The Rush To Buy Was Not Present As In Past Years
The Mercury News reports from California. “More than one-third of Bay Area residents say they are ready to leave in the next few years, citing high housing costs and traffic as the region’s biggest problems, according to a poll. Of the 1,000 people polled by the Bay Area Council, 34 percent said they are considering leaving. ‘We can whine about this, or we can win by solving our traffic and housing problems,’ said Carl Guardino, president of the Silicon Valley Leadership Group. ‘The last time the Bay Area had seemingly solved its traffic problems was the worldwide recession of 2008. A recession is not how we want to solve our traffic and housing problems.’”
From CNBC. “The luxury home market may be losing some of its luster. Average sales prices for homes listed at $1 million or more fell 1.1 percent in the first quarter compared with a year earlier, marking the biggest decline in more than two years, according to Redfin. Nela Richardson, chief economist at Redfin said that after 2009, the asset-rich benefited from rising values. ‘There was so much stability in asset growth that the wealthy felt comfortable making a large purchase,’ she said. ‘That stability is over.’”
“The supply of homes priced at $5 million or more jumped 13 percent — the biggest inventory rise in more than three years. ‘There is oversupply at the high end, especially in certain pockets and cities,’ Richardson said. It’s not just megamansions in Houston or penthouse condos in Miami Beach or Manhattan’s ‘Billionaire’s Row’ that are sitting unsold. Richardson said affluent communities like Montgomery, Maryland, have rising numbers of $1 million or $1.5 million homes on the market with no buyers. ‘They should be flying of the shelves,’ she said. ‘But these homes are just sitting there.’”
The Naples Daily News in Florida. “According to the Bonita Springs — Estero Association of Realtors (BEAR) Media Committee, activity in the Bonita Springs and Estero housing market saw a downshift in sales for March and overall for quarter one 2016. However, more inventory continues to come into the market. Regarding a five-month downshift in the market, buyers are still looking, but the rush to buy was not present in early 2016 as in past years.”
“What was also evident in quarter one was that traditional resales are in competition with new construction. ‘Sellers have been frustrated by the longer sales cycle,’ stated D. Michael Burke, 2016 BEAR President. ‘In regards to new construction competition, sellers need to be mindful and realistic about their listing prices and the condition of the property.’”
The Houston Chronicle in Texas. “This week marks two years since a judge ruled the proposed Ashby tower could go forward after a month long trial and jury verdict that agreed with residents that the 21-story tower would be a nuisance to surrounding property owners. The judge agreed to some of the roughly $1 million in damages jurors assessed against Houston-based Buckhead Investment Partners but denied residents the permanent injunction they were seeking to halt the project. Yet the 1.6-acre lot sits empty as both sides await a decision on their appeals. ‘It feels like we’re in limbo,’ said Penelope Loughhead. ‘We’re in the dark. We know they are allowed to build, but no ground has been broken.’”
“The developers declined to comment. Development, particularly of multifamily family buildings inside the 610 Loop, boomed in the wake of the Ashby ruling, but depressed oil prices have now led to tightened financing for such projects. Real estate experts say that the market is overbuilt for high-end apartment projects in Houston. ‘The delay from litigation may actually have benefited the developers by avoiding an adverse market,’ said John Mixon, a retired University of Houston law professor who specializes in property rights. ‘I doubt that the developers would have chosen this outcome, though.’”
The Associated Press. “Jami Patel spends long hours behind the front desk of a nearly empty motel, desperate for someone, anyone, to check in. Hardly anyone ever does, not since the once-booming natural gas industry pulled up stakes amid a prolonged, severe slump in energy prices. ‘I don’t know how much longer I can hold on,’ lamented Patel, 43. ‘If it continues like this, the business is going to be dead.’”
“That’s the last outcome Patel would have envisioned after she and her husband spent more than $1 million on renovations a few years back. Times were good then; the 50-room Rodeway Inn was routinely filled with some of the legions of gas workers who helped turn Pennsylvania from a bit energy player into the nation’s No. 2 natural gas-producing state, after Texas. When they were here, the drillers made a lot of people feel flush. Landowners with mineral rights commanded signing bonuses of thousands of dollars per acre. Landlords hiked rents.”
“Towanda’s story is playing out everywhere the drillers are leaving or have left, places like Gillette, Wyoming, and Oklahoma City, where there have been massive job layoffs at energy company headquarters and the downturn has blown a billion-dollar hole in the state budget. The fallout is readily apparent in Towanda. For-rent and for-sale signs are plentiful along Main Street. ‘I don’t think anybody saw it coming, to this deep of a decline that quickly,’ said David Spigelmyer, president of the Marcellus Shale Coalition, a trade group.”
The Grand Forks Herald in North Dakota. “As drilling rigs went from more than 200 during the boom to below 30, development has dried up. A Home Depot store that opened just three years ago will close next week. Shane Roers came from the family business in Fargo to Dickinson, where Roers West has made a mark developing new projects for businesses, apartments and homes. Now, they’re trying to weather the slowdown.”
“In Williston, hotels have the biggest challenges. Twenty-two were built during the boom, and even that wasn’t enough back then. Now they have 1,800 open rooms and are running at just 20 to 25 percent capacity, said Tom Rolfstad, Williston’s former economic development director. With about 3,200 vacant apartments in Williston, Rolfstad figures about 6,400 bedrooms are vacant. And rents are down by ‘half at least,’ he said.”
“At the height of the boom, tenants were paying $2,500 a month. Now, occupancy is so low property managers are offering deals and incentives to renters who often are paying something close to $750 a month.”
‘What was also evident in quarter one was that traditional resales are in competition with new construction.’
Ho ho ho, what’s this? New construction competing with existing shacks! This is Naples, one of the hottest markets in north America. Are you telling me they don’t have a shortage anymore? Because if they can build shacks in pricey Naples, they might form teams of instructors, travel and teach these construction skills in other towns and cities.
‘Sellers have been frustrated by the longer sales cycle,’ stated D. Michael Burke, 2016 BEAR President. ‘In regards to new construction competition, sellers need to be mindful and realistic about their listing prices and the condition of the property’
You tell em’ D. Michael. Tell em’ like they’re little children that need a spankin’.
By virtue of the fact it’s built profitably for far less than the asking price of resale housing irrespective of location, you know there is a problem approaching. A big one.
‘The last time the Bay Area had seemingly solved its traffic problems was the worldwide recession of 2008. A recession is not how we want to solve our traffic and housing problems’
Recession is how rental watch and jingle solve housing bubbles. Build until the market is saturated, borrowers default, pension funds lose money. Disaster all around. And that’s their only plan. That’s the governments only plan.
“No no no, prices going way higher than they ever have is normal,” says these guys.
No it’s not. Does anyone remember the $1 million over asking? That’s not normal. Recall the builder that bailed on the bay area recently? Why is anyone making loans out there? Oh right, the government is backing them. The banks can’t lose. Very sustainable.
My point is you don’t have a shortage. Sure maybe you can’t build stuff and have to live in old crappy houses. If so, that’s your culture. But these prices weren’t happening in the 1930’s. The 70’s or 80’s. Heck there was maybe a couple hundred years where it didn’t happen. It’s the credit.
Don’t think so? Imagine if the federal government said today it was going to do what that builder did, get out? No more extra special elevated loan caps. Calamity? Bottom falls out?
Where’s your shortage now?
I never understood the appeal of living like a 3rd world tenant while making $100,000+. The bay area is insane, and yet my brethren millenials are infatuated with the “Cali life”. While there for work, most everyone I met that wasn’t some tech or medical professional , was someone juggling 2-3 service sector jobs to afford splitting a tiny apartment 2 or 3 ways.
My friends there are all doing pretty well. None of the are in san francisco, but surrounding areas.
I’m sure there are people doing well. There would have to be or the area would implode. “Doing well” is subjective however, they may be happy with multiple roommates in a $2k or $3k apartment?
I’m just speaking from extensive personal experience in the area. Friends who are programmers making $100-120k, living in the Tenderloin district (disgusting hobo haven), who eventually gave up on the dream and moved to Sacramento or another CA city.
One guy who was our paint/QA rep lived in Redwood city yrs back, and despite him and his roommate making $90k, they were still priced out and eating Ramen/Chinese take out.
That $2k rental is far more affordable than the equivalent purchase price of $4500/month.
Hmm one bought two houses, I think he has been in one 10 years+ so paid off easily. The 2nd house I have no idea about, but yea he could buy a house for $4 million in cash no problem.
Another is living in a house, rented with his wife/kids. I don’t know how well his job pays but I assume it isn’t too bad? He sold his house elsewhere to move there. He is renting AFAIK, wife doesn’t work afaik.
Others seem to be doing okay. I don’t know about my coworkers in Oakland but none of them seem to talk about struggling. A lot of them seem to own houses or condos or whatever.
I was told that if I wanted to move out there $150K+ no problem without looking hard. And I don’t know what kind of stock options that would bring. Obviously if stuff slows down, it will go boom. But there is jobs there, and some of them have huge paydays for a lot of people (at least in the past they did.) That’s why prices are high. Gold rush!
Are you sure?
“Silicon Valley “Stunned” by Slashed Start-Up Investments”
http://www.vanityfair.com/news/2016/03/silicon-valley-stunned-by-slashed-start-up-investments
In the last 90 days the HBB has already covered falling rents, rising defaults and rising unemployment in the bay area.
it is so crowded up there too. cold and foggy, competition for restaurants and movies, illegals, traffic, foreigners, cant save any $…I don’t get it either.
I object to your characterization that I prefer to solve housing bubbles with recessions. I lived the FB life in the 1990 recession and I wish that on no one. I was forced to complete a “cash in” refi in 1994 to lower my interest rate, because the LTV was too high on my home. I do remember my PITI was $681/month…..oh that was nice. But I had to put $20,000 more into the loan to get the refi.
