The Market Has Reached Its Apex
A report from Community Impact in Texas. “Austin Board of Realtors market data for single-family homes in Southwest Austin over the past five years indicates that inventory is increasing slightly in some areas and dramatically in others. ZIP codes where homes fall into a higher price range, such as 78735 and 78737, are seeing inventory figures almost double from December 2015 to October 2016, demonstrating that supply is driving down demand, and buyers are becoming more cautious. ‘The market is softening a bit,’ said Burt Dement, a Broker Associate for Realty Austin’s Southwest Austin office. ‘Buyers are resisting the increased prices, so homes are sitting a little bit longer and inventory is building up.’”
“As inventory increases, buyers are realizing they have more options—causing sellers to rethink their price points. ‘There have been really strong sales, but now all of the sudden you have more supply, which drives demand down a little bit,’ Dement said. ‘Now that we have the supply, buyers have a lot more options and can negotiate a little bit more.’”
The San Francisco Chronicle in California. “The penthouse in the luxury high-rise Millennium Tower has just sold for $13 million, according to the Wall Street Journal, despite the fact that the sinking luxury high-rise has a lean you can see from space. The sixtieth-floor grand penthouse may be a few inches lower than it was when it was purchased and subsequently built out by venture capitalist Tom Perkins in 2009, but that didn’t stop tech veteran Craig Ramsey from purchasing the 5,000-square-foot space.”
“In fact, Ramsey told the WSJ he felt the price was ‘very reasonable’ and ‘well below what the market was nine months ago.’ He added that after talking to engineers and attorneys he felt the risk was low enough to be worth the reward of getting the penthouse, which cost Perkins (who passed away in June) about $18 million to purchase and build out. ‘I’m willing to take whatever risk there is to benefit from a depressed environment,’ Ramsey said.”
From Florida Politics. “Senate budget chairman Jack Latvala isn’t interested in balancing state government’s books on the backs of counties hit hard by the BP oil spill. And he believes the state might have to let local property taxes increase along with home values. Those are among the pressures on the state’s finances projected during the next three years, according to Amy Baker, coordinator for state Office of Economic and Demographic Research. ‘We’re building a structural imbalance,’ Baker said.”
“The good news is that the tourism economy is doing well. And although construction is lagging, there’s a large ’shadow inventory’ of distressed homes left over from the foreclosure epidemic that followed the Great Recession. They’d likely have to be torn down and rebuilt, and that would mean jobs, according to a report Baker’s office prepared for the committee.”
From Crain’s Chicago Business in Illinois. “After rising for six straight years, spending on Chicago-area commercial and residential construction projects is expected to drop in 2017 amid a cooling apartment market. After propping up the construction market in recent years, residential development will drag down overall construction starts to $12.3 billion in 2017, a 6 percent drop from this year, according to Dodge. The main reason: Apartments, the strongest sector for developers and construction firms the past few years, will lose a lot of their oomph.”
“‘We are starting to see that multifamily market slip across the country,’ said Richard Branch, senior economist at Dodge. ‘There’s been so much high-end construction going on, especially in the major metropolitan markets, that the market has kind of reached its apex.’”
“Dodge estimates residential construction starts will drop 27 percent in 2017 from $7.5 billion this year—the biggest volume since before the last recession in 2006—with multifamily starts plunging 48 percent. The expected dip in multifamily construction comes after a wave of new downtown apartment towers in recent years that has landlords bracing for a decrease in occupancy and rents. ‘When you have projects of the magnitude of Vista Tower and One Bennett Park, even in a large metropolitan market like Chicago, the market isn’t going to support two projects of that size in back-to-back years. For those two projects, that’s almost $1.3 billion (in construction costs),’ Branch said.”
Jeebus:
‘ZIP codes where homes fall into a higher price range, such as 78735 and 78737, are seeing inventory figures almost double from December 2015 to October 2016, demonstrating that supply is driving down demand’
I can’t recall reading about how supply drives down demand in any of my economics text books. However, given that demand recently has primarily been due to speculators chasing mania price appreciation, it makes sense that the sudden appearance of a supply glut would lead to shriveling demand.
