August 22, 2016

The Departure Of Investors Is Quietening The Market

A report from the Australian Financial Review. “Buyers seeking advice need to take extra care they’re not being flogged developer apartments in deals better suited to their adviser’s pocket than their own situation. Leaked documents show hard-sell strategies being offered to advisers promise them $5000 for one successful residential property referral, or ‘passive income’ of $300,000 a year for just over one successful sale a week. ‘The departure of Asian investors is quietening the market,’ says Suzi Antic, a director and investor advocate for Melbourne Property Acquisition and Investments, which acts as an intermediary between developers and advisers.”

“‘A lot of developers are really struggling to sell apartments that have been built,’ Antic says. ‘That means they are honing in on local buyers,’ she says.”

“Some buyer’s agents claim sales inquiries have slipped by about 40 per cent since lenders cracked down on overseas’ borrowers by increasing deposits, restricting currencies used for payment, boosting scrutiny of overseas income and tightening checks on employment. Lenders have also tightened – or stopped – offering loans to borrowers for high-rise apartments. In addition, an estimated 45,000 apartments are due for completion and settlement over the next nine months in Melbourne, Sydney and Brisbane, an increase of nearly 25 per cent compared with last year, according to planning consultancy MacroPlan Dimasi. Another 53,000 could be coming to market in the same postcodes next year, the consultancy estimates.”

“To attract buyers some developers are discounting, extending settlement terms and offering headline-grabbing incentives such as luxury flights and accommodation packages to Europe and Asia. But others are sceptical about the continued strength of demand if overseas’ buyer numbers continue to fall, price rises outpace income growth and apartment completions result in a big supply surge. ‘They must be on crack cocaine,’ says David Morrell, founder and director of Morrell Koren, about claims that advisers can make hundreds of thousands a year in referral fees.”

The Hindu Business Line in India. “The luxury real estate market has come crashing down in the past few years, leaving developers of opulent housing saddled with an inventory that will, by some accounts, take four years to clear. The situation represents a dramatic turnaround from 2010, up until which year many developers, spurred on by rising demand among investors and end-users, were focussed on luxury projects. ‘We didn’t have as many homeless billionaires as the number of houses that were planned for them,’ Pankaj Kapoor, Managing Director of real estate consultancy Liases Foras, told BusinessLine.”

The Daily Nation on Kenya. “The property market in Mombasa County is experiencing a major shift, with low-cost houses now making their way into upmarket areas of Nyali and Shanzu. The shift from high cost to low -cost housing units comes in the wake of concern by developers that sales of high-end properties were dwindling after supply exceeded demand, with prospective home owners preferring to buy low cost housing units.”

“According to figures released by Hass Property Index, Nairobi is experiencing a glut especially in the high-end segment, with prices for housing units falling in the city’s outskirts. Rent for high-end housing units are also projected to decrease. In Mombasa, although property agents say there are no official statistics yet, the same trend is being witnessed. According to Rescom Properties Managing Director, Michael Masila, sales for high-end units have slowed down.”

“‘I have been trying to sell a house located in Shanzu, going for Sh20 million, for the past one year but have been unable to get a buyer,’ he says.”

The Associated Press on Brazil. “The celebrations are done and the torch extinguished, but now that the Olympics are gone, Rio is left with questions about what will become of the city’s plan to convert the Olympic Park into a bustling recreational district with luxury apartments and offices. Amid a continuing national recession, the consortium behind the park has sold less than 7 per cent of the Olympic Village’s 3,604 apartments, and real estate experts worry a similar fate is ahead for the main Olympic site.”

“‘Right now we are in the bottom of a well. Nobody is making offers on apartments, and there are many apartments sitting empty,’ said Claudio Tavares de Alencar, president of the Latin American Real Estate Society.”

“There’s an oversupply of apartments all over Rio, obvious by the sight of partially built towers. After years of rising, prices per square meter have dropped 6 per cent in the last year and a half to 10,241 reals, or about $3,200, according to real estate index FipeZap. With financial institutions charging prohibitively high rates for lending, real estate agencies have begun offering incentives such as honeymoon trips or private school tuition.”