Housing demand is somewhat elastic. In a recession, people double up, move home, or move to a better economy. In an expanding economy, household formations rise. The effects are well documented.
Certainly, building more houses than we needed in 2005, 06& 07 was foolish, driven by funny money financing. All the cards (house of cards) aligned, lead primarily by the wall street banks.
I don’t believe we have much speculative buying today, compared to 2006 & 07. The housing market where I live is impacted by a housing shortage. I have demonstrated many times during the last year that there is a short supply of both for sale and for rent housing.
I understand it is easy to find areas with extra supply in the oil states and it appears that Florida (secondary & resort area) is getting overbuilt. It is not the situation in Sacramento. The answer to the housing bubble and the housing crises is to have a balanced supply. That means building more houses here.
Objection overruled.
Union City, CA Housing Prices Crater 9% On Ballooning Defaults And Excess Housing Inventory
http://www.zillow.com/union-city-ca/home-values/
Everybody in California is a real estate genius, until they lose their ass in a downturn. The next one is coming like winter.
And when it comes, you can be sure the real estate industrial complex spokesmen will collectively proclaim, “No one could have seen it coming!”
No one who counts Bear, no one who counts
‘I don’t believe we have much speculative buying today’
”Inventory in the San Francisco Bay Area home market is so tight that the vast majority of homes for sale are the subject of bidding wars.’
‘When Marianne Jackson found the perfect three-bedroom home in Oakland listed at $699,000, she knew the owners would never sell for that price. So the eBay executive, who lives in the Silicon Valley suburb of Los Gatos, wrote what she hoped would be a compelling offer: $200,000 over the asking price, with no contingencies and an attractive payment package (Jackson won’t say if she offered all-cash). The capstone of her offer was a letter describing the multiple generations of her long-time Californian family who would eventually benefit if she bought the home.’
‘Jackson’s pitch worked: she beat out 11 other offers, and last month closed for $900,000. “Honestly, I thought it was a complete long shot. With that much competition, you couldn’t tell how crazy the prices were going to go. I feel like we scored!” she says. “That’s crazy to say. Two hundred thousand over asking price and I quote ‘I feel like we scored!’”
‘Jackson isn’t the only homebuyer paying far over list price in the area. Last month, 84% of offers written by Redfin agents in Oakland faced bidding wars, the highest share among the 83 markets that the real estate data and brokerage firm serves. Seattle and San Francisco were nearly as heated, with 77% of offers written by Redfin agents facing multiple competing offers. In Los Angeles, 74% of offers were involved in bidding wars, while 69% were in Denver. Even in Austin, where techies are fleeing pricier West Coast hubs in search of a lower cost of living, 59% of offers written by Redfin agents faced bidding wars in March.’
‘Fifty-five percent of offers written by Redfin agents ranging from $200,000 to $400,000 faced competition in March, while 60% of offers from $400,000 to $800,000 faced bidding wars. By contrast, only 46% of offers written for $1.5 million or more by Redfin agents faced multiple bids in March.’
‘The high proportion of bidding wars (59% of all Redfin written offers) doesn’t look likely to let up even as more homes come onto the market for the spring selling season. “We’re seeing some new listings–and it’s all at the high end,” says Nela Richardson, Redfin’s chief economist. “We see in almost every market that where inventory is coming on board is at $350,000 to $4 million.’
‘Housing has also become more expensive relative to incomes, especially at the low end of the market, according to Trulia. In 2012, starter home buyers needed to pay 32.2% of their income to purchase a median-priced starter home. Now they must put up 37.7% of their incomes, a 5.6% jump. Trade-up home buyers and premium home buyers haven’t seen as much of a bump: they must spend 24.9% of their incomes (up 2.6 percentage points from 2012) and 13.4% of their incomes (up 1.4 percentage points), respectively.’
This article is about three weeks old. Now Nela tells us they are screwed.
‘That’s crazy to say. Two hundred thousand over asking price and I quote ‘I feel like we scored!’
Yeah, there’s no speculation. Here’s dead giveaway you supply and demanders conveniently omit; when the price of a thing goes up, demand should go down. We’ve had the opposite in all these “hot” markets. Why is that? Could it be these people expect to make money on these shacks?
This thread reminds me of the mom who lives across the street from me in a large empty-nest house. Her husband lost his job here years ago and took a new position out of the area. Rather than sell the place and move with his job, she continues living in the owner-occupied McMansion, counting her Zillow home equity wealth gains as California real estate continues to only go up.
I agree Nela is a bit wreckless, driven by a primal need to own her own home. However, this is not fraudulent nor speculative in the blatant manner of 2006.
My son and wife have given up looking for housing in the bay area until the market cools, which some reports suggest it is starting to do now (Nela not withstanding).
The point I am making is that demand is still strong. There are many people with $500,000 in the bank, ready to buy a bay area home, but the crazy pricing has dampened their spirits. A year ago, when my son wanted to buy a house for $1,000,000 (3 Bd, 2 Ba, 1800 SF) I ran the history and showed him it sold for $1,000,000 in 2006, defaulted in 2010, and some flipper bought it for $500,000 in 2014, remodeled it and now wants $1,000,000 again (it did sell btw).
Again, the point I am making is if we could build enough housing in the bay area to meet the demand, a lot of this yo-yo bubble bull would be much more muted. I know it is hard to accomplish, but it is the best solution.
“… counting her Zillow home equity wealth gains as California real estate continues to only go up.”
If it is handled right by the Fed this Miracle of Rising Prices may save us all.
Nela is the redfin economist. This woman is an ebay exec.
‘driven by a primal need to own her own home’
Are you saying she now lives in a cardboard box? I’d bet she already has a house. But what about demand rising in the face of higher (and higher) prices? Everybody from Yun on down will quote supply and demand like scripture but they never mention that demand should shrink with higher prices. It’s not just added supply that controls prices. When demand increases with prices, a certain, maybe large, percentage of buyers are doing so expecting even higher prices and to profit from it. Speculative markets are in their own world, not the one of supply and demand.
Earlier this week I posted an article with two new Massachusetts FBs. They had bought their rental properties long ago. Why default now? It was a business decision, they said.
Driven by a primal need to own her own home she Speculated that stretching beyond her means to buy an insanely overpriced house would pay off in the long run as her income and home price both rose over time. Unfortunately neither happened as the economy continued its downward trajectory, the massive house price bubble collapsed, and she and millions of other Speculators were ruined.
Jingle Male: Again, the point I am making is if we could build enough housing in the bay area to meet the demand, a lot of this yo-yo bubble bull would be much more muted. I know it is hard to accomplish, but it is the best solution.
This begs the question that it is consumption demand which is driving this, versus speculative (”Hope”) demand driving this.
While consumption demand can be satiated, speculative demand cannot. Not with the amount of physical product which can be generated.
There’s a place close-in to DC where the county council just voted to flatten one of the few remaining tracts of forest and put in 1200 houses. It is literally a few hundred yards (if that) from where Turbo Tax Geithner bought and sold a house when he was Treasury Secretary. Turbo Tax got lucky - he wasn’t going to lose money on that house if he could help it, and he sure could help it.
Will that drive down the prices in the area an iota? Most assuredly not. Not in the short term. Why? There will be heavy speculative demand which cannot be satiated by the amount of physical product which can be built.
And that - the destruction of the few remaining forested tracts in a densely-built area - is a side effect of the speculative housing market encouraged by the FIRE sector and implemented by the Fed and the politicians representing the FIRE sector. In addition to the side effect of rising rents.
the destruction of the few remaining forested tracts
You know where there are a lot of forested tracts? Out west, where the federal government owns a lot of land.
Some people want the federal gov to give up that land, I guess so someone can build unneeded spec houses on it.
“I don’t believe we have much speculative buying today, compared to 2006 & 07.”
Oh there’s still plenty of speculators out there, believe you me. Multiple new home purchases as an investment? It happens all the time still. Maybe not like in 06-07, but still…
I don’t believe we have much speculative buying today, compared to 2006 & 07.
I sure see the speculative mindset around me. One recent anecdote: cute young 20-something techie at my workplace bought a condo a couple of years back—when what she really wanted was a SFH (decided not to over-reach). Fast-forward, her means have improved, so now she bought a townhouse (lives more like a house, no upstairs neighbors). Do you think she sold the old place? Nope, not yet. Her initial plan was to keep it as an airbnb; next, it was to have her mother live there and airbnb one of the rooms; now, she is thinking she might sell it after all—but hasn’t yet. In the pre-speculative-mania era, you used to see people actually sell _prior_ to buying another place, or make closing contingent on the sale of their previous place. I remember in the late-90’s there were chains of properties the had closing dependencies—all waiting for someone to make a non-contingent offer so the whole chain could close, like dominoes.
Doubtful.
Just got back from a few days in the bay area. Traffic is really bad. Several of the interstates get congested starting at 1:30 in the afternoon and stay that way until 8 at night. It wasn’t that bad when I lived there. People that live in east bay and commute over to the peninsula are hosed.
I guess they can’t build roads either.
Isn’t there an app for that?
I remember coming back to SF from a valve shop out in Benecia around 1-2 pm. Man, 680 (I think), feeding onto the Bay Bridge was atrocious. It was 6 lanes of gridlocked hell. That and I believe the toll is $6 peak, just to cross a new bridge span that was built primarily in China and assembled in California.
Traffic is really bad ??
About as congested as I have seen it in my lifetime…The only thing that comes close was during the dot-com era…
We were Bay Areans during DotCom 1.0. My wife’s cousin lived in San Jose, where we visited him but one time. The last ten miles on the freeway coming and going took over an hour to drive in the middle of the afternoon. Bay Areans obviously love their traffic congestion and all the greenhouse gas emissions and noxic tailpipe pollutants that result, because otherwise they would take measures to solve the traffic congestion problem.
