August 21, 2016

A Market Gone Wild

The Globe and Mail reports from Canada. “A year ago, when Bank of Canada Governor Stephen Poloz cut interest rates for the second time in six months, we knew we’d have to take the bad with the good. Slashing the bank’s overnight rate in half to 0.5 per cent would surely further inflate regional real estate bubbles. But that, we figured, was just the price to pay in order to fuel non-energy exports and a sustainable recovery.”

“Hewers of wood and drawers of water, not. Canada is now a real estate nation, with little else to keep the economy from sinking into an even deeper funk. Gross domestic product shrank 0.1 per cent in May, and that’s after excluding the negative impact of Alberta’s wildfires on oil sands output. Yet, we’re still buying houses like there’s no tomorrow. And there may not be a tomorrow for the suckers who buy in at the peak, whenever it comes.”

“The so-called economic rotation from oil to manufacturing exports that rate cuts (and the related decline in the Canadian dollar) were supposed to produce has not only failed to materialize but policy makers have pumped helium into an already overheated real estate sector that is masking structural weaknesses in the economy and setting us up for a bigger fall.”

“Politicians who claim to be fighting for the middle class have priced most of them out of the Toronto and Vancouver housing markets. But worry not. B.C. has slapped a 15-per-cent tax on foreign buyers and Ontario could follow, while Ottawa is contemplating raising minimum down payments and slapping a hefty deductible on banks’ insured mortgages.”

“These and other demand-side policies might indeed lead to a real estate slowdown – to wit, the 18-per-cent year-over-year drop in Vancouver home sales in July. But at what cost? If prices do start to fall, even moderately, buyer psychology will shift rapidly and a reverse wealth effect will set in. A real estate crash (which bypassed Canada during the last recession) could become a self-fulling prophecy. On the bright side, policy makers might finally get their economic rotation.”

From Metro News. “Following the introduction of B.C.’s 15% tax targeting foreign homebuyers, realtors say local buyers no longer seem to be feeling the FOMO that had been spurring them to compete in bidding wars.”

“‘What it did, in my opinion, it’s changed the behaviour of the locals where everybody before was rushing in to buy something, going in way over their head with multiple offers,’ said Steve Saretsky, a realtor with Sutton Group West Coast, describing a situation in which local buyers expected prices to continue to rise because of interest from foreign buyers. ‘Then (the tax) came out and everyone’s like oh, all these foreign buyers are going to leave the market, maybe I’ll wait.’”

“There has already started to be some price reductions in some detached homes in Richmond and Tsawwassen, Saretsky said, markets that had seen detached home prices rise a nosebleed 47 and 42 per cent, respectively. ‘It just couldn’t keep going,’ Saretsky said.”

The Nelson Daily. “Last week the province instituted a tax on foreign ownership, increased fines for realtor misconduct and moved to create a provincial superintendent of real estate, who will take over all regulation and rule-making duties from the Real Estate Council of B.C. The moves are in response to the ongoing public outcry for reigning in skyrocketing real estate prices in the Lower Mainland and drafting tighter controls for the industry across the province. However, the need for control of a market gone wild in the rest of B.C. is not reflected in the market of Nelson of the present day, say some local realtors.”

“In fact, Valhalla Path Realty’s Robert Goertz doesn’t foresee a foreign ownership tax being implemented in Nelson, since the heritage city does not have the same issues with foreign ownership as Vancouver does. ‘People are buying in Vancouver on speculation. People who own homes in Nelson use their homes, even if it is as a secondary dwelling,’ he said.”

“But Century 21 realtor Brian Euerby said a foreign ownership tax may come to pass in Nelson, even though the tax was largely targeted toward those from mainland China that are making offers without seeing the properties. ‘The demographic of the (buyers) would suggest they prefer the larger urban lifestyles,’ he said about Nelson. ‘That said, though, this model is being watched carefully by other levels of government and there has been some discussion that this tax may well spread throughout the entire province if foreign ownership spreads to the Interior.’”

