Irrational High, High, High Demand For A Few Houses
A report from the Seattle Globalist in Washington. “When Gabriel was exploring whether to buy a new townhouse in Lake City, the deciding factor wasn’t location, size, or even price. It was the rapid depreciation of the Chinese yuan and a safe bet on the strength of the U.S. dollar. Gabriel, who didn’t want to share is full name, is a special kind of first-time home buyer. The only son of government officials in northern China, he’s come to Seattle to take community college courses in hopes of transferring to the UW next year to study computer science.”
“His new townhouse, like his new Jeep SUV and even his education, are like safe deposits for his family’s wealth: they can be used, enjoyed, and sold again without the fiscal accountability attached to a bank account back home. And with the added peace of mind of being fixed securely in U.S. currency. These investments, often made in suitcases of cash brought over undeclared from China, are such common practice among the rising millionaire class that the government issued a crackdown this year on foreign currency outflow.”
“But rather than slow the offshore spending down, the Chinese are desperate to get their money out — and they’re sending it, along with their college-age kids, to Seattle. ‘Groups of Chinese tourists come to our downtown office waiting room asking to see a condo right away,’ says Hong Beni O’Donnell, a Chinese broker with Windermere Real Estate. ‘A house listed at $400k will immediately receive offers at $500k or higher.’”
The Orlando Sentinel in Florida. “Orlando condo owners and real estate agents are studying federal reforms they hope will boost what has become one of the nation’s slowest recovering condominium markets. Restrictions on FHA mortgages for condo buyers are set to ease starting this month. Buyers will be able to get federally backed mortgages to purchase condos in buildings where two-thirds of residents are renters. In the past, at least half of residents had to own units to meet mortgage rules. ‘It would boost our business big time,’ said Thomas Allen, broker for Orlando-based Urbanista.”
“The new measures could literally open doors for renters who would like to start building some equity, said Helene Brotman, a broker for Premiere Property Group. ‘It would open this market for first-time buyers, especially at [renter-heavy] buildings like The Grande and Paramount,’ said Brotman, who rents a condo on the edge of downtown. But for her? She said she would be unlikely to buy because she gets too good a deal on her rental condo.”
The Topeka Capital-Journal in Kansas. “New home building in Topeka is lagging behind that of its nearest neighbors, sitting at less than half of pre-recession rates. In 2010, Topeka’s vacancy rate sat at about 10 percent. Although that has dropped and segments of the market are right, it boils down to ‘an over-supply of housing units,’ said Bill Fiander, director of the Topeka planning department.”
“Bobbie Flory, executive director of the Lawrence Home Builders Association, said it looks as if 2016 will see about the same rate of new homes built as 2015. The Lawrence market also is seeing home prices increase, which Flory attributed at least in part to the cost of raw ground and the development process. ‘The average-priced home in Lawrence, new construction, is $349,452,’ she said. ‘That is really high.’”
“Topeka Realtor Helen Crow said too many houses were built in Topeka in past years. Crow, who has been a Topeka-area Realtor for 43 years, offers a unique view of the capital city’s situation. ‘We have too many houses in Topeka,’ Crow said. ‘We have more houses than households. There are vacant houses everywhere. What sells is the trendy look, the HGTV perfection, the clean house. So there’s this irrational balance of high, high, high demand for a few houses. In the prime market spots within Shawnee County, we’ve seen prices go up this year, we’ve seen demand like we haven’t had in a decade. But we have half the town that struggles. The last (report showed) in the Highland Park district, only 15 percent of the houses offered for sale in 2015 sold. Eighty-five percent expired unsold.’”
The Bangor Daily News in Maine. “A 1950-built ranch-style house on Rankin Street may be the poster child for the problem of abandoned houses in the city. The owner of the house walked away from the property after the lender began foreclosure action, and now the structure is deteriorating rapidly. The City Council will consider next month requiring the owners of abandoned houses to register with the city and to maintain them, so they don’t become an eyesore or even a danger.”
“‘I want to make these owners uncomfortable for allowing these properties to crumble, especially when we have such a need for housing,’ Councilor Valli Geiger said of the new ordinance she proposed.”
“There are too many examples of homes being foreclosed on by banks and the structures are not maintained, she said. This ordinance is a common sense approach to deal with it, she said. Rockland Code Enforcement Officer John Root said he is aware of at least a dozen homes that are abandoned in the community. Often, he said, a bank begins foreclosure action, the owner will leave and the bank does nothing to maintain it. In many of these instances, the bank does not even proceed with foreclosure so no one takes responsibility.”
“The code officer said often times the property management companies are out-of-state and not responsive. One of those properties is the ranch-style house that was built in 1950 at 269 Rankin St. The property was bought in 2007 by Christopher Paniccia of North Providence, Rhode Island, for $154,275. He took out a mortgage with Quicken Loans Inc. for $146,550. A foreclosure action was filed in court by Bank of America in 2011, which had acquired the loan through a merger with another lender. Bank of America transferred the loan in 2015 to Nationstar Mortgage LLC of Lewisville, Texas. Nationstar filed a foreclosure action in April 2016. That matter remains pending in court.”
“A notice on the house refers anyone with concerns about the condition of the property to an out-of-state telephone number answered by Chase Property Management. Elizabeth Seymour with Chase said Thursday that the company has no record of owning that property and believes the posting of their phone number was a mistake.”
The Guardian in Nevada. “In Las Vegas, where an up-and-down economy creates big winners and desperate losers, thousands of houses sit vacant, abandoned to the gray-area between people who could no longer afford them and banks trying to get a handle on a spiraling inventory. Into the breach has stepped thousands of squatters, among them suspected scam artists who scheme to get utilities turned on at their chosen targets, living for free as they plot their end game: getting a bank to pay them to leave in a racket known as cash-for-keys.”
“Now, authorities are upping their game with new laws and more aggressive enforcement. North Las Vegas has created a taskforce of police, code enforcement and utilities officials that have developed ways to red flag foreclosed vacant houses before squatters get a chance to move in. A new law approved by the state legislature last year now brings possible jail time for such offenses as housebreaking and forcibly entering a vacant home to take up residence or letting someone else live there without the owner’s consent.”