But…but…recovery!
https://www.yahoo.com/news/bad-sign-car-companies-gm-cuts-1-300-213635961.html
Recovery ended in Sept, keep up. All downhill for the next 7 yrs.
Remember my friend…… a “recovery” is falling prices to dramatically lower and more affordable levels by definition.
The recovery is just emerging.
“As inventory increases, buyers are realizing they have more options—causing sellers to rethink their price points. ‘There have been really strong sales, but now all of the sudden you have more supply, which drives demand down a little bit,’ Dement said. ‘Now that we have the supply, buyers have a lot more options and can negotiate a little bit more.’”
Thanks, but I think I’ll buy at the foreclosure auction.
This is the second Austin UHS I’ve found in less than a week saying prices are down.
I had 23 units walked and turned in for the draw by the end of today, so it’s gonna be a nice Christmas.
Sitting at a desk all day was so boring, I don’t know how people can just do that every day until they’re 60, 65, or much older than that. They’re just watching the clock all day, counting out time until their own death, when I’d rather get the next unit started so I can get paid for it…
My E contract on Dallas project 2011-2014….. E…. E….. E isn’t for electric…… e is for E-N-R-A-G-E-D.
http://picpaste.com/pics/55b3fcc049df6d19054ba14d412ca2f9.1482279034.png
I’m pretty new to this, all I did was build or expand grow houses before starting on a real project with the 7am Monday morning mandatory all hands meeting with the safety boss and sign-in.
New things will be happening in 2017.
You’ll own it in no time at all.
massive.housing.boom
Speaking of owning something….
See that wood butcher of mine standing on the baker scaffold? He was finishing up installing that cold form metal framing, opposite side of wall of the e-room in the first picture. See that horizontal stiffener mid way up the framing in the foreground? No straps. Stiffeners. Structural. Stamped drawing. Seismic. And the Sparkys hadn’t even started turning those studs into swiss cheese for 50 miles of BX. Still structural.
http://picpaste.com/cee44d0ad42e2a3a59600d5e9c909737.JPG
I used to tell my sparky to let me know when it’s right. I mean “really right” and I’ll come look at it. Then I’ll buy you a beer, if it’s right enough. Otherwise, you’ll be working the weekend with your crew.
Not residential. I was a plant engineer guy. Heard Ben say “we can’t afford that”. Didn’t apply for me.
Trumpung
“the sinking luxury high-rise has a lean you can see from space. The sixtieth-floor grand penthouse may be a few inches lower than it was when it was purchased and subsequently built out by venture capitalist Tom Perkins in 2009, but that didn’t stop tech veteran Craig Ramsey from purchasing the 5,000-square-foot space.”
“In fact, Ramsey told the WSJ he felt the price was ‘very reasonable’ and ‘well below what the market was nine months ago.’ He added that after talking to engineers and attorneys he felt the risk was low enough to be worth the reward of getting the penthouse, which cost Perkins (who passed away in June) about $18 million to purchase and build out. ‘I’m willing to take whatever risk there is to benefit from a depressed environment,’ Ramsey said.”
The Leaning Tower of Stupid
Stupid… Was just thinking the same thing. Are these VCs seriously thinking of passing this thing around until it falls over entirely? If I were an infestor, I wouldn’t even buy anything in the fall path. I suppose they could flip this to unsuspecting foreigners.
Well aside from the tilt, it IS a gorgeous building.
houses make u feel rich.
crushing_housing_losses
did u buy your dow 20k wife beater at walmart yet?
Your fenders are flapping Poet.
No but next time I’m there I’ll find the door you’re greeting at and say hello.
http://www.investing.com/rates-bonds/germany-30-year-bond-yield
1-Year Return - 27.65%
https://ycharts.com/indicators/japan_30_year_government_bond_interest_rate
Change From One Year Ago: -46.79%
Oooph….. The reckoning that was on the horizon is now upon us. It’s just the beginning my friends. It’s just the beginning. Liquidate the junk including houses(if you can find a buyer at any price), get out of debt and hang onto every dollar you’ve got. You’ll be glad you did.
