In The Throes Of A Softening As A Glut Floods The Market
A report from the Dallas Morning News in Texas. “Homebuilders in North Texas and around the country are looking forward to at least a couple more good years for sales and construction. But some tough times could be down the road with a possible recession and another price bubble, a housing industry economist warns. ‘During the next five years, we actually go into a fairly severe cycle of overvaluation,’ said Mark Boud, top economist for housing analyst Metrostudy. ‘This will be hard to avoid.’”
“The median sales price of North Texas preowned homes has jumped more than 40 percent in the last few years and is at a record level. Prices went up an additional 10 percent in 2016. ‘You’ll need to be prepared for more severe recession after the party ends.’ Boud said. ‘We are kind of setting the table for that.’”
The Baltimore Sun in Maryland. “Federal workers in Maryland and across the nation are bracing for reductions in head counts, civil service protections and even salaries when President-elect Donald Trump and Congress turn their attention to government spending later this year. The threats and preliminary steps taken by Congress have created anxiety for many of the government’s 2.1 million employees, including some 300,000 who live in Maryland. ‘The federal government is the core driver of the Maryland economy, whether we like it or not,’ said Richard Clinch, director of the Jacob France Institute at the University of Baltimore. ‘When the federal government gets nervous, employees don’t buy houses, cars and flat-screen TVs.’”
From Forbes on New York. “The upper end of Manhattan’s real estate market has been slumping for months, with apartments in some of the borough’s priciest enclaves languishing on the market before selling. New York’s priciest borough is still in the throes of a softening at the very high end as a glut of expensive condominiums floods the market. The downward decline is forcing developers at some of Manhattan’s priciest condominiums to cut prices.”
“Buyers who signed contracts and completed those purchases at 432 Park Ave., got price reductions averaging 10%, an analysis by appraiser Miller Samuel Inc. showed. A penthouse on the 88th floor of the building sold last month for $60.9m, a 20% price cut from its original asking price. One of the last remaining full-floor apartments at One57, one of a cluster of expensive new condominium towers on Manhattan’s so-called Billionaires’ Row, sold last month for $45.8m, about $12.7m less than its $58.5m asking price.”
The Seattle Times in Washington. “An immigrant from China who had been living in King County has pleaded guilty to visa-fraud charges after federal authorities charged her with using stolen money from overseas to purchase a house on the Eastside. Shilan Zhao, 53, submitted false documents to federal immigration authorities and will forfeit her $900,000 house in Newcastle and give up properties worth tens of millions of dollars in California and New York, the U.S. Attorney’s Office in Los Angeles said. She also will spend up to five years in federal prison.”
“The indictment says she used funds from fraudulent transactions from a grain storehouse in China to buy a four-bedroom house on 113th Avenue Southeast in Newcastle for $525,000 in 2012. Her ex-husband, 53-year-old former Chinese government official Jianjun Qiao, was a director at the grain business in Zhoukou.”
“The pair laundered about $2.2 million in funds from overseas into a Canadian bank account, according to the indictment. Zhao also sold a Bellevue home on 139th Place Southeast for $998,000 in 2014 after the family bought it for $687,000 in 2010, county records show. Zhao lived in Newcastle but also owned a condo in Flushing, N.Y., and several properties in Southern California, the U.S. Attorney’s Office said. The Monterey Park, Calif., properties have a combined value of $28 million, according to the Los Angeles Times.”
“While this specific type of prosecution is rare, there has been no shortage of problems with the EB-5 immigration program, both locally and around the country. Just last week, local developer Lobsang Dargey pleaded guilty after defrauding hundreds of EB-5 investors from China.”
“In June, another Seattle developer, Henry Liebman, was fined $1.24 million for improperly using unlicensed brokers to steer EB-5 investors his way. And in April, a Bellevue immigration lawyer got a $278,000 fine in a similar EB-5 case. Washington is home to the fifth-most EB-5 investors from overseas, with more than 800 investors and family members living in the state, according to a new federal report.”