“The province could allow the City of Vancouver to impose a tax on vacant homes, with a city-led study finding over 10,800 empty homes in the city in 2014. The province could allow other cities to implement similar taxes. ‘You would be surprised as to how many vacant homes there are out there, but none of which I would suggest are as a result of the foreign buyers that are being targeted on the Lower Mainland,’ Euerby said.”

“‘People need a place to live and rising prices are the reality they are faced with even if it means over extending themselves,’ Euerby said. ‘I personally believe people are over extending themselves to reach up for prices. Any rise in the interest rates and this is going to tip many over the edge, a society that is already statistically spend $1.60 for every $1 earned.’”

“And a good deal of the $1.60 is simply debt service, he said. ‘If this tax, and it is substantial, spreads nationwide, it will have an impact,’ he said. ‘Two things are driving this market: foreign investment in larger urban centres; and low interest rates. If one or the other of those is taken out of the equation then Houston, we have a problem. If both change, well … stay tuned.’”




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59 Comments »

Comment by Ben Jones
2016-08-21 10:01:33

‘a situation in which local buyers expected prices to continue to rise because of interest from foreign buyers’

And it doesn’t matter how much is reality. You could insert British or Latin American buyers in Florida. Malaysians in London. Russians in Dubai. Every bubble is based on a bit of truth. The weather, outside buyers, location. A combination is nice.

A letter to the editor:

‘There are times when a picture is truly worth a thousand words. The cartoon by I. Rice, “ Oh what a difference a year before an election makes,” in the July 29 edition, exposes just how out-of-touch, cynical, ill-thought-out, and cosmetic the BC Liberal’s pre-election housing tax ploy is.’

‘As we approach the fourth and final year of Premier Christy Clark’s regime, hurried, incoherent policies appear to be the order of the day.’

‘For example, rather than formulate a comprehensive provincial anti-poverty strategy – such as exists in every other province – our provincial housing minister staggers from stating that social housing advocates in Vancouver are “whiners”, to using millions of dollars on crisis action triggered by the politically embarrassing pre-election Victoria court house encampment.’

‘Waiting until the fourth and final year of her regime, Premier Photo-Op has made token, inconsistent housing taxation policies that apply only in Metro Vancouver despite the fact that housing affordability is an issue as far up the Fraser Valley as Chilliwack; here in Greater Victoria; in the Squamish-Whistler-Pemberton corridor, and in Okanagan centres such as Kelowna.’

‘It is a tragic pattern that reflects the inadequate missteps of an out of-touch, incompetent government sticking its finger in a dike while a tsunami of speculation, money laundering and real estate flipping will destroy the hopes of hardworking British Columbians – particularly a whole younger generation – who will never be able to afford a place of their own. Those who must, or choose to, rent are equally victimized by ever-rising rents.’

‘The proposed 15 per cent tax on foreign purchasers of property in Metro Vancouver will not deter a foreign money launderer who would view such a meagre tax as a simple cost of doing his nefarious business.’

‘Now is the time to adopt a provincewide comprehensive housing strategy to prevent the contagion of unaffordable housing to spread in a province blessed with forests, underutilized saw mills and unemployed workers. Poverty in the midst of plenty is a man-made, not a God-ordained condition.’

 
Comment by azdude
2016-08-21 10:06:57

The more fiat we print the richer we are. People around the world want our money.

Comment by Professor Bear
2016-08-21 14:55:03

Makes you wonder why they don’t print ten times as much, given the realization that we could easily enough be ten times as wealthy.

Comment by junior_bastiat
2016-08-21 16:00:20

Also makes you wonder how many .gov employees are tasked to monitor currency printing in other countries in order to adjust exchange rates. Would be interesting to know how many goldman sachs employees have security clearances.

 
 
 
Comment by alphonso bedoya
2016-08-21 10:39:50

“Self-interest”. Was it more subtle in the past ? Were we just younger and not aware of it ? Has it become more blatant ?

 
Comment by Crdt
2016-08-21 11:06:31

Here in BC people are not ready to believe that it is over. Lots of bargain hunters getting a chance to make full price offers without having to over bid, thinking they just won the housing lottery.