“Carlos Carvalho, the billionaire who developed the Olympic Park and village, has infuriated many in a country that desperately needs subsidized housing for saying the athletes village caters to the city’s elite. It is called ‘Ilha Pura’ — Pure Island — and apartments average 1.4 million reals ($435,000), offering amenities such as pools, a spa and a beauty salon. Penthouses of 1,700 square feet go for up to 2.3 million reals ($700,000). Another wealthy developer is building luxury marble and glass high-rise apartments around the Olympic golf course, with units that will start at about $2 million.”

“‘They are very nice-looking apartments,’ said Idenir Cunha, a 67-year-old retired physician’s assistant who lives in an older complex nearby. ‘If I had the money, I would love to buy one. But in the middle of this crisis, who does?’”

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Comment by Ben Jones
2016-08-22 17:35:59

‘There’s an oversupply of apartments all over Rio, obvious by the sight of partially built towers. After years of rising, prices per square meter have dropped 6 per cent in the last year and a half to 10,241 reals, or about $3,200′

“Right now we are in the bottom of a well. Nobody is making offers on apartments, and there are many apartments sitting empty,” said Claudio Tavares de Alencar, president of the Latin American Real Estate Society.’

No more bananas on offer for your shack Rio. The Olympics are over and you guys are hosed. I’ll still do a fund raiser to get you out, but remember, the stipulation is you can’t come back to the US.

Comment by azdude
2016-08-22 19:10:42


Comment by Ben Jones
2016-08-22 19:32:51

I thought those pics from Tribeca in the earlier thread were depressing. I don’t know why people think New York is so fabulous. The run down “redbrick” (as Kerouac used to say, like it was one word real fast) buildings were plain when they were built. Now they’re old and drab. I was never so disappointed as when I visited the French Quarter in NAH-lins in the 80’s. People said, “it’s really old.” Yeah, and it looked like crap when they built it and it hasn’t gotten any better. Bah, on the redbrick.

The apartments I manage are nice. The renters really like it. It’s not for me but they genuinely prefer it to single standing shacks.

Comment by The Crushin' Russian
2016-08-22 20:33:17

There is nothing more depressing than being bled dry by a massive mortgage payment on a rapidly depreciating asset every month for your entire working career.

Why buy it when you can rent it for half the monthly cost?

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Comment by palmetto
2016-08-23 05:58:44

“I don’t know why people think New York is so fabulous.”

I don’t either, and I was born in mid-town Manhattan. It’s dirty, depressing and it stinks, for the most part. I know people who have New York City in their blood, my mother was one of them. I could never understand it.

I’ve read a couple of histories of the city, and apparently, for much of its history, it’s been a brutal, graft and crime-ridden place.

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Comment by dandroidz
2016-08-23 07:27:23

A couple days as a tourist in NYC is all I ever need. The smell of Chinese owned fish shops, hobo urine, and taxi honking is not worth it. Plus every Broadway show is $150+ for bad seats. I still have yet to do a Broadway show.

Comment by snake charmer
2016-08-23 07:14:15

Carvalho is notorious for his overt elitism, referring to his class as “noble.” The Latin American elite is many things, but noble is not a word commonly used to describe it. From the Atlantic Monthly:

“One of them, a 92-year-old billionaire named Carlos Carvalho, controls some 65 million square feet of property in the area. His most famous project for the Olympics is the so-called Athletes’ Village. After the games are over, all 31 of the Village’s 17-story towers will be transformed into luxury condos featuring multiple swimming pools, tropical gardens, and an unobstructed view of Jacarepaguá Lake. It makes for a glaring contrast with London, where athlete accommodations were largely converted into affordable housing after the 2012 Summer Games.

Carvalho is less tactful than Paes. In an interview with The Guardian last year, he spoke of his dream to turn Barra into “a city of the elite, of good taste.” This is why he dubbed the Athletes’ Village development Ilha Pura, or pure island. “It needed to be noble housing,” Carvalho said, “not housing for the poor.” On social media, some Brazilians expressed disgust at what they saw as Carvalho’s brazen elitism.”

