrac, has penalized a bank.’
‘The centre identifies cash linked to terrorism, money laundering and other crimes by sifting through millions of pieces of data annually from banks, insurance companies, securities dealers, money service businesses, real estate brokers, casinos and others.’
‘Fintrac spokesman Darren Gibb says he cannot legally discuss details of the bank’s infraction, and the agency is exercising its discretion to withhold the financial institution’s identity.’
‘More than one in 10 Vancouver condos sit empty’
‘City’s overall non-occupancy rate of both single-family homes and condos sits at 4.8 per cent, according to new figures compiled by analyzing BC Hydro data. Of more concern in a city strapped for affordable housing is the 12.5-per-cent non-occupancy rate for condominiums, which account for most of the city’s 10,800 empty homes.’
‘The cross-Canada average of vacant apartments for census metropolitan areas over 200,000 people was 7 per cent, according to the study. Quebec had the lowest rate, at 5 per cent, followed by Toronto at 5.4 per cent. Near the mid-point of the list was Calgary at 8.6 per cent, while Victoria was third highest at 11.5 per cent, topped by London (13.5 per cent) and Windsor (16.5 per cent).’
‘Vancouver’s highest overall vacancy rate (including houses and apartments) in 2014 — at 7.4 per cent — was in Point Grey, Fairview and Kitsilano. The non-occupancy rate in the downtown peninsula that year was 6 per cent.’
A 10% vacancy rate in Vancouver. That slightly exceeds our national vacancy rate.
Ben -
I mistakenly posted on the Sat HBB - meant to ask this here……
I wonder how much of this ill gotten gain and subsequent tax evasion ended up in those high priced sky box condos in NYC in the recent past?
I recall on this site and several others that I read that folks in NYC were wondering where all this money to buy these overpriced, multimillion dollar condos was coming from. Ruskies, Chicomms, Brazilians etc. seemed to be the ones. Wonder if the PP will expose this in the near term.
‘More cool water is being dumped on the once-hot real estate market in St. John’s, according to data released by two housing groups. The price for condominiums plummeted, falling almost 10 per cent in the same time frame. The Royal LePage survey of home prices in the area shows more dark clouds hovering. The group says home prices in Alberta and Newfoundland are just starting to adjust to the oil downturn.’
‘Kingston seems to be bucking the national trend for the first three months of this year when it comes to house prices. According to the Royal LePage House Price Survey released Thursday, the aggregate price of a home in the Kingston area decreased 3.3 per cent in the first quarter of 2016.’
‘The average home in Kingston is now worth slightly more than $300,000. Nationally, the price of a home in Canada increased 7.9 per cent in the first quarter, averaging $521,621.’
‘Soper said this trend is in sharp contrast to the situation from 2011 to 2014 and in the mid-2000s, when a booming energy sector attracted families from all over Canada to Alberta. Kingston home buyers and sellers don’t have to worry about up-and-down markets, Armer said, with prices on average only increasing three per cent per year.’
“Kingston is a great place to invest in real estate because it’s consistent, with lots of government workers, and we don’t go through the highs and lows of Vancouver, Toronto and Calgary.”
‘There’s lots of buyers and lots of inventory in the area, Armer said. “It’s not a seller’s market, it’s not a buyer’s market, it’s very balanced,” Armer said. “We’re lucky to live here in terms of having a stable market and thank God we don’t have to deal with the Toronto and Vancouver situations, which are a little bit crazy now.”
“Kingston is a great place to invest in real estate because it’s consistent, with lots of government workers, and we don’t go through the highs and lows of Vancouver, Toronto and Calgary.”
Sure, it’s not as if the government will ever be affected by a downturn in the economy and therefore tax receipts.
Government employee in Kingston probably means prison guard.
‘On April 7, Winnipeg’s Artis REIT plans to divulge details about its $140-million plan to revitalize its downtown Winnipeg flagship property, the Winnipeg Square/360 Main St. complex that occupies an entire city block southwest of Portage & Main.’
‘As Gordon Sinclair, Jr. reported a day ago, Artis plans to build a 40-storey apartment tower over Winnipeg Square’s south pad as well as conduct a $35-million facelift on 360 Main St., the office tower on the north pad.’
‘There should also be more short-term demand for apartments in downtown Winnipeg, given what appears to be an oversupply of condos in Winnipeg overall. If housing prices in Winnipeg level off, then high-end downtown rental apartments will become more attractive to empty nesters seeking to ditch detached homes in the suburbs.’
‘Why? People nearing retirement are unlikely to purchase condos if they fear the value of those units will decline in the short term. Younger adults without kids, the other main target demographic for downtown living, are more likely to seek out an apartment in the first place.’
‘If Artis pulls the trigger on this development, the tower could rise very soon. Unlike condo developers, apartment builders don’t need to sell units in advance in order to attain financing for construction.’
Join the One Percent and Live a Decade Longer:
“The wealthiest Americans can expect to live at least a decade longer than the poorest—and that gap, as with income inequality, is growing ever wider.
Take a 40-year-old man in the top 1 percent. He can expect to live, on average, to 87. His counterpart in the bottom 1 percent would be expected to perish, on average, before his 73rd birthday. For women, who live longer on average, the gap was narrower, but still substantial. Life expectancy for the richest women is almost 89, about 10 years longer than the poorest.”
http://www.bloomberg.com/news/articles/2016-04-11/join-the-one-percent-and-live-a-decade-longer
If you avoid debt, you can retire 20 years earlier and really live while you are in your prime.
Good point.
FWIW, I have gone from lots of time on my hands and dead broke to chained to a cubicle and buying chit on-line that I didn’t need due to cabin fever.
Even the bottom 1 percent live like Kings thanks to Taco Bell Pizza Hut Walmart, Target and Netflix.
The bottom 5% in he USA live like the top 1% in many countries.
That’s a stretch. More like they live like 3rd world middle class, or even a bit better depending on the country. 3rd world 1% own all the wealth in their countries, they’re rich; don’t kid yourself.
He’s not kidding himself, he’s deluded.
And costco tents for only $59. Sleeping bags too.
Globalist Larry Summers promotes globalism in globalist Washington Post:
“Since the end of World War II, a broad consensus in support of global economic integration as a force for peace and prosperity has been a pillar of the international order. From global trade agreements to the European Union project; from the work of the Bretton Woods institutions to the removal of pervasive capital controls; from the vast expansion in foreign direct investment to major increases in the flow of people across borders, the overall direction has been clear. Driven by domestic economic progress, by technologies such as containerized shipping and the Internet that promote integration, and by legislative changes within countries and international agreements between countries, the world has gotten smaller and more closely connected.
This broad program of global integration has been more successful than could reasonably have been hoped. We have not had a war between major powers. Global standards of living have risen faster than at any point in history. And material progress has coincided with even more rapid progress in combating hunger, empowering women, promoting literacy and extending life.”
https://www.washingtonpost.com/opinions/whats-behind-the-revolt-against-global-integration/2016/04/10/b4c09cb6-fdbb-11e5-80e4-c381214de1a3_story.html
And on the topic of globalism, Huffington Post leads with a link to Glenn Greenwald’s The Intercept titled Pro-TPP op-eds lifted straight from lobbyists:
https://theintercept.com/2016/04/10/tpp-lobbyist-opeds/
Globalists gonna globe.