‘The pair laundered about $2.2 million in funds from overseas into a Canadian bank account, according to the indictment. Zhao also sold a Bellevue home on 139th Place Southeast for $998,000 in 2014 after the family bought it for $687,000 in 2010, county records show. Zhao lived in Newcastle but also owned a condo in Flushing, N.Y., and several properties in Southern California, the U.S. Attorney’s Office said. The Monterey Park, Calif., properties have a combined value of $28 million, according to the Los Angeles Times’
Interesting:
‘into a Canadian bank account’
BTW, what ever happened to the feds cracking down after the Panama Papers and the pilot programs scrutinizing Miami and New York real estate? The last I remember of it, the Miami UHS were holding seminars on how to evade the rules.
http://www.bbc.com/news/world-38319026
Panama Papers
This year saw the release of the biggest leak of documents in history, when the Panama Papers were made public.
Eleven million documents were leaked from one of the world’s most secretive companies, Panamanian law firm Mossack Fonseca. They revealed in detail how parts of the offshore industry work.
We asked you what stories over the last 12 months you wanted to hear more about and in response many of you asked - what happened as a result of the Panama Papers?……….
In all honesty, I had completely forgotten about the Panama Papers. There is just so much outrageous bullshit coming at us that I just can’t keep up with it anymore. My outrage bucket only holds about the last 4 days worth of bullshit.
The most ironic phrase in domestic policymaking is “federal crackdown.” People involved in shady banking and real estate transactions tend to get a free pass, or at most a wrist slap, and they know it. I’m still amazed a token prosecution of a Chinese national is occurring. It reminds me of the drug mule who deliberately is betrayed at the airport so that the remaining mules can slip through.
During Holder’s embarrassing and disgraceful time as Attorney General, did the federal government actually crack down on anything other than whistleblowers?
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy,” Mr. Holder told the Senate Judiciary Committee.”
– Eric Holder, Attorney General, explaining “Too Big to Jail” - why not a single banker went to prison on his watch, prior to Holder leaving “public service” to accept a lucrative position on Wall Street.
A nod and a wink….It’s still crime.
Chinese fraud? Say it aint so….I always thought buying $700k, 800k, or $2 mill homes in the US using cash was legit.
Glad someone finally got caught, more to come.
All housing transactions are cash…….. Borrowed cash.
Delivered by monkeys that flew out of your butt carrying suitcases full of cash.
“Chinese authorities helped the IRS and U.S. Immigration and Customs Enforcement on the case, the Department of Justice said.”
Oops!
Who could’ve foreseen this kind of fraud when we let all those Chinese embezzlers and money launders into this country?
‘New York’s priciest borough is still in the throes of a softening at the very high end as a glut of expensive condominiums floods the market’
If this could happen in Manhattan, why do we have to endure shortage booster-ism in any market? Oh but the rich foreigners are looking to park money in safe deposit boxes! Prime Manhattan real estate will always hold its value, we were told.
‘Homebuilders in North Texas and around the country are looking forward to at least a couple more good years for sales and construction. But some tough times could be down the road with a possible recession and another price bubble, a housing industry economist warns. ‘During the next five years, we actually go into a fairly severe cycle of overvaluation,’ said Mark Boud, top economist for housing analyst Metrostudy. ‘You’ll need to be prepared for more severe recession after the party ends.’
This report came from the annual shack builder conference in Florida, which the DMN covers. All the papers used to go there. Metrostudy is the main cheerleader for the industry, so if they are saying this the wheels are probably already off. The report has a chart with which cities have the highest SF starts. Dallas is tops with over 20,000, Houston a close second.
“It’s a great time to buy now, but in a few years it’s gonna stink. But buying now is OK.”
I bet this EB-5 visa thing turns into a story that plays a key part in unwinding property values in all the ultra hot markets. Once the dust settles average folks will be left with severe property price declines due to fraudulent visa investors and other factors.
800 visa holders in the market mentioned isn’t a lot but price action happens in the margins.
‘China’s Money Controls Set to Slow Down U.S. Property Shopping Spree’
‘Citizens are no longer able to use foreign currency to buy overseas properties’
‘China marked the beginning of 2017 with a new set of currency-exchange regulations in an effort to curb capital outflow from the country. While the new policy is likely to have a ripple effect on the U.S. real estate market, slowing down Chinese investment in the short term at least, undeterred investors will find new loopholes to move their money out, some brokers say.’
‘The government is making the process of buying houses in the U.S. more difficult, but not impossible, said Li Chuang, an agent at real estate brokerage TripleMint who has Chinese clients. “Each time a new regulation is imposed, there is a renewed effort dedicated to finding new loopholes for skirting the process or mitigating the risk,” she said. “Many are willing to take that risk given the current economic environment.”