Comment by 2banana
2016-08-22 17:42:43

Didn’t the same thing happen in Vancouver?


“The celebrations are done and the torch extinguished, but now that the Olympics are gone, Rio is left with questions about what will become of the city’s plan to convert the Olympic Park into a bustling recreational district with luxury apartments and offices. Amid a continuing national recession, the consortium behind the park has sold less than 7 per cent of the Olympic Village’s 3,604 apartments, and real estate experts worry a similar fate is ahead for the main Olympic site.”

Comment by Ben Jones
2016-08-22 18:14:00

‘After years of rising, prices per square meter have dropped 6 per cent in the last year and a half to 10,241 reals, or about $3,200′

My calculator says this is $355/sq ft.

This guy should do comedy:

‘We didn’t have as many homeless billionaires as the number of houses that were planned for them’

Comment by In Colorado
2016-08-23 08:17:32

$355 a sq ft in third world Rio, where a college grad is lucky to make $1000 a month?

Eons ago (1968) Mexico hosted the Olympics and built a very sensible and no nonsense Olympic Village. After the games were over the apartments were put on the market and quickly sold, because they were sensibly priced, were spacious and seemed reasonably well built (they did survive the 1985 quake undamaged, IIRC). I have relatives who live there to this day. I don’t remember the exact prices back then, but I seem to recall that they were about $5000 USD, which was real money back then. The people who bought them were college educated, middle class Mexicans.

The crazy thing now is that few middle class college grads in Mexico could afford to buy a 50 year old flat in the Olympic Village today.

It’s a bubbly

Comment by Senior Housing Analyst
2016-08-22 17:48:46

Shirley, MA Housing Prices Nosedive 27%YOY; Housing Correction Expands Nationally

Comment by Ben Jones
2016-08-22 18:23:05

These Market Watch things are written by UHS:

‘Home buyers in Seattle might be able to breathe a bit easier. That’s the feeling on the streets from many real estate brokers. From the MLS board to the Realtor association and brokers’ offices, the general murmur is that while the market is still very hot, we can feel a bit of a slowdown in the air. Some buyers are giving up. Some aren’t willing to waive all of their contingencies any longer. Cash buyers still win, and big offers still prevail, but buyers are negotiating a bit harder and sellers are playing along.’

‘A bit of a slowdown would be welcome in the Seattle real estate market. Just don’t expect prices to go down any time soon. The fundamentals for today’s buying frenzy are solid. Seattle has become a more valuable place to live.’

The only reason for a frenzy in shack buying is speculation. Fear of missing out or outright greed to cash in. And it always ends. Ask your neighbors in Vancouver.

Comment by The Crushin' Russian
2016-08-22 18:27:50

“These Market Watch things are written by UHS:”

That’s why MW has been relegated to the scrap heap.

Does anyone even read the garbage there anymore?

Comment by Professor Bear
2016-08-22 23:25:06

“Does anyone even read the garbage there anymore?”

Think free entertainment.

Comment by Ben Jones
2016-08-22 18:45:04

Oh dear…

‘A Texas bankruptcy filing by WholeLife Properties may scuttle the company’s planned mixed-use Wildwood development north of County Road 466A across from Pinellas Plaza.’

‘The company filed for Chapter 11 bankruptcy on June 7 in Texas Northern District Federal Court. WholeLife announced last December that its planned development would include 543,500 square feet of commercial space, 172,240 square feet of institutional space and more than 700 homes and apartments.’

‘The first phase, scheduled to begin as early as last spring, called for 400 luxury bungalows expected to rent to adults age 55 and older on three-year leases for $3,000 to $4,000 a month. An apartment building of up to six stories also was planned for the site.’

‘Now, the project could be scrapped due to the bankruptcy, which was prompted by a lender’s May 13 letter threatening foreclosure on vacant land the company owns in McKinney, Texas.’

‘On July 19, federal trustee William Neary filed a motion to appoint an independent trustee to oversee the case or convert it to a Chapter 7 bankruptcy because WholeLife’s attorneys withdrew from representing the company. The attorneys said WholeLife had paid just $20,000 of its $50,000 retainer. Franklin Hayward took over as WholeLife’s attorney in August.’