Just because a consensus exists doesn’t mean the consensus is correct. And whose consensus is it, anyway? The consensus of people like … Larry Summers. See how easy that was?
He is perhaps the stupidest, most ego-driven intellectual the post-industrial world has ever produced. There are times when I can’t tell if his positions are attributable to routine academic naivete institutionalized at the level of public policy, or, instead, to pure arrogance and self-interest. It’s incredible to me that Obama appointed him as Treasury Secretary, and then nearly appointed him as Fed Chair.
All this guy has done is p-o everyone and yet he still gets all these high-power jobs. Maybe he’s got a lot of dirt on people?
The problem in being opposed to “globalism” is that most of the people opposed are nationalists, authoritarians. They automatically (knee-jerk) assume globalism is world government, so the solution is massive protectionism, nationalism, authoritarianism and execution of all nonconformists.
The globalism I like is a stateless concept where people have the natural right to migrate where ever they can afford. It is statist to deny any individual the right to migrate anywhere. If you do not own the land you have no right to dictate to the landowner who will set foot on his property.
How come Summers never expired from terminal acne?
Excerpt from the article:
“One substantial part of what is behind the resistance is a lack of knowledge. Everyone who loses a job because a factory moves abroad knows it; many who lose their jobs for local reasons blame globalization. But no one thanks international trade for the fact that their paycheck buys twice as much in clothes, toys and other goods as it otherwise would.”
Yeah, enjoy your $10/hr service (serf-ice?) job at Wally World to buy more Chinese made s**t you don’t need at said Wally World, while the cost of essentials (insurance, health care, housing) keep increasing at double digit rates every year. Mr. Summers, you sir, are a d-bag.
An article posted yesterday needs to be revisited and clarified because, even though this website of Ben Jones has demonstrated throughout the years the lemming-like behavior of our fellow human beings and how these lemmings will unquestionably follow the dictates of perceived authority figures in a Groupthink manner, a lot of readers here apparently just do not get it.
The first article to come will be a version of the incident and next article to come will be an article to help explain the behavior of the people featured in the first article. The associated links will follow in subsequent posts.
Here’s the article that describes a version of the incident:
“A prank caller tricked Burger King workers into smashing all the restaurant’s windows”
“(Reuters) - Several employees of a Burger King fast-food outlet in Minnesota were persuaded by a prank caller posing as a fire official to smash the restaurant’s windows, convinced that rising gas pressure was threatening to cause an explosion, police said Saturday.
“Police in the Minneapolis suburb of Coon Rapids were dispatched to the scene Friday night after someone at a gasoline station next door called emergency services to report what appeared to be an act of vandalism in progress, police Captain Tom Hawley said.
“The restaurant manager told arriving officers she had just received a phone call from a man identifying himself as a fire department official who seemed to have a working knowledge of commercial fire safety systems, which he asked her to check, according to Hawley.
“In the course of their conversation, she recounted, the caller spoke as if he were remotely monitoring the situation inside the restaurant, and said he could tell that “gas pressure inside the building was rising.”
“As he gave her “updates,” the caller insisted the gas buildup was reaching excessive levels, and finally warned that the restaurant was in danger of exploding unless the exterior windows were immediately broken to relieve pressure, Hawley said.
“After quickly ushering out the handful of customers who were present at the time, the manager and three other employees ran out to their cars, grabbed tire irons and other objects and began smashing all the glass ringing the building.”
Next up will be an article that will help explain this behavior.
The following information was distilled from the excellent book “Influence: The Psychology of Persuasion” written by Robert Cialdini …
“A common denominator in most of the research about authority is that people drastically underestimate how much the appearance of authority will influence them. The fact is, they are extremely inclined to follow the instructions of someone who looks like they know what they are doing.
“The mechanism in play with the authority principle is that you will be inclined to substitute the judgment of someone who possesses the symbols of authority for your own. Cialdini cites a chilling study where an unknown person using the title “Doctor” gave incorrect medication instructions – over the phone – to very experienced nurses. Even though the instructions were clearly wrong, the nurses did not use their own clinical judgment. Instead, the instructions of the “doctor” were followed 95% of the time.”
The “fireman” on the phone in this case was the authority and the Burger King supervisor was following the instructions of this fireman authority. The other employees were in turn following the instructions of the Burger King supervisor, another authority. The results was a bunch of lemmings following the instructions of an authority figure who in turn was a lemming following the instructions of a pseudo authority figure who was in fact just a rather clever and convincing prankster.
Here’s a link to the Burger King article …
http://www.businessinsider.com/r-prank-caller-tricks-burger-king-workers-into-smashing-windows-2016-4
Same thing happened in Morro Bay, CA a few months ago
Here’s this link that refers to the psychology that drove the Burger King employees behavior …
http://www.takebackyourbrain.com/2007/the-psychology-of-persuasion-authority/
You can save the long-winded explanations. IDIOCRACY has arrived. End of story.
https://www.youtube.com/watch?v=icmRCixQrx8
“You can save the long-winded explanations. IDIOCRACY has arrived. End of story.”
Idiocracy has always been with us, these Burger King incidents are just its latest expressions.
The fact that 95% of the electorate voted for Obama, McCain, and Romney in 2008 and 2012 indicated we’d become Retard Nation. While stupid people have always been with us, they have NOT always been such an overwhelming majority.
Nobody elected anyone. Nobody. They were all selected. There is no electorate. American Idol has more of an “electorate” than the US does.
Nobody elected anyone. Nobody. They were all selected.
We’re a republic, not a democracy.
We’re not even that anymore. What was it the old Soviet Union had, with its Politburo? Seems to be closer to what we’ve got than anything.
Pure democracy is dangerous, as the Founding Fathers recognized, being susceptible to demagoguery. Thus, they greatly limited it, filtering it through a representative system with multiple checks and balances, including many “selections” instead of direct popular elections.
It’s what the Constitution is all about. As American as apple pie.
The only representative system we have is pretty much reserved for special interests. Pay to play.
Who do the special interests represent?
I’m still posses about 17th amendment
Beginning if the republics end
Pure democracy is dangerous, as the Founding Fathers recognized, being susceptible to demagoguery.
The founding fathers were mostly rich guys. They didn’t like the idea of democracy because they wanted to run the country themselves, with little interference from the 99%.
The founding fathers were mostly rich guys. They didn’t like the idea of democracy because they wanted to run the country themselves, with little interference from the 99%.
When you think about it, they wanted to trade the British aristocracy for a home grown plutocracy, complete with slaves and indentured servants.
If you could get them to smash out their own windows, that might prove an idiocracy. As long as they’re smashing out their bosses’ windows, I’m not so sure.
It could be a creative demand for $15 an hour.
What’s a bigger prank, this or the tens of millions going out to vote in something that looks rigged on both sides?
Sunshine is the best disinfectant (after fire).
‘the tens of millions going out to vote in something that looks rigged on both sides’
Where are the voting rights regulations? Where were they when the Libertarians got a million signatures and the “two parties” raised it to 2 million? When Ron Paul got denied a fair shake? The two parties are a dictatorship. We can learn after the fact about rectal feeding. We sit and watch our government help one of the richest countries bomb the snot out of one of the poorest, Yemen. Isn’t it quaint that we held a trial which determined Germany had committed a crime by invading Poland? We are so far past what we think we are.
So where’s the part about HBBers “just not getting it?”