“Victoria Seaman, a Nevada assemblywoman and real estate agent who helped sponsor the new anti-squatter law, said Nevada is leading the nation in tough new housebreaking laws. ‘This is a problem nationwide, but no more so than here,’ she said. ‘We’re hearing from other states who want to jump onboard with similar laws.’”
‘These investments, often made in suitcases of cash brought over undeclared from China, are such common practice among the rising millionaire class…’
What is the US now, Canada? I’m pretty sure this is illegal. And don’t give me this millionaire class stuff. Put a 3% tax on them or restrict loans and they stop buying shacks.
I’m pretty sure any American coming into this country with a suitcase full of cash, declared or undeclared, would be flagged for special attention immediately. Any American depositing such a large sum in a bank likely would be flagged, also immediately. Yet this racket is allowed to continue.
“Gabriel’s” money comes from his parents’ legitimately-earned salaries, no doubt. It’s all good!
I’m guessing that the cash was laundered offshore, then “legitimately” wire transferred to our pristine financial institutions.
The question is whether the “suitcases of cash” is literal. If they literally are buying property with cash, there should be red flags galore.
The car dealers take lil homey g’s walmart bag of cash and lay it out as payments below the threshold so he doesnt raise attention on hos eacalade purchase.
True story: I know a guy who semi retired and built a place in Jakarta (wife likes to shop there), really big and nice apparently. Went to sell it (wife and him got deathly sick every year, couldn’t take it) and the buyer was a guy that brought the proverbial briefcase with cash. Always took a different route to the house as well to avoid being tracked.
Previous house he had he made a mint on as well - sold it to some schlub from Apple. Yuuuuge ocean view. Not too envious of his money (he has porsches, bmws, ferraris) - looks like he’s dead and is a total cuck - wife spends his money like its water falling from the sky. Never worked and no kids, sole job is to spend his money!
‘A notice on the house refers anyone with concerns about the condition of the property to an out-of-state telephone number answered by Chase Property Management. Elizabeth Seymour with Chase said Thursday that the company has no record of owning that property and believes the posting of their phone number was a mistake’
Well that settles it. Elizabeth said so and all follow up stops I guess.
Jeebus, just slap a $50k lien on it and Elizabeth will be calling contractors left and right.
‘Restrictions on FHA mortgages for condo buyers are set to ease starting this month…‘It would boost our business big time’
And the commissions too, I suppose. The UHS are bragging about how hard they lobbied to get this done. It’s a lot more than just the percentage of renters in the condos too, look at the details.
No law was passed, no vote taken. Drip, drip.
“EASE” just in time as condos are scking wind
smells like smelly mel watt
“Victoria Seaman, a Nevada assemblywoman and real estate agent who helped sponsor the new anti-squatter law, said Nevada is leading the nation in tough new housebreaking laws.
Meanwhile, the real problem, banks’ failure to accept responsibility for houses and mortgages that deadbeats have walked away from, remains unaddressed. Until municipalities make it financially untenable for banks to sit on vacant houses and do nothing, the problem will fester. Communities should slap increasingly onerous fines and liens on them, then sell them at auction at true market value if banks fail to maintain and police the properties.
There’s an easy way to fix this. Get rid of that FASB ## rule which allows banks to book these houses on the balance sheet at their sale price. If a house appears abandoned (check the electric bill), simply send an appraiser out to re-value the house, taking condition into account. Now the bank suddenly has a bunch of deteriorating physical stuff (they hate physical stuff) on the books. Katie bar the door on fire sales.
They used to have to get rid of the house in a short time. Notice how this temporary, emergency measure isn’t even talked about anymore.
There was a reason why banks had these restrictions before.
And the Federal Reserve never mentions moral hazard anymore either. I remind myself of that every few days now.
> “And the Federal Reserve never mentions moral hazard anymore either. I remind myself of that every few days now.”
Yes, you mentioned that the other day, and it’s true. I haven’t heard that in ages from them. It’s a small but telling thing. Thanks for mentioning it.
Perhaps they realize that they have crossed the Rubicon.
Yup, it’s now the “new normal” baked into the banks’ cake. Their profits won’t survive without it, no more than a middle class family can survive without two professional incomes. Which means it’s time to pour money into the coffers of Congress to protect it at all costs.
I think the main issue is that FDIC banks aren’t holding the homes. They’re owned by the mortgage pools, managed by special servicers.
From the FDIC website, I tried to look back at what it looked like in a different recovery phase of the housing market…in the mid-1990’s, as compared to today.
On 12/31/96, FDIC insured institutions had total assets of $5.6T, and $2.6 Billion in 1-4 unit residential.
On 6/30/16, FDIC insured institutions had total assets of $16.5T and $4.1 Billion in 1-4 unit residential.
The homes aren’t owned by the banks.
‘Neil Barofsky, the congressionally appointed watchdog for the Troubled Asset Relief Program, which pumped $700 billion to banks, auto makers and homeowners after the crisis, argues in the book that the Home Affordable Modification Program introduced in early 2009 was poorly thought out and executed, opening the door for abuse.’
“The hurried rollout of HAMP would soon bring with it a rash of misconduct and criminal activity,” Barofsky writes.’
‘As it turned out, the main beneficiaries of the mortgage program were the banks — a repeated theme in Barofsky’s book, “Bailout: An Inside Account Of How Washington Abandoned Main Street While Rescuing Wall Street.” The book is fairly blistering in its assessment of the Treasury Department’s handling of the bailouts, saying Geithner & Co. consistently took pains to avoid causing problems for the banks, often at the expense of homeowners and taxpayers.’
‘The few details that did come to light troubled Barofsky. The program was essentially going to be operated by mortgage servicers, who were not prepared to handle millions of modifications. They also had no incentive to help homeowners, according to Barofsky, because in a foreclosure they get their fees before anybody else.’