‘Neary said WholeLife also had failed to provide tax returns and operating statements and that Lowery did not attend an initial debtor meeting.’

Comment by Ben Jones
2016-08-22 18:52:56

‘Under-fire EU Chief Jean-Claude Juncker risked widening divisions with European leaders today by saying borders were the ‘worst invention ever’. He called for all borders across Europe to be opened, despite the chaos caused over the last year from the flood in refugees fleeing Syria and the wave of terror attacks hitting various continent’s cities.’

‘The remarkable comments will further undermine Mr Juncker’s precarious position as European Commission President. He has faced repeated calls to quit after his failure to keep Britain in the EU and the refugee and Greek debt crises. Today he accepted the Commission ‘deserves criticism’ but insisted national government’s ‘have to share the blame’.’

‘Speaking at the Alpbach Media Academy this morning, Mr Juncker said: ‘Borders are the worst invention ever made by politicians.’

‘The contentious remarks from the Brussels chief are the polar opposite of moves by elected leaders of EU member states who have tighten their borders over recent months after more than a million entered the bloc from Syria in less than a year.’

‘Mr Juncker also said a stronger EU was the best way of beating the rising trend of nationalism cross Europe. ‘We have to fight against nationalism, we have the duty not to follow populists but to block the avenue of populists.’

‘The embattled EU Commission president described Brexit as an ‘unheard-of political crisis’ for the EU but told EU member states that the only way of overcoming the challenge of Britain leaving would be to remain as one. ‘In the concentration of globalisation and European problems, we must not lose our way,’ he said.’

Comment by Ben Jones
2016-08-22 18:54:18

Jean-Claude Juncker drunk and bitch slaps leaders

Comment by azdude
2016-08-22 19:05:49

whats up with all the kisses?

Comment by Professor Bear
2016-08-22 23:28:27

Old men kissing each other on the lips…bletch!

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Comment by phony scandals
2016-08-23 06:47:34

‘NO’ German Girls Given TEMPORARY TATTOOS To Help Prevent Swimming Pool Sex Attacks

UK Express - August 23, 2016 90 Comments

The small press-on designs also sport angel-like wings and are part of a new prevention campaign launched in the Bodensee district in the state of Baden-Wurttemberg.

Veronika Wascher-Goggerle, the Women’s and Family representative of the district, is behind the launch and said the press-on tattoos would also help raise awareness over the growing issue of sex attacks in swimming pools.

The Bodenseekreis is famous for its bathing and boasts numerous indoor and outdoor swimming pools.

Alleged sex attacks by migrants have caused heated debate in the area over the last few months and some pools are hiring extra security – or even banning asylum seekers altogether.

Swimming pool sex assaults a big issue in Germany

However, Wascher-Goggerle does not want to associate her campaign with any problems with migrants, stating that there have always been sexual abuse problems at swimming pools, even before the start of the refugee crisis.

Comment by oxide
2016-08-23 09:59:20

Let me understand this: if a girl is wearing an angel wing tattoo, a potential rapist (migrant or no) is going to say - “Oh no, this one has raised her awareness! Better stay away from *her.*”

No thanks. This is what mace (or, “a” mace) is for.

Comment by snake charmer
2016-08-23 07:08:55

Wouldn’t a “stronger EU” eventually require the equivalent of EU nationalism? A political union supplementing the existing economic union? I cannot see that happening.

Junker thinks borders are the worst invention ever because he can ensconce himself in Brussels and pontificate, without having to confront the consequences in his daily life.

Comment by Overtaxed
2016-08-22 19:20:03

Melbourne and Sydney are really beautiful places to live. However, that said, the prices there are simply beyond any reason. And it’s not just the price of houses, everything is massively expensive; food, cars, taxes and housing. I’ve been to most of the highest priced cities in the world and even still, Melbourne (and Geneva) have to rank up there with the most outrageous I’ve ever seen.

So, given that, you have to think there’s a massive bubble there. The prices being that high for everything means there should be less to spend on housing.