I’ve got it. Have had it for years. I keep it in a shoebox under some old clothes in the closet, and only take it out when nobody’s around.
Hey, someone should try this with Congress.
Gray divorce can drag both parties into the red:
“It’s certainly is not good for your retirement. That nest egg you worked so hard to accumulate must now be split and support two households instead of one.
“If you are divorced in retirement, your retirement money will be cut in half,” says Craig Ferrantino, president of Craig James Financial Services. “A pension earned during marriage is usually property of both spouses. If you are married the whole time and had a pension, it is cut in half. If you had an IRA, that is cut in half.”
Divorce is generally not part of the plan, says Brian Spinelli, financial adviser at Halbert Hargrove. “For most people it does cause a lifestyle shift,” he says. “A number of clients delay retirement.”
Boyd says in a recent case the wife was 63 and the husband 69. Even though they had a “nice” net worth, she wanted alimony and he did not want to work until he is 80.
“How do you resolve that?” he says. “That’s one of the big issues of people in their mid- to late-60s getting divorces. How do you maintain that lifestyle? You can’t. You have to cut back. It’s a hard conversation, but that’s a big problem when you talk about these gray divorces.
“Sometimes people are lucky, when they have enough money so that each can enjoy a lifestyle,” he says. “That’s a small percentage. I represent wealthy people. Is it the same lifestyle they would have had together? Most of the time it is not.”
https://www.washingtonpost.com/business/get-there/gray-divorce-can-put-split-couples-into-the-red/2016/04/08/1fa02dda-fc09-11e5-9140-e61d062438bb_story.html
Lol, I read the first words of the post as “Gay divorce”. Moar cawfee!
BTW, you might want to find different sources to link to. WaPo is a miserable rag that publishes work by liars, shills, parasites and propagandists. Utterly useless for information, just like its owner and his Amazon ponzi. Sometimes mildly amusing, though.
Related article asks are you cheating on your spouse? What you need to know about ‘financial infidelity’
http://www.foxnews.com/opinion/2016/04/08/are-cheating-on-your-spouse-what-need-to-know-about-financial-infidelity.html
Bring back blame divorces, this “no fault” stuff is crap. What’s this 69 year old dude getting divorced for?
It’s the “I always wanted to be married, but I never wanted to be married to a grandmother” thing.
Or it’s a “the kids are grown and gone, and I’m sick of living with this bum/witch” thing.
If no fault divorce was abolished, does that mean a judge could say that those are not good reasons? That’s a great idea. Increase the government’s in the details of family life.
If no fault divorce was abolished, does that mean a judge could say that those are not good reasons? That’s a great idea. Increase the government’s in the details of family life.
Even with no fault divorce the government intrudes. Big time. Ask any guy paying alimony or any guy sitting in jail because he couldn’t pay his government mandated child support payments because he was unemployed.
That’s not the same thing. It’s just making someone support his kid, not keeping people in a marriage that they don’t want to continue.
Of course, it’s a dumb policy. The “deadbeat dad” is not going to be pay child support if he can’t work.
And he has to pay that child support and alimony and she keeps half their wealth, if not more, even if he was the one who earned it. And this happens even if he didn’t want to get divorced. With no fault divorce she can nuke the marriage for no reason at all and take him to the cleaners. This only happens because of government intrusion.
Not from her perspective. If he can he will hand over the dough, even if he can’t afford to do so, otherwise he goes to jail. She has him by the nutz and they both know it, and she couldn’t do it without the help of .gov
You may have a point there. It’s the threat of jail that makes people pay. The guys who actually go to jail generally don’t have any money.
But your point point about government intrusion if off the mark. You have to look at from Bill in LA’s point of view. The man and the woman made a decision to involve the government in their relationship when they got married. At that point they made a decision to play by the government’s rules. There was no coercion.
The guys who actually go to jail generally don’t have any money.
From what I’ve observed those guys don’t even go to jail. Only the guys who will rush to pay once they’re released are jailed in the first place. The bums just ride off into the sunset, spreading their seed in the next town.
My sister’s a lawyer in Florida. Over there they’ll take a guy’s driver’s license away if doesn’t pay child support. This is also dumb. If a guy can’t drive, it makes it difficult to go to work. The impression that I got is that some people there do lose their licenses.
Observations: if you marry late in life then a reason-based court only considers assets obtained after marriage as split even. But I don’t trust the courts that much. Nine out of ten times they side with government. Prenups don’t mean a thing if you are in the 95%. If marriage is “til death to us part,” more often than not one of the couple will die alone. As an anarchist, I would not want to get a marriage license. That is just more information the government should not have. It is a needless set of information to give to the State. Same thing with voter registration. I don’t register to vote and don’t want that info in a State database.
Then don’t work for the government and whatever you do don’t get a security clearance.
Every time you post here, the government adds it to your file. This kind of posting population is crack to the sneaky peekers.
No divorce for poor people.
Global meltdown, soon come. Like any minute now.
The edges are already in full melt.
STAGflation?
if oil makes it to $45 and w rents rising to catch up to prices as lease contracts renew
stagflation for you
With demand cratering and a massive excess supply of both items I don’t think that’s anything to be concerned with.
Remember… Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
New York Post editorial linked from Drudge:
http://nypost.com/2016/04/09/team-obama-is-setting-us-up-for-another-housing-market-collapse/
“This sucker could go down” — George W. Bush
Something about these finger-pointing southpaw presidents…
At least there is some good news.
The Office of the Comptroller of the Currency recently warned that mortgage underwriting standards have slipped and now reflect “broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”
When the economy and housing prices turn south again, a lot of these loans will go bad, just as they did last time.
Good news: That probably won’t cause another global financial crisis, because the banks largely learned their lesson on that front back in 2008.
Bad news: The taxpayers will likely wind up on the hook. Directly or indirectly, Uncle Sam has been responsible for insuring at least 80 percent of new mortgages since 2008
Evictions rise as Boston gentrifies
“But the situation in wealthy cities like Boston is even more insidious. Unlike tenants in Milwaukee who fall behind on their rent, many people in East Boston and other rapidly gentrifying neighborhoods do pay, reliably, often for years. But without the protection of a formal lease, they can be subject to a so-called “no-fault eviction” simply because their landlord decides to clear out a building to renovate it for a newer, upscale market. “There is a housing crisis, but on top of that is a second, overlaying crisis of market pressure and speculative investors,” said Matt Nickell, an attorney with Greater Boston Legal Services. In a place like East Boston, he said, “It’s not uncommon for a landlord to raise the rent three or four times in a single year”
https://www.bostonglobe.com/opinion/2016/04/10/evictions-rise-boston-gentrifies/HsGxOJiFDtrNWr8njV5jXP/story.html
The rich (and the millenials) are moving downtown, where their new playgrounds are. The poors who live downtown are being shunted out to the exurbs.
I’m not sure what can stop that, other than widespread rent-control, or a massive shift in wealth from the rich to the rest.
“…sold in a leveraged purchase to a smaller competitor when business slowed in 2014, and then the oil bust hit.”
The company was already destroyed by the building boom. The oil bust just nailed the lid down.
Hey, Blue, how’s everything going up there on the inland sea? Is spring starting to gain a foothold?
Yesterday was the first day in a week that we did not have snow in the air. By the end of this week it will be 70. It’s almost time.
The company was already destroyed by the building boom ??