‘The Chinese yuan suffered its steepest annual slump in more than two decades in 2016, losing about 5% of its value against the U.S. dollar, and hitting an eight-year low. Fearful of the yuan’s further depreciation, some citizens are eager to dock their money in the U.S. properties.’
“My Chinese clients aren’t concerned about the value appreciation of houses they buy in the U.S., because they will gain in the currency front,” said Lin Pan, founder of New York-based Lin Pan Realty Group.’
They’ll care about the value of the house when it drops 30% vs their 5% currency gain.
Arrest the Chinese Reralturds as accomplices. Deport them.
China needs to do this. They are bleeding out a Trillion a year and the growth miracle is over.
“Shilan Zhao, 53, submitted false documents to federal immigration authorities and will forfeit her $900,000 house in Newcastle and give up properties worth tens of millions of dollars in California and New York, the U.S. Attorney’s Office in Los Angeles said. She also will spend up to five years in federal prison.”
“The indictment says she used funds from fraudulent transactions from a grain storehouse in China to buy a four-bedroom house on 113th Avenue Southeast in Newcastle for $525,000 in 2012. Her ex-husband, 53-year-old former Chinese government official Jianjun Qiao, was a director at the grain business in Zhoukou.”
Jeebus, why do they not revoke her citizenship, if she has it, or legal residency? Just wrap her up in Chinese drywall, mark her “Return to Sender” and launch her on a catapult across the Pacific. Maybe she’ll end up on the Spratlys.
And this was one of the primary drivers of the bubble - the collapse of China’s producer economy due to the collapse of the American consumer economy. Just a global house of cards to be unwound. Thankfully the dems are out of power so we might actually see a good reset of prices in a number of areas - chiefly housing and health care.
I don’t see the Rs as being intentionally helpful, although they might accidentally be. I just think that the almost inevitable recession that will come with the new president (seems like the only time they are allowed to happen now), might get a little out of control and actually cause a real reset in a few things this time.
North Salt Lake, UT Housing Prices Crater 8% YoY
http://www.zillow.com/north-salt-lake-ut/home-values/
Dang, natty, I’m reposting your video on the Little Emperors and Empresses from the other thread. It was most enlightening.
https://www.youtube.com/watch?v=sH8sSKwS_gU
Citizens of the US, you’ve been had, bad.
Ridiculous!
“I like’a tha peeeeple like’a my caw”
Easier to buy us than invade us.
A lot of these “princelings” are grandchildren of the senior Maoist revolutionaries who took power in China in 1949. These Comrades of Proven Worth have wasted no time skimming the wealth of the country for their own benefit and parking the money in the US.
If young American parvenus flaunted their parents’ wealth like that in a foreign country, it wouldn’t go over too well.
Well, they did a bit post WW2. The Talented Mr. Ripley was based on this very phenomenon. But it was more based on behavior than flaunting wealth. Don’t get me wrong, they had nice stuff, but much of it was understated, sort of a hangover that the Protestant wealthies of the US had from the aftermath of the Depression. Behavior, however, could be just as obnoxious.
Western Europe tolerated it to a great degree.
Yeah, I remind people of the ugly American from back in the day when they complain about uncouth Chinese people. I think it’s a universal behavioral symptom of having some money when you’re only one generation off the farm.
Where have I heard this before?
http://www.telegraph.co.uk/business/2017/01/11/perils-icarus-trade-world-runs-short-dollars/
“But some tough times could be down the road with a possible recession and another price bubble, a housing industry economist warns.”
Oh my, the R word…
Rutebega?
Well, dang, I got a kick out of that one for some reason, thanks for the laugh.
It’s an all purpose comedic term. Any sentence you end with “with a rutabaga” is funny.
For instance, “Donald Trump will be inaugurated with a rutabaga” is funny, for no other reason than the word ‘rutabaga’.
Looks like heads are going to roll in the intelligence community once Trump is sworn in. He does not take kindly to fake news or fake “intelligence reports” of the sort so beloved by the neocons.
https://twitter.com/realdonaldtrump/status/819155311793700865
Heads need to roll in the Bush cabal. Apparently JEB! paid for the original report, figures if Rick Wilson was involved. Later turned over to the Clintons. BBC clip below.
https://i.sli.mg/eNXs5f.jpg
https://streamable.com/nrqfo
Marblehead, MA Housing Prices Crater 10% YoY
http://www.zillow.com/marblehead-ma/home-values/
Short or long health insurance stocks?