For the DebtDonkeys and degenerate gamblers and MT Pockitz, you’re chit out of luck.
omg more doom and gloom!
U can cherry pick anywhere in the world but the bottom line is we are booming.
Divine.leader.DjT
I just posted the fact Jack. If you loaned the Japanese government money for 30 years 12 months ago half of it is gone to money heaven!. What was that fat interest you were getting? Half of one percent?
exactly
Folks were buying these bonds for the appreciation. The only one buying for the yield was uncle fed.
I posted yesterday about basically the treasury (taxpayer) being on the hook for any losses the fed has on all the bonds they bought.
Someone said there would be no losses cause they would hold them to maturity.
In that case the balance sheet will never shrink. Hasn’t shrunk since they started.
‘Someone said there would be no losses cause they would hold them to maturity.’
Unless they were US buyers, who would see the currency damage around 20%. And the opportunity cost.
That -46.79% return is in response to a historically gradual rate of interest rate normalization off a historically negative base.
Just imagine the bloodbath in bonds when rates establish a significant trend towards normalcy. You ain’t seen nothing yet!
FYI Ben, Wal-Mart got rid of their greeters at the entrances a couple years ago. Now they are checking receipts at the exits. Makes ya wonder…
Well I try not to go there if I don’t have to.
Waldport, OR Housing Prices Crater 5% YoY
http://www.zillow.com/waldport-or/home-values/
“And although construction is lagging, there’s a large ’shadow inventory’ of distressed homes left over from the foreclosure epidemic that followed the Great Recession. They’d likely have to be torn down and rebuilt, and that would mean jobs, according to a report Baker’s office prepared for the committee.”
Well, there it is. A large “shadow inventory” of distressed homes. Not that they could have released these for sale to the public at decent prices, oh no, we can’t have THAT now, can we? Meanwhile, the UHS were telling people “inventory is tight”. What a bunch of shiite.
“Rotten houses rotting in the sun
Seems I’ve seen those devil shacks since the world begun
Mercy I’m a criminal, Jesus I’m the one
Rotten houses rotting in the sun”
With apologies to Elton John, from his song “Rotten Peaches”.
Sorry to add to my post, but this burns my naked patootie. So they let those houses rot instead of giving people a deal. Now they’re gonna tear them down (because they’re probably full of black mold and termites and garbage from crack parties) because “that would mean jobs”
Jobs for whom, fuq face? A bunch of illegals hopping around and banging nails yelling “ai, ai, ai” and playing their polka music all day long? For what? More substandard shacks at luxury prices built by greedy GCs?
Merry Christmas
https://www.youtube.com/watch?v=XNgdN92fPzw
Jeebus, that’s funny. Imagine if someone put out a tune like that today.
I fuqqin’ swear to God….the folks in Tallahassee need to get their hineys ripped second and third ones.
And I’m just the one to do it, too. Head up there with a load of granite counter tops, one for every dooshwad in the legislature, give ‘em a straddle seat, with tar and feathers.
You know what these azzwipes were talking about spending money on? Building a freakin’ terminal at the mouth of Tampa Bay to accommodate the “modern” 17 story cruise ships. They started soliciting opinions from the public. I gave ‘em my opinion, all right. Must’ve been a number of people felt like I did, because I haven’t heard anything about it since. But you should have read all the heavy breathing about it in the citydata Tampa sub-forum, all the local geniuses thought it was a splendid idea. Along with self-driving cars, yeah.
I dunno why people go to those forums for relocation advice, lol. Mouthbreathers helping dimwits.
Not just tear the houses down, but rebuild them. By the time they’re rebuilt, it will be time for them to decay again. Why don’t we just have people dig ditches and then fill them in, while we’re at it?