It was a oil boom before the building boom….I suspect that the owner went bank big time during the run-up…Not so much for the 70 employees…
that’s how a credit expansion destroys businesses and their employees.
that’s how a credit expansion destroys businesses and their employees ??
If you cherry pick examples well then yes…Credit, VC money has created many great companies and has helped employ tens of millions of people…
Not cherry picking. Most people in business extrapolate way into the future. Rapidly increasing sales leads many companies to overexpand capacity and to do it with debt that has to be paid back over the long term. The inevitable downturn is crushing when there is debt service and no orders. Very destructive.
Many majors are suffering from this around the world right now.
Hey, boyz n’ girlz, if you want a crap shack in Saskatoon, just arm yourself and take possession. That’s where all this is going. Them’s as got the lead, makes the rules.
We’re all Venezuela now.
“Eat me.”
LOL
“Ladies and gentlemen, I’ll be brief. The issue here is not whether we broke a few rules, or took a few liberties with our female party guests - we did.”
[winks at Dean Wormer]
http://www.youtube.com/watch?v=ROxvT8KKdFw - 399k -
I watched that movie this weekend. “My advice to you is to start drinking heavily.”
Here’s another quote, one that Summers, et al., might utter: “You f____d up! You trusted us.”
The whole quote is even better: “Flounder, you can’t spend your whole life worrying about your mistakes! You fucked up… you trusted us! Hey, make the best of it! Maybe we can help.”
I forgot the Animal House reference - I was referring to the exchange here yesterday when someone, uh, misspelled, uh, “racist.”
Two “unexpected” secret meetings! My, my, what’s that all about? Negative interest rates? Lol, I wanna buy a house with a negative interest rate mortgage, where the bank pays me interest to live there.
http://www.zerohedge.com/news/2016-04-10/obama-announces-unexpected-meeting-yellen-following-tomorrows-expedited-procedures-f
Lol, Joe Biden and Barack Obama. A lying souse from Scranton and a diseased tick from wherever. Meeting with the felon. That’s a real brain trust right there.
i guess giving the little people some extra cash each month by lowering credit card interest rates a lot, is out of the question.
NIRP doesn’t mean you’d get a negative mortgage. It is supposedly a way for the central bank to get banks to lend their reserves instead of parking them. Do any of the countries that are experimenting with NIRP have negative home mortgages?
I wuz being sarcastic, Blue.
Here’s some pearls of wisdom from the diseased tick:
“While Obama noted he doesn’t regret U.S. involvement in Libya, he said he did wish he had planned better for the aftermath.
“Probably failing to plan for the day after what I think was the right thing to do in intervening in Libya,” Obama told Wallace during his first appearance on “Fox News Sunday” as president.”
LOL, like someone who made a mistake in the interior decorating of their home.
http://www.huffingtonpost.com/entry/obama-worst-mistake_us_570b9751e4b0836057a194b0
Obummer did the exact same thing W did in Iraq: Deposed the leader of a country without much of a plan as to what to do next.
Maybe O thought not disbanding the army (as W inexplicably did) would be the trick.
While Obama noted he doesn’t regret U.S. involvement in Libya, he said he did wish he had planned better for the aftermath.
It’s always fun to party, but no one ever thinks about the inevitable hangover or cleaning up after the party’s over.
It’s always fun to party, but no one ever thinks about the inevitable hangover or cleaning up after the party’s over ??
The hangover part is for the American tax payer…The military has a perfect business model…Either blow it up or declare it obsolete…Then build new stuff…
Thanks to the men and women of the armed forces, the best days of the US are well behind us.
Bombing people is a lot easier than getting them to behave themselves.
‘We borrowed to the max, bought houses and used [equity in] their homes as ATMs, often to buy an extra car or new toy,’ says Antle, who finds himself counselling people with six-figure incomes. ‘But we were only doing what was expected.’”
Beauty! I guess the education system in Canada is just as bad as that in the US. Garbage in, garbage out.
1. Dumb ‘em down.
2. Profit.
But we were only doing what was expected
AKA FOMO.
I think I’m going to be able to pickup a kickass snow machine for cheap by the end of summer.
Cash makes me the King this year.
“Something wicked this way comes” - Americans are gunning up in record numbers. This does not indicate confidence in our future or trust in authorities or government to ensure security.
http://www.breitbart.com/big-government/2016/04/09/36-percent-increase-background-checks-time-last-year/
“Because when seconds count, the police are only minutes away” — Unknown
… but it does indicate major credit card balance increases for the coming years as Jimbob buys up 5x more guns than he can shoot.
“Anyone who says the American economy is in trouble is peddling fiction.” –Barak Obama, 2016 SOTU address.
http://www.zerohedge.com/news/2016-04-10/obama-announces-unexpected-meeting-yellen-following-tomorrows-expedited-procedures-f
Remember those $300/$600 stimulus checks everybody got in 2007?
Yep, I do…in a fit of patriotism I blew mine on a new bicycle.
I spent mine on my health premium which, at the time, I thought was really expensive.
Used mine as additional mortgage principal.
Where would our “markets” be without endless stimulus, bailouts, and ZIRP/NIRP?
http://www.zerohedge.com/news/2016-04-11/futures-jump-tandem-soaring-italian-banks-hopes-government-bailout
Arms makers take on Pentagon’s cost cop:
http://www.politico.com/story/2016/04/defense-pentagon-spending-assad-221776
$600+ billion a year is alot of borrowed money to pay for playing world cop.
Are out of pocket medical costs too high?
http://www.wsj.com/articles/are-out-of-pocket-medical-costs-too-high-1460340176
Article reports that total U.S. health care spending has more than doubled since 2000.
You mean $5000 deductibles are too high? When I tell my Euro relatives about US HD plans, they are horrified and think I’m joking. Then I tell them how much the premiums are on those HD plans and how much prescription drugs cost.
Ask the EU folks how many mri per thousand people
How long they wait for knee,hip replacement etc
Then imagine living in pain w/o any choice
I had the flu and tried to get an appointment here in the goodl o’l USA. Called 8 doctors. Soonest I can get in is 5 weeks from now.
Both systems are overloaded. Ours just costs much more.
It’s been well documented that Americans don’t get better healthcare, we just pay more.
We pay A LOT MORE
Ask the EU folks how many mri per thousand people
How long they wait for knee,hip replacement etc
My SIL in the UK has not had to wait for such treatments. She needed an MRI for a neck issue and it was done in timely manner. My MIL had her hip replaced in Germany in a very timely fashion.
This whole “Euros have to wait an eternity for treatment is a myth sold to us by the American Medical/Insurance Industrial complex.
And if you can’t afford the $5K deductible it doesn’t matter if doctors are idly standing by waiting for patients. I have seen people at my GP’s office walk away when they learn they have to cough up $140 to see the doctor. I’ve had medical billing people get wide eyed when they see that I have a “mere” $400 deductible and am told “you have GREAT insurance”
Our medical system sucks for the average Joe. Why is this so hard for Americans to accept? We just bend over and take more of it.
http://thehealthcareblog.com/blog/2014/08/06/how-much-does-an-mri-cost-in-california-255-973-25-2925/
Here is the problem that no one wants to face:
“One a Medicare recipient, was charged $2,450, and Medicare paid $255. There was no patient payment.”
Question: If Medicare only reimburses $255, and the real cost is likely much higher, how can the healthcare providers stay in business?
