A Lot Of Speculation Out There
A look at supply and demand in a housing bubble, starting with Radio New Zealand. “Reserve Bank measures have had little success in reining in the market, with house price growth in New Zealand’s largest city starting to accelerate again. According to figures from QV, the market has increased 15.4 percent year on year and 3.3 percent over the past three months - pushing the average house price to $955,793 in May. Prime Minister John Key told Morning Report the Reserve Bank still had options open to it to curb the city’s over-heated property market. ‘I know people are sick of it but all roads lead back to supply - you have to build enough housing. But my simple point would be if you want to do more around borrowing in that area, and the capacity for those people to access that market, the easiest road home there is through the Reserve Bank’s actions.’”
“Mr Key said he would potentially support Finance Minister Bill English’s loan-to-income ratio idea, and the bank could consider a range of actions. Martin Hawes said negative equity - when a home is worth less than the money owed on it, was a distinct possibility if the trend continued. Mr Hawes said, as an investor, he would not buy property in Auckland at the moment. He said the high value of the rental market and the easy availability of credit were signs the city was in a housing bubble.”
“‘There’s a loss of touch with intrinsic value, that is, the market becomes so highly valued that the income from the market, in this case in terms of rents, becomes quite different,’ he said. ‘Second, there’s almost always easy credit when a bubble inflates. My concern is that every day Auckland house prices continue to inflate, the chance of a violent end and a very unhappy ending to the whole market increases.’”
The New Zealand Herald. “More than 33,000 Auckland dwellings are officially classified empty as the city grapples with a crisis of affordable housing and homelessness. Auckland’s 6.6 per cent vacancy rate is higher than either Sydney (5.2 per cent) or Melbourne (4.8 per cent), where there has been an uproar over ‘ghost houses’ deliberately left empty by speculators trading on a soaring market.”
“Labour’s Housing spokesman Phil Twyford said it was not surprising that the super-rich were happy to leave houses empty when Auckland prices were rising so fast. ‘It’s madness, and says a lot about the housing crisis, that we’ve got thousands of homes deliberately left vacant by their owners while in South Auckland there are kids sleeping under bushes.’”
“Chris Haturini of Mt Albert said her family had suffered for two years living alongside a ‘ghost house,’ which she said was owned by an overseas-based investor. It had been infested with rats and occupied by squatters and drug users who left used syringes lying about. Ms Haturini, who is in the property management and now home staging business, said she had heard up to 35,000 residences in the city could be empty. ‘People are afraid to talk about this … But it’s just nuts.’”
News 1130 in Canada. “The Bank of Canada believes rising prices in Vancouver’s real estate market are not sustainable, but there seems to be two schools of thought on what is fueling them. One local academic says addressing foreign ownership, and not a lack of supply, is what will really calm things down. SFU Assistant Professor of Public Policy Josh Gordon says we keep building and so prices will keep rising and he thinks that’s enough evidence that pumping in supply will not slow the market down.”
“Gordon thinks government should address foreign ownership first. ‘[With] Some form of tax. I also think simply cracking down on money laundering and enforcing those provisions a bit more strictly.’ He’s concerned adding too much supply will worsen any correction down the road leading to unsellable condos. ‘There is this attempt to shift the blame and say it’s all about supply even when it obviously isn’t. This is really damaging and it’s upsetting to a lot of people. People in Vancouver just aren’t buying it anymore,’ adds Gordon.”
The Province in Canada. “A Vancouver west-side house that changed hands five times in just over two years shows prices are being pushed up by speculators, says a Vancouver real estate agent. The house at 6712 Adera St. first sold in March 2014 for $3.2 million, and last sold in May, for $7.6 million, said Steve Saretsky on his blog headlined: Vancouver Real Estate Speculation Runs Rampant.”
“He said the house’s final sale was among 179 west-side house sales in that month. Of those, 28 houses — or almost one a day — had been sold at least once in the previous 12 months, said Saretsky, who went through the tax histories of each of the sales to come up with the number. That works out to 16 per cent of all May sales, he said. ‘It’s like a lot of speculation out there,’ said Saretsky, who works for Sutton West Coast Broadway Realty. ‘It is happening. They (buyers) are hanging on to it like stock and then selling’ it at a profit.”
“The Adera property sold in July 2015 for $6.4 million before being sold for $7.6 million 10 months later, a $1.2-million profit. The buyer made a gross profit of $120,000 a month or $4,000 a day. Saretsky acknowledged there is ‘nothing illegal at all’ about homeowners selling properties held for a short period of time, and speculation is risky if the market crashes. But ‘it’s adding to the problem’ of unaffordable housing, he said. The rising prices ‘aren’t all about supply and demand.’”
The Tennessee Ledger. “It’s easy to watch a renovation show on HGTV or the DIY Network, see how much money can be made and think, ‘Hey, I can do that.’ And with a housing market as hot as Nashville’s, what could possibly go wrong? Turns out, many things can go wrong if you don’t have experience. One expert even suggests Nashville is getting close to ‘flipping out,’ reaching a peak at which house prices are so high that not everyone, especially less experienced or new flippers, can make a profit.”
“But it’s the hope that things will go very right – like $100,000-profit-on-a-flip right – that makes it so appealing for those already lining up financing in their mind while watching at home with a bowl of popcorn and a glass of wine. Nashville’s Troy Dean Shafer happens to be one of those creative contractors you’ve likely seen renovating old homes for a profit on TV. His show, ‘Nashville Flipped,’ premiered in April on DIY Network.”
“One of the homes Shafer flipped on his show was in Madison, a property he bought for $78,000, put $45,000 into and then sold for $169,000 the first day it went on the market. He’ll take profits like that all day. ‘It wasn’t like a grand slam as far as a ton of money coming in after Realtors and everything, but as far as an ROI, to only be into it for $125,000 and then to clear $25,000, that was a good ROI,’ he says. ‘I’m always thinking, ‘What’s next? What’s the next big area? Is it Madison? Is it Buena Vista? Is it Bellevue? Is it Hendersonville?’”
“‘What we’re seeing in the data is that basically Nashville is approaching its peak flipping point, which occurred back in 2006,’ says Ralph McLaughlin, chief economist with Trulia. ‘In 2006, about nearly 12 percent of all transactions were flips, and just in the last quarter of 2015, it was 8.3 percent, so it’s getting close to flipping out, so to speak, in that it’s approaching the peak level of flipping that was occurring before the crash.’”
“The big question is whether or not that is indicative of a bubble because a rise in house flipping can be considered a sign of an overheated housing market. But McLaughlin says they are not concerned about Nashville or any other hot flipping markets experiencing a bubble. ‘There was a sharp increase in flipping activity in Nashville since the recovery started,’ McLaughlin points out. ‘It looks like things are flattening out, so it doesn’t look like Nashville will totally flip out.’”
“David McKinney says the value of property has gone up so rapidly all over that it makes it difficult to find a flip property that is worth the return on investment. ‘Now the land’s more valuable than the house and property were just a short time ago, so that’s why so many of them are being torn down and two to four are being built in their place,’ he says. ‘The people who’ve been there are a long time, some of them are asking amounts for their property that they don’t necessarily think they’ll get and, lo and behold, someone ponies up the paycheck for it. It’s causing the property values to go up exponentially.’”
‘Commentary
Housing and Chinese investors
‘Raising a family in a tent trailer? Maybe it’s not as bad as it sounds, but I’m sure glad I don’t live on the West coast. It’s not that I don’t appreciate that part of the country, I just have no desire to become house-poor while paying a mortgage on a cardboard moving crate, which is what much of the population is apparently going to be living in the future.’
‘It was recently announced that the average price of a single detached home in Metro Vancouver was $1.4 million in April. That’s a 30 per cent increase from a year earlier. We’re not talking about 5000-square-foot luxury homes with a pool and separate quarters for domestic help. That’s a small, run-of-the-mill three-bedroom home. And an older one at that.’
‘According to Statistics Canada, the median total income in a typical household in British Columbia was $74,150. That’s not a typical salary, that’s a household income, meaning most likely two people are working to create that total.’
‘Try buying a $1.4 million home on that salary. Even if you could manage to save up the recommended 25 per cent down payment, which is very unlikely (that’s $350,000), you would still be carrying a $1,050,000 mortgage.’
‘A quick check on the CIBC website mortgage calculator with a five-year fixed mortgage amortized over 25 years means your monthly payment would be $5,982. That’s not feasible for a typical family and pretty much eliminates a huge number of potential first time home buyers.’
‘It’s been an open secret that the Vancouver market has been driven up by foreign buyers and greedy real estate dealers. Now a university study is pointing the finger directly at Chinese investors and shady real estate agents. It’s called REAL estate for reason. A property and a building has a real value. They are tangible commodities and any qualified home appraiser can give you the ‘real’ value of a home.’