Comment by Ben Jones
2016-08-21 12:32:14

Where are they getting the money?

Comment by Crdt
2016-08-21 13:06:36

There are lots of mortgage brokers floating around, banks are still pushing mortgages The belief that this is just a pause before prices resume their “inevitable” meteoric rise it’s still intact. Some people “pool” their money as well.

Comment by Ben Jones
2016-08-21 13:14:34

But the prices to incomes have to be out of this world. Are the lenders doing 5, 6, 10 times years of annual incomes?

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Comment by Crdt
2016-08-21 14:24:07

Hey Ben.. Been following your blog for a very long time thx for the excellent forum. People here truly believe that any mortgage amount is ultimately a safe bet, as such parents take “equity” out of their houses to help their kids. Lenders do crazy things like allowing a line of credit to be used for down payments, people lie on their applications, I think rental income can be used as “income” and so forth. The level of “creativity” is astounding when it comes to making a mortgage work. Lots of speculators have multiple properties that again can be used as collateral for subsequent loans.

 
Comment by Professor Bear
2016-08-21 15:01:19

‘People here truly believe that any mortgage amount is ultimately a safe bet, as such parents take “equity” out of their houses to help their kids.’

Isn’t this predicated on the assumption that prices will steadily rise forever?

The Vancouver Sun
Real-time sales numbers show a decline in ‘average’ Vancouver home prices
Joanne Lee-Young
More from Joanne Lee-Young
Published on: August 19, 2016 |
Last Updated: August 19, 2016 7:16 AM PDT
Zolo, a national real estate brokerage tracking MLS home sales in real time, says the “average price” of homes sold in the last 28 days in the City of Vancouver has fallen 21.4 per cent .

Earlier this month, as surging Vancouver luxury home prices were making international headlines and local real estate boards reported continued price spikes, another set of gauges was telling a different story.

These numbers revealed that average home prices in Metro Vancouver have been falling — not just in recent weeks, but also going back several months.

The various snapshots make for a muddle that might wash out over a longer period, but it’s a cacophony of confusion for buyers and sellers trying to figure out what to do right now, not to mention homeowners obsessed with the rise and fall in the worth of their assets.

Zolo, a national real estate brokerage, has been attracting attention for its tracking of MLS home sales in real time. It says the “average price” of homes sold in the last 28 days in the City of Vancouver has fallen 21.4 per cent, is down 25.1 per cent over the last three months, and down 7.4 per cent from last year.

 
 
Comment by In Colorado
2016-08-21 14:56:43

The belief that this is just a pause before prices resume their “inevitable” meteoric rise it’s still intact

Wasn’t the Canadian bubble one of the first to resume after last time’s crash? I seem to recall us discussing here about how smug Canadians were once their resumed it’s inflation.

So yeah, they probably think that “it’s different here”. Also, unlike now, when oil crashed back then, it was a short lived reprieve for consumers. I seem to recall that gas was cheap for about a year, then it got expensive again. Whereas now we have $2 gas in the summer. I wonder how low it will drop this winter. That is going to hurt Canada, big time (though it will definitely be good for me).

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Comment by Ben Jones
2016-08-21 15:07:25

From the first link:

‘A real estate crash (which bypassed Canada during the last recession) could become a self-fulling prophecy’

China’s huge 2008 QE saved their bubble, as it did in Australia.

 
Comment by The Crushin' Russian
2016-08-21 15:08:12

Falling prices are good for everyone.

 
Comment by Professor Bear
2016-08-21 15:31:21

And yet China’s huge 2015 QE couldn’t save their stock market. At what point does Humpty Dumpty become so thoroughly shattered that he can never be put back together again?

A quick look at Bloomberg reveals the Shanghai Composite index has a year-to-date return of -9.53% and a one-year return of -12.18%; not sure whether this considers currency devaluation. The current (August 19, 2016) level of 3,108.102 remains 39.8% below the June 12, 2015 peak of 5,166.350.