For a glimpse into the real estate agent mentality here, this “newsletter” was placed in my mailbox yesterday:
“I was speaking with a large national developer about their [sic] predictions for Tampa Bay in the coming year. The response I received was exciting to say the least. He told me that he’s very bullish on Tampa Bay and he can see our area becoming the San Diego of the East Coast. Other than our weather, I can see how our area has the potential to be even greater than it already is — and hopefully our property values will climb to near San Diego levels.”
…
“If you don’t currently own a home, what are you waiting for?”
Good find, snake.
“He told me that he’s very bullish on Tampa Bay and he can see our area becoming the San Diego of the East Coast.”
What a freakin’ joke. The San Diego of the East Coast. Never. Gonna. Happen. I haven’t been to San Diego in years, but back in the 90s it was this sparkling city by the sea, clean looking, nicely laid out, with a fantastic harbor. Tampa Bay is a large polluted mud hole. Not to mention, San Diego has great beaches with aquamarine water. Tampa Bay doesn’t have beaches to speak of, maybe just some patches of dirty wet sand here and there where you can look out at water you wouldn’t dare stick a toe in. San Diego has the best weather in the country. Tampa Bay is hot and humid and in the winter is cool and dank, if we’re lucky.
This is typical Florida chamber of commerce BS. The penny-ante Florida business “movers and shakers” have always had this inferiority complex when it comes to Southern California and I don’t know why this is. California wanna-bees. During the eighties, Miami was gonna be the “Hollywood of the East Coast”, lol. The Miami Vice folks couldn’t get out of the state fast enough.
Don’t get me wrong, Florida does have some things to recommend it, that are unique to the state. Great fishing, boating, and a certain convenience of lifestyle in many parts of the state. The Atlantic coast is very nice. The Gulf Coast, not so much.
Sorry to throw any cold water on that beautiful vision of San Diego, but it ain’t that great. They have a bad sewage problem and the beaches are contaminated most of the time, at least when I lived there for couple years a little over a decade ago, in Pacific Beach. The beaches were constantly being closed down for swimming. The whole area was grimy and a lot of vagrants.
I was curious if they had improved things since I was there, so just now I looked it up online — as of yesterday they have 4 ocean warnings ongoing.
http://www.sdcoastkeeper.org/learn/swimmable/san-diego-water-quality/beach-advisories
Also, San Diego sits on top of a massive ant supercolony. Ants everywhere, and you can’t get rid of them. We even got raided in my old office’s computer server room, of all places.
I think San Diego is highly over-rated.
“They have a bad sewage problem and the beaches are contaminated most of the time, at least when I lived there for couple years a little over a decade ago, in Pacific Beach. The beaches were constantly being closed down for swimming. The whole area was grimy and a lot of vagrants.”
Oh. Well, maybe Tampa Bay WILL become the San Diego of the East Coast after all. The beach where we went south of Oceanside was pretty nice, though, no sewage problems.
“Also, San Diego sits on top of a massive ant supercolony. Ants everywhere, and you can’t get rid of them. We even got raided in my old office’s computer server room, of all places.”
Heh, there’s another thing Tampa Bay has in common with SD. Red ants all over the place. You can’t sit on the grass here.
San Diego’s issue with sewage is more of the same: Old, aging infrastructure, and when it fails (which is common) you end up with contaminated beaches. A while back, the city did get a bunch of money to fix it all up, but I never followed up on what happened.
It seems our country has a lot of old, failing infrastructure. Like in Corpus Christi TX you can’t drink the water because of bacteria growing in the old cast-iron water pipes.
Trump was talking about spending money to make our airports all nice and shiny, but my opinion, if we’re going to spend money we should fix the core things first — like water and sewage first, then roads.
I’ve visited San Diego, and L.A. on numerous occasions, and prefer here, even when it’s molten hot and threatened by tropical weather systems for months on end. And there are plenty of Gulf beaches I like! But you’re right that a certain class of people loves to trot out California, or Atlanta, or Charlotte, as something we should aspire to be. Some of us chose to live here because it wasn’t those places.