‘However, the real estate market also has that price of ‘what the market will bear,’ which is the problem. Every time someone over-pays for a house, the bar is then raised and every other house in that neighborhood will rise along with it. That’s not supposed to be how it works.’
‘It used to be if you lived in a neighbourhood where the average house price was $100,000, and someone came along and paid $200,000 for the same type of home, they would be considered a fool for paying double for what it was worth. Now the trend is that all the other houses in that same neighborhood are suddenly priced at the same ridiculous level.’
‘How are foreign investors are allowed to crush the home ownership dreams of born and bred Canadian citizens who can’t afford to buy a home in the city were they call home. There’s too many questions here and yet very few answers and government, both federally and provincially, are doing nothing to get a handle on the situation.’
‘First of all, why are Chinese investors paying more for real estate than it is worth? Either they are being misled and misinformed on overseas real estate values, (us being overseas) or they are the worst educated investors in the entire world.’
‘The second concern raised is that dropping a ton of cash on an overseas property that doesn’t hold a lot of value is a great way to launder money and invest it in a place other than China. Then there’s the second group of individuals and institutions who love it when the market goes up.’
‘There’s the banks and all money lending institutions, and the real estate people who live on commissions based on a percentage of the selling price. In Vancouver there is a well-known practice called ‘contract flipping’, where real estate agents flip a property multiple times, each time at a higher price before the deal closes. Buyers avoid paying taxes and the real estate agents make a commission on each flip. It’s a shady practice, but perfectly legal.’
‘I rarely endorse government involvement in a free enterprise system, but when it comes to having foreigners crushing our own population, it’s time for them to get involved. It may be happening on the West coast now, but it will soon be widespread in Ontario if things don’t cool down.’
I don’t want to over-emphasize Chinese speculators, but they were the focus of these links I had. There’s also the locals, like from yesterdays post, who see outside speculators and rush to get in. It’s kind of a germ of an idea; I’ll pay a lot for a Sedona house because I can sell it to a Californian in six months; that sort of thinking.
I recently had a post about over-supply in Saskatoon. How come these Chinese investors don’t buy there, if the idea is just to get the money out of China?
Why?
Because it won’t fit the narrative.
The reality?
US Housing Demand Plummets To 20 Year Low
http://1.bp.blogspot.com/-0q8fIAsczFk/VUANHEhSbnI/AAAAAAAAjRs/oANwXOUviGw/s1600/MBAApr292015.PNG
Your supposed reality is your own distorted narrative that you keep dumping on this board.
This is most certainly not reality for those of us who live in popular places.
Don’t disparage our basement command center in Omaha!
That is funny! +1 😉
Housing my friends….. Housing.
Hacienda Heights, CA Housing Prices Crater 10% YoY
http://www.zillow.com/hacienda-heights-ca/home-values/
I live in Vancouver, a lot of speculation here that the thing about Chinese buyers is that they aren’t buying for the house, per se, rather they are using the houses to somehow get the money into Canada and create a trail to show that it’s legitimate money. Money laundering, essentially. So what matters isn’t the house, they aren’t interested in that, they are interested in buying the most expensive house they can, in order to launder the most money they can.
Can’t pretend I really understand this, but this is one of the theories that’s out there. It does make you wonder when you see someone paying $1 million over ask for a POS shack in Vancouver, when you can buy a pretty fancy mansion anywhere else in the world for a lesser price.
Canada makes it easy to bring money in. IMO, these Chinese have a well developed network of agents, banks, lawyers, etc, in Vancouver and that’s why they concentrate there. The politicians are bought and won’t touch them. If they are caught, the government takes a couple grand and gives it back to them. This house that got flipped; I’d bet it was one money laundering deal following another.
Fake Yuan smuggled out of the country and we except as real.
Cheaper to buy land with fake money then invade it.
With a globe full of land where 95% of it goes undeveloped, it’s no wonder it’s known as worthless dirt.
“Cheaper to buy land with fake money then invade it.”
Same difference, except you don’t have to bother with guns, military training and dead sons and daughters to use fake money to execute your invasion.
“…why are Chinese investors paying more for real estate than it is worth?”
Because there is a worldwide epic housing bubble and they are in the grip of a mania, the madness of crowds? When this bubble explodes and trillions in wealth goes poof, masses of would be real estate tycoons will sit slack jawed on the sidewalks drooling while making strange mewling sounds.
‘Commentary
Housing and Chinese investors
Broken link
Huh, I’m not sure why that isn’t linking. Heres’ the URL:
http://citizen.on.ca/?p=6384
Thank you!
What I don’t understand is why West Coast Americans and Canadians don’t implore their national governments to put a lid on Chinese money laundering activities that drive their housing costs through the roof. Why not just say NO to Chinese gamblers blowing a bubble in residential housing?
Because a large percentage of the population is delighted by it- builders, RE agents, and homeowners who log onto Zillow to see their “wealth” increase by 1% per month.
You have to be smarter than the average bear to see the downside in all of this.
Met the next door neighbor today. She told me in an awestruck, hushed tone that the Property Bros house in the neighborhood sold for $520K+ (I think - she also said it was listed in the $400’s.This is in Las Vegas, btw.)
Our lease is up a year from now. We’ll have to move again. I am depressed.
High prices are great for local taxes… especially in CA where we need new high dollar saless due to crock 13
Yup, and the local governments (city and county) too, who are currently raking in record levels of property taxes.
I remember hearing at least one economics professor and also a physics professor during the course of my college years explain to the class that “there is no such thing as a free lunch.” But apparently the economists who choose to become central bankers live under the illusion that the magic money machines they own and operate somehow defy this basic law of material reality.
How the Government Hides Inflation, as Housing Costs Soar
by Wolf Richter • June 16, 2016
Renters Squeezed by the Fed’s “Wealth Effect”
http://wolfstreet.com/2016/06/16/rent-inflation-fed-wealth-effect-owners-equivalent-rent/
‘Why are rents rising sharply when incomes, especially for the lower 80%, have languished? It’s not like renters have more money to blow on rent and thus are driving up rents. On the contrary.’
‘Since the Fed began its ZIRP and QE programs with the express goal of inflating asset prices, stocks and bonds have soared, home prices have soared, commercial real estate has soared, including apartments. Nearly all asset prices have soared. According to the Green Street Commercial Property Price Index (CPPI), commercial real estate prices have more than doubled since May 2009, when the Fed’s “wealth effect” started to kick in.’
http://www.cnbc.com/2016/06/16/rents-now-top-list-of-fastest-rising-prices.html
Look at the last graph. See the enormous spike in rents for the lower third of renters. This is a disgrace brought to you by this president and his cronies Janet Yellen and Mel Watt. They have arranged for many thousands of apartments to be renovated, rents jacked up and flipped or what have you. I’ve documented it here for a good while, and I challenge any reporter to look into it.
And I say this; they did it on purpose. They wanted that juice of money going into the economy from the renovations. It makes house prices seem not so out of line. It pushes people into buying. The high rents incentivized a 30-40 year boom in luxury apartments, hand in hand with a doubling or tripling of land prices. Prove me wrong reporters.
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.’
Note:
‘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’
Coordinating Offense and Defense in 2016
“You can never forget about cycles, but the next 24 months look
doggone good for real estate.”
http://uli.org/wp-content/uploads/ULI-Documents/Emerging-Trends-in-Real-Estate-United-States-and-Canada-2016.pdf
“”The people who’ve been there are a long time, some of them are asking amounts for their property that they don’t necessarily think they’ll get and, lo and behold, someone ponies up the paycheck for it.’”
Hey, it only takes one buyer. Just one.
“‘It’s causing the property values to go up exponentially.’”
One buyer will do that, will cause comparable property values everywhere to go up ‘exponentially’ in this case. One buyer.
Think of the magic that is involved! One buyer who does not actually have to pay for what he is buying can - presto! - can magically create wealth in the form of equity increases for hundreds of strangers who just happen to live nearby.
A miracle economy powered by nothing but price increases, price increases that are in turn powered not by actual money being paid out but instead are powered by promises of money someday being paid out.
Magic. Greater fool magic.
What can go wrong?
This creation of equity is a creation of wealth, but it is not a creation of income. For a creation of income to happen something has to happen to the wealth.
Rental income is something that can happen to the wealth. Rental income is income springing forth from the renting out of wealth. This can be true whether the wealth is actually rented out or not.
If the wealth is actually rented out then actual income is produced. If the wealth is not rented out then that’s okay because imputed income is produced, and this imputed income counts the same as actual income when it comes time to tally up our fine country’s GDP.
Actual income + imputed income counts the same when it comes to figuring out GDP.