Chinese Stocks Crash Again to Extend Biggest Plunge Since 1996

Bloomberg News
August 24, 2015 — 6:26 PM PDT
Updated on August 25, 2015 — 4:15 AM PDT

Chinese shares plummeted to extend the steepest four-day rout since 1996 on concern the government is abandoning market support measures.

The Shanghai Composite Index tumbled 7.6 percent to 2,964.97 at the close, sinking below the 3,000 level for the first time in eight months. The gauge has dropped 22 percent in four days since Aug. 19. More than 700 stocks fell by the 10 percent daily limit in Shanghai on Tuesday, including PetroChina Co., the nation’s biggest company by value. Hours after the market closed, the central bank cut interest rates and lowered the amount of cash banks must set aside.

Speculation around the government’s intentions has escalated since Aug. 14, after China’s securities regulator signaled authorities will pare back the campaign to prop up share prices as volatility falls. The China Securities Regulatory Commission made no attempt to reassure investors after Monday’s plunge, unlike a month ago when officials issued two statements shortly after an 8.5 percent drop.

“It’s panic selling and an issue of confidence,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “The government won’t step in to rescue the market again as it’s a global sell-off and it’s spreading everywhere now. It’s not going to work this time.”

Tuesday’s drop is the seventh decline of more than 6 percent for the benchmark gauge in the past three months.

The CSI 300 Index declined 7.1 percent, with gauges of energy, technology and material companies sinking more than 8 percent. PetroChina, long considered a favorite holding of state-linked rescue funds, closed at its lowest level since December.

1987 Crash

The Hang Seng Index rebounded 0.7 percent after a gauge of price momentum dropped to the lowest level since the October 1987 stock-market crash. The Hang Seng China Enterprises Index lost 0.9 percent to the lowest close since March 2014.

Unprecedented government intervention has failed to stop a more than $4.5 trillion rout in mainland equities since June 12 amid concern the slowdown in the world’s second-largest economy is deepening. Officials have armed a state agency with more than $400 billion to purchase stocks, banned selling by major shareholders and told state-owned companies to buy equities.

When the Shanghai Composite tumbled 8.5 percent on July 27, the regulator issued statements shortly after the market closed saying it would probe the sell-off and underlining the government’s commitment to supporting equities. The CSRC hasn’t made any statements since Monday’s tumble.

“The regulator probably thinks the market slump this time hasn’t impacted the broader financial system, or they think the situation is still controllable,” said Xue Hexiang, a senior strategist of Huatai Securities Co.

State Support

China has halted intervention in the stock market so far this week as policy makers debate the merits of the government campaign to prop up share prices, according to people familiar with situation.

On Aug. 14, the regulator said China Securities Finance Corp., the state agency tasked with supporting share prices, would no longer add to holdings unless there’s unusual volatility and systemic risk, although it would remain in the stock market for years to come.

Officials should wind down the stock market support program even if prices continue to decline, according to a front-page commentary in the state-run Economic Information Daily on Tuesday.

Some 17 percent of listed shares traded on mainland bourses were halted from trading Tuesday, little changed from Monday. About 40 percent were suspended during the depths of last month’s rout.

 
 
 
 
Comment by Professor Bear
2016-08-21 13:04:40

Sounds like a number of folks are about to win the winner’s curse.

Comment by In Colorado
2016-08-21 14:58:53

This happened to a young pup at the office. He’s a single guy, and has been trying to buy a house in Denver for a couple of years, always losing the bidding war, until finally, a month ago he “won”.

And the place he bought is a wreck. He’s dropping some serious coin in remodeling it: new kitchen, new baths, new flooring, etc.

 
 
 
Comment by Senior Housing Analyst
2016-08-21 11:28:38

“Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month”

http://www.zerohedge.com/news/2016-08-18/vancouver-housing-market-implodes-average-home-price-plunges-20-1-month-market-devas

 
Comment by patrick
2016-08-21 11:31:23

It is infuriating to know that China will not allow us to buy their homes but we are expected to allow them to buy ours. Why?

Yes, we need a housing policy, but not just for BC - but for all of Canada.