‘In a meeting with Geithner — this one involving fewer f-bombs than others — Barofsky says he finally realized the root of the Treasury Department’s apparent lack of interest in helping homeowners: They apparently had another goal in mind. At the meeting, Elizabeth Warren, then chair of a congressional oversight panel established in 2008 to oversee the bailouts, questioned Geithner about HAMP’s ability to help homeowners — not the last time she would grill him.’
“In defense of the program, Geithner finally blurted out, ‘We estimate that they can handle ten million foreclosures, over time,’ referring to the banks. ‘This program will help foam the runway for them.’”
‘To Barofsky it seemed that Geithner saw HAMP mainly as a way to stretch out the foreclosure process, giving banks time to recover from the crisis without having to be hit with a wave of foreclosures all at once.’
“Helping the banks, not home owners, did in fact seem to be Treasury’s biggest concern,” Barofsky writes. “HAMP was not separate from the bank bailouts; it was an essential part of them.”
“Helping the banks, not home owners, did in fact seem to be Treasury’s biggest concern,” Barofsky writes.
When Ron Paul tried to rein in the Fed and its bankster accomplices, 95% of the functional retards called the ‘Murican electorate instead voted to bend over for the crony capitalist status quo. So Treasury was just doing the will of the sheeple.
10-4 make them sell and achieve price discovery
Nobody even talks about that “temporary” suspension anymore. Sounds permanent to me. It’s nothing more than a “heads I win, tails you lose” system designed for bankers and crony capitalists.
http://www.bloomberg.com/news/articles/2016-10-04/manhattan-apartment-sales-plunge-20-as-homebuyers-get-pickier
There are a lot more apartments available for purchase these days in Manhattan. And fewer people are buying.
Sales of previously owned condominiums and co-ops fell 20 percent in the third quarter from a year earlier as potential buyers grew cautious amid more choices, according to a report Tuesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There were 5,290 resale apartments on the market at the end of September, 53 percent more than the number available in late 2013, the lowest point for listings.
The swelling inventory is providing an opportunity to New Yorkers shut out of a market in which construction has been dominated by ultra-luxury condos aimed at the wealthiest buyers. Resales, particularly those priced at less than $1 million, were in chronically short supply in recent years, and those that made it to the market sparked bidding wars. Now, more owners are listing apartments to profit from climbing values, and they’re finding lots of company.
Bill Clinton calls Obamacare a “crazy system” that “doesn’t make sense” (while ignoring Hillary’s role in creating this debacle).
http://www.americanthinker.com/blog/2016/10/bill_clinton_calls_obamacare_a_crazy_system_that_doesnt_make_any_sense.html
Here is a quote from a friend of mine: “It would be really handy, starting in a few months, to have two parallel universes: one in which supporters of Hillary might learn by example how idiotic it was to support her, and one in which supporters of Trump might learn by example how idiotic it was to put him into power.
But since we don’t have that, here is what will happen instead: a narcissistic, authoritarian megalomaniac will get into power and use the violence of the state to do a bunch of evil crap. Those who SUPPORTED that maniac will then say that things would still have been even WORSE with the other one in power, while those who supported the OTHER maniac will say that this only proves that they were right, and that THEIR candidate should have been elected.
And then we’ll do it all again in another four years. Because too many people are gullible and stupid.”
the FSA isn’t gullible or stupid. They get pols to steal your sht and give it to them.
‘Because too many people are gullible and stupid’
First of all, this is the problem of discussing things on the internet. Imagine you were at a gathering and went on this rant. You would quickly be talking to yourself. People don’t want to hear someone tell them they are stupid. Do you listen to someone say that about you?
Secondly, it’s not constructive. We have a form of government, however flawed, that requires elections. That involves the exchange of ideas. If I say, “it’s pointless, everybody is too stupid,” it ends the exchange. We have a candidate that said huge parts of the electorate are deplorable, irredeemable. That’s inherently elitist. What this means is leave the decisions to us, you aren’t capable. A lot of people fought and died so we wouldn’t have that type of system and I for one am glad of it.
So we have this way of governing ourselves, flawed though it is, certainly preferable to having someone do it for us. That means everybody has a say. I may not agree with this person or that, but any individual, no matter what their level of education or knowledge has a right to participate.
Bill lives under the belief that if enough people don’t vote that our “form of government” will dissolve and be replaced by a borderless, Ayn Randian, “voluntaryist” paradise.
He’s free to bring that up in polite conversation, but as you already mentioned, he will get few takers. And insulting people won’t get them to change their minds. He might be a good engineer, but I suspect he would make a lousy salesman.
Let us know which voluntary association or voluntary exchange that you want a badged thug to forbid. You are against voluntaryism, is what you imply. Which peaceful people should be murdered, jailed, or robbed? I expect no answer.
What the hell are you talking about? Colorado said nothing about badged thugs or forbidding voluntary exchanges. Nor did he say anything about peaceful people being murdered, jailed or robbed.
I’ll give you some voluntaryism. When I compare your comments to Colorado’s, I’d volunteer to be in a foxhole with Colorado rather than you. Providing he’d have me. He’s entitled to decide who he wants in the foxhole with him. How’s that?
You are the fool rattling on. You and In Colorado write on a subject you know nothing about. Here. http://Www.voluntaryist.com
Voluntarism appeals to those who believe that they have an innate advantage over other people. It is not about volunteering anything at all, in the sense of self sacrifice for others. It is rather about doing and getting what one wants regardless of the negative impact on others.
In old times this philosophy was called “Every man was a law unto himself.”
Blue,
you got that one wrong too.
Voluntaryism is not about no rules. It’s about no rulers.
Again, the link: http://www.voluntaryist.com
You guys still do not read what I wrote before. You practice voluntaryism most of your life. In fact, today you practiced it all day - voluntary association. Unless you wear a badge and uniform and follow orders (regardless of the moral issues), you practice voluntaryism SUCCESSFULLY 364 days a year. It’s not only moral, it’s practical and it’s what got humanity out of the caves.