ACA capped their profits at 15%. Under Trump that goes away. They’ll be able to charge AsMuchAs they please now. Thought ACA was expensive? Just wait!
Under Trump, the ACA goes away.
The free sh*t army is pizzed.
Competition is going to crush health care costs.
Ask yourself why medical procedures not covered by insurance such as cosmetic surgery or lazik had gone down in price the last 30 years even as technology is advancing year after year….
Under Trump, the ACA goes away
That’ll be a nice tax cut for the one percent.
Competition is going to crush health care costs.
That’s never happened in the past.
And how are we going to get cost crushing competition this time when we haven’t gotten it before? Is Trump going to do something that has never been done before?
Has competition across state lines been tried? I think that’s what they are doing.
In Mexico you can get quality medical care for a fraction of what it costs in the US.
OK, it’ll be interesting to see if that makes a significant difference. I’m hoping that they will change the rule that made it so the government couldn’t drive down the price of meds for medicare…but the likelihood of that getting through congress seems low.
My personal opinion is that pure capitalism won’t be able to fix healthcare due to the power of the forces that will try to keep prices up, and it will need to be more of a regulated utility like power.
Just talked to a 59 year old today who said his Blue Cross plan premiums have gone up $5k in the last 2 years, it’s going up again next year if nothing changes. His insurance agent tried Obamacare for him and even though he didn’t make cr@p for money last year it was still more money for less coverage.
I believe they said of the 2 million who got insurance through Obamacare 88% are subsidized.
I know 3 people who have it and all 3 fudged their income.
My personal opinion is that pure capitalism won’t be able to fix healthcare due to the power of the forces that will try to keep prices up, and it will need to be more of a regulated utility like power.
The challenge is that there needs to be a profit motive to drive innovation in Healthcare.
Gilead is making a killing from their Hepatitis C cure. Is that wrong? If pricing for the drug was like utilities, no one would take the risk to develop such drugs.
We only see the winners in the press, not the multitude of losers.
There is a 5% chance for a cancer drug to make it from Phase I to approval (12% all others). But you need to spend a lot of money to even find the drug to get into Phase I trials.
Without a big profit motive, how much money do you think would go into drug development with a 90% chance of failure?
I was talking more about hospital costs as far as what needed to be a regulated utility. I get what you are saying about drugs and I was thinking of them when I typed that. But I DO think everyone should be free to negotiate the lowest possible prices from the drug companies. There’s no reason why it should be any cheaper in any other country if it’s the same drug from the same company.
*Wasn’t
Well, here’s another interesting healthcare tidbit: Trump has appointed RFK Jr. to head up a panel regarding the CDC and the vaccine issue.
Good. Scientific American and WhopperPost are already attacking, of course.
Just for the record, I am not anti-vaccine. I am, however, anti poisonous vaccines. I am also anti-shoot-the-kids-up-all-at-once and play Russian Roulette as to which ones get Rainman syndrome.
Like many, I had a series of vaccines when I was a pup. They were spaced out over time on a schedule. And although there may be those on the blog who might question my mental health, I didn’t end up with polio or anxiously awaiting the Judge Wapner program. Something IS seriously wrong with vaccines these days, with what’s in them and how they are administered.
God bless ya, DJT.
Rental Watch: Without a big profit motive, how much money do you think would go into drug development with a 90% chance of failure?
Defense companies get money for failed projects all the time. Occasionally something useful comes out of it.
Defense companies get money for failed projects all the time. Occasionally something useful comes out of it.
——-
That’s because the money comes from the government, not rational investors. Are you saying that we should turn drug development over to the Federal Government?
” Is Trump going to do something that has never been done before?”
We are hoping that he and those that will support him will do something without taking a bribe.
It’s gonna get crrrrrrrushed.
Ask yourself why medical procedures not covered by insurance such as cosmetic surgery or lazik had gone down in price the last 30 years even as technology is advancing year after year….
Maybe because those are optional procedures. If your assertion was true, then because of the prevalence of HD plans with huge deductibles, pretty much most procedures would be going down in price, which they are not. I mean, that was the whole premise of the other article, the one that stated that a broken arm could be bankrupting for most as they would be liable for paying for it thanks to the $5K deductibles. Yet those procedures remain pricey. Why? Because if you break your arm or need your appendix removed, you won’t “do without” because it’s too pricey.