We are sitting on a mountain that can - and will - collapse. We are no different.

As for that Globe article - surprised how uninformed the writer is. Our industrial economy is excellent right now, farming, fishing, mining, logging, oil can make a profit at today’s rate, same with gas, uranium, potash, - did I mention gold too. Our 70% service sector - yes, bloodsuckers will continue to exist in even bigger numbers. Why?

But we are transitioning into a different type of economy and jobs that require less education are disappearing fast. Fortunately, we are the second highest educated population in the world. We should transition nicely.

I hope everyone noted how BC gov has taken power away from the realtor governors. About time.

Comment by alphonso bedoya
2016-08-21 12:04:07

So Canadian households aren’t carrying near-record debt loads ?

There are two economies. In my neighborhood and yours, people are doing well. And so is Don Coxe, I might add.
Now, about the other 95%….

 
Comment by The Crushin' Russian
2016-08-21 12:11:37

Chinese nationals using dumb.borrowed.money. to buy rapidly depreciating assets at grossly inflated prices results in collapsing demand……. and cratering prices.

 
 
Comment by Senior Housing Analyst
2016-08-21 11:32:15

Labor Force Participation Rate Plummets To 37 Year Low; Joblessness At Record Levels

http://data.bls.gov/timeseries/LNS11300000

 
Comment by patrick
2016-08-21 11:45:33

P Bear

You asked what is there to stop another Q of say $4T - just push an electronic button and bury it forever -

That 4T with the other 4 or 5 depreciates the value of goods and services - 1 plus 1 will always equal 2. You cannot get G&S WORTH 3 from it.

We will all awaken to devalued currency and it’s even worse economic effects if we don’t do something - a year ago !

Comment by Professor Bear
2016-08-21 11:52:24

“…do something…”

Such as…?

Comment by patrick
2016-08-21 16:09:49

p bear

at this stage - pray -

and become creative -

and let the market of supply and demand rule - no fake government assistance

 
 
 
Comment by Senior Housing Analyst
2016-08-21 12:17:42

Vashon, WA Housing Prices Nosedive 8% YoY As Housing Inventory Balloons Statewide

http://www.zillow.com/vashon-wa/home-values/

 
Comment by palmetto
2016-08-21 12:30:57

Thursday. Colorado. Incoming. Be prepared.

Comment by In Colorado
2016-08-21 14:18:31

Details?

Comment by palmetto
2016-08-21 14:36:19

A certain someone is having a little hoedown at which he is expected to lay out his immigration “platform” and it is purported to be an about face, at the behest of his new “campaign manager”. Lots of sad panda boo-boo.

https://www.youtube.com/watch?v=zOXtWxhlsUg

Comment by In Colorado
2016-08-21 17:15:59

I still won’t vote for Hillary.

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Comment by In Colorado
2016-08-21 17:21:36

Looked for a link to an upcoming Trump visit to Denver. Couldn’t find one. Went to his website, he won’t be around here this coming week.

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Comment by palmetto
2016-08-21 17:53:17

I won’t vote for Hillary, either.

It’s not a rally, it’s a “campaign event”. Possibly a fundraiser, or some sort of “insider” confab. He’d never do this at a rally, wouldn’t want stunned supporters to walk out, followed by the cameras.

Colorado is an interesting choice and probably strategically chosen for this sort of thing. He doesn’t have a lot of support there, so not a lot of supporters around to be upset. It’s Cruz territory and they didn’t even hold a primary.

Interesting, too, is that Kellyanne Conway was formerly in the Cruz camp. Such a load when they announced her as the new campaign manager, they tried to make it like Bannon was front and center, but he’s not even around. They said it was a return to the “old” Trump, lol, and instead they got some sock puppet shifting between teleprompters and apologizing like crazy for being a dick. Even worse than the Manafort version. At least Manafort kicked the RNC into line and got him through the convention.

Kellyanne with the fake tan will ring the curtain down on the campaign, like Merkel rung the curtain down on Europe, like Hillary will ring the curtain down on the US. They don’t make ‘em like Elizabeth I anymore.