And you still write trash about it.
That means you do not know what you are talking about. You are just pretending to know and make fools out of yourselves. Learn. Read. The link.
Bill,
You are kind of pushy about us reading your club link, don’t ya think?
Why should I not be if you guys keep writing false things about voluntaryism?
One hint: root of “voluntaryism” is “volunteer.” There is no force in volunteer.
“your club link”
You are also in that club and you refuse to realize it. (the exception is the day you vote and if you wear a uniform and badge and follow orders).
What false thing about voluntaryism did I say? All I said was that you believe it will usher in a better world. Of course we all are to some degree “voluntaryists”, but you take it to the next level, which you claim is “no rulers.” I got news for you bub, there are always rulers. If not elected, then self appointed strong men.
In one breath you say “You are also in that club and you refuse to realize it.”, then in the next one you call us “statists”. So which is it? Are we libertarians or are we jack booted fascist thugs?
Again, as Ben pointed out, insulting people will not win them over to your cause.
“You are also in that club…”
No. I have tendencies but I’m not in the club. I don’t want “no government”. I want an honest and just government. So I will vote.
I point out that you have two arms and two legs and you guys violently deny it. You practice voluntaryism every day until you hire agents to kill, kidnap and steal. That day is election day and undoes all the good you do.
You can do without those agents. You do without them 364 days a year and every day of the year when there is no election.
The problem with having no authority is, “how do you handle criminals?”
The criminals are bigger, more violent and ruthless, lower empathy and hold their lives less dearly than I do mine. In times past they would have been the rulers. In some places they still are.
Bill, those of us who have to live in the real world will never have the luxury of going along with your Libertarian la-la land fantasies. Open borders? Free trade? No effective regulation of rapacious banksters and corporations? How is that different than what we’ve already got?
“how do you handle criminals?”
They are running the government. Look up democide. In the 20th century the criminals you worry about murdered 262 million people.
“how do you handle criminals?”
They are the police. They are not constitutionally obligated to protect you. You have to provide your own defense. And they only show up to draw chalk around a body. Or they stop you and steal your cash (asset forfeiture) and use “broken twilight” as an excuse.
“how do you handle criminals?”
They kidnap you for growing plants they don’t like. They kidnap you for owning firearms they don’t like.
“how do you handle criminals?”
They rob you every paycheck.
They are the worst criminals ever. They are government.
You lose by default. The rest of us would like to effect change. We have a nonviolent avenue to do that. Best avenue if it has a chance. Others shed blood to keep this open to us. It is road that must be well traveled.
I’m going to start writing the RNC, emploring them to change their primary process to one that requires “rank voting”. Instead of picking your choice, you rank the candidates based on your preference.
Polarizing candidates won’t stand a chance.
Candidates that can articulate their vision and plan for America best would win.
“Candidates that can articulate their vision and plan for America best would win.”
You mean like Donald Trump?
“A lot of people fought and died so we wouldn’t have that type of system”
When? Certainly the Revolutionary War. And after that?
The system brought about by the Revolutionary War limited the franchise mainly to white, male loandowners. So a large majority of the population was treated as deplorable and excluded from politics.
You could also count the Civil War, where lots of men died so that black people were whole people.
And don’t forget that the Constitution — the product of the Revolution — allowed for an amendment process to allow black and women to vote without more fighting and dying.
’so that black people were whole people’
We’ve already been over that.
‘limited the franchise mainly to white, male loandowners’
Yeah, we should have kept being British subjects.
OK, good. Just so we’re clear on which people fought and died when so we don’t have an elitist system. Revolutionary War, and maybe the Civil War, depending on your point of view.
And look where we are today.
http://www.zerohedge.com/news/2016-10-04/us-considering-air-strikes-assad-regime-after-top-general-warns-it-could-lead-war-ru
So who has a say in this?
“The system brought about by the Revolutionary War limited the franchise mainly to white, male loandowners. So a large majority of the population was treated as deplorable and excluded from politics.”
That’s not how it is anymore. What’s wrong with you?
‘Clinton’s State Department was getting pressure from President Obama and his White House inner circle, as well as heads of state internationally, to try and cutoff Assange’s delivery of the cables and if that effort failed, then to forge a strategy to minimize the administration’s public embarrassment over the contents of the cables. Hence, Clinton’s early morning November meeting of State’s top brass who floated various proposals to stop, slow or spin the Wikileaks contamination. That is when a frustrated Clinton, sources said, at some point blurted out a controversial query.’
“Can’t we just drone this guy?” Clinton openly inquired, offering a simple remedy to silence Assange and smother Wikileaks via a planned military drone strike, according to State Department sources. The statement drew laughter from the room which quickly died off when the Secretary kept talking in a terse manner, sources said. Clinton said Assange, after all, was a relatively soft target, “walking around” freely and thumbing his nose without any fear of reprisals from the United States.’
It goes on to the “non-legal” solutions to the leaks matter.
“The system brought about by the Revolutionary War limited the franchise mainly to white, male loandowners. So a large majority of the population was treated as deplorable and excluded from politics.”
That’s not how it is anymore. What’s wrong with you?
Yes, I’m aware of that. It was you who mentioned the American Revolution.
‘Yeah, we should have kept being British subjects.’
As sick as it sounds a small minority love to be subjugated. Freaks.
What’s wrong with you? Don’t you understand context? Or does making tortured, literal statements apropos of nothing make your putter flutter?
Man, you must’ve messed yourself with delight the day you found this blog and discovered the proprietor believes everyone should have a say. I’ll bet you think he’s a real sucker for that, too.
Weird that ZH just happened to have a story on a man who got arrested, ARRESTED, mind you, for asking a question regarding the US-Israel involvement in the Middle East, right smack in the middle of the USA, in Kansas. ARRESTED!!!!!
http://www.zerohedge.com/news/2016-10-04/dire-free-speech-warning-issued-executive-director-kansas-city-library-system
What’s wrong with you? Don’t you understand context? Or does making tortured, literal statements apropos of nothing make your putter flutter?