And if the rent-to-buy ratio of houses is to remain the same then rents must go up if the prices of the houses go up. WHICH MEANS rental income - whether actual rental income or imputed rental income - must go up as housing prices go up, WHICH MEANS our fine nation’s GDP will increase as the prices of houses go up.
So … it is all good. All, all good. All.
Boca Raton, FL Affordability Surges As Housing Prices Crater 6% YoY
http://www.zillow.com/boca-raton-fl-33433/home-values/
Shouldn’t that read 6/10ths of ONE percent. Not 6%. I never was very good at math. I’m probably wrong. But, if I am correct all of your posts are wrong? What am I missing. Zillow says: ZILLOW HOME VALUE INDEX
$258,700
8.1% 1-year change -0.6% 1-year forecast
Please give me a lesson here on how to read Zillow. Thanks.
Down 6% and falling.
Youre in the wrong business if you’re not good at math my friend.
Karen,
Can you help out our friend again?
Comment by Palm Beach County
2016-06-18 07:05:46
Shouldn’t that read 6/10ths of ONE percent. Not 6%. I never was very good at math. I’m probably wrong. But, if I am correct all of your posts are wrong? What am I missing. Zillow says: ZILLOW HOME VALUE INDEX
$258,700
8.1% 1-year change -0.6% 1-year forecast
Please give me a lesson here on how to read Zillow. Thanks.
Reply to this comment
Comment by Captain Lou Albano
2016-06-18 07:29:16
Down 6% and falling.
Youre in the wrong business if you’re not good at math my friend.
Karen,
Can you help out our friend again?
But of course!
https://snag.gy/m5EzRB.jpg
Palm Beach County, we have so many posters on this board who can’t seem to figure out how to read Zillow correctly, despite being schooled in this over and over, that I created the handy infographic linked to above.
It’s amazing how quiet they all became after I posted this a few times (although some of their responses were funny - at least one of them pontificated at length how “he” had spent a lot of time analyzing the data and figured out how to arrive at the truth on Zillow. LOLZ.)
How many screen names does HA have?
Who is ha?
How many screen names does HA have?
How many different posters on HBB will use how many different gyrating, backpedaling, tap dancing, distracting, distorting, and obfuscating strategies in their desperate attempts to take the focus off the real issues?
Seriously, Housing Analyst?
Get back on your meds.
You were doing so well there for the past couple of weeks, only posting under 2-3 names simultaneously.
Years back, Homestead of Toyota ran an ad saying: “One day only: 1/2 percent off all vehicles.” People came in droves thinking they were getting………instead of paying 99 1/2%.
I’m more impressed with the folk that think that if a house goes down 50%, all they need is for it to go up 50% to undo the loss.
A great American has finally been exonerated …
https://finance.yahoo.com/news/feds-given-case-against-one-215314558.html
September 1, 2014
‘Mozilo, who lives in a 12,692-square-foot house in Santa Barbara, California, defended the size of a lender that did $408 billion of originations in 2007 and had a $1.5 trillion servicing portfolio. “What’s wrong with that?” he said. “Should Amazon be condemned for being the biggest in their space?”
‘According to regulators, Countrywide didn’t tell investors it was creating increasingly risky mortgages, while Mozilo expressed doubts to colleagues. “We are flying blind on how these loans will perform in a stressed environment,” he wrote in an e-mail about one product.’
‘He focused on his career’s highlights in the interview, recounting one business magazine calling Countrywide “The 23,000% Stock” and another naming him one of the most respected CEOs in the world. “Go back and you’ll see that Countrywide was one of the most admired companies in the country,” he said. Mozilo added that he has “no idea” why the government is going after him again. “It’s unfortunate, but I try to make the best of it.”
‘Mozilo earned more than $500 million from 1999 to 2008.’
‘Countrywide was one of the most admired companies in the country’
He’s right about that. At least from a media standpoint. The Wall Street Journal ran a front page article going on about how he was helping all these regular people get in on the gravy. It goes to show how the housing boom was glorified, with not even a bit of skepticism that it would blow up. How people forget that money doesn’t grow on trees.
“A great American has finally been exonerated…”
He [was] doing god’s work… said so himself, IIRC.
The first Orange American
A protected minority group of one…
There is another.
Lincoln, MA Affordability Advances As Housing Prices Plunge 10% YoY
http://www.movoto.com/lincoln-ma/market-trends/
‘The Adera property sold in July 2015 for $6.4 million before being sold for $7.6 million 10 months later, a $1.2-million profit. The buyer made a gross profit of $120,000 a month or $4,000 a day.’
In 2006, a majority of stupid, amoral Venezulans voted for corrupt collectivist kleptocrats who promised them benefits someone else would pay for. Now the chickens have come home to roost.
Learn something, Democrats.
https://www.yahoo.com/news/deaths-arrests-looting-erupts-venezuela-110904468.html?ref=gs
It is pretty amazing - isn’t it?
A country sitting on more oil than Saudi Arabia and with massive amounts of excellent farmland has its people literally starving in the dark.
All because of progressive socialists in charge who promised lots of free sh*t to thier free sh*t army to seize and maintain power.
Who is better off?
Not the people
Not the FSA
Not businesses
Not the producers
The only people better off are the socialists in power.
There is a lesson in there somewhere…
There is a lesson in there somewhere… ??
Yes there is and its to get out and vote so as to not allow criminals like GWB jr. and Dick Cheeny to seize power of this country…We should be thankful that we did not end up is a world wide depression along with a world war…
Comment by 2banana
2016-06-15 08:57:02
I like Trump.
He tells it like it is.
That the war in Iraq was a huge mistake. Biggest of the GWB administration ??
Mistake ?? Is that what you call it 2-fruit ?? Tell it to the family of the ones who died…Tell it to the tens of thousands that are physically & mentally wrecked..
He Tells it like it is ??
Oh he sure does…
I like the soldiers who don’t get captured
She bleeds from wherever
Rapists & murdering Mexicans
Ban the Muslims
Crooked Hilary
Lying Ted
Weak Jeb
Show me your birth certificate
Look at her face
Huffington is unattractive, both inside and out
You know, it really doesn’t matter what the media write as long as you’ve got a young, and beautiful, piece of ass
My African American over there
I’d look at her right in that fat, ugly face of hers, I’d say ‘Rosie, you’re fired.’”
The beauty of me is that I’m very rich
My fingers are long and beautiful, as, it has been well documented, are various other parts of my body
I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her
is that I’m more honest and my women are more beautiful
Look at those hands, are they small hands
Thanks sweetie. That’s nice
And Chit….We still have four and a half months to go…Barring something taking Hilary down, the A$$ Whipping thats coming for the republican party will be historic…They went all in with Bush and the right wingers and are now going to pay the price with Trump being the final chapter…
But the question still remains.
How did goon get that dog up there?
Because murderous gentility is so much better, especially when they’re all smiles with fists full of vaseline.
I am missing the upside with either party’s candidate choice.
+$1bn
Stupid should hurt.
A preview of coming attractions once the collectivist kleptocrats at the DNC establish their permanent Democrat supermajority. Forward!
http://hosted.ap.org/dynamic/stories/L/LT_VENEZUELA_UNDONE_EMPTY_SCHOOLS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2016-06-17-08-02-55
The Comrades of Proven Worth at the DNC should not be expected to share in the dystopian hardships they will be inflicting on the former middle and working classes, once they have installed their permanent Democrat supermajority and set about “redistributing the wealth” and unchecked looting of the productive. Why, living in the squalor they are going to create through their economic mismanagement, patronage, and graft would be so…un-collectivist!
http://www.dailymail.co.uk/news/article-3640941/Super-rich-quaff-champagne-Venezuela-country-club-middle-classes-scavenge-food-rubbish-dumps-DOGS-starving.html
I present betting cards to lefties and they walk
Hilary will win and:
Sub 2% growth
Higher crime rates
Higher illigit birth rates
$50 each or $ 200 for the trifecta
They walk
Comment by Ben Jones
2016-04-08
Danielle DiMartino Booth makes an interesting point in the last link:
‘The movement between regions will be catalyzed by demographics, according to the JLL study, which notes there will be more people over the age of 55 by 2050 than there were inhabitants on earth in 1950.’
“This demographic impact will have a profound effect on real estate investment strategies with the amount of private equity capital targeting direct real estate set to increase by over 500 percent, much of it driven by increasing institutional allocations looking at higher yielding opportunities.”
‘Did you notice something implicit in JLL’s argument? It would seem lower for longer will remain the mantra for the foreseeable future, which suggests frothier markets and subpar growth will continue. The most interesting tidbit comes down to who will be doing the investing, that is private equity.’
‘As it were, private equity “dry powder” directed specifically to real estate investments rang in the New Year at record levels. There is now $231 billion in dry powder available just for properties in the United States after $107 billion was raised in 2015.’