Well, that’s the end of that campaign. Oh, and I agree with oxy about the post-partum Princess.

https://www.washingtonpost.com/news/the-fix/wp/2016/08/21/it-sure-sounds-like-donald-trump-is-considering-his-biggest-flip-flop-yet/

 
 
 
 
 
Comment by Senior Housing Analyst
2016-08-21 13:06:00

Las Vegas, NV Housing Prices Crater 8% YoY As Housing Correction Expands

http://www.zillow.com/nv/home-values/

 
Comment by palmetto
2016-08-21 13:08:55

Lol, this guy. I gotta admit, he’s crude, but he speaks sooth.

“He then launched an attack on the United Nations and its members - including by inference Manila’s traditionally close ally, Washington - saying, it could not fulfill its own mandate but was “worrying about the bones of criminals piling up”.

“I do not want to insult you. But maybe we’ll just have to decide to separate from the United Nations,” he said. “Why do you have to listen to this stupid?”

Criticizing the U.N. for not doing enough to address hunger and terrorism and for not being able to do anything about Syria and Iraq and allowing big powers to bomb villages and kill innocent civilians, he said he would invite China and African nations to form another global organization.”

http://www.reuters.com/article/us-philippines-duterte-un-idUSKCN10W05W?il=0

Comment by junior_bastiat
2016-08-21 16:04:41

Wouldn’t be surprised if the US continues to dog him that they move into Russia’s orbit. Getting crowded with Iran, Syria, and candidates Turkey and Yemen. The people of europe already support Putin, saw it first hand about 4 years ago, bet its 10x that with the refugee invasion.

Sign of the times that their propaganda contains far less BS than the US’.

Comment by palmetto
2016-08-21 17:31:55

I’ve said in the past that if Putin were to “invade” Europe, he’d be welcomed with open arms and bouquets of flowers and doves released into the air.

 
 
 
Comment by Senior Housing Analyst
2016-08-21 13:16:38

US Household Formation Plummets To Record Low

http://ftalphaville.ft.com/files/2014/12/HHFGS.png

Comment by Professor Bear
2016-08-21 15:12:11

Closely related story: The central planners’ plan to turn all American households into homeowner households is an abysmal failure.

Only extraordinarily high geezer (65+) homeownership rates are staving off an absolute collapse in U.S. homeownership rates. Ten years from now, most of these folks will have moved on to the Happy Holidays Retirement Community or beyond.

Real Time Economics Housing
U.S. Homeownership Rate Falls to Five-Decade Low
The homeownership rate, the proportion of households that are owner-occupied, fell to 62.9%, half a percentage point lower than the second quarter of 2015 and 0.6 percentage point lower than the first quarter 2016, the Census Bureau said on Thursday.
Photo: Drew Angerer/Getty Images
By Jeffrey Sparshott
Jul 28, 2016 11:49 am ET

The U.S. homeownership rate fell to the lowest level in more than 50 years in the second quarter of 2016, a reflection of the lingering effects of the housing bust, financial hurdles to buying and shifting demographics across the country.

The homeownership rate, the proportion of households that are owner-occupied, fell to 62.9%, half a percentage point lower than the second quarter of 2015 and 0.6 percentage point lower than the first quarter 2016, the Census Bureau said on Thursday. That was the lowest figure since 1965.

There are many ways to interpret the numbers. Part of the story is the catastrophic housing market collapse, which was especially severe for Generation X—those born from 1965 to 1984.

Younger households may struggle to save amid student debt, growing rents, rising home prices and limited inventories of starter homes. Indeed, the homeownership rate for 18- to 35-year-olds slipped to 34.1%, the lowest level in records dating to 1994.

At 77.9%, the homeownership rate was highest for those 65 years and over.

Comment by azdude
2016-08-21 15:39:17

they keep stacking people in the depressing looking apartment complexes.