Man, you must’ve messed yourself with delight the day you found this blog and discovered the proprietor believes everyone should have a say. I’ll bet you think he’s a real sucker for that, too.
There’s no context issue and there’s nothing wrong with me. I point out your nonsense on a regular basis and you just get angry and absurd. At least that Albuquerque Dan character learned a couple of things from me over the years.
And it sounds like you would to see some censorship on this blog.
“And it sounds like you would to see some censorship on this blog.”
If I did, Ben would ban me so fast my head would spin.
Yes, there’s a context issue and you know it. And there’s plenty wrong with you. Can’t understand what you’re reading for starters. The only thing I’ve learned from you is how toxic self-appointed hall monitors are. Prigot.
The Revolutionary War was a 100% estate tax on property legally owned by George III.
Explain the context.
Mind your manners! How can it be that EVERYONE thinks EVERYONE else is stupid?
It’s a mania.
I can’t wait to see Hillary get schlonged.
I’m with you. –>
Hillary should have gotten schlonged a long time ago. This is a good panel discussion put on by Judicial Watch, a non-partisan group that originally brought up the questions about Hillary’s emails and later the Clinton Foundation. 90 minutes, but actually a good watch once you get past the moderator’s intro.
https://www.youtube.com/watch?v=KsgapaYCs40
Hillaryous is unelectable.
But…but…green shoots!
http://www.marketwatch.com/story/two-fed-gdp-trackers-show-economic-growth-wilting-2016-10-03
IMF lowers U.S. economic forecast, warns of risks of anti-trade policies
The Port of Los Angeles is seen in this view from San Pedro in 2015.
(Nick Ut / Associated Press)
Jim Puzzanghera
The International Monetary Fund on Tuesday downgraded its forecast for the U.S. economy and warned that “persistent stagnation” here and abroad could add more fuel to a populist backlash against trade and immigration that would further stifle growth.
In its quarterly World Economic Outlook, the IMF significantly cut its estimate for U.S. growth this year, to 1.6% from a July estimate of 2.2%.
…
The IMF described worldwide growth as “subpar,” with a slowdown in the U.S. and other advanced economies being offset by slightly stronger output in developing and emerging nations.
…
You guys might get some crumbs from trickle down stock gains.
Otherwise be happy with your service jobs.
You get and take the job you deserve. No one else is responsible.
Anyone remember the bad old days?
You needed 20% down to buy a house.
Banks kept their loans on thier books and ate the bad loans.
Too many bad loans and bank executives got fired or went to jail.
Houses were affordable.
Then bigger and bigger government with more and more regulations gradually took over the housing lending market to make things fair.
How did that work out for you?
exactly buddy
now it seems credit is just created out of thin air to give people loans.
Its a house of cards all over again.
The financiers have everyone by the balls with credit creation. they call collecting interest work. LMFAO
Notice how many of the sports stadiums are sponsored by banks?
Denver = Debtver.
All those brand new vehicles towing trailers full of expensive shiny toys were “paid for” with HELOCs or cash out refis. Median household income here is less than $60,000, in case you forgot.
Actually it was working out just fine until some of those regulations were removed.
For example, Glass-Steagall regulations. Or regulations which had prevented banks from buying each other until they were too big to fail. Or, regulations which had prohibited teaser rates and less-than fully amortized monthly payments. Or accounting rules which had required banks to book the houses at current value instead of mark-to-fantasy. O ethics rules which had prohibited the banks from “owning” Congress, as Dick Durbin famously said of the Floor of the Senate. Or regulations which would have curbed the disregard of risk and rampant profit chasing on the part of Fannie Mae, which was a privately owned company until 2008.
You like likely counter that we should get rid of Fannie Mae altogether and let the banks sink or swim on their own. In that case, how would it have worked out for me? It wouldn’t have worked out at all. Housing would have been out of my reach; in fact it would have been out of the reach of most of HBB. And we would all be renting for life. Which is why Fannie Mae was created in the first place, 80 years ago.
‘how would it have worked out for me?’
You’d almost have your house paid off by now. Instead you have more than 20 years to go.
“…we would all be renting for life.”
The opposite is proved by my own experience.
‘we would all be renting for life’
Yeah, that’s why ownership is at a 50 year low.
Houses are overpriced I think overall 4x, more in some places. That is what government support has fostered, not affordability. Even at zero interest, an FB will pay twice what they would under the old system.
“Houses are overpriced I think overall 4x, more in some places.”
That point is apparently lost on Oxide, who believes the only effect of FHA lowdown policies is to increase affordability.
The unmentioned effect is redistribution. People who are in Uncle Sam’s favored groups get low-payment loans which give them a leg up in the market compared to people who are not in Uncle Sam’s favored groups.
The problems with today’s regulations is they won’t deal with core issue - debt generators who are able to sell off risk. They try to dance around the issue, generating the reams of regulation which have socially perverse results.
“Bureaucratic self-preservation might also explain the decision to adopt as broad of an exemption for QRMs as possible, so as to minimize any political fallout from the real estate and housing industries. Few will disagree that residential mortgage-backed securities played an important role in the 2008 financial crisis. For those in the audience involved in RMBS offerings, you must be quite happy with the broad exemption from the risk retention rules. For those of you in the audience who are involved in other types of securitizations that had little, if any, part in causing the financial crisis, you are probably wondering why you were unfairly targeted.”
I was particularly dismayed by the “one-size-fits-all” approach taken by the regulators to create a flat 5% risk retention requirement for all asset classes, except for securitizations involving so-called “qualified residential mortgages” (QRMs) for which the risk retention level is zero. These were arbitrary choices.
– https://www.sec.gov/news/speech/speech-piwowar-03012016.html
You needed 20% down to buy a house.
When exactly was this? the FHA has been around forever. I know my parents bought their first place in the early 60’s with a 3% down FHA loan.
As did my parents.
And the typical American family has a much higher standard of living than in the early 1960s.