Answer: They charge everyone else more.
As a higher and higher percentage of the population is getting healthcare paid through Medicare, this kind of thing will become a greater and greater problem.
“One a Medicare recipient, was charged $2,450, and Medicare paid $255. There was no patient payment.”
I had some lab work done last year. Rack price: ~$500. Negotiated insurance price: ~$40
“One a Medicare recipient, was charged $2,450, and Medicare paid $255. There was no patient payment.”
Question: If Medicare only reimburses $255, and the real cost is likely much higher, how can the healthcare providers stay in business?
Of course, you’re making an assumption that the “real cost” was a lot higher than $255 because some people pay about ten times that much. Who knows what the real cost actually is?
Who knows what the real cost actually is?
Easy way to find out: mandate ONE price for everyone.
Sounds fair, right?
Then we would know what the real cost is.
This on United Health……hmmmm……
http://www.latimes.com/business/hiltzik/la-fi-united-health-obamacare-20160408-snap-htmlstory.html
Have people learned nothing from the last housing bubble implosion? (Other than if you’re a .1%er, your gambling debts will be made whole by taxpayers.)
http://www.marketwatch.com/story/forget-flipping-houses-these-investors-flip-mortgages-2016-04-11
Housing bust lingers for Generation X:
http://www.wsj.com/articles/housing-bust-lingers-for-generation-x-1460142759
Article mistakenly refers to “homeownership rates” of Generation X. They were never owners, just borrowers. The bright side of this allegedly gloomy article is that many of them may never borrow again, and as renters will finally learn what freedom is.
Don’t be a debt donkey.
U.S. apartment market shows signs of losing steam:
http://www.wsj.com/articles/apartment-market-in-the-u-s-shows-signs-of-losing-steam-1460067027
Why buy when you can rent for less than 30% of the cost?
I don’t subscribe to the WSJ. I am hoping it is the beginning of a renters market, especially in Northern California for my sister’s sake. My own lease expires in January 2017 so maybe there will not be a rent increase on renewal…
“I am hoping…”
“so maybe there will not be a rent increase…”
Why buy when you can rent at full market and constantly be uncertain?
CRUSHING.RENTER.LOSSES.
Why?
Because rental rates are half the monthly cost of buying it.
“I am hoping…”
“so maybe there will not be a rent increase…”
Why buy when you can rent at full market and constantly be uncertain?
CRUSHING.RENTER.LOSSES.
Muggy, I resemble that remark and chuckled ruefully.
Why buy when you can rent at full market and constantly be uncertain?
CRUSHING.RENTER.LOSSES.
That’s funny
Forget flipping houses — these investors flip mortgages:
http://www.marketwatch.com/story/forget-flipping-houses-these-investors-flip-mortgages-2016-04-11
If you have to borrow for 30 years it is neither affordable nor can you afford it.
Don’t be a debt donkey. Just don’t.
“The sheer volume of notes the government is selling off is unprecedented, he says, and the opacity of the secondary market creates “a fertile ground for abuses.”
Hell from here on out…
Quick! Everybody in the handbasket!
If you’re here thinking about it, you’re already chewing…
From the article’s comment section …
“So instead of the pains of being a landlord, which isn’t easy to begin with, you’re going to be a landlord for a problem home with a bankrupt owner with questionable paperwork and owe some random undisclosed back taxes for a property that hasn’t been properly cared for for years and could be vandalized at any moment by the distressed owner……sounds great…. “
I thought Frank-Dodd was to do away with all this krap!!
In other news from Canada.
Major Newspaper Censors Politically Incorrect Story About Muslim Chain Attack
“Muslims rule the world” quote deleted before article pulled entirely
Paul Joseph Watson - April 11, 2016 43 Comments
A major newspaper in Canada has removed a story about two refugee children who choked a girl with a chain while shouting “Muslims rule the world” in a shocking example of politically correct-driven censorship.
The original article published by the Chronicle Herald described how a grade three girl at Chebucto Heights Elementary School was choked on two separate occasions by two “refugee boys” who had arrived in February and that “a chain was used on both occasions”.
According to the girl’s mother ‘Missy’, who didn’t want to be named because she feared retribution, the boys yelled “Muslims rule the world” while they carried out the assault, but were not even disciplined by the school.
252 refugee students are currently enrolled in the region, with another 71 waiting on settlement of permanent housing.
Another mother quoted by the Herald also claimed that her daughter begged her to be allowed to stay home from school after she was “slapped after she and a classmate disagreed in the schoolyard,” and that the school again took no action and didn’t even call her.
But perhaps the most shocking turn of events came when the Herald, which had already printed the story in its hard copy, first edited the article on its website to remove the “Muslims rule the world” quote and then deleted the story entirely.
After social justice warriors chimed in with a flurry of complaints, in a bow to political correctness, the Herald replaced the story with a mealy-mouthed apology stating, “Bullying is a sensitive subject. So is the integration of newcomers, particularly those who have faced challenges, even trauma, on their way here.”
Oh Canada!
Back to the trauma zone with the lot of them!
If the editors decide to change what they publish, it’s not censorship.
German kids beaten up by Muslim migrants
Diversity - coming soon to a neighborhood near you (if it hasn’t arrived already).
Forward!
“In recent months, Fitzpatrick’s Auctioneers in St. John’s has seen its yard fill with trucks, snowmobiles and assorted toys their owners couldn’t afford. Down the road, at Traders Buy/Sell/Lend, Les Paul electric guitars line the floor, while a glass jewellery case is thick with gold chains of the sort seen on rappers and professional baseball players. Much of the stuff comes from Newfoundlanders laid off from jobs in Alberta, Erick Mathiasen, a buyer for the store, tells Maclean’s.”
______________________________/
I might have to take a road trip to Newfoundland to put in a lowball bid on one of those guitars.
I have an older relative who lived in Newfoundland as a child. It was not a wealthy part of Canada; rather, it was a backwater often made fun of by other Canadians.
It was not a wealthy part of Canada; rather, it was a backwater often made fun of by other Canadians ??
Until oil hit $100.+ per barrel….Then came jobs, then expansion, then bust….
‘this hot stimulus could abruptly and unexpectedly turn cold, and force the price of homes’
‘There would have been bidding wars on half of them even a year ago,’ he says. ‘Now I don’t know if any of them are selling’
this hot stimulus
Money like this, coming from abroad, is “hot money” because, as far as your economy is concerned, it has effectively been freed from its dark twin, debt, which would otherwise serve to keep the money’s effect on your economy “cool”.
White women in their 30s, 40s, 50s in rural America dying at a higher rate.
http://www.charlotteobserver.com/news/nation-world/national/article71045097.html
Alcohol, other drugs, smoking…
The article does say that people’s health in rural areas are far worse than those of people in urban areas. Makes sense. Access to medical professionals is greater in urban areas. Job opportunities with higher salaries in urban areas. You probably will do okay if you are a wealthy rancher. But better health in clean urban areas is a big advantage.
I suspect depression plays a role also…Being treated like Chattel likely has significant downside health risks associated with it…
Personal financial depression results from paying 200% premiums for depreciating assets like houses.
People in rural areas live a life on the couch watching trash TV. They grow fantastically obese, and compound it with high blood pressure from watching angertainment or true crime frightwig reinactments all day. There is no interest in their life, so they crave cable-generated adrenaline.