I submitted this one by email, perhaps I should just link it here:
Rapidly increasing amounts of SFH purchases are failing to close across the country. Seattle has not made it into the top 10 list yet, but we do have fortress San Jose,CA in 7th place and fortress Portland,WA in 9th place in terms of percentage contracts-failing-to-close.
https://www.bloomberg.com/news/articles/2017-01-11/suddenly-home-sale-agreements-are-falling-apart-across-the-u-s
The underlying data is from
https://www.trulia.com/blog/trends/sale-fail/
Whenever I see data like this, I wonder if what it means.
I downloaded the spreadsheet that they provide, and they give national data (not just the top 100 metros).
Nationally, we went from 1.4% failed in Q4 2014 to 2.3% in Q4 2015 to 4.3% in Q4 2016. A steady increase, no doubt.
Is 1.4% low if you look at more than 3 years of data? Is 4.3% high? How much is influenced by the proportion of cash buyers?
I’d love to see this data across the entire market cycle.
“I wonder if what it means.”
CR8R
He-he, Bezos just bought hisself a sweet lil’ spread in DeeCee. I guess he wants to be close to his “investments”.
https://www.washingtonpost.com/news/reliable-source/wp/2017/01/12/jeff-bezos-is-the-anonymous-buyer-of-the-biggest-house-in-washington/?utm_term=.8db4bbe5a7e9
Ees ovor for jou, jefe.
Keep your friends close…
A pied-à-terre for Bezos.
Auburn, WA Housing Prices Crater 9% YoY
http://www.movoto.com/auburn-wa/market-trends/
China’s massive credit bubble is out of control.
https://www.bloomberg.com/news/articles/2017-01-12/china-credit-expansion-exceeds-estimates-as-loan-demand-rises
Take a vacation to Australia! It’s summer there. You could stay in a Shacky.
http://www.domain.com.au/news/shacky-8211-a-melbournedesigned-relocatable-shack-8211-is-taking-airbnb-by-storm-20170112-gtpkme/
Is that Peter Noone’s son in the video? I expected him to start singing “Mrs. Brown You’ve Got A Lovely Daughter.”
Well, there ya go, Ben. We were hoping for peace in the Middle East, we were hoping for the bombing to stop and for a moment there, it looked as if Syria just might make it out of the woods…
http://www.zerohedge.com/news/2017-01-12/israeli-jets-bomb-damascus-military-airport-syria-vows-it-will-respond-flagrant-atta
But, NOOOOOOOOOO, they couldn’t have that now, could they? It just drove ‘em f’ckn batty watching things get calmer.
And this, my friends (and enemies) is DJT’s first real test, believe it or not. This is where the rubber meets the road. Everything else he can handle, but this is the one place where he may stub his toe. And ours as well. Sigh.
The bastards couldn’t wait.
Israel has been bombing Syria for years. It’s all that Hamas Hezbollah mumbo jumbo.
“The bastards couldn’t wait.”
Syria (and Egypt) drew first blood in 1973, and the Golan Heights saw some of the most intense fighting… a win or die situation for Israel. A true proxy war, the Syrians and Egyptians received the Sagger guided missile from the Soviets, which were very effective against Israeli armor. The American TOW missile system leveled the playing field for Israel. Syria will never be forgotten… and they’re occupying King David’s land.
Back to your regular programming.
US Top 40 Singles Week Ending 3rd June, 1972
1 I’LL TAKE YOU THERE –•– The Staple Singers
https://www.youtube.com/watch?v=Qsl4A9hZEto
FBI Quietly Releases 300 Pages Of Hillary Clinton Investigation Records
CHUCK ROSS
Reporter
7:35 PM 01/08/2017
Read more: http://dailycaller.com/2017/01/08/fbi-quietly-releases-300-pages-of-hillary-clinton-investigation-records/#ixzz4VcHsN3hc
I think I will order from L.L.Bean this weekend.
I did 2017 Christmas shopping last night and put a big order in. Bean Is The Best!
+1 Lots of LL Bean shopping here too.
Redmond, WA Housing Prices Crater 18% YoY As Demand For Housing Plummets
http://www.movoto.com/redmond-wa/market-trends/