The typical American family had a higher standard of living in 1913 than it did in 1776. Therefore not having a Fed was good for living standards.
You have to compare the Fed to the non-Fed period. The improvement in living standards in the past 100 years has to be a lot better than 137-year period that you refer to.
“You have to compare the Fed to the non-Fed period.”
Irrelevant. You can’t draw statistically valid conclusions based on one data point with myriad uncontrolled influences.
I know that. I was really just joking.
“The typical American family had a higher standard of living in 1913 than it did in 1776. Therefore not having a Fed was good for living standards.”
How is that statement different than the following?
“The typical American family had a higher standard of living in 2016 than it did in 1913. Therefore, having a Fed was good for living standards.”
The truth is that standards of living increased mainly for reasons completely unrelated to the Fed. The Fed may have sped things up or slowed things down differently than what would have occurred naturally, but over long periods of time, the Fed probably made little or no difference to the improvement of the standard of living for the average American.
“The truth is that standards of living increased mainly for reasons completely unrelated to the Fed.”
Exactly my point. But then I am not the poster who repeatedly mentions 1913 as the year when things started improving (just before we entered WWI, mind you).
Like hell they do. In the 1960s the typical mom could stay at home and raise the kids in an affordable house on a modest salary. Not so much today.
The typical “mom” can still stay home and a family can live on a modest salary if they were willing to live at a 1960 standard of living.
typical mom - how quaint
You had to have expensive mortgage insurance for under 20% down.
“You needed 20% down to buy a house.”
Down payments used to be higher in the “walk-away” states.
was that 1961 or earlier?? What year was the “good ol days?”
no one ever answers this…
Da Boyz are bailing from the Fed’s rigged, broken, manipulated “markets.”
http://www.businessinsider.com/goldman-sachs-analysis-ownership-of-us-corporate-equity-market-2016-10
Obama: gun salesman of the century. Hillary is going to boost this into turbo mode.
http://www.washingtonexaminer.com/gun-sales-hit-17th-straight-record/article/2603496
Is it too late to buy stock in Smith and Wesson? kinda hit a double peak this yr at $30. ($26 today)
“Global central bank policy makers have turned world financial markets into a casino, thanks to their unprecedented monetary policies, warned bond investor Bill Gross of Janus Capital Group on Tuesday. ”
http://www.foxbusiness.com/markets/2016/10/04/bill-gross-warns-financial-markets-have-become-vegas-casino.html
‘Gross has been lambasting ultra-loose central bank policies for hindering global economies by keeping so-called “zombie” corporations alive and inhibiting “creative destruction.” For several years, Gross and others have warned that zero and negative interest rates not only fail to provide an easing cushion should recession occur, but they destroy capitalism’s business models.’
“Our argument is that NIMs (net interest margins) for banks, and the solvency of insurance companies and pension funds with long dated and underfunded liabilities, have been negatively affected and that ultimately, the continuation of current monetary policies will lead to capital destruction as opposed to capital creation.”
But Mike thinks it’s a good trade off to ruin pensions for millions so he can refinance and save $50 a month.
“…it’s a good trade off…”
Some of us HBB posters have repeatedly raised the issue of low rates killing pension systems over the years, but I cannot recall any acknowledgement by the Fed that their policies might be creating such undesirable impacts.
If anyone has any evidence to the contrary, please post.
But Mike thinks it’s a good trade off to ruin pensions for millions so he can refinance and save $50 a month.
No, I never wrote that.
You own it now.
Central Banks
QE purchases near record even as doubts grow
Although doubts over central banks’ policies have risen, the pace of purchases is near an all-time high
Read latest:
Trump’s mudslinging puts the Fed in danger
an hour ago
Haruhiko Kuroda, Bank of Japan governor, has overseen a quantitative easing policy
© EPA
6 hours ago
by: Elaine Moore
Central banks are embarking on the largest quarterly purchase of assets since quantitative easing was introduced following the financial crisis, as policymakers double down on monetary policy despite growing concern it has reached its limits.
In the final three months of the year, the UK, Japan and Europe are expected to spend a combined $506bn on assets — the largest quarterly sum created since the early days of the US Federal Reserve’s QE programme in 2009.
Figures from JPMorgan Asset Management show that rolling quarterly asset purchases have intensified after the UK’s vote leave the EU as the Bank of England joins the European Central Bank and Bank of Japan in cutting interest rates and creating money to buy assets — mostly government bonds — in a bid to expand credit and spur investment.
Central bank governors including the BoE’s Mark Carney and ECB’s Mario Draghi insist QE has aided economic stability and prevented catastrophe, but the success of the scheme is contested by those who say inflation remains limp and that asset purchases have fuelled inequality, encouraged profligacy and hit the incomes of those who rely on savings.
“It is now nearly a decade since the financial crisis. In this time central banks have amassed huge balance sheets through quantitative easing and there is as yet no end in sight,” said Steven Major, global head of fixed income research at HSBC, who expects global bond yields to be no higher in 2021 than they are now.
…
This is what happens when you run out of millennial yuppies who will pay $1500 a month for a one bedroom apartment:
“According to California property management software company Yardi Matrix, Denver’s year-over-year rent growth fell to 2 percent on a year-over-year basis in September, below the national average of 4.7 percent and well below the double-digit increases experienced in past years.”
http://www.bizjournals.com/denver/news/2016/10/04/denvers-apartment-rent-growth-continues-to-slow.html
“This sucker could go down” — George W. Bush
Despite incredible student debt, millenials are flocking to expensive cities.,Boston, Irvine, San Francisco…
“Boston was one of the most popular cities to live post-college, LendingTree said, followed by Irvine, California, and San Francisco. The states with the highest outstanding college debt per student loan borrower included Washington, D”
http://finance.yahoo.com/news/crippled-student-debt-millennials-flock-141231392.html
Zoiks! No wonder apartment construction has been crazy in Irvine! Irvine Spectrum area is a big attraction and a lot of high tech businesses surround it. My office area has bike share so at you can take a bike to go to the Spectrum or Farmers market on Wednesdays. They just started yoga classes at my office area too. Whole Foods market nearby, 24 hour fitness, The Yardhouse…
Not quite walkable but that score gets higher every year here.