Comment by Ben Jones
2016-08-22 19:25:54

You might have missed all the Chinese FB’s there recently, turning out to be not so all cash after all. A few months ago a couple of undercover guys went around applying for loans and most of the Australian loan guys were coaxing them how to fib on the applications. It’s the same ol same ol.

Comment by dandroidz
2016-08-23 03:45:58

Housing Market is All Good, Best time in History!

What a joke. This columnist justifies this housing madness by saying the hard hit speculative areas are still at pre-2008 levels, therefore the whole market is healthy. Jump in now, or forever miss out guys!!

Comment by azdude
2016-08-23 06:09:22

I know someone who just pulled 50k in equity to to some remodeling cause his house in so cal has went up in value so fast.

Equity and capital gains from stocks! JUST WIN BABY!

Comment by Palm Beach County
2016-08-23 03:52:50

Opinion: This is the best time in history to invest in real estate

By Jeff Reeves
Published: Aug 23, 2016 5:27 a.m. ET

Why the housing market isn’t headed for another bubble

Comment by The Crushin' Russian
2016-08-23 05:17:00

It’s early yet to be buying a house. Buy after prices crater.

Comment by azdude
2016-08-23 06:03:40


Comment by The Crushin' Russian
2016-08-23 06:52:22

Pull yourself up out of the gutter, cheer up and remember az_donk…. Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.

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Comment by azdude
2016-08-23 07:10:00


Comment by phony scandals
2016-08-23 06:04:34

From the Marketwatch article…

“For starters, let’s talk about the real estate environment. Generally, it’s quite good.”

At first glance I thought that said…

For squatters, let’s talk about the real estate environment. Generally, it’s quite good.

Las Vegas residents on edge over invasion of squatters | The … - - Cached - Similar pages
May 14, 2016

Comment by Hard Rain
Comment by dandroidz
2016-08-23 06:07:54

Bull Sh!t. In my town on the Route 128 beltway I’ve seen 4 or 5 properties listed in the last week or so, on the same block no less. People must be sensing the top. Loads of people in the North Shore and suburbs around Boston are at or close to retirement age. Some of them have enough sense to cash out and go to a cheaper state like FL. This housing shortage is a crock.

Comment by snake charmer
2016-08-23 06:52:13

When I first moved here in the early 1990s, Florida was inexpensive, which made sense because wages in this part of the country were low. But the housing bubble, particularly the global treatment of residential housing as an asset class, changed the expenses part of the equation. We haven’t become NYC or San Francisco, but Florida is much less of a bargain, even comparatively, and wages remain low.

Also regarding my state, I was in Captiva earlier this year and learned that, on an island with less than 400 permanent residents, 100 houses are for sale. The source of that information was the guide on our tour boat, who informed us in between dolphin viewings that she was a realtor too.

Comment by dandroidz
2016-08-23 07:14:59

Eh I think compared to up here in New England/Boston, where people pay $400,000 for a 150 yr old house that needs work, FL is still a relative bargain. I have no doubt snow birds have driven up the prices in FL, and foreigners (especially in Miami). But my ladies’ family bought a nice little condo in WPB for under $100,000, they could sell their current residence, SFH, 25 yrs old, for $600,000.

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Comment by The Crushin' Russian
2016-08-23 07:19:16

DebtDonkeys pay $400k for a 15 year old house that needs work too.

Comment by palmetto
2016-08-23 07:30:23

“The source of that information was the guide on our tour boat, who informed us in between dolphin viewings that she was a realtor too.”

LOL, that’s a good marketing tactic right there. Not only does she make a little money from being a guide, but I bet she picks up the occasional client from those tours.

If the zika outbreaks keep multiplying, though, Florida may return to its former status faster than expected. I saw Bob Buckhorn’s (mayor of Tampa, for those not familiar) appearance on the news yesterday, against a backdrop of a scummy pool at an abandoned house, discussing how to reduce the mosquito threat. Along with his invitation to Amy Schumer to return to Tampa.

This has been one brutally hot summer, snake. I thought last summer was bad, but this one takes the cake. Worst yet.