‘For being six years into a recovery in commercial real estate, investors certainly remain enthusiastic, especially public pensions. Pensions have allocated some $207 billion to private equity funds since late 2012. Increasingly, allocations have targeted real estate funds with March of this year providing a perfect example of the merriment surrounding this asset class. Here’s a wee sampling with special notations if the real estate fund is of a particular bent:
Texas Teachers: $500 million
State of Oregon’s Pension: $300 million
Pennsylvania Public School Employers: $307 million
Ohio Workers Compensation Bureau: $125 million
State of Minnesota’s Pension: $100 million (distressed); $100 million (opportunistic)
State of Maine Pension: $50 million
State of New Jersey: $200 million (commercial)
State of Kansas: $50 million
Texas Municipal: $375 million
“Pensions’ chronic underfunding has prompted them to stretch to achieve unrealistic return targets,” New Albion Partners’ Brian Reynolds explained. Reynolds has been keeping a running tally of these allocations and is quick to point out that leverage is often needed to hit the bogeys, which are 7.5 percent or more. Bear that in mind when you consider the money being shoveled into these funds.’
‘It really comes down to size, that is, of the pension system. In the early 1980s, pension liabilities amounted to about 50 percent of gross domestic product (GDP); today they are 100 percent of GDP. “Because of their growth, their investment flows have led to asset bubbles that have generated permanent losses,” Reynolds added.’
‘Pensions flocked to hedge funds but that strategy blew up after Long Term Asset Management nearly took down the financial system. This strategy was followed by wholesale herding into commodities, which we all know ended is disaster.’
‘The catch is the rate-of-return bogeys have barely budged despite Baby Boomers moving increasingly closer to retirement suggesting some risk should be taken off the table. (Rather than keeping you in suspense, it’s nearly an impossible feat to lower return targets. Less in assumed returns means states and municipalities have to pony up more money they don’t happen to have on hand. The State of Connecticut has reached the point where it is now taking a stab at taxing Yale’s endowment in a desperate attempt to top off its underfunded pensions.)’
‘No matter how you slice it, most public pensions face a dire set of circumstances, which begs the question: Just what are they to do?’
‘Reynolds’ reply: “They have turned to the last remaining asset class with high expected rates of return – commercial real estate. It’s as simple as that.”
‘Perhaps pensioners should begin praying the JLL report pans out. With commercial real estate prices declining in January for the first time since 2010, the latest data available, and investors balking at rich valuations, it just might take a miracle to keep profitable prospects alive.’
http://thehousingbubbleblog.com/?p=9602
I’ve heard some very intelligent people say over the past years that teachers are going to be taking a bath. This article is more evidence of that.
Teachers have turned our public education system into DNC collectivist indoctrination mills. It will be poetic justice when the Comrades of Proven Worth at the NEA retire, only to learn that the corrupt, crony capitalist kleptocracy they devoted their careers and votes to sustaining, has ripped them off, too. And the special snowflakes they molded into good little Democrat entitlement voters devoid of the skills and attributes needed to be net assets to society won’t be much good to them when they need financial support in their not-so-golden years.
That right there is one of the most awesome. posts. ever. I’ve had the same thoughts myself.
Thank you, Brother Bill.
But in town it was well known
when they got home at night
their fat, psychopathic wives
would thrash them within inches of their lives
Make America Thin Again!
After the Great Reset there won’t be many fatties to be seen.
Doing to the chillens
17%raise in bk Chighetto
Here is Chuck’s words on the indoctrination camps
http://townhall.com/columnists/chucknorris/2011/03/08/public_education_progressive_indoctrination_camps
Ray…such nonesense. Does that include you and yours or just the group that ‘you’ personally select. Says a lot!
Another “Greek” bailout that will go straight to the bankers.
https://www.theguardian.com/world/2016/jun/17/eurozone-releases-75bn-in-bailout-funds-for-greece
“… straight to the bankers.”
God’s Plan.
May sales of homes, condos down 17% in Naples
Naples-area listings in May rose 51% for condo units and 27% for single-family homes
June 18, 2016 10:00AM
TRD WEEKEND EDITION
http://therealdeal.com/miami/
Question: is there any way to make this blog more ‘user friendly’ by being able to log on to the last comment rather than scrolling through all of them each time we click on to this board. For those that like to check periodically scrolling through all of the posts many times a day shouldn’t be necessary. What am I missing?
Joshua Tree extension for Chrome
JT Extension
or for Firefox
JT Extension
Thanks go to drumminj…
So here’s our latest, updated money velocity chart (M2) and this latest update is stuck at January 1 …
https://fred.stlouisfed.org/series/M2V
M2 velocity is getting sucked down a deflationary vortex along with interest rates.
The funny thing is that at least in the case of rates, central banks are helping to fuel the vortex to an ever greater suction force.
Of course the alternative to standing by while watching the vortex increase to ever-larger size and force is to pop bubbles and crash asset prices by raising rates. This is quite a conundrum!
Market Watch
How Low Interest Rates Enable Deflation
By Paul Farrell
June 18, 2016
Too Low, Too Long
June 15: How can the Fed be so self-unaware as to not understand that the neutral (natural rate) of interest is lower because of the Fed’s accommodative policies? As a dollar of monetary stimulus produces less and less growth (a bit like a dollar of incremental debt), of course the natural rate will be lower. Where is Bill Gross when you need him to bring back the new normal? The yen no longer seems to respond to monetary-policy initiatives in Japan. That’s exactly where we are headed. Throw out the old playbook; it’s not working. In fact, low rates facilitate unproductive investment and overcapacity. The result is deflation.
—Peter Cecchini
…
That is a disgusting chart of M2. Are we all fools ? Your chart identifies the core problem - and we do nothing to fix it !!
Sarasota, FL Affordability Surges As Housing Prices Crater 16% YoY
http://www.movoto.com/sarasota-fl/market-trends/
Vienna, VA Affordability Improves As Housing Prices Dive 4% YoY
http://www.zillow.com/vienna-va/home-values/
More can-kicking for the insolvent Eurozone banks.
http://wolfstreet.com/2016/06/18/reckoning-for-banks-italy-spain-portugal-risk-free-capital-government-bonds/
“In the short term, it does not appear that rates are going to be much of an issue,” says Stephen Loonam, executive vice president of commercial real estate for UMB Bank-Arizona. “We sensitize the floating rates so that we understand how high rates can go before a property’s income stream is no longer able to adequately service the debt.”
‘Loonam says that because rates are depressed at the moment, it is driving values higher in all asset classes, not just real estate. “I think the larger concern is what happens in the long run,” he says. “Rising rates will eventually hold back values of assets, which could be a problem for assets with maturing loans. As rates rise in the long term, it may be difficult for borrowers with maturing loans to refinance.”
‘Don Garner, Executive vice president, Alliance Bank of Arizona: “Overbuilding in certain property types is a concern. Developers and lenders often follow the herd instinct and financing becomes readily available at aggressive terms, which can lead to over-leverage and overbuilding. Apartment construction financing is a good example. Large banks were very aggressive two or three years ago, but now have pulled back significantly.”
‘Brandon Harrington, Senior vice president, Capital Markets, Walker & Dunlop: “We were recently reviewing an offering memorandum for an apartment community in Phoenix and every financed sale comparable noted Walker & Dunlop as the lender.”
‘Stephen Loonam, Executive vice president, Commercial Real Estate, UMB Bank- Arizona: “Multifamily land prices and cap rates are being driven not only by a robust rental market but also by cheap financing. Many of the multifamily deals we see today are back by institutional capital partners driven by IRR. The IRR’s are enhanced by very aggressive bank construction financing and very aggressive permanent financing. This aggressive financing and development is concerning as you look back at the build-up to the housing crisis.”
http://azbigmedia.com/azre-magazine/heres-watch-cre-financing
Some things I don’t understand, like actual surprise that all institutions in Democrat-run municipalities, even law enforcement and the judiciary, are corrupt to their core. What is it that sheeple don’t understand about “corrupt, incompetent Democrat maladministration”? (Redundant, I realize.)
http://www.zerohedge.com/news/2016-06-18/shockingly-corrupt-oakland-police-department-destroyed-16-tweets
It’s because they have for previous decades convinced people that Republicans (Nixon) are the only crooks and that democrat s are humanitarians. Of course they are lies but most voters are dumb.
The Republican base, by and large, adhors corruption, while their Democrat counterparts embrace it. That’s the big difference between the two parties.
You are referring to my mom’s and Dad’s Republican Party. My parents passed away awhile back that was the greatest generation, the boomer Republican Party doesn’t care squat about corruption.
Goon, you must surrender your AR-47. It’s for the children.
http://buzzpo.com/dick-durbin-says-no-self-respecting-sportsman-uses-ar-47-hunt-deer-illinois/
Lol “AR-47″ what a dick he is.