Four decades later, California experts find that Proposition 13 is a boon to the rich
Benjamin Franklin’s adage about death and taxes being the only certainties in this world long has required a footnote in California, where Proposition 13 has been chiseled into the tax structure since 1978.
The ballot measure limited property taxes to 1% of assessed valuation, barred reassessments except when a property was sold, and capped increases at 2% a year. Those are simple formulas, but they’ve generated passionate debates over their impacts for the better part of four decades. Last week, the state’s respected Legislative Analyst’s Office weighed in with a worthy new look at the most common claims about Proposition 13 and how well they hold water.
The study by Carolyn Chu and Brian Uhler of the Legislative Analyst’s Office clarifies much about the law and strips away plenty of underbrush accrued in the debate since 1978. Perhaps most important, the authors underscore how much we still don’t know about the measure’s impact, largely because the state hasn’t compiled statistics needed for the discussion.
That’s a reminder of the most enduring fact about Proposition 13, which is that California was not prepared to deal with the consequences of its enactment — and still isn’t.
Proposition 13 blindsided policymakers, who had to scurry to bring existing laws and assessment practices into compliance. They had to funnel revenues back to cities and counties that stood to lose billions in property taxes. Municipal losses were backfilled from the state’s multibillion-dollar surplus, which itself had fueled much of the discontent with property tax rates. Since then, legislative and ballot-box tweaks to the law have become a recurrent feature of California politics, because its inadequacies keep surfacing.
Chu and Uhler validate some common notions about Proposition 13. One is that it’s been a particular boon to wealthier Californians. “Because higher-income households own more, higher-value homes and Proposition 13 tax relief is proportionate to home wealth,” they observe. “The majority of Proposition 13 tax relief (in dollar terms) goes to higher-income households.”
They calculate that two-thirds of its tax benefits go to those with incomes above $80,000, and most of that to homeowners earning more than $120,000. The benefits to renters, by comparison, are speculative. While landlords may pass some of their tax savings on to tenants, the extent to which that happens is unclear, they say.
The authors document how the limitation on reassessments leads to huge variations in the tax bills even among similar, neighboring properties and similar homeowners. Among Bay Area homeowners aged 45 to 55, with incomes of $80,000 to $90,000 and homes worth $575,000 to $625,000, tax payments in 2014 ranged from $1,350 to $7,500.
The governing factor, of course, is the length of time between changes of ownership; the longer the period, the greater the mismatch between the property’s market value and its tax bill. This effect was memorably identified by financier Warren Buffett during the 2003 California recall election, when he observed that he paid $14,400 in taxes on his $500,000 Omaha home, but less than $2,300 on his $4-million Laguna Beach manse — and that the bill that year had risen by $1,920 on the former and $23 on the latter. “In effect,” he said, “it makes no sense.”
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-prop-13–20160929-snap-story.html
Oh look another hit piece on a law that, believe it or not, benefits property owners at all points of the income spectrum. Gotta agitate for a way to strip away legal protections from arbitrary reassessment. The government needs that money for Gibs!
Also, Prop 13 may not directly benefit renters, but you can bet that any tax increases due to it’s repeal will be passed on to tenants. Ergo a repeal would be bad for the poor/working people.
Landlords generally charge you what the market will bear, it’s not based on their expenses. They might make that excuse when sending you the rent increase notice, but don’t be fooled–if they thought that raising your rent would push you to an alternative residence, they wouldn’t do it.
They want to place the “blame” for the increase elsewhere, so you don’t get mad, and figure that every other landlord is doing it too…
If there is enough demand, they will raise your rent even if it *does* push you to an alternate residence. They did that to me. They had no reason to accommodate a single woman in a 3-bed townhome when there were plenty of double-and-triple income renters who would gladly pay that rent (and absorb the next rent increase).
“…a law that, believe it or not, benefits property owners at all points of the income spectrum…”
It mainly benefits people who bought California housing thirty years ago over new arrivals. When we got here in the mid-1990s, we locked in higher taxes on a starter home than people who had lived here for decades were paying on $1m+ homes.
A lot of California “progressives” support the high income taxes of California while prospering from the low real estate taxes and living in white/Asian neighborhoods (areas with no blacks or Hispanics). This has been going on for decades.
A millenial who loves California would do well by investing in Roth 401ks and Roth IRAs and be mostly into index stock funds. Maybe have some apartment REITS such as Avalon Bay, and rent small as close to the ocean as possible.
Presumable a lot of California “progressives” are themselves black or Hispanic.
No, most “progressives” I know are white or Asian
The people you know must not reflect the state’s population. California is around 1/3 Hispanic and they vote overwhelmingly for Democrats.
Irvine is 50% Asian… so, that makes sense. I remember visiting UCI in 1979 to play computer games. It was rural back then.
Simple solution.
Make the protections afforded by Prop 13 only apply to primary residences.
Yes, rich people would still get a greater benefit, but only if they are also residents, and thus paying CA income tax.
And investors wouldn’t get the protection (commercial property, etc.), nor would second homes.
Tax and spend, spend and tax.
When does it stop?
It doesn’t with an R or D in power.
That’s good.
WW2 still needs to be paid for, then Vietnam, Bush Wars….
medicare, soc sec…..
Boomers are living a lot longer….
get used to higher taxes or higher debts.
Houses represent irresistably lucrative illiquid assets for the Comrades of Proven Worth (D) who run the People’s Republic of Kalifornia to tax, tax, tax. They will find a way around Proposition 13. Forward!
‘A foreclosure action was filed in court by Bank of America in 2011′
But shadow inventory is a conspiracy theory.
The shadow inventory is pretty much constrained at this point to judicial foreclosure states.
3%+ of all homes in NY/NJ are in foreclosure. Florida is at 1.7%
Arizona is at 0.3%, CA at 0.3%, CO at 0.3%.