Comment by The Selfish Hoarder
2016-08-21 16:11:03

My apartment complex is Mediterranean style and looks very nice. The landscape blends in well here in the mountain area of OC. Would be nice if I had an indoor washer and dryer of my own, but those are mechanical things that would break down. Would be nice to have two bedrooms but the rent would be higher. I have so much money left over after renting I gotta buy another wine refrigerator.

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Comment by azdude
2016-08-21 16:56:27

The stuff people in these places and start havn them pay the place off for them. Seems like a nice arrangement.

 
Comment by The Selfish Hoarder
2016-08-21 18:24:35

The stuff people in these places and start havn them pay the place off for them. Seems like a nice arrangement.

Um, it’s 52 units. And it’s also one of several other places the owners own. Hardly any ma and pa landlords.

I refuse to rent from small landlords. One reason is their kind seems to be the ones bragging that I’m paying for their house. Eff that.

I invest in REITs as well and get dividends from apartment REITs such as Equity Residential and Avalon Bay.

The income off my bonds pays 3/4 of my monthly rent here in Orange County.

 
 
 
Comment by The Crushin' Russian
2016-08-21 15:51:14

There is nothing more depressing that a massively inflated mortgage payment on a depreciating asset for the rest of your life.

Comment by palmetto
2016-08-21 17:54:59

With or without a whine refrigerator.

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Comment by The Crushin' Russian
 
 
 
 
 
Comment by azdude
2016-08-21 14:52:47

the dumb money didn’t hold onto their homes the last 5 years and missed out out some bigtime gains!

Comment by The Crushin' Russian
2016-08-21 15:31:32

Remember az_donk…. I can ask $50k for my ten-year-old Honda Civic but where is the buyer at that price?

So it is with all depreciating assets like houses.

 
 
Comment by Senior Housing Analyst
2016-08-21 15:59:18

If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.

“Debt is bondage.”~ Suze Orman, May 11, 2013

Don’t Be A Debt Donkey®

Comment by azdude
2016-08-21 16:57:38

DUMB MONEY

Comment by The Crushin' Russian
2016-08-21 17:43:06

borrowed az_donk borrowed!

 
 
 
Comment by Ben Jones
2016-08-21 16:32:59

July 21, 2016

Purchase prices of Vancouver rental apartment soar 47%
Average price for mostly older apartments close to $500,000 per suite

‘A recent Vancouver transaction reveals that some buildings are attracting even higher prices. A 69-year-old, wood-frame rental apartment building at 2293 West 6th Ave. sold for $4.5 million, or $750,000 for each of the six units, where rents average $1,680 per month.’

‘The price, while not a record for older rental apartments – a $1.1 million-per-unit sale at the University of British Columbia holds that distinction – is an indication of the stratospheric prices being seen in Vancouver’s multi-family sector.’

‘The Kitislano building, configured into two-bedroom suites, sold after multiple offers for $50,000 above the list price, according to NAI Commercial, which sold the project. The capitalization rate is a low 2.1%.’

47% in one year. Some were 60% higher.

Comment by phony scandals
2016-08-21 17:21:14

“A 69-year-old, wood-frame rental apartment building at 2293 West 6th Ave. sold for $4.5 million, or $750,000 for each of the six units, where rents average $1,680 per month.’

You must need common core math to make that deal pencil out.

 
 
Comment by Ben Jones
2016-08-21 17:16:31

‘In 2012, Mongolia marked its debut in international capital markets with a stunning dollar bond sale that was meant to usher in a new era for the country. Four years later, the currency is in free fall and concerns are growing that the cash-strapped government will struggle without external assistance.’

‘The reversal of fortune for this sparsely-populated country underscores the impact the slowdown in China is having on economies that have for years depended on supplying raw materials to Chinese factories.’

‘One fund manager, who is still invested in Mongolia, told CNBC that the country’s turmoil reflected the broader trend of “ultra-loose” monetary policies adopted by central banks around the world, which led to a debt binge.’

“After several years [of low interest rates], you have a situation where many people borrowed too much money at too low rates and now, even at these rates, are not able to repay. That’s the dilemma,” Michael Preiss, executive director at Taurus Wealth Advisors, told CNBC by phone.’