…and after the dot com bust, you could roll along on empty freeways in the bay area like you were in Elko, NV. You know it may happen again, though probably not like the “light switch” effect of 2001.
It already did happen again from 2008 to 2012 or so…the freeways were not empty but traffic was MUCH lighter in the north bay.
I caught some morning rush hour in the bay area this past summer. Lots of nice buildings with kooky company names on them I’ve never heard of. What real products are coming out of the bay area this go around? I haven’t heard of anything worth AF.
“More than one-third of Bay Area residents say they are ready to leave in the next few years, citing high housing costs and traffic as the region’s biggest problems, according to a poll released Monday.”
And this is where the disconnect lies, in my opinion. The Fed and corrupt agencies like Freddie and Fannie either have no idea or don’t care about the unintended consequences of their policies. It drives people out of the communities where they grew up and swamps the communities they go to inhabit. I live in one of the latter and it’s noticeable…in housing prices and congestion. Nobody likes it, and yet everyone acts like “oh well, this is the way it is.”
“Nobody likes it, and yet everyone acts like “oh well, this is the way it is.”
There it is! Life-long psychological conditioning (a close cousin of dumbing-down) rules!
I like it, I love it. I want some more of it.
These are the people that are moving to Seattle and driving our real estate prices up, as they are a relative bargain as compared to SFO.
No relief to be had from the horrific traffic by coming up here, however, as we have far less roads per capita than down there and a mass-transit system still trying to figure out what it wants to be when it grows up.
Seattle’s really bad, especially 405. Whenever possible I bring another poor schlub from the office up with me so I can use the HOV lane.
I’m not against people moving around under normal conditions. Far be it from me, as I’m not from here either. But things have gone parabolic the past 15 years and, in particular, the past 7.
I play a little game when I hit the road around Portland. I count how many out of state plates there are per 10 cars. Invariably, it’s 2-3 from California and 2 from some other state. Sum ting wong.
In many places in the country people never leave where they were born and that has issues as well. But it goes too far the other way here, IMO.
“Heck there was maybe a couple hundred years where it didn’t happen. It’s the credit.”
One common denominator among self-proclaimed MSM-favored experts is their very short memories, which results in mania behavior quickly becoming accepted as normal.
It’s simple math.
CA adds between 300k and 400k in population per year, and has for a long time.
In 2014, the population was estimated at 38.8MM.
In 1990, the population was 30MM.
Over 24 years, this is 8.8MM new people who need shelter, or about 360k new human beings per year that need a place to live.
When you consider replacement of existing structures, you need to build approximately 200k housing units per year in order to keep up with population growth (both single-family and multi-family).
Do you know how many years from 1990 to 2014 CA exceeded 200k new housing units?
2: 2004 (212k), and 2005 (209k)–and they BARELY exceeded 200k.
How many years did we build less than 100k? That’s less than half the needed amount for population growth.
12: 1992-1996, 2008 to present.
We have a massive deficit of physical shelter, which leads to overcrowding and high prices.
I know you want to blame the Fed for blowing bubbles, but there is a very real supply deficit in CA that has been building for decades, and that is a major contributor to high prices here.
Low interest rates make it possible for people to pay high prices, but buyers wouldn’t need to pay high prices if there were more options.
More houses will bring more traffic. How many millions will CA stuff along their coast ? All of the worlds excess population after they have screwed up their own countries ? I doubt it.
Cities will elect to only build million dollar homes , same taxes but without having to build out infrastructure after all cites have pensions to pay.
Plenty of talk about low income housing and cities will build token numbers of these.
result you will have the rich escaping form over populated chaos on the other side of the world and some working poor maybe Americans maybe not in subsidized housing. Middle class will leave.
kinda like it is now.
300k chinese added
http://www.cbia.org/uploads/5/1/2/6/51268865/original_historical_data_-_updated_with_2015_prelims.pdf
I just did some quick math.
From 1990 to 2014 (including 1990, so it’s 25 years of development), CA built 2.9MM housing units.
Or approximately 115k per year.
This is a little over half what is needed to keep up with population growth.
Yes, it wasn’t always this way. From the 50’s through the 80’s we built plenty of homes. The average from 1954 to 1989 was 207k homes per year. And prices never got completely unhinged from reality.
What happened?
CEQA was passed in 1970, which affected new approvals for development. It took time to burn off the prior approved housing (cities usually plan a decade or two in advance), but once the previously approved housing projects were completed, the supply was choked off.
Don’t you see?
California cut housing development in HALF starting in about 1990. You don’t think over time doing such a thing would create supply shortages? Don’t you think those supply shortages will manifest themselves in part in higher housing prices?
I know you’re a smart guy, it’s just shocking to me that you don’t see data like this and see lack of supply as a major problem and significant contributor to high home prices (and high rent).
Problem is CA lost population from 2003-2015 and the net loss is growing. CA has millions of excess, empty and defaulted houses as the vacancy rate continues to expand.
Link please.
And your population numbers are sheer fantasy due to the millions of uncounted illegal aliens living here.
It’s been posted over and over again. You just don’t like the data.
see howmoneywalks.com - check map
ca losing $ to other states
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=california%20population
If you tilt your head the right way, the line will go down and to the right, not up and to the right.
Are you sure?
“5 Million People Left California In The Last Decade”
http://www.sacbee.com/site-services/databases/article32679753.html
Yes, I’m sure.
From your article:
“About 5 million Californians left between 2004 and 2013. Roughly 3.9 million people came here from other states during that period, for a net population loss of more than 1 million people.”
“Despite the loss of residents to other states, California continued to grow during the last decade because of natural increase - more births than deaths - and foreign migration.”
Are you positive?
“for a net population loss of more than 1 million people.”
and foreign migration
Si.
http://www.ppic.org/main/keystat.asp?i=1263#3
Here are the countries of origin in CA, and in the US as a whole.
http://www.cbia.org/
That’s a beaut of an organization Rental_Fraud.
If they were truly interested in earning profit in the construction business they wouldn’t be yapping on about low margin work like housing and pimping the CA housing narrative.
Don’t like the data? Blame the source.
Here are some more links for you that all point in the same direction.
http://la.curbed.com/2016/3/4/11159938/california-housing-shortage-homeownership
“Compounding the problem is a startling lack of construction. The studies found that, between 2005 and 2015, permits were filed for only 21.5 units of housing for every 100 new residents of the state. This has led to increased rental prices and more cases of room sharing. (LA is home to some of the US’s most crowded zip codes.)”
http://www.hcd.ca.gov/housing-policy-development/statewide-housing-plan/web_hcd_stateofhousing_april2014.pdf
“Highlights of the State of Housing in California:
Affordability Worsens, Supply Problems Remain”
http://www.caeconomy.org/reporting/entry/california-housing-shortage-getting-more-attention
“What’s driving this housing crisis? It’s a classic problem of supply and demand. The state doesn’t build enough housing to accommodate its population growth. California is home to roughly 13 percent of the nation’s population, and has slightly greater than average population growth. Yet, over the last 20 years the state has accounted for only 8 percent of all national building permits.”
All this in an environment of collapsing demand. Right?
I think someone paid too much for a bunch of worthless dirt. And it was worthless because it was encumbered but you and your counterparts knowingly paid the grossly inflated price anyways and now you want the encumbrances removed by legal process.
Eat your losses.
http://limoneira.com/real-estate/what-is-soar/
I think Portland has something like this also a urban boundary make sit hard to build.
“make sit hard to build.”
True, but there are gobs n gobs of empty lots around town. That, and many great older structures are being torn down to make room for condo towers and other assorted garbage builds.
http://www.kgw.com/news/local/touche-restaurant-bar-facing-potential-demolition/161034990
Refute the data:
Growing population
Building too few homes for that population growth
25 years in the making
Are you sure?
Glendale, CA Housing Prices Plummet 11% YoY On Ballooning Housing Inventory
http://www.zillow.com/glendale-ca/home-values/
Thanks Rental Watch. You can lead the horse to water, but you can’t make it drink! Most of us get it!
Most of 2 speculators.
“A recession is not how we want to solve our traffic and housing problems”
But it’s sure great for those of us who live within our means. It was so much easier traveling in the summer and getting into National Parks. In the winter months the lift lines were shorter too!
I was thinking about something goon said the other day; Denver was a lot better place during the recession. I moved permanently south of Austin at the tail end of the Texas oil depression. I rented a little 1/1 house on 8 glorious hill country acres for 5 years at $285/month, no rent increases. There was this guy who supplied grocery stores with produce and he’d sell his overflow by the box, a couple three dollars. Mangos, banana’s vegetables, you name it. Shiner Bock was $3.85 a six pack, and this was back when it was made in a 100 barrel wooden fermenter - delicious. I could go up to the only Whole Foods in the world and buy the vegetarian protein hela-cheap, the stuff they charge 2 or 3 times the price of beef now. I could spend all night on 6th street for $10, see 7 or 8 bands, never pay a cover. I could buy cigars that cost $10 now for less than 2 bucks.
Jobs weren’t great, but paying rent was an after-thought. An old pickup and you were good to go.
Around 1996 you could buy a new house in Buda for the low 50’s. I bought 12 acres for $63k that had a well on it that could have supplied a small town. I would hold up a glass of it and you wouldn’t see one speck of anything; perfectly pure right out of the ground and I never treated it. Then it started, housing bubble, dot-com bubble, everything started getting more and more expensive. People poured in, developers took over, paved everything in sight. Aquifers went down and got polluted. Where most of us lived on acreage with deer and foxes, houses were crammed in right next to each other. Now it’s solid roads, houses and buildings as far as you can drive. We didn’t know how good we had it.