Hey Dick, the Second Amendment wasn’t written out of fear the deer might one day turn on us.
I’m looking at AAL as a potential close buy next week. I’m thinking of putting a $25 limit buy on it for 100 shares but won’t be able to do that until some T-bills mature on Thursday. It was $55.76 in March 2015. It could drop to $25 sometime in the next few weeks.
A lot is going to hinge on the BREXIT vote. I think REMAIN will win for a simple reason: women will always vote for “security” and the elites have buffaloed them into believing the sky will fall if they vote for BREXIT. So Britain will remain a bankster looting colony and London will remain the global epicenter of financial fraud.
Yeah you are probably right. Either that or the bankers will rig the vote.
“women will always vote for “security” ” Give me a break, there are just as many frightened male sheeple as there are frightened female sheeple.
Let’s see how they vote.
The ecb will force payor countries to finance the PIGS
They already are and UK losses 20? Billion a year
“What they do?
Gonna ban the AK
My sh*t wasn’t registered
Any f*ing way” — Ice Cube, Amerikkka’s Most Wanted, 1990
“Bad boys, bad boys… What’cha gonna do? What’cha gonna do when they come for you?” —Bob Marley
Raghuram Rajan is one of the most respected economists and central bankers in the world, and he nailed this one:
‘MarketWatch: You’ve said you’re concerned with the wealth effect of quantitiative easing – that asset prices have gone up and investors are worried they are going to come back to earth.’
‘Rajan: This is the problem of the bridges. If you build a bridge it has to reach to the other side. So I think a bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place. So there is some sort of virtuous cycle that gets kicked off which becomes self-fulfilling over time. The alternative is you kick off the wealth effect now, but over time people realize the wealth ain’t coming and then you have an asset price adjustment. I think the jury is still out on which one we’re going to go through.’
http://www.marketwatch.com/story/in-interview-indias-rajan-says-monetary-policy-has-run-its-course-2016-04-15?siteid=yhoof2&yptr=yahoo
‘a bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place’
For houses, we haven’t seen incomes increase anywhere near what’s happened with prices. The jury isn’t out, the verdict is in and it’s starting already. All over the world.
These magic people and their wealth effects should be washing cars for a living, not setting gargantuan policies.
Nothing would be more satisfying than hearing someone tell Janet to fetch a bag of Cheetos.
Raghuram Rajan is one of the most respected economists and central bankers in the world, and he nailed this one:
Except even he refuses to see the truth that, as you say, the jury isn’t out, the crash has already started.
Almost everyone seems to be neck deep in this. Why else the inability to carry the insight all the way, and see what’s actually happening?
He probably knows. He was a vocal call on the crash within central banking circles. He’s critical of QE and negative interest rates. But he’s still one of the magic people, thinking they can thread the needle of human economic behavior. We’ve really gone past the point where central bankers are there to stop panics. Now they see themselves as wizards behind the curtain; pulling levers, pushing buttons, controlling entire economies, when no one gave them the power or wisdom to do so.
The central bankers have one enormous trump card: 95% of the electorate are stupid, so they need not ever worry about having to deal with another dogged truth-teller and would-be reformer like Ron Paul.
“Why else the inability to carry the insight all the way, and see what’s actually happening?”
Central bankers either didn’t used to have, or at least didn’t used to utilize, a bully pulpit as a routine job duty. Alan Greenspan ushered in the era of the rock star economist central banker, so nowadays offering Delphic utterances to the press has become an expected part of the job.
Note that if a central banker sees a crash on the horizon and offers the information to the press, firms and households will take respective defensive actions such as laying off employees, reducing investment, and selling stocks in favor of bonds or cash. All of these risk averse behaviors in concert have the potential to create a self-fulfilling prophesy for bad times ahead. Hence central bankers tend to favor green shoots over crashes in their predictions.
In a very surprising move, Rajan just tendered his resignation, effective 4 September 2016.
The “rock star” RBI governor Raghuram Rajan, feted by foreign investors but under pressure from political opponents at home, stunned government officials and colleagues on Saturday by announcing he would step down after just one three-year term.
http://in.reuters.com/article/rbi-rajan-term-end-september-idINKCN0Z40C0
‘So I think, in the industrial world at least, it seems as if unless we have a brain wave and understand fully what is really going on, it is really muddling through, doing what we can — which then means we have to be a little more pragmatic about growth. If you look at the IMF forecast, they start the year thinking growth will be much stronger than before and end the year revising down, down, down, down.’
‘The IMF is not an exception here. Everyone is doing this, which suggests that everybody sort of somehow thinks we’re going to make up that missing growth somehow when in fact it may not be possible. So I am not giving you a great answer. It is an answer of satisficing, rather than one that says we absolutely know the answer, here it is, my favorite instrument and push as hard as you can on it.’
‘My sense is industrial countries’ central banks should probably consider whether they are doing more harm than good by easing further. I don’t think the benefits beyond a certain point have been that clear, and certainly the costs of staying in this ultra-accommodative phase for much longer will build up – the known costs – and then there are less-known costs. How much are we, with these policies, preventing adjustments that should take place. I know this has got a bad name, it is the “liquidationist” or “Austrian” view, but it is a very real question of whether we’ve allowed the adjustments to take place enough or whether we’re keeping too many inefficient firms alive.’
‘I know this has got a bad name’
Yeah, 7 or 8 years into these “unprecedented, experimental” multi-trillion dollar Keynesian policies and allowing markets to work has a bad name? Let’s take the weekend topic; supply and demand and housing. How is supply and demand supposed to work in light of the wealth effect of forcing housing prices up? Price tells the market what to do. You’ve sent the wrong signal. Land prices have skyrocketed. So we end up with luxury apartments and canyons of empty, safe deposit box condos. Glut is becoming a common term used for expensive housing all across the country and the globe. No one can connect the dots with these economists? This is what they are trained to do. But they are so caught up in their Wizard of Oz role that they can only wonder why the levers and buttons aren’t working.
‘If I push interest rates below a certain point, the income effects start becoming greater than the substitution effects. The usual point is I push down interest rates – I say, “wow, it is better to consume now than to save,” and I consume. But what if I have an end-of-life goal in terms of savings and I push down interest rates really low and I say “wow, I really can’t meet my savings goal. I am going to be on the streets when I am old, so I better save some more.” That is the perverse effect of low interest rates.’
‘You could get savings increase rather than decrease. And as far as investment goes, it is not clear to me that the key constraint on investment is interest rates. It may be aggregate demand. But if there is this perverse effect of interest rates on consumption than you are not helping aggregate demand, either. We don’t understand why, at such low interest rates, people aren’t investing, but they’re not. I think the constraints may be other than the cost of capital. So, in other words, I am saying you are pushing down interest rates but you are not having the effect you desire of increasing aggregate demand.’
‘We haven’t seen all the moves so far pay off. And at some point, like the generals in World War I, sending people over the trench and seeing them mowed down, you start asking whether this tactic actually works. And you can’t keep saying more, more, more, right? So I think we’re about at that place where we need to ask is more the answer?’
so I better save some more.
If they reduce people’s actual current purchasing power, they shouldn’t be surprised that levels of purchasing go down.
The US central bank is a bank-centric GSE-esque consortiums of banks (even The Economist thinks the system needs tuning). It understands and supports the banking business model, the center of which is debt. The one thing at which central bank policies are effective is encouraging more debt. They have been spectacularly successful at that. Their record otherwise is mixed (they take credit for the positive developments and assign blame for the not-so-positive). However, debt is future consumption drawn forward. While the future is infinite, I think there’s a limit on how much consumption can be pulled forward without breaking the currency.
Central banks have this mistaken conceit that because they can kill the economy, they can conversely make it grow. Just because a person can kill another person doesn’t mean that they can also resurrect that person.
‘We haven’t seen all the moves so far pay off. And at some point, like the generals in World War I, sending people over the trench and seeing them mowed down, you start asking whether this tactic actually works.
Are politicians getting re-elected? Are the donors continuing to benefit? If so, then these tactics are working. Perhaps not in the initial way anticipated, but in an eminently acceptable way nonetheless.
‘…you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place. So there is some sort of virtuous cycle that gets kicked off which becomes self-fulfilling over time. The alternative is you kick off the wealth effect now, but over time people realize the wealth ain’t coming and then you have an asset price adjustment. I think the jury is still out on which one we’re going to go through.’
You can wish in this hand and #### in the other, and see which one fills up the fastest.
“So there is some sort of virtuous cycle that gets kicked off which becomes self-fulfilling over time.”
Are millions and millions of newly-built, unoccupied luxury apartments all around the world accompanied by a steady increase in low-income populations which can’t afford the bare minimum rent to put roofs over their heads somehow considered a virtue in central banking circles?