“Some of us chose to live here because it wasn’t those places.”
Exactly.
Dow 20K reminds me of Napoleon’s army within sight of Moscow, before General Winter and the Russian Army stopped them in their tracks, then forced them into a catastrophic retreat all the way back to France.
I think General Winter, of a sorts, is about to show up and crush these Ponzi markets.
https://en.wikipedia.org/wiki/Keynesian_beauty_contest
‘Keynes described the action of rational agents in a market using an analogy based on a fictional newspaper contest, in which entrants are asked to choose the six most attractive faces from a hundred photographs. Those who picked the most popular faces are then eligible for a prize.’
‘A naive strategy would be to choose the face that, in the opinion of the entrant, is the most handsome. A more sophisticated contest entrant, wishing to maximize the chances of winning a prize, would think about what the majority perception of attractive is, and then make a selection based on some inference from his knowledge of public perceptions. This can be carried one step further to take into account the fact that other entrants would each have their own opinion of what public perceptions are. Thus the strategy can be extended to the next order and the next and so on, at each level attempting to predict the eventual outcome of the process based on the reasoning of other rational agents.’
“It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.” (Keynes, General Theory of Employment, Interest and Money, 1936).’
‘Keynes believed that similar behavior was at work within the stock market. This would have people pricing shares not based on what they think their fundamental value is, but rather on what they think everyone else thinks their value is, or what everybody else would predict the average assessment of value to be.’
Pols like Keynes because his central theme makes it ok to take your $ and spend it their way
Infrastructure ,military and golden ghettos comes to 3 trillion
VIZZINI: Let me put it this way: have you ever heard of Plato, Aristotle, Socrates?
MAN IN BLACK: Yes.
VIZZINI: Morons.
MAN IN BLACK: Really? In that case, I challenge you to a battle of wits.
VIZZINI: For the Princess?
The MAN IN BLACK nods.
VIZZINI: To the death?
The MAN IN BLACK nods.
VIZZINI: I accept.
MAN IN BLACK: Good. Then pour the wine.
Dow 20,000 makes no sense. Then again, nothing about these rigged, broken, manipulated markets has made sense since 2008, when fundamentals ceased to matter (heckova job, central bankers).
http://wolfstreet.com/2016/12/20/2016-ipo-worst-year-since-2003-reveals-sick-stock-market/
They took ‘errr jobs!
http://www.businessinsider.com/china-school-closures-heavy-smog-2016-12
Oh dear. Italy’s oldest bank is starting to look un-fixed and un-fixable. Can you say, “cascading systemic risk” boys and girls? I knew you could!
http://www.marketwatch.com/investing/stock/BMPS?countrycode=IT
But…but…stress tests!
http://www.telegraph.co.uk/business/2016/12/21/monte-dei-paschi-shares-suspended-liquidity-warning/
Please, Canada, do us a solid and take these would-be freeloaders off our hands.
http://www.aljazeera.com/indepth/features/2016/12/americans-dream-canada-trump-161218122212160.html
If bartender, waiter, and barista jobs are automated, there goes our Obama-Fed-Goldman Sachs “recovery.”
http://www.marketwatch.com/story/the-next-job-to-be-automated-bartending-2016-12-21?link=MW_latest_news
I remember going to one of these in NYC in 1960.
https://www.6sqft.com/horn-and-hardart-automats-redefining-lunchtime-dining-on-a-dime/
Hiving off the libtards - there has to be a downside somewhere, but I’m not seeing it. Goodbye and good riddance to everyone who voted for corruption and the crony capitalist status quo.
http://www.independent.co.uk/news/world/americas/us-elections/canada-invite-liberal-us-states-break-away-donald-trump-america-a7418341.html
Jeebus please leave. And take Nevada with you
‘Although, you being…you know…Canadians, we’re confident in a polite transition as we become your fourth territory, Washorefornia.
Or Calorington.