Testify, Brother Ben. Too many people and too much speculation is ruining everything.
I moved to Austin in December 1995 and stayed till 2003. Glad I got to see the “old” Austin before it went away.
“A recession is not how we want to solve our traffic and housing problems”
But it’s sure great for those of us who live within our means.
You must mean that it’s great for people who don’t become unemployed during the recession, or perhaps those who have great inherited wealth and don’t need jobs.
have rising numbers of $1 million or $1.5 million homes on the market with no buyers. ‘They should be flying of the shelves,’ she said. ‘But these homes are just sitting there.’”
Flying off the shelves like milk or bread right? These real estate people are so very stupid in so many ways.
Yes and nevermind an alarming amount of Americans can’t respond to a $500-$1000 emergency without using credit. Or that if you have $5,000 in your savings and no debt, you are better off than near 50% of the US population? Sheez, no wonder $1 million homes aren’t flying off the shelves. Are they running out of Chinese and Indian buyers?
And the alarming number (read: 99%) of Americans who can’t bid up a $800K house to $1.1 M because they can’t get a neg-am mortgage which allows them to pay 1/3 the actual PITI , like they could in 2006.
For reference Dandroidz, on HBB you may hear references to “strawberry pickers.” During the bubble ~2006, two strawberry pickers, $15K/year each, were able to buy a $750K house in California. We use that story as the archetype of easy mortgages.
‘the archetype of easy mortgages’
It was two couples that picked strawberries on the loan. I found that story on the Hollister Free Lance IIRC. (It was such an old style web page I couldn’t copy it, I had to retype the text into the blog). The report wasn’t about how easy it was to get a loan. A lawyer had take it to the DA alleging fraud by the loan officer(s). They had allegedly falsified some things on the loan application. That’s the way I remember it. You don’t find this kind of stuff til it blows up. And with Home Ready, you could drive a bus full of strawberry pickers through an application. Literally.
https://www.fanniemae.com/singlefamily/homeready
FAQ PDF:
https://www.fanniemae.com/content/faq/homeready-faqs.pdf
Exactly.
The level of housing fraud since 2009 makes 2000-2008 look squeaky clean.
I had to Google a neg-am loan, just to understand it. What a crock. Who would want a loan that keeps increasing (speculators?-?) That’s insane. Talk about kicking the can down the road. These financial schemes are over my head as a practical mechanical engineer. Math is math to me, not these tricked out financial equations/schemes.
Short answer: yes, speculators. For most, the plan was to buy the house, pay the minimum payment for the 2-3 year grace period, and then sell for massive profit and never pay a penny of principle. Problem was, everyone had the same idea at the same time. Many of those loans reset at the same time, right about the time we physically ran out of buyers. So everyone was trying to sell into a market of no buyers, and then the mortgage reset.. and it went downhill from there.
You’re way out in the weeds on that Donk.
The simple reality is everyone paid too much for a depreciating asset. And still are.
‘Who would want a loan that keeps increasing’
It was a way of buying more house. If you kept it at principle and interest one qualified for a smaller number. If you only calculated principle, bigger loan. So much of this is forgotten. Why a bigger loan? The bigger the house the more it would appreciate, or so it was thought. Then they started layering; neg-am, adjustable rate, etc.
you can do 3% smelly met watt loan w the source being vague, fuzzy, fraud
Houses are not investments. Houses depreciate.
I just told my young coworker about the Robert Shiller research/indices, and how he found over a century homes did not gain value. She tried to call me out on it, because they recently cashed out of a crapshack for a better crap shack and were very “profitable”. Yep go ahead and doubt an Ivy League economist and his Nobel Laureate
“Houses are not investments. Houses depreciate.”
Indeed they do.
Shirley, MA Housing Prices Crater 12% YoY
http://www.movoto.com/shirley-ma/market-trends/
Hoosier Daddy.
May the 4th be with you!
Must watch Star Wars…
” ‘We can whine about this, or we can win by solving our traffic and housing problems,’ ”
…by letting 1/3 of the population leave.
You should have seen SF when the BART workers went on strike in 2013. The Ferry buildings had lines going down the city blocks as people had no trains or buses to ride. It was kind of funny actually. Those BART drivers wanted more $$, despite average salaries topping $80,000
By letting? I’m pretty sure there are people that leave everyday without any ones permission. Whine or solve problems? It’s California, what do you think?
They leave and infect areas like Portland and Austin with their ideologies and social values. Eck.
El Cajon, CA Housing Affordability Surges As Prices Prices Plummet 11% YoY
http://www.zillow.com/el-cajon-ca-92020/home-values/
infect areas like Portland and Austin with their ideologies and social values. Eck ??
Another California hater I see….Infect with ?? Portland and Austin are the most liberal & diverse cities in their respective states…How is it that Californians are infecting them with Ideology & social values ?? Your bias or possibly just plain envy is showing dude…
Data my friend…
Pleasanton, CA Housing Prices Crater 22% YoY
http://www.movoto.com/pleasanton-ca/market-trends/
‘possibly just plain envy’
I’ve seen you say this before. Why wouldn’t someone envious of Californians just move there?
It’s too expensive.
Irrelevant.
Nobody is envious of poverty, crime and fraud.
More and more moving to Texas from other states — especially …
Dallas Morning News-7 hours ago
“California is a no-brainer — California is such a large state and Texas is such a … than Texans are accustomed to paying for food and housing might erode that…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=18&cad=rja&uact=8&ved=0ahUKEwi1qauPvcHMAhVO2WMKHb3IBao4ChCpAggvKAAwBw&url=http%3A%2F%2Fwww.dallasnews.com%2Fbusiness%2Fheadlines%2F20160504-more-and-more-moving-to-texas-from-other-states–especially-california.ece&usg=AFQjCNHbex-IdNsrF9lMOLJXORIneZ5bFA&sig2=iD0O7F8nRfKJz0DXpjT9eA&bvm=bv.121421273,d.cGc
“By letting?”
If they weren’t anchored there by crushing poverty, you’d see the state empty in hurry. California is a populace immobilized by hopeless dependency on the welfare state.
People making 6 figures aren’t anchored anywhere. You are anchored to your basement by your fat butt, however.
Don’t be a Lola.
“California Is Americas Poorest State”
http://www.laweekly.com/news/california-is-americas-poorest-state-4177082
I never trusted public transit while I was there… did the caltrain a couple times to get down to silly valley, and it was ok, but nothing I would rely on to get to work. Driving is pretty much impossible as well.
Bikes rule in the city.
Yes from my experience getting around, MUNI seemed to operate on their own schedule. I used to sit at a station and watch the estimated train time change randomly, and sometimes just gave up and walked to work at the shipyard.
You get the Tide and the huge fight in Virginia Beach between the VBTA and the city over expanding the light rail to the oceanfront. The developers want it ($$$$) and the citizens know that no one rides it.
silver line 30% below use projections
no money for roads
sliverlyin
Dude the Tide is such a joke. You still have to drive 15-20 mins from most of VB and Norfolk to get to the nearest station!! LOL.
VB is already on the hook for 2 or 3 cars I believe. Millions on studies. I think the latest ‘estimate’ was $350 million just to bring it to Town Center, all of a whopping 4 miles of track.
Town Center filled with chain restaurants and a false illusion of an urban center. Ruths Chris? Yardhouse? Cheesecake Factory? PF Changs? So cultured….
?”Cultured”?
The unsophisticated demand ‘culture’.
Fountain Hills, AZ Housing Affordability Rises As Prices Crater 6% YoY
http://www.zillow.com/fountain-hills-az/home-values/
‘I don’t know how much longer I can hold on,’ lamented Patel, 43. ‘If it continues like this, the business is going to be dead.’ That’s the last outcome Patel would have envisioned after she and her husband spent more than $1 million on renovations a few years back.’
The article goes on to say they borrowed this money.
‘The fallout is readily apparent in Towanda. For-rent and for-sale signs are plentiful along Main Street. ‘I don’t think anybody saw it coming, to this deep of a decline that quickly,’
And nobody saw the tech bubble collapsing.
And BTW, it’s contained:
‘For the first time since oil prices began crashing in mid-2014, banks polled by the Federal Reserve are warning of a “spillover” effect onto loans made to businesses and households in energy-dependent regions of the country.’
‘Senior loan officers of nearly 100 banks acknowledged that credit quality has “deteriorated” on everything from auto loans and credit cards to commercial real estate mortgages. Translation: More people aren’t paying and delinquencies are rising.’
‘It’s a sign of how the deep spending cuts, mass layoffs and even bankruptcy filings in the oil patch are inflicting real pain in certain energy-focused states like Texas and North Dakota.’
‘Some large U.S. banks have individually warned of early signs of so-called contagion.’
‘For instance, last month Wells Fargo said office vacancies in the Houston area have risen and multifamily housing activity is looking “a little bit weaker.” That makes sense given the rise in bankruptcies and the mass layoffs announced by Houston-based energy companies like Halliburton, Baker Hughes and ConocoPhillips.’
‘These energy troubles are already creating headaches for bank stocks, which have fared far worse than the broader market this year. In recent weeks big banks have announced major losses linked to loans in the oil and gas sector. For example, Bank of America set aside nearly $1 billion to protect from loan losses, mostly by energy customers.’
‘JPMorgan Chase boosted its provisions for credit losses by 88%, mostly due to its oil, natural gas and pipeline business.’
‘But the trouble had spread to related businesses. At least 25% of banks surveyed by the Fed said it had affected auto loan in energy-dependent regions. That mirrors findings elsewhere. Credit score tracker TransUnion reported oil-focused states like North Dakota, Texas and Oklahoma experienced a spike in seriously delinquent (60 days or more) auto loans during the fourth quarter of 2015.’