Go figure!
Does it seem to anyone else besides me that central bankers have an annoying habit of slapping one another high fives in the aftermath of executing policies which make a complete hash of economic fundamentals that would otherwise promote a welfare-maximizing equilibrium? Why does repeatedly gumming up the carburetor by adding sugar to the gas tank qualify in their overactive imaginations as a policy success?
I don’t agree. REAL prices can be adjusted in many ways, and low interest rates sure isn’t one of them.
Eg, Try a bubble price constant for ten years with 10% annual inflation. Or even better, a continuing increase in price as REAL average wage rates decline - with foreigners buying using their inflated but pegged currencies (who said life had to be fair).
The fed put us in this conundrum. They started by massaging only one variable in the economy and have disturbed hundreds of others without any idea of how to bring it all back to what nature does best - balance the environment.
It is so hard to believe that so many well educated people can have such poor judgement.
Late breaking news alert! And it’s a doozie! Nato member Germany just called out Washington for its warmongering toward Russia. Holy Jeebus! The Council on Foreign Relations is having FITS! I blame Trump.
http://www.zerohedge.com/news/2016-06-18/suddenly-nato-imploding-alliance-member-germany-slams-nato-warmongering-against-russ
And check out the ridiculous justification for provoking Russia into war, OH MY GOD, THEY WERE HACKING HILLARY! That’s an invasion of the US! NATO must react!
“Specifically, NATO is alleging that because Russian hackers had copied the emails on Hillary Clinton’s home computer, this action of someone in Russia taking advantage of her having privatized her U.S. State Department communications to her unsecured home computer and of such a Russian’s then snooping into the U.S. State Department business that was stored on it, might constitute a Russian attack against the United States of America, and would, if the U.S. President declares it to be a Russian invasion of the U.S., trigger NATO’s mutual-defense clause and so require all NATO nations to join with the U.S. government in going to war against Russia, if the U.S. government so decides.”
You can’t make this stuff up.
What’s next, treason charges against Trump for calling our “leaders” weak and ineffective, thereby giving aid and comfort to the enemy?
Don’t think for one minute they wouldn’t try if they thought they could make it stick.
Curiouser and curiouser…
Milwaukee, WI Real Estate and Homes for Sale-10,975
http://www.realtor.com/realestateandhomes-search/Milwaukee_WI/radius-20
Milwaukee, WI Real Estate and Homes, Price Reduced-3,280
http://www.realtor.com/realestateandhomes-search/Milwaukee_WI/shw-pr/radius-20
30% of all Milwaukee sellers reduced their price at least once.
Three Realtors Arrested In Mortgage Fraud Scheme
http://www.capemaycountyherald.com/news/crime/article_c09dfb9e-d532-593a-9e9b-247c17074bad.html
A 22 minute John Oliver video about one’s retirement money …
http://qz.com/705518/jon-oliver-knows-what-andy-haldane-doesnt/?utm_source=YPL&yptr=yahoo
Happy Father’s Day to all you dads out there. Don’t let your babies grow up to be cannon fodder for the hungry military industrial complex. A bunch of bankers and deviants are not worth it. Do your part to starve Washington and Wall Street. Don’t give them your children.
A preview of coming attractions once Hillary is sworn in.
http://www.counterpunch.org/2016/06/17/hillarys-agenda-here-and-abroad-intertwinedfull-spectrum-dominance-around-the-globe-a-swelling-precariat-at-home/
“US economy just ‘doesn’t want to grow up:’ BofA’s Contopoulos”
“The United States, along with the European Central Bank and Bank of Japan , are stuck overseeing ‘Peter Pan’ economies that refuse to wean themselves off cheap money policies.
“That assessment comes from Bank of America-Merrill Lynch Global Research’s head of high yield and relative value strategy, who said Federal Reserve chair Janet Yellen and her global central banking counterparts have been reduced to little more than high ranking babysitters.
“‘A Peter Pan economy is an economy that just doesn’t want to grow up,’ Michael Contopoulos recently told “Fast Money.” The central bankers of the U.S., Japan and Europe ‘are like three nannies managing the economies. And, that’s what they’re supposed to be doing.’
“Speaking about the central banks’ mandate for price stability, Contopoulos added: ‘If you think about it, their job is to spur inflation and growth. It’s to baby the economies forward. It’s just not happening though.’
“The analysis coming as the ten-year Treasury note yield (U.S.: US10Y) fell to multi-year lows this week, breaking the 1.60 percent mark. Meanwhile, the Fed decided leave interest rates unchanged.
“‘I think rates could go lower. You have ten trillion of negative yielding assets globally. Treasuries, U.S. investment grade and U.S. high-yield are virtually some of the only assets available right now with a positive yield,’ said Contopoulos, who drives the firm’s view on cross assets and the high yield and loan markets. ‘Fundamentals are weak.’
“Contopoulos also points out the problems stretch to earnings, too — a spot that particularly worries him because there are only two ways for companies to grow: Via capital structures and rising equity multiples.
“‘Either you cut costs, cut CAPEX [capital expenditures] or fire your unproductive labor force. Or, at least stop hiring,’ he said. ‘And, I think we/re starting to see a slowing in the labor force because quite frankly, we have a tight labor market and corporations can’t hire much anymore.’
“In a note out earlier this month, Contopoulos warned job losses may grow later this year or early next year due to poor productivity, slowly rising wages and lackluster corporate earnings. The situation is party caused by central banks in ‘fantasy-land,’ he wrote.”
Cash. Get it and save it.
Link …
https://finance.yahoo.com/news/us-economy-just-doesnt-want-200000586.html#
Contopoulus is a banker fool pirating what is good for his creed.
He forgets, or conveniently ignores, the best way to grow the economy -
“acquire the other guy’s market”
After all, he stole it from us.
And we didn’t even fight back to keep it.
‘I know people are sick of it but all roads lead back to supply - you have to build enough housing. But my simple point would be if you want to do more around borrowing in that area, and the capacity for those people to access that market, the easiest road home there is through the Reserve Bank’s actions.’
What about unprecedented levels of speculation by investors who have rationale concluded that interest rates have nowhere to go but down from here, fueling further valuation increases and still more speculative demand to pile into real estate investments?
Seriously, how many people are ‘going to all cash’? How many would sell their homes? Did any of you? What do you do with the cash? Not many people are willing to sit at near zero percent interest for very long in a bank. So, they hold a depreciating ‘asset’ year after year for whatever reasons they have. Did anyone on this board go to all cash? What now?
“Did anyone on this board go to all cash?”
I’m keeping my home but I’ve let go of most everything else.
“What now?”
Wait.
Maybe tip in if be it passes
UK could be a winner
My case for going to cash (FWIW) …
There are two ways of making money:
1. Working for it, and
2. Reaping a return on an investment.
So how is number 1 working out for most people? How’s the job market? Lots of money to be made there? No? Well then let’s go to number 2:
How’s that return on invested capital, on savings, working out for most people? Lots of money to be made there? No?
Well then if number 2 is not the case and if number 1 is not the case then where is all the money supposed to come from the keep our consumer-based economy humming along?
If you yourself can’t earn the cash and if your investments won’t earn the cash then where is the needed cash going to come from? In such an environment cash is tough to get and it is tough to keep; In such an environment cash will increase in its value.
“Did any of you?”
Yes, though mainly through luck of timing of a move. (However, we just said NO to the Used Home Salesperson who tried to talk us into using an interest-only mortgage to get into a bubble-priced home.)
“What do you do with the cash?”
Bought musical instruments, cars, food, paid rent, paid off our credit cards without ever paying any interest…it’s amazing how many useful things you can do with cash that you can’t do without it!
Clinging to a depreciating asset while the value evaporates is what dumb.borrowed.money does best.
I sold in 2009, went all cash….
no debt, no real estate.
Maybe 30% in stocks since then in the 401k.
lol@lola
“rationally”
‘In a tiny rental house pushed up against the freeway in Wallingford, landlord Bruce Wilson is looking for his piece of a housing boom that has seen prices zoom sky high across the city. Wilson said he realized he’d been undercharging a pair of retired nurses who have been living there for the past eight years with rent at $1,460 a month. His solution? Jack up the rent by nearly $1,000 a month, all at once.’
“The free lunch is over with,” said Wilson, who said he looked only at the cold, hard math of the situation. “This was a business decision.”
‘Tenants Peggy Haug, 68, and her wife, Juanita Merrifield, 74, said they can’t afford the 64 percent rent hike on Social Security and their retirement nest egg. Their pleas for a smaller, phased-in rent hike were rejected.’
“We couldn’t believe it. All my friends have just said that it’s not right,” Haug said. So now, they’re getting ready to move out.’