They are all around up here. WalMart is like a scene from the The Walking dead, crammed with shuffling, weezing, soon-to-be dead.
And they live in your empty skull, rent free.
Wasn’t there a recent study on men aged 40 to 55 around this issue as well?
San Francisco, CA Housing Market Craters; Prices Plunge 7% YoY As Speculators Exit And Defaults Ramp Up
http://www.zillow.com/san-francisco-ca/home-values/
‘We borrowed to the max, bought houses and used [equity in] their homes as ATMs, often to buy an extra car or new toy,’
Has it been this crazy in previous real estate cycles, or is the Housing Bubble historically unique?
Historically unique, unprecedented and entirely predicated on fraud.
I remember my parents utilizing cash-out refinancing for various reasons over the years.
Usually it was to help pay for things like college (since the student loan applications took into consideration home equity in determining what your parents COULD pay for college).
So, using home equity has been around for a long time.
However, I don’t remember it being used as frivolously as it is now (for extra cars or toys).
Despite pulling equity out for various reasons over the years, my parents now live in a home debt-free. My parents never used home equity for things like vacations and toys. I can’t remember going on a plane for vacation (we drove everywhere, frequently stayed places that were CHEAP, no resorts). We never bought new cars…only used, and drove them into the ground.
So, what is different now is the level of complacency for debt. My parents remembered 15%+ interest rates. People today think that sub 5% rates are the long-term “normal”.
When the money is nearly free, and perceived to always be that way, it’s easy to binge at the all-you-can-eat bar.
However, today, while there is a heavy appetite on the demand side, supply is still far more conservative than it was in 2005-2007.
And it’s always been poor practice.
If it comes to that I’d rather just sell the house and use the cash for college…kids are leaving anywho don’t need as big a spread.
When there is an 8-year difference between the oldest and youngest, that’s easier said than done.
“Has it been this crazy in previous real estate cycles, or is the Housing Bubble historically unique?”
Another probing question from one of the USA’s “educators”, who has no clue. Garbage in, garbage out.
Just for a little comic relief. Brilliant!
http://news.nationalpost.com/arts/television/alexander-skarsgard-presents-mtv-movie-award-with-no-pants-alongside-a-bewildered-samuel-l-jackson
This is rich…..
http://wallstreetonparade.com/2016/04/senator-elizabeth-warren-asks-jack-lew-who-owned-an-offshore-account-at-citigroup-to-investigate-panama-papers/
Ventura, CA Housing Market Implodes, Prices Crater 16% YoY As Housing Inventory Balloons
http://www.movoto.com/ventura-ca/market-trends/
I’m afraid I need a little HBB therapy session…
The market in Seattle is well and truly nuts. Everyone points to tech hiring as the cause, which has been booming, bringing folks from all over to work here. This clearly has an impact, but I’ve been here enough years not to accept the “it’s different here” argument at face value. I also think that what has happened in terms of slowdown in VC in the last six months or so in Silly Vally suggests that it won’t last forever.
With that context, here’s the situation we are being offered to buy a family house, the one that my wife grew up in; her mother passed earlier this year, and the family is getting ready to put it on the market. It’s not what I would call a “deal”—the price looks in line with the market, from what I can tell, maybe a little high considering the condition. The house needs serious renovation: nothing other than a bathroom and some carpet has been replaced since a late-70’s remodel, which sadly removed all of the charm that I suspect the 20’s house probably originally had.
Some part of my wife would like to keep it in the family; but she also doesn’t think she can live in it as it is today, with the relatively dated, unattractive condition. So if we did buy it, I think we’d be looking at roughly a 250K-300K remodel (just a SWAG), adding on a story for more living space, etc.
It’s in a great neighborhood, near the zoo, would have a view (from the added story but I wouldn’t want to count on that unless I could purchase a view easement from the down-slope neighbor. Also would need to acquire a light easement from the other neighbor, because it is adjoined by a huge lot with a tiny little house on it that is certain to be replaced by a modern 4-plex at some point.
I like the idea of my kids growing up in the same house and neighborhood that my wife did. But buying in at the peak of the Bubble 2.0 sounds like a terrible idea to me. It wouldn’t bankrupt us—but it would guarantee that I’d have to work for at least a few years more than I would if we didn’t overpay at the peak.
I’m really struggling with this. God, I wish the market weren’t insane right now, and that we weren’t being forced to make a decision about this right now.
Thoughts?
And get eaten alive by depreciation and falling prices?
Rent it.
We already rent a house that I like better, for the short-term; longer-term, we’re going to outgrow this rental, and have to move at some point.
Then rent a larger shanty.
yeah, I’ll let Jake give you some shock therapy.
Heh.
Yeah, maybe that is what I need; I have been sitting out the insanity for 13yrs now, and maybe it is making me a little crazy…
https://www.youtube.com/watch?v=20n-cD8ERgs
‘adding on a story for more living space’
Is that even possible?
Why wouldn’t it be possible? I’ve known people who have done it to houses.
I think it probably depends on whether the foundation is adequate to support the extra weight, and whether the existing structure is sufficiently stout and well-engineered. I wouldn’t want to do it without having an engineer weigh in on those points, of course.
“adding on a story for more living space”
This is very common in the Tampa Bay area. They are typically very ugly.
Sounds like you should let it go. So much aggravation involved in that level of remodel, so many undiscovered problems. Is it really worth becoming a slave to for the last of your vigorous years?
You might consider whether the fact that the kitchen and other rooms are “dated” is really a problem. If the house was built in the 1920s, your wife probably grew up in a house that was quite dated, yet it bothered nobody. If you give it some thought, it might not be an issue that needs to be addressed to the tune a hundred thousand bucks or more.
I guessed what Muggy’s youtube was even before I clicked on it.
Sounds like a falling knife, or at best a money pit.
No matter how hard you work and no matter what your paycheck, you can’t compete with the money-laundering criminals. Don’t let them dictate the price you pay.
And even if the house were free, now your wife is demanding 300 large for a reno? That’s an awful lot to pay for some sentiment and the sight of elephant poop. Not to mention the future four-plex of rowdy renters which will surely bring down the neighborhood anyway. If you truly have that kid of money, then you can afford to rent for a long time, or buy a house of your own later.
Donk,
All houses are moneypits.
Show her other markets that have tanked on a spread sheet.
The remodeling costs are never recovered
It sounds like a friend of mine who was looking to buy in SF. He could afford the insanity, but he recognized that it was insanity and decided to just stop looking.
HOWEVER, the family house is a wrinkle that he didn’t need to contend with.
When I was a kid, my mom once said to go with your initial gut reaction when taking a test where you weren’t confident in the right answer…a very Malcolm Gladwell “Blink” kind of perspective–which has served me well.
In this regard, consider a coin flip exercise. Heads=you buy the house, and Tails=you don’t buy the house. Pretend that the coin determines your fate. Flip. What does your gut tell you…if it lands tails, are you disappointed? If it lands heads, are you fearful (cost/renovation, etc.)?
Fundamentally, the house is a place you are going to live. Yes, the economics matter–especially if you can’t afford the place–but if you are going to plan to live there for 15-20 years, the economics matter less than the intangibles. And that is what the coin flip might help with in weighing the intangibles with the cost.
The other thing to consider since this is a family sale, is to see if your wife’s siblings would consider a “shared appreciation” arrangement. You buy for a more reasonable price, but the other family members have a piece of the upside. You are sheltered from downside, and they get a piece of the upside if it keeps going up. And in the meantime, they get a chunk of cash now.