‘Over 80% of banks surveyed by the Fed said tightening lending policies on new loans or lines of credit to firms in the energy sector has been important to mitigate their risk of loan losses. Other strategies include limiting oil companies’ ability to draw down credit lines, restructuring loans, requiring additional collateral and setting aside additional reserves.’
Ben Jones this blog has been on a roll lately with an endless sequence of incalculable losses. Every single person I know who bought an overpriced shack in Denver 2014 to present is in deep, deep denial.
P.S. I’m getting a new dishwasher installed this week, because renting.
Poorly penned, worn narratives screaming desperation in conjunction with a CraterRage epidemic makes for a wildy successful blog.
Fitchburg, MA Housing Affordability Improves As Prices Plunge 5% YoY
http://www.movoto.com/fitchburg-ma/market-trends/
Just got back from a cruise, A middle class South African was telling how he and his family now live in a small basic house in a gated housing set-up. He said he just walked away from a nice suburban home, that was not at all “safe” ……..Wonder if and when that could happen here,
Orangeburg?
As every Democrat-run urban center turns into dystopian bankrupt basket cases, trust me, a lot of people will be walking away from their formerly “nice suburban homes.”
From what I’ve read the only ’safe’ communities in South Africa are gated with actual security guards (armed).
Pork prices soar to record highs in China. In country after country, food inflation - spurred by goverment money printing and economic mismanagement - has spurred social unrest. How long will the Chinese masses put up with a government run by and for corrupt party hacks and their well-connected cronies?
http://www.businessinsider.com/chinese-pork-prices-hit-record-highs-2016-5
Crazy seeing how they [China] bought Smithfield pork/ham yrs back. I was living in Va at the time and thought, “oh boy, this will be great”.
“With about 3,200 vacant apartments in Williston, Rolfstad figures about 6,400 bedrooms are vacant. And rents are down by ‘half at least,’ he said.”
Maybe they can become the new Sturgis. When the fat, old, Skynerd listening, Harley slobs leave Sturgis, the can motor down to Williston for some more man-fun.
Spoken like a true carpetbagger. BTW, how’s Neil Young looking these days? Oh, wait, kinda like a fat, old slob. PS: Most of the Skynryd listening guys are spindly and wizened rather than fat.
“Spoken like a true carpetbagger”
Carpetbagger, I was born and raised in Skynerd town. Just because I am old, Southern and male doesn’t mean that when I get old, I have to buy a fat Harley and run with trash. When I was a kid we rode fast Jap or Brit bikes, had skinny girlfriends and went to college. We made fun of the fat Harley loosers. I still have an attractive, thin wife; not like these fat pigs sitting on the back of a Harley.
Maybe you need to go to the Twin Peaks in Waco to hang with your brothers.
Bwa-ha-ha-ha, you can’t even spell it, liar. Or maybe you’re just being too clever by half.
And yeah, I’ve been working on a project where I’m in constant contact with the “trash” you look down on, in the Blue Ridge. I can’t believe what these people are up against and yet they keep on going, cheerfully, with manners I could only dream of having. One of ‘em is worth ten of you. The husbands and wives work opposite shifts just to support their families, not to mention dealing with relatives who have been used up and spit out by the military, and other relatives who have been hooked on the poison drugs pumped into their schools and communities.
Pack that carpetbag and GTFO. You give the term “Cracker” a bad name.
Yes, this is an economic forum. I am not sure why one fat Harley rider is worth ten of me. I guess becoming grossly overweight, smoking and drinking to excess, and hanging about with other fat people is something you aspire to. There is nothing redeeming about this whole “Biker” culture that you adore. Dressing up like a thug and having your wife dress up like a whore while riding on a financed Harley with no muffler and the radio blaring is something relatively new to our culture. When I was growing up, grown men cut their hair, worked hard and plowed their money into their families. It is too bad many of the “adults” of my generation still want to act like kids. Perhaps that is the root of this nation’s consumption economy.
Like my Gram-ma used to say, when you lie with dogs, you get fleas.
“Yes, this is an economic forum.”
Exactly. Housing my friend. Keep the topic to housing.
Monterey County, CA Housing Prices Turn Negative YoY; Prices Plummet 6% QoQ
http://www.zillow.com/monterey-county-ca/home-values/
“When I was growing up, grown men cut their hair, worked hard and plowed their money into their families.”
Hold on now, you just said when you were a kid you made fun of the fat Harley loosers.
“We made fun of the fat Harley loosers.”
Weren’t they grown men?
Were the “fat Harley loosers” women?
Is that why you were all able to graduate high school and go on to college?
The husbands and wives work opposite shifts just to support their families, not to mention dealing with relatives who have been used up and spit out by the military, and other relatives who have been hooked on the poison drugs pumped into their schools and communities.
People like that can’t afford Harleys. If they have them, they should sell them and pay off some debt.
When I was growing up, grown men cut their hair, worked hard and plowed their money into their families.
And as their lives had value, they stayed off each other’s lawns.
Hey Donk.
“We made fun of the fat Harley loosers.”
Not to their face I’m sure.
You can do it without worry if they’re off their motorcycles.
Lol, jeff. Oh, BTW, “Puppet Show and Spinal Tap”. That’s all I could think of yesterday, looking at Indiana.
“You can do it without worry if they’re off their motorcycles.”
Never judge a man until you have walked a mile in his shoes.
That way, you are a mile away and you have his shoes.
Give me a break, just go to you-tube and check out some of these “Biker” events. These people are the low scum of the earth; nothing redeeming, no positive benefit to the nation or their communities. They sell drugs, vomit, commit crimes, and worst of all - they ride around with these fat, tattooed, pigs on the back.
Besides, all of the Southern rock bands are nothing but shells of their former greatness. Most, like Skynerd, only have one original member. These bands would surely be gone without the Biker love fests.
Sorry Guys, I guess I hit a nerve here with the fat Harley comments. I did not realized this forum intersected with the 1 percenter’s blog.
Nothing personal, but I am guessing that a few of you have had to move from the two-wheeler to the three-wheeler. Nothing like the rolling-thunder of a herd of fat, old, bearded, tattooed long-hairs riding their three-wheel rigs in formation to the nearest Hooters. “Hey waitress, can you change the channel to FOX News?”
Those Jap and Brit scooters are a bit cuck-y.
And the free-birders are spindly and you know it.
“When I was a kid we rode fast Jap or Brit bikes, had skinny girlfriends and went to college. We made fun of the fat Harley loosers. I still have an attractive, thin wife;”
Where was this magical “Skynerd town” where all the kids rode Rice with skinny girlfriends on the back and had a100% high school graduation rate followed by 100% college attendance after surviving calling the Harley bikers “loosers” and still managed to grow old with runway model wives?
Jacksonville
Jacksonville…. love it. Home of Molly Hatchet and Lynyrd Skynyrd.
RIP Ronnie Van Zant and Danny Joe Brown.
Oh. That’s different. I like Jax. Quietly goes about its business, while Tampa, Miami and Orlando get all the attention. Lotsa good people in Jax. Driving can be a nightmare, though, if you’re not familiar with the area.
“Molly Hatchet”
When the Irish boyz used to come to the Cape (Cod) to work the summer season back in the day, they always wanted to know where they could go to hear them some Molly. They’d say it real quick with the Irish accent, ended up coming out like “Hatsh*t”
Jacksonville?
Not everybody from Jacksonville graduated high school and went on to college. Although this guy may have eaten a biker.
Just before he died, Toole smiled effusively and told an interviewer named Billy Bob Barton, “People eat pigs, cows, horses. I like to eat people. It’s good meat too. You ain’t tried it, don’t you be saying it ain’t tasty.”
From Wikipedia
Ottis Elwood Toole (March 5, 1947 – September 15, 1996) was an American drifter who was convicted of six counts of murder.
Ottis Elwood Toole (sometimes misspelled “Otis”) was born and raised in Jacksonville, Florida. Toole’s mother was abusive; Toole claimed she would dress him in girls’ clothing and call him Susan.[1] His father was an alcoholic who abandoned him.[1] Ottis claimed that as a young child, he was a victim of sexual assault and incest at the hands of many close relatives and acquaintances, including his older sister and next door neighbor. He claimed that his maternal grandmother was a Satanist, who exposed him to various Satanic practices and rituals in his youth, including self-mutilation and graverobbing, and dubbed him “Devil’s Child”. Toole claimed this abuse began when he came out as gay to his family.
I saw this yesterday. The cheapest ticket is $199.
The Coachella of classic rock is coming soon, and it features no less than Bob Dylan, the Rolling Stones and Paul McCartney.
Neil Young, the Who and Roger Waters of Pink Floyd will round out the bill for Desert Trip, a new festival scheduled for Oct. 7 through 9 at the Empire Polo Club in Indio, Calif., home of the popular Coachella Valley Music and Arts Festival. But instead of the millennial-heavy crowd that flocked there last month for LCD Soundsystem, Ellie Goulding and Disclosure — accompanied by flower-crown fashion and trendy V.I.P.s — this one aims squarely at baby boomers, a largely untapped festival audience.
Goldenvoice, a California concert promoter that is owned by the global concert giant A.E.G. Live, organized the mega-concert, which will have two acts play full-scale shows — not abbreviated festival sets — per night.
The Rolling Stones and Mr. Dylan are scheduled to get things going on Friday, Oct. 7, with Mr. McCartney and Mr. Young filling the Saturday slots on Oct. 8. Mr. Waters and the Who will close out the event on Sunday, Oct. 9.