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Comment by snake charmer
2016-08-23 08:32:53

It’s been excruciating, but to me, last summer was worse because of the almost three feet of rain that fell. It’s almost unbearable when temperatures in the mid to upper-90s alternate with almost Biblical deluges. Plus, the summer weather pattern, which normally ends around Halloween, lasted all the way until Christmas.

I tell people who are thinking about moving here to visit in August and then decide. It’s supposed to be 96 today.

Comment by dandroidz
2016-08-23 11:09:19

Had a wedding in WPB in early June, my God I do not miss living in the south. 93-95 everyday and 80+% humidity. Suffocating.

Comment by azdude
2016-08-23 05:38:18

Let me guess. All eyes are back on the FED today?

Comment by Professor Bear
2016-08-23 06:09:24

Falling oil prices are one of the most powerful forms of economic stimulus known to man. $60/bbl is still a long ways off…maybe never again!

Not even OPEC can save the struggling oil market now, Goldman warns
By Sara Sjolin
Published: Aug 23, 2016 7:47 a.m. ET
OPEC freeze deal would be ‘self-defeating’, GS says

OPEC failed at reaching an output deal in Doha in April, and hopes are fading the cartel will agree on anything this time

OPEC production freeze or not, the oil market is not going to recover anytime soon as troubled oil-producing nations prepare to ramp up production and pave the way for hundred of thousands of barrels to be released into the already oversupplied market, Goldman Sachs warns.

Libya, Iraq and Nigeria — which all have suffered from severe supply disruptions — last week started to show the first signs of ramping up production, seen as halting oil’s nascent recovery, according to the bank.

The moves, however, were largely overshadowed by growing expectations the Organization of the Petroleum Exporting Countries will agree on capping output at an informal meeting in Algeria next month, helping crude (CLV6, -0.97%) last week log its best week in more than five months. Additionally, a sharp drop in the dollar (DXY, -0.22%) has also pushed up oil prices.

“We believe neither [OPEC freeze or dollar slump] will be sufficient to support prices much further,” the Goldman strategists, led by Damian Courvalin and Jeffrey Currie, said in note dated Monday.

“In our view, thawing relationships between parties in conflict in areas of disrupted production would be more relevant to the oil rebalancing than an OPEC freeze, which would leave production at record highs and could prove counter productive if it supported prices further and incentivized activity elsewhere.”

Goldman says at least 100,000 barrels a day in total from those countries will be unleashed to the market in the second half of 2016, dealing a blow to a sector that’s already buckling under from high production and oversupply globally. At that rate, the bank sticks to its view that crude will remain in the $45-$50 range through next summer.

Comment by azdude
2016-08-23 06:12:58

A strong dollar is helping to keep prices high. Thank you janet.

Comment by palmetto
2016-08-23 06:31:08


Not exactly a helpful appearance for her. Lol, that joke about “take my pulse” rather backfired.

Comment by phony scandals
2016-08-23 07:30:33

BRILLIANT! ‘Hillary Hospital’ Signs Welcome Hillary Clinton to LA for Her Hollywood Fundraising Gigs

Jim Hoft Aug 23rd, 2016 7:10 am

Signs and posters appeared in front of Cedars-Sinai, St. John’s, UCLA and Los Angeles Children’s Hospital yesterday and overnight.

The signs used HILLary Clinton’s logo and mimicked international hospital signs with the distinctive H. The signs also featured the word “ill” in the middle of Hillary’s name.

Signs were spotted in front of buildings with the names of Cheryl and Haim Saban, who hosted HILLary Clinton’s fundraiser yesterday and Steven Spielberg who also has contributed greatly to Clinton’s campaign. - 284k -

Comment by azdude
2016-08-23 06:39:30

“As for Japan, “the market is driven completely by the BOJ’s buying rather than views on each companies’ earnings,” said a fund manager at a Japanese asset management firm.

The endgame, when it strikes, will hardly be a surprise: a quick historical lesson of what happens when the government nationalizes all capital markets, if one can even call them that, look at what happened with the USSR. For now, however, the money printers are spinning and “one has to dance.”

I guess if you have good connections to the BOJ you can make a lot of cash.