The devil is in the details, and I can think of a thousand reasons why this would be a bad idea, but with related parties, sometimes arrangements like this can work.
I live in Redmond east of Seattle, where it is equally crazy. Heck, everything all the way east to the meth-lab-filled Cascade foothills is crazy.
I wouldn’t buy right now. I lucked out and bought in 1998 right before prices shot skyward. The new house in my neighborhood is currently listed for 10x (not a misprint) of what I paid for mine. Of course, it has 3x the interior square footage of mine as well.
I’m seeing signs of the market softening (or at least, price-resistance) right now.
Sorry you’re going through this. Not a whole lot of that sounds real good, hopefully some of the sale price of your MILs house is coming to you and your wife.
“God, I wish the market weren’t insane right now, and that we weren’t being forced to make a decision about this right now.”
I don’t know if this is the case with your deal right now or not but a pretty smart guy told me years ago if someone says take it or leave it, you leave it.
Aside from that, before I put 250K-300K into remodeling a house that was built in the 20’s I would look into the cost of tearing it down and building exactly what I wanted new.
before I put 250K-300K into remodeling a house that was built in the 20’s I would look into the cost of tearing it down and building exactly what I wanted new.
You are spot-on with that comment, phony scandals. It is quite likely the right choice.
But if we think about it that way, the price of the lot looks incredibly ridiculous to me.
And not a buyer in sight at that price for the dirt with or without the shack.
No, I’m quite certain that they will find a buyer when they list it—probably even at a price that I consider ridiculous. It will almost certainly be purchased by a builder, though, who will tear it down and replace it with a roughly $1.5M new build.
Post a link so we can monitor what happens.
“But if we think about it that way, the price of the lot looks incredibly ridiculous to me.”
Maybe you let them put it on the market for 6 months and if it doesn’t sell you could negotiate the price down closer to where it did make sense.
If it does sell maybe it wasn’t meant to be.
PS
We did in Stuart Fl. last year that was a tear down. The cost to tear down the old house was $15k leveled and hauled away. I also know of much bigger houses (7000 to 10,000 sq. ft.) that have cost $28k to $30k so you would have to check.
It seems like directness and shock treatment are called for here rather than weak sauce. With that in mind: I see nothing but big, screamin’ red flags in what you wrote. I would not buy that house if I were you. I read what you say and I cannot believe you’re even considering it. I find your case the exact opposite of Muggy’s which made sense to me.
As a further point of possible credibility: my family is mostly farmers and rarely move. I grew up on a farm with nice, river front property. After almost 50 years my parents were selling the place and moving into my grandparent’s place. I had the opportunity to buy the old place I grew up in - and I would have gotten a deal, unlike you - and I didn’t buy it. There were too many remodeling costs (we obviously knew every detail of the place) and being next to the river there weren’t a lot of options. Your discussion of the neighbors and viewing easements, etc. reminds me of this.
Good luck! It might be a dilemma if your wife doesn’t agree!
Don’t think housing prices are massively inflated?
http://picpaste.com/pics/1a0b3da135e49a3a391b1daddd9b2cd1.1460391564.jpg
Irrelevant
Your engagement with enragement is causing you derangement FL_Donk.
CT_Donk, you’re full of rage. It’s the only thing you’ll ever own.
He claims to know the cause of your rage. The cause of his is a mystery.
Irrelevant.
revenant
Remember my friends… Nothing accelerates the economy and creates jobs like falling prices. Nothing.
Santa Monica, CA Housing Prices Crater 8% YoY
http://www.zillow.com/santa-monica-ca/home-values/
I miss posted this on Saturday’s post - wanted to put it on today’s.
From the Jacksonville Free Press:
“We were here when there was nothing but hoes and rats on the street, and now it’s one of the hottest neighborhoods [in Chicago]. The time had come to downsize this part of the business and to move forward.” thus said Okrah.
Gee - I worked in Okrah’s hood before Okrah landed there - I guess I must be one of the hoes or rats to which she refers. What a f….ing dolt this large lathered idiot is. There were some 30 years ago, when I first landed in the amazing utopia called Chicago, many small owner run businesses, fruit and veggie vendors, etc. on West Randolph St. and restaurants throughout that area long since gone. So……Okrah - YOU did not build that - it was the small fry, the architects and arteeesty types, the risk takers, small business guys that started to revitalize the hood to which you refer that made it safe enough for you to enter the market there. Sheesh - where do these elite blood sucking morons get off?
http://jacksonvillefreepress.com/oprah-closing-harpo-studios-for-good/
Yesterday I was driving and I listened to the Sunday REIC devils out of Las Vegas on 720 AM. One hour was these guys:
http://www.newamericanfunding.com/refinance.aspx
Benefits of refinancing your home mortgage:
‘Increase your long term net worth: A lower interest rate on your mortgage means you’ll save money over the lifespan of the loan. Use the extra cash to buy real estate for a retirement home, save for your child’s college fund, or buy a vacation home.’
‘Use your home equity, instead of credit cards, to finance expensive purchases and take advantage of lower interest rates.’
They were breathless in explaining they refi up to 100% LTV, credit scores as low as 580. Get this; FHA “stream-line” refi’s are no appraisal, no income documentation.
The second hour was a UHS and a loan guy. Flippers, the usual banter. It would all crash and burn if the government didn’t keep the pedal to the metal, but it’s still a good time to buy. They talked about shadow inventory. It went something like this: “the banks have learned they can dribble these houses out so they don’t crash the market.” And there is development everywhere, again.
Has anyone noticed all of Canada is at California prices? It was negative 3 degrees Celsius in Fort McMurray yesterday afteroon.
“They were breathless in explaining they refi up to 100% LTV, credit scores as low as 580. Get this; FHA “stream-line” refi’s are no appraisal, no income documentation.”
Sounds exactly like a Quicken Loans commercial. Exactly.
http://thehousingbubbleblog.com/?p=9573
‘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.’
But Rental Fraud and Jingle Fraud said the loans are good now.
“At National Bank Financial, analyst Peter Routledge has raised concerns about the ‘price insensitive’ foreign buyer. In a note earlier this year, the bank says it’s observing ‘accelerating outflows of hot money from China.’ While not all of it lands in Canada, ’some of it does and much of it finds its way into the housing markets of Vancouver and Toronto.’”
“So what takes the price insensitive buyer out of those markets? Routledge said he anticipates China will take steps in the ‘near future’ to stem currency outflows. ‘Our concern is that this hot stimulus could abruptly and unexpectedly turn cold, and force the price of homes in (Vancouver and Toronto) down,’ he wrote.”
They’re all concerned (bankers and politicians) that the money laundering could stop, thereby causing prices to decrease.
But they didn’t, and don’t, care about the fact that money laundering is happening in the first place. Nor do they care about the effects it has on all of us peons.
Goon, Jake - whatever the hell your moniker is these days…..file this under warmists gonna warm….
http://davidstockmanscontracorner.com/the-circus-barker-lies-again-elon-musks-tesla-3-is-no-more-green-than-a-comparable-audi-7-sportback/
The ocean is dying. And driving a Tesla won’t bring it back
http://mobile.nytimes.com/2016/04/10/world/asia/climate-related-death-of-coral-around-world-alarms-scientists.html
but how fun is a quiet speedster to drive around?