Despite their established places in the rock canon, the six acts have never shared a bill. Roger Daltrey of the Who called the lineup “the greatest remains of our era.”
http://www.nytimes.com/2016/05/04/arts/music/desert-trip-coachella-stones-dylan-mccartney.html?_r=0
Geezer rock.
The Who is one of my favorite bands - but ay yi yi Roger Daltrey should NOT be singing any longer - I’ve caught a few recents concerts on cable and I had to change the channel.
this one aims squarely at baby boomers, a largely untapped festival audience.
That’s pretty funny. Haven’t these exact same musicians been tapping these exact same boomers for nigh on 50 years of concerts?? And with Woodstock, didn’t boomers INVENT the festival?
Yep, true. but it was NOT expensive back in the day. I grew up in S.F., went to HS in the mid ’70’s and saw the big rock names nearly every week at Winterland…and was easily able to afford that working part time for minimum wage. I don’t recall what a ticket cost but it wasn’t much maybe $5 or so.
(no longer listen to rock though)
How’s that hope ‘n change working out for ya, Appalachia?
http://hosted.ap.org/dynamic/stories/U/US_DEM_2016_CLINTON?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2016-05-03-14-11-52
To the point of 95 percent being idiots, as Ben has pointed out repeatedly, every time the immigration issue comes up for an actual vote of the people, the people choose a hard line. Even in CA.
I own a car. Do YOU have a right to tell me who can be in my car and who cannot?
If I own land, do YOU have a right to remove my guests from my land?
If you have no such right, can you delegate a right you do not have to my next door neighbor, so that he can remove my guests? If not, can you delegate a right to people from a faraway place to come onto my property and remove my guests?
To the point of 95 percent being idiots, as Ben has pointed out repeatedly, every time the immigration issue comes up for an actual vote of the people, the people choose a hard line. Even in CA.
According to to the guy who calls himself Taxpayers, the founding fathers wanted a republic, so those actual votes of the people are a bad idea, or something like that.
Revisit: “Household Formation Is Cratering”
http://realmoney.thestreet.com/articles/08/21/2013/household-formation-cratering
Where is formation today? Right where it was in 2011…. At record lows.
http://realmoney.thestreet.com/articles/08/21/2013/household-formation-cratering
I think this is the summary paragraph from the above link:
“The bottom line is that the increase in housing activity in the past year has not been broad-based, nor has it resulted from a rebound in economic activity. It’s been driven by a small portion of the society that has the cash and credit available to capitalize on the situation.”
The current housing market is another aberration, similar to 2004-2007, but with its own unique characteristics. Everyone was in the game last time. (There is systemic memory of the last crash; people know what “bubble” means this time around.) We’re looking at a smaller pool of gamblers now, but the losses will still be of the same magnitude.
There is no narrative other than the fact that household formation is cratering and confirmed by the fact that housing demand is at 20 year lows and homeownership rate is at 48 year lows.
See what fixed and prices do to a market economy?
If not for the Chinese locusts buying up RE, Northern California rents would be reasonable. Irvine is still building lots of apartments. Average house price out of reach. A young buddy of mine and his wife (parents of one year old twins) “bought” an $800,000 house two years ago and it’s “worth a million now.” He is Vietnamese descent and she is Chinese descent. Had $ help from her parents. They fit right into Irvine. It’s odd though that I see very few Asians here in Irvine. The Chinese supposedly are a huge percent of the residents here but I see mostly whites.
I grew up in Irvine in the 1980s and 90s back when it was still orange groves and strawberry fields.
When we first moved there it was middle class mostly white families with some Asians interspersed. By the mid to late 80s it became “yuppified.”
I had a friend from Taiwan that lived across the street and I worked for his mother briefly in her rug store. Irvine has always been a popular destination for Asians.
When I go back to visit my parents (oh yeah and my two 30 something brothers that still live at home) I’m taken aback by the amount of signage in Chinese and Asian businesses and supermarkets that have sprung up in the last 5 years or so.
Sheldon Silver, the former New York state speaker who presided over a “cauldron of corruption” (which describes all Democrat political machines), is finally sent to prison after a career of massive corruption and sleaze finally caught up with him. Hillary Clinton and Jon Corzine, however, retain their impunity from any possibility of facing criminal penalties for their lawbreaking.
http://www.independent.co.uk/news/world/americas/disgraced-former-new-york-state-speaker-sheldon-silver-gets-12-years-a7012146.html
Americans are going to pay a heavy price for letting a private banking cartel run by Keynesian fraudsters control our monetary policy and money issuance. These are exactly the kind of gold-collar grifters that Thomas Jefferson and other founders warned the Republic to be eternally vigilant against.
http://www.telegraph.co.uk/business/2016/05/03/aep-us-dollar-plunges-as-world-plays-dangerous-game-of-pass-the/
http://www.themoneymasters.com/the-money-masters/famous-quotations-on-banking/
Good to see that at least some Democrat rank-and-file refuse to bend over for the deeply corrupt, crony capitalist status quo or its evil standard-bearer.
http://www.breitbart.com/2016-presidential-race/2016/05/03/bernie-sanders-supporters-plan-occupy-democratic-national-convention-shut/
The riots predicted for Cleveland have now been moved to Philadelphia.
So far, nearly 2,000 individuals have indicated their interest on Facebook in disrupting the convention with the intended goal of having a “9.9 million person march” take place there in order to wage an “American Civil Revolution.
Breitbart should pay less attention to Facebook.
Irrelevant.
In the UK we have bank after bank coming in with earnings below expectations, retailers failing to meet expected figures. They are not just missing they are badly missing. Manufacturing has started to contract and future GDP growth isn’t meeting expectations and is being revised down. Now my question is are we in the UK alone in this or is this playing out through out the world. I’d guess the world but confirmation or rejection of my hypothesis, that yet again we are teetering on the edge of the cliff is correct would be welcome.
Not to worry. Middle class taxpayers can bail out any and all banks in danger of failing due to their own greed and recklessness.
Kind of insane to think the people who make up the $60-100k range, bail out the banks/companies with billions in assets and CEOs who make millions. They will tap us one way or another, maybe go for a direct snatch of that pot of gold known as 401ks?
Kind of insane to think the people who make up the $60-100k range, bail out the banks/companies with billions in assets and CEOs who make millions.
What’s more insane is that in 2008 and 2012, 95% of the electorate bent over for Wall Street by casting votes for the Oligopoly’s annointed water carriers Barak Obama, John McCain, and Mitt Romney. Ron Paul was our last best hope to put a stop to the oligarchs’ wholesale swindles against the 99%, but ‘Muricans were too stupid and docile to push back against the banksters.
Yep.
’d guess the world but confirmation or rejection of my hypothesis, that yet again we are teetering on the edge of the cliff is correct would be welcome.
The 2008 financial crisis was never resolved, merely papered over with trillions in printing-press “stimulus” while not a single banker or politician (i.e. Chris Dodd or Barney Frank) went to prison for their role in causing the crisis. Now the Keynesian lunatics running our central banks are running out of road to kick the can. Yellen the Felon is desperately trying to defer the financial reckoning day until after the election, hoping against hope her crony Hillary Clinton will be our next president so there will be no Pecora Commissions to pack the banksters and their political enablers off to prison. Short answer to your question, Frankie: we are indeed on the edge of the abyss. Get ready for it all to go pear-shaped.
Hong Kong retail sales plunge 13.6 per cent to record biggest slump …
http://www.scmp.com/…/hong-kong/…/hong-kong-r...
South China Morning Post
Mar 31, 2016 - Hong Kong retail sales plunged 13.6 per cent year on year in the first two months of 2016 – the biggest slump since 1999 – and the worst may …
Hong Kong retail sales slump slows, but outlook remains miserable …
http://www.scmp.com/…/hong-kong/…/hong-kong-r...
South China Morning Post
Mar 3, 2016 - Sales of jewellery, watches and other luxuries continue slide.
Luxury spending slump in Hong Kong pushes retail sales down
https://boschglobal.com/Luxury_Spending_Slump_In_Hong_Kong_Pus...
images/279/hong_kong_retail_153446175_31695081_H.jpg. Luxury spending slump in Hong Kong pushes retail sales down. Hong Kong retail sales in the first …
Slump in Chinese Tourists Leaves Hong Kong Malls Struggling …
http://www.bloomberg.com/…/slump-in-chinese-tourists-leaves...
Bloomberg L.P.
Apr 19, 2016 - Instead, it’s an attempt to refresh its tenant mix to woo new visitors in response to Hong Kong’s deepest retail sales slump since 2003, when the …
Slump in Chinese Tourists Hitting Hong Kong Retail - VOA
http://www.voanews.com/…/slump…hong-kong-retail/33064...
Voice of America
6 days ago - Hong Kong is experiencing its biggest retail slump since 2003. The government and industry groups have said the purchases of jewelry, …
Retail sales slump worst in 17 years - The Standard
http://www.thestandard.com.hk/section-news.php?id=167884
The Standard
Apr 1, 2016 - Thomson Cheng Wai-hung, chairman of the Hong Kong Retail Management Association, warned that closures and staff cuts will become more …
Hong Kong Retail Slows as Mainland Tourists Stay Away - WSJ
http://www.wsj.com/…/hong-kong-retail-slows-as-main...
The Wall Street Journal
Dec 29, 2015 - Until then, analysts say Hong Kong retail will likely continue its slump and companies will need new ways to attract business, as they can no …
UPDATE 1-Hong Kong Feb retail sales in worst slump since 1999 …
http://www.reuters.com/…/hongkong-economy-retail-idUSL3N17333A
Reuters
Mar 31, 2016 - (Adds details and comments). * Feb retail sales -20.6 pct y/y in value terms. * Weak tourism, shrinking asset markets hurt consumption - govt.