We’re fine with either.
Just please take us.’
Butthurtistan?
And how come you guys never mention joining up with Mexico?
There are millions of dead pine trees in CA and the industry is so dysfunctional there is no where to sell them.
Most of the millions of dead trees on Federal land such as USFS and BLM will rot.
http://www.sanluisobispo.com/news/business/article119627643.html
dead pines into flooring
The San Fran “down cycle” May last more than 9 months dude
‘Ankara Assassination Proves Crisis in Middle East Is Engulfing Turkey’
‘It did not have to turn out this way. As the Arab Spring so-called spread across the region six years ago, Turkey might have served as a mediator to prevent violence and contain crises. Instead, it backed the Muslim Brotherhood in Syria and elsewhere and tolerated ever more extreme jihadis. Mr Erdogan was certainly not alone in thinking that there would be regime change in Damascus, but he was the one worst affected when the project failed.’
http://www.unz.com/pcockburn/ankara-assassination-proves-crisis-in-middle-east-is-engulfing-turkey/
‘Twitter is “toast” as a company and the stock is not even worth $10, according to a research note published Tuesday, following the departure of another top executive at the social media service. The microblogging platform’s chief technology officer, Adam Messinger, tweeted that he would leave the company and “take some time off”, while Josh McFarland, vice president of product at Twitter, also said he was exiting the company. Both executives announced their departure on Tuesday.’
‘Meanwhile, last month, Adam Bain stepped down as chief operating officer last month to be replaced by chief financial officer Anthony Noto, who has yet to be replaced. Twitter has also lost leaders from business development, media and commerce, media partnerships, human resources, and engineering this year.’
‘The departures prompted Trip Chowdhry, the managing director of equity research at Global Equities Research, and a noted “uber-bear” on tech stocks, to issue a note on Tuesday claiming Twitter is “toast” and “not even a $10 stock”.
“Many investors were foolishly building (an) investment thesis based on complete stupidity,” Chowdhry wrote.’
Here’s why Twitter is tending worthless:
http://www.zerohedge.com/news/2016-11-18/how-twitter-ceo-jack-dorsey-restricted-advertising-trump%E2%80%99s-campaign
“I pulled all persuasion and lead gen spending, costing Twitter millions of dollars.”
It’s not that it’s Trump so much as the fact that potential advertisers see these high profile shenanigans and don’t want to roll the dice on ad buys and lead generation spending. They wonder if this sort of thing could happen to them and decide not to mess with it and allocate money elsewhere.
From the story in Ben’s post, it looks like some Twitter personnel have had disagreements with Dorsey as well. I’ve heard the Saudis have a 20% stake in Twitter. Wonder what that’s worth now?
The $USD Strength Just Became a REAL Problem For China
Phoenix Capital Research’s picture
by Phoenix Capital…
Dec 20, 2016 9:28 AM
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It’s official: investors are now “all in” on this market rally.
According to Trim Tabs, between November 8th and December 5th, investors put $97.6 BILLION into US stock ETFs. To put this into perspective, for the ENTIRE year of 2016, they put just $61.5 billion.
This is the hallmark of a mania. And as usual, individual investors are walking into a catastrophe like lambs to the slaughter.
The $USD is currently above 103. This is a MASSIVE problem for the financial system, particularly China, the second largest economy in the world.
http://www.zerohedge.com/news/2016-12-20/usd-strength-just-became-real-problem-china
Yo… Palmetto?
Here’s the conclusion to my eBay “buy” story from a few days ago.
http://picpaste.com/ebay_haircut.jpg
Awesome. What was the deal, exactly? They started at $500 and lowered the price and then you sniped it? Good deal!
It’s a piece of technical wool clothing for winter bow hunters, custom fitted, raglan sleeve design with elastic gussets on the backside. I wanted it for long distance cycling (arms out front) as I’m tired of plastic clothing that breathes poorly.
“They started at $500 and lowered the price…”
Yes. This sort of gear is a tough sell… especially these days.