‘In Tukwila, Reginald Wilson saw his cheap $850 townhome rent go up an extra $1,085 in April after a local investment company bought the complex and began fixing it up. Now he doesn’t know whether he’ll be entirely priced out of the area, which has traditionally been more affordable than most of Seattle and the Eastside.’
“These people are all about the investment,” said Wilson, an out-of-work security officer who’s also looking for a new place. “There’s no help for people. They can do whatever they want.”
‘Trish Abbate, one of the tenant counselors at Solid Ground, found this out firsthand a year ago when her landlord posted a note on her affordable studio in North Seattle: Her rent was going up 54 percent. She wound up moving out. “There’s so much money to be made here that it’s just a matter of time before a landlord is like, ‘You know what? I could get $350 more a month, so why not?’ ” Abbate said.’
The free lunch is over but not the way he was insinuating.
This isn’t just happening in Seattle. When I had a vacancy a few months ago I got a bunch of applicants who told me about their complex raising rents 40%. I saw their incomes; they couldn’t afford the rent before the raise.
Again, look at the last graph. Look at the rent increases for the lower third of rents. This is what Mel Watt has accomplished with the “value-add” boom in apartment renovation and rent jacking that is taking place all over the country.
http://www.cnbc.com/2016/06/16/rents-now-top-list-of-fastest-rising-prices.html
If you jump up the rent then you jump up your ROI. If you jump up your ROI then this make your property more valuable - AND it makes comparable properties more valuable.
Making comparable properties more valuable increases loads of equity, which means it creates - it prestos- into being loads of WEALTH.
Wealth for you, wealth for your neighbors, wealth for all.
Income too, income for you, income for your neighbors, income for all. Much of this income may just be a bit imputed (imputed = unspendable) but, hey, it makes the GDP numbers work so why the fuss?
Clearly more of this must be done!
‘How do you add $200,000 or more in value overnight on your investment property? Easy! Just sprinkle on some magic fairy dust! But if you are like me and used up the last of your fairy dust on your last flight to never-never land with Peter, you are in luck. You can still add incredible amounts of equity on your property, without magic, by using cap rates.’
‘Simply put, when your expenses decrease or your income increases, you end up with more money in your pocket. More extra money means a higher NOI, which means the value of your property is increased.’
‘Let’s look back at our example of Farmer Fred. Fred looks at the property he just bought and notices several things. He is currently paying $15,000 per year for property management. He knows that an on-sight resident manager can do the job in exchange for free rent, saving him $8,000 per year. He also decides that his rents are a little below average for the area, so he increases his rent by just $25 per month per unit, bringing in an extra $300 per unit, per year or $7,200 in extra income per year total.’
‘Doing just those two small acts, Farmer Fred immediately begins keeping an extra $15,200 per year. To Farmer Fred’s wallet, this is awesome; but even better, in investment lingo, his net operating income just increased by $15,200. His old NOI was $74,500, but now is $89,700. Now, keeping the same cap rate from before and using the new NOI value, Equation B (NOI/Cap Rate = Market Value) now shows: $89,700/.0667 = 1,344,827.59. Farmer Fred has increased the value of his property from $1,116,941.53 to $1,344,827.59, a total change of over $200,000.’
‘Even if you do not yet own a piece of real estate, imagine how powerful cap rates can be on a property that is under-performing because of poor management. You are in a terrific position to purchase the property at a discount, improve the property, and resell it some day for the new value that you have created. While harnessing the power of cap rates may not be magic, the results can nevertheless do wonders for both your future and your bank account.’
Here’s the thing; the magic fairy dust works in reverse:
“Thanks to a glut of new high-end apartment buildings, some Bay Area landlords are offering incentives such as free rent for a month or more, six months of free parking, free electricity for a year or up to $1,500 in gift cards. Some are waiving application fees and cutting security deposits to $1,000 or less on units that rent for $3,000 a month and up. But with so many buildings opening around the same time, the incentives are getting bigger and spreading to somewhat older buildings that compete with new ones. South of Market, South Beach, Mission Bay and Potrero Hill are San Francisco’s ground zero for new construction — and rent concessions.”
“Afi Valizadeh is a San Francisco real estate broker who helps investors buy condominium units and then finds tenants for them. ‘All of a sudden the (apartment buildings) started offering one month free, six months’ free parking,’ Valizadeh said. Now prospective tenants ‘come to me and say, look at all this inventory out there. I want this (unit) for this much. They are offering me prices now.’ Rents in her buildings have dropped 15 percent on average since last year. ‘Rents in the Madrone were $5,500 last year, this year they are $4,500 for the same two-bedroom,’ she said.”
“Rent increases have slowed over the past year in 71 percent of the Boston area’s ‘luxury zip codes’ where $3,000 and up is the norm, Zillow reports. That’s compared to 61 percent for the rest of Greater Boston where rents are not so lofty. And renters on the high end are also more likely to be offered all sorts of incentives to sign a lease. Slowing luxury rents is not just a Boston phenomenon, but one taking place around the country as new luxury towers flood city centers from New York to San Diego. ‘There has been a slowdown in the apartment market but it is more common in luxury zip codes than in non-luxury ones,’ noted Aaron Terrazas, senior economist at Zillow.”
“In Arlington County, projections by the Metropolitan Washington Council of Governments show that 69,000 new residents will move in by 2045. That’s a population increase of nearly a third. Of course, all those new people will need somewhere to live. And if recent trends are an indicator, many will choose to rent their homes. So, while a glut of recent apartment construction may have led regional rents to flatten a bit lately, it looks like there will be plenty of demand for new and existing units in the coming years.”
“Cranes and crews are all over town, putting up new luxury apartment buildings in some of the hottest neighborhoods. The building continues, even as Houston’s economy slows down. That has created an oversupply of apartment units that could take years to fill. Analysts said the area is now in a renter’s market. ‘Right now, we are overbuilding, and we are going to continue to overbuild,’ Patrick Jankowski, with the Greater Houston Partnership, said.”
“Jankowski said that means renters can find deals because with 45,000 new apartment units expected to be added this year and next, the area is maxed out, building more than could be filled in three of the region’s best years. ‘A lot of anecdotes out there of ‘their manager is willing to reduce their rent’ to make sure that they don’t leave. But if you’re out there looking for a new apartment, you can get two months free rent, sometimes you can get a gift card on top of that,’ Jankowski added.”
“In a top of the line apartment, Jankowski said the savings could add up to an extra $3,000 a year. ‘Rents are soft now. But they’re going to get even softer over the next six months,’ Jankowski said.”
http://thehousingbubbleblog.com/?p=9661
‘Afi Valizadeh is a San Francisco real estate broker who helps investors buy condominium units and then finds tenants for them…Now prospective tenants ‘come to me and say, look at all this inventory out there. I want this (unit) for this much. They are offering me prices now.’…‘Rents in the Madrone were $5,500 last year, this year they are $4,500 for the same two-bedroom,’ she said.’
And Farmer Fred may have paid a pretty penny for his complex, maybe even borrowed a lot of money to do so. His margins are razor thin because he didn’t want to miss out on these sweet deals.
Greed is a basic human trait. It can go too far especially in an environment where a boom is artificially extended, interest rates are suppressed for a decade and credit is flowing like wine.
“We couldn’t believe it. All my friends have just said that it’s not right,” Haug said. So now, they’re getting ready to move out.’
Yes, and you and all your empty-headed friends voted for this when you cast votes for Wall Street water carriers who gave the Fed free rein to create new asset bubbles while carrying out its massive swindles against the 99% with ZIRP and QE-to-Infinity. You reap what you vote, ladies. Deal with it.
As long as 95% of the electorate bend over for the Wall Street-Federal Reserve looting syndicate by voting for its Republicrat water carriers, they have no right to complain about their standard of living getting worse each year.
http://wolfstreet.com/2016/06/16/rent-inflation-fed-wealth-effect-owners-equivalent-rent/
While I agree with you regarding Republicrat water carriers, I am in disagreement with the dissing of “the electorate”. How do you know the votes aren’t rigged in the first place and you’re blaming the wrong people?
As part of the electorate, what would you have us do? Please just tell us. What do you want us to do? I am asking this sincerely. I never get an answer when I ask most people. Except for the Selfish Hoarder, because he does, after a fashion, present some actions or inactions. I’m not sure they’re workable, though.
Please give people workable solutions that don’t involve certain death or imprisonment. If there aren’t any, you go first.
I like you, Ray, you know that. But the constant dissing of people as some massive blob of idiots is getting real old and there may be those who might like to be presented with a solution. Got one? Or two or three?
Good luck getting an answer! I have the same question but I doubt we’ll be offered any viable alternatives to the status quo.