The national average is 0.9%
Sure. I made a video driving around Glendale, AZ. There are abandoned foreclosures everywhere. The vacancy rate is something like 16%.
Re: Topeka
The local realtors have to pimp Topeka, in order to maintain their income, but they know the truth:
No reason to build in Topeka, because there are no decent paying jobs in Topeka. And, with the takeover of Westar Energy by an outside the state utility, look for more “right sizing” to occur. Same story as everywhere else. The jobs that pay $30/hour are disappearing fast, and are replaced with $12/hour jobs
The only people making any money are the “double-dipping” government employees (retired Federal employees now working for the state). Who continually bitch about “Obama Phones” and “parasites”.
(I know a “triple-dipper”……..20 years in the military, then 20 years with the state police. Now he is a US Government paid “Consultant”, teaching Middle Eastern and Central American police departments the latest techniques in managing the wretched refuse.)
Too far west (70 miles) for a commute to Kansas City Metro, or Johnson County. Too many drug problems. No jobs that pay more than $15/hour. A perfect illustration of how house prices follow incomes (barring unique circumstances) in most of Flyover.
Topeka gets a lot of help from the Federal Government, in that many local businesses are kept afloat by the weekend traffic generated by soldiers coming over from Ft. Riley to shop.
-Highland Park is, (uhhh…..how can it be said now…..), a part of town with much “diversity”.
Lawrence, OTOH…..
-Lawrence is only 20-25 miles by Kansas Turnpike from Topeka, but is worlds apart in almost every way you can measure.
-Kansas University is there. Tons of people from KC area go to Lawrence during basketball season, and spend money at the local watering holes before games. KU Basketball fans are about as deranged as SEC football fans.
- Lawrence, being a free spending liberal town (when compared to the rest of Kansas) still has functional government, excellent public schools, and local services. (None of which exist in Topeka)
- Most of the state employees making decent paychecks commute from Lawrence to Topeka.
- Lawrence is less than 30 minutes from downtown KC, or the Johnson County business and industrial parks. A reasonable commute on the Turnpike or K-10. This will only improve when the K-10 bypass around Lawrence is completed.
These are the reasons that Sam Brownback is an idiot. Absolutely nobody is going to move their businesses to Kansas (or any other Flyover state), just to save a few percent on state income taxes. While at the same time, increasing taxes (sales, cigarettes, liquor, traffic tickets) on the wretched refuse, thus reducing their buying power.
Good news for gold bugs: The scenario of rate hikes is a straw man which is unlikely to ever be implemented, given perpetual worries about weakness in the global economy. Hence the low interest rate support for non-income bearing assets like gold is likely to continue in perpetuity.
Metal Commodities
Gold slides to lowest level since Brexit vote
6 Mins Ago
Reuters
Melted gold flows out of a smelter into a mould of a one kilogram bar at a plant of gold refiner and bar manufacturer Argor-Heraeus SA in the southern Swiss town of Mendrisio.
Arnd Wiegmann | Reuters
Gold slid more than 1 percent on Tuesday to its lowest since Britain’s shock vote to leave the European Union in June, as a bounce in the dollar after upbeat U.S. data triggered a break of key support at $1,300 an ounce.
“Just the better risk appetite in the market this week as Deutsche Bank seems to have stabilized for the moment,” said Jim Wyckoff,senior analyst at Kitco Metals. “We’ve done some technical damage today near-term to suggest we’re going to trade sideways to lower.”
…
Has everyone seen ” Snowden?” Good eye-opener.
Pieczenik: Clintons Behind Deaths of 10,000 Haitians
Bill and Hillary also scammed country out of charity money
Jamie White | Infowars.com - October 4, 2016
Bill and Hillary Clinton are directly responsible for the deaths of 10,000 Haitians as a result of their Foundation’s incompetence and corruption in the aftermath of the earthquake that struck Haiti in 2010, says Dr. Steve Pieczenik.
“It was negligence,” said Dr. Pieczenik on The Alex Jones Show Tuesday. “They brought in Nepalese soldiers who had no idea what they were doing, the Clintons had no idea, Bill Clinton as usual was completely incompetent as was Hillary, and they had all kinds of cross-purpose activities going on.”
Had there been no incompetency and “specific malfeasant behavior” by the United Nations and the Clinton Foundation, those 10,000 lives could have been prevented with simple vaccines.
“They were specifically negligent,” said Pieczenik. “Because of the E. coli sepsis that they created defecating in the water. So there’s criminal charges involved.”
“Not only were they robbers, they were murderers.”
Dr. Pieczenik also pointed out that the Clintons’ own daughter Chelsea called out her parents and the UN in a letter for their disastrous relief effort.
“If we do not quickly change the organization, management, accountability and delivery paradigm on the ground, we could quite conceivably confront tens of thousands of children’s deaths by diarrhea, dysentery, typhoid and other water-related diseases in the near future,” she wrote.
The UN has recently admitted to the scientific community’s hypothesis that cholera introduced by UN peacekeepers is responsible for the 10,000 Haitian deaths in the months following the 2010 earthquake.
Pieczenik explained that Trump should demand an auditing of the Clinton Foundation before the election because once they’re audited all their transgressions with the law will be laid bare.
“You’ll see the connection to Haiti,” he said. “You’ll see the connection to the Russians. You’ll see the connections to the Saudis.”
As we’ve reported years ago, the Clintons’ “humanitarian” involvement in Haiti has only made the country poorer and more dependent while they financially enrich themselves and their cronies.
They’re all really good at killing people.
FIVE WEEKS TO VICTORY!
Victory for what?
So, in Nevada vacant houses are being taken over by squatters and now the state is trying to deal with that by going after the squatters. Here’s an idea, why don’t the banks just make these houses available to the buying public at a “reasonable”, wage driven price and sell all these vacant houses!? Squatter problem solved and homes are no longer vacant!!! SIMPLE!!!
https://www.theguardian.com/us-news/2016/sep/30/las-vegas-squatters-homes-abandoned-police