HA talks about not being a debt donkey - but this……How many days are you a donk to gubmit? Think about what you get in return for you confiscated dollars at the behest of your local, state and federal betters?
https://www.illinoispolicy.org/illinoisans-work-119-days-to-pay-for-government/
Illinois ranks 44th in the nation, meaning 43 other states have an earlier Tax Freedom Day than the Land of Lincoln. Compared with the Midwest average, Illinois residents will work nine days longer just to pay taxes.
And it seems matters will only get worse.
The Chicago-based Metropolitan Planning Council recently unveiled an aggressive plan for infrastructure improvements backed by a 30-cents-per-gallon hike in motor fuel taxes – which would push Illinois’ gas taxes to the highest in the nation. In a separate plan, Cook County Commissioner Richard Boykin proposed a 4-cents-per-gallon hike on motor fuel taxes. And on the heels of Chicago’s largest property-tax hike in modern history, comes a proposed $200 million property-tax hike dedicated solely to teacher pensions.
I hear there is a company in Panama that can help you with that.
Is there an App for that?
How about RocketDodge?
LOL—nice.
Hmm, looks like housing will magically be affordable really soon!
http://www.peacockworks.com/wp-content/uploads/2012/07/kiss-e1342152596450.png
Working on my taxes today (c’mon 15% bracket) I can across this brilliant Q & A on Turbo tax site:
Consequences of filing your tax returns separately
On the other hand, couples who file separately receive few tax considerations. Separate tax returns may give you a higher tax with a higher tax rate. The standard deduction for separate filers is far lower than that offered to joint filers.
In 2015, married filing separately taxpayers only receive a standard deduction of $6,300 compared to the $12,600 offered to those who filed jointly.
Well, yeah, duhhhhhh, $6300 is a lot less money than $12,600. Duhhhhuhhhhuhhhh…… /s
Boston Metro Housing Market Implodes; Prices Crater 11% YoY As Market Sinks Statewide
http://www.zillow.com/ma/home-values/
Post on this article timed at near 2 pm and what happens to the markets - ticks up a bit then when the market realizes the gist of the discussion - CRATER.
When will this doooooofus just shut his yammer?!!! Sheeesh.
Obama ‘pleased’ with Fed’s Yellen -White House
Reuters 4/11/2016 1:59 PM ET
Print Article
WASHINGTON, April 11 (Reuters) - U.S. President Barack Obama is happy with the job done by Federal Reserve Chair Janet Yellen, with whom he is meeting on Monday to discuss regulatory issues and world economy, the White House said.
“The president has been pleased with the way she has fulfilled what is a critically important job,” White House spokesman Josh Earnest said at a news briefing. (Reporting by Clarece Polke)
There you go trying to censor him! You’re outrageous!
Ironic seeing Soros-sponsored useful idiots descending on Washington DC to decry the pernicious role of big money on our political system.
https://twitter.com/hashtag/DemocracySpring?src=hash&ref_src=twsrc%5Etfw
realtors are liars
Down she goes:
Today:
Alcoa announced that it laid off 600 people in the first quarter, and plans to let go of as many as 1,000 more people “given the current market environment.”
B…b…but…”Anyone who says the American economy is in decline is peddling fiction.” — Barak Obama, SOTU Address, March 2016
It rolled over
Alcoa, cooking up some numbers …
http://www.zerohedge.com/news/2016-04-11/behold-accounting-magic-101-how-alcoa-just-beat-consensus-eps
Aluminum prices, from 1989 to the present (chart):
http://www.infomine.com/investment/metal-prices/aluminum/all/
Australian bauxite prices (five-year chart) …
https://www.google.com/#q=australian+bauxite+price
Housing bubble looking shaky in San Francisco. Import moar Chinese embezzlers!
http://www.businessinsider.com/san-franciscos-condo-boom-turning-into-bust-2016-4
Not to worry, we have it on good advice that California housing can never fall because it costs so much to get things approved. Did you know it costs half a million bucks to install a toilet in the bay area? Now I’ll admit I never understood exactly how the cost of regulation gave support to anything, except maybe to urge people to get the heck out.
Come to think of it, people were saying the same thing in 2005. Remember that real ass-hat poster yo mamma? What a douche. He used to whine, “a lot costs $150,000 in Oakland!” So what? The best think they made me do in economics was to plot by hand the supply and demand curves under various scenarios. If a thing is artificially high in price, it will be over-produced, and the price will fall. It doesn’t matter what was paid for it before.
First it was ‘the land’!
Then it was ‘labor!’
Then it was ‘materials!’
Now its ‘building permits!’ or better yet “hookups!”
It’s none of the above. Regarding permits, on all the projects I’ve built, none were less than $10 million, all were located in heavy suburban areas with the exception of two and not a single one of those permits exceeded $2500.
But all the gyrations and guessing is priceless.
The Vampire Squid pays a $5.1 billion dollar fine for mis-selling its MBS toxic waste “investments.” No criminal penalties or sanctions, naturally.
http://www.theguardian.com/business/2016/apr/11/goldman-sachs-2008-financial-crisis-mortagage-backed-securities
Will China’s Ponzi markets crash before ours?
http://www.telegraph.co.uk/business/2016/04/10/china-guru-warns-of-erm-style-currency-crisis-as-deflation-persi/
Chinese embezzlers and money launderers seem to be getting more frantic to escape the People’s Republic with their ill-gotten loot.
http://www.bloomberg.com/news/articles/2016-04-11/chinese-buyers-double-their-aussie-property-investments-again
Cheaper to buy land then invade it.
Chinese food prices starting to surge. How much more “stimulus” aka currency debasement before the proles start getting restive at the loss of their purchasing power?
https://www.rt.com/business/339169-china-inflation-food-prices/
How much per pound is Labrador now?
It’s good to be an oligarch.
http://wolfstreet.com/2016/04/11/bp-ceo-gets-huge-raise-after-record-loss-over-5000-layoffs/
“BP has a set of metrics that help inform its executive salaries, and the board says the pay is justified. ‘BP’s performance surpassed the board’s expectations on almost all of the measures that determine remuneration – and the outcome reflects this,’ a BP spokesman told Reuters last Friday.”
Translation: We set the metrics (aka numbers, but we use the term metrics because that’s the latest buzzword) very low so that they can easily be exceeded, and exceeded they were.
Maybe letting a criminal private banking cartel control our monetary policy and money issuance isn’t such a hot idea.
http://www.zerohedge.com/news/2016-04-11/bernankes-former-advisor-people-would-be-stunned-know-extent-which-fed-privately-own
http://www.socialstudieshelp.com/Eco_Deregulation.htm
Banking Crisis and Reform
There are many people that feel that the government should remove much of the regulations placed on banks and allow them to compete on the open market. Regulations, they feel, destroy the ability of banks to make money, raises costs, lowers interest rates paid to depositors and is not generally not good for the bank or the consumer. This was the belief of the Carter and Reagan Administration’s in the late 70’s and early 80’s. The result of this rather laissez faire approach was a period of deregulation. What is meant by deregulation is the removal of, or lessening of government regulations restricting an industry. Deregulation has effected many industries in recent years, including banking.
“Regulations, they feel, destroy the ability of banks to make money, raises costs, lowers interest rates paid to depositors and is not generally not good for the bank or the consumer.”
(snort)
Crater