‘you and all your empty-headed friends voted for this’
So if I go to my tenants and hand them a rent increase of 40 or 50%, should I add this comment to the notice? I don’t know who they vote for, it’s none of my business.
I look at this differently. I did a bit of rent increases between tenants, found it self-defeating and backed down. Their incomes haven’t gone up. What this guy is doing is setting up future vacancy. Vacancy is a landlords biggest expense. I had read it, but learned it the hard way. Being a landlord means I know a lot about people life and problems. If they lose a job, I feel it. If they get a divorce or start taking drugs, I feel it. This guy is shooing away what are probably stable tenants that pay on time and could afford the rent. Putting people in an unaffordable situation will always bit you in the butt.
I’ve come to the conclusion that it’s best to keep rents as low as I possibly can. I’ve learned that qualifying renters is the key to that. The higher the rent, the harder to qualify, the higher my vacancies. Tenants will let me put them way over their head. I have to prevent that. I really dislike rejecting someone. There should be something out there for everybody. Apartments are supposed to be the answer, especially older apartments that come with a lower price tag. As these people in San Francisco and Boston are finding out, the high prices will eventually lead to more supply and the shoe will be on the other foot. In my case, I hope to have stable happy tenants when that day comes.
So if I go to my tenants and hand them a rent increase of 40 or 50%, should I add this comment to the notice? I don’t know who they vote for, it’s none of my business.
My comment wasn’t directed at you, the landlord. It was directed at the tenants. If they voted for Obama, McCain, or Romney, they voted for the status quo, i.e. they bent over for the Wall Street-Federal Reserve looting syndicate. Since they are members of the 99%, that means that they voted against their own interests, which means, ipso facto, that they are stupid. Stupid should hurt, and in this case the hurt is coming from a rent increase tied directly to the runaway speculation due to the Fed’s deranged money-printing. Next year their insurance premiums will be jacked up something like 17% due to Obamacare, which is another penalty for the stupidity of the Obama Zombies. The only real victims in this scenario are the Ron Paul voters, the intelligent 5% of the electorate, who are suffering the consequences of being victims of the bad decisions of the indescribably stupid 95% who voted for more of the same.
It would be AWESOME if landlords added comments linking imbecility at the voting booth to a higher cost of living.
These landlords are being overly greedy and they will eventually suffer like we are already seeing. They are thinking about the top line and not the bottom. The higher the rents, the greater the building. The higher the rents the higher the vacancies. If San Francisco can have tenants setting rents so will Seattle. These landlords will look back and say, “man I remember so-and-so. She always paid her rent on time and in full.” The goal should be 100% occupancy in a safe, comfortable, affordable shelter. Equilibrium is more desirable than a year or three of out sized profits.
“They are thinking about the top line and not the bottom.”
Well stated!
Too bad my landlord doesn’t have the common sense you have.
These are conclusions from a business standpoint. I did a little rent increasing and it back fired. Life is going to happen and if you stretch people somebody isn’t going to get paid. Then you are in the position of notices, evictions, it goes on and on. If you have a stable tenant that pays on time and you work together to get through life’s little hiccups, that person is gold. The returns are high enough to provide profit, maintain the property, pay taxes and insurance. Why go chasing that extra buck, squeezing and squeezing? It’s dumb. Hang onto good tenants, let the bad ones move on and everybody is happy. It’s good business.
“I did a little rent increasing and it back fired.”
If you push your rent increases beyond what the market will bear, not only do you increase the short-run risk of getting stiffed by your current tenant, but you also face the long-run risk of finding yourself with an empty unit on your hands.
It’s been over seven years since the birth of Bitcoin and as its growth continues in 2016 as a new asset class for the 21st century. As the Brexit vote approaches, China’s woes are heavily weighing down markets, and socialist regimes failing daily investors worldwide are discovering the cryptocurrency’s value. Very well known economists and researchers are discovering Bitcoin’s potential to be a top asset for the future up there with gold, bonds, fine art, and real-estate.
http://www.livebitcoinnews.com/investment-circles-look-to-bitcoin-as-the-asset-class-of-the-21st-century/
What happens to bitcoin if there is no internet?
I’ll answer my own question: Bitfood becomes an excellent investment if there is no internet.
How do you suppose the WORLD wide web will disappear? Are you into hardware? Do you understand what decentralize means?
I guess his question could be construed as making a case for physical gold. (I really you are already there as regards your portfolio diversification…)
Yeah PB, I,am just about. 8% precious and 1% Bitcoin (was 0.5% Bitcoin about 5 weeks ago, then the price has gone way up since).
I think unless the rates go up to 20% next year I will push for 15% to 20%. But half in gold mining stocks.
Any update on Portland & seattle ?
The last of the boom towns
1 to 100 of 2500
https://portland.craigslist.org/search/apa
1 to 100 of 120
https://portland.craigslist.org/search/apa?query=first+month+free
1 to 100 of 214
https://portland.craigslist.org/search/apa?query=two+months+free
Portland, OR Real Estate and Homes for Sale
2,231 Homes
http://www.realtor.com/realestateandhomes-search/Portland_OR
Portland, OR Price Reduced Homes for Sale
591 Homes
http://www.realtor.com/realestateandhomes-search/Portland_OR/show-price-reduced
Chosen at random:
4004 NE 18th Ave, Portland, OR 97212
3 beds 2 baths 2,505 sqft
06/17/16 Price change $629,000-3.1%
05/08/16 Price change $649,000-5.3%
04/14/16 Listed for sale $685,000+132%
05/28/04 Sold $295,000+63%
02/24/00 Sold $181,000+33.6%
08/25/95 Sold $135,500+12.9%
05/26/95 Sold $120,000
http://www.zillow.com/homedetails/4004-NE-18th-Ave-Portland-OR-97212/53887801_zpid/
The driveway looks like a skeeball thing.
that driveway knocks out the SUV crowd!
“Across the street from Sabin Elementary School.”
No thanks.
that long lonesome highway working your way through america
Amazon CamperForce Program
https://www.youtube.com/watch?v=jTlD1RsW1bQ
Hey-hey, ho-ho, another NATO “ally” tells Washington to stuff it.
http://www.zerohedge.com/news/2016-06-19/i-dont-need-war-black-sea%E2%80%9D-another-nato-member-folds-bulgaria-refuses-join-naval-tas
“Following Germany’s scandalous statement accusing NATO of “warmongering” toward Russia and revealing how deep the European fissures within NATO truly are, Reuters added that NATO-member, and Black Sea coast country Bulgaria “appeared to buckle to Russian pressure on Thursday” when its Prime Minister Boiko Borisov said he would not join a proposed NATO fleet in the Black Sea “because it should be a place for holidays and tourists, not war.”
A place for holidays and tourists, not war. Wow. What a concept!
Of course I note the MSM propaganda in Reuters’ statement that Bulgaria “appeared to buckle to Russian pressure”. What a joke. The Washington subsidized MSM outdoes the old Soviet Pravda.
The Stone Roses — The Stone Roses (1989):
https://www.youtube.com/watch?v=klQllZ-y-tc
Blur — Leisure (1991):
https://www.youtube.com/watch?v=xlSMlfcPUkQ
P.S. Oasis are not the Beatles.
Wait, there’s more?
Sonic Youth — Daydream Nation (1988):
https://www.youtube.com/watch?v=PVwJMOtfJbU
Pixies — Doolittle (1989):
https://www.youtube.com/watch?v=GZRpANN4NF8&list=PLhj6R3nBEgyIdyIVKV2XDfDUdyhcWsWpw
Nirvana — Bleach (1989):
https://www.youtube.com/watch?v=pMLre9Jed_4
Hermiston, OR Affordability Improves As Housing Prices Crater 11% YoY
http://www.zillow.com/hermiston-or-97838/home-values/
Do you just randomly pick podunk towns across america?
One of my coworkers lives there - it is a great place to be when the SHTF because it’s so far away from the big cities full of FSAers and SJWs.
They have a great growing season there - watermelons even. And they look out for each other.
And prices are falling there my friend.
Are they looking out for that too?
Stupid SHOULD hurt.
http://www.nytimes.com/2016/06/20/world/americas/venezuelans-ransack-stores-as-hunger-stalks-crumbling-nation.html?_r=0
While 95% of ‘Muricans continue to bend over for the crony capitalist status quo by voting for Republicrat corporate statists, voters in the EU are finally starting to push back.
https://www.yahoo.com/news/rome-elects-populist-raggi-first-female-mayor-exit-211507705.html?ref=gs
“Household Formation Is Cratering”
http://realmoney.thestreet.com/articles/08/21/2013/household-formation-cratering
The End Game Of Bubble Finance——Political Revolt | David …
http://davidstockmanscontracorner.com/the-end-game-of-bubble-finance-political-revolt/ - 213k - Cached - Similar pages
3 days ago