‘Some analysts are not convinced that the raising of interest rates will reverse the damage.’

“We do not consider the announced measures sufficient in themselves to stem dollar/tugrik buying,” said Tim Condon of ING in a morning note on Friday, adding a regime change might be needed in order to halt the buying pressure.’

‘Natixis’ Nguyen added raising rates is usually effective in low-rate environments. Instead, Mongolia’s rates were already higher than most countries. Instead, it would make raising funds more expensive when Mongolia can least afford it. If the currency continues to weaken, it will also result in higher import costs and inflation at a time when Mongolia’s foreign reserves are dwindling.’

Comment by Ben Jones
2016-08-21 17:21:08

The Land of Genghis Khan is Having and Epic Economic Meltdown
Bloomberg-Aug 18, 2016
It all went bad when China’s growth throttled back from double-digit levels in 2011 …

 
 
Comment by phony scandals
2016-08-21 18:32:55

VIDEO: Trump Fans Send CNN Crew Some Loud, Pointed Orders Before Rally

US News 2 hours ago TheBlaze - US 12

Before the start of Republican presidential nominee Donald Trump’s rally in Fredericksburg, Virginia, on Saturday, a cellphone camera caught the large crowd targeting a CNN crew at the front of the venue with a pointed command.

“Do you job!” the crowd began chanting, which grew louder as heads turned and fingers began pointing at the crew.

CNN walks in, crowd boos, chants “Do Your Job” – Trump Virginia pic.twitter.com/rInKtm5Nle

— Jack Posobiec (@AngryGoTFan) August 21, 2016

But the crowd wasn’t done.

Soon they switched gears and began chanting, “Tell the truth!”

Trump Virginia crowd chanting “tell the truth” at CNN pic.twitter.com/S42MKnx9e9

— Jack Posobiec(@AngryGoTFan) August 21, 2016

Comment by Professor Bear
2016-08-21 19:38:49

There’s a market in Trump and Clinton lies
By Steve Goldstein
Published: Aug 19, 2016 10:44 a.m. ET
Odds suggest Trump will lie more in August than Clinton will

Republican presidential candidate Donald Trump on Thursday said his rival Hillary Clinton never tells the truth.

“While sometimes I can be too honest, Hillary Clinton is the exact opposite: she never tells the truth. One lie after another, and getting worse each passing day,” he said during a speech in Charlotte.

There’s a way to test that theory — and bet on it.

The political betting site PredictIt has a market in how many totally false statements the two will make.

PredictIt uses the analysis of the site PolitiFact, and statements rated “totally false.”

The current odds suggest that Clinton is the more truthful — there’s a 65% probability Clinton will make just one totally false statement in August, according to the betting odds. The least amount of lies to bet on for Trump is four, and the market is split between five and six lies, with 26% odds on each, for the real-estate tycoon.

Comment by Professor Bear
2016-08-21 21:33:50

Seems like there is a market these days for anything that can reasonably be measured. The trend certainly makes life more interesting.

 
 
 
Comment by Professor Bear
2016-08-21 21:37:44

“break glass in case of emergency”

Good luck with that plan.

Comment by Professor Bear
2016-08-22 06:09:12

Is a kinder, gentler Trump on the way in?

Washington Wire
Trump Campaign Appears to Soften Immigration Stance
Republican U.S. presidential nominee Donald Trump attends a campaign rally in Erie, Pa., on Aug. 12.
Photo: Reuters
By Jay Solomon
Aug 21, 2016 1:50 pm ET

Donald Trump’s new campaign team appeared to soften his position on immigration as they took to the Sunday talk shows to try to revive his momentum.

The Republican presidential nominee has pledged over the past year to significantly tighten U.S. immigration policies and force out of the country 11 million undocumented workers. The billionaire businessman has specifically talked about creating a “deportation force” to rapidly remove illegal immigrants.

On Sunday, Mr. Trump’s new campaign manager, Kellyanne Conway, dialed down the pledge, suggesting the deportation force might not be set up after all.

 
 
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