Comment by palmetto
2016-08-23 07:10:28

Hey, Colorado, if you should peek in here, this is the status on the Trump appearances in your neck of the woods:

He’s going to do a fundraiser in Aspen, but the immigration speech in Denver is cancelled, along with some other appearances in Oregon and Nevada as well.

My guess is that the “leaks” regarding immigration were in fact a trial balloon, to see how much the base would tolerate. Including Jeff Sessions. Had it showed promise, or even mild tolerance, this would have been the week of an immigration pivot, laying out policy and procedure, and probably some admonitions to the base about bigotry. I’m thinking there was considerable pushback, so they scrapped the immigration apology tour. And are apparently re-grouping around the Clinton Foundation stuff.

I should have known better than to diss Kellyanne Conway. She’s a pro with years of polling experience and knows how to turn on a dime.

Comment by phony scandals
2016-08-23 07:47:16

Seattle could open housing for homeless where it’s OK to use heroin … - - Cached - Similar pages
19 hours ago

Comment by Sean
2016-08-23 07:49:59

Worked Thru 4 Bubbles – They All End The Same
August 23, 2016

The three primary drivers of the economy are starting to head south: retail, housing, autos. I can smell the housing market slipping away now. I’ve been early on housing, like I was when the mid-2000’s Bubble 1.0 popped, but I was eventually very correct (I sold my dream house in November 2004).

The housing market is beginning to crater. I draw on “hands on” data from the Denver area because I can get “boots on the ground” due diligence accomplished. Denver is considered somewhat of a demographic “bellweather” for economic trends as they unfold. I don’t care what the media propaganda is reporting, in Denver housing sales are rapidly slowing, inventory is rapidly building and prices are falling. I’ve witnessed two $2 million+ homes in my area reduce their offer price 14% and 20% respectively shortly after their initial listing.

Comment by Apartment 401
2016-08-23 08:58:04

New Bloomberg article:

“In the late 1990s, Americans started referring to the new tract-built luxury homes popping up in suburbs across America as McMansions, a biting portmanteau implying that the new structures were mass-produced and ugly, with added, implied snark that their denizens, however wealthy, lacked the sophistication to tell filet mignon from a Big Mac.

Lately, these homes have come in for a fresh round of scorn, thanks to an anonymously authored blog that has been breaking down the genre’s design flaws in excruciating detail. Early posts lambasted builders for erecting garages bigger than the homes they’re attached to, a tendency toward dropping giant homes on tiny lots, plus shoddy construction and a mishmash of contrasting styles. (Gothic Tudor, anyone?)

It’s fun reading that nevertheless raised the question: How well have these homes kept their value? Not well, compared with the rest of the U.S. housing market.”

Comment by snake charmer
2016-08-23 11:21:52

A curious article. I read it carefully but still don’t understand what the “premium” metric is supposed to measure. But I do like the linked blog,

Comment by Apartment 401
2016-08-23 10:34:50

“We as a society tend to overvalue homeownership, at least from a financial perspective. Were it not for the psychic and sentimental benefits of homeownership, it’s otherwise hard to imagine financial advisers counseling their clients to dump all their savings into a single, giant, highly illiquid asset.

Especially one that, on average, shows such meager returns.

Over the past century, home prices have risen an average of about 0.6 percent per year, according to data from economist and Nobel laureate Robert J. Shiller. Investing in an index fund has, on average, far higher returns than owning, even after you take into account the costs of renting and the tax subsidies for buying.

For millennials, a mass lifestyle shift away from owning and toward either renting or crashing with relatives could be especially advantageous. That’s because buying a house not only locks up your savings; it also locks you, the owner, into a specific geographic location.

For workers who are just figuring out their careers — and who, given the unlucky timing of their graduations, are more likely to have started out in low-paying positions — this seems especially wrongheaded. We want young workers to be mobile and to have as few frictions for job-hopping as possible. Changing jobs is, after all, the main way young people get raises and derail themselves from a poorly paying job track.”–good-for-them/2016/08/22/818793be-68a4-11e6-ba32-5a4bf5aad4fa_story.html?utm_term=.40bbfe7850ad

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