Hong Kong’s Luxury Retail Slump to Last Through 2016 | Jing Daily
jingdaily.com/hong-kongs-luxury-retail-slump-to-last-through-2016/
Dec 3, 2015 - The luxury retail sales decline in Hong Kong brought on by lackluster mainland Chinese tourist numbers is set to carry on through 2016, …
As goes Hong Kong, so goes Vancouver, BC?
Labor Force Participation Rate Falls To 38 Year Low; Joblessness At Record High
http://data.bls.gov/timeseries/LNS11300000
I love how the key stats in plain site of the BLS reports are the vast majority of jobs “created” have been waitress/hostess/bartending jobs. That and a large # of seniors coming back into the workforce because they cannot afford to retire.
The MSM keeps going on and on about job surges, low unemployment, and job gains. Pathetic. Cheers to our recovery.
“That and a large # of seniors coming back into the workforce”
There are no jobs to come back to.
There are jobs but they are not even McJobs. In the UK we have zero hour contracts
Zero hours contracts
Key points:
Zero hours contracts normally mean there is no obligation for employers to offer work, or for workers to accept it.
Most zero hours contracts will give staff ‘worker’ employment status.
Zero hours workers have the same employment rights as regular workers, although they may have breaks in their contracts, which affect rights that accrue over time.
Zero hours workers are entitled to annual leave, the National Minimum Wage and National Living Wage and pay for work-related travel in the same way as regular workers.
What are they?
A zero hours contract is generally understood to be a contract between an employer and a worker where:
the employer is not obliged to provide any minimum working hours, and
the worker is not obliged to accept any work offered.
On 26 May 2015, new regulations about zero hours contracts were brought in. The law prevents employers from enforcing ‘exclusivity clauses’ in a zero hours contract. An exclusivity clause would be where an employer restricts workers from working for other employers.
The Exclusivity Terms in Zero Hours Regulations 2015 state:
it will be automatically unfair if someone is dismissed if they have breached a contractual clause stopping them from working for another employer
it is unlawful for a worker to suffer a detriment because they work for another employer.
http://www.acas.org.uk/index.aspx?articleid=4468
‘The next big monetary and fiscal policy move should include an airdrop of money from helicopters to stimulate the U.S. economy, says Bill Gross, a portfolio manager at Janus Capital Group Inc. Gross may not be entirely serious about “helicopter money”, but in his latest Investment Outlook note published on Wednesday, he said the Federal Reserve and U.S. Treasury should engage in another round of quantitative easing (QE), printing trillions of dollars to buy government bonds and thereby boost economic growth.’
‘Gross notes that the Federal Reserve, the European Central Bank, Bank of Japan, and the Bank of England have effectively already bought bonds from their governments for six years and allowed them to spend money to support their sagging economies.’
“They buy the bonds by printing money or figuratively dropping it from helicopters – expanding their balance sheets in the process,” said Gross. “They then remit any net interest from their trillions of dollars or yen bond purchases right back to their Treasuries. The money in essence is free of expense and free of repayment as long as the process continues uninterrupted.”
‘Gross said he believes central banks will print more helicopter money via QE “perhaps even in the U.S. in a year or so and reluctantly accept their increasingly dependent role in fiscal policy.” Such a move would allow governments to focus on infrastructure, health care, and introduce a “universal basic income” for displaced workers amongst other increasing needs.’
‘They then remit any net interest from their trillions of dollars or yen bond purchases right back to their Treasuries’
It’s better than free Bill. As we’ve pointed out here long ago, the more they borrow, the more interest they earn.
What a racket. Yet ‘Muricans, docile and stupid, vote overwhelmingly for more of the same.
Given the populist upsurges in Europe and the US, the central banks, egged on by their Oligopoly handlers, have a narrowing window of opportunity to escalate their swindles against the 99%. Unless, of course, Hillary Clinton is our next president, in which case the swindles can go on into perpetuity once the DNC’s permanent Democrat Supermajority is a fait accompli.
http://www.zerohedge.com/news/2016-05-04/why-bill-gross-thinks-helicopter-money-imminent-politicians-bankers-will-choose-fly-
“… printing trillions of dollars to buy government bonds and thereby boost economic growth.”
Boost economic growth = boost prices of assets.
If economic growth is measured via prices then all one has to do to boost economic growth is to - presto! - is to boost prices.
You do not have to actually and physically increase wealth, all you need to do is reprice it.
BTW, Zillow says the economic growth of my miracle house increased by over four-thousand dollars from just thirty days ago.
I think a case can be made that if, say, an oil well was to have the physical amount its extraction of oil increased while at the same time the price (and hence the value) of this extracted oil decreased then this increased physical production could be seen as a decrease in economic output.
And vice-versa; If reduced physical production is more than offset by rising prices then it would be economic growth that would be experienced.
“universal basic income”!?
What would that be AFTER the further asset bubble inflation due to additional QE?
More demand destruction, more jobelessness, etc.
This is comforting:
‘Freddie Mac in the first quarter reported a loss but did not need to get an infusion from the Treasury Department. Sister mortgage buyer Fannie Mae is less likely to run into these concerns, according to Ed Groshans, an analyst at Height Securities. In a note to clients, he says Fannie Mae’s first-quarter losses on the fair value of its derivatives could reach $4.1 billion, which could result in a “close to breakeven quarter.” He says derivative losses at Fannie Mae would need to exceed $5 billion to put it at risk of needing to drawing capital.’
“The Australian Dollar Is Cratering”
http://www.businessinsider.in/The-Australian-dollar-is-cratering-Heres-whats-happening-in-FX/articleshow/52011142.cms
Liquidate, get out of debt and hold onto every dollar you’ve got because they’re becoming more valuable every day.
Gee, that’s fascinating. Maybe those $5 bottles of Australian wine at the local supermarkets will get even cheaper.
Irrelevant.
Remember…..Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
Creates jobs doing what, Housing Analyst?
Data my good friend. Stick with the data.
Bend, OR Housing Prices Crater 13% YoY
http://www.zillow.com/bend-or-97701/home-values/
Bend housing market is like Mars…when the sun is out it’s scalding 350 degrees hot…when the sun goes down it drops to 200 below….
Khrator!
The average pack of cigarettes in Australia will cost a whopping £23 by 2020 - with 69% of that cost being purely tax.
Between 2017 and 2020 the Government is set to increase the excise on tobacco products 12.5% each year.
A pack of 25 in the country already costs about £13 to £15, whereas an average pack of 20 will set you back around £8 in the UK.
The treasury says it is marking up the price on the products to make the nation healthier, saying the World Health Organisation recommends a tax rate of 70% on the price of cigarettes.
Treasurer, Scott Morrison, said in a speech to parliament: “The net impact of the tobacco measures will raise $4.7bn (£2.4billion) over the next four years.”
http://www.mirror.co.uk/news/world-news/pack-cigarettes-cost-23-australia-7892822
Well the price of tobacco isn’t getting cheaper. Roughly $33 a pack by 2020.
There is a near-exact correlation between the AUDJPY and the US stock market, due to bankster carry-trade shennanigans.
After the Chinese Communist Party has implicitly encouraged the sheeple to “invest” in the country’s rigged, broken, insanely overvalued markets, the latter may not react well to losing their live savings in China’s Ponzi markets and asset bubbles.
http://www.marketwatch.com/story/china-corporate-bondholders-lose-their-confidence-in-a-beijing-bailout-2016-05-04#:UZ5Wm9AwrQxFjA
‘As Chinese growth slows and corporate profits decline, many are finding it hard to service their debt. Already, there have been 22 bond defaults in China’s domestic market this year, as many as in all of 2015.’
‘That number may seem small, given that China has more than 3,900 domestic issuers with outstanding debt. But this year’s jump in defaults, mainly by state-run firms—which account for around 70% of the corporate-bond market—has shaken investors’ long-held assumption that if such companies had trouble paying back creditors, the government would have their backs.’
‘Some argue that by letting more state-owned companies default, Beijing is encouraging a much-needed reassessment of risk in China’s bond market, where analysts say the assumed government support has allowed unprofitable and poorly managed companies to issue debt cheaply.’
‘The danger is that investors will flee the market if they don’t know which bonds are now safe. Already, the premium investors are willing to pay for the highest-rated Chinese company bonds over the debt of riskier companies rated at single-A has widened to an all-time high, based on their yields.’
No wonder CHY-nah is stamping its foot today.
The central banksters’ War on Savers - the big lie underneath.
http://davidstockmanscontracorner.com/the-central-bank-war-on-savers-the-big-lie-beneath/
The sheeple of Flint, Michigan, installed successive corrupt, incompetent Democrat municipal administrations (is there any other kind?). So now they are boo-hooing about the entirely predictable bad governance they inflicted on themselves. Am I supposed to feel sorry for them or pay to reverse the consequences of the corruption they themselves voted for?
http://www.reuters.com/article/us-michigan-water-obama-idUSKCN0XV0YT
Yes, this whole thing is hilarious - the end result of decades of corrupt, democratic, black leadership in Flint, and now it’s all the white, republican governor’s fault. Sure, I buy that.
Can’t be his fault… he’s WHITE!
The Plunge Protection Team (PPT) jumped in early this morning. Usually they wait to intervene to prop up the Ponzi until about 10:00 am.
It’s not too late in May to sell — YET!
Nooo!
The Grilled Cheese Truck, Inc. (GRLD) -Other OTC
0.11 Down 0.04(25.07%) 11:28AM EDT
http://finance.yahoo.com/q?s=grld
I think this Food Truck thing might be winding down.
At my office we have two trucks scheduled each Mon, Wed and Fri.
Lately, only one has been showing up and the variety has been diminishing.
I noticed the same trend at the office building across the freeway from us.
They’re not a great deal. Some you used to be able to at least get a entree and side (sandwich and fries) etc for 10 bucks or under. Now they charge $10 for the hamburger and another $4 for a side of fries! $4 for FRIED POTATOES!!!! I can buy a 5 lb bag of potatoes for $3 at the grocery store.
I can walk to the diner down the street and get a burger and fries for 9.95 so you’re probably looking at $14-15 after tax and tip.
I mostly bring my lunch now.
5 guys will kick any food trukers @zz. ALL. DAY. LONG.
Hipsters love everything mobile. Phones, food, tiny houses with wheels. And ‘member It ain’t home till the wheels come off.
US Housing Demand Plunges To 20-Year Low
http://2.bp.blogspot.com/-yX5B5Hn95bQ/VYC3Wr6ihBI/AAAAAAAAj7I/alOslZa-cK8/s1600/MBAJune172015.PNG
‘I don’t think anybody saw it coming, to this deep of a decline that quickly,’
Soon to be said about a housing market near you.
“This sucker could go down” — George W. Bush, 2008
There is no speculation, just stupidity and greed driven by “primal need”. Big difference.
Why oil prices have nowhere left to go but down
By Barbara Kollmeyer
Published: May 4, 2016 10:02 a.m. ET
Critical information ahead of the U.S. market’s open
Below, look out.
Looking for a letup in the selling that has walloped markets over the past 24 hours? This morning at least, you’re about to be as disappointed as Ted Cruz.
Economic worries drove investors into the dollar and out of commodities, with oil taking an additional hit on fresh fears of a supply glut. It stands to reason that investors are probably wondering if this is the start of a stock-market selloff — it’s May, GET OUT.
“We’ve seen a slight pullback in commodity markets, which appears to be leading the declines in equity markets,” Craig Erlam, senior market analyst at Oanda, speaking for the no-panic side. “We’re probably seeing a little profit-taking following what has been a decent run since the middle of February.”
But there may be cause to panic, say others like IG’s Angus Nicholson, who noted how two Fed speakers (Lockhart and Williams) were busy talking up chances of a June interest-rate hike Tuesday night.
“If this is the Fed’s game plan, and we begin to see a slew of Fed speakers getting more hawkish, the U.S. dollar may start to gain from its very low levels. This may mark the turning point for the mid-February rally in commodities,” the IG analyst says. And given how oil and stocks have often been joined at the hip, this could mean trouble for stocks in the near term, he adds.
Our call of the day couldn’t agree less, saying that slick black commodity hasn’t really earned the last few months’ gains and get ready for sub $40-a-barrel.
…
Hey-hey, ho-ho, methinks they’re already taking a leaf out of the book of the person all the “experts” say would be a foreign policy disaster. I’ll be danged.
http://www.zerohedge.com/news/2016-05-04/pakistan-best-frenemy-washington-pulls-plug-subsidizing-f-16s-indias-neighbor
More of this, and faster, please.
Of course, we’re on the hook to defend India against the Chi-coms on the water. WHY? WHY? They’re making a ton of money off us, all those H1Bs and other stuff. Taxes are extracted from us to pay for them on so many levels.
“I paid half a million to immigrate to the US and all I got was this lousy convenience store/liquor store/motel, etc.
They’ve got nukes, they can take care of themselves.
Washington, DC Housing Affordability Grows As Prices Crater 6% YoY
http://www.zillow.com/columbia-heights-washington-dc/home-values/
Looks like the oversupply of housing in Ft. Murray is about to be fixed:
http://edmontonjournal.com/news/local-news/fort-mcmurray-wildfires-photos-from-tuesday-may-3
Realtor Lightning?
Todays Debt Clock reading: $19,266,426,850,^^^
Forward!!!
Puggs:
This…..
and then all the other stuff tickin away like a time bomb.
http://www.usdebtclock.org/#
Yup… take notice of credit card, student loan and mortgage debt…all running like race horses again. Whatever dip happened between ‘09 - ‘12 is all but evaporated. I remember when those numbers were actually going in the opposite direction.
So much for the budget deficit going backwards too. Reducing that is so 2015.
https://www.theguardian.com/technology/2016/feb/17/san-francisco-tech-open-letter-i-dont-want-to-see-homeless-riff-raff
tech versus San Fransisco
He’s probably trying to live cheap in the Mission or Tenderloin… serves him right.
https://www.theguardian.com/business/2016/may/02/further-future-festival-burning-man-tech-elite-eric-schmidt
“It’s all about balance. We are the ones meant to be the air, not the earth,” Piorkowski said. “So you have this group who can travel. The purpose can never be to enable everyone to travel because that would create imbalance.”
Some weird Hunger Games future awaits
80,000 ft mac Murray mandatory evacuation due to massive brush fire…..
http://www.ctvnews.ca/mobile/video?clipId=862034
Whole lotta sad panda butthurt out there today.
Send us your huddled Democrat-on-Arrival Entitlement Masses, yearning to spoonge off the taxpayers….
http://thehill.com/latino/278785-migrant-numbers-skyrocket-at-mexican-border
More jawboning from another one of Yellen’s racketeers. The Fed will NEVER normalize rates voluntarily. To do so would implode its Ponzi markets and asset bubbles.
http://www.marketwatch.com/story/kashkari-says-fed-wont-move-aggressively-to-raise-rates-2016-05-04?link=MW_latest_news
Blue collar white males: the expendable class to the Republicrat duopoly.
http://money.cnn.com/2016/05/04/news/economy/america-left-behind-white-men/index.html
Freight volumes, unlike faked official “all is well!” statistics, don’t lie….
http://www.zerohedge.com/news/2016-05-04/air-freight-volumes-across-largest-global-market-tumble-15-first-quarter
How’s that hope ‘n change working out for ya, Los Angeles?
http://www.latimes.com/local/lanow/la-me-ln-homeless-count-20160504-story.html
Freight volume doesn’t lie: we’re in a recession.
http://wolfstreet.com/2016/05/04/freight-rail-traffic-plunges-aar-april-report-photos-idled-engines-transportation-recession/
“When you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you – you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”
-– Francisco’s “Money Speech,” from “Atlas Shrugged”
New Jersey, the most corrupt state in the union - Democrat-run for decades, it goes without saying - stands accused of poisoning its children, much like Flint, MI. Seriously, people, when you vote for corrupt, incompetent Democrat “leadership,” how can you expect anything but malgovernance?
http://www.businessinsider.com/newark-public-schools-lead-poisoning-2016-5
Another real estate bubble zone up in smoke…
Fort McMurray fire: Entire city forced to flee as inferno rages
By Holly Yan, David Williams and Chuck Johnston, CNN
Updated 8:21 PM ET, Wed May 4, 2016
(CNN)The sky in northern Alberta’s Fort McMurray resembled a wall of fire and smoke Wednesday as a mammoth inferno swallowed parts of the Canadian city.
Authorities ordered the evacuation of about 88,000 people, including the entire city of Fort McMurray, the Regional Municipality of Wood Buffalo said. Reception centers for evacuees were being set up in Edmonton.
A state of emergency across the province was declared later in the day.
The blaze has already destroyed 80% of Fort McMurray’s Beacon Hill community, RM Wood Buffalo said.
The wildfire began Sunday and had torched 24,710 acres by Wednesday, CNN partner CBC News said. The cause of the blaze remains unclear.
In all, some 1,600 structures have been destroyed by the fire, Alberta Premier Rachel Notley said.
…
This area was already facing extreme economic hardship thanks to the collapsed commodities bubble before fire hit. It’s a very sad situation, indeed.
Technology | Wed May 4, 2016 6:33pm EDT
Related: World, Environment, Natural Disasters
Canadian town, already staggering from oil bust, hit by wildfires
EDMONTON, Alberta | By Rod Nickel
Flames rise in Industrial area south Fort McMurray, Alberta Canada May 3, 2016.
Courtesy CBC News/Handout via Reuters
Fort McMurray, the Canadian oil town engulfed by wildfires, was already crippled by a collapse in crude prices before flames raced into the once-booming city, burning hundreds of homes to the ground and chasing residents into bush camps for safety.
Dubbed Fort McMoney when its oilsands industry was flourishing and residents were among the wealthiest in Canada, Fort McMurray had been hemorrhaging workers and wealth for 18 months before fires forced the evacuation of the entire city’s 88,000 residents.
“Fort McMurray was really the ground zero of all that was happening related to oil and gas,” said Sandeep Agrawal, urban studies and regional planning professor at the University of Alberta. “When this bust happened, it was catastrophic in many ways.”
Surrounded by thick boreal forest and vast oil sands deposits, hundreds of kilometres from the nearest major city, Fort McMurray was deeply reliant on a single commodity.
Its population ballooned to over 120,000 in 2015, sparking housing shortages and skyrocketing prices, before a 70 percent drop in oil prices last year slammed the door on growth, prompting the exodus of almost one-third of its inhabitants.
“Stores were closing, small businesses were closing. A year or two ago you could not get a seat in the restaurants, but the buying power was not there any more,” said Ria Dickason, a South African immigrant who has lived in Fort McMurray for 14 years and fled the fires on Tuesday.
“Everyone was concerned about it, because it impacted every single person. It doesn’t matter what type of work you do because lots and lots and lots of people lost their jobs.”
Real estate websites are littered with listings for sprawling Fort McMurray homes with asking prices approaching C$1 million - double Canada’s average home price - in neighborhoods that are now charred and smoldering amid Alberta’s largest-ever evacuation for a fire.
…
Just watched “REQUIEM FOR THE AMERICAN DREAM” on Netflix.
Highly recommend watching it. Chomsky nails it.
I’ll give it a watch. Just watched “The Big Short” finally, great flick.
… “Inside Job” is a great chaser flick right after “The Big Short”.